Financing of Infrastructure

Projects
 Amount Disbursement Procedure

The Lender agrees to lend – a sum based on the agreement for the Project
Cost.
A lender enforces any of its rights arising out of the financing and
security documents.
The obligation of each of the lender are several. Failure of a lender to
carryout these obligations will not relieve the borrowers from their
obligation with regards to the documents.
Borrowing Disbursement
The disbursement will be in installments based on the agreement.
It is subjected to Borrower complying with the provisions of the
agreement.
The disbursement procedure is stipulated by the lender.
The borrower should make a request for it before ten days prior to the
draw date.

This request is irrevocable. Each notice of borrowing should specify.

i) The draw down date
ii) The amount of drawing
iii) The purpose of the money
 Certification from authorized officer
should include:-
i) a) Evidences showing fulfillment of all the conditions laid by the
lender. (For 1 drawing)
b) The proceeding withdrawals will be as per the project cost
(Estimates), or for interest payment, or for LC commission as per the
agreement.
c) All or any portion of the drawing should reimburse the borrower for
any Cost overrun. The amount depends on the nature of the estimated
project cost.
d) The representation and warranty made by the borrower should be true,
complete and correct. It should also confirm that, no previous notice of
borrowing is in survival.
e) No potential event of default or Event of Default should have occurred or
continuing.

ii) The Notice of Borrowing from the auditor regarding the expenditure
incurred on the project and the utilization of previous Borrowing
iii) A certificate from the lenders Engineer regarding the physical progress.
3) After receiving the Notice of Borrowing, the lender will
a) review the attachments so as to determine whether all the required
documents are provided and all the other conditions are satisfied.
b) Will notify their decision by assuming that all the conditions precedent
are satisfied. If unsatisfied CP notice shall have been received prior to the
receiving date

4) If any lender determines that the precedent conditions are not satisfied
he has to notify the borrower before three days of the Date of Drawdown
that it cannot be made. This statement is called unsatisfied CP notice. Any
such statement received less than three days prior to the Drawdown date is
not valid.
5) If the lender determines that any conditions mentioned are not
satisfied or the unsatisfied CP notice is received ,then they should
notify the Borrower in writing two days prior to the Drawdown
Date. They should also specify it and attach the copy of unsatisfied CP
notice. Upon such written notice from the lender, none of the lenders
have any obligation to make the Drawdown on the required date.

6) If the borrower satisfies all the conditions precedent in the Drawdown

agreement the unsatisfied CP notice is no longer valid. If the borrower
give it in writing with in a duration of five days, then no lenders can
issue a new CP notice.
7) The lenders have no liability to any person arising from any notice
issued as a result of an unsatisfied CP notice submitted by any person.
No lender should have any affiliate to the borrower if the lender issue
the CP notice with good faith.
8) Maximum amount in accordance with the construction budget shall be
given by the lenders according to their commitment as setout in the
respective agreement. The amount which is repaid or prepaid cannot
be reborrowed.
 Draw stop Notice

In addition to the issuing of unsatisfied CP Notice and lending conformation

notice, the lender can also issue Draw stop Notice to the borrower if the
conditions are not satisfied as per the agreement.
A copy of it also sent to other lenders, lender’s agent, security trustee and the
account bank notifying that the Drawdown cannot be made to the
borrower.

The Draw stop notice is valid until the conditions are satisfied by the
borrower. The lender’s agent should notify it in writing the withdrawal of
Draw stop notice upon the receipt of confirmation of the remedial of the
default events.
Payment

a) All payments including interests to be paid by the borrowers

without setoffs and counter claim to the lenders.

b) All the money should be paid, on or before the due date with
immediate available fund.

c) Interests are paid as if the payment is done in the due date.

 Other Conditions
a) The lenders may withhold the disbursement against the margin money
for working capital in the cost of the project, until the project
commences and build up of working capital commences.
b) The borrower shall not utilize the amount of facilities equivalent to the
contingency provision in the project cost till the completion of the
review of the project cost by the lenders.
c) The borrower incur preliminary/preoperative costs for the project only to
the extend that these have been certified by the Auditors
Mandatory Repayment
a) The lenders at their sole discretion apply payments or proceeds
received by the borrower is pursuant for the following repayment
methods
1) If Central Government, State Government or any other
government authorities directly or indirectly pays any compensation
to the borrower or lender, they should be repaid with sale, disposals
or any other way.
2) All the insurance proceeds other than under third part liability
or loss of profit insurances should be paid regularly.
 3) The balance of the amount received as late completion liquidated
damage under EPC Contracts after reimbursement of contingency
amounts drawn under the construction budget.
4) Performance shortfall liquidated damages received under EPC
Contracts.

b) All the payments for authorizations or approvals or other consents should

be paid by the borrower or lender whoever needs it.
Voluntary Premature repayment
a) The borrower can pay the payment of the full principal amount or a
portion of it together with the accrued interest. He has to write a
notice to the lender prior to 30 days.
For this
i) Prior written approval of lender is obtained
ii) Such prepayment is made on principal repayment/interest payment
date.
iii) Such payments are made on terms & conditions satisfactory to
lenders
iv) Such prepayments are done subject to payment of prepayment
premium as stipulated by the lenders in agreement
b) Voluntary prepayment would be adjusted in the inverse order of
maturity and pre paid amounts will not be permitted to be re-borrowed
Taxes
1) Taxes and Net Payment.
A deduction of tax can be enjoyed by the borrower to the amount
which he pays to the lender as per the agreement. But it should be
ensured that after making those payment the lender should posses a
sum equal to the net sum which it would have been received.
2) Tax indemnity
If the lender wants to pay on account of tax, the borrower should
assure the lent amount upon the request by the lender.
3) Notification by lender
If the lender have to claim the above he should inform the borrower
through their agents within 15 days prior to the claim. He should
provide a copy of the claims and other documents to the borrower.
4) Notification by the borrower
If at anytime the borrower is not able to pay the money, it should be
notified to the lender.
5) Receipt
The borrower should deliver to the lender ,a copy of the authorized
official document, of the deductions made within 30 business days.
Security
Security for the facilities
1) All the expenses and service laid down by the lender to the borrower
as per the facility agreement should be secured with the following
points;
 charge by mortgage on all the immovable asset of borrower, both
present and future.
 charge by the hypothecation of all the movable assets of the
borrower.
 charge on borrower’s all cash flows, book debts and receivables
and any other revenue of any forms.
 charge of all intangibles including but not limited to goodwill and
uncalled capital.
 A charge by the way of creation of security interest in;
1. The borrower’s project document duly acknowledged by the
counter parties and should be supplied from time to time.
2. The clearances of the borrowers
3. The letter of credit, performance bonds or guarantees provided by
any party on the project documents.
4. All insurance contracts/insurance proceeds.
 A charge on trust and retention account (TRA) and other reserves
and any other bank accounts of the borrower maintained any where.
 A charge by the way of pledging 51% of the paid up Equity share
capital of the borrower held by the sponsors of the project.
2) The security created /to be created shall be held by the Security
Trustee on behalf of and for the benefit of the lender.
Creation of additional Security

If in any time of the subsistence of the agreement, the

Trustee/Lender feels that the provided securities by the borrower is not
enough for the disbursement of the rest of the facilities he can ask for
more substantial securities. Then the borrower should provide more
securities to satisfy the lender/Trustee.
Representations and
Warranties
Corporate Status

 The Borrowers
They have the power and authority to own the project and the assets of it.
They have the power for the transactions in the project with the proposed
functions and generate the revenue and make sufficient profit so that
they can earn money.
Litigation

Except that disclosed by the borrower there should be no litigation,

action, suit, investigation, complaint or other proceedings by or
against the borrower before any court, tribunal, Government authority
in progress or pending or, to the best knowledge.
If so they may not get sufficient support from the lender.
Tax returns and payments

The borrowers should pay all the income tax returns and other payments
required by the Applicable laws.
All those legal requirements should be fulfilled.
If not he should provide the sufficient reserves to the lenders and if
satisfied by them will help in financing their projects.
Compliance with Statutes

The borrower is in compliance with all-material respects with all

Applicable laws in context with the business and the ownership of all
assets.
The agreement and each of all other transaction documents should be
guided by the legal norms of India.
These documents should be prepared in the right forms and should abide
to the real forms of these documents.
Clearances, licenses and other rights
 The borrower have to get all the clearances specified by the agreement
except those which should be provided in the later stages of the project
construction and operations.
 All other documents which needs authorization should be done from
the corresponding sections.
 The legality, validity, binding effect and enforceability should be
known.
 The borrower should have all the licenses like import licenses,
trademark, brand name, service name, patents with respect to the
usage of technologies or the ownership and operations etc.
Project Budget: Construction Budget
1. The implementation schedule and the project budget is based on the
assumptions made. The assumption should be realistic in nature
which is stated in project documents.
2. The construction budget specifies all the cost incurred in the
implementation of project. It also includes the anticipated cost by the
borrower for implementing the project.
3. The borrower should implement the project within the stipulated cost
in accordance with the financial plan agreed between the borrower
and the lender.
4. All the budget should be furnished well before submitting to the
lender. It should contain assumptions related thereto;

 Budget projections must be prepared with due care

 With the borrower’s expectations in every matter
 Based on reasonable assumptions on the legal side
 Consistent with the provisions in Transaction Agreement.
Transaction Documents
 The borrower should comply with all the conditions of the transaction
document and it should not be void able with the other parties. No
default should occur in any project document.
 All the transaction documents delivered to the lender should be
genuine and if there is any copies it should be true and in the same
date.
 All services provided, materials supplied, licenses and other rights
granted to the borrower will, provide all rights to the borrower to
obtain all stated above, including its performance obligations under the
Transaction Documents.
 No other transaction documents other than which (Except transaction
document no other agreement or arrangement to which borrower is a
party) is furnished to the lender can be used.
 All conditions precedent to the obligation of the respective parties
under the project documents should be satisfied with the agreement.
Conditions Precedent And
Effectiveness
Conditions Precedent to Commitments
 Constitutional Documents:
 The borrower needs to: Provide copies of constitutional documents of
borrower and sponsors; amend the constitutional documents on
requirement of lenders; provide evidence of corporate power, authority
and required corporate action to enter into and signature authority of
the persons executing the finance documents and project documents
on behalf of the borrowers and sponsors.

 Project Documents: The borrower needs to execute the EPC contracts,

the Fuel Supply Contract, the Operations and Maintenance Agreement
and the PPA along with any amendments required by the lenders.
 Clearances: The borrower shall obtain all the necessary clearances for
the project as well as satisfy all the required clearances prior to the
commencement of construction of the project.

 Financial Closure: The borrower shall tie up all the funds towards the
project cost.

 Project Site: The borrower shall acquire and obtain possession of the
land necessary for the project.
 Sponsor Support: The borrower shall acquire and furnish the Sponsor
Support Undertaking to the satisfaction of the lenders.

 Litigation: The lenders must receive an opinion from the Lender’s

Counsel that public interest litigation pending against the project will
not affect the project or the borrower in an adverse manner.
Conditions Precedent to First
Disbursement

 Insurance: The borrower should finalize the insurance package with

the consultation of an insurance consultant.
 Trust and Retention Account: The borrower should open a Trust and
Retention account with the Account bank for deposit of all its cash
flows including disbursements and capital inflows in the account.
 Environment Management Plan: The borrower shall develop
Environment Management Plans for the project as per laws with
proper identification of procedures and allocation of resources and
responsibilities to the satisfaction of lenders.

 The borrower shall develop a suitable safety and health policy.

 Onsite disaster management plan must be developed.

 Non Disposal Undertaking: The sponsors shall not dispose
off their respective share holding in the equity share
capital of the borrower until the final settlement
Preliminary and Preoperative Expenses: The borrower
shall obtain certification from Auditors regarding
preliminary and preoperative expenses incurred towards
the Project Cost as per confirmation of the satisfaction of
the lender.
 Key Appointments: The borrower shall appoint appropriate technical,
financial, and executive professionals with appropriate qualifications
and experience for key posts.
 Project Management Committee: The borrower shall constitute a
Project Management Committee of its directors for the purpose of
supervising and monitoring the progress in the implementation of the
project.
 Appointment of Statutory Auditors: The borrower shall provide
evidence of appointment of chartered accountants as Auditors of the
borrower to the lender.
 Third Party Approvals: The borrower shall obtain all the necessary
third party approvals, consents and waivers.
 Transaction Documents: Each of the transaction documents shall have
to be executed by the respective parties and shall become effective and
enforceable in accordance to the term and conditions.
 Corporate Authorization and Documents: Certified copies of up-to-
date constitutional documents
Evidence of corporate power and authority of borrower and sponsor to
enter into transaction documents
Recent certified financial documents and certificate of good standing
All necessary corporate resolutions of borrower and sponsor
Specimen signatures of the parties authorized by resolutions
 The borrower shall receive report from the auditor with respect to the
audit of pre-operating and development costs.
 The auditor shall conform that all the pre-operating and development
expenses have been made towards the development expenses of the
project
 The auditors shall submit a certificate to the lender’s agent in respect
of statutory dues of the borrower.
 Documentary evidence that borrower has complied with all its
obligations to file all its corporate and other documents.
Conditions Precedent to Subsequent
Disbursements
 Request for Drawdown
 Legal proceedings, events of default, representations and
warranties:
a. There shall be no event of default under the transaction
document. All the transaction documents shall be true and
correct in every aspect.
b. The borrower shall submit to the lender’s agent a certificate
that there are no pending legal proceedings pending.
c. The borrower shall certify that there is no adverse change
with respect to the project
d. There shall be no event in which the borrower’s borrowing
power or authority to borrow will be restricted.
 Performance of Obligations:
• The borrower shall perform all its obligations as per the transaction
documents
• The borrower shall provide certificate from Authorized officer of
the borrower to the lender that the project participants have
performed all aspects of the obligations
• Borrower shall provide certificate from auditors that equity
contribution up to the time of drawdown has been received.
• The borrower shall provide certificate from Authorized officer of
the borrower to the lender that there are no occurrences of defaults
or potential defaults
• The lenders shall receive certificate from the insurance consultant
that insurance policies are valid and in use.
 Security: The borrower shall within 6 months from the
date of I disbursement create the security.
 Representations and Warranties: The borrower shall
provide a certificate issued by the authorized officer of the
borrower stating that all the representations and warranties
are valid, true and correct.
 Reports: The borrower shall provide all the most recent
reports on the progress of the implementation confirmed
by the lender’s engineer
Conditions Applicable
During Currency of The
Agreement
 General Covenants:
a. Affirmative Covenants:
The borrower shall comply at all times the following covenants:
 Information Covenants:
1. The borrower shall deliver to the lenders and the lender’s agent:
a. Monthly reports of condensed financial information and progress
report within 15 days of the end of every month
b. Within 30 days of the end of each fiscal year, copies of
management letters or certificate from the auditors certifying
compliance by the borrower with the Financial Covenants contained
in the financial documents.
c. As soon as available or after 45 days of a quarter, un-audited
financial statements of income, retained earnings and cash flow of
the borrower for the quarterly period and the related balance sheet
at the end of the period.
d. At the end of 90 days of each financial year, audited statements of
incomes, retained earnings and cash flows of the borrower for the
year must be produced.
e. As required by the lenders a statement of the deposits made in and
the disbursements/withdrawals made out of the Trust and Retention
Account, certified by the account bank.
f. 30 days from the end of each financial year, an insurance adequacy
certificate from the insurance consultant must be provided.
g. Every 6 months, environmental, health, safety status of the project
must be provided.
2. The borrower shall promptly inform the lender and the lender’s
agent of:
a. Any event which constitutes a potential event of default or an event
of default specifying its nature and about the steps the borrower has
taken to remedy it.
b. Failure of performance guarantee tests carried out during the
project.
c. Shortfall in performance of project against stipulated performance
levels.
d. Receipt of a notice of buy-out under PPA
e. A proposed non-routine price escalation under any of the project
documents.
f. Any notice intending to cancel or alter the terms of the insurance
contracts
g. Any actual or proposed termination, rescission, discharge,
amendment or waiver under the Power Purchase Agreement
 Compliance with statutes, contracts etc: The Borrower shall comply
with the applicable law, obtain, comply with and maintain
clearances, approvals, licenses, permissions obtained by it. The
borrower shall promptly execute all it’s contractual duties including
those under the transaction documents.
 Tax, Duties, Fees: The borrower shall:
a. Pay and discharge all the taxes imposed on it or on its income or
profit or properties.
b. Pay all the duties and fees payable in connection with execution,
issue, delivery, registration or notarization of this agreement.
 Project Management: The borrower shall constitute and retain at all
times a Project Management Committee comprised of the Nominee
Directors and the senior executives of the borrower satisfactory to the
lenders in order to supervise and monitor the progress of
implementation of the project.
 Performance of Obligations: The borrower shall perform and observe
in all material respects all of it’s covenants and agreements contained
in the transaction documents.
 Maintenance of Accounts/Reserves: The borrower shall ensure credit
of all proceeds, equity/contingent equity contributions and preference
share subscriptions, insurance proceeds, all the charges and payments
under the PPA.
Financial Covenants
The borrower shall:
 At all times during the tenor of the agreement and the facilities
maintain a maximum DER of 2.33 times.
 From the date of expiry of the availability period, until the final
settlement date maintaining of an asset cover of at least 1.35 times.
 Maintain a Minimum Debt Service Coverage Ratio (MDSC) of at least
1.4 times on rolling four quarters basis from the date of expiry until
the final settlement date.
 Other Conditions: The borrower shall to the satisfaction of the
lenders:
a. Make arrangements for fuel.
b. When required the lenders appoint a reputed auditing firm as
independent auditor to verify the adequacy of the accounting and
monitoring systems and procedures and carry out periodic audit of
the accounts.
c. The borrower shall enter into appropriate hedging methods as per
the instructions of the lenders agent.
d. The borrower shall not appoint a person as its director who is also
director on the board of a company which is found to be a willful
defaulter by any bank.
Negative Covenants
 Without the prior written approval of the lenders, the borrowers
shall not:
a. Liquidate, consolidate, merge, sale any of its assets
b. Pass any resolution or otherwise take any steps for voluntary
winding up, dissolution or liquidation.
c. Convey, sell or lease or otherwise dispose of or mortgage any
project assets.
d. Undertake any project or investments without prior consent of the
lenders.
e. The borrower shall not make or declare any restricted payments in
the construction period
f. Engage in any other business other than the project.
g. Engage or allow any person to engage in acts that may constitute to
public nuisance.
h. Issue any debentures, raise any loans, accept deposits from the
public, issue preference or equity capital or give any guarantees.
i. Except to the lenders or working capital lenders, the borrowers shall
not pay any commissions to its directors, promoters, managers or
any other person to facilitate guarantees, counter guarantees,
indemnities or undertake liabilities in connection with financial
assistance for the borrower for the purpose of the project.
j. Shall not make any investments by way of deposits, loans and
advances in any concern other than as specified by TRAA.
k. Shall not revalue its assets at anytime during the currency of the
facilities except as maybe required by applicable laws but with prior
concern of the lenders.
Reports And Inspection
Reports
 The borrower shall furnish to the lender reports that are required
including reports of the lender’s engineer and insurance consultant
in form and matter satisfactory to the senior lenders.
They must report on:
a. Project cost
b. Construction schedule
c. Environmental matters
d. Project documents
e. Occupational health and safety matters related to the project
Inspection
 The Borrower shall:
a. Project Expenditure Records: Maintain records showing the
expenditure incurred on the project, utilization of proceeds of the
facilities, progress of the project and the operational and financial
conditions of the borrower. These records are available for the
lenders and their authorized representatives to inspect and verify.
b. Inspections: With prior notice from the lenders, permit the lenders
and the representatives to carry out technical, financial and legal
inspections during the construction and operational periods of the
project and to inspect all records, accounts and registers of the
borrower. All the expenses shall be met by the borrowers in this
regard.
 Auditor’s Certification Regarding Diversion of Funds:
a. The borrower shall at the request of the lender cause an
investigation conducted by its statutory auditors to ascertain
whether there has been any diversion of funds.
b. The statutory auditors shall forward it’s report to the lenders.
c. The cost of the investigation shall be borne by the borrower.
 Disclosure of Information:
a. By this the borrower gives the lender the consent for the disclosure
of the following:
1. Information and data relating to the borrower
2. Information and data relating to any credit facility availed by the
borrower.
3. Defaults made by the borrower in dispelling any such duties of the
borrower.
b. The lenders may disclose and furnish such information to the Credit
Information Bureau or any other agency appointed by the Reserve
Bank of India if they deem it necessary and appropriate
c. The borrower declares that the data declared and furnished by the
borrower to the lender are true and correct and further undertakes
that:
1. The Credit Information Bureau and any other agency so authorized
can use, process the said information and data disclosed by the
lenders in the way they deem fit.
2. The Credit Information Bureau may furnish for consideration, the
processed information and data or products prepared by them to
banks/financial institutions as maybe specified by the Reserve Bank
of India.
Events of Defaults and
Remedies
Events of Default
 Borrower not following the repayment schedule laid down by the
agreement.
 Default in any performance or observance of any covenant, conditions
warranties or provisions contained in the agreement or any other
financial documents.
 Any misleading or fakeness in the furnished documents by borrower
to the lender.
 If the borrower is unable to provide in writing his inability in paying
the debts when it is matured.
 The dissolving of the borrower voluntarily or involuntarily.
 The recalling of the borrower by any other lenders when he is not able
to arrange any alternate way of the money.
 Selling or disposal of any assets pledged or hypothecated by the lender
without prior notification to the lender.
 If the borrower has taken steps to change of ownership of assets or
shares without intimation to the lender.
 Any sponsors fail to perform the obligations to the borrower or project
including the contribution to equity.
 Abandonment of the project by the borrower.
 Any Government approval obtained under any transactions is revoked,
suspended, modified or withheld or the termination.
 The borrower fails to maintain insurance over the projects or the assets
Consequences of Events of Default
If at all any event of default happens the lenders have the right to
cancel their commitments and accelerate the outstanding dues. In the
exercise the lenders can take the following actions:
 Give a written notice to the borrower that all the obligations and
commitments regarding the disbursement of the facilities are
terminated.
 They can undertake any rights specified under security documents
and other Financial documents for accelerating the outstanding dues
for capital contribution.
 They can enforce all the liens created pursuant to the security
documents
 The lenders and security trustee on behalf of the lender have the
following rights also:
 To enter upon and take possession of the assets of the borrower.
 To transfer the assets of the borrower by way of lease or the license
can be laid for sale.
 To restructure management set up.
 To appoint nominee director.
 To pursue any other legal remedy or right provided by law.
 The borrower has the right to publish the names of such borrower and
its directors as defaulters
 Notice to the Lenders in case of Happening of Defaults: If
any case of default has happened, the borrower shall, upon the
knowledge of the same give notice to the lenders in writing specifying
the nature of such a potential event of default or event of default.
 Right to Disclose/Publish the Names of The Borrowers
and its Directors as Defaulters: In the event of the borrower
committing a default in the repayment of any of the installment of the
facilities or payment of interest, the lender shall have the right to
disclose the name of the borrower and its directors as defaulters to the
Reserve Bank of India.
 Expenses of Preservation of Assets of Borrower and of Collection:
All expenses incurred by the lender after an event of default has
occurred in connection with:
a. Preservation of the assets of the borrower and/or it’s subsidiaries.
b. Collection of the amounts due under this agreement and the other
financing documents.
 Liquidation: In the event of the commencement of
liquidation/winding up of the proceedings of the borrower, the
proceeds realized out of the assets of the borrower shall subject to
the provisions of the Company’s Act or any other applicable law at
the time.
SUSPENSION
 The access of the borrower to the facilities can be suspended or terminated by
the lenders upon the occurrence of anyone of the following events:

 Non Compliance of terms and condition: Failure by the borrower to carry out
all or any terms of the financing document.

 Assignment or transfer of properties to receiver, assignee: If the borrower

permits any legal proceedings by which properties shall or may be assigned or
transferred or delivered to a liquidator, Assignee appointed either by the
borrower or by court of law, such property shall be distributed among the
creditors of the borrower.

 Change in borrower setup: Based on the opinion of the lender any change in
the borrowers setup that would affect the conduct of the borrowers business, or
financial position or execution of the project.
Suspension to continue till default
remedied
 The borrowers right to make withdrawals from the facilities shall be
suspended till the lender notifies the borrower that the right to make
withdrawals has been restored.
TERMINATION:
 If the borrower is not able to collect the facilities on the laid down date,
then the lender has the power to cancel the entire payment. It should be
notified to the borrower in writing that he is terminating the right of the
borrower to withdraw the facilities.
 Cancellation of commitments: The borrower by a written notice to the
lenders or lenders agent can cancel unused commitments
 Lenders Agents or Security Trustee

 The appointment of the Lender’s Agents or Security Trustee is

acknowledged by the borrower in accordance with the financing document
and confirms its obligation to pay the fees and expenses with regards to
such appointment.
 The lender’s agent accepts such appointment.
 The borrower acknowledges that the Lenders Agents or Security Trustee is
authorized to perform the duties and to exercise such rights, powers as are
delegated to them respectively under the Financing document and will
have no obligations or duties as agents/trustee which are not expressed in
the financing document.
 The lenders agent is not the agent of the borrower.
 Amendment

 No amendment of any portion of this Agreement or any financing document to

which any lender or the borrower will be a part of , will be effective only when
signed by the lender.
 No Amendment , waiver or consent shall be effective unless in writing and
signed by all the lenders in respect of the Intercreditor Fundamental Events
including the following:
a) Increase any commitments of the lender or subject the lender to any
additional obligations.
b) Reduce the principle or interest on any fees or other amounts payable.
c) Postpone any date fixed for any payment of principal of interest on any
fees or other amounts payable.
d) Change the percentage of the commitments of the aggregate unpaid
principle amount of the number of lenders that shall be required for the lenders
any of them to take any action.
e) Amend the definition of the “Lenders”.
Notice

 Any demand ,communication or other request to be made to a lenders

or borrowers or to any other party shall be in writing.

 The failure of the lenders to forward any notice or the failure to arrive
shall never be deemed to release the borrower from any obligations
under this agreement.
Evidence & Calculations

 Accounts maintained by a lender / lenders agent in connection with

agreement are conclusive evidence of the matter to which they
relate.

 In any legal proceedings in connection with the agreement or

financing documents, any certification or determination by a lender
of a rate or amount shall be conclusive evidence.
Cost & Expenses

 If the borrower agrees to pay all sums paid by the lender under the
provisions of the agreement or financing document within 30 days
from the date of notice of demand from the lenders agent, then
such sums will include the costs and expenses of each lender and
the lenders agent in connection with the preparation, execution,
delivery, modification and amendment of the agreement.

 The fees and expenses of the lenders council.

 The expenses involved with the preservation of asset of the
borrower.
 All other reasonable expenses and out of pocket expenses.
 All such sums that are payable as above mentioned may be debited to the
borrower’s account maintained with the lender or the lenders agent and
will carry an interest at the default rate of the lenders from the date of
payment till such reimbursement.
 If the borrower defaults in making such reimbursement within 30 days
from the date of notice of demand, the borrower shall pay liquidated
damages in accordance with the provisions of the Facility Agreement from
the date of payment made by the lender till the date of reimbursement by
the borrower.
 Without prejudice to any other agreement of the borrower , the agreements
and the obligations of the borrower shall survive the payment in full of
principal, interest and all other amounts payable ,under any of the other
financing document.
Assignment, Novations & Participations
 Any lender may without the consent of the borrower or any other party
assign all or any of its rights and benefits (under the Financing document)
to any bank, financial institution or institutional lender.
 If the above condition occurs then unless and until the assignee has agreed
with the lenders agent and other lenders that it shall be under the same
obligations towards each one of them as it would have been under if it has
been an original party as a lender, the lenders agent and other lender shall
not be obliged to recognize such assignee as having the rights against each
of them.
 If the lender wishes to novate all or any of its rights, benefits and
obligations hereunder and the other financing document to which it is a
party then such novation shall be made by delivering to the lenders agent a
duly completed, stamped and executed novation notice, together with the
lenders agents administrative fee.
 On the receipt of such a notice and payment of such fee, the lenders agent shall
countersign it for and on the behalf of itself and other parties to this agreement
and subject to the terms of that Novation Notice:
 Amicable Resolution

 Any dispute, difference between the parties in relation to the agreement

or the financing document shall be attempted to be resolved amicably.

 The parties shall meet at the earliest mutual convenience and in any
event within 15 days of such dispute, difference or controversy being
notified in writing and attempt to resolve the same.
 Governing Law

 The borrower has to agree that the agreement shall be governed and
construed in accordance with the laws of India.
 Jurisdiction

 The borrower agrees that the courts and tribunal India , shall have the
jurisdiction to settle any disputes , which may arise in connection with
this agreement and that any legal Proceedings arising in connection
with this agreement may be bought to those courts and tribunals the
borrower submits to.

 Nothing shall limit any right of the Security Trustee or the lender to
take proceedings to any other jurisdiction, nor shall the taking of
proceedings in any other jurisdiction.
 Execution in counterparts

 The agreement may be executed in a number of counterparts , each of which

when so executed shall be deemed to be original and all of which taken
together shall constitute one and the same agreement.
Waiver not to impair the rights of the
lender

 No delay in exercising or omission to exercise any right, power or

remedy accruing to the Lender’s upon any default under the
financing document shall impair the rights of the lender.