THIS AGREEMENT (this “Agreement”), executed and entered into  as of                                                                                                                         (the “Agreement Date”), is by and among:

1.                                              , a company duly incorporated and validly existing under the laws of India with Corporate Identification Number ……………………… and having its registered office at                                               (hereinafter referred to as the “Project Proponent” which expression shall, unless it be repugnant to the subject or context thereof, include its successors and permitted assigns);
2. STATE BANK OF INDIA a body corporate constituted under the State Bank of India Act 1955 and having its Central office at State Bank Bhavan, Madame Cama Road, Mumbai, 400       021       acting       through       its                                            Branch, Mumbai   at                                 (hereinafter referred to as the “Escrow Agent”); and
3.                                  , a company duly incorporated and validly existing under the Laws of India with corporate identification Number                 and having its registered office at              , (hereinafter referred to as the “Oil Marketing Company”, which expression shall, unless it be repugnant to the subject or context thereof, include its successors and permitted assigns); and

[The Project Proponent, the Escrow Agent and the Oil Marketing Company are hereinafter collectively referred to as the “Parties” and individually as the “Party”]

WHEREAS:

1. The Project Proponent has availed credit facilities (hereinafter called “the Facility”) from State Bank of India (hereinafter called “SBI”) under the interest subvention scheme of Government of India pursuant to arrangement letter financing and security agreements executed by the Project Proponents in favour of State Bank of India. The details of the Facility, the arrangement letter and the financing and security agreements are given in Schedule
2. The OMC has entered into a Purchase Agreement (as defined hereunder) whereunder the OMC has agreed to purchase Ethanol from the Project Proponent for such volume and at the rates, as stated in the Purchase Agreement. The Project Proponent has represented that the Purchase Price (as defined hereunder) at least exceeds the Instalment and Interest of the Facility under the Facility Agreement (as defined hereunder)
3. In order to ensure due repayment of the Facility together with interest and all other amounts due and payable by the Project Proponent to State Bank of India in respect of the Facility the Project Proponent and the OMC have agreed that the entire payments made in respect of the Ethanol purchased by the OMC from the Project Proponent shall be remitted to an Escrow Account to be opened with the Account Bank and that the Account Bank shall withdraw the amount of Debt Payment Amounts (as hereinafter defined) in priority to allowing all other payments to the Project Proponent in the manner and as per terms and conditions contained hereunder:

NOW, THEREFORE, in furtherance of the transaction contemplated hereby and in consideration of the mutual covenants of the parties hereto set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

1. INTERPRETATIONS

1.1 Definitions

Unless the context indicates a contrary intention all capitalized terms used herein that are not otherwise defined elsewhere in this Agreement shall have the respective meanings ascribed hereunder:

Authorised Representative in relation to a Party means the person who is duly authorised to act on behalf of the relevant Party.

“Project proponent” means Sugar Mills/Distilleries/Entrepreneurs availing financial assistance from the Bank for setting up new distilleries/expansion of distilleries to produce ethanol under the government “scheme for extending financial assistance to project proponents for enhancement of ethanol distillation capacity or set up distilleries for products of 1^st generation ethanol from feedstocks such as cereals, sugarcane, sugar beet etc”.

Business Day means a day on which commercial banks including, but not limited to the Escrow Agent are open for normal business in Mumbai.

Debt Payment Amount means the Interest and the Instalment that is due each month from the Project Proponent to SBI under the Facility Agreement

Due Date(s) shall mean, in respect of

• each instalment, the Instalment Payment Dates;
• Interest, the Interest Payment Dates;

Escrow Account has the meaning set out to such term in Clause 3.1 hereof.

Escrow Amount means the money lying to the credit of the Escrow Account for the time being and from time to time.

Facility means the term loan facility described in detail in the Schedule.

Facility Account means the term loan account maintained by the Project Proponent with SBI in respect of the Facility.

Facility Agreement shall mean the Facility Agreement dated < put date > executed by the Project Proponent in favour of SBI for availing the Facility as detained in Schedule I hereunder

Final Settlement Date shall mean the date on which the entire dues payable by the Project Proponent to SBI under the Facility Agreement have been paid, discharged or performed in full to the satisfaction of SBI and there are no sums which are owed, even contingently, to SBI by the Project Proponent as evidenced by a no dues certificate being issued by SBI.

Interest means the amount of monthly interest payable by the Project Proponent to SBI under the Facility Agreement subject to adjustment of subvention (if any) of the Government of India under the Interest Subvention Scheme.

Instalment means the amount of monthly/quarterly instalment (as the case may be) of the Facility in terms of the repayment schedule in the Facility Agreement

Interest Payment Date shall mean the first day of each calendar month occurring after the initial disbursement date until the Final Settlement Date.

Instalment Payment Date means the last day of the month for which the interest is due.

Party means any party to this Agreement.

Purchase Agreement means agreement dated <put date> entered into between the Project Proponent and the OMC were under the OMC has agreed to purchase from the Project Proponent, ethanol or other item agreed between the Project Proponent and OMC against payment of Purchase Price.

Purchase Price means all amounts payable by OMC to the Project Proponent under the Purchase Agreement for the supply of ethanol by the Project Proponent to OMC from time to time during the subsistence of the Purchase Agreement.

2. Appointment of Escrow Agent.

The Project Proponent and the OMC jointly designate State Bank of India as described in the description of Parties as the escrow agent (the “Escrow Agent”) for the purposes set forth herein, and the Escrow Agent hereby accepts such appointment and agrees to accept, hold and disburse the Escrow Amount in accordance with the terms hereof. All references to the “Escrow Agent,” as that term is used herein, shall refer to the Escrow Agent solely in its capacity as such, and not in any other capacity whatsoever, whether as individual, agent, fiduciary, trustee or otherwise.

3. Establishment and Maintenance of Escrow Account

3.1  The Escrow Agent confirms that it has opened the escrow account, the details of which are set out below (the “Escrow Account”) in the name of the Project Proponent and OMC on the terms of this

<Name of Project Proponent> Escrow Account, having Account Number <put escrow account no.> denominated in INR.

3.2  The Escrow Agent holds all money forming part of the Escrow Amount as a banker subject to the terms of this Agreement, and as a result, such money will not be held in accordance with the fixed deposit account rules in State Bank of India (“SBI”).

3.3  The Parties undertake to provide to the Escrow Agent all documentation and other information required by the Escrow agent from time to time to comply with all applicable regulations in relation to the Escrow Account forthwith upon request by the Escrow

4. Deposit of Escrow Amount

4.1  The Project Proponent will raise an invoice on the OMC after dispatch of ethanol as soon as time is due for raising of invoice to OMC and ensure that OMC remits the entire Purchase Price for dispatch of ethanol by Project Proponent to OMC in the Escrow Account within such period as stipulated in the Purchase Agreement by means of NEFT/RTGS

4.2  OMC shall ensure that the entire Purchase Price shall be remitted/credited to the Escrow Account without any deduction or rebate and that till the Final Settlement Date no amount shall be paid by OMC directly to the Project Proponent under the Purchase Agreement. Provided however, the obligation of the OMC under this clause shall be limited to the obligation of the OMC under the Purchase Agreement for payment of Purchase

4.3  Project Proponent hereby authorises OMC to remit the entire Purchase Price to the Escrow Account and such payment by OMC to the Escrow Account shall be construed as due discharge by OMC of its obligation for payment of price of ethanol to the Project Proponent under the Purchase Agreement for the amount of ethanol supplied by the Project Proponent to the OMC as per invoice raised by the Project Proponent on the

4.4  All amounts deposited as per clauses 4.1, 4.2 and 4.3 hereinabove and held in the Escrow Account and credited to the Escrow Account from time to time shall be deemed to form part of the Escrow

4.5  The Escrow Amount lying to the credit of the Escrow Account will not bear any interest, unless the Escrow Amount is kept deposited, at the request of the Project Proponent, as term deposits of SBI for such time as may be required by. However, the amount equivalent to Debt Payment Amount shall not be liable for being kept in term

4.6  The Project Proponent as well as the OMC agrees that the Escrow Agent has no responsibility whatsoever to ensure that the OMC deposits the Purchase Price to the Escrow Account.

5. Withdrawal from Escrow Account

5.1  The Project Proponent authorises the Escrow Agent that from the Escrow Amount an amount equivalent to a month’s Debt Payment Amount shall be  held back  by the    Escrow Agent and that on each Due Date the Escrow Agent shall withdraw the Debt Payment Amount so held back and shall credit to the Facility Account towards payment of Interest and Instalment of the

5.2  The Project Proponent shall be allowed by the Escrow Agent to withdraw from the Escrow Account the balance remaining in the Escrow Account after compliance of the stipulation of clause 5.1 above. However, if the Escrow Amount falls short of the Debt Payment Amount for the next Due Date the Project Proponent shall not be entitled to withdraw any amount from the Escrow Account till such time as the balance in the Escrow Account exceeds the Debt Payment Amount and such withdrawal by the Project Proponent shall be limited to the balance in the Escrow Amount which is in excess of month’s Debt Payment

6. Tax Matters.

The Project Proponent and the OMC agree that, for Tax reporting purposes, all taxable interest on or other income, if any, attributable to the Escrow Amount shall be allocable to the Project Proponent. All income earned from the cash and investments of the Escrow Amounts held in the Escrow Accounts shall be taxable to the Project Proponent and shall be reportable by the Escrow Agent to the income tax or any other taxing authority, whether or not such income has been distributed during such year. The Escrow Agent shall have no responsibility for the preparation and/or filing of any tax or information return with respect to any transactions, whether or not related to this Agreement that occurs outside the Escrow Amount.

7. Rights, Obligations and Indemnification of the Escrow Agent.

7.1  In performing any of its duties under this Agreement, or upon the claimed failure to perform its duties hereunder, the Escrow Agent shall not be liable to anyone for any damages, losses, or expenses that such party may incur as a result of the Escrow Agent so acting or failing to act (save except for damages arising out of its own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction). Accordingly, the Escrow Agent shall not incur any such liability with respect to: (i) any action taken or omitted to be taken in good faith and without gross negligence or willful misconduct; or (ii) any action taken or omitted to be taken in reliance (including reliance not only as to a document’s due execution and the validity and effectiveness of its provisions, but also as to the truth and accuracy of any information contained therein) upon any document, including any written notice, request or instruction provided for in this Agreement, that the Escrow Agent shall in good faith and with exercise of due care believe to be genuine without inquiry and without requiring substantiating evidence of any kind, to have been signed or presented by a proper Person or Persons and to conform with the provisions of this Agreement.

7.2  The Project Proponent hereby agrees to indemnify and hold the Escrow Agent and its directors, officers, agents and employees (collectively, the “Escrow Agent Indemnitees”) harmless from and against any and all claims, liabilities, losses, damages, fines, penalties and expenses, including out-of-pocket, incidental expenses and reasonable legal fees and expenses (“Escrow Agent Losses”) that may be imposed on, incurred by, or asserted against, the Escrow Agent Indemnitees or any of them in connection with or arising out of (i) the Escrow Agent’s performance under this Agreement; provided that the Escrow Agent has acted in good faith and without gross negligence or wilful misconduct. The provisions of this Clause 7.2 shall survive the termination of this Agreement.

8. Non-absolve of Project Proponent

The Project Proponent agrees that the authority granted to the Escrow Agent under clause 5.1 of this Agreement for withdrawal of Debt Payment Amount for credit to Facility Account on each Due Date shall not absolve the Project Proponent from its obligation for payment of any or all amounts due by the Project Proponent to SBI under the Facility Agreement and that in case of inability of the Escrow Agent for any reason including but not limited to insufficiency of balance in the Escrow Account or if any part of the Escrow Amount is at any time attached, garnished or levied upon under any court order, or operation of the Escrow Account is stayed or enjoined by any court order, or any order, judgment or decree shall be made or entered by any court affecting the Escrow Account, then in any of such events, the Escrow Agent shall provide the Project Proponent and the OMC with prompt written notice of any such events and the Project Proponent shall forthwith arrange for payment of Interest and Instalment of the Facility in terms of the Facility Agreement.

9. Fees.

The Project Proponent shall be liable for the fees and expenses of the Escrow Agent for so long as any portion of the Escrow Amount is held by the Escrow Agent hereunder. The amount of such fees shall be agreed upon between the Project Proponent and the Escrow Agent at the time of execution of this Agreement and such amount shall be construed as fees for the purpose of this clause 8. The Escrow Agent shall have, and is hereby granted, a prior lien upon the Escrow Amount with respect to its unpaid fees, and non-reimbursed expenses.

10. Notices and Instructions.

Any notices, account statements, consents or other communication required to be sent or given hereunder by any of the parties hereto or SBI shall in every case be in writing and be sent or given to each party referenced below, and shall be deemed properly served if (a) delivered personally, (b) delivered by a recognized overnight courier service, or (c) sent by facsimile transmission with a confirmation copy sent by overnight courier, in each case, to the parties at the addresses and facsimile numbers as may be furnished in writing by each Party to the other.

11. Governing Law.

This Agreement and the rights and obligations of the parties hereto hereunder shall be governed in all respects, including validity, interpretation and effect, by the laws of India.

12. Amendment and Waiver.

This Agreement may be amended, or any provision of this Agreement may be waived, provided that any such amendment or waiver will be binding on a party hereto only if such amendment or waiver is set forth in a writing executed by all the Parties.

13. Termination.

This Agreement shall continue till the Final Settlement Date and OMC shall be discharged of its obligation under clause 4.2 of this Agreement upon receipt of a intimation from SBI that the OMC stands discharged of its obligation under said clause 4.2.

14. Assignment of Interests.

No assignment of the interest of any of the Parties hereto shall be binding upon the Escrow Agent unless and until written notice of such assignment shall be filed with and acknowledged by the Escrow Agent.

15. Non-liability of OMC

SBI shall have no recourse against OMC and OMC shall not be liable to any Party for default by the Project Proponent of its obligation of repayment of dues under the Facility Agreement or for any other breach thereof and the obligation of the OMC shall be limited to deposit of the Purchase Price in the Escrow Account as per terms of this Agreement.