SHARE ACQUISITION AGREEMENT
Between
DELHI POWER SUPPLY COMPANY LTD.
and

NORTH NORTH-WEST DELHI ELECTRICITY
DISTRIBUTION COMPANY LIMITED

Tata Power, a company incorporated under the provisions of the Companies Act, 1913 and having its registered office at Nagin Mahal, 6th Floor, 82 Veer Nariman Road, Mumbai 400 020 (hereinafter referred to as Tata Power, which expression shall, unless repugnant to the context or meaning thereof, include its successors and permitted assigns) of the first part;

DELHI POWER COMPANY LIMITED a company incorporated under the provisions of the Companies Act, 1956 with registered office at Shakti Sadan, Kotla Marg, New Delhi - 110002 ) (hereinafter referred to as 'Holding Company', which expression shall, unless repugnant to the context or meaning thereof, include its successors and permitted assigns) of the second part; and

North North-West Delhi Electricity Distribution Company Limited, a company incorporated under the provisions of the Companies Act, 1956 and having its registered office at Shakti Bhawan, Nehru Place, New Delhi-110002 (hereinafter referred to as "COMPANY", which expression shall, unless repugnant to the context or meaning thereof, include its successors and permitted assigns) of the last part;

Delhi Vidyut Board (hereinafter referred to as the 'Board') is a statutory body constituted under section 5 of the Electricity (Supply) Act, 1948 and has been engaged in the electricity generation, transmission and distribution in the National Capital Territory of Delhi.

The Government of National Capital Territory of Delhi (hereinafter referred to as the "GNCTD") by Notification No. F.11(28)/98-EB/341 dated March 3, 1999 issued in exercise of the powers under section 17 of this Electricity Regulatory Commissions Act, 1998 constituted the Delhi Electricity Regulatory Commission Act, 1998 constituted the Delhi Electricity Regulatory Commission (hereinafter referred to as the 'Commission') and vested in the Commissioner various functions as provided in section 22 of the said Act.

The Delhi Electricity Reform Act, 2000 (hereinafter referred to as the 'Reform Act') has been enacted by the Legislature of the State of Delhi containing provisions, amongst other, enabling restructuring of the Board and the Reform Act has been in force with effect from November 3, 2000.

After the coming into force of the Reform Act, the Commissioner stands recognised under section 3 of the Reform Act and is entitled to exercise all powers and function as set out in the Reform Act.

E

In exercise of power under the Reform Act, GNCTD has on November 22, 2001 published the Delhi Electricity Reform (Transfer Scheme) Rules, 2001 (hereinafter referred to as the 'Transfer Scheme') and GNCTD will issue a notification making the Transfer Scheme effective as on completion date (hereinafter referred to as date of the transfer);

F

Holding Company was incorporated as a limited company under the Companies Act, 1956 in the National Capital Territory of Delhi; the Certificate of Incorporation was granted by the Registrar of Companies, NCT of Delhi on July 4th 2001 and the Certificate of Commencement of Business was granted on December 31st 2001;

G

The COMPANY has been incorporated as a limited company under the Companies Act, 1956 to undertaken the business of distribution and retail supply of electricity the areas listed in part III of Schedule 'H' of the Transfer Scheme (Annexed as Schedule A) (hereinafter called the 'Specified Area'); the Certification of Incorporation was granted by the Registrar of Companies, NCT of Delhi on July 4th, 2001 and the Certification of Commencement of Business was granted on December 31st, 2001.

H

The COMPANY will under taken the business of distribution and supply of electricity in the Specified Area from the date of the transfer as per the authorisation contained in the Transfer Scheme and the Licence to the granted by the Commission.

I

In terms of the provisions of the Reform Act and Transfer Scheme which will come into force on the date of the transfer the distribution and retail supply activities of the Board pertaining to the Specified Area alongwith specified assets, specified liabilities, specified personnel and specified proceedings shall been transferred to the COMPANY.

J

The COMPANY shall be duly authorised and empowered to under taken the business of electricity distribution and retail supply in the Specified Area to all consumers, from the date of the transfer;

K

Presently, the Authorised Share Capital of the COMPANY is 368,00,00,000 (Three Hundred and Sixty Eight crores only) comprising of 36,80,00,000 ( Thirty six crores eighty lacs) equity sharesof Rs 10/- each and the entire share capital is held by te Holding Company.The equity shares of te COMPANYare in dematerialised form.

L

GNCTD and the Holding Company initiated a competitive bidding process for selecting a participant from the private sector to purchase from Holding Company the majority interest in COMPANY comprising of 18,76,80,000 (Eighteen crores seventy six lacs eighty thousand) equity shares of Rs. 10/- each (in respect of 51% of te shares) and manage the business of distribution and retail supply of electricity in the pecified Areaand for the said purpose the Request for Qualification and the finalised drafts of these Share Acquisition Agreement, Shareholders Agreement, Bulk Supply Agreement, Escrow Agreement, Loan Agreement and other relevant documents were made available to the bidders;

M

Pursuant to the above Request for Qualification, six (6) companies were short-listed for submission of financial bids. As per the Request for Proposal Document dated November 22nd, 2001, two bids were submitted by the bidders and Tata Power is one of the companies/consortium which submitted a bids on further negotiations, Tata Power submitted revised bid on May 14th, 2002. GNCTD accorded approval to the bids as per their letter Nos. F.11(118)/2001-Power/180. dated May 29th, 2002 and F.11(118)/2001-Power/181. dated May 29th 2002, which shall prevail in the event of any conflict with any of the Bid Documents and/or the agreements entered hereinafter;

N

Tata Power has been selected as the preferred bidder for sale of the said 18,76,80,000 (Eighteen crores seventy six lacs eighty thousand) equity shares (51%) held by GNCTD in COMPANY and for vesting of the managements and control of COMPANY's business, namely, distribution and retail supply electricity in the Specified Area;

O

Tata Power has complied with the terms of the Bid Documents which are necessary to execute this Share Acquisition Agreement and Holding Company has agreed to sell and transfer to Tata Power and Tata Power has agreed to purchase from Holding Company 18,76,80,000 (Eighteen crores seventy six lacs eighty thousand) equity Shares on the terms and conditions contained in the Bid and in this Agreement;

NOW THEREFORE FOR AND IN CONSIDERATION OF MUTUAL PROMISES MADE AND CONTAINED HEREIN IT IS AGREED AS FOLLOWS :