Exhibit 2.2
AGREEMENT FOR OPTION TO PURCHASE SHARES
made on
this 29th day of November, 1999
by and between
(1) MR. XXXXXX XXXX and Others
(2) XXXXXX INFOWAY LIMITED;
(3) MR. XXXXXX XXXX and Others; and
(4) INDIAWORLD COMMUNICATIONS PRIVATE LIMITED
------------------------------XXXX & GIRISH & CO.------------------------------
Advocates
0XX Xxxxx, Xxxxxx Xxxxxxxx,
00, Xxxxxxxx Xxxxx Road,
Marine Lines,
Mumbai -400 002.
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INDEX
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Serial No. Clause Number Particulars Page Nos.
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1. Clause 1 Definitions and Interpretations 5 - 8
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2. Clause 2 Agreement between the parties 9 - 10
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3. Clause 3 Conditions Precedent 10 - 12
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4. Clause 4 Payment of Xxxxxxx Deposit and 13
Purchase Price
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5. Clause 5 Completion 13 - 15
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6. Clause 6 Warranties 15
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7. Clause 7 Covenants by the Parties 15 - 17
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8. Clause 8 Exclusivity and Non competitions 17
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9. Clause 9 Term and Termination 17 - 18
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10. Clause 10 Assignment 18
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11. Clause 11 Costs and Expenses 18
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12. Clause 12 General 18 - 20
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13. Clause 13 Conciliation and Arbitration and 20 - 21
Claim under Warranty
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14. Clause 14 Service of Notice 21 - 22
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LIST OF SCHEDULES
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Schedule Number Particulars
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Schedule 1 List of Members and their Shareholding
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Schedule 2 List of Directors
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Schedule 3 Websites and domains owned by the Company
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Schedule 4 Escrow Agent Letter
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Schedule 5 Warranties
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Schedule 6 Resolution passed by Board of Directors of the Purchaser
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Schedule 7 Resolution passed by Board of Directors of the Company
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Schedule 8 Resolution passed by Board of Directors of X. X. Xxxx Impex &
Investments Private Limited
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LIST OF ANNEXURES
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Annexure No. Particulars
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Annexure A Audited Annual Account as at 31st March, 1999
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Annexure B Provisional Accounts as at 19th November, 1999
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AGREEMENT FOR OPTION TO PURCHASE SHARES
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THIS Agreement is made at Mumbai, on this ____ day of November, 1999 by and
between
(1) MR. XXXXXX XXXX son of XX. XXXXXXXXXX XXXX residing at X-00 Xxxxxxxxxx
Xxxxxxxx, 00 Xxxxxx Xxx Xxxx, Xxxxxx - 400 036 and;
(2) XX. XXXXXXX X XXXX wife of MR. XXXXXX XXXX residing at X-00 Xxxxxxxxxx
Xxxxxxxx, 00 Xxxxxx Xxx Xxxx, Xxxxxx - 400 036;and
(3) X. X. XXXX IMPEX AND INVESTMENTS PRIVATE LIMITED a private company
incorporated under the Companies Act, 1956 and having its registered office
at 304, Xxxxxxxx Xxxxxxxx, 000, Xxxxxxx Xxxxx, Xxxxxx - 400 021.
who are shareholders of IndiaWorld Communications Private Limited described
hereinafter, and whose names and details of shareholding in the company are
given in Schedule 1 hereto (all of whom are hereinafter collectively referred to
as the "Vendors" and individually referred to as a "Vendor") of the First Part;
(4) XXXXXX INFOWAY LIMITED, a public company within the meaning of the
Companies Act, 1956 (1 of 1956) having its registered office at II Floor, 1-8-
303/36, Mayfair Centre, S.P Road, Secunderabad 500 003 (hereinafter referred to
as the "Purchaser") of the Second Part,
(5) (i) MR. XXXXXX XXXX, son of XX. XXXXXXXXXX XXXX residing as aforesaid
(hereinafter referred to as "Mr.RJ") (ii) Xx.XXXXXXXXXX XXXX son of Xx.XXXXXXXX
XXXX residing as aforesaid and (iii) Xx. XXXXXX X.XXXX wife of Xx.XXXXXXXXXX
XXXX (All of whom are directors of Indiaworld Communication Private Limited and
are hereinafter collectively referred to as the "Existing Directors " and
individually referred to as the "Existing Director") of the Third Part; and
(6) INDIAWORLD COMMUNICATIONS PRIVATE LIMITED, a private company within the
meaning of the Companies Act, 1956 (1 of 1956) and having its registered office
at 304 Xxxxxxxx Xxxxxxxx, 000 Xxxxxxx Xxxxx, Xxxxxx - 000 000, Xxxxx
(hereinafter referred to as the "Company") of the Fourth Part;
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WHEREAS
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(A) The Vendors have promoted and formed the Company for carrying on the
business of consultants of software systems, communications and information
systems.
(B) The Company has established an Internet portal as xxx.xxxxxxxxxx.xx.xx, and
all of which are registered URLs in the name of "IndiaWorld Communications
Private Limited" and Domains, particulars of all of which are set out in
Schedule 2 hereto and also has the right to use Softwares in connection with or
related to the above Portal and Domain web sites.
(C) The Company's Authorised, Subscribed and Paid-up Share Capital as at the
date of this Agreement is as under:
(i) Authorised Capital of Rs.5,00,00,000/- divided into 50,00,000
Equity Shares of Rs. 10/- each;
(ii) Subscribed and Paid up Capital of Rs. 20,00,000/- divided into
2,00,000 Equity Shares of Rs. 10/- each;
(D) The entire paid up Capital consisting of 2,00,000 Equity Shares is held as
of the date of this Agreement only by the Vendors and other persons as more
particularly mentioned in Schedule 1 hereto and there is no other person who has
any right, title or interest in that Paid up share capital
(E) The persons whose names are mentioned in Schedule 3 are acting in their
capacity as the Existing Directors of the Company and are in charge of the
ultimate management of the affairs of the Company.
(F) Subject to the general superintendence, direction and control of the
aforesaid Existing Directors, Mr.RJ as the Managing Director of the Company is
in charge of day-to-day management of the affairs of the Company.
(G) The Purchaser, being desirous of acquiring an option to acquire from the
Vendors 151,000 equity shares of Rs. 10 each in the capital of the Company, and
the Vendors are willing to grant the same upon the terms, and subject to the
conditions hereinafter mentioned.
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IN THE PREMISES AFORESAID AND FOR THE CONSIDERATIONS MENTIONED HEREINAFTER IT IS
HEREBY AGREED BETWEEN THE PARTIES HERETO AS UNDER:-
1. Definitions & Interpretation
----------------------------
For the purposes of this Agreement:
"Act" means the Companies Act, 1956 (1 of 1956) and includes any further
amendment or reenactment thereof.
"Agreement" means this Agreement.
"Agreement Date" means the date of this Agreement.
"Accounting Date" means 31st day of March 1999.
"Accountants" means a firm of Chartered Accountants appointed by the Purchaser
for financial appraisal of the Company upto the Agreement Date.
"Audited Annual Accounts" means the Balance sheet and the Profit and Loss
account for the financial period ending as on the Accounting Date including
notes to the accounts and other statements forming part thereof copies of which
are hereto annexed as Annexure A.
"Balance Sheet Date" means the Accounting Date.
"Base Date" means the 19th day of November, 1999.
"Business Day" means any day (other than Saturday and Sunday) on which banks are
open for business in Mumbai, India.
"Board" means the board of directors of the Company.
"Business Hours" means 10am - 6pm on any Business Day.
"Chief Promoter" means Mr.Xxxxxx Xxxx.
"Completion" means all the following shall have taken place (i) the Vendors
shall have received the Xxxxxxx Deposit; (ii) the Purchaser shall have acquired
1,51,000 shares
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pursuant to the exercise of the Option; (iii) 1,51,000 Shares shall have been
registered in the name of the Purchaser; and (iv) the Purchaser shall have paid
to the Vendors and the Vendors shall have received the Purchase Price for sale
of 1,51,000 Shares to the Purchaser.
"Completion Date" means 12.00 midnight of 30th day of June, 2000 or such other
date as may be mutually agreed, in accordance with the Option Period set out
hereinafter..
"Director" means a director, for the time being, of the Company.
"Xxxxxxx Deposit" means a non-refundable amount to be paid by the Purchaser to
the Vendors in consideration of the Vendors granting the Option to the Purchaser
to purchase the Shares at an aggregate price of Rs. 325.43 crores
"Escrow Agent" means Standard Chartered Bank.
"Escrow Agent Letter" means a letter in form and substance set out in Schedule 4
hereto.
"Financial Statements" means the Annual Accounts and Provisional Accounts
referred to collectively.
"Option" means an option granted to the Purchaser to purchase the 1,51,000
Shares.
"Option Period" the period commencing from the 1st day of April 2000 and ending
on the 30th day of June 2000 or ending on such other later date as provided
hereinafter in Clause 4.3 or such other date as may be mutually agreed.
"Person" means an individual, company, corporation, government or governmental
subdivision or agency, business, estate, trust, partnership, or association, two
or more of any of the foregoing having a joint or common interest, or any other
legal or commercial entity or undertaking; and `Persons' shall be construed
accordingly.
"Provisional Accounts" means collectively the Provisional Balance Sheet as at
the Base Date and the Provisional Profit and Loss Account including other
Schedules forming a part thereof for period from the 1st day of April, 1999 and
ending on the Base Date. Copies of which are hereto annexed as Annexure B
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"Provisional Balance Sheet" means the unaudited provisional balance sheet of the
Company as at the Base Date.
"Provisional Profit and Loss Accounts" means the unaudited provisional profit
and loss accounts for the period from 1st April 1999 and ending on the Base
Date.
"Purchase Price" means the purchase price to be paid by the Purchaser in the
amount set out in Clause 4.
"Purchaser's Nominee" means a director appointed by the Purchaser
"Purchaser Representative" means an individual recommended by Purchaser to be
appointed by the Company as Chief Operating Officer of the Company.
"Purchaser's Secondees" means one or more senior executive including Chief
Operating Officer of the Company appointed by the Purchaser.
"Requisite Consents" means corporate, statutory and other approvals
"Rupees" shall mean and refer to Indian Rupees only.
"Share" means an equity share of Rs. 10 each, fully paid up and "Shares" mean
1,51,000 equity shares in the equity share capital of the Company, held by the
Vendors.
"Share Certificate" means a certificate in respect of a Share.
"Transfer Deed" means an instrument of transfer of Shares prescribed under
Section 108 of the Act.
"Warranties" means the warranties set forth in Schedule 5;
Any reference to a statutory provision shall be construed as including reference
to:
(a) any statutory modification, consolidation or re-enactment (whether
before or after the date of this Agreement) for the time being in force;
(b) all statutory instruments or orders made pursuant to a statutory
provision;
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(c) any statutory provision which is a consolidation, re-enactment or
modification pertaining to the original enactment;
Unless otherwise stated, a reference to a Clause, Schedule or Annexure is a
reference to a Clause or a Schedule or an Annexure to this Agreement.
The Schedules and Annexures to this Agreement constitute an integral part
hereof.
The Headings in this Agreement are for convenience only and shall not constrain
or affect its construction or interpretation in any way whatsoever.
References to days or dates (including without limitation the Completion Date)
which do not fall on a Business Day, shall be construed as references to the day
or date falling on the immediately subsequent Business Day.
Wherever in this Agreement a period of time is referred to, the day on which
that period commences shall be the day on which the event occurs which causes
the period to start running.
As used in this Agreement, the term `to the best of the knowledge, information
and belief' when used in relation to the Vendors shall mean (a) within the
actual knowledge, information and belief of any director, officer, employees,
agent or representative of the Vendors or of the Company, and (b) within the
knowledge, information and belief that any of the same would have gained after
making due and careful enquiry into the matter in question.
Where the context so admits, any reference to the singular includes the plural,
and any reference to the plural includes the singular, and any reference to a
gender includes other gender or genders.
Any reference to a `Party' means the Vendors, the Purchaser, Existing Directors
or the Company, as the context may require, and references to the `Parties'
shall be construed accordingly.
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2. Agreement between the Parties
-----------------------------
2.1 In consideration of the Purchaser making payment of the non refundable
Xxxxxxx Deposit of the aggregate amount of Rs 51,31,00,000/- (Rupees Fifty One
Crores Thirty One Lacs only) to the Vendors as indicated against their names
respectively in Schedule 1 hereto on or before the date hereof the receipt
whereof the Vendors doth hereby admit and acknowledge the Vendors hereby grants
to the Purchaser the Option to purchase from the Vendors, and agree to sell to
the Purchaser 1,51,000 Shares against payment of Rs.325,43,00,000/- (Rupees
Three hundred twenty five crores forty three lacs only) in the aggregate upon
exercise of the Option by the Purchaser and the Existing Directors agree to
register transfer of the same upon the terms and conditions hereinafter set out,
upon the Purchaser purchasing the same on or before the Completion Date.
2.2 In consideration of the payment of the Xxxxxxx Deposit by the Purchaser to
the Vendors subject to the terms and conditions hereof, the Vendors shall, upon
exercise of the Option by the Purchaser, (as legal and beneficial owners), to
sell to the Purchaser and the Purchaser shall purchase from the Vendors 1,51,000
Shares, free from all claims, liens, charges, encumbrances and equities together
with all rights attached or accruing thereto (including without limitation
accrued dividends, if any) upon the terms and subject to the conditions set out
in this Agreement.
2.3 In further consideration of the payment by the Purchaser of the Xxxxxxx
Deposit as aforesaid the Existing Directors agree to entrust the power and
authority to look after management of day to day operations of the Company to a
person nominated by the Purchaser as the Chief Operating Officer who shall cease
to hold such office if the Completion does not take place on the Completion
Date. The Existing Directors agree to resign as the Directors of the Company on
Completion, in the event of the Purchaser purchasing 1,51,000 Shares on or
before the Completion Date.
2.4 It has been specifically agreed by and between the Parties hereto that the
agreement for purchase of 1,51,000 Shares by the Purchaser from the Vendors and
the agreement of the Vendors to sell the same to the Purchaser is on the
Completion Date and the Parties have agreed to deliver the Share Certificates,
Transfer Deeds and Demand Drafts for payment thereof by the respective Parties
to the Escrow Agent, and in consideration of the Purchaser making payment of the
Xxxxxxx Deposit on or before the Agreement Date this Agreement has become
effective between Parties from the
9
Agreement Date. The Completion shall include without prejudice to the
particulars set out in Clause 5 hereinafter, payment of the Purchase Price by
the Purchaser to the Vendors, sale and transfer of the Shares by the Vendors to
the Purchaser, registration of the same by the Company in the name of the
Purchaser more particularly set out hereinafter, subject to the Purchaser
exercising the Option to purchase 1,51,000 Shares. The Escrow Agent shall not
deliver any of the Share Certificate or any Transfer Deeds to the Purchaser
except as otherwise specifically provided in this Agreement.
2.5 Each of the Vendors, the Purchaser, the Existing Directors and the Company
agrees to take all steps and to do all acts, deeds and things for discharging
its obligations for ensuring that the Completion shall take place on or before
the Completion Date.
2.6 In order to ensure that the Shares, the subject matter of this Agreement,
are duly acquired, transferred and registered in the name of the Purchaser, the
Directors shall cause the Company to approve registration of the Shares in the
name of the Purchaser at a meeting of the Board duly convened with requisite
quorum on or before the Completion Date.
2.7 The Vendors and the Existing Directors shall at the costs of the Company
provide and request the Company's auditors and cause the employees to provide
support and assistance upto 31st March, 2001 to the Company or as may be
reasonably requested by the Purchaser for the management of the Company and
conduct of its affairs including the business development and growth which the
Purchaser desires to make.
3. Conditions Precedent
--------------------
3.1 The Completion shall not take place before the commencement of the Option
Period.
3.2 The Purchaser, even after paying the Xxxxxxx Deposit shall not be entitled
to purchase the Shares unless the Purchaser shall have:
(a) deposited with the Escrow Agent on or before the Completion Date the
three demand drafts for payment of the Purchase Price to the Vendors
in the amounts and in the names of the Vendors as indicated in
Schedule 1,
(b) paid the stamp duty on the Transfer Deeds,
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(c) furnished to the Chief Promoter as of the Agreement Date a copy
certified by the Chief Financial Officer of the Purchaser as true copy
of the original of the resolution in the form given in Schedule 6
passed at the meeting of the board of directors of the Purchaser
authorising its official/s / representative/s named therein to sign,
execute, stamp and deliver this Agreement and the Transfer Deeds and
thereby to bind itself to perform its obligations as set out herein;
and
3.3 The Vendors shall not be entitled to receive from the Escrow Agent the
amounts deposited by the Purchaser and the documents referred to in Clause 3.2
above unless
I the Vendors shall have delivered the following :
(a) To the Purchaser a copy certified by the Chief Promoter as true copy
of a resolution in the form given in Schedule 7 passed at a meeting of
the Board authorising its official(s)/representative(s) named therein
to sign, execute and deliver this Agreement and thereby to bind itself
to perform its obligations as set out herein;
(b) To the Purchaser a copy certified by the Chief Promoter as true copy
of a resolution in the form given in Schedule 8 passed at a meeting of
X.X. Xxxx Impex & Investments Private Limited authorising its
official(s) named therein to sign, execute and deliver this Agreement
and thereby to bind itself to perform its obligations as set out
therein.
(c) Delivered to the Escrow Agent all original Share Certificates in
respect of 1,51,000 Shares and the relevant Transfer Deeds duly
executed by or on behalf of each of the Vendors are to deliver the
same to the Purchaser for registration by the Company.
(d) Handed over to the Purchaser a letter of resignation as of the
Agreement Date by the Purchaser's nominee and the Purchaser's
Secondees resigning thereunder as Director of the Company with effect
from the Completion Date in the event of the Completion not taking
place on the Completion Date for any reason whatsoever.
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(e) To the Purchaser a power of attorney each from the Vendors authorising
the Purchaser to renew and/or replace any transfer deeds the validity
of which shall have expired and sign execute and deliver to itself
replaced transfer deed on behalf of the Vendor who is the executant of
such transfer deed the validity of which shall have expired.
(f) To the Purchaser resignation letters of each of the Existing Directors
resigning as a Director of the Company with effect from the Completion
Date in the event of the Completion taking place on the Completion
Date.
And
II the Vendors duly complete or arrange to complete the matters specified
in Clause 3.3 I so as to ensure of the transfer of Shares in the
names of the Purchaser in the Register of Members of the Company so as
to enable the Escrow Agent to deliver the duly registered Shares to
the Purchaser.
3.4 After receiving the intimation from the Parties the Company shall
(a) register the Power of Attorney referred to in Clause 3.3 I (d).
(b) address and deliver a letter in form and substance satisfactory to the
Purchaser stating, inter alia, that the Company has verified each of
the Share Certificates in respect of 1,51,000 shares and the relative
Transfer Deeds and that Transfer Deeds have been duly and properly
executed by or on behalf of the Vendors and that no lien has been
noted and or recorded by the Company in respect of any of the 1,51,000
shares; and.
(c) Furnish to the Parties a copy certified as true copy by the Chief
Promoter and Chairman of the Company of a resolution passed at a
meeting of the Board appointing an individual nominated by the
Purchaser as Director of the Company with effect from the Agreement
Date.
3.5 Upon the Completion of the above conditions on its part to be fulfilled the
Purchaser shall be entitled to require the Escrow Agent to deliver the Share
Certificates in respect of 151,000 shares and cause Transfer Deeds to be
validated or cause the Escrow Agent to execute new Transfer Deeds in replacement
of the old for sale and transfer of 151,000 shares to the Purchaser as and when
so requested by the Purchaser.
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4. Payment of Xxxxxxx Deposit and Purchase Price.
-----------------------------------------------
4.1 The Purchaser has paid to the Vendors non-refundable Xxxxxxx Deposit
amounting to Rs.51,31,00,000.00 (Rupees Fifty one crores thirty one lacs only)
on or before the Date hereof and receipt whereof is hereby admitted and
acknowledged by the Vendor.
4.2 The Purchaser shall make payment to the Escrow Agent after the commencement
of the Option Period but before the Completion Date of the aggregate amounts of
Rs. 3,25,43,00,000.00 (Rupees three hundred twenty five crores forty three lacs
only) by 3 demand drafts in the amount and drawn in favour of three of the
Vendors for purchase of the Shares as mentioned in Schedule 1.
4.3 In the event of the Purchaser failing to purchase 151,000 Shares before the
Completion Date and requesting the Vendors to extend the Completion Date upto
30th September, 2000 subject to such request having being made before 31st May,
2000, the Vendors shall allow the Purchaser to purchase 151,000 Shares at any
time before the 30th September, 2000 subject to the Purchaser paying the
additional and increased amount as provided in clause 5.3 set out hereinafter
subject however, to the Purchaser having satisfied all other conditions on his
part to be fulfilled as set out in clause 3 hereinbefore including the
conditions as to the exercising of the Option after the commencement of the
Option Period.
5. Completion
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5.1 Subject to Clauses 3 and 4 above, upon the Purchaser agreeing to exercise
the Option and the Completion shall take place after the 1st day of April, 2000
on or before the Completion Date at Mumbai as under:
(a) the Escrow Agent shall after causing the stamps to be affixed by the
Purchaser on the Transfer Deeds, obtain signatures of the Purchaser on the
Transfer Deeds in respect of 151,000 Shares transferred by each of the
Vendors to the Purchaser.
(b) after obtaining signatures of the Purchaser as aforesaid on the Transfer
Deeds the Escrow Agent shall forward the same to the Company with a request
to transfer 1,51,000 Shares to the Purchaser from the name of the Vendors
to the name of the Purchaser.
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(c) the Company shall convene a meeting of the Board and approve transfer of
1,51,000 Shares from the Vendors to the name of the Purchaser and authorise
entry of the name of the Purchaser as the registered holder of 1,51,000
Shares in the books and records of the Company including in its register of
members and thereafter direct the Share Certificates pertaining to 1,51,000
Shares to be endorsed in the name of the Purchaser and to deliver the Share
Certificates to the Escrow Agent with a request to give the same to the
Purchaser.
(d) upon receiving the Share Certificates duly endorsed in the name of the
Purchaser the Escrow Agent shall deliver the said Share Certificates to the
Purchaser and shall hand over the demand drafts received by it from the
Purchaser to the Vendors.
5.2 In the event of the Completion not taking place latest by the Completion
Date for the failure on the part of the Purchaser to pay the amount set forth in
Clause 4, the Escrow Agent shall, unless otherwise directed by the arbitrators,
return and deliver the Share Certificates, the Transfer Deeds and resignation
letters of the Existing Directors and resignation letters of the Purchaser's
nominees and Purchaser's Secondees as may be deposited with the Escrow Agent to
the Vendors and return the three Demand Drafts to the Purchaser and in such an
event notwithstanding the fact that the Completion shall not have taken place on
the Completion Date, the amount paid by the Purchaser to the Vendors as and by
way of non-refundable Xxxxxxx Deposit shall be retained and by shall stand for
failed to the Vendors and the Vendors shall have no liability whatsoever to
return or refund the same to the Purchaser.
5.3 Notwithstanding anything contained hereinabove, if requested by the
Purchaser the Vendors shall extend the Completion Date not beyond 30th
September, 2000 for the Completion to take place on or before that date subject
to the condition that the Purchaser shall pay the Purchase Price increased by an
additional amount calculated at the rate of 16% p.a. on the Purchase Price of
1,51,000 Shares for the period beginning from 1st July, 2000 until the extended
Completion Date and in that event all the provisions, set out in Clause 5.1
shall mutatis mutandis apply for the Completion to take place on such other
later date subject, however, to the payment of increased Purchase Price
calculated as above said.
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5.4 In the event of the Completion taking place on the Completion Date
including any later Completion Date, the Vendors and the Existing Directors
shall assign transfer and make available to a person nominated by the Purchaser
all the technical, administrative and billing contracts pertaining to the
domains owned and or hosted by the Company.
6. Warranties
----------
6.1 The Purchaser has entered into this Agreement relying upon the
representations and warranties of the Vendor terms of the Warranties as set out
in Part 1 of Schedule 5 hereto, and save as of the date of this Agreement, each
of the Warranties shall be separate and independent and shall be deemed made
whether or not the Purchaser knew or could have discovered (whether by any
investigation made by it or on its behalf into the financial affairs of the
Company or otherwise) that any of the Warranties has not been complied or
carried out or is otherwise untrue or misleading.
6.2 The Vendors have entered into this agreement relying upon the
representations and warranties of the Purchaser as to the facts and statements
as on the agreement date and more particularly set out in Part II of Schedule 5
of the warranties and each of the warranties shall be separate and independent
and shall be deemed made whether or not the vendors knew or could have
discovered (whether by an investigation made by any of them or otherwise) that
any of the warranties has not being complied with or carried out or is otherwise
untrue or misleading.
6.3 Each Party undertakes to disclose to the other Party promptly anything
which comes to its notice which is inconsistent with any of its Warranties.
7. Covenants by the Parties
------------------------
7.1 The Parties hereto agree that each of them shall observe and/or perform
the following covenants and conditions until the termination of the agreement.
(a) The Board shall co-opt as a director of the Company the Purchaser nominee;
(b) The Company shall form a management committee nominated by the Purchaser in
consultation with Mr. RJ and such management committee shall be incharge of
day to day management of the Company.
15
(c) The Vendors and the Existing Directors shall at the cost of the Company
provide and request the Company's auditors and cause the employees to
provide support and assistance upto 31st March, 2001 to the Company or as
may be reasonably requested by the Purchaser for the management of the
Company and conduct of affairs of the Company including for the development
of the business.
(d) The Purchaser shall not do any act of commission or omission in respect to
the business of the Company which in the opinion of Mr. X X will adversely
affect any traffic or value of any of the websites, namely Xxxxxxxx.xxx ,
Xxxx.xxx and Xxxx.xxx.
(e) The Vendors and the Existing Directors shall exercise all rights as
shareholders and directors consistent with the provisions of this Agreement
and shall not do any act of commission or omission which will in any manner
adversely affect the implementation of this Agreement and vesting of the
rights in the Purchaser.
(f) Each of the Vendors and the Existing Directors hereby undertakes to renew
and/or replace from time to time any transfer deed the validity of which
shall have expired and shall execute a power of attorney in favour of the
Escrow Agent to renew and/or replace the transfer deeds required to be
renewed or replaced as aforesaid.
(g) The Purchaser through the Management Committee appointed for the purpose as
mentioned in Clause (b) above, shall be free to undertake the business of
the Company in the manner the Purchaser considers advantageous and
beneficial to the Company and for achieving growth and development of the
business. However, the Purchaser shall not, without the written consent of
Mr. X.X make any commitment involving any financial outlay exceeding Rs. 50
lakhs and further that in the event of Mr. X.X being of the opinion that
such commitment is not necessary to be incurred in the interest of the
Company's business and the Purchaser is not agreeable with that view, the
Purchaser may nevertheless incur such expenditure subject to the conditions
that in the event of the Completion not taking place on the Completion
Date, the Purchaser shall assume liability for the same and reimburse to
the Company such part of the commitment as shall have already been
incurred. The Purchaser shall however, he entitled to refer the matter to
arbitrators and establish to the satisfaction of the arbitrator that such
16
financial out lay incurred are in fact reasonable and beneficial to the
Company and to the Vendors as Shareholders of the Company and the Vendor
have suffered no prejudice by reason of such financial outlays. In such an
event, the Purchasers shall not be liable to compensate the Company or the
Vendors to the extent the arbitrators decide the matter in the favour of
the Purchaser.
8. Exclusivity and Non Competitions
--------------------------------
8.1 None of the Vendors shall negotiate with any third party for sale,
mortgage, pledge, encumber or dispose of any of the Shares or otherwise create
any interest in the shares in any manner whatsoever until 31st December 2000 or
such other later date as the Parties agree, except that in the event
(i) that this Agreement shall have been terminated by the Parties by mutual
agreement or
(ii) the Completion not taking place on the Completion Date on account of a
default of the Purchaser in payment of any money as provided herein.
8.2 None of the Vendors and the Existing Directors shall directly or indirectly
undertake or establish or caused to be undertaken or establish any enterprises
for undertaking the business in competition with or similar to the business of
the Company upto six months after the Completion Date in the event of the
Completion taking place and or upto 31st December, 2000 in the event of the
Completion not taking place on account of default of the Vendors, except the
business of messaging services and software development currently being carried
on in the name of Netcore Solutions Private Limited.
9. Term and Termination
--------------------
9.1 This Agreement shall become effective from the Agreement Date and shall
remain effective and valid until the Completion Date.
9.2 In the event of the Completion not taking place latest by the Completion
Date, for failure on the part of the Purchaser in depositing the three bank
drafts aggregating Rs 325,43,00,000/- (Rupees Three hundred twenty five crores
forty three lacs only) or for any reason not attributable to the Vendors the
Escrow Agent shall return the Share
17
Certificates, the Transfer Deeds, the letters of resignation written by the
Existing Directors and the letter of resignation written by the Chief Operating
Officer appointed by the Purchaser to the Vendors.
9.3 In the event of the Completion not taking place latest by the Completion
Date for any default on the part of the Vendors and subject to the Purchaser
having duly deposited the three bank drafts aggregating to Rs 325,43,00,000/-
(Rupees Three hundred twenty five crores forty three lacs only) and fulfilled
the obligations on his part to be fulfilled, the Escrow Agent shall, unless
otherwise agreed to by the Purchaser in writing withhold the delivery of the
bank drafts and other documents to the Vendors, till the Vendors duly fulfill
their part of the obligation under this Agreement.
10. Assignment
----------
This Agreement and the obligations of the Parties hereto shall enure for the
benefit of the Parties and for their respective successors. But neither the
Chief Promoter nor the Vendors, nor any of the Existing Directors, nor the
Company nor the Purchaser shall be entitled to assign any of its rights,
liabilities and obligations hereunder.
11. Costs and expenses
------------------
11.1 Each Party shall pay its own costs in relation to the negotiation leading
up to the sale of the Shares and to the preparation, execution and carrying into
effect of this Agreement and of all other documents referred to in it.
11.2 The Purchaser shall be responsible for the stamping of the transfer form
for transfer of the Shares delivered by the Vendors and for the payment of the
relevant stamp duty.
11.3 The Vendors agree to bear all fees and expenses payable in relation to
the appointment of the Escrow Agent.
12. General
-------
12.1 If any Party hereto consists of more than one person then the liability of
those persons in all respects under this Agreement shall be a joint liability of
all of those persons and a liability of each of those persons severally.
18
12.2 No variation, modifications or waiver of any provision of this Agreement
nor consent to any departure by any party therefrom, shall, in any event be of
any force or effect unless the same shall be confirmed in writing, signed by the
Parties, and then such variation, modification waiver or consent shall be
effective only to the extent, of which it may be made or given.
12.3 No Failure, delay, relaxation or indulgence on the part of any party in
exercising any power or right conferred upon such party in terms of this
Agreement shall operate as a waiver of such power or right, nor shall any single
exercise of any such power or right preclude any other or future exercise
thereof or the exercise of any other power or right under this Agreement.
12.4 If any provisions of this Agreement shall be invalid and not enforceable
in accordance with its terms, all the provisions which are self-sustaining and
capable of separate enforcement without regard to the invalid provisions shall
be and continue to be valid and enforceable in accordance with their terms.
12.5 Each Party to this Agreement shall sign, execute, deliver and register and
obtain all such consents as are required and do all deeds and things as may be
reasonably required by the other party so as to effectually enable the other
party to carry out and give effect to the term and intention of the parties
under this Agreement whether before or after completion.
12.6 The parties to this Agreement shall exercise their rights shall cause
their representatives and nominees on the Board of Directors of the Company, to
do and perform all acts, deeds and things as may be necessary or expedient to
give effect to the terms and intent of this Agreement.
12.7 Each of the parties hereto undertakes with the other:-
(a) to perform and observe and to procure that the Company will perform and
observe all the provisions of this Agreement;
(b) to take all necessary steps on its part to give full effect to the
provisions of this Agreement.
19
(c) without prejudice to the generality of the foregoing to exercise and
procure that every person for the time being representing it will exercise
or refrain from exercising any rights of voting at any meeting of the
members or of the directors of the Company so as to ensure the passing of
any and every resolution necessary or desirable to procure that the
affairs of the Company are not conducted contrary to this Agreement and
likewise so as to ensure that no resolution is passed which does not
accord with such provisions.
12.8 In entering into this Agreement the parties recognise that it is
impractical to provide for every contingency that may arise in the course of the
performance thereof. Accordingly, the parties declare it to be their intention
that this Agreement shall operate between them with fairness and without
detriment to the interest of any of them and if in the course of the performance
of this Agreement unfairness to any party hereto shall be manifest, they will
use their best endeavors to remove the cause or causes of the same.
12.9 Each Party shall bear its own costs of its legal advisor and all other
expenses in connection with this Agreement and the completion hereof except as
otherwise provided herein.
13. Conciliation and Arbitration and Claim under Warranty
-----------------------------------------------------
13.1 In the event of any dispute or difference between the Parties the same
shall be resolved by the Parties by conciliation by a sole conciliator appointed
by mutual agreement between the Parties to the dispute, and in the event of any
failure of the Parties to appoint a common conciliator, by a panel of
conciliators, one Conciliator to be appointed by the Vendors and one conciliator
shall be appointed by the Purchaser and such two selected conciliators shall
jointly appoint a third conciliator to form a panel of three conciliators. The
decision of the conciliators may be accepted by the Parties and the Parties
shall endeavor to the extent feasible to abide by the decision of the
conciliator(s). If, however a Party is dissatisfied or is not willing to accept
the decision of the conciliators, or if, the conciliator/s have not been
appointed within a period of 30 days from the date on which the Party shall have
demanded reference to conciliation, that matter of dispute or difference shall
be resolved through arbitration the Vendor shall appoint one arbitrator and the
Purchaser shall appoint one arbitrator and such two appointed arbitrators shall
then appoint a third arbitrator to form a panel of three arbitrators. The
decision given by majority of the arbitrators shall be award of the
20
Arbitrators and the same shall be final, conclusive and binding upon the
Parties.
13.2 The conciliation and the arbitration proceedings shall be conducted in the
city of Mumbai in accordance with the provisions of Arbitration and Conciliation
Act, 1996 and the language for arbitration shall be English.
14. Service of notice
-----------------
14.1 Any notice and any certificate permission consent licence approval or
other communication or authorisation to be served upon or delivered or given or
communicated to one party hereto by the other (in this Clause called a
"communication') shall be in the form of a document in writing, without
limitation including fax and telegram
14.2 All communication shall be made
(i) to all the Vendors and the Existing Directors at the following address or
to the following fax number:
Addressed to :
(i) Mr. Xxxxxx Xxxx
Fax No: 00 - 00 - 000 0000
(xx) Xx. Xxxxxxx Xxxx
Fax No: 00 - 00 - 000 0000
(xxx) X. X. Xxxx Impex & Investments Private Limited
Fax No: 91 - 22 - 000 0000
for the attention of: Xx.X.X.Xxxx
(ii) to the Purchaser at the following address or to the following fax number:
Address: II Floor, 1-8-303/36, Mayfair Centre, S.P Road, Secunderabad 500 003
Fax Number: 91 - 44 - 432 6295
For the attention of : Mr.T.R.Sanathanakrishnan
21
(iii) to the Company at the following address or to the following fax number:
Address: 304, Xxxxxxxx Xxxxxxxx, 000, Xxxxxxx Xxxxx, Xxxxxx - 400 021.
Fax Number : 91 - 22 - 202 3904
For the attention of : Xx.X.X.Xxxx
14.3 All communication shall be delivered by hand during Business Hours or sent
by fax, telegram or sent by registered post (where possible by airmail).
14.4 A communication shall have effect for the purpose of this Agreement and
shall be deemed to have been delivered to and received by the party to whom it
was addressed:
14.4.1 if delivered by hand upon receipt by the relevant person for whose
attention it should be addressed as provided above, or upon receipt by any other
person then upon the premises at the relevant address who reasonably appears to
be authorised to receive post or other message on behalf of the relevant party;
14.4.2 if sent by fax upon the transmission of the communication to the
relevant fax number and the receipt by the transmitting fax machine of an
answer-back code showing that the fax message has been received properly by the
fax code showing that the fax machine to which it was transmitted; and
14.4.3 if sent by telegram twenty four hours after the text of the cable has
been given to the relevant telegraph company or other authority for transmission
unless before the expiry of that period an advice of inability to deliver is
received by the party making the communication;
14.4.4 if sent by registered post seven days from the date upon the
registration receipt provided by the relevant postal authority.
14.5 Each Party shall be obliged to send a communication to the other in
accordance with this Clause notifying any charges in the relevant details set
out in the second paragraph of this Clause, which details shall then be deemed
to have been amended accordingly.
14.6 Any communication received by the Chief Promoter shall be deemed to have
been received by all the Vendors.
22
LIST OF SCHEDULES
-----------------
Serial No. Schedule Number Particulars Page Nos.
--------------------------------------------------------------------------------------------------
1 Schedule 1 List of Members and their 24
Shareholding
--------------------------------------------------------------------------------------------------
2. Schedule 2 List of Directors 25
--------------------------------------------------------------------------------------------------
3. Schedule 3 Websites and domains owned by the 26
Company
--------------------------------------------------------------------------------------------------
4. Schedule 4 Escrow Agent Letter 27 - 29
--------------------------------------------------------------------------------------------------
5. Schedule 5 Warranties 30 - 39
--------------------------------------------------------------------------------------------------
6. Schedule 6 Resolution passed by Board of 40
Directors of the Purchaser
--------------------------------------------------------------------------------------------------
7. Schedule 7 Resolution passed by Board of 41 - 42
Directors of the Company
--------------------------------------------------------------------------------------------------
8. Schedule 8 Resolution passed by Board of 43
Directors of X. X. Xxxx Impex &
Investments Private Limited
--------------------------------------------------------------------------------------------------
23
SCHEDULE 1
INDIAWORLD COMMUNICATIONS PRIVATE LIMITED
LIST OF MEMBERS AND THEIR SHAREHOLDINGS
Sr Name of the Share Holders and No. of Distinctive Nos. Particulars Price Remarks
. Address Shares To From of Shares
N being sold
o. in
Agreement
-------------------------------------------------------------------------------------------------------------------------
1 X. X. XXXX IMPEX & INVESTMENTS 150,000 1-24000 1,50,000 3,232,748,344.37 Acting as
PVT. LTD. 24501-45000 Vendors
304, Xxxxxxxx Xxxxxxxx, 000, 00000-00000
Xxxxxxx Xxxxx, Xxxxxx 400 021 90001-123000
130001-150000
170001-190000
197501-200000
-------------------------------------------------------------------------------------------------------------------------
2 XXXXXX X. XXXX 20,000 150001-170000 500 10,775,827.81 Acting as
X-00 Xxxxxxxxxx Xxxxxxxx, 00 Xxxxxx
Xxxxxx Xxx Xxxx, Xxxxxx - 400 036
-------------------------------------------------------------------------------------------------------------------------
3 X.X. XXXX 7,500 190001-197500 - Not
X-00 Xxxxxxxxxx Xxxxxxxx, 00 acting as
Nepean Sea Road, Mumbai - 400 036 Vendor
-------------------------------------------------------------------------------------------------------------------------
4 XXXXXX X. XXXX 7,500 24001-24500 - Not
X-00 Xxxxxxxxxx Xxxxxxxx, 00 123001-130000 acting as
Nepean Sea Road, Mumbai - 400 036 Vendor
-------------------------------------------------------------------------------------------------------------------------
5 X.X. XXXX HUF 5,000 45001-50000 - Not
X-00 Xxxxxxxxxx Xxxxxxxx, 00 acting as
Nepean Sea Road, Mumbai - 400 036 Vendor
-------------------------------------------------------------------------------------------------------------------------
6 XXXXX X. XXXX 5,000 50001-55000 - Not
X-00 Xxxxxxxxxx Xxxxxxxx, 00 acting as
Nepean Sea Road, Mumbai - 400 036 Vendor
-------------------------------------------------------------------------------------------------------------------------
7 XXXXXXX X. XXXX 5,000 85001-90000 500 10,775,827.81 Acting as
X-00 Xxxxxxxxxx Xxxxxxxx, 00 Xxxxxx
Xxxxxx Xxx Xxxx, Xxxxxx - 400 036
-------------------------------------------------------------------------------------------------------------------------
200,000 1,51,000 3,254,300,000.00
-------------------------------------------------------------------------------------------------------------------------
24
SCHEDULE 2
----------
1. Website owned by IndiaWorld Communications Private Limited is
xxx.xxxxxxxxxx.xx.xx
--------------------
2. Domains owned by IndiaWorld Communications Private Limited, as under:
----------------------------------------------------------------------------------------------------------
Xxxxxxxx.xxx XxxXxxxxx.xxx Xxxxx.xxx Xxxxxxx.xxx
----------------------------------------------------------------------------------------------------------
Xxxx.xxx IndiaLine. com Xxxx.xxx IndiaTradePoint. Com
----------------------------------------------------------------------------------------------------------
Xxxxxxxx.xxx XxxxxXxxxx.xxx Xxxxxxxxxx.xxx Xxxxxxxxxxxx.xxx
----------------------------------------------------------------------------------------------------------
Xxxx.xxx XxxxxXxxxxxxx.xxx Xxxxxx.xxx XxXxxxx.xxx
----------------------------------------------------------------------------------------------------------
Xxxx.xxx Xxxxxxx.xxx Xxxxxxxxxxxxx.xxx
----------------------------------------------------------------------------------------------------------
Xxxxx.xxx Xxxxxxxxx.xxx XxxxxXxxxx.xxx
----------------------------------------------------------------------------------------------------------
25
SCHEDULE 3
----------
M/S. INDIAWORLD COMMUNICATIONS PRIVATE LIMITED
----------------------------------------------
LIST OF DIRECTORS
-----------------
Particulars Date of Appointment
----------------------------------------------------------------------------------------
1 Xx. Xxxxxx X. Xxxx (Director) (Managing July 21st, 1992
Director) July 4th, 1996
----------------------------------------------------------------------------------------
2 Xx. X.X. Xxxx January 16th, 1995
----------------------------------------------------------------------------------------
3 Xxx. Xxxxxx X. Xxxx July 21st, 1992
----------------------------------------------------------------------------------------
26
SCHEDULE 4
ESCROW AGENT LETTER
1. We, all the under signed request you
(i) to receive on or before 30th September, 2000 (the "Completion Date")
for safe custody and holding to the order of the undersigned jointly
except as otherwise provided in paragraph 2 set out hereinafter
(a) ______________ Share Certificates (the "Share Certificates") in respect
of 1,51,000 Equity Shares (the "Shares") issued by IndiaWorld
Communications Private Limited (the "Company"), particulars whereof are
given in Schedule 1
(b) Transfer Deeds (the "Transfer Deeds") executed by the holders of the
Shares whose names are also given in Schedule 1 (the "Vendors") or new
transfer deeds in replacement thereof executed by their Agent namely :
Xxxxxx Infoway Limited ("SIL") (SIL acting through its authorised
representative who shall have been authorised pursuant to resolution of
its Directors on the lines of Schedule 2 to act on behalf of SIL).
(the Share Certificates and the Transfer Deeds are collectively
referred to as the "Documents")
(c) Three Powers of Attorney (on lines of the draft given in Schedule 3)
given by the Vendors in favour of SIL (SIL acting through its
authorised representative) authorising SIL to execute new Transfer
Deeds and deposit the same in replacement of those transfer deeds whose
validity shall have expired.
(d) Three Demand Drafts issued by Bank for aggregating amount of Rs.
325,43,00,000 (Rupees Three hundred twenty five crores forty three
lakhs) delivered by SIL in the name of the Payees mentioned in Schedule
1.
27
(e) A resolution passed at a meeting of the Directors of the Company on the
lines of the draft given in the Schedule 4 approving and directing
registration of the transfer of the Shares with effect from the date
therein mentioned in favour of SIL (which shall not be later than the
Completion Date)
And hold the aforesaid Documents until the Completion Date unless otherwise
requested by all the undersigned.
(ii) On the Completion Date or earlier but not before 1st April, 2000 (if
agreed by all the undersigned) you shall hand over (a) Transfer Deeds
and the Share Certificates and the resolution referred to in (i) (e)
above to SIL, and (b) Three Demand Drafts to the Vendors
2. Within 30 days after the Completion Date, you will return the Documents to
the persons who deposited the same with you unless all the undersigned
jointly request you to hold the documents for a further specified period and
you also agree to the same. Your action in this respect will not be
challenged by anyone or all of us.
3. You will be paid a fees of Rs.6.5 lakhs for rendering the above services as
under:
Rs.1.5 lakhs on execution of this agreement
Rs.5 lakhs by 31st March, 2000 or on receipt or instructions to release
documents from safe custody, whichever is earlier.
4. In the event if any dispute between the parties, We all hereby severally
and/or jointly agree that you will not be made party to any suit/proceedings
except as necessary or proforma party and no relief will be sought against
you.
5. All the Vendors severally and jointly agree to pay you/reimburse you for any
costs, expenses that you incur or might incur on being impleaded as
necessary party or proforma party. Further, we all severally and/or jointly
hereby undertake to indemnify you for any loss, costs, expenses, damages
etc., that you suffer or incur or might suffer or incur as a consequence of
or for reasons associated with your holding the Documents in safe custody or
returning or passing on the
28
Documents and that we shall severally and/or jointly pay you the same
forthwith on your first demand without demur.
6. In the event of any future instructions being unclear in your opinion, you
shall revert to both the parties to get the instructions clarified. Should
the lack of clarity persist, you will not carry out any such unclear
instructions. For such non performance, we hereby jointly and severally
declare that you will not be liable for any loss, damages or injury suffered
by any or all of us in relation to or as a consequences of your holding the
Documents or returning or passing on the Documents and also on your not
parting with the Documents.
7. Besides, you are also entitled to a fee of Rs. 3,000 per day of holding the
Documents if you have to hold the same beyond the Completion Date due to any
order of the Court/Judicial/Quasi judicial body.
8. You are also entitled to exercise lien on the Documents till your
fees/charges etc., are paid in full.
9. All the instructions as aforesaid shall be given by the undersigned in
writing
The above instructions may be modified or revoked only by all the undersigned
advising you about the same and except of the aforesaid these instructions are
irrevocable.
Note: Schedules to the Escrow Agent Letter are not annexed to this Agreement
29
SCHEDULE 5
----------
PART I
Vendors Warranties
------------------
The Vendors represents and warrants to Purchaser as follows:
1. One of the Vendors is a Company with limited liability duly incorporated
and existing under the laws of India and has the power and authority to
enter into this agreement and to consummate the transactions contemplated
herein.
2. The execution and delivery of this agreement and performance of the
transactions contemplated herein have been duly and effectively authorised
to the extent required by applicable Laws. The Company and each of the
Vendors have the full legal capacity, right, power and authority, without
the consent of any other person, to execute and deliver this Agreement, and
tocarry out the transactions contemplated hereby.
3. Neither the execution, delivery nor performance of this agreement by the
Vendors nor the consummation of the transactions contemplated by this
agreement will:
(i) Conflict with, or result in a breach, violation or default of any
provisions of the memorandum of association or articles of
association of the Company; or
(ii) result, with or without the lapse of time, in a breach of any of the
terms or provisions of, or constitute a default under, any mortgage,
licence, permit, agreement or any other instrument affecting
Purchaser or by which Purchaser may be bound; or
(iii) violate any law, order, judgement, decree, statute, rules or
regulation applicable to Vendor, of any Governmental authority
(iv) restrict the ability of the Company to carry on its business, or
(v) violate, contravene, breach or conflict with any provision of and
constitute a default under, any other agreement or instrument to
which the Company and/or the Vendors are parties or by which they or
their property or assets may be bound.
30
4. The Vendors have not concealed any relevant and material fact or
information from Vendors, which materially and adversely affects the
business prospects.
5. The Vendors have all necessary permits, licences and governmental
authorisations required by it for the purpose of its Business under all
applicable laws and in particular all permissions and authorisations.
6. The authorised capital of the Company is 50,00,000 equity shares of the
face value of Rs 10 each and the issued and outstanding capital of the
Company is 2,00,000 equity shares with a face value of Rs.10 each. All the
shares of the Company have been duly authorised, validly issued and are
fully paid. None of the shares have been issued in violation of any
preemptive rights. There are no restrictions affecting the transferability
of any portion of the shares except as disclosed to the Purchaser. There
are no outstanding options, rights including pre-emption rights, warrants,
conversion rights or other agreements or commitments to which the Company
or any or all of the Vendors is/are a party or by which either is bound,
providing for the issuance of additional shares of the capital of the
Company or for any other adjustment, purchase or transfer affecting the
capital. There are no rights in or claims possessed by any person against
the Company, either now or at any future date and whether contingent or
not, to compel such an issuance, adjustment or transfer.
7. There are no mortgage, charge, pledge, lien or other form of security or
encumbrance on, over or affecting any of the issued share capital of the
Company nor is there any commitment to give or create any of the foregoing,
and no person has claimed to be entitled to any of the foregoing.
8. As of the date hereof, the Vendors are, and at the Completion date shall
be, the legal and beneficial owners and they shall have good and
indefeasible title to all the shares agreed to be sold and transferred to
the Purchaser in terms of this Agreement free and clear of any liens,
encumbrances, security interests, restrictive agreements, transfer
restrictions, voting trust arrangements, claims or imperfections of any
nature whatsoever.
9. The assets of the Company have been insured in accordance with good
commercial practice. Such insurance policies are complete, correct and are
31
currently in full force and effect and nothing has been done or omitted to
be done which could make such insurance policies void or voidable and there
is no claim outstanding under any such policy.
10. The Company has filed or caused to be filed all necessary information,
notices, computations and returns including tax returns which ought to have
been made during the previous financial years to the relevant authorities
and has paid all the amounts assessed/directed by such authorities
including all taxes. All such information, notices, computations and
returns submitted to the relevant authorities are true and accurate and are
not the subject of any dispute nor are likely to become the subject of any
dispute with those authorities.
11. The Company has observed and performed all the terms and conditions on its
part to be observed and performed and fulfilled all of its commitments
under all of its contracts of material nature or involving substantial
financial outlay.
12. The Company has not taken any loan or advances or credit facilities from
any bank, institution or others for the business of the Company and has not
given any corporate guarantee or assurance for any such loans, advances or
credit facilities given to any other person except the loan availed by the
Company from Intel Pacific Inc. upon terms and conditions more particularly
set out in the Website Development Agreement entered into by the Company
with Intel Pacific Inc.
13. The Balance Sheet and Profit and Loss Account as at March 31, 1999
(including the notes on accounts and other papers forming part of the
Annual Accounts) and the provisional accounts as at November 19, 1999:-
(a) have been prepared in accordance with general accounting principles
applicable in India and gives a complete, accurate, true and fair view
of the state of affairs of the Company;
(b) contains either provisions adequate to cover, or full particulars in
notes, of all taxation (including deferred taxation) and other
liabilities (whether quantified, contingent or otherwise) of the
Company as at that date;
(c) are not affected by any unusual or non-recurring items or by any
contract or arrangement which is not of an arm's length nature.
All the accounts, books, ledgers, financial and other records, of
whatsoever kind of the Company are in its possession and give a true and
fair view of its financial position.
32
14. Since the date of the Provisional Balance Sheet as on November 19, 1999
the business of the Company has been carried on in the ordinary course and
there has been no material adverse change in the assets and liabilities of
the Company.
15. The book debts and outstanding to the Company as shown in the aforesaid
Balance Sheets are good.
16. Except for the Company's right in software which cannot be transferred, the
Company has good and marketable title to all properties and assets as
disclosed in the said Balance Sheets. Except as aforesaid, all such
properties and assets are free and clear of mortgages, pledges, liens or
other encumbrances.
17. All accounts receivables of the Company are good and will be paid as when
they fall due and payable.
18. The Company has not, and until the date of this Agreement will not have,
liabilities or obligations of any nature, whether absolute, accrued,
contingent or other wise, matured or unmatured, other than those shown in
the aforesaid Balance Sheets except those which may be incurred in the
ordinary course of business after the date of this agreement.
19. There are no other employment contracts with (i) a contract period which
cannot be terminated with notice not longer than three months, and/or (ii)
a monthly remuneration amount exceeding Rs 5,00,000 and/or (iii) a
severance payment exceeding three monthly salaries. Number of employees of
the Company is restricted to 15.
20. There are no outstanding liability of the Company in regard to provident
fund, pension fund or other employee welfare funds which are required to be
maintained by the Company under law, there are no other such funds
maintained by the Company.
21. Save and except for the arbitration proceedings in regard to shares
procured by the Company through the sub-broker Xxxxx Corporation (Vyaj
Badla Proceedings) wherein the loss, if any, to the Company is not likely
to exceed Rs 10,00,000/- (Rupees Ten Lacs only) there are no disputes,
litigation or arbitration proceedings, before any Court or other authority,
now pending or threatened by or against or affecting the Company or any of
its property or right. There are also nothing which is likely to give rise
to any such dispute, litigation or arbitration. Further, the Company is not
the subject of any investigation or inquiry by any
33
governmental, administrative or regulatory body nor is any such
investigation or inquiry threatened.
22. No corporate action nor any other steps have been taken or legal
proceedings been started or threatened against it for its winding-up,
dissolution, administration or reorganisation of the Company or for the
appointment of a receiver, administrator or similar officer of it or of any
or all or part of its assets or undertaking.
23 No activities of the Company infringe or are likely to infringe any
intellectual property rights of any third party and no claim of substantial
amount has been made against the Company in respect of any infringement.
All rights, title and interest in the Portal xxx.xxxxxxxxxx.xx.xx and the
--------------------
Domains listed in Schedule 2 to the Agreement exclusively and absolutely
vest in the Company and no other persons including any of the Vendors or
the employees of the Company have any right, title or interest in them.
24. The Company has not done anything in respect of which any product/service
liability of substantial amount claim is outstanding or has been made prior
to the date of this Agreement.
25. The Company is not a party to any agency or management agreement or to any
contract which restricts its freedom to carry on its business in any part
of the world in any manner as it thinks fit.
26. The Company is not in default involving substantial amount under any
agreement to which it is a party. The Company is not a party to any
agreement or other corporate restrictions which materially or adversely
affects the business, property or operation, present or proposed, or the
condition, financial or other wise of the Company.
27. The Company has not given any guarantee or warranty, or made any
representations, in respect of goods or services supplied or contracted to
be supplied by it or accepted any liability or obligation that would apply
after any of these goods or services had been supplied by it.
28. Save and except the arrangement the Company has with X.X. Xxxx Consultants
Private Limited for certain services at a monthly fee of Rs 40,000 and
Netcore Solutions Private Limited neither the Company, the Vendors nor any
of its/their affiliates owns an equity interest in any corporation, firm or
other entity which is:
(a) A customer or lessee of the Company;
34
(b) A supplier or lessor of the Company;
(c) A competitor of the Company.
29. Save and except the employment contract of three directors there are no
contracts- or agreements between the Company and any of its directors or
between the Company and any of the relatives of directors.
30. The register of members and other statutory books and registers of the
Company have been properly kept and contain an accurate and complete record
of the matters with which they should deal and no notice or allegation that
any of them is incorrect or should be rectified has been received or made.
31. The Company had no capital commitments outstanding at the Last Accounts
Date and the Company has not since then incurred or agreed to incur any
capital expenditure or commitments or dispose of any capital assets save
and in the normal and ordinary conduct of its business activities.
32. There are no liabilities (including contingent liabilities) which are
outstanding on the part of the Company other than those liabilities
disclosed in the Last Accounts or incurred, in the ordinary and proper
course of trading, since the Last Accounts Date.
33. There is no outstanding in respect of the Company in connection with any
guarantee, or agreement for indemnity or for suretyship given by, or for
the accommodation of the Company.
34. All returns, computations and payments which should be or should have been,
made by the Company for any Taxation purpose have been made within the
requisite periods and are upto-date, correct and on a proper basis.
35. The Company has duly deducted and accounted for all amounts which it has
been obliged to deduct in respect of Taxation including by deducing tax, as
required by law, from all payments made, or treated as made, to its
employees or former employees, agents etc.
36. The Company is not, nor will it become, liable to pay or make reimbursement
or indemnity in respect of any Taxation (or amounts corresponding thereto)
in consequence of the failure by any other person to discharge that
Taxation within any specified period or otherwise, where such Taxation
relates to a profit, income or gain, transaction, event, omission or
circumstance arising, occurring or deemed
35
to arise or occur (whether wholly or partly) on or prior to the date of
this agreement.
37. The Company is not, nor has it agreed to become, a member of any joint
venture, consortium, partnership or other unincorporated association,
except those in the case of xxxxxxxxxxxxxx.xxx and xxxxxxxxxx.xxx.
38. There is no dispute with any revenue or other official department in
relation to the affairs of the Company, and there are no known facts which
may give rise to any such dispute.
39. There are no claims pending or threatened, or capable of arising, against
the Company, by an employee or xxxxxxx or third party, in respect of any
accident or injury, which are not fully covered by insurance.
40. The Company has conducted and is conducting its business in all respects in
accordance with all applicable laws and regulations.
41. No power of attorney outside the normal course of business given by the
Company is in force. There are no outstanding authorities (express or
implied) by which any person may enter into any contract or commitment to
do anything on behalf of the company.
42. The company is not nor will it with the lapse of time become in default in
respect of any obligation or restriction binding upon it.
43. The Company is not under any legal or moral liability or obligation or a
party to any ex-gratia arrangement or promise, to pay pensions, gratuities,
superannuation allowances or the like, or otherwise to provide `relevant
benefits' to or for any of its past or present officers or employees or
their dependents and there are no retirement benefit, or pension or death
benefit, or similar schemes or to which the company contributes except the
schemes approved by the authorities.
44. There are no other material facts or circumstances in relation to the
assets, business or financial condition or the company, which, if
disclosed, might reasonably have been expected to affect the decision of
the purchaser to enter into this agreement.
45. Until the completion date the Vendors for self and also on behalf of the
Company irrevocably undertake to ensure that -
36
(a) The Company shall not alter its Memorandum and Articles of Association
without the prior written consent of the Purchaser.
(b) The Company shall not issue any rights or bonus shares and debentures
without the prior written consent of the Purchaser.
(c) The Company will not give effect to a reduction of share capital or go
into liquidation and shall not sell, dispose off or alienate its assets to
a material extent and shall ensure that its assets are in good condition.
(d) Minute books, Books of accounts, Common Seal, Statutory Books and
records and other papers and documents of every nature and description are
properly and safely kept by the company.
(f) the Vendors shall exercise its rights as shareholders of the Company
in trust for the implementation of this Agreement and achieving the
transfer of the shares as per the terms of this Agreement
46. The Vendors undertakes to indemnify the Company and the Purchaser fully
against any loss, damages or other consequences which the Company and/or
the Purchaser may suffer or incur by any reason of any of the
representations warranties and declaration set out being incorrect in any
material particulars.
47. In the event of any further or other liabilities of any nature whatsoever,
including liabilities by way of excise duty, sales tax, income tax, customs
duty and industrial and economic and corporate laws etc. and any penalties
thereupon arising or being discovered or in the event of the Company being
required to meet the contingent liabilities other than those disclosed in
the Balance sheet as at November 19, 1999 the Vendors undertakes to meet
and pay the same and to keep the Company and the Purchaser safe, harmless
and indemnified.
Part II
--------
Purchaser's Warranties
-----------------------
The Purchaser represents and warrants to the Vendor as follows:
1. The Purchaser is a limited liability company duly organised, validly
existing and in good standing, as applicable under the laws of India. It
is duly qualified and licenced to do business in each relevant
jurisdiction and has all requisite corporate power to carry on its business
as it is now being conducted.
37
2. The execution and delivery of this agreement and performance of the
transactions contemplated herein have been duly and effectively authorised
to the extent required by applicable Laws.
3. Neither the execution, delivery nor performance of this agreement by the
Purchaser nor the consummation of the transactions contemplated by this
agreement will:
(i) Conflict with, or result in a breach, violation or default of any
provisions of the Memorandum of Association or Articles of
Association of Purchaser; or
(ii) result, with or without the lapse of time, in a breach of any of the
terms or provisions of, or constitute a default under, any mortgage,
licence, permit, agreement or any other instrument affecting
Purchaser or by which Purchaser may be bound; or
(iii) violate any law, order, judgement, decree, statute, rules or
regulation applicable to Purchaser.
(iv) violate any order, writ, injunction, decree or judgement of any court
or governmental agencies,
(v) violate, contravene, breach or conflict with any provision of and
constitute a default under, any other agreement or instrument to
which the Purchaser is a party or by which its property or assets may
be bound.
4. The Company and each of the Vendors have the full legal capacity, right,
power and authority, without the consent of any other persons, to execute
and deliver this Agreement, and to carry out the transactions contemplated
hereby.
5. All acts, conditions and things required to be done, fulfilled and
performed including obtaining of all licenses, permits, approvals,
consents, exemptions and other actions required to be taken under all
applicable laws in order (a) to enable it to lawfully enter into, exercise
its rights under and perform and comply with the obligations expressed to
be assumed by it in this Agreement and (b) to ensure that the obligations
expressed to be assumed by it in this Agreement are legal, valid,
38
binding and enforceable in accordance with its terms have been duly and
properly taken.
6. The Purchaser is in full and complete compliance with all laws, rules and
regulations applicable to it. No claim, inquiry, investigation or other
proceedings have been or is threatened to be instituted against the
Purchaser for non-compliance with the above.
7. The Purchaser has not concealed any relevant and material fact or
information from Vendors which materially and adversely affects the
business prospects.
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SCHEDULE 6
Draft of the Resolution to be passed by Xxxxxx Infoway Limited
RESOLVED THAT:
(a) The approval of the directors be and is hereby accorded to the purchase of
151,000 Equity Shares of Rs. 10/- each of IndiaWorld Communication Private
Limited (the "Vendors") from the persons as mentioned herein below:
Sr. No. Name of vendor No. of the shares to be
purchased
at or for the price of Rs. ___/- and upon such other terms and conditions as may
be agreed for and on behalf of the Company by the authorised officials whose
names are mentioned herein below and the Vendors.
(b) The draft of the Share Purchase Agreement tabled at the meeting be and is
hereby approved for purchasing the 151,000 shares referred to above from the
aforesaid vendors with the liberty to the authorised officials mentioned
hereinbelow to agree to do such modifications and changes as may be considered
appropriate by them in consultation with the vendors.
(c) Each of Mr. ________________, ________________ and ________________ be and
is hereby severally authorised to finalise the purchase of the 49,000 shares as
aforesaid and on such other terms and conditions as may be finalised between
themselves (any of them acting severally) with the vendors and to sign, execute
and deliver the Share Purchase Agreement, the transfer deeds and to pay the
purchase price to the vendors including to pay the stamp duty for the purpose of
completing the same and to do such acts, deeds, and things as may be required
for the purpose.
40
SCHEDULE 7
Draft of the Resolution to be passed by IndiaWorld Communications Private
Limited
A. RESOLVED THAT:
(a) The directors do hereby note and acknowledge that the present shareholders
of the Company namely ________________, ________________, ________________,
________________, ________________ and ________________ have informally
advised the Company that they are in the process of selling and or
transferring ________________ equity shares of Rs.10/- each held by them in
the Company to Xxxxxx Infoway Limited and that the Company should be made a
party to the agreement to be made between the said shareholders and the
said purchaser as and by way of acknowledging the Company of the
obligations to be discharged by the Company to complete the sale and
transfer of the said shares including as to the obligations of the Company
for registering the transfer of the said shares.
(b) The Company do hereby approve the execution of the said agreement on behalf
of the Company for the reasons aforesaid.
(c) Each of 1.________________, 2.________________, 3.________________,
4.________________ be and is hereby severally authorised to sign, execute
and deliver the Share Purchase Agreement and do all such other acts, deeds
and things as may be required for the purpose.
B. RESOLVED THAT:
(a) The transfer of the ________________ shares by the following shareholders
namely ________________, ________________, ________________,
________________, ________________ and ________________ to and in favour of
Xxxxxx Infoway Limited be and is hereby approved and that the share
certificates bearing numbers mentioned hereinbelow:
Sr. No. Share certificate no. No. of the shares comprised in Distinctive nos.
the share certificate
41
be and are hereby endorsed in the name of the aforesaid purchaser evidencing
registration of the transfer of the aforesaid shares by the Company.
(b) Each of Mr. ________________, Mr. ________________ and Mr.________________
be and is hereby authorised to endorse registration of the transfer of the
aforesaid shares in the name of the aforesaid purchaser and make entry thereof
in each of the aforesaid share certificates and return the share certificates to
the Escrow Agent for being delivered to the purchaser.
42
SCHEDULE 8
Draft of the Resolution passed by X.X.Xxxx Impex & Investments Private Limited
------------------------------------------------------------------------------
RESOLVED THAT:
(a) The proposal to grant option to Xxxxxx Infoway Limited to purchase 1,51,000
equity shares of Rs.10/- held by the Company in IndiaWorld Communication
Private Limited to be effective only from April 1, 2000 in consideration of
payment by Xxxxxx Infoway Limited non-refundable Xxxxxxx Deposit of Rs.
____________ to the Company be and is hereby approved and in the event of
the option being exercised by the purchaser the directors do hereby approve
to sell the ____________ shares held by the Company in IndiaWorld
Communications Private Limited as mentioned hereinafter.
(b) The proposal of the sale of _________________ equity shares of Rs.10/-
held by the Company in IndiaWorld Communication Private Limited, Xxxxxx
Infoway Limited at a price of Rs. ______________/- per share by be and is
hereby approved broadly on the terms and conditions set out in the Share
Agreement for option of purchasing shares and upon such other terms and
conditions as may be finalised by an between the aforesaid purchase and the
Company's authorised representatives authorised for this purpose
hereinafter.
(c) Each of Mr. __________________, Mr.___________________ and Mr.____________
be and is severally authorised to sign, execute and deliver the following
agreement for option to purchase shares and transfer deeds and of such
deeds, documents and rights as may be required and together with receipt of
purchase price to be received by the Company.
43
IN WITNESS WHEREOF, the Parties hereto have signed and executed and/or caused to
be signed and executed this Agreement on the date first above mentioned.
SIGNED AND DELIVERED By )
0.Xx. Xxxxxx Xxxx )
0.Xx. Bhavana R.Jain )
0.Xx. C. M. Jain, the Director )
of X. X. Xxxx Impex & Investments )
Private Limited )
the Vendors withinnamed )
in the presence )
SIGNED AND DELIVERED )
on behalf of Xxxxxx Infoway )
Limited, the Purchaser )
withinnamed by the hand of )
Mr. ______________ )
its duly authorised official in the )
presence of.. )
SIGNED AND DELIVERED )
on behalf of IndiaWorld Communications )
Private Limited )
the Company withinnamed, by the )
hand of ___________ , )
its Director in the )
the presence of )
SIGNED AND DELIVERED )
By )
0.Xx. Xxxxxx Xxxx )
0.Xx. Chandanmal Jain )
0.Xx. Pushpa C. Jain )
Directors in the presence of )
44
-------------------------------------
DATED THIS 29th DAY OF November, 1999
-------------------------------------
By and between
(1) MR. XXXXXX XXXX and Others
(2) XXXXXX INFOWAY LIMITED;
(3) MR. XXXXXX XXXX; and
(4) INDIAWORLD
COMMUNICATIONS PRIVATE
LIMITED
-----------------------------
AGREEMENT FOR OPTION TO
PURCHASE SHARES
-----------------------------
-----------------------------
XXXX & GIRISH & CO.
Advocates
0XX Xxxxx, Xxxxxx Xxxxxxxx,
00, Xxxxxxxx Xxxxx Road,
Marine Lines,
Mumbai -400 002.
-----------------------------
45
