EXHIBIT 99.1
STOCK PURCHASE AGREEMENT
BY AND AMONG
XXXXX SYSTEMS CORPORATION
XXXXX SYSTEMS INVESTMENTS B.V.
HCL TECHNOLOGIES LIMITED
HCL HOLDINGS GMBH, AUSTRIA
HCL TECHNOLOGIES (BERMUDA) LIMITED
HCL XXXXX SYSTEMS B.V.
HCL XXXXX SYSTEMS (MAURITIUS) PRIVATE LIMITED
AND
HCL XXXXX SYSTEMS LIMITED
DECEMBER 12, 2003
TABLE OF CONTENTS
Page
----
ARTICLE I AUCTION AND ESCROW........................................................................ 5
1.1 Auction Process................................................................... 5
1.2 Escrow............................................................................ 13
ARTICLE II PURCHASE AND SALE........................................................................ 18
2.1 Purchase and Sale of the Shares................................................... 18
2.2 Closing........................................................................... 19
2.3 Closing Procedures and Deliveries................................................. 19
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PSC AND PSI........................................... 29
3.1 Organization...................................................................... 29
3.2 Authority......................................................................... 29
3.3 No Violation...................................................................... 29
3.4 Governmental Consents............................................................. 29
3.5 Litigation........................................................................ 30
3.6 Title to Shares................................................................... 30
3.7 [INTENTIONALLY OMITTED]........................................................... 30
3.8 [INTENTIONALLY OMITTED]........................................................... 30
3.9 PSC Affiliate Transactions........................................................ 31
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF HCLT, HCL AND HCL BERMUDA.............................. 31
4.1 Organization...................................................................... 31
4.2 Authority......................................................................... 31
4.3 No Violation...................................................................... 31
4.4 Governmental Consents............................................................. 32
4.5 Litigation........................................................................ 32
4.6 Title to Shares................................................................... 32
4.7 [INTENTIONALLY OMITTED]........................................................... 33
4.8 [INTENTIONALLY OMITTED]........................................................... 33
4.9 HCL Affiliate Transactions........................................................ 33
ARTICLE V COMPANY DISCLOSURES....................................................................... 33
5.1 Organization and Qualification.................................................... 33
5.2 Investments and Group Members..................................................... 34
5.3 Authorized Capital................................................................ 35
5.4 Bank Accounts; Powers of Attorney and Representatives............................. 36
5.5 Approvals; No Violations.......................................................... 36
5.6 Financial Statements.............................................................. 37
5.7 Absence of Certain Liabilities and Changes........................................ 38
5.8 Compliance with Applicable Law.................................................... 40
5.9 Termination, Severance, and Employment Agreements................................. 41
5.10 Employee Benefits; Labor Matters.................................................. 42
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5.11 Taxes............................................................................. 46
5.12 Litigation........................................................................ 47
5.13 Environmental Matters............................................................. 48
5.14 Insurance......................................................................... 50
5.15 Title to Properties; Entire Business.............................................. 50
5.16 Intellectual Property Rights...................................................... 54
5.17 Major Customers................................................................... 57
5.18 Material Agreements............................................................... 57
5.19 Insider Interests................................................................. 59
5.20 Illegal Payments.................................................................. 60
ARTICLE VI COVENANTS AND AGREEMENTS................................................................. 60
6.1 Conduct of Business............................................................... 60
6.2 [INTENTIONALLY OMITTED]........................................................... 64
6.3 Continuing Disclosures........................................................... 64
6.4 [INTENTIONALLY OMITTED]........................................................... 64
6.5 Fulfillment of Conditions and Obligations......................................... 64
6.6 Publicity......................................................................... 65
6.7 Transaction Costs................................................................. 65
6.8 Nondisclosure..................................................................... 65
6.9 Name Change....................................................................... 68
6.10 [INTENTIONALLY OMITTED]........................................................... 68
6.11 Stockholders and Stand Down Agreements............................................ 68
6.12 Treatment of Group Agreements..................................................... 68
6.13 Releases.......................................................................... 68
6.14 Non-Solicitation; Employee Non-Competition Restrictions........................... 79
6.15 Non-Competition Restrictions...................................................... 81
6.16 Continuation of Management........................................................ 85
6.17 Tax Issues........................................................................ 85
6.18 Transfer of Shares................................................................ 86
6.19 Stock Options..................................................................... 86
6.20 Safety Net........................................................................ 88
6.21 Title to Mauritius Shares......................................................... 88
6.22 Subsequent Sale by Buyer.......................................................... 88
6.23 Termination of Group Agreements During Interim Period............................. 88
6.24 Imputation of Certain Knowledge and Actions....................................... 89
6.25 Company Cash Balance.............................................................. 90
6.26 Insurance......................................................................... 90
6.27 Release of Escrow Upon Automatic Termination...................................... 90
ARTICLE VII CLOSING CONDITIONS...................................................................... 90
7.1 Conditions to Obligations of the Buyer............................................ 90
7.2 Conditions to Obligations of the Seller........................................... 91
ARTICLE VIII INDEMNIFICATION........................................................................ 93
8.1 Indemnification of the Buyer...................................................... 93
8.2 Indemnification of the Seller..................................................... 93
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8.3 Indemnification of HCL............................................................ 94
8.4 Survival.......................................................................... 94
8.5 Notice............................................................................ 94
8.6 Defense of Third Person Claims.................................................... 95
8.7 Limitations on Indemnity.......................................................... 96
8.8 PSC Indemnification of HCL for Dutch Taxes........................................ 97
8.9 Indemnification for Austrian Capital Transfer Tax................................. 101
ARTICLE IX MISCELLANEOUS............................................................................ 101
9.1 Termination....................................................................... 101
9.2 Effect of Termination; Remedies Not Exclusive; Reserve Price Option............... 103
9.3 Notices........................................................................... 107
9.4 Attorneys' Fees and Costs......................................................... 108
9.5 Reasonable Efforts; Further Assurances............................................ 108
9.6 Brokers........................................................................... 108
9.7 [INTENTIONALLY OMITTED]........................................................... 108
9.8 Counterparts...................................................................... 109
9.9 Interpretation.................................................................... 109
9.10 Successors and Assigns; Assignment................................................ 109
9.11 Entire Agreement.................................................................. 109
9.12 Specific Performance.............................................................. 110
9.13 Disclaimer of Certain Warranties; No Company Liability............................ 110
9.14 Certain Definitions............................................................... 113
9.15 Governing Law..................................................................... 116
9.16 Representation by Counsel; Drafting............................................... 116
9.17 No Consequential Damages.......................................................... 116
9.18 Usage............................................................................. 116
9.19 Arbitration....................................................................... 117
9.20 Force Majeure..................................................................... 118
9.21 Submission to Jurisdiction........................................................ 119
9.22 Waiver of Jury Trial.............................................................. 119
9.23 Partial Invalidity................................................................ 119
9.24 Joint and Several Obligation and Liability........................................ 119
iii
Exhibits
--------
A Form of Agent Agreement
B Form of Bid
C-1 Form of Notice of Receipt of Valid Bid
C-2 Notice of Receipt of Invalid Bid
C-3 Notice of Receipt of Invalid Initial Bids or Identical Valid Initial Bids
D Form of Notice of Winning Bid
E Form of PSI Company Deed of Transfer
F Form of HCL Company Deed of Transfer
G-1 Form of Director Resignation (PSC as Seller)
G-2 Form of Director Resignation (HCL as Seller)
H-1 Form of Termination (POA; Bank Authority) - (PSC as Seller)
H-2 Form of Termination (POA; Bank Authority) - (PSC as Seller)
H-3 Form of Termination (POA; Bank Authority) - (HCL as Seller)
I Form of Termination of Company Stockholders Agreement
J Form of Termination of Stand Down Agreement
K [INTENTIONALLY OMITTED]
L Form of HPS India Transfer Deed
M Form of UBS Consent
N Form of PSI Power of Attorney
O Form of HCL Power of Attorney
P Form of PSC Power of Attorney
Q Form of Company Power of Xxxxxxxx
X-0 Form of Mauritius Stock Transfer Form (HCL Bermuda)
R-2 Form of Mauritius Stock Transfer Form (HCL)
S Form of HCL Bermuda Note
T Form of HCL Bermuda Pledge Agreement
U Form of HPS India Power of Attorney
V-1 Form of HPS India Option (Pre-2000)
V-2 Form of HPS India Option (2000)
W [INTENTIONALLY OMITTED]
X Form of Board Resolutions
Y Form of Board Action Confirmation
Z Form of Letter of Instruction to Representatives
AA [INTENTIONALLY OMITTED]
BB-1 Form of Post-Auction Employee Letter (HCL as Buyer)
BB-2 Form of Post-Auction Employee Letter (PSC as Buyer)
CC Form of Agreement Withdrawing Offers of Option Grants
DD Form of PSI Note
EE Form of PSI Pledge Agreement
FF Form of Proxy
GG Form of Company Shareholders Resolutions
HH Form of PSC Call Option
II Form of HCL Call Option
JJ Form of Notice Accepting Prior Bid or Declining to Bid
iv
KK Form of Notice Regarding Encashment Fund
LL Form of AIG Policy
MM Form of PSI Pledge Deed
Schedules
---------
1.1(b)(vi)(4) Final Option Model
1.2(a)(i)(5) Individuals Signing Resignations
1.2(a)(i)(6) Individuals Signing Terminations of Powers-of-Attorney and Bank Account
Authority
1.2(a)(i)(10) HPS India Nominee Holders
6.14(b) PSC Employee Offers
6.14(e) Employee Non-Compete Customers
6.15(a) Channel Customers
6.15(b) Direct Customers
6.20 Safety Net
8.8 Transactions
v
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered
into as of December 12, 2003 (the "Effective Date"), by and among Xxxxx Systems
Corporation, a Delaware corporation ("PSC"), Xxxxx Systems Investments B.V., a
Dutch company having its registered office in Amsterdam, The Netherlands and a
wholly-owned subsidiary of PSC ("PSI"); HCL Technologies Limited, a corporation
formed in India ("HCLT"); HCL Holdings GmbH, Austria, a corporation registered
and incorporated under the laws of Austria and a wholly-owned subsidiary of HCL
Bermuda ("HCL"); HCL Technologies (Bermuda) Limited, a corporation formed under
the laws of Bermuda and parent of HCL ("HCL Bermuda"); HCL Xxxxx Systems B.V., a
Dutch company having its registered office in Amsterdam, The Netherlands (the
"Company"); HCL Xxxxx Systems (Mauritius) Private Limited, a corporation formed
under the laws of Mauritius and a wholly-owned subsidiary of the Company ("HPS
Mauritius"); and HCL Xxxxx Systems Limited, a corporation formed under the laws
of India ("HPS India"). Each of PSC and HCL (or the respective member of its
Group, as applicable), (i) in its capacity as the prevailing bidder in the
Auction hereunder, is referred to herein as the "Buyer," and (ii) in its
capacity as the losing bidder in the Auction hereunder, is referred to herein as
the "Seller," subject in each case to Section 9.2(b).
RECITALS
The Company is a joint venture between PSC and HCLT, each of which
owns, directly or indirectly through a wholly-owned subsidiary, 50% of the
issued and outstanding capital stock of the Company.
PSC and HCLT desire to terminate their joint venture relationship on
the terms and subject to the conditions set forth herein.
THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained in this Agreement, the parties agree as
follows:
SCHEDULE OF DEFINITIONS
The definitions for the following terms appear in the referenced
Sections of this Agreement:
Term Section
---- -------
ADM 6.15(a)(i)(1)
AIG Policy 6.26
AIG Premium 1.2(b)(vi)(1)
Affiliate 9.14(a)
Agent 1.1(a)
Agent Agreement 1.1(a)
Agreement Introduction
AKD Opinions 2.3(b)(vi)(3)
1
Attorney-in-Fact 1.2(a)(i)(12)
Auction 1.1(a)
Auction Participation Fee 9.2(b)(i)
Bank Accounts 5.4
Bid Notice 1.1(b)(ii)
Board Action Confirmation 2.3(b)(vii)(2)
Board Resolutions 2.3(b)(vii)(1)
Business Day 2.2
Buyer Introduction
Buyer Parties 8.1
Buyer's Closing Breach 9.14(b)
Channel Customer Non-Competition 6.15(a)(i)
Period
Channel Customers 6.15(a)(i)(1)
Claim 8.5
Closing 2.2
Closing Date 2.2
Code 5.9(a)(iii)
Company Introduction
Company Disclosure Letter Article V Introduction
Company Employee 6.14(a)
Company Material Adverse Change 5.1
Company Material Adverse Effect 5.1
Company Group Options 5.3(d)
Company Group Third Person Claim 6.13(b)(i)
Company Options 6.19(b)
Company Owned IP 5.16(a)
Company Released Parties 6.13(b)(i)
Company Released Party Theft 6.13(b)(i)
Company Releasing Parties 6.13(a)(i)
Company Shareholders Resolutions 1.2(a)(i)(12)
Company Shares 1.1(a)
Company Stockholders Agreement 6.11
Company Stockholders Register 1.2(a)(v)(2)(C)
Company's Knowledge 9.14(b)
Confidential Information 6.8(a)
Contracts 3.9
Control 2.1(b)
Current HPS India Nominee 1.2(a)(i)(10)
Stockholders
Customer Contracts 5.17(a)
Damages 9.14(g)
Data Protection Laws 5.8(c)
Development Property 5.15(b)
Direct Customers 6.15(b)(1)
Disposal 5.13(b)(i)
2
Effective Date Introduction
Employee Benefit Plans 5.10(a)
Employee Plan 5.10(a)
Employee Plans 5.10(a)
Employee Post-Auction Option Letter 6.19(b)
Employment Agreements 5.9(a)(i)
Encashment Fund 1.1(b)(vi)(4)
Environmental Laws 5.13(b)(ii)
Environmental Permits 5.13(a)(iii)
ERISA 5.10(a)
ERISA Affiliate 5.10(a)
Escrow 1.2(a)
Escrowed Documents 1.2(b)
Expiration Time 6.14(b)
Financial Statements 5.6(a)
First Person 2.1(b)
Force Majeure Event 9.20(b)
Force Majeure Events 9.20(b)
Form of Bid 1.1(b)(i)
GAAP 5.6(a)
GMT 1.1(b)(i)
Governmental Body 3.4
Group 2.1(b)
Hazardous Material 5.13(b)(iii)
HCL Introduction
HCL Bermuda Introduction
HCL Bermuda Note 1.1(b)(vi)(2)
HCL Bermuda Pledge Agreement 1.2(a)(vi)
HCL Call Option 1.2(a)(iii)(2)
HCL Company Deed of Transfer 1.2(a)(i)(3)
HCL Company Shares 4.6(a)
HCL Disclosure Letter 4.4
HCL Estopped Claims 9.14(e)
HCL Group Agreements 4.9
HCL Released Parties 6.13(c)
HCL Released Party Theft 6.13(c)
HCL Releasing Parties 6.13(d)
HCL Seller Party Theft 6.13(a)(i)
HCL Seller Party Third Person Claim 6.13(a)(i)
HCL Seller Released Activities 9.14(g)
HCL Third Person Claim 6.13(c)
HCL's Knowledge 9.14(f)
HCLT Introduction
HPS India Introduction
HPS India Nominee Shares 1.2(a)(i)(10)
HPS India Option Form 1.2(a)(vii)
3
HPS India Options 1.2(a)(vii)
HPS India Transfer Deed 1.2(a)(i)(10)
HPS Mauritius Introduction
HPS Released Parties 6.13(a)(ii)
Indemnified Party 8.5
Indemnifying Parties 8.5
Initial Bid Date 1.1(b)(i)
Intellectual Property 5.16(b)
Interim Period 6.1(a)
Latest Balance Sheet 5.6(a)
Latest Balance Sheet Date 5.6(a)
Laws 5.8(a)
Liens 3.6(a)
Losses 8.1
Material Agreements 5.18(a)
Major Customers 5.17(a)
Mauritius Released Parties 6.13(b)(ii)
Mauritius Released Party Theft 6.13(b)(ii)
Mauritius Releasing Parties 6.13(a)(ii)
Mauritius Stock Transfer Form 1.2(a)(v)(3)
Mauritius Shares 1.2(a)(v)(3)
Mauritius Third Person Claim 6.13(b)(ii)
Non-Performing Party 9.20(b)
Notary 1.2(a)(ii)(1)
Notice of Arbitration 9.19
Notice of Encashment Fund 1.1(b)(vi)(4)
Notice of Winning Bid 1.1(b)(v)
Objection 1.1(b)(i)
Option Grant Withdrawal Agreement 6.19(c)
Outstanding Bid 1.1(b)(ii)
Permits 5.8(a)
Permitted Lien 5.15(i)
Person 3.5
Prohibition 9.14(h)
Proprietary Information 6.8(b)
Proxy 1.2(a)(i)(12)
PSC Introduction
PSC Call Option 1.2(a)(iv)(3)
PSC Company Deed of Transfer 1.2(a)(i)(2)
PSC Company Shares 3.6
PSC Disclosure Letter 3.4
PSC Estopped Claims 9.14(i)
PSC Group Agreements 3.9
PSC Released Parties 6.13(d)(i)
PSC Released Party Theft 6.13(d)(i)
PSC Releasing Parties 6.13(c)
4
PSC Seller Party Theft 6.13(a)(ii)
PSC Seller Released Activities 9.14(k)
PSC Seller Third Person Claim 6.13(a)(ii)
PSC Third Person Claim 6.13(d)(i)
PSC's Knowledge 9.14(j)
PSI Introduction
PSI Company Deed of Transfer 1.2(a)(i)(2)
PSI Note 1.1(b)(vi)(3)
PSI Pledge Agreement 1.2(a)(ii)(2)
Purchase Price 2.1(a)(i)
PWC Reports 2.3(b)(vi)(1)
Real Property 5.15(b)
Release 5.13(b)(iv)
Release Limitations 9.13(c)
Released Claims 6.13(a)(i)
Remediation 5.13(b)(v)
Reserve Price 9.2(b)(ii)
Reserve Price Option 9.2(b)(ii)
Rules 9.19
S&L 9.20(c)
Seller Introduction
Seller Parties 8.2
Seller Released Parties 6.13(a)(i)
Seller Releasing Parties 6.13(b)(i)
specific performance 9.2(b)(iii)
Stand Down Agreement 6.11
subsidiary 2.1(b)
Technology Services 6.15(a)(i)
Tenant 5.15(h)
Tenant Leases 5.15(h)
Third Party Claim 8.6(a)
Third Party Licenses 5.16(a)
Transaction Documents 3.2
Valid Bid 1.1(b)(i)
ARTICLE I
AUCTION AND ESCROW
1.1 Auction Process.
(a) Subject to the terms and conditions set forth herein, PSC and
HCL will conduct an auction (the "Auction") pursuant to which each of them will
have the opportunity to bid upon all shares of capital stock of the Company
owned or beneficially held by the other party and its Group (all such shares
owned by either PSC and the PSC Group, or by HCL and the HCL Group, as the case
may be, the "Company Shares"). Following the Auction, subject to the terms and
5
conditions set forth herein (i) if PSC is the prevailing bidder, the
transactions set forth in Section 2.1(a)(i) will occur, and (ii) if HCL is the
prevailing bidder, the transactions set forth in Section 2.1(a)(ii) will occur.
JPMorgan Chase Bank, 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 will
serve as escrow agent and the agent and administrator of the Auction and the
Closing, and as escrow agent with respect to the PSI Note and the HCL Bermuda
Note (the "Agent") under the terms of the Agent Agreement attached hereto as
Exhibit A (the "Agent Agreement"). The Agent is not a party to this Agreement,
and its duties and obligations are set forth solely in the Agent Agreement.
(b) The procedures for conducting the Auction are as follows:
(i) The Auction will commence at 12:00 p.m. Greenwich
Mean Time ("GMT") on Wednesday, December 17, 2003, or such earlier time
and date as may otherwise be agreed (with written notice to the Agent)
by PSC and HCL (as conclusively evidenced by the submission of an
initial bid in the Auction by each of PSC and HCL, using a Form of
Bid). The date the Auction commences is the "Initial Bid Date".
Representatives of the parties and the Agent will meet in London,
England at the offices of the Agent's Solicitors (currently Xxxxx &
Overy) on the Initial Bid Date and will conduct the Auction in person,
and using hand delivery of all Auction forms identified herein by and
to the representatives of HCL, PSC and the Agent present at the
Auction, notwithstanding the provisions of Section 9.3; provided, that
the signed Auction forms hand delivered to the Agent may be originals
or fax or other form of electronic copies. The Auction will continue in
London, England, in person, on each subsequent calendar day after the
Initial Bid Date (other than a day, except for Saturday and Sunday, on
which banks are not open for business in London, England), during the
hours each day from 9:00 a.m. GMT until 9:00 p.m. GMT. At the
commencement of the Auction, each of PSC and HCL will submit to the
Agent in writing an initial bid for the Company Shares in the form
attached hereto as Exhibit B (the "Form of Bid"), and otherwise in
accordance with the terms set forth in the Agent Agreement. Each bid so
submitted shall specify the purchase price which the bidding party is
willing to pay (or cause to be paid) for all of the Company Shares of
the other bidding party and its Group pursuant to this Agreement (it
being understood and agreed that if HCL is the Buyer the transactions
contemplated herein will be effected in the form set forth in Article
II, rather than a direct purchase by the Buyer Group of the Company
Shares owned by the Seller Group). All bids in the Auction will be
submitted only using the Form of Bid, will be firm bids expressed in
cash in U.S. Dollars, and will not be subject to any condition or
contingency of any kind or nature whatsoever, it being the agreement of
PSC and HCL that any bid containing any contingency or condition shall
be invalid. Submission of a bid to the Agent in the Auction must be
pursuant to a properly completed and signed Form of Bid that is
submitted to the Agent within the time
6
limitations set forth herein for submission of a bid in the Auction,
must be without the imposition or inclusion of any condition or
contingency of any kind or nature, and the amount of the bid must be at
least 2.5% higher than the then current Outstanding Bid (a "Valid
Bid"). Submission of a Valid Bid to the Agent in the Auction will
constitute a binding, irrevocable offer by the party submitting the bid
to consummate, or to cause the consummation of, the transactions
contemplated herein in the form set forth in Article II and on the
terms and subject only to the conditions expressly set forth in this
Agreement. No party may withdraw or amend a Valid Bid submitted in the
Auction after its receipt by the Agent. Neither the invalidity for any
reason of any bid submitted hereunder by one party nor the failure of
one party to submit a bid shall in any manner affect the validity of
any bid submitted to the Agent by the other party. If either PSC or HCL
has any claim, objection or other challenge (an "Objection") concerning
(1) a bid submitted in the Auction by the other party, including the
actions of the Agent with respect to such bid, or (2) any other aspect
of the conduct of the Auction, including the actions of the Agent in
the conduct of the Auction (including the information provided in the
Notice of Winning Bid), such Objection must be asserted in writing
within one (1) hour (on the same day) of such party's receipt of the
Bid Notice from the Agent with respect to such bid, if the Objection
concerns the matter referenced in clause (1) of this sentence, or prior
to the submission of the objecting party's next bid in the Auction, if
the Objection concerns the matter(s) referenced in clause (2) of this
sentence, or, in the case of the delivery by the Agent of the Notice of
Winning Bid, within one (1) hour of the objecting party's receipt of
the Notice of Winning Bid, which writing in each case must specify in
detail the basis (including the factual basis) for the Objection and be
delivered to the representative of the other bidding party who is
present at the Auction (with a copy delivered to the Agent) prior to
the applicable deadline for the Objection. If either bidding party
delivers an Objection with respect to the Auction within the time
period specified in this Section 1.1(b)(i) for asserting such
Objection, then the Auction shall be automatically and immediately
suspended until such time as the Objection is resolved, including,
without limitation, through the arbitration procedures contained in
this Agreement or in the Agent Agreement, as applicable. PSC and HCL
shall each act reasonably and in good faith in asserting any Objection
to the conduct of the Auction.
(ii) The Agent will review the initial bids received on
the Initial Bid Date immediately upon its receipt of same for
compliance with the requirements contained in the Agent Agreement and
notify each of PSC and HCL in writing immediately, but in no event
later than one (1) hour after the Agent's receipt of the initial bids,
as to whether each initial bid is a Valid Bid, the amount of each bid
and which party has the then current option to submit a new bid, using
the applicable form of notice of receipt of bid attached hereto as
Exhibits C-1 and C-2 (in each case, the "Bid
7
Notice"). Where each initial bid is a Valid Bid, the highest of the two
initial bids, or in the event only one of the initial bids received is
a Valid Bid, the sole, initial Valid Bid, will be deemed to be the
outstanding bid (such higher initial Valid Bid, or the sole initial
Valid Bid, as applicable, and each subsequent Valid Bid made during the
Auction, until such bid is superceded by a subsequent Valid Bid, the
"Outstanding Bid"). If neither initial bid is a Valid Bid or if both
initial bids are Valid Bids but are equal in amount, the Agent will
notify each of PSC and HCL of such event in writing immediately, but in
no event later than one (1) hour after the Agent's receipt of the
initial bids, using the form of notice attached hereto as Exhibit C-3.
Thereafter, each party will submit a new initial bid to the Agent by no
later than the time specified by the Agent in writing as being the
deadline for new bids, such deadline to be one (1) hour after the Agent
delivered the Bid Notice to the parties (provided, that if the Bid
Notice was delivered to the parties after 7:00 p.m. GMT, then the
deadline for such new bids shall be 9:00 a.m. GMT on the following
morning, provided that if such morning is not a day on which banks are
not open for business (other than Saturday and Sunday) in London,
England, in which case the deadline shall be the next succeeding
calendar day that is not a day on which banks are not open for business
(other than Saturday and Sunday) in London, England. The Agent will
review such new initial bids immediately upon receipt for compliance
with the requirements for a Valid Bid and deliver to each of PSC and
HCL in writing immediately, but in no event later than one (1) hour
after the Agent's receipt of the new initial bids, a Bid Notice
notifying each party whether the Agent received a new initial bid or
bids by the then current deadline, whether each new initial bid is a
Valid Bid, the amount of each new initial bid, and, where at least one
of the new initial bids is a Valid Bid, indicating which party has the
then current option to submit a new bid as contemplated in Section
1.1(b)(iii). This process will continue until at least one initial
Valid Bid that is higher than the other initial Valid Bid, if any, is
received by the Agent.
(iii) The party which submitted the initial bid that did
not become the first Outstanding Bid will have the option to submit the
next bid in the Auction (even if the initial bid submitted by such
party was invalid). Any new bid submitted by such party must comply
with all of the requirements for a Valid Bid and must be submitted to
the Agent in writing by no later than the time specified by the Agent
in writing as being the deadline for the new bid, such deadline to be
two (2) hours after the Agent has delivered the most recent Bid Notice
to the parties (provided, that if the Bid Notice was delivered to the
parties after 7:00 p.m. GMT, then the deadline for such new bid shall
be 9:00 a.m. GMT on the following morning, provided that such morning
is not a day on which banks are not open for business
8
(other than Saturday and Sunday) in London, England, in which case the
deadline shall be 9:00 a.m. GMT on the next succeeding calendar day
that is not a day on which banks are not open for business (other than
Saturday and Sunday) in London, England. Any such bid (and any
succeeding bids in the Auction) must satisfy the requirements for a
Valid Bid, which includes a requirement that each new bid must be at
least 2.5% higher than the then current Outstanding Bid. The Agent will
review all such bids and immediately, but in no event later than one
(1) hour after the Agent's receipt of the new bid that is the subject
of the notice, deliver to each party a Bid Notice notifying each party
whether the Agent received a new bid by the then current deadline,
whether the new bid is a Valid Bid, the amount of the new bid, and
indicating which party has the then current option to submit a new bid.
Notwithstanding the foregoing, each of PSC and HCL shall have the
right, which may be exercised not more than once by each of them during
the Auction, to unilaterally extend the deadline for its next bid in
the Auction by up to twenty-four (24) hours, which right may be
exercised by written notice delivered to the other (with a copy to the
Agent) prior to the then current deadline for the next bid of the party
that is extending the deadline. Promptly upon receipt of such notice,
the Agent will promptly notify each of PSC and HCL in writing of the
new deadline for the next bid of the party that has extended the
deadline.
(iv) If a new bid submitted in accordance with Section
1.1(b)(iii) is a Valid Bid, it will be the new Outstanding Bid.
Thereupon, the party that did not submit the then current Outstanding
Bid will have the option to submit a new bid that complies with all of
the requirements for a Valid Bid. Such new bid must be submitted to the
Agent in writing by no later than the time specified by the Agent in
writing as being the deadline for the new bid, such deadline to be two
(2) hours after the Agent has delivered the most recent Bid Notice to
the parties. Notwithstanding the foregoing, no bidding party shall
submit, nor shall the Agent require a bidding party to submit, a bid
after 9:00 p.m. GMT on any day on which the Auction is being conducted.
The Agent shall prepare and deliver to the bidding parties a Bid Notice
concerning any bid submitted in the Auction prior to 9:00 p.m. GMT
immediately, but in no event later than one (1) hour after the Agent's
receipt of the new bid that is the subject of the notice, on the same
day that such bid was submitted to the Agent. In the event a Bid Notice
is delivered to the parties after 7:00 p.m. GMT, then the deadline for
the next bid in the Auction shall be 9:00 a.m. GMT on the following
morning, provided that such morning is not a day on which banks are not
open for business (other than Saturday and Sunday) in London, England,
in which case the deadline shall be 9:00 a.m. GMT on the next
succeeding calendar day that is not a day on which banks are not open
for business (other than Saturday or Sunday) in London, England. The
Auction will continue between the parties until such time as (1) the
party having the then current right to bid fails to submit a Valid Bid
by the applicable bid deadline, or (2) such party informs the Agent in
writing using the form attached hereto as Exhibit JJ that it accepts
the then current Outstanding Bid or that it will not submit a new bid,
whichever occurs first. Throughout
9
the Auction, the Agent will deliver to each of PSC and HCL in
writing immediately, but in no event later than one (1) hour
after the Agent's receipt of the new bid that is the subject
of the notice, a Bid Notice notifying each party whether the
Agent received a new bid by the then current deadline, whether
the new bid is a Valid Bid, the amount of the new bid, and
indicating which party has the then current option to submit a
new bid. Where the party who has the option to submit a bid in
response to the then current Outstanding Bid submits its bid
prior to the then current deadline, and such bid is found by
the Agent not to comply with the requirements for a Valid Bid,
the Agent shall immediately inform the bidding party that its
bid is invalid, and the bidding party shall have one (1)
opportunity to remedy its failure to submit a Valid Bid by
submitting another bid that is a Valid Bid; provided, that in
order to be valid, any such new bid must comply with the
requirements for a Valid Bid and must be submitted in writing
on the same day no later than one (1) hour after the Agent
notified the party that its bid was invalid (even if the
deadline for such corrected bid falls after 9:00 p.m. GMT).
(v) Other than the case of one or both of the
parties' initial bids failing to be Valid Bids or the case
where both initial bids are Valid Bids but are equal in amount
(in which case the provisions of Section 1.1(b)(ii) shall
apply), in the event a party fails to submit a Valid Bid by
the applicable bid deadline, or notifies the Agent in writing
that it accepts the then current Outstanding Bid or that it
will not submit a new bid by the applicable bid deadline, then
the Auction will be deemed to be completed and (1) the then
current Outstanding Bid will be deemed to be the winning bid
in the Auction, (2) the party that submitted the winning bid
will be the "Buyer" and will be deemed to have irrevocably
agreed to consummate, or cause the consummation of, the
transactions contemplated herein as the Buyer in the form
described in Article II and otherwise on the terms and subject
to the conditions set forth herein and in the other
Transaction Documents and (3) the other bidding party will be
the "Seller" and will be deemed to have irrevocably agreed to
consummate, or cause the consummation of, the transactions
contemplated herein as the Seller in the form described in
Article II and otherwise on the terms and subject to the
conditions set forth herein and in the other Transaction
Documents. The Agent will notify each of PSC and HCL in
writing immediately, but in no event later than one (1) hour
after the Agent's receipt of the bid that is the winning bid
in the Auction that the Auction has been completed, the
identity of the party that is the prevailing bidder in the
Auction and the amount of the winning bid, using the form of
notice of winning bid attached hereto as Exhibit D (the
"Notice of Winning Bid").
10
(vi) After completion of the Auction:
(1) Immediately after the Agent's
receipt of the Notice of Encashment Fund, but in no
event later than the second calendar day after the
date of the Agent's receipt of the Notice of
Encashment Fund (provided that if such day is not a
Business Day, then the next succeeding calendar day
that is a Business Day), release to the Seller the
Seller's funds (including any earnings thereon)
deposited with the Agent in Escrow by the Seller and
its Group; provided, that the Agent shall withhold
from the Seller's funds, and shall retain in Escrow,
the Seller's portion the Encashment Fund; provided
further, that if PSC is the Seller, the Agent shall
also withhold from the Seller's funds an amount equal
to the premium for the AIG Policy, determined using
the following formula: the sum of (A) the product of
(I) one-half of the Purchase Price multiplied by (II)
.075, less (B) $250,000 (the "AIG Premium"). The
Agent will retain the AIG Premium in Escrow in
accordance with and pursuant to the terms of the
Agent Agreement.
(2) if HCL is the Buyer, HCL Bermuda
shall execute and deposit with the Agent in Escrow,
and HCL shall cause HCL Bermuda to execute and
deposit in Escrow, the original of its duly and
validly executed (but undated) full recourse
promissory note made payable to the Company, in the
form attached hereto as Exhibit S (the "HCL Bermuda
Note"), in the principal amount equal to the sum of
the Purchase Price less an amount equal to the amount
of cash held by the Agent and that is deemed to be
held by the Agent in Escrow on behalf of and for the
account of HCL Bermuda pending Closing (exclusive of
any cash deposited by the HCL Group to fund its share
of the Encashment Fund), immediately after completion
of the Auction, but in no event later than one (1)
hour after the delivery by the Agent of the Notice of
Winning Bid to PSC and HCL.
(3) if PSC is the Buyer, PSI shall
execute and deposit with the Agent in Escrow, and PSC
shall cause PSI to execute and deposit in Escrow, the
original of its duly and validly executed (but
undated) full recourse promissory note made payable
to HCL, in the form attached hereto as Exhibit DD
(the "PSI Note"), in the principal amount equal to
the sum of the Purchase Price less an amount equal to
the amount of cash held by the Agent and that is
deemed to be held by the Agent in Escrow on behalf of
and for the account of PSI pending Closing (exclusive
of any cash deposited by the PSC Group to fund its
share of the Encashment Fund), immediately after
completion of the Auction, but in no event later
11
than one (1) hour after the delivery by the Agent of
the Notice of Winning Bid to PSC and HCL.
(4) Each of PSC and HCL will deposit
with the Agent in Escrow an amount in cash in US
dollars equal to one-half of the amount that will be
required to encash all Company Options as
contemplated in Section 6.19 of this Agreement (the
amounts so deposited by PSC and HCL collectively,
"Encashment Fund"). The amount of the Encashment Fund
will be determined based on the price per share of
the ordinary shares of capital stock of the Company
implicit in the amount of the Purchase Price (without
taking into account any discounts for control premium
or similar items) and by assuming that all Company
Options that could be encashed as a result of the
Closing, as contemplated in Section 6.19, will be so
encashed. The determination of the amount of the
Encashment Fund will be pursuant to the final option
model attached hereto as Schedule 1.1(b)(vi)(4). Each
of PSC and HCL will use their best efforts to
determine the amount of the Encashment Fund and to
jointly inform the Agent in writing of the amount of
the Encashment Fund using the form of notice attached
hereto as Exhibit KK (the "Notice of Encashment
Fund"), immediately after the completion of the
Auction. Without limiting the provisions of Section
1.1(b)(vi)(1), each of PSC and HCL shall make the
deposit required of it by this Section 1.2(b)(vi)(4)
no later than the ten (10th) calendar day following
the date of the Notice of Winning Bid (provided, that
if the tenth calendar day is not a Business Day, then
the next succeeding calendar day that is a Business
Day). Notwithstanding any other provision of this
Agreement or any of the other Transaction Documents,
the failure of either PSC or HCL to deposit its
portion of the Encashment Fund with the Agent in
Escrow by the deadline set forth in the previous
sentence will be deemed to constitute the irrevocable
agreement of the party that failed to make its
deposit to indemnify and hold the other, the other's
Group, and their respective managers, directors,
officers, employees, consultants and agents harmless
from any and all Losses that any such Person suffers
or incurs as a result of claims made by the directors
and employees of the Company Group concerning the
encashment of the Company Options held by them, as
contemplated in Section 6.19.
(vii) All bids submitted hereunder (which includes
the Agent Agreement) (1) by PSC shall be Valid Bids only if
submitted to the Agent by one of the following individuals
(and if the bid satisfies the other requirements for a Valid
Bid), or such other person as may be designated in writing by
PSC to HCL and the Agent: the President and Chief Executive
Officer, Chief Financial Officer, Vice President-Corporate
12
Development, the Controller, the Director of Corporate
Development or Associate General Counsel of PSC, who are
currently Xxxx Xxxxx, Xx., Xxxxxxx Xxxxxxx, Xxxx Xxxxxx, Xxx
Xxxxx, Xxxxxx Mysore and Xxxxx Xxxx, respectively, and (2) by
HCL shall be valid only if submitted to the Agent by one of
the following individuals (and if the bid satisfies the other
requirements for a Valid Bid), or such other person as may be
designated in writing by HCL to PSC and the Agent: Xxxx Xxxxx,
Xxxxxxx Xxxxxxxxxxxx and Xxxx Xxxxxxx. PSC will notify HCL and
the Agent in writing if the identity of the Chief Financial
Officer, Vice President-Corporate Development or Controller
changes at any time prior to the conclusion of the Auction.
(viii) Except as provided in this Agreement and the
Agent Agreement, the Purchase Price shall not be subject to
deduction, adjustment or right of set-off by either HCL or PSC
(or any member of their respective Groups); provided, that
neither the payment of the Auction Participation Fee nor the
exercise of any other remedy available under this Agreement
and/or any other Transaction Document, will be deemed to be a
deduction, adjustment or set-off prohibited by this Section
1.1(b)(viii).
1.2 Escrow.
(a) On the Effective Date each of the parties referenced
below has deposited, or caused to be deposited, with the Agent in
accordance with the terms of the Agent Agreement ("Escrow"), the
following documents, instruments and other property which, in the case
of documents and instruments, have been duly executed, where
applicable, by an authorized representative or representatives of the
applicable party or its respective Group members, as applicable:
(i) each of PSC and HCL has deposited or caused
to be deposited with the Agent in Escrow:
(1) [INTENTIONALLY OMITTED];
(2) the deed of transfer for the
transfer of the HCL Company Shares to PSI, in the
event that PSC is the Buyer, in the form attached
hereto as Exhibit E (the "PSI Company Deed of
Transfer") (undated, and not executed);
(3) the deed of transfer for the
transfer of the HCL Company Shares to the Company, in
the event that HCL is the Buyer, in the form attached
hereto as Exhibit F (the "HCL Company Deed of
Transfer") (undated, and not executed);
(4) [INTENTIONALLY OMITTED];
13
(5) duly and validly executed letters
of resignation (which resignations shall be subject
to, conditioned upon and effective as of, Closing) in
the forms attached hereto as Exhibits G-1 and G-2 of
each of the individuals serving as a managing
director (directeur) or director of the Company and
each Company Group member, each of which is listed on
Schedule 1.2(a)(i)(5) to this Agreement;
(6) duly and validly executed
terminations of powers of attorney and bank signature
authority granted by the Company or any Company Group
member and held by the individuals listed on Schedule
1.2(a)(i)(6) to this Agreement, in the form attached
hereto as Exhibits H-1 and H-2;
(7) duly and validly executed agreement
terminating the Company Stockholders Agreement, in
the form attached hereto as Exhibit I;
(8) duly and validly executed agreement
terminating the Stand-Down Agreement, in the form
attached hereto as Exhibit J;
(9) US $15,000,000 in cash;
(10) original share certificates
representing shares of capital stock of HPS India
held by the current nominee holders which holders
(the "Current HPS India Nominee Stockholders") and
their respective share holdings are set forth on
Schedule 1.2(a)(i)(10) to this Agreement (the "HPS
India Nominee Shares"), accompanied by transfer deeds
in the form attached hereto as Exhibit L (the "HPS
India Transfer Deed");
(11) a duly and validly executed consent
of UBS AG, in the form attached hereto as Exhibit M;
and
(12) its duly and validly executed
irrevocable proxy in the form attached hereto as
Exhibit FF (the "Proxy") appointing each of Xxxxxxx
Xxxxx and Xxxxxxx X.X. van den Enden or either of
them, as attorney-in-fact (each, the
"Attorney-in-Fact") for the purpose of approving the
resolutions of the stockholders of the Company and
each Company Group member (as applicable) related to
the adoption of the interim accounts of the Company
and the allocation of profit to the general profit
reserve, in the form attached hereto as Exhibit GG
(the "Company Shareholders Resolutions").
(ii) PSI has deposited or caused to be deposited
with the Agent in Escrow:
14
(1) a duly and validly executed power
of attorney in the form attached hereto as Exhibit N
appointing each Attorney-in-Fact to inter alia
appear, on behalf of PSI, in front of Xxxxxx X.
Xxxxxxx civil law notary in The Netherlands (the
"Notary"), to execute (and if necessary to complete)
the PSI Company Deed of Transfer and the PSI Pledge
Deed;
(2) its duly and validly executed
pledge agreement (and any exhibit thereto) in favor
of HCL (which has also been executed by HCL), in the
form attached hereto as Exhibit EE (the "PSI Pledge
Agreement"); and
(3) the Deed of Establishment of a
First Right of Pledge in the form attached hereto as
Exhibit MM, for use in the event that PSC is the
Buyer (the "PSI Pledge Deed").
(iii) HCL has also deposited or caused to be
deposited with the Agent in Escrow:
(1) a duly and validly executed power
of attorney in the form attached hereto as Exhibit O
authorizing each Attorney-in-Fact, on behalf of HCL
to:
(A) inter alia appear in front
of the Notary to execute (and if necessary
to complete) the PSI Company Deed of
Transfer and the PSI Pledge Deed, in the
event that PSC is the Buyer;
(B) inter alia appear in front
of the Notary to execute (and if necessary
to complete) the HCL Company Deed of
Transfer, in the event that HCL is the
Buyer;
(2) its duly and validly executed call
option in favor of PSC (which has also been executed
by PSC), in the form attached hereto as Exhibit II
(the "HCL Call Option"); and
(3) an amount equal to 27 Rupees for
each HPS India Nominee Share (or a total of 2,052
Rupees), which amount represents the purchase price
to be paid to the existing HPS India nominee
stockholders upon Closing, in the event HCL is the
Buyer.
(iv) PSC has also deposited or caused to be
deposited with the Agent in Escrow:
15
(1) a duly and validly executed power
of attorney in the form attached hereto as Exhibit P
authorizing each Attorney-in-Fact to inter alia
appear, on behalf of PSC in front of the Notary to
execute (and if necessary to complete) the PSI
Company Deed of Transfer and the PSI Pledge Deed, in
the event that PSC is the Buyer, and the HCL Company
Deed of Transfer, in the event that HCL is the Buyer;
(2) an amount equal to 27 Rupees for
each HPS India Nominee Share (or a total of 2,052
Rupees (or the equivalent in U.S. dollars)), which
amount represents that purchase price to be paid to
the existing HPS India nominee stockholders upon
Closing, in the event that PSC is the Buyer; and
(3) its duly and validly executed call
option in favor of HCL (which has also been executed
by HCL), in the form attached hereto as Exhibit AA
(the "PSC Call Option").
(v) the Company has deposited or caused to be
deposited with the Agent in Escrow:
(1) [INTENTIONALLY OMITTED];
(2) a duly and validly executed power
of attorney in the form attached hereto as Exhibit Q
authorizing each Attorney-in-Fact to, on behalf of
the Company:
(A) inter alia appear in front
of the Notary for the acknowledgement in the
PSI Company Deed of Transfer of the transfer
of the HCL Company Shares to PSI and the
acknowledgment of the pledge of the HCL
Company Shares to HCL in the PSI Pledge
Deed, in the event that PSC is the Buyer;
(B) inter alia appear in front
of the Notary for the acknowledgment in the
HCL Company Deed of Transfer of the transfer
of the HCL Company Shares to the Company, in
the event that HCL is the Buyer;
(C) make the necessary changes
to the original stockholders register of the
Company (the "Company Stockholders
Register");
(D) file the necessary
documents with the Trade Register of the
Chamber of Commerce of Amsterdam, The
Netherlands; and
16
(E) complete, execute and
deliver any other documents that are
necessary to validly transfer to PSI the
entire legal and beneficial interest in the
HCL Company Shares purchased by PSI, in the
event that PSC is the Buyer; and to the
Company the entire legal and beneficial
interest in the HCL Company Shares
repurchased by the Company, in the event
that HCL is the Buyer.
(3) original certificates (duly
endorsed for transfer, if applicable) representing
all shares in HPS Mauritius owned or beneficially
held by the Company (the "Mauritius Shares"), and
accompanied by two (2) Mauritius stock transfer
forms, in the form attached hereto as Exhibits R-1
and R-2 (the "Mauritius Stock Transfer Form"), duly
and validly executed by all parties thereto (but
undated) and completed to reflect (A) on one form,
the transfer of 50% of the Mauritius Shares to HCL
Bermuda, and (B) on the other form, the transfer of
50% of the Mauritius Shares to HCL, in the event that
HCL is the Buyer, and any other documents required to
so validly transfer the entire legal and beneficial
interest in such shares, in each case duly and
validly executed by the parties thereto.
(vi) HCL Bermuda has deposited or caused to be
deposited with the Agent in Escrow its duly and validly
executed (but undated) pledge agreement (and any exhibits
thereto) in favor of the Company (which has also been executed
by the Company), in the form attached hereto as Exhibit T (the
"HCL Bermuda Pledge Agreement").
(vii) HPS India has deposited or caused to be
deposited with the Agent in Escrow a duly and validly executed
power of attorney in the form attached hereto as Exhibit U
authorizing each Attorney-in-Fact, to inter alia, execute and
deliver on behalf of HPS India stock option agreements in the
forms attached hereto as Exhibit V-1 and V-2 (the "HPS India
Option Form") evidencing stock options to acquire the capital
stock of HPS India ("HPS India Options") which options will be
issued to replace certain Company Options, as contemplated by
Section 6.19.
(b) All documents, instruments and other property
deposited in Escrow by any Person hereunder are collectively referred
to herein as the "Escrowed Documents." No party may withdraw, acquire,
obtain possession or repossession of or cancel or otherwise invalidate
any document, instrument or other property deposited in Escrow, except
as expressly provided in the Agent Agreement.
17
(c) The Agent is concurrently herewith confirming in
writing in accordance with the terms of the Agent Agreement its receipt
of each of the documents, instruments and other property delivered to
the Agent pursuant to this Agreement. The Agent will retain the
Escrowed Documents in accordance with the terms of the Agent Agreement.
Notwithstanding anything herein or in the Agent Agreement to the
contrary, each party to this Agreement acknowledges and agrees that
none of the documents and instruments deposited with the Agent in
Escrow (other than this Agreement and the various powers-of-attorney
and proxies) are or will be deemed to be effective or delivered unless
and until the Closing is consummated as provided herein, regardless of
the due and valid execution thereof as of the date of the Agent
Agreement.
(d) The return of the Escrowed Documents to the parties
hereto will be governed by the terms of the Agent Agreement.
ARTICLE II
PURCHASE AND SALE
2.1 Purchase and Sale of the Shares.
(a) Pursuant to the terms and subject to the conditions
set forth herein, at the Closing the following will take place (in the
sequence set forth below):
(i) if PSC is the Buyer, PSI will purchase the
Company Shares owned or beneficially held by HCL and its
Group, in exchange for cash and the PSI Note in an aggregate
amount equal to the amount of the winning bid in the Auction
(the "Purchase Price"); and
(ii) if HCL is the Buyer:
(1) HCL Bermuda will acquire 50% of the
Mauritius Shares from the Company in exchange for
cash and the HCL Bermuda Note in an aggregate amount
equal to the Purchase Price; and
(2) as soon as practicable after the
completion of HCL Bermuda's purchase of 50% of the
Mauritius Shares contemplated above, HCL will acquire
the remaining 50% of the Mauritius Shares from the
Company in exchange for the HCL Company Shares.
The parties hereto acknowledge and agree that the repurchase
by the Company of Company Shares pursuant to this Section
2.1(a)(ii) shall in all cases mean a repurchase as
contemplated in article 2:207 of the Dutch Civil Code.
18
2.2 Closing. The consummation of the transactions described in
Section 2.1(a) (the "Closing") will commence as soon as practicable after the
completion of the Auction, but in no event more than two (2) calendar days after
completion of the Auction (provided, that if the second calendar day after
completion of the Auction is not a Business Day, then no later than the next
succeeding calendar day that is a Business Day) at the office of the Agent's
Solicitors (currently Xxxxx & Xxxxx) in London, England. Notwithstanding the
foregoing, if a Prohibition exists during the Interim Period that has not been
overcome, disapplied or otherwise terminated or removed prior to the date
contemplated above for the commencement of the Closing, then the Closing shall
commence on the first calendar day that is a Business Day following the date on
which such Prohibition has been overcome, disapplied or otherwise terminated or
removed (the date and time as of which all conditions to the obligations of the
Buyer and Seller to Close as set forth in Article VII have been satisfied or
waived being herein called the "Closing Date"). For purposes of this Agreement,
the term "Business Day" shall mean any calendar day during the week other than
Saturday, Sunday or any calendar day on which banks are not open for business in
Dallas, Texas, London, England, or New Delhi, India due to a
government-sanctioned national holiday.
2.3 Closing Procedures and Deliveries. The following actions will
be taken and the following events will occur in connection with the Closing;
provided, that in the event the Closing is taking place after a Buyer Closing
Breach, the Closing deliveries of the documents, instruments and other property,
deposited in Escrow by the parties will be revised to the extent necessary to
conform to the applicable provisions of Section 9.2(b). Where applicable, the
Agent, in accordance with the Agent Agreement, and the Attorney-in-Fact, in
accordance with the applicable power-of-attorney referenced herein, will
complete (including by completing any blanks contained therein) and/or execute
and deliver the applicable Escrowed Documents that are intended to become
effective for the Closing and take such other actions as may be authorized under
the Agent Agreement or in the powers-of-attorney, as applicable, in connection
with the Closing. PSC and HCL acknowledge and agree that the completion of the
transfer of the HCL Company Shares to PSI, in the event that PSC is the Buyer,
and the transfer of 50% of the Mauritius Shares to HCL Bermuda and the remaining
50% of the HPS Mauritius Shares to HCL, in the event that HCL is the Buyer, must
be completed by midnight GMT on December 31, 2003. Without limiting the
foregoing, and by way of example, in the event that HCL is the Buyer, if the
Agent completes the transfer of 50% of the Mauritius Shares to HCL Bermuda by
midnight GMT on December 31, 2003, but is thereafter unable to complete the
transfer of the remaining 50% of the HPS Mauritius Shares to HCL by no later
than midnight GMT on December 31, 2003, then this Agreement shall terminate in
accordance with Section 9.1(g) and any steps previously taken in respect of
Closing under Section 2.3 shall be void and deemed never to have occurred. At
the Closing:
(a) If PSC is the Buyer:
(i) the Agent will complete the PSI Note, the
PSI Pledge Agreement, the PSI Pledge Deed and the PSC Call
Option by dating such
19
documents (including any exhibits thereto) as of the then
current date (provided that the Notary will date the PSI
Pledge Deed, as provided in Section 2.3(a)(ii)), providing the
dates of any other documents referenced therein and filling in
any blanks in the PSI Pledge Agreement and the PSI Pledge Deed
referencing the principal amount of the PSI Note with the
principal amount thereof. After completion of the foregoing
actions set forth in Section 2.3(a)(i) the cash and the PSI
Note, in the aggregate amount equal to the Purchase Price,
deposited in Escrow and held for the account of PSI will be
deemed held by the Agent for the account of HCL pending
completion of the actions set forth in Sections 2.3(a)(ii),
(iii), (iv), (v) and (vi).
(ii) The Agent will deliver (by email as a
scanned document, by facsimile and by courier) to the Notary
(after completion of the actions specified in Section
2.3(a)(i)):
(1) the powers of attorney of PSC, PSI,
HCL and the Company regarding the PSI Company Deed of
Transfer; and
(2) the PSI Company Deed of Transfer
and the PSI Pledge Deed.
Immediately upon receipt by the Notary of said
documents and instruments, the Notary will date and
execute the PSI Company Deed of Transfer to reflect
the purchase of the HCL Company Shares by PSI and
will amend the Company Stockholders Register to
reflect that PSI has become the holder of the HCL
Company Shares. In addition, the Notary will date and
execute the PSI Pledge Deed to reflect the pledge of
the HCL Company Shares to HCL.
The Notary will then return to the Agent three (3)
certified copies of the PSI Company Deed of Transfer,
along with a copy of the Company Stockholders
Register (by email as a scanned document, by
facsimile and by courier) for delivery to PSC and the
Company, as applicable, and a certified copy of the
PSI Pledge Deed.
(iii) The Agent will deliver to PSC (as soon as
practicable after the completion of the actions set forth in
Section 2.3(a)(ii)):
(1) any other Company Share transfer
documents deposited in Escrow by PSC and its Group;
(2) a certified copy (afschrift) of the
PSI Company Deed of Transfer;
20
(3) a copy of the extract of the Trade
Register of the Chamber of Commerce of Amsterdam
provided to the Agent by the Attorney-in-Fact,
reflecting that each of the representatives who has
resigned from the Company has been deregistered as
managing director (directeur) of the Company with the
Trade Register of the Chamber of Commerce in
Amsterdam, The Netherlands;
(4) a copy of the Company Stockholders
Register, in which the Notary has drawn up that PSC
and PSI are the only holders of the issued and
outstanding ordinary shares of the Company;
(5) the certificates representing the
HPS India Nominee Shares, accompanied by the HPS
India Transfer Deeds and any other transfer documents
with respect thereto deposited in Escrow, each dated
by the Agent as of the then current date;
(6) the resignations, waivers and
releases of the representatives who have resigned
from positions with Company Group members and the
terminations of powers of attorney and bank signature
authority with respect to Company Group members; and
(7) two complete, fully executed
original sets (or copies, where originals are not
available) of all the other Escrowed Documents that
are to become effective if PSC is the Buyer, and the
originals (without delivery of copies to the HCL
Group) of any other Escrowed Documents deposited in
Escrow by the PSC Group that are not intended to
become effective if PSC is the Buyer.
(iv) The Agent will deliver to HCL (as soon as
practicable after the completion of the actions set forth in
Section 2.3(a)(ii)):
(1) subject to Section 1.1(b)(vi)(1),
the cash deposited in Escrow by HCL and its Group
(together with any earnings thereon), by wire
transfer of immediately available funds to an account
specified in writing by HCL (if the Agent has not
already delivered such cash to HCL pursuant to
Section 1.1(b)(vi)(1));
(2) a certified copy (afschrift) of the
PSI Company Deed of Transfer;
(3) a copy of the Company Stockholders
Register, in which the Notary has drawn up that PSC
and PSI are the only holders of ordinary shares of
the Company;
21
(4) the 2,052 Rupees deposited by HCL
which amount represented the aggregate purchase price
to be paid to the Current HPS India Nominee
Stockholders upon Closing in the event that HCL was
the Buyer; and
(5) two complete, fully executed
original sets (or copies, where originals are not
available) of all the other Escrowed Documents that
are intended to become effective if PSC is the Buyer
(other than the certified copies of the notarial
deeds (and the related transfer documents)
representing the HCL Company Shares (and the related
transfer documents), the HPS India Nominee Shares
(and the related transfer documents), the
resignations, waivers and releases of the
representatives from positions with the Company and
the Company Group, and the terminations of powers of
attorney and bank signature authority with respect to
the Company and the Company Group), and the originals
(without delivery of copies to the PSC Group) of any
other Escrowed Documents deposited in Escrow by the
HCL Group that are not intended to become effective
if PSC is the Buyer.
(v) The Agent will deliver to PSI any earnings
on the cash held in Escrow on behalf of PSI as soon as
practicable after the completion of the actions set forth in
Section 2.3(a)(iii).
(vi) The Agent:
(1) will retain in Escrow for the
benefit of HCL Bermuda the PSI Note, PSI Pledge
Agreement (including any exhibits thereto) and the
copy of the PSI Pledge Deed, subject to and in
accordance with the terms of the Agent Agreement;
(2) will retain in Escrow for the
benefit of HCL the PSC Call Option, subject to and in
accordance with the terms of the Agent Agreement; and
(3) will wire or mail, as applicable,
(on the Closing Date or as soon as practicable after
the Closing Date) to each Current HPS India Nominee
Stockholder a check issued by the Agent and payable
to the Current HPS India Nominee Stockholder in an
amount equal to 27 Rupees per HPS India Nominee Share
held by such Current HPS Nominee Stockholder
(provided, that if the endorsement of the prescribed
authority in India on the HPS India Transfer Deeds is
not present or has expired, the Agent, with the
assistance of PSC, HCL and the Company, will obtain
the endorsement or the renewal of such endorsement,
as applicable,
22
before mailing the checks to the Current HPS Nominee
Stockholders). PSC will assist the Agent in
converting the funds deposited in Escrow to Rupees
for purposes of this provision, and will provide any
additional funds required in order to obtain 2,052
Rupees upon conversion.
(b) If HCL is the Buyer:
(i) [INTENTIONALLY OMITTED]
(ii) the Agent will complete the HCL Bermuda
Note, the HCL Bermuda Pledge Agreement and the HCL Call Option
by dating such documents (including any exhibits thereto) as
of the then current date.
(iii) After completion of the actions set forth in
Section 2.3(b)(ii), the cash and the HCL Bermuda Note, in the
aggregate amount equal to the Purchase Price, deposited in
Escrow and held for the account of HCL Bermuda will be deemed
held by the Agent for the account of the Company pending
completion of the actions set forth in Sections 2.3(b)(iv),
(v), (vi), (vii), (viii) and (ix).
(iv) After completion of the actions set forth in
Section 2.3(b)(ii), the Agent will complete the Mauritius
Stock Transfer Form for the transfer of 50% of the Mauritius
Shares to HCL Bermuda by filling in the blank for the
consideration with the amount of the Purchase Price and by
dating the form as of the then current date and will similarly
complete any other documents deposited in Escrow required to
validly transfer the entire legal and beneficial interest in
50% of the Mauritius Shares to HCL Bermuda, and the Agent will
retain such form pending the completion of the other actions
set forth in Sections 2.3(b)(vi) through (ix) to be completed
as of the Closing Date, after which the Agent will send such
form to Xxxxxxx Corporate Finance Ltd. as provided in this
Section 2.3(b)(xii).
(v) After completion of the actions set forth in
Section 2.3(b)(iv) (other than the transmittal of the
Mauritius Stock Transfer Form to Xxxxxxx Corporate Finance
Ltd.), the following property will be deemed held by the Agent
for the account of HCL Bermuda (subject to the HCL Bermuda
Pledge Agreement), pending completion of the actions set forth
in Sections 2.3(b)(vi), (vii), (viii) and (ix), after which
the Agent will deliver or retain, as applicable, such property
as provided in Sections 2.3(b)(x), (xi) and (xii):
(1) original share certificates
representing 50% of the Mauritius Shares (if
available), duly endorsed for transfer, if
applicable, and any other documents deposited in
Escrow required to validly transfer the entire legal
and beneficial interest in such
23
shares (including a copy of the related Mauritius
Stock Transfer Form which the Agent will file with
the Financial Services Commission of Mauritius as
provided herein); and
(2) any earnings on the cash deposited
in Escrow and that was held for the account of HCL
Bermuda.
(vi) After completion of the actions set forth in
Section 2.3(b)(iv), each of PSC, HCL and the Company will
promptly use their best efforts to:
(1) cause Pricewaterhousecoopers LLP
(or the Company's financial auditors at that time) to
promptly complete its SAS 100 review of the financial
accounts of the Company for the period ending as of
September 30, 2003 and its bring-down review of the
applicable interim period beginning October 1, 2003
and through the approximate date of completion of the
actions set forth in Section 2.3(b)(iv) and to issue
its reports relating thereto (the "PWC Reports");
(2) deliver copies of the PWC Reports
to the Agent immediately after issuance of same;
(3) cause AKD Xxxxxxx van Wijman to
issue its legal opinions concerning the free reserves
of the Company (the "AKD Opinions");
(4) deliver copies of the AKD Opinions
to the Agent immediately after issuance of same.
(vii) After completion of the actions set forth in
Section 2.3(b)(vi):
(1) the Agent will provide a copy of
the Company Shareholders Resolutions along with the
Proxies relating thereto to the Attorney-in-Fact, who
will immediately date such Company Shareholders
Resolutions as of the then current date and execute
such Company Shareholders Resolutions as proxies for
the shareholders of the Company and return a fax copy
of same to the Agent.
(2) if the PWC Reports and the AKD
Opinions support a finding by the Board of Directors
of the Company that the Company has sufficient free
reserves under Dutch law to complete the Company's
repurchase of the HCL Company Shares in exchange for
the remaining 50% of the Mauritius Shares:
24
(A) the Board of Directors of
the Company (which shall include
representatives of PSC and HCL) will, and
HCL and PSC will take all necessary action
to cause the Board of Directors to, adopt
the resolutions of the Board of Directors of
the Company concerning the free reserves of
the Company, in the form attached hereto as
Exhibit X (the "Board Resolutions"), at a
meeting of the Board of Directors of the
Company duly called and convened or pursuant
to unanimous written consent; and
(B) if the Board Resolutions
are adopted by the Board of Directors of the
Company, PSC will immediately confirm with
the Agent the adoption of the Board
Resolutions by delivering to the Agent the
confirmation of the due adoption of the
Board Resolutions, duly and validly executed
by PSC, in the form attached hereto as
Exhibit Y (the "Board Action Confirmation").
(viii) After completion of the actions set forth in
Section 2.3(b)(vii), the Agent will, by no later than midnight
GMT on December 31, 2003, complete the Mauritius Stock
Transfer Form for the transfer of 50% of the Mauritius Shares
to HCL by dating such form as of the then current date and
will similarly complete any other documents deposited in
Escrow required to validly transfer the entire legal and
beneficial interest in the remaining 50% of the Mauritius
Shares to HCL.
(ix) The Agent will, by no later than midnight
GMT on December 31, 2003, deliver (by email as a scanned
document, by facsimile and by courier, after completion of the
actions set forth in Section 2.3(b)(viii)) to the Notary:
(1) the powers of attorney of PSC, HCL
and the Company for the execution of the HCL Company
Deed of Transfer (after filling in the date of such
document with the then current date); and
(2) the HCL Company Deed of Transfer.
Immediately upon receipt by the Notary of said
documents and instruments, the Notary will date and
execute the HCL Company Deed of Transfer to reflect
the repurchase of the HCL Company Shares by the
Company and amend the Company Stockholders Register
to reflect that the Company has repurchased (without
cancellation of the repurchased shares) the HCL
Company Shares.
25
The Notary will then return to the Agent three (3)
certified copies of the HCL Company Deed of Transfer,
along with a copy of the Company Stockholders
Register (by email as a scanned document, by
facsimile and by courier) for delivery to HCL.
(x) The Agent will deliver to HCL (as soon as
practicable after the completion of the actions set forth in
Section 2.3(b)(ix)):
(1) a certified copy (afschrift) of the
HCL Company Deed of Transfer;
(2) a copy of the Company Stockholders
Register, in which the Notary has drawn up that PSC
is the sole holder of the issued and outstanding
ordinary shares of the Company;
(3) the certificates representing the
HPS India Nominee Shares, accompanied by the HPS
India Transfer Deeds and any other transfer documents
with respect thereto deposited in Escrow, each dated
by the Agent as of the then current date;
(4) the resignations, waivers and
releases of the representatives who have resigned
from positions with Company Group members other than
the Company because HCL is the Buyer, and the
terminations of powers of attorney and bank signature
authority of the representatives with respect to all
Company Group members other than the Company; and
(5) two complete, fully executed
original sets (or copies, where originals are not
available) of all the other Escrowed Documents that
are intended to become effective if HCL is the Buyer
(other than the notarial deeds representing the HCL
Company Shares (and the related transfer documents),
the resignation, waivers and releases of the
representatives who have resigned from positions with
the Company because HCL is the Buyer, and the
terminations of powers of attorney and bank signature
authority with respect to the Company), and the
originals (without delivery of copies to the PSC
Group) of any other Escrowed Documents deposited in
Escrow by the HCL Group that are not intended to
become effective if HCL is the Buyer.
(xi) The Agent will deliver to PSC (as soon as
practicable after the completion of the actions set forth in
Section 2.3(b)(ix)):
(1) subject to Section 1.1(b)(vi)(1),
the cash deposited in Escrow by PSC and its Group
(together with any earnings thereon) by wire transfer
of immediately available funds to an account
26
specified in writing by PSC (if the Agent has not
previously delivered such cash to PSC pursuant to
Section 1.1(b)(vi)(1));
(2) a certified copy (afschrift) of the
HCL Company Deed of Transfer;
(3) a copy of the extract of the Trade
Register of the Chamber of Commerce of Amsterdam,
provided to the Agent by the Attorney-in-Fact
reflecting that each of the representatives who has
resigned from the Company because HCL is the Buyer
has been deregistered as managing director
(directeur) of the Company with the Trade Register of
the Chamber of Commerce in Amsterdam, The
Netherlands;
(4) a copy of the Company Stockholders
Register, in which the Notary has drawn up that PSC
has become the sole holder of the issued and
outstanding ordinary shares of the Company;
(5) the 2,052 Rupees deposited by PSC
which amount represented the aggregate purchase price
to be paid to the Current HPS India Nominee
Stockholders upon Closing in the event that PSC was
the Buyer;
(6) the resignations, waivers and
releases of each of the representatives who has
resigned from the Company because HCL is the Buyer,
and the terminations of powers of attorney and bank
signature authority with respect to the Company; and
(7) two complete, fully executed
original sets (or copies when originals are not
available) of all the other Escrowed Documents that
are intended to become effective if HCL is the Buyer
(other than the resignations, waivers and releases of
the representatives who have resigned from positions
with the Company Group members other than the Company
because HCL is the Buyer, and the terminations of
powers of attorney and bank signature authority with
respect to the Company Group members other than the
Company), and the originals (without delivery of
copies to the HCL Group) of any other Escrowed
Documents deposited in Escrow by the PSC Group that
are not intended to become effective if HCL is the
Buyer.
(xii) The Agent will:
(1) mail the Mauritius Stock Transfer
Form evidencing the transfer of 50% of the Mauritius
Shares from the Company to HCL
27
Bermuda to Xxxxxxx Corporate Finance Ltd.. (3rd
Floor, Amed Building, 00, Xxxxxxxxx Xxxxxx,
Xxxx-Xxxxx, Xxxxxxxxx) with instructions to file such
form with the Financial Services Commission of
Mauritius;
(2) upon confirmation from Xxxxxxx
Corporate Finance Ltd. that the Mauritius Stock
Transfer Form referenced in Section 2.3(b)(xii)(1)
has been filed, mail the Mauritius Stock Transfer
Form evidencing the transfer of 50% of the Mauritius
Shares from the Company to HCL to Xxxxxxx Corporate
Finance Ltd. at the address noted above with
instructions to file such form with the Financial
Services Commission of Mauritius;
(3) will retain in Escrow for the
benefit of the Company the HCL Bermuda Note the HCL
Bermuda Pledge Agreement (including any exhibits
thereto), the HCL Bermuda Pledge Stock Transfer Form
and the original share certificates representing all
of the Mauritius Shares, subject to and in accordance
with the terms of the Agent Agreement;
(4) will retain in Escrow for the
benefit of PSC the HCL Call Option, subject to and in
accordance with the terms of the Agent Agreement; and
(5) will wire or mail, as applicable,
(on the Closing Date or as soon as practicable after
the Closing Date) to each Current HPS India Nominee
Stockholder a check issued by the Agent and payable
to the Current HPS India Nominee Stockholder in an
amount equal to 27 Rupees per HPS India Nominee Share
held by such Current HPS Nominee Stockholder
(provided, that if the endorsement of the prescribed
authority in India on the HPS India Transfer Deeds is
not present or has expired, the Agent, with the
assistance of PSC, HCL and the Company, will obtain
the endorsement or the renewal of such endorsement,
as applicable, before mailing the checks to the
Current HPS Nominee Stockholders). HCL will assist
the Agent in converting the funds deposited in Escrow
to Rupees for purposes of this provision, and will
provide any additional funds required in order to
obtain 2,052 Rupees upon conversion.
(c) After completion of all other applicable actions and
deliveries to be completed as of the Closing Date, the Agent will
deliver to the Company:
(i) a certified copy (afschrift) of the PSI
Company Deed of Transfer, in the event that PSC is the Buyer;
28
(ii) a certified copy (afschrift) of the HCL
Company Deed of Transfer, in the event that HCL is the Buyer;
and
(iii) a copy of the Company Stockholders Register
in which the Notary has drawn up that PSC and PSI are the sole
holders of the issued and outstanding ordinary shares in the
Company, in the event that PSC is the Buyer, or that PSC is
the sole holder of the issued and outstanding ordinary shares
of the Company, in the event that HCL is the Buyer, as
applicable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PSC AND PSI
PSC and PSI, jointly and severally, represent and warrant to HCLT and
HCL as follows:
3.1 Organization. PSC is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware, U.S.A.
PSI is a Dutch company duly organized and validly existing under the laws of The
Netherlands.
3.2 Authority. Each of PSC and PSI has all requisite power and
authority to execute, deliver, and perform in obligations under this Agreement
and the other agreements, certificates and instruments to be executed in
connection with or pursuant to this Agreement (collectively with this Agreement,
the "Transaction Documents") to which it is a party. The execution, delivery,
and performance by each of PSC and PSI of this Agreement and each other
Transaction Document to which it is a party has been duly authorized by all
necessary action, corporate or otherwise, on the part of PSC and PSI, as
applicable. This Agreement and each other Transaction Document to which it is a
party has been duly executed and delivered by each of PSC and PSI, as
applicable. This Agreement and each other Transaction Documents is a legal,
valid, and binding agreement of each of PSC and PSI (to the extent each is a
party thereto), enforceable against each of PSC and PSI in accordance with its
respective terms except as enforceability may be limited by bankruptcy,
insolvency or other laws affecting the enforcement of creditors' rights
generally, and except that the availability of the remedy of specific
performance or other equitable relief is subject to the discretion of the court
before which any proceeding therefore may be brought.
3.3 No Violation. The execution, delivery, and performance of this
Agreement and each other Transaction Document to which it is a party by each of
PSC and PSI will not conflict with or result in the breach of any term or
provision of, or violate, or constitute a default under any charter provision or
bylaw or under any material Contract, instrument, or Law to which either of them
is a party or by which either of them is in any way bound or obligated.
3.4 Governmental Consents. Except as set forth in Section 3.4 of
the disclosure letter prepared by PSC (the "PSC Disclosure Letter"), no consent,
approval,
29
order, or authorization of, or registration, qualification, designation,
declaration, or filing with, any governmental or quasi-governmental agency
(regulatory or otherwise), authority, commission, board, or other body, or any
court or tribunal (collectively, a "Governmental Body") is required on the part
of PSC or PSI in connection with the consummation of transactions contemplated
by this Agreement and the other Transaction Documents.
3.5 Litigation. There are no pending, or to PSC's Knowledge,
threatened, lawsuits, administrative proceedings, or reviews, or formal or
informal complaints or investigations by any individual, corporation,
partnership, Governmental Body, or other entity (a "Person") against PSC, PSI or
any PSC Group member that in any manner challenges or seeks to prevent, enjoin,
alter or materially delay any of the transactions contemplated by this Agreement
and the other Transaction Documents.
3.6 Title to Shares.
(a) PSC owns of record and beneficially 40,075,000
ordinary shares of capital stock of the Company, nominal value EUR .04
per share, which shares constitute all shares of capital stock of the
Company owned or held by PSC and the PSC Group (the "PSC Company
Shares"). The PSC Company Shares are free and clear of any liabilities,
obligations, liens, pledges, claims, spousal interests (community or
otherwise), security interests, assignment of rights or interests,
encumbrances, contingencies and adverse claims of any nature
(collectively, "Liens") except as may exist by virtue of this
Agreement. Except for the PSC Company Shares, neither PSC, nor any
member of the PSC Group, owns or holds or has any right to acquire or
obtain any options, warrants, rights, convertible or other securities,
or other Contracts or commitments of any character relating to the
issued or unissued capital stock or other securities of the Company or
any Company Group member.
(b) PSC has no reason to believe, based on PSC's
Knowledge, that the Company does not own of record and beneficially the
Mauritius Shares, free and clear of any Liens; provided, that it is
expressly understood and agreed that any knowledge possessed by the
Company or any member of its Group or any of their respective
representatives concerning the Mauritius Shares shall not be imputed to
PSC or any member of its Group and neither PSC nor any PSC Group member
shall be deemed to know any facts (actual or constructive) or
circumstances concerning the Mauritius Shares solely by virtue of them
being known to the Company or any member of its Group or any of their
respective representatives.
3.7 [INTENTIONALLY OMITTED]
3.8 [INTENTIONALLY OMITTED]
30
3.9 PSC Affiliate Transactions. Set forth in Section 3.9 of the
PSC Disclosure Letter is a list of all contracts, agreements, arrangements,
commitments, and understandings (written or oral) (collectively "Contracts")
(including, without limitation, any consultancy, secondment, joint employment or
advisory arrangements, option and other incentive or compensation arrangements,
and transactions relating to assets, real estate, third Person vendor goods or
services and inter-party services) between (i) any Company Group member, or any
officer, director, or, to PSC's Knowledge, any manager or employee (or, to PSC's
Knowledge, any member of the immediate family of any of the foregoing) of any
Company Group member on the one hand and (ii) any PSC Group member, or any
officer, director, or, to PSC's Knowledge, any manager or employee (or, to PSC's
Knowledge, any member of the immediately family of any of the foregoing) of any
PSC Group member, on the other hand, and pursuant to which any party thereto has
any rights, duties, liabilities, or obligations that remain outstanding as of
the Effective Date (collectively, the "PSC Group Agreements").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF HCLT, HCL AND HCL BERMUDA
HCLT, HCL and HCL Bermuda, jointly and severally, represent and warrant
to PSC as follows:
4.1 Organization. HCLT is a corporation registered, incorporated
and validly existing under the laws of India. HCL is a corporation registered,
incorporated and validly existing under the laws of Austria. HCL Bermuda is a
corporation registered, incorporated and validly existing under the laws of
Bermuda.
4.2 Authority. Each of HCLT, HCL and HCL Bermuda has all requisite
power and authority to execute, deliver, and perform its obligations under this
Agreement and each other Transaction Document to which it is a party. The
execution, delivery, and performance by each of HCLT, HCL and HCL Bermuda of
this Agreement and each other Transaction Document to which it is a party has
been duly authorized by all necessary action, corporate or otherwise, on the
part of HCLT, HCL and HCL Bermuda, as applicable. This Agreement and each other
Transaction Document to which it is a party has been duly executed and delivered
by each of HCLT, HCL and HCL Bermuda, as applicable. This Agreement and each
other Transaction Documents is a legal, valid, and binding agreement of each of
HCLT, HCL and HCL Bermuda (to the extent each is a party thereto), enforceable
against each of HCLT, HCL and HCL Bermuda (to the extent each is a party
thereto) in accordance with its respective terms, except as enforceability may
be limited by bankruptcy, insolvency or other laws affecting the enforcement of
creditor's rights generally, and except that the availability of the remedy of
specific performance or other equitable relief is subject to the discretion of
the court before which any proceeding therefore may be brought.
4.3 No Violation. The execution, delivery, and performance of this
Agreement and each other Transaction Document to which it is a party by each of
HCLT, HCL and HCL Bermuda will not conflict with or result in the breach of any
term or provision of, or
31
violate, or constitute a default under any charter provision or bylaw or under
any material Contract, instrument, or Law, to which either of them is a party or
by which either of them is in any way bound or obligated.
4.4 Governmental Consents. Except as set forth in the disclosure
letter prepared by HCL (the "HCL Disclosure Letter"), no consent, approval,
order, or authorization of, or registration, qualification, designation,
declaration, or filing with, any Governmental Body is required on the part of
either HCLT, HCL or HCL Bermuda in connection with the consummation of
transactions contemplated by this Agreement and the other Transaction Documents.
4.5 Litigation. There are no pending, or to HCL's Knowledge,
threatened, lawsuits, administrative proceedings, or reviews, or formal or
informal complaints or investigations by any Person against HCLT, HCL or HCL
Bermuda, or any HCL Group member that in any manner challenges or seeks to
prevent, enjoin, alter or materially delay any of the transactions contemplated
by this Agreement and the other Transaction Documents.
4.6 Title to Shares.
(a) HCL owns of record and beneficially 40,075,000
ordinary shares of capital stock of the Company, nominal value EUR .04
per share (the "HCL Company Shares"). The HCL Company Shares are free
and clear of any Liens, except as may exist by virtue of the Agreement.
Except for the HCL Company Shares, neither HCL, nor any member of the
HCL Group, owns or holds or has any right to acquire or obtain any
options, warrants, rights, convertible or other securities, or other
Contracts or commitments of any character relating to the issued or
unissued capital stock or other securities of the Company or any
Company Group member. If (a) HCL is the Seller in the transactions
contemplated by this Agreement, upon the sale of the HCL Company Shares
to PSI at the Closing, HCL will deliver the entire legal and beneficial
interest in all of the HCL Company Shares to PSI free and clear of any
Liens and (b) if HCL is the Buyer in the transactions contemplated by
this Agreement, upon the sale of the HCL Company Shares to the Company
at the Closing, HCL will deliver the entire legal and beneficial
interest in all of the HCL Company Shares to the Company free and clear
of any Liens; provided, that in either case all ministerial actions
under applicable Law in respect of the actual transfer of the legal and
beneficial interest in all of the HCL Company Shares to PSI or to the
Company, as applicable, and that are not dependent upon action by HCL
or any member of its Group have been completed.
(b) HCL has no reason to believe, based on HCL's
Knowledge, that the Company does not own of record and beneficially the
Mauritius Shares, free and clear of any Liens; provided, that it is
expressly understood and agreed that any knowledge possessed by the
Company or any member of its Group or any of their respective
representatives concerning the Mauritius Shares shall not be
32
imputed to HCL or any member of its Group and neither HCL nor any HCL
Group member shall be deemed to know any facts (actual or constructive)
or circumstances concerning the Mauritius Shares solely by virtue of
them being known to the Company or any member of its Group or any of
their respective representatives.
4.7 [INTENTIONALLY OMITTED]
4.8 [INTENTIONALLY OMITTED]
4.9 HCL Affiliate Transactions. Set forth in Section 4.9 of the
HCL Disclosure Letter is a list of all Contracts (including, without limitation,
any consultancy, secondment, joint employment or advisory arrangements, option
and other incentive or compensation arrangements, and transactions relating to
assets, real estate, third Person vendor goods or services and inter-party
services) between (i) any Company Group member, or any officer, director, or, to
HCL's Knowledge, any manager or employee (or, to HCL's Knowledge, any member of
the immediate family of any of the foregoing) of any Company Group member on the
one hand and (ii) any HCL Group member, or any officer, director, manager or
employee (or, to HCL's Knowledge, any member of the immediate family of any of
the foregoing) of any HCL Group member, on the other hand, and pursuant to which
any party thereto has any rights, duties, liabilities, or obligations that
remain outstanding as of the Effective Date (collectively, the "HCL Group
Agreements").
ARTICLE V
COMPANY DISCLOSURES
The following information and statements concerning the Company and the
Company Group and the disclosure letter prepared by the Company (the "Company
Disclosure Letter") are provided by the Company to PSC and HCL solely for their
convenience to assist them in their respective due diligence reviews. The
following information and statements and the Company Disclosure Letter do not
and shall not be deemed to constitute or contain a representation or warranty of
any type whatsoever and are provided subject to the express qualifications set
forth in Section 9.13 hereof.
5.1 Organization and Qualification. The Company is a Dutch
corporation duly organized and validly existing under the laws of The
Netherlands and has the requisite corporate power and authority and any
necessary governmental authority to own, operate, and lease its properties and
assets and to carry on its business as it is now being conducted, except for
failures to have such power and authority as could not reasonably be expected to
result in a Company Material Adverse Effect. Except as set forth in Section 5.1
of the Company Disclosure Letter, the Company is duly qualified or licensed to
do business and is in good standing in each jurisdiction where the character of
its properties owned or leased or the nature of its activities makes such
qualification or licensing necessary, except for failures to be so qualified or
licensed and in good standing as could not reasonably be expected to result in a
Company Material Adverse
33
Effect. For purposes of this Agreement, "Company Material Adverse Effect" or
"Company Material Adverse Change" means in each case any change or effect that,
individually or when taken together with all such other changes or effects, the
Company believes is, or could reasonably be expected to be, materially adverse
to the condition (financial or other), business, operations, properties, assets,
liabilities, results of operations of the Company and the Company Group, taken
as a whole, or to adversely affect the ability of the Company to timely perform
its obligations under this Agreement.
5.2 Investments and Group Members.
(a) Section 5.2 of the Company Disclosure Letter is a
list of each Company Group member and each other Person in which the
Company directly or indirectly owns or holds (or has the right to
acquire or obtain) any equity or debt interest or any form of
proprietary interest and its jurisdiction of incorporation or
organization.
(b) Except as set forth in Section 5.2(b) of the Company
Disclosure Letter, (i) the Company is, directly or indirectly, the
record and beneficial owner of all outstanding shares of capital stock
or other equity interests of each Company Group member, there are no
proxies or voting agreements with respect to any such shares, and no
equity security of any Company Group member is or may become required
to be issued by reason of any options, warrants, scrip, rights to
subscribe to, calls, or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable
for, shares of any capital stock or other equity interests of any such
Company Group member, and there are no contracts, commitments,
understandings, or arrangements by which any Company Group member is
bound to issue additional shares of its capital stock or other equity
interests or securities convertible into or exchangeable for such
shares or other equity interest, and (ii) all such shares or other
equity interests directly or indirectly owned by the Company are owned
by the Company or a wholly-owned Company Group member, free and clear
of any Lien, other than Liens in the form of requirements or
regulations governing transfer created by state, federal and foreign
securities laws and securities regulations and the Buyer under this
Agreement.
(c) Except as sets forth in Section 5.2(c) of the Company
Disclosure Letter, each Company Group member is duly organized, validly
existing, and, if applicable, in good standing under the laws of its
jurisdiction of incorporation or organization and in each jurisdiction
where the character of its properties owned or leased or the nature of
its activities makes such qualification or licensing necessary, and has
the requisite corporate or entity power and authority and any necessary
governmental authority to own, operate, or lease its properties and
assets and to carry on its business as it is now being conducted,
except for failures as could not reasonably be expected to result in a
Company Material Adverse Effect.
34
(d) Except as set forth in Section 5.2(d) of the Company
Disclosure Letter, each Company Group member is duly qualified or
licensed to do business and is in good standing in each jurisdiction
where the character of its properties owned or leased or the nature of
its activities makes such qualification or licensing necessary, except
for failures to be so qualified or licensed and in good standing as
could not reasonably be expected to result in a Company Material
Adverse Effect. Complete copies of the charter documents, bylaws, or
equivalent organizational documents of each Company Group member have
been delivered to PSC and to HCL.
(e) Except as set forth in Section 5.2(e) of the Company
Disclosure Letter, neither the Company nor any Company Group member:
(i) beneficially owns, or possesses any option
or right, has an obligation or has otherwise agreed (including
by virtue of any merger, consolidation or similar arrangement)
to acquire, any equity or debt interests in any Person that is
not a Company Group member; or
(ii) is party to any joint venture, partnership,
or similar arrangement.
5.3 Authorized Capital.
(a) The authorized capital stock of the Company is
300,000,000 shares, nominal value EUR .04 per share, of which
80,150,000 ordinary shares are issued and outstanding. Each of PSC and
HCL own of record and beneficially 40,075,000 ordinary shares.
(b) The authorized capital stock, the number of shares of
capital stock outstanding, and the record and beneficial owners of such
outstanding capital stock of each Company Group member (other than the
Company) is set forth in Section 5.3(b) of the Company Disclosure
Letter.
(c) All of the outstanding shares of capital stock of the
Company and each Company Group member have been duly authorized and are
validly issued, fully paid, nonassessable, and free of preemptive or
similar rights.
(d) Section 5.3(d) of the Company Disclosure Letter lists
each option, warrant or other right to acquire the capital stock of the
Company and any Company Group member outstanding on the date hereof
(the "Company Group Options"), the number of shares covered by such
Company Group Options, the exercise prices, the exercise dates, and the
plan or agreement pursuant to which such Company Group Options were
issued. Except as set forth in Section 5.3(d) of the Company Disclosure
Letter, (i) there are no preemptive or similar rights nor any
outstanding subscriptions, options, warrants, rights, convertible
securities, or other Contracts or commitments of any character relating
to the issued or
35
unissued capital stock or other securities of the Company or any
Company Group member to which the Company or any Company Group member
is a party; and (ii) there are no voting trusts or other understandings
to which the Company or any Company Group member is a party with
respect to the voting capital stock or other interests of the Company
or any Company Group member.
5.4 Bank Accounts; Powers of Attorney and Representatives. Set
forth in Section 5.4 of the Company Disclosure Letter is a list of (a) each
bank, trust company and stock or other broker with which the Company has an
account, credit line or safe deposit box or vault, or otherwise maintains
relations (collectively, "Bank Accounts"), (b) all Persons authorized to draw
on, or to have access to, each of the Bank Accounts, (c) all Persons authorized
by proxies, powers of attorney or other like instruments to act on behalf of the
Company, and (d) all Persons who are corporate representatives of the Company or
any Company Group member.
5.5 Approvals; No Violations.
(a) Except as set forth in Section 5.5(a) of the Company
Disclosure Letter, in Section 3.4 of the PSC Disclosure Letter, or
Section 4.4 of the HCL Disclosure Letter, no filing with, and no
permit, authorization, consent, or approval of, any Governmental Body
is necessary for the consummation by the Company of the transactions
contemplated by this Agreement and the other Transaction Documents.
(b) Except as set forth in Section 5.5(b) of the Company
Disclosure Letter, the execution and delivery of this Agreement and the
other Transaction Documents to which it is a party, the consummation by
the Company of the transactions contemplated by this Agreement and the
other Transaction Documents and the compliance by the Company with any
of the provisions of each of the Transaction Documents to which it is a
party do not and will not:
(i) conflict with or result in any breach of any
provision of the charters or bylaws or equivalent
organizational documents of the Company or any Company Group
member;
(ii) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a
default (or give rise to any right of termination,
cancellation or acceleration) or require any authorization,
consent or approval under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license,
lease, or other Contract or other instrument or obligation to
which the Company or any Company Group member is a party or by
which any of them or any of their properties or assets may be
bound; or
(iii) provided all filings, permits,
authorizations, consents, and approvals as described in
Section 5.5(a) are made or obtained, violate or
36
require any authorization, consent or approval under any Law
applicable to the Company, any Company Group member or any of
their properties or assets;
except, with respect to the foregoing Sections 5.5(a) and (b), such violations,
conflicts, breaches, defaults, terminations, cancellations, accelerations,
authorizations, consents or approvals referred to in this Section 5.5 as could
not reasonably be expected to result in a Company Material Adverse Effect.
5.6 Financial Statements.
(a) Attached as Section 5.6(a) of the Company Disclosure
Letter is a true and complete copy of (i) the audited consolidated
balance sheet of the Company (the "Latest Balance Sheet") as of
December 31, 2002 (the "Latest Balance Sheet Date") and the related
audited consolidated statements of operations and cash flow for the
year then ended, (ii) the unaudited consolidated balance sheet of the
Company as of March 31, 2003 and the related unaudited consolidated
statements of operations and cash flow for the three (3) month period
then ended and (iii) the audited balance sheet of HPS India as of
December 31, 2002 and the related audited statements of operations and
cash flow for the year then ended ((i), (ii) and (iii) (collectively,
the "Financial Statements"). The Financial Statements and the notes
thereto present fairly the consolidated financial condition of the
Company and HPS India, as applicable at the dates specified and the
results of its operations for the periods specified and have been
prepared in accordance with The Netherlands and Indian, as applicable,
generally accepted accounting principles, consistently applied,
("GAAP"), subject in the case of the unaudited statements to the
absence of footnote disclosure and other presentation items and to
changes resulting from normal period-end adjustments for recurring
accruals, which will not be material individually or in the aggregate.
The Financial Statements do not contain any items of a special,
extraordinary or nonrecurring nature, except as expressly stated in the
Financial Statements. The Financial Statements have been prepared from
the books and records of the Company and the Company Group and HPS
India, as applicable, which are up to date, in the possession of the
Company or the applicable Company Group member and HPS India, as
applicable, properly complete in accordance with applicable Law and
applicable standards, principles and practices generally accepted in
the state or country of incorporation, and which accurately and fairly
reflect the transactions of, acquisitions, and dispositions of assets
by, and incurrence of liabilities by the Company and the Company Group
and HPS India, as applicable.
(b) The Company and the Company Group have no liabilities
and obligations except for (i) liabilities and obligations reflected on
the Latest Balance Sheet, (ii) current liabilities incurred in the
ordinary course of business after the Latest Balance Sheet Date, and
(iii) obligations incurred in the ordinary course of business under the
Material Agreements and under other Contracts entered into
37
by the Company and the Company Group in the ordinary course of business
that are not included within the definition of Material Agreements set
forth in Section 5.08, which liabilities and obligations are not
required by GAAP to be reflected in the Latest Balance Sheet.
(c) All accounts, notes and other receivables reflected
in the Latest Balance Sheet or included in the assets of the Company
and the Company Group at Closing arose in the ordinary course of
business and are fully collectible, without resort to litigation, at
the face amount thereof less any reserve reflected in the Latest
Balance Sheet, and are not subject to counterclaim, set-off, reduction,
or defense.
(d) Except as set forth in Section 5.6(d) of the Company
Disclosure Letter, during the last five years, neither the Company nor
any Company Group member has been advised by their respective auditors
of inadequacies in their respective systems of internal accounting
controls which inadequacies have not been rectified, including by
implementing substantially all of the recommendations of said auditors,
if any.
5.7 Absence of Certain Liabilities and Changes.
(a) [INTENTIONALLY OMITTED]
(b) Since the Latest Balance Sheet Date, the Company and
each Company Group member have conducted their business in the ordinary
course of business in a manner consistent with past practices, and
neither the Company nor any Company Group member has had any material
change in its assets or become subject to any material liabilities or
obligations other than liabilities or obligations (i) incurred in the
ordinary course of business consistent with past practices, or (ii)
incurred in connection with this Agreement and set forth in Section
5.7(b) of the Company Disclosure Letter.
(c) Except as set forth in Section 5.7(c) of the Company
Disclosure Letter, since Latest Balance Sheet Date, there has not been:
(i) any Company Material Adverse Change;
(ii) any declaration, setting aside or payment of
any dividend or other distribution (whether in cash, stock or
property) with respect to any capital stock of the Company or
any Company Group member;
(iii) any split, combination or reclassification
of any capital stock of the Company or any Company Group
member or any issuance or the authorization of any issuance of
any other securities in respect of, in lieu of or in
substitution for shares of capital stock of the Company or any
Company Group member;
38
(iv) any redemption, purchase, or other
acquisition by the Company or any Company Group member of any
of its equity capital;
(v) any payment or transfer of assets (including
without limitation any repayment of indebtedness) to or for
the benefit of any equity holder of the Company or any Company
Group member, other than compensation and expense
reimbursements paid in the ordinary course of business;
(vi) any revaluation by the Company or any
Company Group member of any of its assets, including, without
limitation, the writing down or off of notes, accounts or
other receivables, other than in the ordinary course of
business;
(vii) any entry by the Company or any Company
Group member into any Material Agreement;
(viii) any increase in indebtedness for borrowed
money (including capital leases) or any Contract to guarantee
the indebtedness of any Person;
(ix) any breach or default (or event that with
notice or lapse of time would constitute a breach or default),
termination, or threatened termination under any Material
Agreement by the Company or any Company Group member, or, to
the Company's Knowledge, by any third Person;
(x) any change by the Company or any Company
Group member in its accounting methods, principles, or
practices;
(xi) any increase in the benefits under, or the
establishment, amendment or renewal of, any Employee Plan, or
any increase in the compensation payable or to become payable
to directors, officers, employees, or consultants of the
Company, except for annual merit increases in salaries or
wages in the ordinary course of business consistent with past
practices;
(xii) the termination of employment (whether
voluntary or involuntary) of any employee of the Company or
any Company Group member;
(xiii) any theft known to the Company,
condemnation, or eminent domain proceeding or any material
damage, destruction, or casualty loss affecting any asset used
in the business of the Company or any Company Group member in
excess of $5,000, whether or not covered by insurance;
39
(xiv) any sale, assignment, or transfer of any
asset used in the business of the Company or any Company Group
member in excess of $5,000, except sales of assets and
services in the ordinary course of business;
(xv) any waiver by the Company or any Company
Group member of any material rights related to the Company's
or any Company Group member's business, operations, or assets;
(xvi) any other Contract entered into or affecting
the Company's or any Company Group member's business,
operations, or assets, except in the ordinary course of
business;
(xvii) any Contract, or passage of any board or
equity holder resolution to do or resulting in any of the
foregoing; or
(xviii) any other action taken by the Company or any
Company Group member that, if Section 6.1 had then been in
effect, would have been prohibited by such section if taken
without PSC's and HCL's consent (and no Contract or board or
equity holder resolution to take any such action exists).
5.8 Compliance with Applicable Law.
(a) The Company and each Company Group member currently
holds and is in compliance with the terms of all licenses, permits, and
authorizations (collectively, "Permits") necessary for the lawful
conduct of its business, and has complied with, and neither the Company
nor any Company Group member is in violation of, or in default under,
any such Permits, or applicable Laws, except for violations or defaults
that could not reasonably be expected to result in a Company Material
Adverse Effect. All material returns, reports and other documents
required to be delivered or filed by the Company or any Company Group
member to or with any Governmental Body have been properly prepared in
all material respects and delivered or filed in accordance with
applicable Law. No loss or expiration of any Permit is pending or, to
the knowledge of the Company, threatened or reasonably foreseeable,
other than expiration in accordance with the terms thereof of Permits
that may be renewed in the ordinary course of business without lapsing.
The term "Laws" shall mean any Permits and all applicable statutes,
laws, ordinances, rules, regulations, injunctions, judgments, orders,
directives, requirements, writs, decrees or official interpretations
(including in the form of a letter), in each case, in writing, of any
Governmental Body having, asserting or claiming jurisdiction over a
Person or over any part of that Person's operations or assets.
40
(b) Without limiting the foregoing, each register, minute
book and other book which the Company and any Company Group member is
required to maintain under applicable Law has been properly maintained
and contains a complete and accurate record of the matters which it is
required by the Law to record.
(c) Without limiting the foregoing, the Company and each
Company Group member has at all times complied with all applicable Laws
regulating data protection, privacy or the recording, monitoring or
interception of communications (the "Data Protection Laws"). Neither
the Company nor any Company Group member has received: (i) any
enforcement, information or equivalent notice under the Data Protection
Laws; (ii) any written communication from any Governmental Body with
competent authority over the Company Group's data processing
activities, indicating that it is investigating an allegation that the
Company or any Company Group member is in breach of the Data Protection
Laws or that it proposes to take, or is considering taking, enforcement
action under the Data Protection laws; or (iii) any written
communication from any Person complaining about the Company Group's use
of information about that Person or alleging any breach of any of the
Data Protection Laws.
(d) No investigation or review by any Governmental Body
with respect to the Company or any Company Group member is pending or,
to the Knowledge of the Company, threatened, nor, to the Knowledge of
the Company, has any Governmental Bodies indicated any intention to
conduct such an investigation or review, and no fine has been levied
against, or order entered with respect to, the Company or any Company
Group member by any Governmental Body.
5.9 Termination, Severance, and Employment Agreements.
(a) Set forth in Section 5.9 of the Company Disclosure
Letter is a complete and accurate list of each of the following:
(i) each employment, severance, separation,
consultant and non-competition Contract (without the employee
name, but with the employee's office or position) between the
Company or any Company Group member and any director, officer
or employee or consultant of same other than any such
Contracts that are terminable at will or upon no more than 30
days prior written notice and without triggering any severance
obligation or other liability to the Company or any Company
Group member, and each form of employment agreement utilized
by the Company or any Company Group member (collectively, the
"Employment Agreements");
(ii) Contract with any director, Affiliate,
officer, or key employee (or any member of the immediate
family of any of the foregoing), agent, or contractor of the
Company or any Company Group member the benefits of
41
which are contingent, or the terms of which are materially
altered, on the occurrence of a transaction involving the
Company or any Company Group member of the nature of any of
the transactions contemplated by this Agreement or the other
Transaction Documents or relating to an actual or potential
change in control of the Company or any Company Group member;
(iii) Contract or plan under which any Person may
receive payments that may be subject to any excise tax,
surcharge or other similar tax or penalty imposed by any
Governmental Body, including under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), or
included in the determination of such person's "parachute
payment" under Section 280G of the Code; and
(iv) Contract or plan, including any stock option
plan, stock appreciation right plan, restricted stock plan, or
stock purchase plan, any of the benefits of which will be
increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the other Transaction
Documents or the value of any of the benefits of which will be
calculated on the basis of any of the transactions
contemplated by this Agreement.
(b) Except as set forth in Section 5.9(b) of the Company
Disclosure Letter, neither the Company nor any Company Group member
owes any amount to a present or former director, officer or employee of
the Company or any Company Group member (or his dependent) other than
for accrued remuneration or reimbursement of business expenses incurred
in the ordinary course of business.
(c) Set forth in Section 5.9(c) of the Company Disclosure
Letter is (i) the total number of employees of the Company and each
Company Group member, including employees who are on maternity leave or
absent because of disability or other long-term leave of absence and
who have or may have a right to return to work with the Company or any
Company Group member; and (ii) the date of start of employment, period
of continuous employment, salary, grade and age of each employee of the
Company and each Company Group member, and, where an employee has been
continuously absent from work for more than one month, the reason for
the absence (but excluding the names of the employees).
5.10 Employee Benefits; Labor Matters.
(a) Set forth in Section 5.10(a) of the Company
Disclosure Letter is a complete and correct list of all the employee
benefit plans of the Company and each Company Group member, including,
but not limited to the "Employee Benefit Plans" (as defined in Section
(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), all plans or policies providing for
42
"fringe benefits" (including but not limited to vacation, paid
holidays, personal leave, employee discounts, educational benefits or
similar programs), and each other bonus, incentive compensation,
deferred compensation, profit sharing, stock, severance, retirement,
health, life, disability, group insurance, employment, stock option,
stock purchase, stock appreciation right, supplemental unemployment,
layoff, consulting, or any other similar plan, Contract or policy
(whether written or oral, qualified or nonqualified, currently
effective, pending or terminated), and any trust, escrow or other
Contract related thereto, which (i) is or has been established,
maintained or contributed to by the Company, any Company Group member
or any ERISA Affiliate or with respect to which the Company, any
Company Group member or any ERISA Affiliate has any liability, or (ii)
provides benefits, or describes policies or procedures applicable, to
any officer, employee, director, former officer, former employee or
former director of the Company, any Company Group member or any ERISA
Affiliate, or any dependent thereof, regardless of whether funded
(each, an "Employee Plan," and collectively, the "Employee Plans"). The
term "ERISA Affiliate" shall mean any Person the employees of which,
together with the employees of the Company or the Company Group, are
required to be treated as employed by a single employer under the
provisions of ERISA or Code Section 414.
(b) Each Employee Plan has been operated and administered
in compliance with all applicable Laws, including ERISA and the Code,
to the extent applicable.
(c) With respect to each Employee Plan, the Company has
furnished to PSC and HCL true, correct and complete copies of:
(i) the plan documents (including amendments and
summary plan descriptions);
(ii) the most recent determination letter
received from applicable Governmental Bodies, including the
U.S. Internal Revenue Service, if applicable;
(iii) the annual and other material reports
required to be filed with any Governmental Body for the three
most recent plan years of each such Employee Plan; and
(iv) all related trust, insurance or other
funding Contracts that implement such Employee Plan.
(d) Except as set forth in Section 5.10(d) of the Company
Disclosure Letter and to the extent of coverage required under Code
Section 4980B, no written or oral representations have been made by, or
on behalf of, the Company or any Company Group member to any employee
or officer or former employee or officer of the Company or any Company
Group member promising or
43
guaranteeing any coverage under any employee welfare benefit plan (as
defined in ERISA Section 3(1)) for any period of time beyond the end of
the current plan year.
(e) Except as set forth in Section 5.10(e) of the Company
Disclosure Letter, the consummation of the transactions contemplated by
this Agreement will not:
(i) accelerate the time of payment or vesting,
or increase the amount of compensation (including amounts due
under an Employee Plan) due to any employee, officer, former
employee or former officer of the Company or any Company Group
member; or
(ii) require the Company or any Company Group
member to make a larger contribution to, or pay greater
benefits or provide owner rights under, any Employee Plan than
it otherwise would.
(f) Where applicable, all Employees Plans have been
placed with a reputable insurance company or private pension fund or in
a separate trust. The Company has no reason to believe that the regular
premium costs and financing obligations involved for the Company or any
Company Group member with respect to any Employee Plan will
substantially increase in the near future as a result of the
transactions contemplated in this Agreement or any other reason
whatsoever, except as a consequence of ordinary course salary
increases.
(g) There is no amendment, modification or termination
proposed, intended, in progress or communicated to the employees of the
Company Group with respect to the Employee Plans which may result in a
substantial increase of the costs involved therein compared to current
costs.
(h) No Person holds as an asset of any Employee Plan a
security issued by, or property leased to or occupied by, and no loan
has been made out of an asset of any Employee Plan which is outstanding
to, the Company, any Company Group member, PSC or HCL.
(i) No trustee of any Employee Plan has subjected the
assets of any Employee Plan to any indemnity obligation. There is no
loan outstanding from the Company or any Company Group member, PSC or
HCL to any Employee Plan.
(j) No employee has received an increase in remuneration
that is pensionable under any Employee Plan since the date on which the
current administrative year of any such Employee Plan commenced. Except
as set forth in Section 5.9(j) of the Company Disclosure Letter,
neither the Company nor any Company Group member has (i) incurred a
liability for breach or termination of an employment contract
including, without limitation, a redundancy payment,
44
protective award and compensation for wrongful dismissal, unfair
dismissal, compensation for sex, race or disability discrimination and
failure to comply with an order for the reinstatement or re-engagement
of an employee; (ii) incurred a liability for breach or termination of
a consultancy Contract; or (iii) made or agreed to make a payment or
provided or agreed to provide a benefit to a present or former
director, officer or employee of the Group Company or to any of their
dependents in connection with the actual or proposed termination or
suspension of employment or variation of an employment contract.
(k) Other than routine claims for benefits, there are no
actions, suits, claims, audits or investigations pending or, to the
Knowledge of the Company, threatened against, or with respect to, any
of the Employee Plans or their assets, trustees or administrators; and
all contributions required to be made to the Employee Plans have been
made timely and in accordance with applicable Law.
(l) All reports, returns or filings required by any
Government Body with respect to any Employee Plan have been timely
filed in accordance in all material respects with all applicable
requirements, except as could not reasonably be expected to have a
Company Material Adverse Effect.
(m) No condition exists that would subject the Buyer, any
ERISA Affiliate, the Company or any Company Group member to any excise
tax, penalty tax or fine imposed by any jurisdiction related to any
Employee Plan, including, but not limited to a violation of Section
406(a) or (b) of ERISA or any "prohibited transaction" (as defined in
Code Section 4975(c)(1)).
(n) Except as set forth in Section 5.10(n) of the Company
Disclosure Letter, all employees of the Company and the Company Group
members are terminable at the will of the Company or the applicable
Company Group member, and neither the Company, any Company Group
member, nor any present or former director, officer, employee or agent
of the Company, or any Company Group member, has made any binding
commitments of the Company or any Company Group member, written or
verbal, to any present or former, director, officer, employee or agent
concerning his term, condition, benefits or employment (other than as
expressly required by Law or stated in an applicable Employee Plan).
(o) None of the Company or any Company Group member is a
party to any collective bargaining or other labor union contract, works
counsel, staff association or other body representing any of its
employees. No collective bargaining Contract is being negotiated by the
Company or any Company Group member. The Company and each Company Group
member are in compliance in all material respects with all applicable
Laws respecting employment, employment practices and wages and hours.
There is no pending or, to the Knowledge of the Company, threatened
labor dispute, strike or work stoppage against the Company or any
Company Group member that may materially
45
interfere with respective business activities of the Company or any
Company Group member. None of the Company, any Company Group member or
any of their respective representatives or employees has committed any
unfair labor practices in connection with the operation of the business
of the Company and the Company Group, and there is no pending or, to
the Knowledge of the Company, threatened charge or complaint against
the Company or any Company Group member by any Governmental Body,
including the National Labor of Relations Board or any comparable state
agency.
(p) Set forth in Section 5.10(p) of the Company
Disclosure Letter is a complete list of all current directors and
officers of the Company and the Company Group member.
(q) To the Company's Knowledge, except as set forth in
Section 5.10(q) of the Company Disclosure Letter, none of the officers
or key employees of the Company or any Company Group member require a
work permit, visa or similar governmental authorization.
(r) Except as set forth in Section 5.10(r) of the Company
Disclosure Letter, none of the officers or key employees is subject to
any restrictive covenants with any previous employer.
(s) Except as set forth in Section 5.10(s) of the Company
Disclosure Letter, neither the Company nor any Company Group member
owes any amount to a present or former director, officer or employee of
the Company or any Company Group member (or his dependant) other than
for accrued remuneration or reimbursement of business expenses incurred
in the ordinary course of business.
5.11 Taxes. Except as set forth in Section 5.11 of the Company
Disclosure Letter:
(a) The Company and each Company Group member have timely
filed all U.S., Indian and other income tax returns and reports
required by all applicable jurisdictions and other material returns and
reports relating to any taxes required to be filed. Such reports and
returns are true, correct and complete, except for such failures to be
true, correct and complete as could not reasonably be expected to
result in a Company Material Adverse Effect.
(b) The Company and each Company Group member have paid
or made adequate provision in their respective financial records for
all taxes owed except taxes that if not so paid or provided for could
not reasonably be expected to result in a Company Material Adverse
Effect, and, except as disclosed in Section 5.11 of the Company
Disclosure Letter, no unpaid deficiencies in taxes or other
governmental charges for any period have been proposed or assessed by
any Governmental Body and, to the Knowledge of the Company, no
46
Governmental Body is threatening to propose or assess against the
Company or any Company Group member any such deficiency or charge that
could reasonably be expected to result in a Company Material Adverse
Effect.
(c) The Company and each Company Group member have
withheld or collected and paid over to the appropriate Governmental
Bodies or are properly holding for such payment all taxes required by
Law to be withheld or collected, except for such failures to have so
withheld or collected and paid over, or to be so holding for payment as
could not reasonably be expected to result in a Company Material
Adverse Effect.
(d) There are no liens for taxes upon the assets of the
Company or any Company Group member, other than liens for current taxes
not yet due and payable and liens for taxes that are being contested in
good faith by appropriate proceedings diligently prosecuted and listed
on Section 5.11(d) of the Company Disclosure Letter.
(e) There are no outstanding Contracts or waivers
extending the statutory period of limitation applicable to any claim
for, or the period for the collection or assessment of, taxes due from
or with respect to the Company or any Company Group member for any
taxable period.
(f) No claim has been made by a taxing authority in a
jurisdiction in which the Company or any Company Group member does not
file tax returns that the Company or any Company Group member is
required to file tax returns in such jurisdiction, and, to the
Company's Knowledge, no taxing authority could reasonably make such a
claim.
(g) Neither the Company nor any Company Group member has
any obligation or liability for the payment of taxes of any other
Person arising as a result of any obligation to indemnify another
Person or as a result of the Company or any Company Group member
assuming or succeeding to the tax liability of any other Person as a
successor, transferee or otherwise.
(h) All taxes accrued but not yet due and all contingent
liabilities for taxes are adequately reflected in the reserves for
taxes in the financial statements referred to in Section 5.6.
5.12 Litigation. Except as set forth in Section 5.12 of the Company
Disclosure Letter, there is no suit, claim, action, proceeding, or investigation
pending or, to the Knowledge of the Company, threatened against the Company or
any Company Group member or any of their respective properties or assets before
any court, regulatory agency, or tribunal. Neither the Company nor any Company
Group member is subject to any outstanding order, writ, injunction, or decree.
47
5.13 Environmental Matters.
(a) Except for matters disclosed in Section 5.13 of the
Company Disclosure Letter and except for matters that could not
reasonably be expected to result in a Company Material Adverse Effect:
(i) the properties, operations and activities of
the Company and the Company Group are and have at all times
been in compliance with all applicable Environmental Laws (as
defined below);
(ii) the Company and the Company Group and the
properties and operations of the Company and the Company Group
are not subject to any existing, pending or, to the knowledge
of the Company, threatened action, suit, claim, investigation,
inquiry or proceeding by or before any Governmental Body under
any Environmental Laws;
(iii) all notices, permits, licenses, consents,
authorizations, approvals, certificates variances, filings or
similar authorizations ("Environmental Permits"), if any,
required to be obtained or filed by the Company or any Company
Group member under any Environmental Laws in connection with
any aspect of the business of the Company or the Company
Group, including without limitation those relating to the
generation, management, treatment, storage, transportation,
Disposal (as defined below) or Release (as defined below) of a
hazardous or otherwise regulated substance, if applicable,
have been duly obtained or filed and will remain valid and in
effect after the transactions contemplated in this Agreement
and the other Transaction Documents, and the Company and the
Company Group are in compliance with the terms and conditions
of all such Environmental Permits;
(iv) the Company and each Company Group member
have satisfied and are currently in compliance with all
financial responsibility requirements applicable to their
operations and imposed by any Governmental Body under any
Environmental Laws;
(v) to the Company's Knowledge, there are no
environmental conditions existing on any current or former
property of the Company or any Company Group member or
resulting from the Company's or such Company Group member's
operations or activities, past or present, at any location,
that would give rise to any on-site or off-site Remediation
(as defined below) obligations imposed on the Company or any
Company Group member under any Environmental Laws;
(vi) to the Company's Knowledge, since the
effective date of the relevant requirements of applicable
Environmental Laws and the extent required by such applicable
Environmental Laws, all Hazardous
48
Substances (as defined below) generated by the Company and the
Company Group, if any, have been transported only by carriers
authorized under Environmental Laws to transport such
substances and wastes, and disposed of only to treatment,
storage, and disposable facilities authorized under
Environmental Laws to treat, store or dispose of such
substances and wastes;
(vii) there has been no exposure of any person or
property to Hazardous Substances, nor has there been any
Release of Hazardous Substances into the environment by the
Company or any Company Group member or in connection with
their properties or operations that could reasonably be
expected to give rise to any claim against the Company or any
Company Group member for damages or compensation; and
(viii) the Company and the Company Group have made
available to PSC and HCL all internal and external
environmental audits and studies, consent decrees,
injunctions, orders and all correspondence on substantial
environmental matters (including any Remediation) in the
possession of the Company or the Company Group relating to any
of the current or former properties or operations of the
Company and the Company Group; and
(ix) no current or former property owned, leased,
occupied or used by the Company or any Company Group member is
designated or listed in a register or other record of
properties with respect to which there are environmental
matters that may require Remediation.
(b) For purposes of this Agreement, the term:
(i) "Disposal" shall mean discharging,
depositing, injecting, dumping, spilling, leaking, or placing
any Hazardous Material into, on or under any land or water so
that such Hazardous Material or any constituent thereof may
enter the environment or be emitted into the air or discharged
into any waters, including groundwater;
(ii) "Environmental Laws" shall mean any and all
federal, state, local and foreign Laws (including licenses and
permits) of any Governmental Body pertaining to health,
safety, or the environment in effect in any and all
jurisdictions in which the Company and the Company Group own
property or conduct business;
(iii) "Hazardous Material" shall mean any
substance whether solid, liquid or gaseous that: (x) is
listed, defined or regulated as a "hazardous substance,"
"hazardous material," "hazardous waste," "extremely hazardous
waste," "toxic substance," "sludge," "solid waste,"
"pollutant," "contaminant," or otherwise classified as a
hazardous, or toxic,
49
in or pursuant to any Environmental Law; (y) is or contains
asbestos, radon, any polychlorinated biphenyl, urea
formaldehyde foam insulation, explosive or radioactive
material, crude oil or any fraction thereof, or motor fuel or
other refined or process petroleum hydrocarbons; or (z) causes
or poses a threat to cause a contamination or nuisance to the
property or any adjacent property or a hazard to the
environment or the health or safety of persons on or about the
property or any adjacent property;
(iv) "Release" shall mean any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping, or disposing into the environment
that is not authorized by Permit required by or from any
Governmental Body pursuant to any Environmental Law;
(v) "Remediation" shall mean those actions taken
in the event of a Release or threatened Release of a Hazardous
Material into the environment, to prevent or minimize the
Release of a Hazardous Material so that it does not migrate to
cause substantial danger to present or future public health or
welfare of the environment and includes, but is not limited to
storage, confinement, dikes, trenches, ditches, clay cover,
neutralization, cleanup, recycling, reuse, diversion,
destruction, segregation dredging, excavation, repair,
replacement, collection, treatment, incineration, monitoring,
storage, transportation, and destruction.
5.14 Insurance. The Company and the Company Group are currently
insured, and during each of the past three (3) calendar years have been insured,
in the amounts and for the risks set forth in Section 5.14 of the Company
Disclosure Letter. Section 5.14 of the Company Disclosure Letter contains a
complete listing and description of all insurance (and all self-insurance
arrangements) maintained by the Company or any Subsidiary as of the date hereof
that provides coverage for any current or contingent claim, indicating the form
of coverage, name of carrier and broker, coverage limits and premium, expiration
dates, deductibles, and all endorsements. No insurer has ever canceled or
refused to accept or continue an insurance relationship with the Company or any
Company Group member (or has ever threatened to do so) and to the Company's
Knowledge, no facts or conditions exist that would adversely affect the ability
of the Company to renew or obtain new insurance at comparable levels at rates
not materially higher than present rates, except for such facts or conditions
that generally affect companies similarly situated to the Company.
5.15 Title to Properties; Entire Business.
(a) Except as set forth in Section 5.15(a) of the Company
Disclosure Letter, the Company and the Company Group members have good
title or a valid and subsisting leasehold interest in and to or a valid
and enforceable license to use all material assets, properties and
rights owned, used or held for use by them in the conduct of their
business, in each case, free and clear of any Liens
50
other than Permitted Liens (as defined below). The Company and the
Company Group members own or have sufficient right to use all assets
and properties necessary to conduct their businesses in the manner in
which they are currently conducted, which assets are in good condition
and repairs, ordinary wear and tear excepted, and (where applicable),
are in good working order and have been properly and regularly
maintained.
(b) Set forth in Section 5.15(b) of the Company
Disclosure Letter is the street address, a description of the current
use, and, if applicable, the development status of all real property
that is owned or leased by the Company or any Company Group member (the
"Real Property") and all other real property that the Company or any
Company Group member is currently developing or has contracted to
develop that is not Real Property (the "Development Property").
(c) Except as described on Section 5.15(b) of the Company
Disclosure Letter, the Real Property and the Development Property is
zoned or otherwise permitted for a classification that permits the
continued use of the Real Property and the Development Property in the
manner currently used by the Company or the applicable Company Group
member, and permits the anticipated future use of the Development
Property by the Company, Company Group member, or any future user of
the Development Property known to the Company. The Company has not
received notice of, and the Company has no Knowledge of, any pending or
contemplated change in any Law applicable to the Real Property or the
Development Property, or of any natural or artificial condition upon or
affecting the Real Property, the Development Property, or any part
thereof, any of which would result in any material change in the
condition of the Real Property or the Development Property, or any part
thereof, or in any way materially limit or impede the operation or
development thereof. There are no actions pending or, to the Company's
Knowledge, threatened that would alter the current zoning
classification of the Real Property or the Development Property or
alter any applicable Laws, covenants, conditions or restrictions that
would adversely affect the use of the Real Property or the Development
Property.
(d) Improvements on the Real Property and the Development
Property were, or are designed to be, constructed in full compliance
with, in all material respects, and remain in compliance with, in all
material respects all applicable Laws, covenants, conditions and
restrictions affecting the Real Property and the Development Property.
Except as set forth in Section 5.15(d) of the Company Disclosure
Letter, to the Knowledge of the Company, (i) all water, sewer, gas,
electric, telephone, and drainage facilities, and other utilities
required by applicable Laws for the normal and proper operation of the
Real Property and the Development Property are installed to the
property line and are adequate to serve the Real Property and the
Development Property; (ii) all utilities serving the Real Property and
the Development Property enter through currently effective public or
private easements; and (iii) no fact or condition exists which would
51
result in the termination of such utilities services to the Real
Property or the Development Property.
(e) The Company has not received notice from any
Governmental Body, and the Company has no Knowledge, of any
circumstance requiring the correction of any condition with respect to
the Real Property or the Development Property, or any part thereof, by
reason of a violation of any Law. Neither the Company nor any Company
Group member has received notice from any insurance company or
Governmental Body of any defects or inadequacies in the Real Property,
the Development Property, or the improvements thereon that would
adversely affect the insurability or usability of the Real Property,
the Development Property, or such improvements or prevent the issuance
of new insurance policies thereon at rates not materially higher than
present rates. The Company has not received any notice from any
insurance company or board of fire underwriters requesting the
performance of any material work or alteration with respect to the Real
Property or Development Property, or requiring material increase in the
insurance rates applicable to the Real Property or the Development
Property. The Real Property and the Development Property comply, to the
Company's Knowledge, with the requirements of all insurance carriers
providing insurance therefor.
(f) To the Company's Knowledge, neither the Real Property
nor the Development Property violates any restriction, condition, or
Contract contained in any easement, restrictive covenant, or similar
instrument or agreement affecting the Real Property, the Development
Property, or any part thereof. Access to the Real Property and the
Development Property is sufficient for the current use thereof by the
Company or the applicable Company Group member and for any use by
future users of the Development Property known to the Company. To the
Knowledge of the Company, no fact or condition exists that would result
in the termination of current access to or from the Real Property or
the Development Property.
(g) The Company holds all Permits (including certificates
of occupancy) which, to the Company's Knowledge, are required for the
continued operation and/or the development of the Real Property and the
Development Property as the same are currently operated, developed, or
anticipated to be developed. To the Knowledge of the Company, no
portion of the Real Property or the Development Property is situated in
an area designated by a Governmental Body as having special flood or
mudslide hazards. The Real Property and the Development Property are
independent units which do not now rely on any facilities located on
any property that is not part of the Real Property and the Development
Property to fulfill any municipal or other governmental requirement, or
for the furnishing to the Real Property and the Development Property of
any essential building systems or utilities (including drainage
facilities, catch basins, and retention ponds). No other building or
other property that is not part of the Real Property or the Development
Property relies upon any
52
part of the Real Property or the Development Property to fulfill any
municipal or other governmental requirement or to provide any essential
building systems or utilities. Without limiting the generality of the
foregoing, no reciprocal easement agreements affect the Real Property
and the Development Property.
(h) Except as set forth in Section 5.15(h) of the Company
Disclosure Letter, neither the Company nor, to the Company's Knowledge,
any other Person has granted any rights, options, rights of first
refusal, or any other agreements of any kind, which are currently in
effect, to purchase or to otherwise acquire any interest in the Real
Property or the Development Property, or any part thereof. Listed in
Section 5.15(h) of the Company Disclosure Letter is all of the Real
Property which is subject to any Contract for its lease, license or
sublease ("Tenant Leases") or other possessory interests, including,
but not limited to, conditional sale or other title retention
agreements, reservations, options and rights of first refusal. Except
for the Company, a Company Group member and the tenants, licensees or
sublessees (hereinafter "Tenant") under the agreements described on
Section 5.15(h) of the Company Disclosure Letter, there are no parties
in possession of, or that have the right to possess, any portion of
such Real Property as lessees, tenants at sufferance, or trespassers.
The Company and each Company Group member, as applicable, has performed
and complied with all of its obligations under the Tenant Leases as and
when required, and there exists no fact or circumstance that, with or
without notice or passage of time, or both, could constitute a default
of the landlord or lessor under any of the Tenant Leases, or entitle
any Tenant thereunder to any offset or defenses against the prompt and
current payment of rent or the performance of any other obligation of
the Tenant thereunder. There are no rental or other concessions of any
nature granted to any Tenant under the Tenant Leases. There are no
Tenant Leases or other agreements with respect to such Real Property
that give any Tenant the right to purchase such Real Property or any
part thereof. The rentals and other sums due or to become due under the
Tenant Leases have not been, and will not be, assigned, encumbered or
subjected to any Liens as of the Closing. The Company or a Company
Group member is the owner of the entire lessor's interest in and to
each of the Tenant Leases and none of the Tenant Leases or the rentals
or other sums payable thereunder has been assigned or otherwise
encumbered. The Company is the owner of the entire tenant's interest in
and to each of the leases under which it is a tenant, and no such lease
has been assigned or otherwise encumbered. There are no regulations,
decrees, codes, ordinances, rules, or Laws of any governmental
instrumentality, including Environmental Laws, or other agreements in
effect (other than the Tenant Leases) which restrict in any way the
rental that may be charged to tenants of any portion of the Real
Property.
(i) As used in this Agreement, a "Permitted Lien" means:
(i) a lien of a landlord, carrier, warehouseman,
mechanic, materialman, or any other statutory lien arising in
the ordinary course of
53
business that does not materially detract from the value of
the encumbered property or assets or does not materially
detract from or interfere with the use of the encumbered
property or assets in the ordinary course of business;
(ii) a lien for taxes not yet due or being
diligently contested in good faith in appropriate proceedings
and that will not result in a Company Material Adverse Effect;
(iii) with respect to the right of the Company or
the Company Group to use any property leased to the Company or
the Company Group, a lien that arises by the terms of the
applicable lease;
(iv) a purchase money security interest arising
in the ordinary course of business that does not materially
detract from the value of the encumbered property or assets or
does not materially detract from or interfere with the use of
the encumbered property or assets in the ordinary course of
business; or
(v) any other lien that does not materially
detract from the value of the encumbered property or assets or
does not materially detract from or interfere with the use of
the encumbered property or assets in the ordinary course of
business.
5.16 Intellectual Property Rights.
(a) Set forth in Section 5.16(a) of the Company
Disclosure Letter is a complete list of (i) all Intellectual Property,
including, without limitation, all patents and pending applications
therefor, registrations of trademarks (including service marks) and
pending applications therefor, and registrations of copyrights and
applications therefor and registered mask works and pending
applications therefor, that is owned by the Company or any of Company
Group member and that are material to the operation of the Company's or
any Company Group member's business (collectively, the "Company Owned
IP"), (ii) all licenses and other Contracts pursuant to which the
Company or any Company Group member is granted any rights to any
Intellectual Property owned by any third party, that are material to
the operation of the Company's or any Company Group member's business
(other than standard, commercial shrink-wrap software for which, to the
Company's Knowledge, the Company has obtained all appropriate third
party licenses) (all of the foregoing under this clause (ii)
collectively, the "Third Party Licenses") and (iii) all licenses and
other Contracts under which the Company or any Company Group member has
granted any rights to or transferred any Company owned IP. All current
or former employees and independent contractors of the Company and any
Company Group member have assigned in writing all of their rights in
the Company Owned IP to the Company or a Company Group member, as
applicable.
54
(b) The Company or a Company Group member is the owner,
free and clear of any Liens, of or holds the necessary rights in all
Intellectual Property material to the conduct of the business or
necessary for the operation of the properties, assets and business of
the Company and the Company Group members, except as could not
individually or in the aggregate, have or reasonably be expected to
have, a Company Material Adverse Effect. As used herein, "Intellectual
Property" means all intellectual property, including, without
limitation, all patents and pending patent applications, continuations,
divisions, extensions, reissues, or reexaminations thereof, trademarks
and pending trademark applications, trade dress, service marks and
pending service xxxx applications, domain names, logos, commercial
symbols, business name registrations, trade names, copyrights and
copyright registrations, computer hardware and software, including
source code, mask works and pending mask work registration
applications, inventions, trade secrets, formulae, know-how, technical
information, research data, research raw data, laboratory notebooks,
procedures, designs, proprietary technology and information.
(c) Except as set forth in Section 5.16(c) of the Company
Disclosure Letter, neither the Company nor any Company Group member has
created any Liens, which convey to a third Person any rights in the
Company Intellectual Property, limit the ability of the Company or any
Company Group member to enforce or maintain the Intellectual Property
or restrict the use by the Company or any Company Group member of the
Intellectual Property in any way. The Company and the Company Group
have all the rights necessary to license to third Persons the use of
all Intellectual Property. Neither the Company nor any Company Group
member is obligated to pay to any Person any royalty or other
consideration in connection with the Intellectual Property, that taken
as a whole is material to the operation of Company's or any Company
Group member's business.
(d) To the Company's Knowledge, the Company and the
Company Group are in compliance in all material respects with the Third
Party Licenses that are material to the conduct of the business of the
Company and the Company Group.
(e) The Company and the Company Group are not, and will
not be as a result of the execution, delivery or performance of this
Agreement, or the consummation of the transactions contemplated hereby,
in breach, violation or, default of any Third Party Licenses that are
material to the conduct of the business of the Company and the Company
Group members and the rights of the Company or any Company Group member
in the Intellectual Property will not be materially and adversely
affected by the execution, delivery or performance of this Agreement or
the consummation of the transactions contemplated hereby or in the
other Transaction Documents.
55
(f) The use of processes, methods, software and
technologies by the Company or the Company Group members or their
licensees or sublicensees, to the Company's Knowledge, does not and
would not infringe and does not and will not result in the
misappropriation or other unauthorized use of the Intellectual Property
of any third party except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse
Effect.
(g) There are no allegations, claims, suits or
proceedings instituted or pending against the Company, or, to the
Company's Knowledge, against any other Person, which challenge the
Company's or any Company Group member's rights in the Intellectual
Property or the ownership (with respect to Company Owned IP), validity,
priority, enforceability, scope or effectiveness of any of the
Intellectual Property, including without limitation any interferences,
oppositions, cancellations or other contested proceedings and, to the
Knowledge of the Company, there are no threats of the same.
(h) Except as set forth in Section 5.16(h) of the Company
Disclosure Letter, to the Company's Knowledge, there is no unauthorized
use, infringement or misappropriation of the Intellectual Property by
any third Person, including any employee or former employee of the
Company or any Company Group member, except as could not, individually
or in the aggregate, reasonably be expected to have a Company Material
Adverse Effect. Commercially reasonable measures have been taken to
maintain the confidentiality of the inventions, trade secrets,
formulas, know-how, technical information, research data, procedures,
designs, proprietary technology and information of the Company and the
Company Group and all other information the value of which to the
Company or any Company Group member is contingent upon maintenance of
the confidentiality thereof. Without limiting the generality of the
foregoing, each employee or independent contractor of the Company or
any Company Group member who was involved in the development of
Intellectual Property or who has had access to proprietary information
of the Intellectual Property (subject to the Third Party Licenses) has
entered into a Contract for maintaining all confidential information of
the Company or such Company Group member. No source code or object code
of any Company Owned IP that is material to the conduct of the business
is subject to escrow and such source code has not been disclosed to any
third Person.
(i) Except as set forth in Section 5.16(i) of the Company
Disclosure Letter, no current or former employee or independent
contractor of the Company or any Company Group member owns or has
claimed an interest in any Intellectual Property material to the
conduct of its business.
(j) Except as set forth in Section 5.16(j) of the Company
Disclosure Letter, neither the Company nor any Company Group member has
entered into any contract to indemnify any other Person for or against
any charge of infringement or misappropriate of, or interference or
conflict with respect to, any of the Company's Intellectual Property.
56
5.17 Major Customers.
(a) Section 5.17 of the Company Disclosure Letter
contains a list of: (i) the customers of the Company or any Company
Group member from whom the Company and the Company Group members,
collectively, generated 80% of their aggregate revenues during period
from October 1, 2002 through September 30, 2003 and (ii) all customers
of the Company or any Company Group members that are not identified in
Section 5.17(a)(i) and that have entered into a contract or contracts
with the Company or a Company Group member with a total future contract
value in excess of two million dollars ($2,000,000) (collectively, the
"Major Customers"); (iii) the amount of revenues attributable to each
Major Customer in the fiscal year ended December 31, 2002; (iv) the
amount of revenues attributable to each Major Customer during the one
month period ended January 31, 2003; (v) the scheduled expiration date
of the respective contracts between the Company, any Company Group
member and the Major Customers (the "Customer Contracts"), as
applicable; and (vi) the provisions of each Customer Contract relating
to a change of control of the Company or any Company Group member, as
applicable.
(b) Except as could not reasonably be expected to have a
Company Material Adverse Effect, or as set forth in Section 5.17(b) of
the Company Disclosure Letter, since January 1, 2002: (i) none of the
Major Customers has terminated or adversely altered its relationship
with the Company or any Company Group member other than in the ordinary
course of business, or, to the Company's Knowledge, threatened to do so
or otherwise notified the Company or any Company Group member of its
intention to do so; and (ii) there has been no dispute with any of the
Major Customers.
5.18 Material Agreements.
(a) Set forth in Section 5.18(a)(i) of the Company
Disclosure Letter lists each of the following Contracts (including all
amendments thereto) to which the Company or any Company Group member is
a party or a beneficiary or by which the Company, any Company Group
member or any of their respective assets is bound (collectively, the
"Material Agreements"):
(i) master agreements pursuant to which the
Company or any Company Group member sells or distributes any
products or services, and any task orders relating to such
master agreements having a value in excess of $20,000 per
month (or the equivalent in the currency specified in the
agreement);
(ii) real estate leases, subleases and licenses
for Real Property;
57
(iii) Contracts concerning the sale or purchase of
Real Property or Development Property;
(iv) Contracts evidencing, securing or otherwise
relating to any indebtedness for borrowed money for which the
Company or any Company Group member is, directly or
indirectly, liable;
(v) capital or operating leases or conditional
sales Contracts having a value in excess of $20,000 (or the
equivalent in the currency specified in the agreement);
(vi) insurance policies;
(vii) Employment Agreements;
(viii) Contracts other than Employment Agreements
(or employment, severance, separation, consultant and
non-competition contracts terminable at will or upon not more
than 30 days prior written notice without triggering any
severance obligation or other obligation to the Company or any
Company Group member) with or for the benefit of any equity
holder, director, officer, key employee, or key consultant (or
any Person that, to the Company's Knowledge, claims or has any
basis to claim any rights as such) of the Company or any
Company Group member;
(ix) Third Party Licenses and License Agreements;
(x) any partnership, joint venture, consortium,
or other similar Contract;
(xi) any other Contract pursuant to which the
Company or any Company Group member could be required to make
or entitled to receive aggregate payments or other aggregate
value in excess of $20,000 (or the equivalent in the currency
specified in the Contract);
(xii) Contracts with Governmental Bodies,
including, without limitation, concerning concessions, grants,
subsidies or tax matters, other than customs bonding Contracts
and any other Contracts the failure of which to have in effect
could not reasonably be expected to result in a Company
Material Adverse Effect;
(xiii) guarantee, surety, or indemnity Contracts
other than as set forth in any Third Party Licenses or License
Agreements or other agreements entered into in the ordinary
course of business;
58
(xiv) any Contract purporting to restrict the
ability of the Company or any Company Group member to compete
or to provide products or services or pursuant to which the
Company or any Company Group member so restricts or limits a
third Person; and
(xv) Contracts granting any Person power of
attorney or other similar authority (other than to directors,
officers and employees in the ordinary course of business).
(b) Except as described in Section 5.18(b) of the Company
Disclosure Letter, (i) each Material Agreement is valid, binding, and
in full force and effect and enforceable against the Company or the
applicable Company Group member, and, to the Company's Knowledge, the
other parties thereto in accordance with its terms; (ii) the Company or
the applicable Company Group member has performed all of its
obligations under each Material Agreement, and there exists no breach
or default (or event that with notice or lapse of time would constitute
a breach or default) on the part of the Company or the applicable
Company Group member or, to the Company's Knowledge, on the part of any
other party under any Material Agreement; (iii) there has been no
termination or notice of default or, to the Company's Knowledge, any
threatened termination or basis for any termination under any Material
Agreement; and (iv) to the Company's Knowledge, no party to a Material
Agreement intends to alter its relationship with the Company or the
applicable Company Group member, as a result of or in connection with
the acquisition contemplated by the Transaction Documents or has been
threatened with bankruptcy or insolvency.
5.19 Insider Interests.
(a) Except as set forth in Section 5.19 of the Company
Disclosure Letter, to the Company's Knowledge, no officer, director,
manager, employee (or any member of the immediate family of any of the
foregoing) or agent of the Company or any Company Group member or any
Affiliate of any officer, director or manager of the Company or any
Company Group member:
(i) has any interest in any assets or property
(whether real or personal, tangible or intangible) of or used
in the business of the Company or any Company Group member
(other than as an owner of outstanding securities of the
Company);
(ii) is indebted or otherwise obligated to the
Company or any Company Group member (other than expense
advances in the ordinary course of business); or
(iii) is a party to any Contract with the Company
or any Company Group members, other than employment severance,
separation, consultant and non-competition Contracts
terminable at will or upon not
59
more than 30 days prior written notice without triggering any
severance obligation or other obligation to the Company or any
Company Group member.
(b) Neither the Company nor any Company Group member is
indebted or otherwise obligated to any such Person described in Section
5.19(a), except for amounts due under normal arrangements applicable to
all employees generally as to salary or reimbursement of ordinary
business expenses not unusual in amount or significance.
(c) As of the date of this Agreement, except for claims
and proceedings listed on Section 5.19 of the Company Disclosure
Letter, to the Company's Knowledge, there are no pending or threatened
Claims for indemnification from the Company or any Company Group member
under applicable Law, or the organizational documents of the Company or
any Company Group member or any insurance policy maintained by the
Company or any Company Group member.
5.20 Illegal Payments. Neither the Company, any Company Group
member, any director or officer, nor, to the Company's Knowledge, any agent,
employee, Affiliate or immediate family member of any of the foregoing has (a)
used any funds of the Company or any Company Group member for contributions,
gifts, entertainment, or other expenses relating to political activity in
violation of applicable Law, (b) made any payment on behalf of or for the
benefit of the Company or any Company Group member to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns in violation of applicable Law, or (c) made any other payment on
behalf of or for the benefit of the Company or any Company Group member in
violation of applicable Law.
ARTICLE VI
COVENANTS AND AGREEMENTS
6.1 Conduct of Business.
(a) Except as expressly contemplated by this Agreement or
except as otherwise expressly approved by a majority of the Board of
Directors (including one (1) representative of each of HCL and PSC
specifically designated in writing for this purpose by notice delivered
to PSC by HCL, on the one hand, and to HCL by PSC, on the other hand,
no later than the date of this Agreement) at a legally convened meeting
of the Board of Directors of the Company or by the affirmative vote of
both HCL and PSC (in their capacities as stockholders of the Company)
at a meeting of the stockholders (or by written consent) during the
period from the Effective Date until the Closing (the "Interim Period")
the Company will (and the Company shall cause each Company Group member
to):
60
(i) conduct its business solely in the ordinary
course consistent with past practices;
(ii) not intentionally take any action that, or
intentionally omit to take any action the failure to take
which, results in or could reasonably be expected to result
in, a Company Material Adverse Effect; and
(iii) use its commercially reasonable efforts to
preserve intact the business organization of the Company and
each Company Group member, to keep available the services of
its and their present officers and key employees, consultants,
advisors and managers and to maintain satisfactory
relationships with customers, agents, re-insurers, suppliers,
and other persons having business relationships with the
Company or Company Group members,
and, in each case, each of HCL and PSC agrees not to cause or support
any action by the Company or any Company Group member in contravention
of any of the foregoing (and agrees to instruct each of its
representatives who serves as manager, director, officer, employee,
consultant or agent of or to the Company or any Company Group member
not to cause or support any such action by the Company or any Company
Group member).
(b) Without limiting the provisions of Section 6.1(a),
except as otherwise expressly provided in this Agreement or as
authorized in writing by HCL and PSC, or as expressly approved by a
majority of the Board of Directors (including one (1) representative of
each of HCL and PSC specifically designated in writing for this purpose
by notice delivered to PSC by HCL, on the one hand, and to HCL by PSC,
on the other hand, no later than the date of this Agreement) at a
legally convened meeting of the Board of Directors of the Company or by
the affirmative vote of both PSC and HCL(in their capacities as
stockholders of the Company) at a meeting of the stockholders (or by
written consent), neither the Company nor any Company Group member
will, and each of HCL and PSC agrees not to cause or otherwise support
any action by the Company or any Company Group member (and agrees to
instruct each of its representatives who serve as manager, director,
officer, employee, consultant or agent of or to the Company or any
Company Group member not to cause or support any such action by the
Company or any Company Group member by delivering to each such Person
the letter attached hereto as Exhibit Z) to:
(i) issue, sell, or dispose of shares of capital
stock of any class of the Company or any Company Group member,
or securities convertible into or exchangeable for any such
shares or securities, or any rights, warrants, or options to
acquire any such shares or securities, other than shares of
capital stock issued upon exercise of the Company Group
Options disclosed in Section 5.3 of the Disclosure Letter, in
each case in accordance with the terms of such options;
61
(ii) redeem, purchase, or otherwise acquire, or
propose to redeem, purchase, or otherwise acquire, any of its
outstanding capital stock, or other securities of the Company
or Company Group member;
(iii) split, combine, subdivide, or reclassify any
of its capital stock or declare, set aside, make, or pay any
dividend or distribution on any shares of its capital stock
except for dividends or distributions to the Company and
Company Group members from their respective Group members;
(iv) sell, pledge, dispose of, or encumber any of
its assets, except for sales, pledges, dispositions, or
encumbrances in the ordinary course of business consistent
with past practices or between the Company and Company Group
members;
(v) incur or modify any indebtedness or issue or
sell any debt securities, or assume, guarantee, endorse, or
otherwise as an accommodation become absolutely or
contingently responsible for obligations of any other person,
or make any loans or advances;
(vi) adopt or amend any bonus, profit sharing,
compensation, severance, termination, stock option, pension,
retirement, deferred compensation, employment or other
employee benefit, trusts, plans, funds, or other Contracts for
the benefit or welfare of any manager, director, officer,
consultant or employee, or (except for normal increases in the
ordinary course of business that are consistent with past
practices and that, in the aggregate, do not result in a
material increase in benefits or compensation expense to the
Company or Company Group member) increase in any manner the
compensation or fringe benefits of any manager, director,
officer, consultant or employee or pay any benefit not
required by any existing plan or arrangement (including,
without limitation, the granting or vesting of stock options
or stock appreciation rights) or take any action or grant any
benefit not expressly required under the terms of any existing
trusts, plans, funds, or other such Contracts or enter into
any Contract to do any of the foregoing; or make or agree to
make any payments to any managers, directors, officers,
agents, contractors, consultants or employees relating to a
change or potential change in control of the Company or any
Company Group member;
(vii) acquire by merger, consolidation, or
acquisition of stock or assets any corporation, partnership,
or other business organization or division or make any
investment either by purchase of stock or securities,
contributions to capital (other than to wholly-owned
subsidiaries), property transfer, or purchase of any material
amount of property or assets, in any other Person;
62
(viii) amend its certificate of incorporation,
bylaws or other comparable charter or organizational
documents, or alter through merger, liquidation,
reorganization, restructuring or in any other fashion the
corporate structure, jurisdiction the Laws under which it is
organized or ownership of any Company Group member;
(ix) take any action other than in the ordinary
course of business and consistent with past practices, to pay,
discharge, settle, or satisfy any claim, liability, or
obligation (absolute or contingent, accrued or unaccrued,
asserted or unasserted, or otherwise);
(x) change any method of accounting or
accounting practice used by the Company or any Company Group
member, except for any change required by reason of a
concurrent change in applicable generally accepted accounting
principles;
(xi) revalue in any respect any of its assets,
including, without limitation, writing off notes or accounts
receivable other than in the ordinary course of business
consistent with past practices;
(xii) authorize or make any new expenditure not
permitted under the then current, board-approved budget;
(xiii) make any tax election, settle or compromise
any federal, state, local or foreign tax liability, consent to
the extension of time for the assessment or collection of any
federal, state, local or foreign tax, or take any action that
would cause HPS Mauritius or HPS India to constitute a per se
corporation under U. S. Treasury Regulation Section
301.7701-2(b)(8)(i) or make any other significant decision
regarding any significant Tax matter;
(xiv) settle or compromise any pending or
threatened suit, action, or claim that is material,
individually or when aggregated with other suits, actions or
claims, to the Company and the Company Group taken as a whole
or relevant to the transactions contemplated by this
Agreement;
(xv) authorize, recommend, propose or announce an
intention to adopt a plan of complete or partial liquidation
or dissolution of the Company or any Company Group member;
(xvi) enter into any collective bargaining
Contract;
(xvii) engage in any transaction with, or enter
into any Contract, with, directly or indirectly, any Company
Group member, PSC Group member or HCL Group member other than
pursuant to such Contracts
63
existing on the date of this Agreement and disclosed on the
Disclosure Letter or other than pursuant to the procedures in
place on the date hereof governing transactions between any
Company Group Member and the stockholders of the Company; or
(xviii) voluntarily take any action or willfully
omit to take any action that could make any disclosure in
Article V untrue or incorrect in any material respect at any
time, including as of the Closing Date as if made as of that
date.
6.2 [INTENTIONALLY OMITTED]
6.3 Continuing Disclosures. During the period between the
completion of the Auction and the Closing, the Buyer will be entitled to receive
such monthly operating reports, budgets, financial statements and projections,
and copies of material reports and communications (including material
communications with customers, suppliers and employees) prepared by, for or
delivered to management (including the Board of Directors) of the Company or any
Company Group member as the Buyer may reasonably request.
6.4 [INTENTIONALLY OMITTED]
6.5 Fulfillment of Conditions and Obligations.
(a) Each of PSC and HCL agrees not to take any action
(and agrees not to cause or support any action by the Company or any
Company Group member (and agrees to instruct each of its
representatives who serve as manager, director, officer, employee,
consultant or agent of or to the Company or any Company Group member
not to cause or support any such action by the Company or any Company
Group member)) that would cause the conditions on the obligations of
the parties to effect the transactions contemplated by this Agreement
and the other Transaction Documents not to be fulfilled, including
without limitation by taking or causing to be taken any action that
would cause their respective representations and warranties in this
Agreement not to be true and correct as of the Closing. Each of PSC and
HCL will take all commercially reasonable steps within its power
(including by taking steps in its capacity as a stockholder of the
Company) to cause to be fulfilled the conditions precedent to the
obligations of the other parties hereto to consummate the transactions
contemplated by this Agreement that are dependent on the actions of PSC
or HCL, respectively.
(b) Without limiting the foregoing, each of PSC and HCL
agrees that during the Interim Period it will not directly or
indirectly take any action (and agrees not to cause or support any
action by the Company or any Company Group member (and agrees to
instruct each of its representatives who serve as manager, director,
officer, employee, consultant or agent of or to the Company or
64
any Company Group member not to cause or support any such action by the
Company or any Company Group member)) that would cause the rescission
or cancellation of any action validly taken by the Board of Directors
of the Company or any member of its Group for purposes of implementing
the transactions contemplated by this Agreement in accordance with the
terms of this Agreement.
6.6 Publicity. PSC, HCL and the Company will reasonably cooperate
with each other in the development and distribution of all news releases and
other public disclosures relating to the transactions contemplated by this
Agreement. In furtherance of the foregoing, during the Interim Period, neither
PSC, HCL nor the Company will issue or make, directly or indirectly, any press
release or public announcement concerning the transactions contemplated by this
Agreement without obtaining the prior written consent of PSC and HCL to such
press release (which consent will not be unreasonably withheld) except as may
reasonably be deemed, upon advice of legal counsel to the disclosing party, to
be required under applicable legal and stock market requirements. In any such
event, the non-disclosing party shall, to the extent practicable, be afforded a
reasonable opportunity to review and comment upon any such disclosure prior to
such disclosure.
6.7 Transaction Costs. Except for the fees of the Agent, which
will be shared equally by PSC and HCL, each of PSC, HCL and the Company will pay
all transaction costs and expenses (including legal, accounting, and other
professional fees) that it incurs in connection with the negotiation, execution,
and performance of this Agreement and the transactions contemplated by this
Agreement; provided, that PSC shall pay (a) the capital duties, stamp taxes and
any other similar third party ministerial levies, charges, costs and expenses
(including notary and filing fees) incurred by the Company in converting to a
B.V. or incurred by the Company, HCL or HCL Bermuda in consummating the
transactions contemplated hereby that would not have been incurred by the
Company, HCL or HCL Bermuda, as applicable, had the transactions contemplated
hereby been completed as a direct sale of the PSC Company Shares to HCL Bermuda,
or a direct sale of the HCL Company Shares to PSC, as applicable, and (b) up to
$150,000 U.S. in professional fees and expenses actually incurred (as evidenced
by actual third-party invoices provided to PSC for review) by HCL no later than
six (6) months following the Effective Date for Tax advice it seeks concerning
the transactions described in Section 2.1(a) and the implementation thereof.
6.8 Nondisclosure.
(a) Each of PSC and HCL has been and will be provided
with written and oral information regarding the other (and the other's
Group) that is either non-public, confidential or proprietary in nature
(any written or oral non-public, confidential or proprietary
information, "Confidential Information"). Each of PSC and HCL agrees,
for the periods specified in Section 6.8(b), to treat any and all
Confidential Information regarding the other (and the other party's
Group) that has been or will be communicated to it by or on behalf of
the other parties to this Agreement, whether before or after the date
of this Agreement, as strictly
65
confidential, and will not use such Confidential Information for
purposes other than in connection with the transactions contemplated by
this Agreement and the other Transaction Documents or otherwise
directly or indirectly disclose any Confidential Information to any
Person except as expressly authorized herein. Each of PSC and HCL
further agrees, to the extent it is the Seller under this Agreement,
that for the periods specified in Section 6.8(b), it will not divulge,
communicate, use to the detriment of the Company or its Group members
or use for the benefit of any other Person, including itself or its
Affiliates, any Confidential Information of the Company or any Company
Group member, and that any such Confidential Information was received
in confidence and constitutes assets of the Company or the applicable
Company Group member, as the case may be, and that after the Closing
the Seller shall have no right to any of such Confidential Information
or the use thereof for the applicable periods specified in Section
6.8(b).
(b) The obligations contained in this Section 6.8 shall
commence on the date hereof with respect to the obligation of PSC and
HCL with respect to Confidential Information of the other (and the
other party's Group), and on the Closing Date with respect to the
obligation of the Seller with respect to Confidential Information of
the Company and the Company's Group, and shall continue (i)
indefinitely, with respect to all issued patents and pending patent
applications, including continuations, divisions, extensions, or
reissues thereof and any and all information and communications
concerning reexaminations or the strengths and weaknesses of any such
issued patents or pending patent applications, all patentable
processes, patentable methods, patentable business methods, and
patentable designs and systems, unpublished copyrighted works,
proprietary computer hardware and software, including proprietary
source code, proprietary inventions, trade secrets, proprietary
formulae, proprietary know-how, proprietary technical information,
proprietary research data, proprietary laboratory notebooks,
proprietary procedures, proprietary designs, proprietary technology and
information, but excluding, with respect to all of the foregoing,
customer lists and contact information, marketing data and marketing
materials and financial information, (the foregoing items collectively,
"Proprietary Information"), and (ii) for the three (3) year period
following the Closing Date with respect to all Confidential Information
other than Proprietary Information.
(c) For purposes of this Agreement, Confidential
Information will not include information that (i) the receiving party
independently developed or obtained from a source not under an
obligation of confidentiality unless such Confidential Information was
unlawfully disclosed by such source, (ii) is or becomes publicly
available through no fault or action of the receiving party in
violation of this Section 6.8, (iii) the receiving party receives the
prior written consent of the disclosing party to disclose, or (iv) the
receiving party is required by Law to disclose. Notwithstanding the
foregoing, if the receiving party is required by Law or receives an
inquiry or request from a Governmental Body to disclose information
that otherwise would constitute Confidential Information,
66
then the receiving party shall promptly notify, to the extent lawful,
the other party in writing so that the other party may, to the extent
available, seek a protective order or other appropriate remedy. If such
protective order or other remedy is not obtained prior to the deadline
for disclosure, the receiving party will furnish only that portion of
the Information that it is advised by counsel is legally required to be
so disclosed and the receiving party shall exercise its commercially
reasonable efforts to obtain reasonable assurances that confidential
treatment will be accorded to the Confidential Information.
(d) Each of PSC, HCL and the Company agrees that (a) the
fact that the parties are engaging in discussions with respect to the
transactions contemplated by this Agreement and the other Transaction
Documents, and (b) the terms, conditions or other facts with respect to
the transactions contemplated by this Agreement and the other
Transaction Documents, including the terms of this Agreement and the
other Transaction Documents, shall be deemed to be Confidential
Information by each party and shall be subject to the limitations set
forth herein with respect thereto.
(e) Notwithstanding the foregoing, each of PSC, HCL and
the Company may disclose another party's Confidential Information and
the other information referred to in this Section 6.8 to (i) members of
its Group; (ii) managers, directors, officers, employees, advisors or
representatives on a need-to-know basis solely in connection with its
evaluation of the transactions contemplated by this Agreement and the
other Transaction Documents; provided that such manager, director,
officer, employee, advisor or representative is not, to the Knowledge
of the disclosing party, a competitor or an Affiliate of a competitor
of any party to this Agreement or (iii) its stock exchanges to the
extent required by applicable law or the listing agreement to which it
is a party. Each of PSC, HCL and the Company will be responsible for
any breach of the terms of this Section 6.8 by any of its managers,
directors, officers, employees, advisors or representatives to whom it
has provided any Confidential Information. In addition, each of PSC,
HCL and the Company (and each of their respective representatives) may
disclose to any and all Persons, without limitation of any kind, the
tax treatment and tax structure of the transactions contemplated by
this Agreement and the other Transaction Documents; provided, however,
that except as provided in Section 6.8(c) none of the foregoing parties
(nor any of their representatives) may disclose any information that is
not necessary to understanding the tax treatment and tax structure of
any of the transactions contemplated by this Agreement and the other
Transaction Documents (including the identity of the parties and any
information that could lead another to determine the identity of the
parties).
(f) After Closing, at the request of the applicable
disclosing party, or if this Agreement is terminated in accordance with
its terms, HCL, on the one hand, and PSC, on the other hand, will
return all copies of the other party's Confidential Information
(including the return of all such Confidential Information of the
67
Company by the Seller) received by it or its representatives
(including, but not limited to, all reproductions and derivations
thereof), or notify the other party in writing that all of the other
party's Confidential Information (and reproductions and derivations)
have been destroyed.
6.9 Name Change. On or as soon as possible after the Closing Date,
but in any event within forty (40) calendar days after the Closing Date (one
hundred (100) calendar days in the case of India), the Buyer will take all
actions required to change the name of the Company and each Company Group member
to a name bearing no similarity to the Seller's name, and will cause the Company
and the Company Group members to file all documents necessary to effect such a
name change (provided, that where PSC is the Seller, PSC shall take all such
actions with respect to the Company, and HCL shall take all such actions with
respect to the other Company Group members). Subject to the preceding sentence,
any licenses granted by the Seller to the Company or any Company Group member to
carry (part) of the Seller's name is terminated as of the Closing Date. The
Company, for itself and on behalf of its Group, further agrees that during the
pendency of the name changes required pursuant to this Section 6.9, it shall not
take any action, directly or indirectly, to present itself or to hold itself
out, in any manner whatsoever, as being affiliated with the Seller or its Group
and will take all reasonable actions to inform any third party with which it is
interacting that it is not affiliated with the Seller or its Group if it becomes
aware that the third party believes that the Company and its Group is affiliated
with the Seller and its Group. The Company, PSC and HCL each agree that the name
"HPS" is not an acceptable alternative to the current name of the Company or any
Company Group member and therefore will not become the new name or any part of
the new name of the Company or any Company Group member.
6.10 [INTENTIONALLY OMITTED]
6.11 Stockholders and Stand Down Agreements. During the Interim
Period, the Stockholders Agreement dated March 26, 1996 by and among HCL, PSC
and Sinha & Xxxxxxxxx, as amended from time to time (the "Company Stockholders
Agreement"), and the Stand Down Agreement dated November 15, 2002 among PSC,
HCL, the Company, HCLT, Xxxxxx Xxxxxx and Xxxxxxx X. Xxxxxxx (the "Stand Down
Agreement"), shall continue in full force and effect.
6.12 Treatment of Group Agreements. Each of the Company, PSC and
HCL agree that, unless otherwise terminated in accordance with their terms, the
PSC Group Agreements and the HCL Group Agreements will remain in full force and
effect in accordance with their respective terms from and after the Effective
Date.
6.13 Releases. The releases set forth in this Section 6.13 shall
have effect from and after the Closing Date. For purposes of this Section 6.13,
references to PSC and its Group shall mean PSC and its Group as defined in
Section 9.14(d) on a pre-Closing basis, (2) references to HCL and its Group
shall mean HCL and its Group as defined in Section 9.14(d) on a pre-Closing
basis, (3) references to the Company and its
68
Group shall refer to the Company and its Group as defined in Section 9.15(d) on
a pre-Closing basis and (4) references to HPS Mauritius and its Group (other
than the Company) shall refer to HPS Mauritius and its Group as defined in
Section 9.14(d) on a pre-Closing basis:
(a) Release of Seller.
(i) As a material inducement to HCL to enter
into this Agreement and the other Transaction Documents and to
consummate the transactions contemplated hereby and thereby,
effective as of the Closing, if HCL is the Seller, the Company
for itself, and on behalf of its Group members and their
respective present and former managers, directors, officers,
employees, Affiliates (other than the PSC Group), associates,
representatives, agents, attorneys, administrators, successors
and assigns (collectively, the "Company Releasing Parties")
hereby fully, irrevocably and unconditionally releases and
forever discharges and, in the event there is any claim by any
Company Releasing Party, agrees to hold harmless Seller, its
Group members and each of their respective present and former
equity holders, predecessors, successors and assigns and,
except to the extent limited by the Release Limitations, their
respective present and former managers, directors, officers,
employees, Affiliates (other than the Company Group),
consultants, associates, representatives, agents and
administrators (all such released parties collectively, the
"Seller Released Parties") from any and all liabilities,
obligations, claims, demands, actions, causes of action,
losses, contingencies, damages, costs, expenses, including
court costs and attorney's fees, acts, promises and Contracts
of every kind or character, known or unknown, suspected or
unsuspected, fixed or contingent, whether under state,
federal, local or foreign Law, the common law, or otherwise
(collectively "Released Claims"), that the Company Releasing
Parties may have or claim to have against any of the Seller
Released Parties, including, without limitation, any Released
Claims arising out of or relating to Seller's (or any member
of Seller's Group) status as a stockholder of the Company or
the Seller's (or any member of Seller's Group's) participation
(directly or indirectly), if any, in the management of the
Company Group or any member of the Company Group, the HCL
Estopped Claims, use of Company Group personnel for commercial
purposes for the sole benefit of the Seller Group, loss of
Company Group corporate opportunity as a result of Seller
Group actions, including, without limitation, through the use
of the Confidential Information of the Company Group, and any
unlawful or fraudulent actions under any Law that occurred
prior to November 3, 2003; provided, that, subject to the last
sentence of this Section 6.13(a)(i), the foregoing will not
release, waive or prejudice any rights that the Company (or
any Company Group member) may have (1) under the HCL Group
Agreements (except for the HCL Estopped Claims) or this
Agreement, (2) in respect of the theft or
69
misappropriation of physical, tangible assets of the Company
Group by any Seller Released Party ("HCL Seller Party Theft"),
(3) in respect of any claim from a Person other than a Company
Releasing Party or a PSC Releasing Party ("HCL Seller Third
Person Claim"); (4) in respect of any activities by any Seller
Released Party during the period from November 15, 2002
through November 3, 2003 that constitutes fraud or is unlawful
under New York law (and not under the laws of any other
jurisdiction that would apply under any conflict of laws rule
or principle or any treaty) and that involve direct (but
excluding indirect and consequential) financial damages in an
aggregate amount in excess of $2,000,000; and (5) in respect
of any activity by any Seller Released Party during the period
from November 4, 2003 through the Closing Date that
constitutes fraud or is unlawful under any Law.
Notwithstanding the provisions of Section 8.4, the right of
any Company Releasing Party to bring a claim for HCL Seller
Party Theft and HCL Seller Third Person Claims will survive
only until the expiration of the statute of limitations
applicable to such claim, and the right of any Company
Releasing Party to bring a claim under the foregoing clause
(4) will survive only until the first anniversary of the
Closing Date, and thereafter the rights referenced in this
sentence automatically will expire and terminate.
(ii) As a material inducement to PSC to enter
into this Agreement and the other Transaction Documents and to
consummate the transactions contemplated hereby and thereby,
effective as of the Closing, if PSC is the Seller, HPS
Mauritius for itself, and on behalf of the Company Group
members that become members of the HCL Group at Closing and
their respective present and former managers, directors,
officers, employees, Affiliates (other than the HCL Group),
associates, representatives, agents, attorneys,
administrators, successors and assigns (collectively, the
"Mauritius Releasing Parties") hereby fully, irrevocably and
unconditionally releases and forever discharges and, in the
event there is any claim by any Mauritius Releasing Party,
agrees to hold harmless the Seller Released Parties from any
and all Released Claims (except to the extent limited by the
Release Limitations) that the Mauritius Releasing Parties may
have or claim to have against any of the Seller Released
Parties, including, without limitation, any Released Claims
arising out of or relating to Seller's (or any member of
Seller's Group's) status as a stockholder of the Company or
the Seller's (or any member of Seller's Group's) participation
(directly or indirectly), if any, in the management of the
Company Group or any member of the Company Group, the PSC
Estopped Claims, use of Company Group personnel for commercial
purposes for the sole benefit of the Seller Group, loss of
Company Group corporate opportunity as a result of Seller
Group actions, including, without limitation, through the use
of the Confidential Information of the Company Group, and any
unlawful or fraudulent actions under any Law that occurred
prior to November 3, 2003; provided, that,
70
subject to the last sentence of this Section 6.13(a)(ii), the
foregoing release will not release, waive or prejudice any
rights that the Company Group members that become members of
the HCL Group at Closing may have (1) under the PSC Group
Agreements (except for the PSC Estopped Claims) or this
Agreement, (2) in respect of the theft or misappropriation of
physical, tangible assets of the Company Group members that
become members of the HCL Group at Closing by any Seller
Released Party ("PSC Seller Party Theft"), (3) in respect of
any claim from a Person other than a Mauritius Releasing Party
or an HCL Releasing Party ("PSC Seller Third Person Claim");
(4) in respect of any other activity by any Seller Released
Party during the period from November 15, 2002 through
November 3, 2003 that constitutes fraud or is unlawful under
New York law (and not under the laws of any other jurisdiction
that would apply under any conflict of laws rule or principle
or any treaty) and that involve direct (but excluding indirect
and consequential) financial damages in an aggregate amount in
excess of $2,000,000; and (5) in respect of any activity by
any Seller Released Party during the period from November 4,
2003 through the Closing Date that constitutes fraud or is
unlawful under any Law. Notwithstanding the provisions of
Section 8.4, the right of any Mauritius Releasing Party to
bring a claim for PSC Seller Party Theft and PSC Seller Third
Person Claims will survive only until the expiration of the
statute of limitations applicable to such claim, and the right
of any Mauritius Releasing Party to bring a claim under the
foregoing clause (4) will survive only until the first
anniversary of the Closing Date, and thereafter the rights
referenced in this sentence automatically will expire and
terminate.
(b) Release of the Company and Mauritius Released
Parties.
(i) As a material inducement to PSC and the
Company to enter into this Agreement and the other Transaction
Documents and to consummate the transactions contemplated
hereby and thereby, effective as of the Closing, if HCL is the
Seller, the Seller for itself, and on behalf of its Group
members and their respective equity holders, managers,
directors, officers, employees, Affiliates (other than the
Company Group), associates, representatives, agents,
attorneys, administrators, successors and assigns
(collectively, the "Seller Releasing Parties") hereby fully,
irrevocably and unconditionally releases and forever
discharges and, in the event there is a claim by any Seller
Releasing Party, agrees to hold harmless the Company Group
members and each of their respective present and former
attorneys, predecessors, successors and assigns (all such
released parties collectively, the "Company Released Parties")
from any and all Released Claims (except to the extent limited
by the Release Limitations) that the Seller Releasing Parties
may have or claim to have against any of the Company Released
Parties, including, without limitation, any Released Claims
arising out of or relating to the Seller's (or
71
any member of Seller's Group) status as a stockholder of the
Company, the Seller's (or any member of Seller's Group's)
participation (directly or indirectly), if any, in the
management of the Company Group or any member of the Company
Group, any of the disclosures provided by the Company to the
Seller pursuant to this Agreement (including, but not limited
to Article V hereof) and the Company Disclosure Letter as it
may be amended from time to time, any unlawful or fraudulent
actions under any Law by any Company Released Party that
occurred prior to November 3, 2003; provided, that, subject to
the last sentence of this Section 6.13(b)(i), the foregoing
will not release, waive or prejudice any rights that the
Seller Group may have (1) under the HCL Group Agreements
(except for the HCL Estopped Claims), (2) in respect of any of
the Company Group's obligations under this Agreement
(including, without limitation, any payment obligation of the
Company or any member of the Company Group under this
Agreement), (3) in respect of the theft or misappropriation of
physical, tangible assets of the Company Group by any Company
Released Party ("Company Released Party Theft"), (4) in
respect of any claim from a Person other than a Seller
Releasing Party ("Company Group Third Person Claim"), (5) in
respect of any activities of any Company Released Party during
the period from November 15, 2002 through November 3, 2003
that constitute fraud or unlawful actions under New York law
(and not under the laws of any other jurisdiction that would
apply under any conflict of laws rule or principle or any
treaty) and that involve direct (but excluding indirect and
consequential) financial damages in an aggregate amount in
excess of $2,000,000, and (6) in respect of any activity by
any Company Released Party during the period from November 4,
2003 through the Closing Date that constitutes fraud or is
unlawful under any Law. Notwithstanding the provisions of
Section 8.4, the right of any Seller Releasing Party to bring
a claim against any Company Released Parties for Company
Released Party Theft and Company Group Third Person Claims
will survive only until the expiration of the statute of
limitations applicable to such claim, and the right of any
Seller Releasing Party to bring a claim under the foregoing
clause (5) will survive only until the first anniversary of
the Closing Date, and thereafter the rights referenced in this
sentence automatically will expire and terminate.
(ii) As a material inducement to HCL and the
Company to enter into this Agreement and the other Transaction
Documents and to consummate the transactions contemplated
hereby and thereby, effective as of the Closing, if PSC is the
Seller, the Seller Releasing Parties and the Company hereby
fully, irrevocably and unconditionally releases and forever
discharges and, in the event there is a claim by any Seller
Releasing Party, agrees to hold harmless the Company Group
members that become part of the HCL Group at Closing and each
of their respective present and former attorneys,
predecessors, successors and assigns (the "Mauritius Released
Parties") from any and all Released Claims (except to
72
the extent limited by the Release Limitations) that the Seller
Releasing Parties and the Company may have or claim to have
against any of the Mauritius Released Parties, including,
without limitation, any Released Claims arising out of or
relating to the Seller's (or any member of Seller's Group)
status as a stockholder of the Company, the Seller's (or any
member of Seller's Group's) participation (directly or
indirectly), if any, in the management of the Company Group or
any member of the Company Group, any of the disclosures
provided by the Company to the Seller pursuant to this
Agreement (including, but not limited to Article V hereof) and
the Company Disclosure Letter as it may be amended from time
to time, any unlawful or fraudulent actions under any Law by
any Mauritius Released Party that occurred prior to November
3, 2003; provided, that, subject to the last sentence of this
Section 6.13(b)(ii) the foregoing will not release, waive or
prejudice any rights that the Seller Group may have (1) under
the PSC Group Agreements (except for the PSC Estopped Claims),
(2) in respect of any of the obligations of the Company Group
members that become part of the HCL Group at Closing under
this Agreement (including, without limitation, any payment
obligation under this Agreement), (3) in respect of the theft
or misappropriation of physical, tangible assets of the
Company Group members that become part of the HCL Group at
Closing by any Mauritius Released Party ("Mauritius Released
Party Theft"), (4) in respect of any claim from a Person other
than a Seller Releasing Party or the Company ("Mauritius Third
Person Claim"), (5) in respect of any activities of any
Mauritius Released Party during the period from November 15,
2002 through November 3, 2003 that constitute fraud or
unlawful actions under New York law (and not under the laws of
any other jurisdiction that would apply under any conflict of
laws rule or principle or any treaty) and that involve direct
(but excluding indirect and consequential) financial damages
in an aggregate amount in excess of $2,000,000, and (6) in
respect of any activity by any Mauritius Released Party during
the period from November 4, 2003 through the Closing Date that
constitutes fraud or is unlawful under any Law.
Notwithstanding the provisions of Section 8.4, the right of
any Seller Releasing Party to bring a claim against any
Mauritius Released Parties for Company Released Party Theft
and Mauritius Third Person Claims will survive only until the
expiration of the statute of limitations applicable to such
claim and the right of any Seller Releasing Party or the
Company to bring a claim under the foregoing clause (5) will
survive only until the first anniversary of the Closing Date,
and thereafter the rights referenced in this sentence
automatically will expire and terminate.
(c) PSC Release of HCL. As a material inducement to HCL
to enter into this Agreement and the other Transaction Documents and to
consummate the transactions contemplated hereby and thereby, effective
as of the Closing, PSC, for itself, and on behalf of its Group members
and their respective equity holders, managers, directors, officers,
employees, Affiliates (other than the
73
Company Group) associates, representatives, agents, attorneys,
administrators, successors and assigns (collectively, the "PSC
Releasing Parties") hereby fully, irrevocably and unconditionally
releases and forever discharges and, in the event there is a claim by a
PSC Releasing Party, agrees to hold harmless HCL, its Group Members and
each of their respective present and former equity holders, attorneys,
predecessors, successors and assigns and their respective present and
former managers, directors, officers, employees, Affiliates (other than
the Company Group), consultants, associates, representatives, agents
and administrators (all such released parties collectively, the "HCL
Released Parties") from any and all Released Claims (except to the
extent limited by the Release Limitations) that the PSC Releasing
Parties may have or claim to have against any of the HCL Released
Parties, including, without limitation, any Released Claims arising out
of or relating to (i) HCL's (or any member of its Group's) status as a
stockholder of the Company or HCL's (or any member of its Group's)
participation (directly or indirectly), if any, in the management of
the Company Group or any member of the Company Group, (ii) the joint
venture relationship between PSC and HCL involving the Company, (iii)
any other relationship between PSC or any member of its Group, on the
one hand, and HCL or any member of its Group, on the other hand, (iv)
the Stockholders Agreement and the Stand Down Agreement, (v) any of the
disclosures provided by the Company pursuant to this Agreement
(including, but not limited to Article V hereof) and the Company
Disclosure Letter as it may be amended from time to time, and (vi) any
unlawful or fraudulent actions under any Law by any HCL Released Party
that occurred prior to November 15, 2002; provided, that, subject to
the last sentence of this Section 6.13(c), the foregoing will not
release, waive or prejudice any rights that PSC may have (1) under the
PSC Group Agreements (except for the PSC Estopped Claims) or this
Agreement, (2) in respect of the theft or misappropriation of physical,
tangible assets of the Company Group by any HCL Released Party ("HCL
Released Party Theft"), (3) in respect of any claim from a Person other
than a PSC Releasing Party, or Company Releasing Party (if PSC is the
Buyer) or the Company (if PSC is the Seller) ("HCL Third Person Claim")
and (4) in respect of any activity by any HCL Released Party during the
period from November 4, 2003 through the Closing Date that constitutes
fraud or is unlawful under any Law. If PSC is the Seller, the PSC
Releasing Parties and the Company also hereby fully, irrevocably and
unconditionally release and forever discharge and, in the event there
is a claim by any PSC Releasing Party, agree to hold harmless the HCL
Released Parties for any unlawful or fraudulent actions under any Law
by any HCL Released Party during the period from November 15, 2002
through November 3, 2003 other than HCL Released Party Theft and HCL
Third Person Claims. In addition, if PSC is the Buyer, the PSC
Releasing Parties also hereby fully, irrevocably and unconditionally
release and forever discharge and, in the event there is a claim by any
PSC Releasing Party, agree to hold harmless the HCL Released Parties
from (A) the use of Company Group personnel for commercial purposes for
the sole benefit of the HCL Group, (B) loss of Company Group corporate
opportunity as a result of HCL Group actions, including, without
limitation, through the use of the Confidential
74
Information of the Company Group, and (C) activities of any HCL
Released Party during the period from November 15, 2002 through
November 3, 2003 that constitute fraud or are unlawful under any Law,
other than activities that constitute fraud or are unlawful under New
York law (and not under the laws of any other jurisdiction that would
apply under any conflict of laws rule or principle or any treaty) and
that involve direct (but excluding indirect and consequential)
financial damages in an aggregate amount in excess of $2,000,000, other
than in each of the foregoing clauses (A) through (C), HCL Released
Party Theft and HCL Third Person Claims. Notwithstanding the provisions
of Section 8.4, the right of any PSC Releasing Party to bring a claim
against any HCL Released Parties for HCL Released Party Theft and HCL
Third Person Claims will survive only until the expiration of the
statute of limitations applicable to such claim, and the right of any
PSC Releasing Party to bring a claim under the foregoing clause (C)
will survive only for a period of one (1) year following the Closing
Date, and thereafter the rights referenced in this sentence
automatically will expire and terminate.
(d) HCL Releases.
(i) As a material inducement to PSC to enter
into this Agreement and the other Transaction Documents and to
consummate the transactions contemplated hereby and thereby,
effective as of the Closing, HCL, for itself, and on behalf of
its Group members and their respective present and former
equity holders, managers, directors, officers, employees,
Affiliates (other than the Company Group), associates,
representatives, agents, attorneys, administrators, successors
and assigns (collectively, the "HCL Releasing Parties") hereby
fully, irrevocably and unconditionally releases and forever
discharges and, in the event there is a claim by any HCL
Releasing Party, agrees to hold harmless PSC, its Group
members and each of their respective present and former equity
holders, predecessors, successors and assigns and their
respective present and former managers, directors, officers,
employees, Affiliates (other than the Company Group),
consultants, associates, representatives, agents and
administrators (all such released parties collectively, the
"PSC Released Parties") from any and all Released Claims
(except to the extent limited by the Release Limitations) that
the HCL Seller Releasing Parties may have or claim to have
against any of the PSC Released Parties, including, without
limitation, any Released Claims, arising out of or relating to
(1) PSC's (or any member of its Group's) status as a
stockholder of the Company, or PSC's (or any member of its
Group's) participation (directly or indirectly), if any, in
the management of the Company Group or any member of the
Company Group, (2) the joint venture relationship between PSC
and HCL involving the Company, (3) any other relationship
between PSC or any member of its Group, on the one hand, and
HCL or any member of its Group, on the other hand, (4) the
Stockholders Agreement and the Stand Down
75
Agreement, (5) any of the disclosures provided by the Company
pursuant to this Agreement (including, but not limited to
Article V hereof) and the Company Disclosure Letter as it may
be amended from time to time, and (6) any unlawful or
fraudulent actions under any Law by any PSC Released Party
that occurred prior to November 15, 2002; provided, that
subject to the last sentence of this Section 6.13(d), the
foregoing will not release, waive or prejudice any rights that
HCL may have (A) under the HCL Group Agreements (except for
the HCL Estopped Claims) or this Agreement, (B) in respect of
the theft or misappropriation of physical, tangible assets of
the Company Group by any PSC Released Party ("PSC Released
Party Theft"), (C) in respect of any claim from a Person other
than an HCL Releasing Party, or a Mauritius Releasing Party
(if HCL is the Buyer), ("PSC Third Person Claim") and (D) in
respect of any activity by any PSC Released Party during the
period from November 4, 2003 through the Closing Date that
constitutes fraud or is unlawful under any Law. If HCL is the
Seller, the HCL Releasing Parties also hereby fully,
irrevocably and unconditionally release and forever discharge
and, in the event there is a claim by any HCL Releasing Party,
agree to hold harmless the PSC Released Parties for any
unlawful or fraudulent actions under any Law by any PSC
Released Party during the period from November 15, 2002
through November 3, 2003 other than PSC Released Party Theft
and PSC Third Person Claims. In addition, if HCL is the Buyer,
the HCL Releasing Parties also hereby fully, irrevocably and
unconditionally release and forever discharge and, in the
event there is a claim by any HCL Releasing Party, agree to
hold harmless the PSC Released Parties from (I) the use of
Company Group personnel for commercial purposes for the sole
benefit of the PSC Group, (II) loss of Company Group corporate
opportunity as a result of PSC Group actions, including,
without limitation, through the use of the Confidential
Information of the Company Group, and (III) activities of any
PSC Released Party during the period from November 15, 2002
through November 3, 2003 that constitute fraud or are unlawful
under any Law, other than activities that constitute fraud or
are unlawful under New York law (and not under the laws of any
other jurisdiction that would apply under any conflict of laws
rule or principle or any treaty) and that involve direct (but
excluding indirect and consequential) financial damages in an
aggregate amount in excess of $2,000,000, other than, in each
of the foregoing clauses (I) through (III) PSC Released Party
Theft and PSC Third Person Claims. Notwithstanding the
provisions of Section 8.4, the right of any HCL Releasing
Party to bring a claim against any PSC Released Parties for
PSC Released Party Theft and PSC Third Person Claims will
survive only until the expiration of the statute of
limitations applicable to such claim, and the right of any HCL
Releasing Party to bring a claim under the foregoing clause
(III) will survive only for a period of one (1) year following
the Closing Date, and thereafter the rights referenced in this
sentence automatically will expire and terminate.
76
(ii) In addition, if HCL is the Buyer, the HCL
Releasing Parties also hereby fully, irrevocably and
unconditionally release and forever discharge and, in the
event there is a claim by any HCL Releasing Party, agrees to
hold harmless the Company and its present and former
attorneys, predecessors, successors and assigns ("HPS Released
Parties") from (1) the use of Company Group personnel for
commercial purposes for the sole benefit of the PSC Group
without compensating the Company Group for such use, (2) loss
of Company Group corporate opportunity as a result of PSC
Group actions, including, without limitation, through the use
of the Confidential Information of the Company Group, and (3)
activities of any HPS Released Party during the period from
November 15, 2002 through November 3, 2003 that constitute
fraud or are unlawful under any Law, other than activities
that constitute fraud or are unlawful under New York law (and
not under the laws of any other jurisdiction that would apply
under any conflict of laws rule or principle or any treaty)
and that involve direct (but excluding indirect and
consequential) financial damages in an aggregate amount in
excess of $2,000,000, other than, in each of the foregoing
clauses (1) through (3) the theft or misappropriation of
physical, tangible assets of the Company Group by any HPS
Released Party, or any unlawful or fraudulent action by any
HPS Released Party that results in a claim from a third Person
other than a member of the HCL Group. Notwithstanding the
provisions of Section 8.4, the right of any HCL Releasing
Party to bring a claim against the HPS Released Parties for
any such theft or third Person claim will survive only until
the expiration of the statute of limitations applicable to
such claim and the right of any HCL Releasing Party to bring a
claim under the foregoing clause (3) will survive only for a
period of one (1) year following the Closing Date, and
thereafter all such rights automatically will expire and
terminate.
(e) Each of PSC and HCL, in its capacity as a releasing
party in any of the provisions of this Section 6.13, and, in its
capacity as Buyer, if applicable, for and on behalf of the Company in
the Company's capacity as a releasing party in any of the provisions of
this Section 6.13, represents and warrants that:
(i) it has not previously assigned any of the
Claims that are being released and discharged under this
Section 6.13;
(ii) it has not heretofore filed any charges,
petitions, or complaints against any of the other parties with
any federal, state or local governmental agencies that is
ongoing,
(iii) it is the sole lawful owner of the Released
Claims, as applicable, and
77
(iv) no other Person has any right to assert any
such Released Claim.
(f) Each of PSC and HCL, in its capacity as a releasing
party in any of the provisions of this Section 6.13, and, in its
capacity as Buyer, if applicable, for and on behalf of the Company in
the Company's capacity as a releasing party in any of the provisions of
this Section 6.13, agrees that from and after the Closing:
(i) if any agency or court assumes jurisdiction
over any charge or complaint against any of the released
parties on its behalf, it will immediately request that such
agency or court withdraw from or dismiss with prejudice any
such matter, charge or complaint;
(ii) it will never voluntarily join in, or
commence any action or proceeding on behalf of itself, or any
other Person before any court, administrative agency, or other
forum against any of the released parties, pertaining in any
way to or arising out of the matters set forth in Sections
6.13(a), (b), (c), (d) and (e) above;
(iii) it will withdraw with prejudice any
previously filed charges or suits (if any) arising out of the
matters set forth in Sections 6.13(a), (b), (c), (d) and (e)
above; and
(iv) it will not actively or materially encourage
or aid or assist any Person in contemplating, filing, or
prosecuting any action or proceeding against any of the
released parties in any way related to matters set forth in
Sections 6.13(a), (b), (c), (d) and (e) above.
(g) Each of PSC, HCL and the Company acknowledges that it
is aware that it may hereafter discover Released Claims presently
unknown or unsuspected, or facts in addition to or different from those
which it now knows or believes to be true, with respect to the matters
released herein. Nevertheless, it is the intention of each party
hereto, through this Agreement, and with the advice of counsel, fully,
finally and forever to settle and release all such presently unknown or
unsuspected Released Claims, or additional facts, with respect to the
matters released herein, matters which do now exist, may exist, or
heretofore have existed between and among the parties hereto, effective
as of the Closing and to the extent provided in this Agreement. In
furtherance of such intention, the releases herein given shall be and
remain in effect from and after the Closing as full and complete mutual
releases of such matters notwithstanding the discovery or existence of
any such additional or different Released Claims or facts with respect
to the matters released herein.
78
6.14 Non-Solicitation; Employee Non-Competition Restrictions.
(a) Subject only to Section 6.14(b), beginning on the
Effective Date and ending (i) as of the Closing Date, with respect to
the Buyer, and (ii) on the second anniversary of the Closing Date, with
respect to the Seller, each of PSC and HCLT (in their capacities as
either the Buyer or the Seller, as applicable) will not, and will
ensure that its respective Group will not, directly or indirectly: (i)
employ, hire or obtain any services from, in any capacity (including
without limitation as an employee, director, officer, manager, adviser,
consultant or contractor) other than as an employee of the Company
Group, any individual who is at the date of Closing Date, or who has
been in the 12 month period prior to the Closing Date, a director,
officer, manager or employee of any Company Group member (provided,
that the foregoing shall not preclude the hiring of a non-officer
director or former non-officer director of the Company) (collectively,
a "Company Employee"); (ii) solicit any Company Employee for any such
purpose; or (iii) take any action, directly or indirectly, to do or
cause or that would result in any of the foregoing.
(b) Notwithstanding the foregoing, but subject to Section
6.14(g), if PSC is the Seller, PSC or any PSC Group member shall make
one (1) and only one (1) offer of employment to the four (4) Company
Employees set forth on Schedule 6.14(b) to this Agreement during the
fourteen (14) calendar day period immediately following the Closing
Date; provided, that such offer of employment must be in writing and
must expressly provide that the offer is a one-time offer and cannot
and will not be revised in any manner and that the applicable Company
Employee must accept the offer, if at all, no later than 5:00 p.m.
Central Standard Time on the fourteenth (14th) calendar day following
the Closing Date (the "Expiration Time"), it being agreed that any such
offer will also include the express condition that if it is not
accepted by the Expiration Time, it will automatically become null and
void. PSC shall notify HCL in writing of the Company Employees who have
accepted such offer of employment immediately following the Expiration
Time.
(c) [INTENTIONALLY OMITTED]
(d) [INTENTIONALLY OMITTED]
(e) For a period of twelve (12) months from and after the
Closing Date, Seller shall impose restrictions to prevent, and shall
ensure that its Group shall impose restrictions to prevent, any Company
Employee who is employed or engaged by, acting pursuant to the
directions of, or otherwise providing services to or for the benefit
of, Seller or any Seller Group member pursuant to Section 6.14(b)
(including, without limitation, Xxxxx Xxxxx if PSC is the Seller) (i)
from being involved in any way with any of the customers of the Company
Group listed on Schedule 6.14(e) to this Agreement (which schedule will
be updated by PSC and HCL (acting jointly, reasonably and without
unreasonable delay)
79
immediately prior to Closing (if the Closing has not been consummated
by December 31, 2003 and this Agreement has not been terminated), to
add Persons who become customers of the Company Group after the date
hereof provided that such Persons otherwise satisfy the same general
criteria used to develop the list of customers included in Schedule
6.14(e) as it exists on the date hereof); and (ii) from providing any
services, advice or information to Seller or any Seller Group member in
respect of such Persons. Without limiting the generality of the
foregoing, the Seller will impose (to the extent lawful) restrictions
to prevent, and shall ensure that its Group shall impose (to the extent
lawful) restrictions to prevent, such Company Employees from being
involved, directly or indirectly, in any marketing or sales activities,
the provision of any services and any customer relationship activities,
and from providing any background information or sales support, to
Seller or any Seller Group member in connection with the customers of
the Company Group listed on Schedule 6.14(e) to this Agreement.
(f) Effective as of the Closing Date, the provisions of
Section 6.14(e) shall supersede and replace any and all non-compete
provisions in effect as of the Closing Date and binding upon any
Company Employee who is employed by PSC or any PSC Group member
pursuant to Section 6.14(b); provided, that this Section 6.14(f) shall
not be deemed to exempt any such Company Employee from the effects of
any non-compete provisions set forth in this Agreement that are binding
on PSC or any member of its Group during such time that such Company
Employee remains employed by a member of the PSC Group. For purposes of
this Section 6.14(f), a non-compete provision includes, without
limitation, any provision restricting the ability of a Person to engage
in any activity contemplated by his/her employment in any jurisdiction.
Notwithstanding the foregoing, any confidentiality or similar provision
binding upon any such Company Employee shall continue in effect from
and after the Closing Date in accordance with its terms.
(g) Beginning on the Closing Date and ending on the date
that is one (1) year after the Closing Date, each of PSC and HCLT will
not, and will ensure that its respective Group will not, directly or
indirectly employ, hire or obtain any services from, in any capacity
(including without limitation as an employee, director, officer,
manager, adviser, consultant or contractor) any individual who is on
the Closing Date an officer or employee of the other (or any member of
the other's Group, it being agreed that the immediately preceding use
of the term "Group" in this parenthetical shall be as defined in
Section 9.14(d) on a pre-Closing basis); provided, that each of PSC and
HCLT (and their respective Group's) may hire or obtain services from
any such person within the time frame referenced in this Section
6.14(g) if that person at the time of hire or provision of services has
not been an officer or employee of the other (or any member of the
other's Group) for a minimum period of six (6) months.
80
6.15 Non-Competition Restrictions.
(a) (i) During the two (2) year period
immediately following the Closing Date (such period, the
"Channel Customer Non-Competition Period"), HCLT shall not,
and shall ensure that its Group (which shall include any
Person acquired by HCLT or any member of its Group that
becomes a member of HCLT's Group) shall not, directly or
indirectly,
(1) engage in the marketing or sale of
any application development or maintenance services
("ADM") to the Persons set forth on Schedule 6.15(a)
to this Agreement (all such Persons listed on
Schedule 6.15(a), the "Channel Customers");
(2) assist or encourage in any manner
any Person to do any of the foregoing; or
(3) take any action, directly or
indirectly, to do or cause or that would result in
any of the foregoing.
For purposes of this Agreement, ADM does not include, among
other services, business process outsourcing, infrastructure
services, networking services and technology service. For
purposes of this Section 6.15, the term "technology services"
means (i) the development, redevelopment and maintenance of
non-applications software that is either embedded or integral
to the functioning of hardware, or (ii) development,
redevelopment and maintenance of non-applications software
that is related to ASIC, embedded systems, CAD/CAM, process
control, and digital signal processing. Notwithstanding the
foregoing provisions of this Section 6.15(a)(i), in the event
that HCLT offers services other than ADM to any Channel
Customer, and as part of the marketing and selling of such
non-ADM services HCLT also markets and sells ADM services,
then HCLT will not be deemed to have violated the provisions
of this Section 6.15(a) (and will be permitted to market and
sell such ADM services along with the non-ADM services
notwithstanding the provisions of this Section 6.15(a)) unless
(A) the value of the ADM services exceeds 15% of the gross
contract value of the engagement at issue (in terms of
revenue), or (B) the ADM services are not integral and
essential to the provision of the non-ADM services that are
the subject of the engagement at issue.
(ii) [INTENTIONALLY OMITTED]
(iii) In the event that HCL is the Buyer under
this Agreement, during the Channel Customer Non-Competition
Period, if HCL (or any member of its Group) receives an RFI,
RFP or similar request or inquiry from a Channel Customer for
ADM services and such Channel Customer
81
requires that the ADM services sought be sourced exclusively
from India, then HCL shall immediately provide a true and
complete copy of the RFI, RFP or similar request or inquiry to
PSC for its review. If the RFI, RFP or similar request or
inquiry requires that the ADM services sought be sourced
exclusively from India and covers services that the PSC Group
is unable to provide, and if PSC gives its express, written
consent to HCL (such consent not to be unreasonably withheld
or delayed), HCL will be permitted, notwithstanding the
provisions of this Section 6.15(a), to respond to such RFI,
RFP or similar request or inquiry and, if PSC further consents
as provided herein (such consent not to be unreasonably
withheld or delayed), to provide only the specific services
expressly authorized in such consent; provided, that (1) HCL
shall only be permitted to take such action and provide such
services as may be expressly authorized in such written
consent, and (2) if PSC gives consent to HCL to respond to an
RFI, RFP or similar request or inquiry, HCL will be required
to disclose the full and complete terms of any proposed
engagement resulting from any authorized response to such RFI,
RFP or similar request or inquiry (including the entire
proposed Contract, with prices blacked out) and to obtain the
further consent of PSC (such consent not to be unreasonably
withheld or delayed) before entering into any such engagement
or providing any services contemplated thereby.
(iv) Notwithstanding the foregoing provisions of
this Section 6.15(a), nothing contained in this Section
6.15(a) shall serve to prohibit HCLT or any member of its
Group from acquiring, directly or indirectly, an interest in
any Person, such that the acquired Person would be part of its
Group, if less than 50% of the revenues of such acquired
Person is derived from activities that if engaged in by HCLT
or any member of its Group would constitute a violation of the
non-compete restriction set forth in this Section 6.15(a). The
exception to the provisions of Section 6.15(a) set forth in
this Section 6.15(a)(iv) shall apply only to the continuation
of the revenue streams from the specific Channel Customers who
are customers of such acquired Person, which revenue streams
and customer relationships exist on the date of any such
acquisition, it being the intention of the parties hereto that
neither HCLT nor its Group (which includes any such acquired
Person) shall be permitted to develop or expand the acquired
business or otherwise engage in further activities (including
activities that involve other Channel Customers) that violate
the provisions of this Section 6.15(a).
(v) If any customer listed on Schedule 6.15(a)
is acquired by a Person that is not covered by a
non-competition provision contained in this Agreement, then
the restrictions set forth in this Section 6.15(a) shall
automatically terminate and shall no longer apply with respect
to such acquired customer upon consummation of its
acquisition.
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(b) (i) During the two (2) year period immediately
following the Closing Date, Seller shall not, and shall ensure that its
Group (which shall include any Person acquired by any member of
Seller's Group that becomes a part of Seller's Group) shall not,
directly or indirectly,
(1) engage in the marketing or sale of ADM to
any of the customers of the Company Group listed on Schedule
6.15(b) to this Agreement (all such Persons listed on Schedule
6.15(b), the "Direct Customers") in the areas specified on
Schedule 6.15(b); or
(2) assist or encourage any Person to do any of
the foregoing; or
(3) take any action, directly or indirectly, to
do or cause or that would result in any of the foregoing.
(ii) Notwithstanding the foregoing Section 6.15(b)(i), in
the event that the Seller offers services other than ADM to any Direct
Customer, and as part of the marketing and selling of such non-ADM
services the Seller also markets and sells ADM services, then the
Seller will not be deemed to have violated the provisions of this
Section 6.15(b) (and will be permitted to market and sell such ADM
services along with the non-ADM services notwithstanding the provisions
of this Section 6.15(b)) so long as (1) the value of the ADM services
does not exceed 15% of the gross contract value of the engagement at
issue (in terms of revenue), (2) the ADM services are integral and
essential to the provision of the non-ADM services that are the subject
of the engagement at issue and (3) the ADM services are provided using
personnel (at the project manager or lower level) who are not citizens
of, or whose primary residence is not located in, India.
(iii) If any customer listed on Schedule 6.15(b) is
acquired by a Person that is not covered by a non-competition provision
contained in this Agreement, then the restrictions set forth in this
Section 6.15(b) shall automatically terminate and shall no longer apply
with respect to such acquired customer upon consummation of its
acquisition.
(iv) PSC and HCL hereby expressly acknowledge and agree
that, with respect to UBS AG, Lufthansa AS and Lufthansa Services the
restrictions imposed by this Section 6.15(b) on the Seller and its
Group apply only with respect to the specific projects referenced on
Schedule 6.15(b) with respect to each such entity, rather than restrict
the activities of the Seller and its Group with respect to such
entities on a entity-wide basis.
(c) [INTENTIONALLY OMITTED]
83
(d) [INTENTIONALLY OMITTED]
(e) A party whose activities are restricted by a
non-compete provision contained in this Section 6.15 shall use all
commercially reasonable efforts to influence any of its direct or
indirect Affiliates from doing anything which, if such Affiliates were
part of such party's Group, would be prohibited by such non-compete
provision.
(f) Notwithstanding the foregoing provisions of Section
6.15(b), nothing contained in Section 6.15(b) shall serve to prohibit
the Seller or any member of its Group from acquiring, directly or
indirectly, an interest in any Person, such that the acquired Person
would be part of its Group, if less than 50% of the revenues of such
acquired Person is derived from activities that that if engaged in by
Seller or any member of its Group would constitute a violation of the
non-compete restriction set forth in Section 6.15(b). The exception to
the provisions of Section 6.15(b) set forth in this Section 6.15(f)
shall apply only to the continuation of the revenue streams from the
specific Direct Customers who are customers of such acquired Person,
which revenue streams and customer relationships exist on the date of
any such acquisition, it being the intention of the parties hereto that
neither the Seller nor any member of its Group (which includes any such
acquired Person) shall be permitted to develop or expand the acquired
business or otherwise engage in further activities (including
activities that involve other Direct Customers) that violate the
provisions of Section 6.15(b).
(g) Each party whose activities are restricted by a
non-compete provision contained in this Section 6.15 (i) represents and
warrants to the other parties hereto that it is willing and able to
engage in business activities that are not restricted pursuant to this
Section 6.15 and that enforcement of the restrictive covenants set
forth in this Section 6.15 will not be unduly burdensome to such party;
(ii) acknowledges that its agreement to the restrictive covenants set
forth in this Section 6.15 is a material inducement and condition to
the willingness of the other parties hereto to enter into this
Agreement, to consummate the transactions contemplated hereby and to
perform their respective obligations hereunder; and (iii) acknowledges
and agrees that the restrictive covenants set forth in this Section
6.15 are reasonable as to time, geographic area and scope of activity
and do not impose a greater restraint than is necessary to protect the
goodwill and legitimate business interests of the other parties to this
Agreement.
(h) Notwithstanding the foregoing, if any of the
restrictive covenants set forth in this Section 6.15 are found by a
court of competent jurisdiction to contain limitations as to time,
geographic area or scope of activity that are not reasonable or not
necessary to protect the goodwill or legitimate business interests of
the parties intended to be protected by such provisions, then such
court is hereby authorized and directed to reform such provisions to
the minimum extent necessary to cause the limitations contained in this
Section 6.15 as to time,
84
geographical area and scope of activity to be reasonable and to impose
a restraint that is not greater than necessary to protect the goodwill
and legitimate business interests of such parties
(i) Effective as of the Closing Date, the provisions of
this Section 6.15 shall supersede and replace any and all non-compete
provisions in all Contracts entered into on or before the Closing Date
between or among any of the parties hereto (including their respective
Groups). Effective as of the Closing Date, all of such non-compete
provisions in such Contracts shall be null and void. For purposes of
this Section 6.15, a non-compete provision includes any provision
restricting the ability of a Person to engage in any business activity
in any jurisdiction.
6.16 Continuation of Management.
(a) Without limiting the terms of Section 6.14, during
the Interim Period PSC will not, directly or indirectly, re-employ,
reassign, move or re-task the existing management of the Company and
each Company Group member, including all managers, officers,
consultants and advisors, within the PSC Group; provided, that PSC
shall be permitted to replace its director representatives within the
Company Group.
(b) Without limiting the terms of Section 6.14, during
the Interim Period HCL will not, directly or indirectly, re-employ,
reassign, move or re-task the existing management of the Company and
each Company Group member, including all managers, officers,
consultants and advisors, within the HCL Group; provided, that HCL
shall be permitted to replace its director representatives within the
Company Group.
6.17 Tax Issues.
(a) The Company and the Buyer will maintain all income
tax records, working papers and other supporting financial records and
documents relating to the tax returns filed by the Company and its
Group members for all open years and for their taxable years ending in
2000, 2001 and 2002. Such tax returns will be delivered to and
maintained by the Company and the Buyer until the expiration of the
applicable statute of limitations, and the Company and the Buyer will
make the same reasonably available to Seller or its agents (at Seller's
expense) at reasonable times for inspection and copying. Each of PSC
and HCL, for themselves and on behalf of their respective Groups,
agrees not to take any action, including without limitation, taking any
position in any tax return or report to any Governmental Body that
contradicts, is adverse to or inconsistent with the terms of this
Agreement.
(b) HCL (for itself) and HCLT on behalf of its Group,
agrees to treat the repurchase of the HCL Company Shares as a tax-free
redemption under Austrian
85
tax laws (to be subsumed under Sec. 10, par. 2 of the Austrian
Corporate Income Tax Act, Federal Law of July 7, 1988, last updated in
BGBI 2002/68), and agrees not to take any action, including without
limitation, taking any position in any tax return or report to any
Governmental Body that contradicts, is adverse to or inconsistent with
such treatment.
(c) If either PSC, HCLT, HCL or the Company (or any
member of their respective Groups) receives any notice of a pending or
threatened tax audit, claim, assessment, adjustment, litigation,
investigation, administrative proceeding or similar event with respect
to taxes against or with respect to the Company or the Company Group
which may give rise to liability of other parties hereto (or their
respective Groups), the receiving party promptly, but no later than
thirty (30) calendar days of the receipt of such notice, notify PSC,
HCLT, HCL and the Company, as applicable. PSC, HCLT and HCL each agrees
to consult with and to keep each other reasonably informed regarding
the status of any tax audit, claim, assessment, adjustment, litigation,
investigation, administrative proceeding or similar event to the extent
that such event could affect a liability of the other (or their
respective Groups). Subject to Section 8.8, after the Closing, the
owner of the Company will have the right to represent the Company's
interests in any tax audit or administrative or judicial proceeding.
(d) PSC, HCLT and HCL shall reasonably cooperate in
connection with the preparation and filing of tax returns and any
audit, claim, assessment, adjustment, litigation, investigation,
administrative proceeding or similar event with respect to taxes of the
Company or the Company Group for the period prior to Closing. Such
cooperation shall include the provision of records and information
which are reasonably relevant to any such tax return, audit, claim,
assessment, adjustment, litigation, investigation, administrative
proceeding or similar event and making employees reasonably available
on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder.
6.18 Transfer of Shares. Each of PSC and HCL agrees not to, prior
to the completion of the transactions contemplated hereby, sell, dispose of,
transfer or assign, or issue any rights, warrants or options to acquire, or
otherwise grant any Lien on, any Company Shares owned by it or its Group.
6.19 Stock Options.
(a) [INTENTIONALLY OMITTED]
(b) Promptly upon completion of the Auction, but in no
event later than four (4) calendar days after completion of the
Auction, PSC and HCL shall use all commercially reasonable efforts to
cause the Company to, and the Company shall, send to each Company Group
employee (other than Xx. Xxxxxx Xxxxxx) holding options for the
purchase of ordinary shares of the Company ("Company
86
Options") the applicable letter attached hereto as Exhibits BB-1 and
BB-2 (the "Employee Post-Auction Option Letter").
(c) From and after the Closing, each of PSC and HCL shall
implement, and where applicable shall use all commercially reasonable
efforts to cause the Company and HPS India to implement, and the
Company and HPS India shall, as soon as possible after the Closing
implement, the treatment and disposition of all offers for the grant of
Company Options made to Xxxxxx Xxxxxx, in accordance with the terms of
the executed agreement between Xxxxxx Xxxxxx, the Company and HPS India
approved by each of PSC and HCL, to the other directors of the Company,
in accordance with agreement concerning the withdrawal of the offer of
Company Options in the form attached hereto as Exhibit CC (to the
extent duly executed) (the "Option Grant Withdrawal Agreement"), and to
the employees of the Company (other than Xxxxxx Xxxxxx), in accordance
with the applicable Employee Post-Auction Option Letter, including,
without limitation pursuant to any valid election by a Company Employee
pursuant to such Post-Auction Option Letter and the terms and
conditions of any underlying stock option agreements, each as and to
the extent applicable. Without limiting the foregoing, each of PSC and
HCL shall:
(i) comply with the terms of any such executed
agreement with Xx. Xxxxxx Xxxxx and any such Option Grant
Withdrawal Agreement in accordance with the terms set forth
therein;
(ii) encash the applicable Company Options held
by Company Group employees in accordance with the terms of the
applicable Employee Post-Auction Option Letter; and
(iii) cause HPS India to, and HPS India shall,
issue HPS India Options to replace Company Options as
contemplated by the applicable Employee Post-Auction Option
Letter, including pursuant to a valid election by any Company
Group Employee pursuant such letter.
(d) As soon as practicable after the Closing, PSC and HCL
(acting jointly, reasonably and without unreasonable delay) shall
deliver to the Agent a final schedule setting forth in detail a list of
the Company Options outstanding as of the Closing Date and documenting
in detail the disposition of such Company Options as contemplated in
this Section 6.19 (the "Final Option Grid"). Using the information
contained in the Final Option Grid the Agent, acting for and on behalf
of PSC and HCL, will pay (in the specified currency) to each director
and employee identified in such schedule the withdrawal or encashment
price, respectively, owing to each of them as contemplated in this
Section 6.19 (net of applicable withholdings) using the Encashment Fund
until such funds are exhausted. If such funds are not sufficient, each
of PSC and HCL agrees to promptly provide one-half of any additional
funds necessary in order to withdraw the offers of grants of Company
Options made to directors or to encash the
87
Company Options issued to employees that are to be withdrawn or
encashed as contemplated in this Section 6.19. In addition, using the
information contained in the Final Option Grid, PSC and HCL (acting
jointly, reasonably and in good faith) will each use their best efforts
to promptly prepare stock option agreements using the forms of HPS
India Options to replace the Company Options that are to be replaced as
contemplated in this Section 6.19. Once prepared, the HPS India Options
will be provided promptly to the Agent, who will then provide the HPS
Options to the Attorney-in-Fact for execution (and dating) on behalf of
HPS India. Once executed, the Attorneys-in-Fact will return the HPS
India Options to the Agent, who will then deliver such HPS India
Options to the appropriate employee.
6.20 Safety Net. If HCLT or one or more members of the HCL Group is
the Buyer, then HCLT shall have the rights and entitlements set forth in
Schedule 6.20 in the period specified therein.
6.21 Title to Mauritius Shares. Each of PSC and HCL agree to share
equally the reasonable costs and expenses that are incurred to remove any Lien
on the Mauritius Shares; unless the Lien was known by PSC such that PSC breached
its representation and warranty set forth in Section 3.6(b) or was known by HCL
such that HCL breached its representation and warranty set forth in Section
4.6(b), in which case all the costs and expenses incurred subsequent to the
Closing to remove any such Lien shall be borne by the breaching party.
6.22 Subsequent Sale by Buyer. Without limiting any other provision
of this Agreement, including, without limitation Section 6.20, the Buyer agrees
that for a period of two (2) years from and after the Closing Date, the Buyer
will not, and the Buyer will cause its Group to not, sell a controlling interest
in the Company or all or substantially all of the assets or business of the
Company or the Company Group as a whole (in the event that PSC is the Buyer) or
HPS Mauritius or all or substantially all of the assets or business of HPS
Mauritius or the HPS Mauritius Group as a whole (in the event that HCL is the
Buyer) to a third Person in a private transaction. For purposes of clarity, the
restriction set forth in this Section 6.22 shall not preclude, among other
things, public sales or other public distributions of securities (including
pursuant to an initial public offering) of the Company or HPS Mauritius, as
applicable, or any member of the PSC Group or the HCL Group. In addition, the
sale of a controlling interest in PSC, in the event that PSC is the Buyer, or of
HCLT, in the event that HCL is the Buyer, or any similar transaction involving a
direct or indirect parent of the Company or HPS Mauritius, as applicable, will
not constitute a breach of this Section 6.22.
6.23 Termination of Group Agreements During the Interim Period.
(a) PSC agrees that all PSC Group Agreements shall
continue in accordance with their respective terms and conditions
during the Interim Period. Subject to the next sentence, PSC agrees
that, during the Interim Period, it shall not terminate any PSC Group
Agreement for convenience. The foregoing
88
sentence shall not affect or prejudice (i) any right of the PSC Group
to terminate for cause, or not to renew any PSC Group Agreements upon
the expiry of its term, and (ii) where any PSC Group Agreement is for
the provision of goods and/or services in connection with an agreement
between any member of the PSC Group and any customer of the PSC Group,
and the customer terminates or materially amends its agreement with the
member of the PSC Group, the member of the PSC Group may exercise any
right to terminate for convenience that PSC Group Agreement.
(b) HCL agrees that all HCL Group Agreements shall
continue in accordance with their respective terms and conditions
during the Interim Period. Subject to the next sentence, HCL agrees
that, during the Interim Period, it shall not terminate any HCL Group
Agreement for convenience. The foregoing sentence shall not affect or
prejudice (i) any right of the HCL Group to terminate for cause, or not
to renew any HCL Group Agreements upon the expiry of its term, and (ii)
where any HCL Group Agreement is for the provision of goods and/or
services in connection with an agreement between any member of the HCL
Group and any customer of the HCL Group, and the customer terminates or
materially amends its agreement with the member of the HCL Group, the
member of the HCL Group may exercise any right to terminate for
convenience that HCL Group Agreement.
6.24 Imputation of Certain Knowledge and Actions.
(a) Notwithstanding anything to the contrary contained in
this Agreement, any knowledge possessed by Xx. Xxxxxx Xxxxxx or Xx.
X.X. Xxxxxxx shall not be imputed to HCL or any member of its Group,
and neither HCL nor any HCL Group member shall be deemed to know any
facts (actual or constructive) or circumstances solely by virtue of
them being known to Xx. Xxxxxx Xxxxxx or Xx. X.X. Xxxxxxx.
(b) Notwithstanding anything to the contrary contained in
this Agreement, any knowledge possessed by Xx. Xxxxxx Xxxxxx or Xx.
X.X. Xxxxxxx shall not be imputed to PSC or any member of its Group,
and neither PSC nor any PSC Group member shall be deemed to know any
facts (actual or constructive) or circumstances solely by virtue of
them being known to Xx. Xxxxxx Xxxxxx or Xx. X.X. Xxxxxxx.
(c) Notwithstanding anything to the contrary contained in
this Agreement, the mere fact that Xx. Xxxxxx Xxxxxx or Xx. X.X.
Xxxxxxx have taken any action or have omitted to take any action prior
to November 3, 2003, shall not impute that action or failure to take
that action to HCL or any member of its Group even as a result of an
express or implied request, instruction or direction from HCL or a
member of the HCL Group; provided, that such request, instruction or
direction from HCL or a member of the HCL Group did not result in
89
the theft of physical, tangible assets of any Company Group member or
does not give rise to a claim by a third Person unaffiliated with the
Company Group.
(d) Notwithstanding anything to the contrary contained in this
Agreement, the mere fact that Xx. Xxxxxx Xxxxxx or Xx. X.X. Xxxxxxx
have taken any action or have omitted to take any action prior to
November 3, 2003, shall not impute that action or failure to take that
action to PSC or any member of its Group even as a result of an express
or implied request, instruction or direction from PSC or a member of
the PSC Group; provided, that such request, instruction or direction
from PSC or a member of the PSC Group did not result in the theft of
physical, tangible assets of any Company Group member or does not give
rise to a claim by a third Person unaffiliated with the Company Group.
6.25 Company Cash Balance. In the event that HCL is the Buyer, as
soon as practicable after the Closing Date (but in any event before January 31,
2004), PSC will convey or cause to be conveyed to HCL, by wire transfer of
immediately available funds to an account specified in writing by HCL for this
purpose, cash or cash equivalents in an amount equal to the balance of cash of
the Company held in banks as of the Closing Date (net of outstanding checks).
6.26 Insurance. PSC has arranged, at its cost, in the event that
PSC is the Seller, for a binding commitment from American International
Specialty Lines Insurance Company for the issuance, subject to the payment of
the premium therefor no later than December 31, 2003 and subject to the
execution thereof by HCL Bermuda, of the Fiscal Event Insurance Policy, a copy
of which is attached hereto as Exhibit LL (the "AIG Policy"), for the benefit of
HCL Bermuda.
6.27 Release of Escrow Upon Automatic Termination. Each of PSC and
HCL agrees to use its commercially reasonable efforts to cause the Agent to
return the Escrowed Documents (including any funds) to the party that deposited
such documents with the Agent in Escrow as soon as possible following the
automatic termination of this Agreement pursuant to Section 9.1(g).
ARTICLE VII
CLOSING CONDITIONS
7.1 Conditions to Obligations of the Buyer. The obligation of the
Buyer under this Agreement to close the transactions contemplated hereby is
subject to the satisfaction at or prior to the Closing of the following
conditions, but compliance with any such conditions may be waived by the Buyer
in writing:
(a) The Auction shall have been completed.
(b) Each of the Agent, the Notary and the
Attorneys-in-Fact shall have taken all actions required of it with
respect to the documents, instruments and other property to be
delivered to the Buyer and any of its Group members (including any
Company Group members that will become a member of Buyer's
90
Group as a result of the Closing) in connection with Closing, as
specified in Section 2.3(a), in the event that PSC is the Buyer, and in
Section 2.3(b), in the event that HCL is the Buyer.
(c) The Agent will have delivered:
(i) to PSC (and the PSC Group members specified
herein) and to the Company the documents, instruments and
other property specified in Section 2.3(a), as applicable, to
be delivered at Closing, in the event that PSC is the Buyer;
or
(ii) to HCL (and the HCL Group members specified
herein) the documents, instruments and other property
specified in Section 2.3(b), as applicable, to be delivered at
Closing in the event that HCL is the Buyer.
(d) (i) The representations and warranties of the
Seller herein contained shall be true in all material respects at the
Closing Date with the same effect as though made at such time;
provided, that the truth or accuracy of the representations and
warranties of Sections 3.5 or 4.5 or any misrepresentations contained
therein, as applicable, shall not be a condition to Closing; and (ii)
Seller shall have performed in all material respects all obligations
and complied with in all material respects all covenants and conditions
required by this Agreement to be performed or complied with by Seller
at or prior to the Closing Date.
(e) There shall be no Lien on the Mauritius Shares.
(f) There shall not exist a Prohibition binding upon
Buyer (or a member of its Group that has an obligation under this
Agreement) that has not been overcome, disapplied or otherwise
terminated or removed; provided, that the condition to Closing
contained in this Section 7.1(f) will be deemed to have been satisfied
if the Prohibition has been enacted or became effective as a result, in
whole or in part, of action (other than the mere execution and delivery
of any of the Transaction Documents, the announcement of same in
accordance with the terms of this Agreement, or the making of any
filing or report (including the letter dated November 24, 2003 filed
with the Reserve Bank of India prior to the Effective Date and
disclosed to PSC) (without more) required under applicable Law) taken
directly or indirectly by Buyer (or any member of its Group) with the
intention of giving rise to a Prohibition.
7.2 Conditions to Obligations of the Seller. The obligation of the
Seller, by and through the Agent, under this Agreement to close the transactions
contemplated hereby is subject to the satisfaction at or prior to the Closing of
the following conditions, but compliance with any such conditions may be waived
by the Seller in writing:
(a) The Auction shall have been completed.
91
(b) Each of the Agent, the Notary and the
Attorneys-in-Fact shall have taken all actions required of it with
respect to the documents, instruments, and other property to be
delivered to the Seller and any of its Group Members (including any
Company Group Members that will become a member of Seller's Group as a
result of the Closing) in connection with Closing, as specified in
Section 2.3(a), in the event that HCL is the Seller, and in Section
2.3(b), in the event that PSC is the Seller.
(c) The Agent will have delivered:
(i) to PSC (and the PSC Group members specified
herein) and to the Company the documents, instruments and
other property specified in Section 2.3(b), as applicable, to
be delivered at Closing in the event that PSC is the Seller;
or
(ii) to HCL (and the HCL Group members specified
herein) the documents, instruments and other property
specified in Section 2.3(a), as applicable, to be delivered at
Closing in the event that HCL is the Seller.
(d) (i) The representations and warranties of the
Buyer herein contained shall be true in all material respects at the
Closing Date with the same effect as though made at such time;
provided, that the truth or accuracy of the representations and
warranties of Sections 3.5 or 4.5 or any misrepresentations contained
therein, as applicable, shall not be a condition to Closing; and (ii)
Buyer shall have performed in all material respects all obligations and
complied with in all material respects all covenants and conditions
required by this Agreement to be performed or complied with by Buyer at
or prior to the Closing Date.
(e) There shall be no Lien on the Mauritius Shares.
(f) There shall not exist a Prohibition binding upon
Seller (or a member of its Group that has an obligation under the
Agreement) that has not been overcome, disapplied or otherwise
terminated or removed; provided, that the condition to Closing
contained in this Section 7.2(f) will be deemed to have been satisfied
if the Prohibition has been enacted or became effective as a result, in
whole or in part, of action (other than the mere execution and delivery
of any of the Transaction Documents, the announcement of same in
accordance with the terms of this Agreement, or the making of any
filing or report (including the letter dated November 24, 2003 filed
with the Reserve Bank of India prior to the Effective Date and
disclosed to PSC) (without more) required under applicable Law) taken
directly or indirectly by Seller (or any member of its Group) with the
intention of giving rise to a Prohibition.
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ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification of the Buyer. From and after the Closing, the
Seller will indemnify and hold the Buyer, the Buyer Group and their respective
managers, directors, officers, employees, consultants and agents (collectively,
the "Buyer Parties") harmless from any and all proceedings, liabilities,
obligations, claims, demands, actions, causes of action, losses, contingencies,
damages, costs, and expenses, including all court costs and reasonable
attorneys' fees (collectively, "Losses," which term shall exclude, in all cases,
special, indirect, consequential, punitive and exemplary damages (lost income
and profits), unless payable to a third Person unaffiliated with a party seeking
to be indemnified hereunder), that any Buyer Party suffers or incurs as a result
of or relating to:
(a) the breach of any representation or warranty made by
the Seller in Article III or Article IV, as applicable, and Sections
6.13(e), 6.15(g), 9.6 and 9.13(a) of this Agreement, the Agent
Agreement or in any of the deeds of transfer delivered in connection
with the Closing, or any allegation by a third Person (other than a
Buyer Party) that, if true, would constitute such a breach; and
(b) the breach of any covenant or agreement made by the
Seller in this Agreement or any other Transaction Document;
provided, that the foregoing indemnification obligation by Seller of the Buyer
Parties shall not encompass or be deemed to cover any matter or any other
representation, warranty, covenant or agreement for which a specific, exclusive
remedy (including through indemnification) has otherwise been provided in this
Agreement or any other Transaction Document, as applicable, including without
limitation, Schedule 6.20 and Sections 8.3, 8.8 and 8.9, and the payment, if
any, of the Auction Participation Fee after December 31, 2003 as contemplated in
Sections 9.2(b)(i) and 9.2(b)(iii).
8.2 Indemnification of the Seller. From and after the Closing, the
Buyer will indemnify and hold the Seller, the Seller Group and their respective
managers, directors, officers, employees, consultants and agents (collectively
the "Seller Parties") harmless from any and all Losses that any Seller Party
suffers or incurs as a result of or relating to:
(a) the breach of any representation or warranty made by
the Buyer in Article III or Article IV, as applicable, and Sections
6.13(e), 6.15(g), 9.6 and 9.13(a) of this Agreement, the Agent
Agreement or in any of the deeds of transfer delivered in connection
with the Closing, or any allegation by a third Person (other than a
Seller Party) that, if true, would constitute such a breach; and
(b) the breach of any covenant or agreement made by the
Buyer in this Agreement or any other Transaction Document;
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provided, that the foregoing indemnification obligation by Buyer of the Seller
Parties shall not encompass or be deemed to cover any matter or any other
representation, warranty, covenant or agreement for which a specific, exclusive
remedy (including through indemnification) has otherwise been provided in this
Agreement or any other Transaction Document, as applicable, including, without
limitation, Schedule 6.20 and Sections 8.3, 8.8 and 8.9, and the payment, if
any, of the Auction Participation Fee after December 31, 2003 as contemplated in
Sections 9.2(b)(i) and 9.2(b)(iii).
8.3 Indemnification of HCL. From and after the Closing, in the
event HCL is the Buyer, PSC will indemnify and hold HCL, the HCL Group and their
respective managers, directors, officers, employees, consultants and agents
(collectively the "HCL Parties") harmless from any and all Losses that any HCL
Party suffers or incurs as a result of claims made by employees of the Company
Group concerning the replacement of Company Options held by them that were
issued under the HCL Xxxxx Systems NV, The Netherlands Stock Option Master Plan
adopted in 2000 with HPS India Options, as contemplated in Section 6.19.
8.4 Survival. Except as may be otherwise provided in Section 8.8,
the representations and warranties of each of PSC and HCL made in this Agreement
or any other Transaction Document will survive the execution and delivery of
this Agreement and the consummation of the transactions contemplated by this
Agreement for a period of one year from the Closing Date; provided, that the
representations and warranties contained in Section 3.2 and Section 4.2, and
contained in Section 3.6 (if PSC is the Seller) and Section 4.6 (if HCL is the
Seller) shall survive indefinitely, and provided further, that any
representation or warranty the violation of which is made the basis of a claim
for indemnification pursuant to Section 8.1(a) or Section 8.2(a) will survive
until such claim is finally resolved if the Indemnified Party notifies the
Indemnifying Party of such claim in reasonable detail prior to the date on which
such representation or warranty would otherwise expire under this Agreement. No
claim for indemnification pursuant to Section 8.1(a) or Section 8.2(a) based on
the breach or alleged breach of a representation or warranty may be asserted by
a party otherwise entitled to be indemnified after the date on which such
representation or warranty expires under this Agreement. Except as may be
otherwise provided in Section 8.8, or as otherwise expressly set forth in this
Agreement in respect of a particular covenant or agreement, the covenants and
agreements of each of PSC and HCL contained in this Agreement shall survive the
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement indefinitely. Claims for
indemnification under Sections 8.8 shall survive and may be brought or initiated
until the expiration of the applicable statute of limitations, and claims for
indemnification under Section 8.9 shall survive and may be brought or initiated
until one (1) year following the expiration of the AIG Policy.
8.5 Notice. Except as may be otherwise provided in Section 8.8,
any party entitled to receive indemnification under this Article VIII (the
"Indemnified Party") agrees to give prompt written notice to the party or
parties required to provide such
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indemnification (the "Indemnifying Parties") following the discovery of any
breach of a representation, warranty, covenant or agreement, the occurrence of
any indemnifiable Loss or the assertion of any claim or the commencement of any
action or proceeding in respect of which such a Loss may reasonably be expected
to occur (a "Claim"), but the Indemnified Party's failure to give such notice
will not affect the obligations of the Indemnifying Party under this Article
VIII except to the extent that the Indemnifying Party is materially prejudiced
thereby. Such written notice will include (a) the representation, warranty or
covenant with respect to which the Claim is being made, (b) the facts giving
rise to the alleged basis for the Claim, to the extent known by the party
seeking indemnification, and (c) a reasonable estimate of the amount of the
liability or Loss being asserted against the Indemnifying Party by reason of the
Claim, unless such amount is uncertain or contingent, in which event the
Indemnified Party will give a later written notice promptly after the amount
becomes certain or fixed.
8.6 Defense of Third Person Claims. Except as may be otherwise
provided in Section 8.8:
(a) In the event of any Claim brought by, or asserted as
a result of a claim by, a third Person (a "Third Party Claim"), the
Indemnified Party shall promptly notify the Indemnifying Party in
writing of such Third Party Claim. Such written notice will include a
description of (i) the representation, warranty, covenant or agreement
with respect to which the Claim is being made (which may be
subsequently revised by the Indemnified Party within a reasonable time
of new or additional facts becoming known), (ii) the facts giving rise
to the alleged basis for the Claim, to the extent known by the party
seeking indemnification (which may be subsequently revised by the
Indemnified Party within a reasonable time of new or additional facts
becoming known), and (iii) the amount of the Loss being asserted
against the Indemnifying Party by reason of the Claim, unless such
amount is uncertain or contingent, in which event the Indemnified Party
will also give a later written notice promptly after the amount becomes
certain or fixed. The failure to promptly so notify the Indemnifying
Party of the Third Party Claim shall not relieve the Indemnifying Party
of its obligations hereunder, except to the extent that such failure
shall have materially and adversely prejudiced the Indemnifying Party.
(b) Subject to the other terms of this Article VIII, the
Indemnifying Party may by written notice to the Indemnified Party no
later than fifteen (15) calendar days after receiving written notice of
a Third Party Claim from the Indemnified Party, elect to assume and
control the defense (or settlement) of any Third Party Claim as
provided herein, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of expenses
related to such Third Party Claim (including expenses incurred prior to
such election).
(c) If the Indemnifying Party elects to assume and
control the defense of a Third Party Claim, then (i) the Indemnified
Party may only settle such Third Party Claim with the written consent
of the Indemnifying Party, which consent will
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not be unreasonably withheld or delayed, (ii) the Indemnifying Party
may settle such Third Party Claim without the consent of the
Indemnified Party only if (A) any monetary damages payable to any third
party in respect of the Third Party Claim are paid by the Indemnifying
Party, (B) the Indemnified Party receives a full, complete and
unconditional release in respect of the Third Party Claim without any
admission or finding of obligation, liability, fault or guilt (criminal
or otherwise) with respect to the Third Party Claim, and (C) no
injunctive, extraordinary, equitable or other relief of any kind is
imposed on the Indemnified Party, and (iii) the Indemnifying Party may
otherwise settle such Third Party Claim only with the consent of the
Indemnified Party, which consent will not unreasonably be withheld or
delayed. The Indemnified Party may employ separate counsel and
participate in the defense of any Third Party Claim, but the
Indemnified Party will be responsible for the reasonable fees and
expenses of such counsel unless (A) the Indemnifying Party has failed
to assume, or if assumed, has failed to reasonably and actively defend
such Third Party Claim as provided herein or to employ counsel
reasonably satisfactory to the Indemnified Party with respect thereto
within the time period provided in Section 8.6(b), or (B) in the
reasonable opinion of the Indemnified Party (upon advice of counsel) a
conflict of interest exists between the interests of the Indemnified
Party and the Indemnifying Party that requires representation by
separate counsel, in which case the reasonable fees and expenses of one
separate counsel to the Indemnified Party will be paid by the
Indemnifying Party.
(d) If the Indemnified Party settles any Third Party
Claim or consent to any judgment with respect thereto without the
consent of the Indemnifying Party (unless such consent is unreasonably
withheld or delayed) and in violation of the terms of this Section 8.6,
the Indemnified Party shall thereafter have no claim against the
Indemnifying Party under this Agreement with respect to any Loss
occasioned by such settlement.
8.7 Limitations on Indemnity.
(a) The Seller will have no obligation to indemnify the
Buyer Parties for the breaches or alleged breaches of representations
and warranties as provided in Section 8.1(a) until the aggregate amount
of the Losses incurred or reasonably to be incurred by the Buyer
Parties exceeds US $50,000, in which case the Buyer Parties shall be
entitled to indemnification with respect to all amounts in excess of US
$50,000; provided, that the obligation of Seller to so indemnify Buyer
Parties pursuant to Section 8.1(a) will not exceed the Purchase Price
in the aggregate. Notwithstanding the foregoing, the limitations on
indemnification set forth in this Section 8.7(a) will not apply to any
Losses arising out of a breach of the representations and warranties
contained in Sections 3.2, 3.6, 3.9, 4.2, 4.6 and 4.9, as applicable,
Section 9.6 or any claims based on fraud or intentional misconduct in
connection with this Agreement, the other Transaction Documents or the
transactions contemplated hereby and thereby.
96
(b) The Buyer will have no obligation to indemnify the
Seller Parties for the breaches or alleged breaches of representations
and warranties as provided in Section 8.2(a) until the aggregate amount
of the Losses incurred by the Seller Parties exceeds US $50,000, in
which case the Seller Parties shall be entitled to indemnification with
respect to all amounts in excess of US $50,000; provided, that the
obligation of the Buyer to so indemnify the Seller Parties pursuant to
Section 8.2(a) will not exceed the Purchase Price in the aggregate.
Notwithstanding the foregoing, the limitations on indemnification set
forth in this Section 8.7(b) will not apply to any Losses arising out
of a breach of the representations and warranties contained in Sections
3.2, 3.6, 4.2 and 4.6, as applicable, Section 9.6 or any claims based
on fraud or intentional misconduct in connection with this Agreement,
the other Transaction Documents or the transactions contemplated hereby
and thereby.
(c) From and after the Closing, (i) the indemnification
provided under Sections 8.1(a) and 8.2(a) shall be the sole and
exclusive remedy for any breach of any of the representations and
warranties of Buyer or Seller referenced therein (other than any
representations and warranties set forth in Schedule 6.20 and Section
8.8, with respect to which Sections 8.1(a), 8.2(a) and this Section
8.7(c) do not apply) and (ii) the indemnification provided under the
other provisions of Sections 8.1, 8.2, 8.3 and 8.9 of this Article VIII
shall be the sole and exclusive monetary remedy for the matters covered
thereby (other than Schedule 6.20 and Section 8.8, for which this
Section 8.7(c) does not apply).
8.8 PSC Indemnification of HCL for Dutch Taxes.
(a) If HCL is the Buyer, PSC will indemnify and hold
harmless HCL for any Tax (defined for purposes of this Section 8.8 in
Section 8.8(k)) imposed by The Netherlands ("Dutch Tax") on HCL with
respect to the transactions set forth on Schedule 8.8 hereto (the
"Schedule 8.8 Transactions"), less any Tax that would have been
incurred by HCL if the Schedule 8.8 Transactions had not occurred and
instead, on the Closing Date, HCL Bermuda had purchased all the PSC
Company Shares directly from PSC for cash.
(b) As of the date of this Agreement, (i) PSC is not
actually aware that any of the Schedule 8.8 Transactions will violate
any Dutch tax law in effect on the date of this Agreement or result in
any Dutch Taxes being imposed on HCL that would give rise to a claim
for indemnification by HCL pursuant to Section 8.8(a) hereof (assuming
the representations of the members of the HCLT Group in this Agreement
that are relevant to the Schedule 8.8 Transactions are correct), and
(ii) HCLT is not actually aware that any of the Schedule 8.8
Transactions will violate any Dutch tax law in effect on the date of
this Agreement or result in any Dutch Taxes being imposed on HCL that
would give rise to a claim for indemnification by HCL pursuant to
Section 8.8(a) hereof. In this regard, PSC and HCL have received an
opinion of Deloitte & Touche to the effect that the Schedule 8.8
Transactions should not give rise to any Dutch corporate
97
income tax, any Dutch dividend withholding tax or any Dutch capital
registration tax.
(c) HCL will, and will cause the members of the HCLT
Group to, use reasonable best efforts to minimize the Dutch Taxes
referred to in Sections 8.8(a) hereof, including without limitation,
filing all requisite tax returns or notices in the Netherlands with
respect to the Schedule 8.8 Transactions. PSC will bear the cost of
HCL's professional fees for the filing of any such tax return, notice
or other filing on the Schedule 8.8 Transactions, but only to the
extent that, but for the Schedule 8.8 Transactions, HCL would not
otherwise have been required to file such return, notice or other
filing.
(d) PSC's obligations pursuant to Section 8.8(a) hereof
will not apply to any Dutch Tax that results from any action or
omission by HCL or any other member of the HCLT Group that occurs after
the Closing Date that is not related to the Schedule 8.8 Transactions
or the implementation thereof.
(e) As a condition to PSC's obligation to indemnify HCL
pursuant to Section 8.8(a) hereof (but subject to Section 8.8(f)
hereof), and without limiting the provisions of Section 6.17 hereof:
(i) HCLT will promptly notify PSC in writing
upon the receipt by HCL or any other member of the HCLT Group
of notice of any pending or threatened audit, inquiry, claim,
demand, assessment, adjustment, investigation, administrative
proceeding, litigation or other similar event that may affect
the determination of any Dutch Tax for which PSC is or may be
obligated to indemnify HCL pursuant to this Section 8.8
(collectively, "Indemnified Tax Matters"). For purposes of the
preceding sentence, "promptly" means the earlier of (y) thirty
(30) days following receipt of such notice by HCL or any other
member of the HCLT Group or (z) within a time period
sufficient to enable PSC to effectively exercise its rights
under this Section 8.8.
(ii) HCL will, and HCLT will cause the members of
the HCLT Group to, allow PSC to: (1) participate in any
Indemnified Tax Matter, including participating in the
defense, litigation, appeal and settlement of such Indemnified
Tax Matter, or (2) if PSC so elects, represent HCL's interest
(with independent recognized counsel of PSC's choice, such
choice being subject to HCLT's consent, which consent shall
not be unreasonably withheld or delayed) with respect to such
Indemnified Tax Matter, including controlling defense,
litigation, appeal and settlement of such Indemnified Tax
Matter; provided, however, that PSC first acknowledges to HCLT
in writing PSC's obligation to indemnify HCL with respect to
the Dutch Tax that is the subject of the Indemnified Tax
Matter, and provided further that in the case of (2), HCLT may
reasonably participate in such Indemnified Tax Matter (with
counsel of HCLT's choice
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and at PSC's expense). In situation (1), HCL and PSC will, and
HCLT and PSC will cause the members of their respective Groups
to, (A) fully cooperate with each other and their respective
counsel in the defense, litigation, appeal and settlement of
any Indemnified Tax Matter, (B) promptly provide each other a
copy of any correspondence they, or any other member of their
respective Groups, receive relating to such Indemnified Tax
Matter, and (C) promptly provide to each other for approval
any correspondence they propose to submit relating to such
Indemnified Tax Matter. In situation (2), HCL will, and HCLT
will cause the members of the HCLT Group to, (I) fully
cooperate with PSC and its counsel in the defense, litigation,
appeal and settlement of any Indemnified Tax Matter
(including, HCL providing PSC and its counsel with appropriate
powers of attorney), (II) promptly provide PSC a copy of any
correspondence received by HCL or any other member of the HCLT
Group relating to such Indemnified Tax Matter, and (III)
promptly provide to PSC for its approval any correspondence
HCL or any other member of the HCLT Group proposes to submit
relating to such Indemnified Tax Matter.
(iii) If, pursuant to Section 8.8(e)(ii)((2)
above, PSC desires to represent HCL's interest with respect to
an Indemnified Tax Matter, but under the laws of the
Netherlands (or otherwise) is prohibited from doing so, HCL
will, and HCLT will cause the members of the HCLT Group to,
take such actions with respect to such Indemnified Tax Matter
as are requested by PSC, except as otherwise prohibited by the
laws of the Netherlands.
In exercising its rights under this Section 8.8(e), PSC and its counsel
will consult with HCLT, and will in good faith take into account any
reasonable suggestions made by HCLT and its counsel, regarding the
Indemnified Tax Matter, and PSC will not exercise such rights in a
manner that unreasonably favors the interests of the PSC Group over the
interests of the HCLT Group.
(f) A breach by HCLT, HCL or any other member of the HCLT
Group of any of the provisions of Section 8.8(e) hereof with respect to
a particular Indemnified Tax Matter will not prevent HCL from seeking
indemnification under Section 8.8(a) hereof for:
(i) such Indemnified Tax Matter if such breach
is not material and does not deprive PSC of its rights under
Section 8.8(e) hereof in any material respect; or
(ii) any other Indemnified Tax Matter that is
covered by Section 8.8(a) hereof and with respect to which the
HCLT Group has not breached the provisions of Section 8.8(e)
hereof.
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(g) For the avoidance of doubt, the indemnification
obligations of PSC under Section 8.8(a) hereof apply only to Dutch
Taxes imposed on the Schedule 8.8 Transactions (subject to the
limitations in Section 8.8(a)) and do not apply to (i) any other Taxes,
imposed by any other jurisdiction, (ii) any Taxes imposed on any other
transaction (including transactions HCL or the HCLT Group may undertake
following the completion of the Schedule 8.8 Transactions, such as the
payment of dividends or the restructuring of the HCLT Group), and (iii)
any Taxes arising in the period following the Schedule 8.8 Transactions
that result from the structure resulting from the Schedule 8.8
Transactions. The indemnification obligations of PSC under Section
8.8(a) hereof constitute the sole and exclusive remedy of HCL and the
HCLT Group for any Taxes arising out of the Schedule 8.8 Transactions
and for any breach by PSC of its representation in Section 8.8(b)(i)
hereof. The following are illustrations of the application of clause
(iii) above. Clause (iii) would not include any Dutch Taxes imposed on
the Schedule 8.8 Transactions, notwithstanding that those Dutch Taxes
are not due and payable until a date following the Closing Date. For
example, if the sale or transfer by HCL of its shares in the Company to
the Company in exchange for 50% of the Mauritius Shares, triggers a
Dutch Tax, clause (iii) would not apply to that Dutch Tax (and,
assuming the conditions for indemnification under this Section 8.8 are
satisfied, PSC would indemnify HCL for such Dutch Tax), even if that
Dutch Tax is not due and payable until a date that is after the Closing
Date. On the other hand, clause (iii) would include any Dutch Tax that
is triggered after the completion of the Schedule 8.8 Transactions. For
example, if The Netherlands were to impose a tax on any Dutch company
that, directly or indirectly through affiliates, owns 100% of the stock
in a company formed under the laws of Mauritius, and a Dutch affiliate
of HCL incurred that tax (as a result of HCL and HCL Bermuda owning
100% of HPS Mauritius), clause (iii) would include that tax (and thus
PSC would have no obligation to indemnify HCL for that tax).
(h) HCLT covenants that HCL and the other members of the
HCLT Group will report the Schedule 8.8 Transactions in accordance with
Section 6.17(b) hereof. PSC will not be liable under Section 8.8(a)
hereof or otherwise, to indemnify HCL for any Dutch Tax that arises due
to the breach by HCLT or any member of the HCLT Group of the covenant
contained in the preceding sentence or the covenant contained in
Section 8.8(c) hereof.
(i) PSC will pay to HCL (or, if required or permissible,
the Dutch tax authorities) any undisputed claims under Section 8.8 for
Dutch Tax within five (5) days prior to the date (including lawful
extensions) that such Dutch Tax is required to be paid by HCL to the
Dutch authorities. Subject to all other provisions of this Section 8.8,
if (and only if) PSC requires HCL to appeal a decision of The
Netherlands tax authorities or of a lower court of The Netherlands and,
in order to do so, HCL is required to post a letter of credit or a
surety bond (or, if necessary, deposit cash) with such tax authorities
or such court (and HCL cannot avoid such requirement without undue
expense), PSC
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shall post such letter of credit or surety bond (or, if necessary,
shall deposit such cash); provided that (i) the posting of such letter
of credit or surety bond (or the depositing of such cash) shall not
waive any of PSC's rights under this Section 8.8 and Section 8.4, and
(ii) prior to posting such letter of credit or surety bond (or the
depositing of such cash), HCL shall assign to PSC (to the greatest
extent permissible under relevant law) any and all rights HCL has or
may have with respect to such letter of credit or surety bond (or
cash). If, pursuant to the preceding sentence, PSC deposits any amount
with The Netherlands tax authorities or a court, and such amount is
later refunded to HCL or any member of the HCLT Group (or applied to
reduce Taxes of HCL or any member of the HCLT Group other than Dutch
Taxes for which PSC is required to indemnify HCL pursuant to Section
8.8(a) hereof), HCLT shall pay to PSC, within five days of receiving
such refund, the amount of such refund along with any interest paid by
The Netherlands on such refund.
(j) If any provision in this Section 8.8 conflicts with
any other provision in this Agreement, the provision in this Section
8.8 will govern.
(k) For purposes of this Section 8.8, the term "Tax"
means any net income, gross income, gross receipts, sales, use, ad
valorem, value added, transfer, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property, environmental or windfall profit tax, custom, duty
or other tax, or other like governmental assessment, together with any
interest, demand, claim, penalty, fine, addition to tax or additional
amount imposed by any taxing authority. The term Tax shall also include
any reasonable fees of an outside law firm and, if required, an outside
accounting firm, incurred by the HCLT Group in defending, appealing,
litigating or settling any Tax for which PSC is obligated to indemnify
the HCLT Group pursuant to this Section 8.8.
8.9 Indemnification for Austrian Capital Transfer Tax. If (i) HCL
is the Buyer, and (ii) HCL Bermuda receives a payment under the AIG Policy (a
"Policy Payment"), and (iii) in order to enable HCL to fund the Tax Loss (as
defined in such AIG Policy) HCL Bermuda transfers all or a portion of the Policy
Payment to HCL, then (and only then) PSC shall pay to HCL Bermuda an amount
equal to the lesser of (1) the amount of any Austrian capital transfer tax
(i.e., Gesellschaftsteuer) imposed on such transfer or (2) one percent of the
amount of such transfer.
ARTICLE IX
MISCELLANEOUS
9.1 Termination. This Agreement and the transactions contemplated
by this Agreement may be terminated at any time prior to the Closing upon the
occurrence of any of the following:
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(a) by mutual written consent of PSC and HCL (with a copy
to the Agent);
(b) [INTENTIONALLY OMITTED]
(c) by PSC or HCL, as of the date specified in a written
notice of termination to the other (with a copy to the Agent), if there
has been a material breach by the other of any of its representations,
warranties, covenants or agreements set forth herein; provided,
however, that if such breach is susceptible to cure, the breaching
party shall have a period of four (4) calendar days (following delivery
of notice from the party sending notice to the breaching party of its
intention to terminate this Agreement if such breach continues) in
which to cure such breach to the reasonable satisfaction of the party
sending notice; provided, that the party seeking to so terminate this
Agreement pursuant to this Section 9.1(c) may not so terminate this
Agreement if the party seeking to so terminate is, at such time, in
material breach of this Agreement, which breach would result in the
failure of a condition to the other party's obligation to Close to be
satisfied;
(d) by PSC or by HCL, as of the date specified in a
written notice of termination to the Non-Performing Party (with a copy
to the Agent), after the expiration of thirty (30) calendar days
following its receipt of written notice of a Force Majeure Event from
the Non-Performing Party, which Force Majeure Event continues, as of
the date of termination specified in such notice, to prevent the
Non-Performing Party from fulfilling its obligations under this
Agreement; provided, that the party seeking to terminate this Agreement
pursuant to this Section 9.1(d) may not so terminate this Agreement if
the party seeking to so terminate is, at such time, in material breach
of this Agreement, which breach would result in the failure of a
condition to the Non-Performing Party's obligation to Close to be
satisfied;
(e) upon receipt by the Seller of the Auction
Participation Fee as a result of the election under Section 9.2(b) by
the Seller to pursue the remedy set forth in Section 9.2(b)(i); or
(f) [INTENTIONALLY OMITTED];
(g) notwithstanding the foregoing, unless otherwise
expressly agreed by PSC and HCL in writing, this Agreement
automatically shall terminate at midnight GMT on December 31, 2003 if
(i) in the event that PSC is the Buyer, the consideration for the HCL
Company Shares has not been paid over to HCL and title to the HCL
Company Shares has not been transferred to PSI; or (ii) in the event
that HCL is the Buyer, the consideration for 50% of the Mauritius
Shares has not been paid over to the Company and title to such
Mauritius Shares has not been transferred to HCL Bermuda, and
thereafter title to the remaining 50% of the HPS Mauritius Shares has
not been transferred to HCL and title to the
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HCL Company Shares has not been transferred to the Company, in each
case by that date and time.
9.2 Effect of Termination; Certain Remedies Not Exclusive; Reserve
Price Option.
(a) If this Agreement is terminated as provided in
Section 9.1, this Agreement shall forthwith become void and there shall
be no liability or obligation on the part of HCL or PSC, their
respective Group members, or the respective equity holders, managers,
directors, officers, employees, Affiliates, consultants, associates,
representatives, agents, administrators, successors and assigns of any
of the foregoing; provided, that a termination under Section 9.1 shall
not relieve any party of any liability for a breach of this Agreement,
or be deemed to constitute a waiver of any available remedy provided by
Article IX of this Agreement except as otherwise expressly provided
herein.
(b) In the event of a Buyer's Closing Breach, the Seller,
so long as the Seller has not previously terminated this Agreement, may
elect to pursue the following remedies which shall be Seller's sole and
exclusive remedies in respect of such Buyer's Closing Breach, by
providing written notice to the Buyer (with a copy to the Agent) of its
election to so pursue a remedy set forth below, which notice must be
delivered to the Buyer (with a copy to the Agent) after the date of the
Buyer's Closing Breach and prior to December 31, 2003:
(i) The Seller may, in its sole discretion,
elect to receive as liquidated damages for such Buyer's
Closing Breach the sum of $15,000,000 in cash from the Buyer
(the "Auction Participation Fee"). The Seller shall first look
to the Agent and to the funds deposited by the Buyer with the
Agent in Escrow for payment of the Auction Participation Fee;
provided, that the Buyer shall remain fully liable to the
Seller for the amount of the Auction Participation Fee (and
the Seller shall have the right to directly pursue the Buyer
for the payment of same) in the event the Agent does not pay
the Auction Participation Fee to the Seller as provided
herein. The Agent shall pay the Auction Participation Fee to
the Seller immediately (but in no event later than three (3)
calendar days) (provided, if the third calendar day is not a
Business Day, then payment shall be made no later than the
next succeeding calendar day that is a Business Day) after the
Agent's receipt of the Seller's notice of its election to
receive the Auction Participation Fee following a Buyer's
Closing Breach, notwithstanding the termination of this
Agreement pursuant to Section 9.1(g). The parties mutually
agree that damages from a Buyer's Closing Breach are not
susceptible to calculation and that such damages would be
material. The parties, therefore, agree that the Auction
Participation Fee represents a reasonable attempt to estimate
the actual economic loss that would accrue to the Seller from
a Buyer's Closing Breach after the Buyer has had the benefit
of participating in the Auction
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and that the amount of the Auction Participation Fee will be
binding on both parties as liquidated damages with respect
thereto. Upon Seller's receipt of the Auction Participation
Fee, this Agreement, including the Seller's rights to exercise
the Reserve Price Option and to pursue specific performance,
each as provided in Section 9.2(b), automatically shall
terminate, except as otherwise provided in Section
9.2(b)(iii), without any further obligation of any party
hereto to provide notice in writing or otherwise of such
termination. The Seller's election to receive the Auction
Participation Fee as contemplated by this Section 9.2(b)(i)
shall, during the pendency of Seller's receipt of the Auction
Participation Fee, suspend the Seller's rights to exercise the
Reserve Price Option and to pursue specific performance, each
as provided in Section 9.2(b). If the Seller does not receive
the Auction Participation Fee pursuant to this Section
9.2(b)(i) at a time when it is entitled under the terms of
this Section 9.2(b)(i) to so receive the Auction Participation
Fee, then the Seller shall have the right, subject to Section
9.1(g), to exercise the Reserve Price Option or to pursue
specific performance, each as provided in Section 9.2(b), by
providing to Buyer written notice (with a copy to the Agent)
of its election to exercise the Reserve Price Option following
such failure of Seller to receive the Auction Participation
Fee. The Seller will not be required to accept the tender of
the Auction Participation Fee after it has made any subsequent
election to exercise the Reserve Price Option or to pursue
specific performance; provided, that if the Seller accepts
such tender, Seller's rights to exercise the Reserve Price
Option or to pursue specific performance shall immediately
terminate.
(ii) The Seller may, in its sole discretion,
elect to consummate the transactions contemplated hereby as
though the Seller was the prevailing bidder in the Auction
(the "Reserve Price Option"); provided, that notwithstanding
the amount of the winning bid in the Auction, the Purchase
Price payable in cash by the Seller pursuant to the exercise
of the Reserve Price Option shall be the last valid bid
submitted by the Seller in the Auction, less $15,000,000 (the
"Reserve Price"). If Seller elects to exercise the Reserve
Price Option, the transactions contemplated hereby and in the
other Transaction Documents shall take place in the manner and
in the structure set forth in Article II, and otherwise
pursuant to all terms and conditions in this Agreement
(including, without limitation, Section 9.1(g)) and in any
other Transaction Documents applicable in the event that the
party exercising the Reserve Price Option had been the
prevailing bidder in the Auction. Without limiting the
foregoing, if the Seller exercises the Reserve Price Option,
the Seller will be deemed to be the "Buyer" (and shall
thereafter assume all of the obligations and enjoy all of the
rights of the Buyer hereunder) and the Buyer will be deemed to
be the "Seller" (and shall thereafter assume all of the
obligations and enjoy all of the rights of the Seller
hereunder) for all purposes under this Agreement and the other
Transaction Documents, except in the case the Seller is
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unable to Close its exercise of the Reserve Price Option, as
provided below. If the Seller elects to exercise the Reserve
Price Option, the Closing shall take place as soon as
practicable following such election, but in no event later
than December 31, 2003 (unless otherwise expressly agreed in
writing by PSC and HCL (with a copy to the Agent)). Upon
delivery of Seller's notice to the Buyer of its election to
exercise the Reserve Price Option, the Buyer's rights as the
prevailing bidder in the Auction pursuant to the Agreement
(but not its liability with respect to the Buyer's Closing
Breach) shall be suspended during the pendency of the Closing
under the Reserve Price Option. At the Closing of the
transactions contemplated hereby pursuant to the exercise of
the Reserve Price Option, the Seller shall deposit with the
Agent in Escrow an amount in cash equal to the Reserve Price
(provided, that if the Seller has previously received the
Auction Participation Fee as a result of Seller's receipt of
an award of specific performance as contemplated in Section
9.2(b)(iii), then the Seller shall promptly deposit with the
Agent in Escrow an amount in cash equal to the full amount of
its last valid bid in the Auction). The Seller's election to
exercise the Reserve Price Option as contemplated by this
Section 9.2(b)(ii) shall, during the pendency of the Closing
as a result of the Seller's exercise of the Reserve Price
Option, suspend the Seller's right to receive the Auction
Participation Fee and to pursue specific performance, each as
provided in Section 9.2(b). If the Seller consummates the
Closing pursuant to the exercise of the Reserve Price Option,
then the Seller's rights to receive the Auction Participation
Fee and to pursue specific performance or to receive only the
Auction Participation Fee automatically shall terminate. If
the Seller fails to consummate its exercise of the Reserve
Price Option by December 30, 2003 and such failure is due to a
breach by the Buyer of this Agreement, then the Seller shall
have the right to receive the Auction Participation Fee, as
provided in Section 9.2(b)(i), by providing written notice to
the Buyer (with a copy to the Agent) of its election to
receive the Auction Participation Fee no later than December
31, 2003. The Agent shall pay the Auction Participation Fee to
the Seller immediately, but in no event later than three (3)
calendar days after the Agent's receipt of the Seller's notice
of its election to receive the Auction Participation Fee
pursuant to this Section 9.2(b)(ii), notwithstanding the
termination of this Agreement pursuant to Section 9.1(g).
(iii) The Seller may, in its sole discretion,
elect to pursue the remedy of specific performance, mandatory
injunction or similar equitable remedy (referred to in this
Agreement as "specific performance"). The Seller's election to
pursue specific performance as contemplated by this Section
9.2(b)(iii) shall, during the pendency of Seller's pursuit of
same and, if granted, during the pendency of the Buyer's
compliance with such order of specific performance, suspend
the Seller's rights to receive the Auction Participation Fee
and to exercise the Reserve Price Option, each
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as provided in Section 9.2(b), but subject to the provisions
of this Section 9.2(b)(iii). If the Seller is successful in
obtaining an award of specific performance, then the Seller
shall also receive the Auction Participation Fee,
notwithstanding the termination of this Agreement pursuant to
Section 9.1(g). The Seller shall first look to the Agent and
to the funds deposited by the Buyer with the Agent in Escrow
for payment of the Auction Participation Fee; provided, that
the Buyer shall remain fully liable to the Seller for the
amount of the Auction Participation Fee (and the Seller shall
have the right to directly pursue the Buyer for the payment of
same) in the event the Agent does not pay the Auction
Participation Fee to the Seller as provided herein. The Seller
shall promptly provide written notice to the Buyer, with a
copy to the Agent, of Seller's receipt of an award of specific
performance (with a copy of such award attached thereto). Upon
receipt of such notice the Agent shall immediately, but in no
event later than three (3) calendar days (provided, if the
third calendar day is not a Business Day, then payment shall
be made no later than the next succeeding calendar day that is
a Business Day) of its receipt of such notice, pay the Auction
Participation Fee to the Seller, notwithstanding the
termination of this Agreement pursuant to Section 9.1(g). If
the Seller is successful in obtaining an award of specific
performance and it receives the Auction Participation Fee, and
thereafter the parties hereto Close the transactions
contemplated hereby, then Seller's right to exercise the
Reserve Price Option automatically shall terminate. If (1)
Seller is unsuccessful in obtaining an award of specific
performance, or (2) if successful in obtaining such award (and
in receiving the Auction Participation Fee), Seller is however
unable, prior to December 30, 2003, to Close the transactions
contemplated hereby and such failure to Close is due to a
breach by the Buyer of this Agreement or the order of specific
performance, or (3) if the Seller otherwise elects to cease
its pursuit of specific performance by terminating or
withdrawing its proceeding in pursuit thereof, then, in each
case, the Seller shall have the right to exercise the Reserve
Price Option, subject to Section 9.1(g), as contemplated in
Section 9.2(b)(ii) or, in the case of foregoing clause (3), to
elect to receive the Auction Participation Fee as contemplated
by Section 9.2(b)(i)); provided, that the Seller provides
written notice to the Buyer (with a copy to the Agent) of any
such election prior to December 31, 2003.
(c) Without limiting the foregoing, each of PSC and HCL
hereby expressly agree that in the event of a material breach by the
other (or a member of the other's Group) of such party's
representations and warranties, covenants or agreements under this
Agreement, other than a Buyer's Closing Breach, that results in the
failure of a condition to the non-breaching party's obligation to Close
to be satisfied, which failure is not waived by the non-breaching
party, and the Closing does not occur as a result, then the sole and
exclusive remedy available to the non-breaching party shall be (i) in
the event the breach relates to
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a representation or warranty, to terminate this Agreement as provided
in Section 9.1 and/or to recover monetary damages from the breaching
party and its Group arising from such breach, or (ii) in the event the
breach relates to a covenant or agreement (1) to pursue specific
performance or (2) to terminate this Agreement as provided in Section
9.1 and/or recover monetary damages from the breaching party and its
Group arising from such breach. The non-breaching party's election to
pursue specific performance as contemplated by this Section 9.2(c) in
respect of a breach of a covenant or agreement shall, during the
pendency of the non-breaching party's pursuit of same, suspend such
party's right to pursue and recover monetary damages in respect of such
breach. If the non-breaching party is successful in obtaining an award
of specific performance pursuant to this Section 9.2(c), and if the
breaching party promptly thereafter complies with the covenant or
agreement previously breached, then non-breaching party's right to seek
monetary damages in respect of such breach shall terminate. If (i) the
non-breaching party is unsuccessful in obtaining an award of specific
performance, or (ii) if successful in obtaining such award, the
breaching party does not thereafter promptly comply with the covenant
or agreement previously breached, or (iii) if the non-breaching party
otherwise elects to cease its pursuit of specific performance by
formally terminating or withdrawing its proceeding in pursuit thereof
prior to the arbitral tribunal or court (as the case may be) rendering
its decision concerning an award of specific performance, then the
non-breaching party shall thereafter have the right to recover monetary
damages in respect of such breach.
9.3 Notices. Except for the delivery of the documents to be used
in the conduct of the Auction specified in Section 1.1(b), which delivery shall
be governed by the provisions of Section 1.1(b), all notices that are required
or may be given pursuant to this Agreement must be in writing and delivered
personally, by a recognized courier service, by a recognized overnight delivery
service, by telecopy or by registered or certified mail, postage prepaid, to the
parties at the following addresses (or to the attention of such other person or
such other address as any party may provide to the other parties by notice in
accordance with this Section 9.3):
if to PSC or any PSC Group Member: with copies to:
Xxxxx Systems Corporation Xxxxxx & Xxxx, L.L.P.
0000 Xxxx Xxxxx Xxxxxxx 0000 Xxxx Xxxxxx
Xxxxx, Xxxxx 00000 Suite 2800
Attention: Xxxxx Xxxxxxx, Esq. Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000 Attention: Xxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
107
if to HCL or any HCL Group Member: with copies to:
HCL Holdings GMBH P&A Law Offices
c/o HCL Technologies 1st Floor, Dr. Xxxxx Xxx Xxxxxx
X00-00, Xxxxxx XXX 00, Xxxxxxxxxx Xxxx
Xxxxx 000000 Xxxxx New Xxxxx 0000000, Xxxxx
Attention: Xxxx Xxxxxxx Attention: Xxxxx X. Xxxxxx
Telecopy: 00-000-0000000 Telephone: 00-00-0000-0000
00-00-0000-0000
Any such notice or other communication will be deemed to have been given and
received (whether actually received or not) on the calendar day it is personally
delivered or delivered by courier or overnight delivery service, or on the
calendar day it is sent by telecopy or, if mailed, on the calendar day it is
actually received, in each case at or to the address for the recipient
designated in accordance with this Section 9.3.
9.4 Attorneys' Fees and Costs. The prevailing party in any dispute
concerning the terms of the Agreement or any Transaction Document will be
entitled to recover reasonable attorneys' fees and costs incurred in connection
therewith (except to the extent any such fees have already been recovered under
Article VIII of this Agreement).
9.5 Reasonable Efforts; Further Assurances. Each party will use
all commercially reasonable efforts to cause all conditions to its obligations
hereunder to be timely satisfied and to perform and fulfill all obligations on
its part to be performed and fulfilled under this Agreement, to the end that the
transactions contemplated by this Agreement and the other Transaction Documents
shall be effected substantially in accordance with its terms as soon as
reasonably practicable. Each party shall execute and deliver both before and
after the Closing such further certificates, agreements and other documents and
take such other actions as may be necessary or appropriate to consummate or
implement the transactions contemplated hereby or to evidence such events or
matters.
9.6 Brokers. Each party to this Agreement represents to the other
parties that it has not incurred and will not incur any liability for brokers'
or finders' fees or agents' commissions in connection with this Agreement and
the other Transaction Documents or the transactions contemplated by this
Agreement and the other Transaction Documents, and agrees that it will indemnify
and hold harmless the other parties against any claim for brokerage and finders'
fees or agents' commissions in connection with the negotiation or consummation
of the transactions contemplated by this Agreement and the other Transaction
Documents.
9.7 [INTENTIONALLY OMITTED]
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9.8 Counterparts. This Agreement may be executed in one or more
counterparts for the convenience of the parties, all of which together will
constitute one and the same instrument.
9.9 Interpretation.
(a) The article and section headings contained in this
Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and will not in any way affect the meaning or
interpretation of this Agreement. References in this Agreement to
Articles, Sections, Exhibits, and Schedules are to the Articles,
Sections, Exhibits, and Schedules of this Agreement unless the context
requires otherwise. The terms "herein," "hereof," "hereafter,"
"hereunder" and terms of similar import refer to this Agreement as a
whole and not to any provisions or term or portion of this Agreement.
(b) Each of PSC and HCL, for itself and on behalf of its
Group, shall irrevocably relinquish and waive any Objection that is not
asserted in the manner and within the time frame specified in Section
1.1(b)(i). Without in any way limiting the foregoing, the submission of
a bid in the Auction by a party shall constitute the conclusive,
binding and irrevocable acknowledgement and agreement of the party
submitting the bid, for itself and on behalf of its Group, that the
Auction has, up until such time, been conducted in full compliance with
the terms of this Agreement and the Agent Agreement.
9.10 Successors and Assigns; Assignment. This Agreement will bind
and inure to the benefit of the parties named in this Agreement and their
respective successors and permitted assigns. Neither this Agreement nor any of
the rights, interests, or obligations under this Agreement may be assigned or
delegated by either of PSC, on the one hand, or HCLT or HCL on the other hand,
without the prior written consent of the other and any such purported assignment
or delegation without such prior written consent will be null and void; except
that each of PSC and/or PSI, on the one hand, and HCL, HCLT and/or HCL Bermuda,
on the other hand, may assign its rights under this Agreement to any member of
their respective Groups; provided, that any such assignment shall not relieve
the assigning party of any liability hereunder or (except for any change to the
applicable notice provisions) change or modify in any manner whatsoever the
obligations or liabilities of any other party hereto (or impose any new
obligation or liabilities on any other person hereto). This Agreement is not
intended to confer any rights or benefits on any Person other than the parties
to this Agreement except (a) the Buyer Parties and the Seller Parties to the
extent provided in Article VIII; and (b) the Seller Released Parties, the
Company Released Parties, the HCL Released Parties and the PSC Released Parties
each to the extent provided in the applicable sections of Section 6.13, which
Persons set forth in the foregoing clauses (a) and (b) are expressly made third
party beneficiaries to this Agreement.
9.11 Entire Agreement. This Agreement, the other Transaction
Documents, and the related documents contained as Exhibits and Schedules to this
Agreement and
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the other Transaction Documents contain the entire understanding of the parties
relating to the subject matter of this Agreement and supersede all prior written
or oral and all contemporaneous oral Contracts relating to the subject matter of
this Agreement. This Agreement may not be modified or amended except in writing
signed by the party against whom enforcement is sought. The parties hereto agree
to give the Agent notice of any amendment to this Agreement. The preamble,
recitals, Exhibits and Schedules to this Agreement are hereby incorporated by
reference into and made a part of this Agreement for all purposes. The Exhibits
will not be deemed to be effective until fully executed and, in the case of
Exhibits that are deposited with the Agent in Escrow, until their release from
Escrow in connection with the Closing, if applicable.
9.12 Specific Performance. The parties hereby acknowledge and agree
that the failure of any party to perform its agreements and covenants under this
Agreement, including its failure to take all required actions on its part
necessary to consummate the transactions contemplated by this Agreement, will
cause irreparable injury to the other parties for which damages, even if
available, will not be an adequate remedy. Accordingly, except as otherwise
provided in Schedule 6.20, each party hereby consents to the issuance of
injunctive relief by an arbitrator or arbitration panel pursuant to Section 9.19
(without the necessity of posting bond or any other surety) to compel
performance of such party's obligations and to the granting by any such
arbitrator or arbitration panel or court of the remedy of specific performance
of its obligations under this Agreement, subject to Sections 9.2(b) and 9.2(c),
if applicable.
9.13 DISCLAIMER OF CERTAIN WARRANTIES; LIMITED COMPANY LIABILITY.
(a) EACH OF PSC AND HCL REPRESENTS AND WARRANTS TO THE
OTHER, ON BEHALF OF ITSELF AND EACH OF THE PSC RELEASING PARTIES AND
THE HCL RELEASING PARTIES, RESPECTIVELY, THAT IT HAS PERFORMED
EXTENSIVE DUE DILIGENCE AND REVIEWS WITH RESPECT TO THE COMPANY AND ITS
GROUP MEMBERS WITH THE INTENTION OF FORMING ITS OWN CONCLUSIONS, AND
HAS SO FORMED ITS OWN CONCLUSIONS, REGARDING THE CONDITION (FINANCIAL
AND OTHERWISE), VALUE, PROPERTY, LIABILITIES, CONTRACTS, RISKS AND
OTHER INCIDENTS OF THE BUSINESS OF THE COMPANY AND THE COMPANY GROUP,
AND OF THE VALUE OF THE SHARES. WITHOUT IN ANY WAY LIMITING OR
MODIFYING THE FOREGOING, IT IS THE EXPRESS INTENTION AND AGREEMENT OF
PSC AND HCL (ACTING FOR THEMSELVES AND ON BEHALF OF THE PSC RELEASING
PARTIES AND HCL RELEASING PARTIES, RESPECTIVELY), THAT THE TRANSACTIONS
CONTEMPLATED HEREUNDER SHALL BE WITHOUT REPRESENTATION OR WARRANTY OF
ANY KIND (EXPRESS OR IMPLIED), OTHER THAN THE EXPRESS REPRESENTATIONS
AND WARRANTIES OF PSC AND HCL IN THIS AGREEMENT. THE BUYER HEREUNDER,
WHETHER PSC OR HCL, HAS RELIED AND WILL CONTINUE TO RELY SOLELY ON ITS
OWN BUSINESS JUDGMENT AND REVIEWS AND THE EXPRESS
110
REPRESENTATIONS OF PSC AND HCL IN THIS AGREEMENT WITH RESPECT TO THE
TRANSACTIONS CONTEMPLATED HEREIN AND NOT ON ANY INFORMATION PROVIDED BY
OR ON BEHALF OF THE COMPANY OR ANY COMPANY GROUP MEMBER, OR ON ANY
REPRESENTATIONS OR WARRANTIES (EXPRESS OR IMPLIED) MADE BY THE COMPANY
OR ANY COMPANY GROUP MEMBER, INCLUDING, BUT NOT LIMITED TO, ANY OF THE
DISCLOSURES SET FORTH IN ARTICLE V OR THE COMPANY DISCLOSURE LETTER AS
IT MAY BE UPDATED IN ACCORDANCE WITH SECTION 6.3.
(b) PSC AND HCL, ON BEHALF OF THEMSELVES AND THE PSC
RELEASING PARTIES AND THE HCL RELEASING PARTIES, RESPECTIVELY,
EXPRESSLY ACKNOWLEDGE AND AGREE THAT NEITHER THE COMPANY NOR ANY
COMPANY GROUP MEMBER HAS, DIRECTLY OR INDIRECTLY, PROVIDED ANY
REPRESENTATIONS OR WARRANTIES REGARDING THE COMPANY OR ANY COMPANY
GROUP MEMBER IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY,
INCLUDING WITH RESPECT TO THE VALUE OF THE BUSINESS OF THE COMPANY AND
THE COMPANY GROUP AND OF THE SHARES. IN ORDER TO GIVE EFFECT TO THESE
UNDERSTANDINGS, PSC AND HCL, ON BEHALF OF THEMSELVES AND THE PSC
RELEASING PARTIES AND THE HCL RELEASING PARTIES, RESPECTIVELY, FURTHER
DISCLAIM, EFFECTIVE AS OF THE DATE HEREOF AND AS OF THE CLOSING DATE,
ANY RELIANCE ON ANY INFORMATION PROVIDED BY THE COMPANY OR ANY COMPANY
GROUP MEMBER REGARDING THE COMPANY OR ANY COMPANY GROUP MEMBER,
INCLUDING, BUT NOT LIMITED TO, ANY OF THE DISCLOSURES SET FORTH IN
ARTICLE V OR THE COMPANY DISCLOSURE LETTER AS IT MAY BE UPDATED IN
ACCORDANCE WITH SECTION 6.3, AND ANY DAMAGES THAT ANY OF THEM MIGHT
INCUR IN CONNECTION THEREWITH. WITHOUT LIMITING THE FOREGOING, THE
DISCOVERY OF AN ERROR OR OMISSION IN THE DISCLOSURES SET FORTH IN
ARTICLE V OR THE COMPANY DISCLOSURE LETTER AS IT MAY BE UPDATED IN
ACCORDANCE WITH SECTION 6.3 PRIOR TO THE CLOSING WILL NOT, IN THE
ABSENCE OF A MATERIAL BREACH OF THIS AGREEMENT WITH RESPECT TO SUCH
COMPANY DISCLOSURES BY EITHER THE SELLER OR ITS GROUP, ON THE ONE HAND,
OR BY THE BUYER AND ITS GROUP, ON THE OTHER HAND, RESULT IN THE FAILURE
OF A CONDITION TO THE BUYER'S OR THE SELLER'S, RESPECTIVELY, OBLIGATION
TO CLOSE THE TRANSACTIONS CONTEMPLATED HEREBY TO BE SATISFIED.
(c) NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT
OR ANY OF THE OTHER TRANSACTION DOCUMENTS, PSC AND HCL EXPRESSLY
ACKNOWLEDGE AND AGREE THAT EXCEPT AS EXPRESSLY SET FORTH BELOW, NONE OF
THE COMPANY, ANY MEMBER OF THE COMPANY GROUP, NOR ANY OF THE COMPANY
RELEASED
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PARTIES SHALL HAVE ANY LIABILITY WHATSOEVER, WHETHER IN LAW, AT EQUITY
OR OTHERWISE, TO ANY PARTY FOR THE COMPANY'S (OR ANY COMPANY GROUP
MEMBER'S) BREACH, DEFAULT OR NONCOMPLIANCE WITH ANY OF THE COMPANY'S
COVENANTS AND AGREEMENTS CONTAINED IN THIS AGREEMENT. IN FURTHERANCE OF
THE FOREGOING AND THE RELEASES SET FORTH IN SECTION 6.13, EACH OF THE
PSC RELEASING PARTIES, THE HCL RELEASING PARTIES AND THE COMPANY
RELEASING PARTIES EXPRESSLY, UNCONDITIONALLY AND IRREVOCABLY
DISCHARGES, ACQUITS AND RELEASES EACH OF THE HCL RELEASED PARTIES, THE
PSC RELEASED PARTIES, AND THE COMPANY RELEASED PARTIES FROM AND AGAINST
ANY CLAIM ARISING FROM OR RELATED TO ANY SUCH BREACH, DEFAULT OR
NONCOMPLIANCE BY THE COMPANY OR ANY COMPANY GROUP MEMBER WITH THE
COMPANY'S COVENANTS AND AGREEMENTS SET FORTH IN THIS AGREEMENT;
PROVIDED, THAT NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT
(1) NEITHER THE FOREGOING DISCHARGE, ACQUITTAL AND RELEASE NOR THE
RELEASES SET FORTH IN SECTION 6.13 SHALL ENCOMPASS, AND EACH PARTY
(OTHER THAN THE COMPANY AND EACH COMPANY GROUP MEMBER, AS EXPRESSLY
PROVIDED HEREIN) SHALL REMAIN LIABLE FOR, ANY BREACH OF ITS COVENANTS
AND AGREEMENTS CONTAINED IN THIS AGREEMENT; (2) THE BUYER SHALL NOT BE
DEEMED TO HAVE DISCHARGED, ACQUITTED AND RELEASED UNDER THIS SECTION
9.13 OR UNDER SECTION 6.13 THE MANAGERS, DIRECTORS, OFFICERS,
EMPLOYEES, CONSULTANTS OR AGENTS OF THE COMPANY AND THE COMPANY GROUP
INCLUDING WITHOUT LIMITATION FOR ANY ACTIONS OR OMISSIONS OR FAILURES
TO ACT WHICH CAUSE OR RESULT IN OR FACILITATE ANY BREACH OF THE
COVENANTS AND AGREEMENTS OF THE COMPANY SET FORTH IN THIS AGREEMENT
(INCLUDING WITHOUT LIMITATION, THE COVENANTS AND AGREEMENTS OF THE
COMPANY SET FORTH IN ARTICLE VI) OR FOR ANY UNLAWFUL OR FRAUDULENT
ACTIONS OR KNOWING VIOLATIONS OF COMPANY POLICIES OR BOARD OF DIRECTOR
(INCLUDING COMMITTEE) OR STOCKHOLDER RESOLUTIONS OR DIRECTIVES; (3)
WITH RESPECT TO ANY MANAGER, DIRECTOR, OFFICER, EMPLOYEE, CONSULTANT OR
AGENT OF THE COMPANY OR ANY COMPANY GROUP MEMBER THAT REMAINS WITH THE
COMPANY GROUP AS OF THE CLOSING, THE COMPANY SHALL NOT BE DEEMED TO
HAVE DISCHARGED, ACQUITTED OR RELEASED UNDER THIS SECTION 9.13 ANY
RIGHT TO DISMISS THE MANAGER, DIRECTOR, OFFICER, EMPLOYEE, CONSULTANT
OR AGENT FOR CAUSE OR TO HAVE RELEASED ANY CLAIM AGAINST SUCH MANAGER,
DIRECTOR, OFFICER, EMPLOYEE, CONSULTANT OR AGENT INCLUDING WITHOUT
LIMITATION FOR UNLAWFUL, FRAUDULENT OR OTHER ACTS OR OMISSIONS OF THE
MANAGER, DIRECTOR, OFFICER, EMPLOYEE, CONSULTANT OR AGENT TAKEN IN
HIS/HER CAPACITY AS SUCH; (4) THE FOREGOING DISCHARGE, ACQUITTAL AND
RELEASE SHALL NOT ENCOMPASS, AND THE COMPANY
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AND EACH COMPANY GROUP MEMBER SHALL BE BOUND BY, THE PROVISIONS OF
SECTIONS 6.13, 6.14, 6.15, 6.17, 6.19 AND 6.24 APPLICABLE TO THE
COMPANY AND TO ANY COMPANY GROUP MEMBER; AND (5) THE SELLER SHALL NOT
BE DEEMED TO HAVE DISCHARGED, ACQUITTED OR RELEASED THE COMPANY AND THE
COMPANY GROUP UNDER THIS SECTION 9.13 OR UNDER SECTION 6.13 FOR, AND
THE COMPANY AND THE COMPANY GROUP SHALL BE LIABLE FOR, THE BREACH OF
ANY COMPANY OR COMPANY GROUP PAYMENT OBLIGATION UNDER THIS AGREEMENT.
THE FOREGOING LIMITATIONS ON THE SCOPE OF THE DISCHARGES, ACQUITTALS
AND RELEASES SET FORTH IN THIS SECTION 9.13 AND, TO THE EXTENT
EXPRESSLY REFERENCED, SECTION 6.13, COLLECTIVELY, THE "RELEASE
LIMITATIONS".
9.14 Certain Definitions. As used in this Agreement:
(a) "Affiliate" means, with respect to a specific Person,
any other Person or member of a group of Persons acting together that,
directly or indirectly, through one or more intermediaries, owns or
controls 25% or more of the issued and outstanding equity capital or
voting rights of the specific Person or, together with the specific
Person, owns or controls 25% or more of the issued and outstanding
equity capital or voting rights of any other Person.
(b) "Buyer's Closing Breach" means:
(i) if HCL is the Buyer (1) if HCL Bermuda does
not deposit in Escrow the duly and validly executed HCL
Bermuda Note within the time frame provided in Section
1.1(b)(vi)(2), or (2) if due to action taken by HCL or its
Group, the Attorney-in-Fact or the Agent, as applicable, is
unable to complete and deliver the HCL Bermuda Note or the HCL
Bermuda Pledge Agreement to PSC at Closing; and
(ii) if PSC is the Buyer, (1) if PSI does not
deposit in Escrow the duly and validly executed PSI Note
within the time frame provided in Section 1.1(b)(vi)(3), or
(2) if due to action taken by PSC or its Group, the
Attorney-in-Fact or the Agent, as applicable, is unable to
complete and deliver the PSI Note or the PSI Pledge Agreement
to HCL Bermuda at Closing.
(c) "Company's Knowledge" or "to the Knowledge of the
Company" or words of similar import means within the actual knowledge
(without any duty to investigate) of any director, the president, chief
executive officer, principal financial officer, principal accounting
officer or any vice president in charge of a principal business unit,
division or function (or the equivalent of any of the foregoing) of the
Company or any of its Group Members.
113
(d) "Group" means in relation to any Person (the "First
Person"), the First Person's ultimate parent company, all direct and
indirect subsidiaries of that ultimate parent and all direct and
indirect subsidiaries of the First Person. The term "subsidiary" means
(i) a Person in which the First Person or its ultimate parent legally
or beneficially, directly or indirectly, owns or controls an equity or
voting interest of at least 50% of the issued and outstanding capital
stock or voting rights, as applicable, or the ability, directly or
indirectly, to appoint at least 50% of the directors, managers or
equivalent governing body of that Person; and (ii) any other Person
that is controlled by or is under common control with the First Person.
The term "control" means the ability to direct the affairs of another
whether by means of share ownership, stockholder or director voting
rights, contractual rights, management control or otherwise. Without
limiting the foregoing, the parties hereto agree that DSL Software
Limited, a corporation formed under the laws of India, is part of the
HCL Group for all purposes. Except as may be otherwise expressly
provided herein, notwithstanding the foregoing, (i) prior to the
Closing, (1) the Company Group shall not be deemed to include HCL, PSC
or any member of their respective Groups, (2) the HCL Group shall not
be deemed to include the Company or any Company Group member, and (3)
the PSC Group shall not be deemed to include the Company or any Company
Group member; provided, that (ii) from and after the Closing (1) the
PSC Group shall be deemed to include any Company Group member who is a
member of PSC's Group after Closing, and (2) the HCL Group shall be
deemed to include any Company Group member who is a member of PSC's
Group after Closing.
(e) "HCL Estopped Claims" means any Damages (i)
associated with work completed under any HCL Group Agreement which work
has been duly accepted under the terms of the relevant HCL Group
Agreement and for which the warranty period, if any, has expired,
excluding any Damages that arise from an allegation or assertion by a
Person other than a HCL Group member which allegation or assertion is
not known by HCL as of the Closing Date; but including any Damages that
arise from an allegation or assertion by a Person other than a HCL
Group member which allegation or assertion is known to HCL as of the
Closing Date but which has not been disclosed in writing to PSC as of
the Closing Date; or (ii) arising from an allegation or assertion by
HCL or any member of its Group (in the absence of an allegation or
assertion by a Person other than a HCL Group Member) under a HCL Group
Agreement which allegation or assertion is known to HCL as of the
Closing Date but which has not been disclosed in writing to PSC as of
the Closing Date.
(f) "HCL's Knowledge" or "to the Knowledge of HCL" or
words of similar import means within the actual knowledge (without any
duty to investigate) of any director, the president, chief executive
officer, principal financial officer, principal accounting officer or
any vice president in charge of a principal business unit, division or
function (or the equivalent of any of the foregoing) of HCL, subject to
Section 6.24.
114
(g) [INTENTIONALLY OMITTED].
(h) "Prohibition" means a Law or an amendment to an
existing Law that is enacted or becomes effective during the Interim
Period that makes it unlawful to Close the transactions contemplated by
this Agreement; provided, that (i) PSC, if a member of its Group is
subject to the Prohibition, and HCL, if a member of its Group is
subject to the Prohibition, must immediately provide the other with
written notice (with a copy to the Agent) of any Prohibition, which
notice shall describe in reasonable detail the legal and factual basis
for the Prohibition; (ii) each of PSC and HCL shall diligently use all
commercially reasonable efforts (working jointly, where appropriate,
and in good faith) to overcome, disapply or otherwise terminate or
remove the Prohibition and to Close the transactions contemplated by
this Agreement and the other Transaction Documents as soon as possible,
including, without limitation, by restructuring the transactions or
seeking a waiver or exemption concerning the Prohibition, (iii) PSC and
HCL shall keep each other informed on a frequent and regular basis as
to their respective efforts to so overcome, disapply or otherwise
terminate or remove any Prohibition; (iv) each of the parties hereto
will take such actions in respect of the transactions contemplated by
this Agreement as may be permitted under applicable Law notwithstanding
the existence of the Prohibition, including, without limitation,
conducting the Auction and taking any actions in respect of Closing, if
applicable, and (v) PSC, if a member of its Group is subject to a
Prohibition, and HCL, if a member of its Group is subject to a
Prohibition, will provide immediate written notice to the other (with a
copy to the Agent) when the Prohibition has been overcome, disapplied
or otherwise terminated or removed. Notwithstanding any of the
foregoing, no party shall be required to violate any Law or to
restructure the transactions contemplated by this Agreement or the
Transaction Documents in a manner that materially and adversely alters
the economic benefits reasonably expected to be realized by such party
from the transactions contemplated by this Agreement and the other
Transaction Documents.
(i) "PSC Estopped Claims" means any proceedings,
liabilities, obligations, claims, demands, actions, causes of action,
losses, contingencies, damages, costs, and expenses, including all
court costs and reasonable attorneys' fees, (collectively, "Damages")
(i) associated with work completed under any PSC Group Agreement which
work has been duly accepted under the terms of the relevant PSC Group
Agreement and for which the warranty period, if any, has expired,
excluding any Damages that arise from an allegation or assertion by a
Person other than a PSC Group member which allegation or assertion is
not known by PSC as of the Closing Date, but including any Damages that
arise from an allegation or assertion by a Person other than a PSC
Group member which allegation or assertion is known to PSC as of the
Closing Date but which has not been disclosed in writing to HCL as of
the Closing Date; or (ii) arising from an allegation or assertion by
PSC or any member of its Group (in the absence of an allegation or
assertion by a Person other than a PSC
115
Group Member) under a PSC Group Agreement which allegation or assertion
is known to PSC as of the Closing Date but which has not been disclosed
in writing to HCL as of the Closing Date. Notwithstanding the terms of
Section 9.14(j), for purposes of the foregoing definition of PSC
Estopped Claims, the phrase "known by PSC" shall mean the current
actual knowledge (without any duty to investigate) of Xxxxxxx Xxxxxx
and Xxxx Xxxxxxx.
(j) "PSC's Knowledge" or "to the Knowledge of PSC" or
words of similar import means within the actual knowledge (without any
duty to investigate) of any director, the president, chief executive
officer, principal financial officer, principal accounting officer or
any vice president in charge of a principal business unit, division or
function (or the equivalent of any of the foregoing) of PSC, subject to
Section 6.24.
(k) [INTENTIONALLY OMITTED].
9.15 Governing Law. This Agreement will be governed by and
construed and interpreted in accordance with the substantive laws of the State
of New York, without giving effect to any conflicts of law rule or principle
that might require the application of the laws of another jurisdiction, except
where it is appropriate for local Law to govern the transfer of the equity
capital of an entity organized under a jurisdiction other than New York or to
determine the liabilities of any party hereto in respect of any Taxes (and
penalties or interest costs relating thereto).
9.16 Representation by Counsel; Drafting. The parties hereto each
acknowledge that each party to this Agreement (other than the Company) has been
represented by counsel in connection with this Agreement and the transactions
contemplated by this Agreement and the other Transaction Documents. Accordingly,
neither this Agreement, the other Transaction Documents, nor any provision
contained in this Agreement or the other Transaction Documents will be
interpreted in favor of or against any party hereto because such party or its
legal counsel drafted this Agreement or the other Transaction Documents or such
provisions. The provisions of this Agreement shall be interpreted in a
reasonable manner to effect the intent of the parties.
9.17 No Consequential Damages. Notwithstanding anything to the
contrary elsewhere in this Agreement, no party (or its Group members) shall, in
any event, be liable to any other party (or its Group members) for any
consequential damages, including, but not limited to, loss of revenue or income,
or loss of business reputation or opportunity relating to the breach or alleged
breach of this Agreement, except for consequential damages, if any, that
comprise a portion of an indemnifiable Loss under Article VIII.
9.18 Usage. Whenever the plural form of a word is used in this
Agreement, that word will include the singular form of that word. Whenever the
singular form of a word is used in this Agreement, that word will include the
plural form of that word. The
116
term "or" will not be interpreted as excluding any of the items described. The
term "include" or any derivative of such term does not mean that the items
following such term are the only types of such items.
9.19 Arbitration. Except as otherwise provided in Section 9.20(c),
any controversy, dispute, or claim arising under or in any manner relating to
this Agreement will be finally settled by arbitration conducted in accordance
with the Rules of the London Court of International Arbitration (the "Rules"),
which rules are deemed to be incorporated by reference into this section;
provided, that the parties shall have the right to seek enforcement of this
Section 9.19 in the courts of the State of New York and in federal courts of the
United States of America, in each case located in New York County, in accordance
with Section 9.21. Notwithstanding any provision of the Rules, any such
arbitration will be conducted before and decided by one arbitrator to be
mutually selected by PSC and HCL, or if PSC and HCL cannot agree on the identity
of an arbitrator within twenty (20) calendar days after one party has given the
other party a notice of such party's decision to submit the matter to
arbitration (a "Notice of Arbitration"), then such arbitration will be conducted
before and decided by three arbitrators, one of whom shall be selected by each
of PSC and HCL (each such selection to made and written notice of the identity
of such arbitrator to the other given no later than thirty (30) calendar days
after delivery of the Notice of Arbitration) and the third of whom shall be
selected by the arbitrators selected by PSC and HCL (such selection to be made
no later than forty (40) calendar days after delivery of the Notice of
Arbitration). If PSC and HCL do not agree on the identity of a single arbitrator
within the twenty (20) calendar day period specified in the preceding sentence,
and thereafter either PSC or HCL (but not both) fails to notify the other of its
selection of an arbitrator within the thirty (30) calendar day period specified
in the preceding sentence, then the party that failed to so make and notify the
other of its selection shall be deemed to have irrevocably agreed to the conduct
of the arbitration by the arbitrator selected (and due notice given) by the
other party in accordance with this Agreement. Any Notice of Arbitration shall
specify the matters as to which arbitration is sought, the nature of the
dispute, the claims of each party to the arbitration (to the extent known), an
estimate of the amount and nature of any damages sought to be recovered and any
other matters required by the Rules. Any arbitration will take place in London,
England. The arbitrator(s) in any such arbitration will apply the laws of the
State of New York, and the United States of America, except as otherwise
expressly provided in Section 9.15, and will have authority to award equitable
relief, including without limitation, specific performance. In any arbitration
under this Agreement, this Agreement will be deemed to have been made in, and
will be governed by and construed under the laws of, the State of New York and
the United States of America, except as otherwise expressly provided in Section
9.15. Any decision rendered by the arbitrator(s) will be final and binding and
judgment thereon may be entered in any court having jurisdiction or application
may be made to such court for an order of enforcement as the case may require.
The parties intend that this agreement to arbitrate be irrevocable and the
exclusive means of settling all disputes under this Agreement, whether for money
damages or equitable relief, except as expressly set forth in Section 9.21. If
arbitration is invoked in accordance with the provisions of this Agreement, the
prevailing party in
117
the arbitration will be entitled to recover from the other all costs, fees, and
expenses pertaining or attributable to such arbitration, including reasonable
attorneys' fees.
9.20 Force Majeure.
(a) Notwithstanding any other provision of this
Agreement, each party to this Agreement may delay its performance under
this Agreement and any of the other Transaction Documents for any
period and to the extent that it is prevented from performing any
obligations pursuant to this Agreement or any of the other Transaction
Documents as a result of a Force Majeure Event. If any party is
prevented from performing any of its obligations under this Agreement
or any of the other Transaction Documents by a Force Majeure Event, it
shall promptly, or as soon as reasonably practicable, notify the other
parties verbally (to be confirmed in writing within five (5) calendar
days of the inception of the delay) of the occurrence of a Force
Majeure Event and describe, in reasonable detail, the circumstances
constituting the Force Majeure Event and of the obligations, the
performance of which are thereby delayed. Such party shall use all
commercially reasonable efforts to overcome the Force Majeure Event and
recommence performance whenever and to whatever extent possible without
delay. The failure to notify (verbally or in writing) the other parties
of a Force Majeure Event within three (3) calendar days of the
occurrence thereof will constitute the irrevocable waiver by the
Non-Performing Party under this Section 9.20.
(b) A "Force Majeure Event" shall mean the occurrence of
an unavoidable event or circumstance (other than a breach by any other
party of this Agreement or any other Transaction Document) beyond the
reasonable control of the party responsible for performance of a
particular obligation under this Agreement or any of the other
Transaction Documents (the "Non-Performing Party"), provided that, such
occurrence could not have been avoided or prevented by the
Non-Performing Party by commercially reasonable precautions and through
the use of commercially reasonable and lawful alternative sources or
other commercially reasonably and lawful alternative means. "Force
Majeure Events" include (1) explosions, fires, flood, earthquakes,
typhoons, catastrophic weather conditions, or other elements of nature
or acts of God, (2) acts of war (declared or undeclared), acts of
terrorism, insurrection, riots, civil disorders, rebellion, political
unrest, hostilities, curfews or sabotage, (3) extraordinary or
emergency acts and declarations of U.S., Indian, or local Governmental
Bodies or courts, and (3) labor disputes, lockouts, strikes or other
industrial action, whether direct or indirect and whether lawful or
unlawful. Force Majeure Events shall not include a Prohibition.
(c) Notwithstanding the provisions of Section 9.19, S & L
Limited, a Texas limited partnership ("S&L"), shall determine, acting
reasonably and in good faith, as promptly as practicable whether a
Force Majeure Event has occurred, the date that any such Force Majeure
commenced and the date that any such
118
Force Majeure Event has ended. S&L's determinations concerning a Force
Majeure Event shall be conclusive, final and binding on PSC, HCL, the
Company and the members of their respective Groups, except in the case
of manifest error, and shall be communicated immediately in writing
delivered to each of PSC, HCL and the Company (with a copy to the
Agent).
9.21 Submission to Jurisdiction. Each of the parties hereto hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the courts of the State of New York and the federal courts of the United
States of America, in each case located in New York County, for the enforcement
of the provisions of Section 9.19 (and agrees not to commence any litigation,
claim or dispute relating thereto except in such courts). Without limiting the
provisions of Sections 9.19 and 9.20, each of the parties hereto hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the courts of the State of New York and of the United States of America, in
each case located in New York County, for any other litigation, claim or dispute
under this Agreement or the other Transaction Documents and the transactions
contemplated hereby and thereby (and agrees not to commence any litigation,
claim or dispute relating hereto or thereto except in such courts); provided,
that this Section 9.21 shall not preclude any party to this Agreement from
commencing litigation, claim or dispute in another jurisdiction to secure
enforcement of any judgment or award (including any decision by an arbitrator or
arbitration panel pursuant to Section 9.19) obtained in accordance with the
terms of this Agreement, including an award of specific performance. Without
limiting the provisions of Sections 9.19 and 9.20, each of the parties hereto
hereby irrevocably and unconditionally waives any objection to the laying of
venue of any litigation, claim or dispute arising out of this Agreement or the
transactions contemplated hereby in the courts of the State of New York or the
United States of America, in each case located in New York County, hereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such litigation brought in any such court has been
brought in an inconvenient forum.
9.22 Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY
WAIVES ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION,
PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.
9.23 Partial Invalidity. Subject to Section 6.15(h), wherever
possible, each provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable Law, but in case any one or more of
the provisions contained in this Agreement will, for any reason, be held to be
invalid, illegal, or unenforceable in any respect, such provision will be
ineffective to the extent, but only to the extent, of such invalidity,
illegality, or unenforceability without invalidating the remainder of such
invalid, illegal, or unenforceable provision or provisions or any other
provisions of this Agreement, unless such a construction would be unreasonable.
9.24 Joint and Several Obligation and Liability.
119
(a) Notwithstanding any other provision of this Agreement
or any other Transaction Document, any representation, warranty,
covenant, agreement, obligation or liability made or undertaken by, or
binding upon, HCL, HCL Bermuda or any other HCL Group member, in any
capacity, under this Agreement or any of the other Transaction
Documents shall be the joint and several obligation and liability of
HCLT, HCL and HCL Bermuda. Without limiting the foregoing, HCLT agrees
that (i) it will perform, or cause HCL and HCL Bermuda to perform, each
and every obligation undertaken by HCL and HCL Bermuda under this
Agreement or any of the other Transaction Documents and (ii) HCLT will
be bound and obligated, as a primary obligor, by each of the provisions
of this Agreement that HCL or HCL Bermuda is bound by to the same
extent that HCL and HCL Bermuda is bound thereby and as though HCLT
were named therein (even if HCLT is not explicitly named in any such
provision), including, without limitation, Section 6.15.
(b) Notwithstanding any other provision of this Agreement
or any other Transaction Document, any representation, warranty,
covenant, agreement, obligation or liability made or undertaken by, or
binding upon, PSC, PSI or any other PSC Group member, in any capacity,
under this Agreement or any of the other Transaction Documents shall be
the joint and several obligation and liability of PSC and PSI. Without
limiting the foregoing, PSC agrees that (i) it will perform, or cause
PSI to perform, each and every obligation undertaken by PSI under this
Agreement or any of the other Transaction Documents and (ii) PSC will
be bound and obligated, as a primary obligor, by each of the provisions
of this Agreement that PSI is bound by to the same extent that PSI is
bound thereby and as though PSC were named therein (even if PSC is not
explicitly named in any such provision), including, without limitation,
Section 6.15.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
120
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
XXXXX SYSTEMS CORPORATION
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxxx
Title: CFO
XXXXX SYSTEMS INVESTMENTS B.V.
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Authorized Signatory
HCL TECHNOLOGIES LIMITED
By: /s/ Xxxx Xxxxxxx
-----------------------------
Name: Xxxx Xxxxxxx
Title: Corporate Vice President,
Finance
HCL HOLDINGS GMBH, AUSTRIA
By: /s/ Xxxx Xxxxxxx
-----------------------------
Name: Xxxx Xxxxxxx
Title: Corporate Vice President,
Finance
HCL TECHNOLOGIES (BERMUDA) LIMITED
By: /s/ Xxxx Xxxxxxx
-----------------------------
Name: Xxxx Xxxxxxx
Title: Corporate Vice President,
Finance
121
HCL XXXXX SYSTEMS B.V.
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Managing Director
By: /s/ Xxxx Xxxxxxx
-----------------------------
Name: Xxxx Xxxxxxx
Title: Managing Director
By: /s/ Xxxxx Xxxxxxxxxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxxxxxxxxx
Title: Managing Director
HCL XXXXX SYSTEMS (MAURITIUS)
PRIVATE LIMITED
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Authorized Signatory
HCL XXXXX SYSTEMS LIMITED
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
By: /s/ Xxxx Xxxxxxx
-----------------------------
Name: Xxxx Xxxxxxx
Title: Authorized Signatory
122
S&L is executing this Agreement solely to indicate its agreement to be bound by
Section 9.20(c) and, to the extent applicable in interpreting or enforcing the
foregoing provision, Article IX, and has no obligation under this Agreement
except under such provisions.
S&L Limited,
a Texas limited partnership
By: International Strategies Inc.,
its general partner
By: /s/ Xxxxxx Xxxxx
---------------------------
Name: Xxxxxx Xxxxx
Title: President
123
