SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT is made this 15th day of September 1997 by and
between:
Xxxxxx Computer Services Limited, a company incorporated under the Companies
Act, 1956 and having its registered office at Mayfair Centre, Xxxxxx Xxxxx Road,
Secunderabad, Andhra Pradesh 500 003 (hereinafter referred to as the "Seller"
which expression shall mean and include its successors, representatives and
assigns); and
Cognizant Software Solutions Corporation, a corporation organized and existing
under the laws of Delaware and having its principal place of business at 000
Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, XXX (hereinafter referred to as the
"Buyer" which expression shall mean and include its successors, representatives
and assigns).
WHEREAS
A. The Seller is the registered and beneficial owner of 960,000 fully paid
equity shares, face value Rs. 10/- (Rupees ten) per share, bearing
distinctive numbers as set forth in Schedule I (all such shares
together being hereinafter referred to as the "Sale Shares") in the
capital of Dun & Xxxxxxxxxx Xxxxxx Software Private Limited, a limited
liability Indian company and having its registered office at 000,
Xxxxxxxxx Xxxx, Xxxxxxx Xxxxx, Xxxxxxx 600 086 (hereinafter referred to
as the "Company"); and
B. The Seller has agreed to sell and Buyer has agreed to purchase, all of
the Seller's rights, title and interests in and to the Sale Shares
subject to the terms and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the premises, the mutual agreements
hereinafter contained, the Seller and Buyer do each hereby agree as follows:
1. Sale and Transfer of Shares
The Seller hereby agrees to sell, assign, transfer and convey to the Buyer
all of its rights, title and interests in and to the Sale Shares, the
details whereof are set out in Schedule 1, and the Buyer hereby agrees to
purchase, acquire and accept all of the Seller's rights, title and
interests in and to the Sale Shares, subject only (i) to the terms and
conditions set forth in this Agreement, (ii) obtaining of requisite
permissions including those from the Secretariat for Industrial Assistance
and the Reserve Bank of India, and (iii) fulfillment of the conditions
precedent set out in Clause 2.
2. Consideration, Conditions, Closing, Escrow
2.1 As consideration for the sale and transfer of the Sale Shares by the
Seller and the other mutual covenants of this Agreement, the Buyer shall
pay to the Seller in one lump sum an aggregate sum of the equivalent of US
$3.4 million in Rupees based on the exchange rate
on the date funds for the transaction contemplated hereby are transferred
by Buyer into India (hereinafter referred to as the "Purchase Price").
The Purchase Price shall be paid in full, without any adjustment,
deduction, set-off or counterclaim, subject to the following conditions
precedent:
2.2.1 The obligation of the Buyer to consummate the purchase of the Sale Shares
is subject to the satisfaction (or waiver by the Buyer) on and as of the
date of the transfer of the Sale Shares (the "Closing Date") of each of
the following conditions:
(a) The representations and warranties of the Seller contained in this
Agreement shall be complete and correct as the date of this
Agreement and as of the Closing Date, as if made at and as of each
such date.
(b) Receipt by the Buyer of the requisite Government permissions
including but not limited to the approvals from the Secretariat for
Industrial Assistance and the Reserve Bank of India for the
consummation of the transactions contemplated hereby.
(c) Receipt by the Buyer from the Seller of a document substantially in
the form of Exhibit 1, withdrawing the litigation filed by the
Seller in the High Court of Judicature, Chennai.
(d) No temporary restraining order, preliminary or permanent injunction,
cease and desist order or other legal restraint or prohibition
preventing the purchase and sale of the Sale Shares shall be in
effect.
(e) The Buyer shall have received the written resignations, effective as
of the Closing Date, of such directors of the Company that have been
appointed by the Seller, in each case acknowledging that such
resigning directors have no claim (for loss of office or otherwise)
against the Company or Cognizant, their Affiliates or their
respective officers, directors, employees, agents or shareholders.
(f) The Buyer shall have received any necessary consents of the Seller
to effect a change in the name of the Company to Cognizant
Technology Solutions India Limited.
2.2.2 The obligation of the Seller to consummate the sale of the Sale Shares is
subject to the satisfaction (or waiver by the Seller) on and as of' the
Closing Date of each of the following conditions:
(a) The representations and warranties of' the Buyer contained in this
Agreement shall be complete and correct as of the date of' this
Agreement and as of the Closing Date, as if made at and as of each
such date.
(b) Receipt by the Seller from the Buyer of a document substantially in
the Form of Exhibit 2, withdrawing the litigation filed by the Buyer
in the Court of III Additional Judge, City Civil Court,
Secunderabad.
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(c) Receipt by the Seller from the Buyer, of a document substantially in
the form of Exhibit 3 withdrawing the Arbitration filed by the Buyer
in the London Court of International Arbitration.
(d) No temporary restraining order, preliminary or permanent injunction,
cease and desist order or other legal restraint or prohibition
preventing the purchase and sale shall be in effect.
2.3 Subject to satisfaction of the conditions precedent, the transaction for
sale and purchase of the Sale Shares shall be completed as soon as
possible from the date of the execution of this Agreement. Upon the
fulfillment of the conditions precedent set out above, the Escrow Agent
under the Escrow Agreement (as defined below) will transfer the Purchase
Price to the Seller as provided in the Escrow Agreement. The Purchase
Price shall be paid to the Seller only upon receipt of' the final
permission from the Reserve Bank of India.
2.4.1 The Buyer and the Seller shall execute concurrently with the execution of
this Agreement an escrow agreement (the "Escrow Agreement") in the form
attached hereto as Exhibit 4 providing for the escrow of the documents to
be delivered hereunder as well as the Purchase Price.
2.4.2 Within two business days after the receipt of preliminary approval by the
Reserve Bank of India for the transactions contemplated hereby the Buyer
shall deposit the Purchase Price into the escrow account maintained
pursuant to the Escrow Agreement and immediately thereafter the Buyer and
Seller shall take all steps for the withdrawal of the litigations and the
arbitration referred to above.
At the Closing and concurrently with payment of the Purchase Price, the
Seller shall undertake and/or cause to be undertaken the following
actions:
(a) Deliver duly sealed, signed and valid share transfer forms for
effecting the sale and transfer of the Sale Shares under the terms
of this Agreement; and
(b) Deliver original share certificates evidencing the Sale Shares.
3. Representations and Warranties of the Seller
The Seller hereby represents and warrants to the Buyer as follows:
3.1 The Seller is a company duly organized and existing under the laws of
India; and
3.2 The Seller is the sole, beneficial and registered owner of the Sale Shares
and its name is duly recorded in the Register of' Members of the Company;
3.3 The Seller has full legal right, power and authority to enter into,
execute and deliver this Agreement and to perform the obligations,
undertakings and transactions set forth herein, and this Agreement has
been duly and validly executed and delivered by the Seller and constitutes
its legal, valid and binding obligation, enforceable against it in
accordance with its terms;
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3.4 The Seller has all requisite powers to own and dispose of the Sale Shares
to be sold by it;
3.5 The Sale Shares owned by the Seller are free and clear of all pledges,
security interests, liens, charges, encumbrances, equities, claims,
options or limitations affecting its ability to vote the Sale Shares or to
transfer the same to the Buyer and all such shares have been validly
authorized and issued and are fully paid up;
3.6 Except for the transaction contemplated by this Agreement there is no
subscription, option, warrant, call-right, arrangement, agreement or
commitment outstanding in relation to the sale or transfer of the Sale
Shares;
3.7 In relation to the fulfillment of the transactions contemplated under this
Agreement, to the knowledge of the Seller, there are no actions, suits,
proceedings, or investigations pending or threatened in relation to the
Sale Shares, and the Sale Shares are not subject to or in default with
respect to any court or administrative order, injunction or decree.
4. Representations and Warranties of the Buyer
The Buyer hereby represents and warrants to the Seller as follows:
4.1 The Buyer is a corporation duly organized and existing under the laws of
Delaware, United States of America; and
4.2 The Buyer has full legal right, power and authority to enter into, execute
and deliver this Agreement and to perform the obligations, undertakings
and transactions set forth herein, and this Agreement has been duly and
validly executed and delivered by the Buyer and constitutes their legal,
valid and binding obligation, enforceable against them in accordance with
its terms.
5. Seller's Covenants
The Seller covenants as follows:
5.1 To co-operate with the Buyer and to use all reasonable efforts to obtain
all approvals necessary for the consummation of' the transaction
contemplated under this Agreement. Any such approvals shall be sought in
an expeditious manner.
5.2 To execute such other documents as may be necessary for effecting the
closure of the transaction contemplated under this Agreement.
5.3 To use best efforts to facilitate the completion of the transactions
contemplated hereunder, including using their best efforts to satisfy the
other party's conditions to closing and consummate and make effective the
transactions contemplated hereby.
6. Buyer's Covenants
The Buyer covenants as follows:
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6.1 To use its commercially reasonable efforts to offer subcontracting work to
the Seller in amount of at least U.S. $ 400,000 in the aggregate over the
24 month period after the Closing Date. Such work to be charged and
performed on an arms-length basis and on standard commercial terms and
conditions.
6.2 To co-operate with the Seller and to use all reasonable efforts to obtain
all approvals necessary for the consummation of the transactions
contemplated under this Agreement. All such approvals shall be sought in
an expeditious manner.
6.3 To use best efforts to facilitate the completion of the transactions
contemplated hereunder, including using their best efforts to satisfy the
other party's conditions to closing and consummate and make effective the
transactions contemplated hereby.
7. Expenses
Except as explicitly set forth herein, the Seller and the Buyer
respectively shall pay their own expenses (including without limitation,
attorneys' fees), in connection with the negotiation, preparation and
execution of this Agreement and any amendments or other documents or
instruments relating hereto and the transactions contemplated hereby and
in connection with the legal actions referred to in Section 2 hereof.
8. Duties on the Transaction
8.1 The Buyer shall be liable for the stamp duties on account of sale and
transfer of the Sale Shares which may be imposed by any authority
including Central or State Government in India in respect of the sale,
transfer or conveyance of the Sale Shares.
8.2 The Seller undertakes to pay forthwith all liabilities which make the Sale
Shares subject of any attachment, charge, or lien arising out of or caused
by any acts of the Seller and shall indemnify and keep indemnified and
saved harmless the Buyer against the same and against all claims, demands
and proceedings said costs and expenses suffered or incurred by it on that
account.
8.3 The Seller shall be liable for payment of all taxes and charges under the
Income Tax Act, 1961, including in particular the payment of the capital
gains tax (if any) in relation or in respect of the Purchase Price
9. Indemnification and Related Matters
(a) The Seller or the Buyer, as the case may be (the "Indemnifying
Party"), agrees to indemnify and hold the other and such others'
respective officers, directors, agents and employees (each, the
"Indemnified Party") harmless from and against any and all claims,
losses, liabilities, obligations, damages, deficiencies, judgements,
actions, suits, proceedings, arbitrations, assessments, costs and
expenses (including, without limitation, expenses of investigation
and enforcement of this indemnity and reasonable attorneys' fees and
expenses) ("Damages"), suffered or paid by the Indemnified Party,
directly or indirectly, as a result of or arising out of (i) the
failure of any representation or warranty made
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by any Indemnifying Party in this Agreement or (ii) a breach of any
agreement or covenant by any Indemnifying Party contained in this
Agreement.
(b) In the event of a claim pursuant to Clause 9(a), the Indemnified
Party shall provide a notice in writing to the Indemnifying Party,
which notice shall state specifically the representation, warranty,
covenant or agreement with respect to which the claim is made, the
facts giving rise to an alleged basis for the claim and the amount
of liability asserted against the Indemnifying Party by reason of
the claim.
(c) Without restricting the rights of the Indemnifying Party or its
ability to claim damages on any other grounds and the same having
resulted in actual loss or damage being caused to the Indemnified
Party or to the Company, the Indemnified Party shall have the right
to require that the Indemnifying Party pay to the Indemnified Party
the amount necessary to put the Indemnified Party into the position
which would have existed if there had been no such breach; or
(d) The Indemnifying Party shall be liable to make payment, within 30
days of the receipt of the notice referred to above.
(e) The failure to give such notice shall not relieve the Indemnifying
Party of any liability under this Clause 9 or otherwise. The
Indemnifying Party may, and at the request of the Indemnified Party
shall, participate in and control the defense of any such suit,
action or proceeding at its own expense.
(f) The Representations and Warranties contained or deemed to be made in
this Agreement, and the obligations to indemnify and hold harmless
pursuant to this Clause, shall survive the consummation of the
transactions contemplated by this Agreement.
10. Failure to Complete
In the event that any Party shall fail to complete this Agreement or
commit any breach of the terms hereof, the Party not in default shall be
entitled to the right of specific performance against the defaulting
Party. In the event that the non-defaulting Party elects not to exercise
its rights of specific performance, it may by notice in writing terminate
this Agreement and thereafter claim damages which it has suffered or
incurred as a result of such breach by the defaulting Party and all costs
and expenses including legal costs. Provided that it is hereby clarified
that non completion of transaction of Sale Shares as a result of non
receipt of the approval by the Buyer from any governmental authority
including but not limited to the Secretariat for Industrial Assistance or
the Reserve Bank of India shall not entitle the other Parties to claim
damages, direct or indirect, from the Buyer.
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11. Miscellaneous Matters
11.1 Amendment
This Agreement may not be amended or otherwise altered except pursuant to
an instrument in writing signed by each of the parties hereto. This
Agreement shall be binding upon and inure to the benefit of' the
respective successors, legal representatives and permitted assigns of the
parties, provided that no party shall assign any of its rights, or
delegate any obligations hereunder without the prior written consent of
the other, and any attempted assignment or delegation without consent
shall be null and void, except that the Buyer may assign any of its rights
and obligations to any Affiliate of the Buyer.
The term "Affiliate" for the purposes of this Agreement shall mean with
respect to any Party to this Agreement any entity which owns or controls,
is owned or controlled by, or is under common ownership or control with
such Party. The assignment of any rights or delegation of' any obligations
under this Clause shall bind the assignee under the same terms and
conditions as the Buyer are bound under and by virtue of this Agreement
and the assignees shall agree at the time of assignment to adhere to this
Agreement.
11.2 Notices
Any notice, request or instructions permitted or required to be given
hereunder by any party to the other shall be in writing and shall be
deemed sufficiently given if delivered personally, sent by registered or
certified mail, postage prepaid, or sent by telex or facsimile.
If to the
Seller: Xxxxxx Computer Services Limited
Address: Mayfair Centre, Xxxxxx Xxxxx Road,
Secunderabad, Andhra Pradesh 500 003
Attn: Xxxxx Xxxxxxx
Fax: 00-00-000000
If to the
Buyer: Cognizant Software Solutions Corporation
Address: 000 Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000, USA`
Attn: Xxxxxx Xxxxxx
Fax: (000) 000 0000
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with a copy to: Cognizant Corporation
Address: 000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000, XXX
Attn: General Counsel
Fax: (000) 000 0000
unless in each case the Buyer and the Seller shall have given notice as
provided herein of a different address.
Notices and other communications sent by mail shall be deemed to have been
given two (2) weeks after the date on which the same shall be proved to
have been posted. Notices and communications sent by telex or facsimile
shall be deemed to have been given when sent (subject to confirmation of
receipt).
11.3 Headings
The headings contained in this Agreement are inserted for reference
purposes only and are not to be considered in interpreting this Agreement.
11.4 Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one
and the same instrument. Each counterpart may consist of a number of
copies hereof each signed by less than all, but together signed by all of
the parties hereto. In pleading or proving any provision of this
Agreement, it shall not be necessary to produce more than one such
counterpart.
11.5 Governing Law
Subject to 11.12, this Agreement shall be governed by and construed and
enforced in accordance with the laws of India.
11.6 Waiver
No delay on the part of the Seller or the Buyer in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of the Seller or the Buyer of any right, power or
privilege hereunder operate as a waiver of any other right, power or
privilege hereunder.
11.7 Severability
Any provision of this Agreement which is held to be invalid or
unenforceable for any reason shall be ineffective to the extent of such
invalidity or unenforceability only, without affecting in any way the
remaining provisions hereof.
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11.8 Further Assurances
Subject to the terms and conditions of this Agreement, each of the parties
hereto will use all reasonable efforts to take, or cause to be taken, all
action, and to do, or cause to be done, all things necessary or proper to
fulfil its obligations under this Agreement.
11.9 Survival
This Agreement and all representations, warranties, covenants and
agreements of the parties contained in this Agreement shall survive the
sale of the Sale Shares and all inspections, examinations or audits on
behalf of the parties.
11.10 Confidentiality
The Parties will retain in secrecy and keep strictly confidential all
non-public information it obtains from the other Party pursuant to this
Agreement and not at any time copy or use or disclose to any other person,
firm, corporation or authority such information except as may be first
consented to in writing by the Party supplying the information and
restrict the dissemination of such information to those of its trusted
employees, agents and representatives as have a direct need to know such
information and bind each such employee, agent or representative to keep
secret such information as he shall receive hereunder.
11.11 Publicity
Buyer and Seller shall prepare and issue a mutually acceptable press
release announcing the intended transfer of the Sale Shares which
announcement shall include statements regarding the positive experience of
both companies in their joint ownership of the Company. Neither Buyer nor
Seller nor their respective Affiliates shall issue or cause the
publication of any press release or other public announcement with respect
to the transactions contemplated by this Agreement without the consent of
the other party, which consent shall not be unreasonably withheld or
withdrawn, except as may be required by law or the regulations or policies
of any securities exchange, in which case the party required to make the
release or statement shall allow the other party reasonable time to
comment on such release or statement in advance of such issuance. Until
the first anniversary of the Closing Date, the Buyer and the Seller may
refer to each other as "alliance partners" however the Seller shall be
clear in any communication with any third party, including but not limited
to, customers or potential customers, that the Seller and the Company are
distinct and independent entities and that neither has the ability to bind
or incur liabilities on behalf of the other.
11.12 Arbitration
Any controversy or claim arising out of or relating to this Agreement, or
any breach or alleged breach thereof, shall be finally settled by
arbitration in accordance with the Rules of Conciliation and Arbitration
of London Court of International Arbitration, London. The arbitration
proceedings shall be held in London. The arbitration award shall be final
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and binding. However, the law governing the arbitration proceedings shall
be the laws of the United Kingdom.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered as of the day and year first above written.
Xxxxxx Computer Services Limited Cognizant Software Solutions Corporation
--------------------------------- ----------------------------------------
By By
--------------------------------- ----------------------------------------
Name Name
--------------------------------- ----------------------------------------
Title Title
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Schedule 1
Date of Allotment No. of Shares Distinctive Numbers
From
3 June 1994 10 11 20
3 April 1995 3,59,990 15011 375000
6 September 1995 6,00,000 1525001 2125000
TOTAL 9,60,000
