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Exhibit 2.1
SHARE PURCHASE AGREEMENT
AMONG
UBIX COMPUTER SERVICES LIMITED
AND
XXXXX XXXXXX AND XXXX XXXXXX
SEPTEMBER 4, 2001
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TABLE OF CONTENTS
PREAMBLE....................................................................1
ARTICLE I THE TRANSACTION...................................................1
1.1. Sale and Purchase of Shares.......................................1
1.2. Consideration.....................................................2
1.3. Working Capital Adjustment........................................3
1.4. Performance Adjustment............................................3
1.5. Closing Time and Place............................................4
1.6. Deliveries and Proceedings at the Closing.........................4
1.7. Waiver of Rights..................................................4
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS...............5
2.1. Organization and Qualification....................................5
2.2. Authority and Authorization.......................................5
2.3. Execution and Binding Effect......................................5
2.4. No Breach, Default, Violation or Consent..........................5
2.5. Directors, Ownership, Control and Title...........................6
2.6. Subsidiaries......................................................7
2.7. Financial Statements; Liabilities.................................7
2.8. Tax Matters.......................................................8
2.9. Litigation........................................................8
2.10. Absence of Certain Changes and Events.............................9
2.11. Constituent Documents and Governmental Rules.....................10
2.12. Governmental Orders..............................................10
2.13. Permits..........................................................10
2.14. Environmental Matters............................................10
2.15. Real Property....................................................11
2.16. Personal Property................................................11
2.17. Intellectual Property............................................12
2.18. Title to Assets..................................................14
2.19. Employee Benefit Plans...........................................14
2.20. Personnel Matters................................................15
2.21. Insurance........................................................16
2.22. Indebtedness.....................................................16
2.23. Other Material Agreements........................................17
2.24. Status of DSF Agreements.........................................17
2.25. Transactions with Affiliates.....................................17
2.26. Customers and Suppliers..........................................17
2.27. Brokers..........................................................18
2.28. Bank Accounts....................................................18
2.29. Ability to Increase Staff and Infrastructure.....................18
2.30. Delivery of Documents; Accurate Disclosure.......................18
ARTICLE III REPRESENTATIONS AND WARRANTIES OF UBIX.........................18
3.1. Organization and Qualification...................................18
3.2. Authority and Authorization......................................18
3.3. Execution and Binding Effect.....................................18
3.4. No Breach, Default, Violation or Consent.........................19
ARTICLE IV TRANSACTIONS PRIOR TO CLOSING...................................19
4.1. Conduct of Business of DSF.......................................19
4.2. Access to Information............................................20
4.3. No Solicitation..................................................21
4.4. Publicity........................................................21
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4.5. Best Efforts; Notification.......................................21
4.6. Confidentiality..................................................22
4.7. Noncompetition and Nonsolicitation...............................23
4.8. Injunctive Relief................................................23
4.9. Transactions with Affiliates.....................................23
4.10. Reserve Bank of India............................................24
ARTICLE V CLOSING AND CLOSING CONDITIONS...................................24
5.1. Closing..........................................................24
5.2. Conditions Precedent to Obligations of UBIX......................24
5.3. Conditions Precedent to Obligations of the Shareholders..........25
ARTICLE VI INDEMNIFICATION.................................................26
6.1. Survival of Representations and Warranties.......................26
6.2. Indemnification..................................................26
6.3. Claims...........................................................27
6.4. Notice of Third Party Claims; Assumption of Defense..............27
6.5. Settlement or Compromise.........................................28
6.6. Failure of Shareholders to Act...................................28
6.7. Escrow...........................................................28
ARTICLE VII MISCELLANEOUS PROVISIONS.......................................29
7.1. Filing Fees; Stamp Duty..........................................29
7.2. Amendments.......................................................29
7.3. Assignment.......................................................29
7.4. Counterparts; Telefacsimile Execution............................29
7.5. Entire Agreement.................................................29
7.6. Expenses.........................................................29
7.7. Further Assurances...............................................29
7.8. Governing Law....................................................30
7.9. Notices..........................................................30
7.10. Severability.....................................................31
7.11. Successors and Assigns...........................................31
7.12. Termination......................................................31
7.13. Waivers..........................................................31
7.14. Arbitration......................................................32
7.15. Exchange Rate....................................................32
EXHIBIT A - SHAREHOLDERS
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SHARE PURCHASE AGREEMENT
This Agreement is made as of September 4, 2001 among UBIX
COMPUTER SERVICES LIMITED, a Mauritius company ("UBIX"), and XXXXX XXXXXX and
XXXX XXXXXX (the "SHAREHOLDERS"), each an individual resident of India and a
registered shareholder of DSF Internet Services Private Limited, a company
incorporated under the Indian Companies Act, 1956 and having its registered
office at X-00 Xxxxx Xxxx, Xxx Xxxxx 110 049 and corporate office at 00 Xxxx
Xxxx Xxxxxxx, 0xx Xxxxx, Xxx Xxxxx 110 016 ("DSF"). Concurrently with the
execution and delivery of this Agreement, the Shareholders are delivering a
Disclosure Schedule containing certain disclosures. References in this Agreement
to any "SCHEDULE" are to the various schedules contained in the Disclosure
Schedule.
PREAMBLE
The Shareholders are the registered shareholders of DSF and,
together with X. X. Xxxxxx, own all of the subscribed equity share capital of
DSF consisting of 11,52,000 equity shares of Rs.10/- each. The Shareholders
desire to sell and transfer to UBIX, and UBIX desires to purchase and acquire
from the Shareholders, seventy percent (70%) of the issued and outstanding
equity shares of DSF, upon the terms and subject to the conditions set forth
herein.
Therefore, in consideration of the premises and the mutual
covenants, agreements, representations, and warranties herein contained, the
parties hereto, intending to be legally bound, agree as follows.
ARTICLE I
THE TRANSACTION
1.1. Sale and Purchase of Shares.
(a) Sale and Purchase. At the Closing referred to in Section 1.5 below,
the Shareholders will sell, transfer, assign and deliver to UBIX, and UBIX will
purchase and acquire from the Shareholders, free and clear of all Liens (as
hereinafter defined), the number of fully paid up equity shares of DSF set forth
opposite such Shareholders' names on Exhibit A hereto (the "PURCHASED SHARES"),
which shall represent seventy percent (70%) of the fully paid up equity share
capital of DSF, immediately prior to the Closing, together with all rights now
or hereafter attaching thereto, for the consideration set forth in Section 1.2.
(b) Assignment of Right to Purchase. UBIX shall have the right to
assign to one or more of its Affiliates (as hereinafter defined) its right to
acquire the Purchased Shares hereunder. As used in this Agreement the term
"AFFILIATE" means, with respect to any Person (as hereinafter defined), (i) any
director, officer, partner or principal of such Person, (ii) any other Person of
which such Person is a director, officer, partner or principal, (iii) any Person
who directly or indirectly controls or is controlled by, or is under common
control with, such Person and (iv) with respect to any Person described above
who is a natural person, any spouse, parent, grandparent, child or grandchild of
such Person, and the term "control" shall mean, with respect to any Person, the
possession, direct or indirect, of the power to direct or cause the direction of
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the management and policies of such Person, whether through ownership of voting
securities, by contract or otherwise.
(c) Definition. As used in this Agreement, the term "LIEN" means (i)
any lien (including any lien relating to Taxes (as that term is defined in
Section 2.8 hereof)), pledge, or negative pledge, (ii) any mortgage, deed of
trust, security interest, charge in the nature of a lien or security interest,
(iii) any title retention agreement, right of first refusal, right of first
purchase or other similar option, (iv) any conditional sale agreement, easement,
right of way, variance or other real estate declaration, (v) any rental, hire
purchase, credit sale or other agreement for payment on deferred terms, or (vi)
any other similar transfer or other restriction, servitude or other encumbrance.
1.2. Consideration. In consideration of the sale and transfer of the
Purchased Shares pursuant to Section 1.1 above, UBIX shall pay an aggregate
amount in cash equal to Eight Hundred Twenty-Five Thousand U.S. Dollars
($825,000) (the "CONSIDERATION"). The Consideration shall be subject to offset
and adjustment as set forth in Sections 1.3 and 1.4, and shall be payable to the
Shareholders as follows:
(a) Down Payment. The amount of Eighty-Seven Thousand Five Hundred U.S.
Dollars ($87,500) was previously paid to the Shareholders.
(b) Closing Payment. At the Closing, UBIX shall pay to the Shareholders
an amount equal to One Hundred Twenty-Five Thousand U.S. Dollars ($125,000) by a
wire transfer to the account designated by the Shareholders in writing prior to
the Closing.
(c) Escrow. At the Closing, UBIX shall deposit, by wire transfer, the
amount of Six Hundred Twelve Thousand Five Hundred U.S. Dollars ($612,500) (the
"ESCROW FUNDS") with Messrs. Mulla & Mulla & Craigie Blunt & Caroe, Advocates
and Solicitors, by its partner Xx. Xxxxxxxx X. Xxxxxx, as Escrow Agent, pursuant
to the terms of a mutually agreeable Escrow Agreement among UBIX, the
Shareholders and the Escrow Agent (the "ESCROW AGREEMENT"). The Escrow Agreement
shall provide that the Escrow Agent will use the Escrow Funds to purchase Indian
Capital Gains Tax Savings Bonds (the "BONDS") in such denominations and
maturities as instructed by the Shareholders, and shall release the Bonds to the
Shareholders on the following dates: (i) US $112,500 of Bonds shall be released
on the date which is six (6) months after the Closing Date (as hereinafter
defined); (ii) US $200,000 of Bonds shall be released on the first anniversary
of the Closing Date; (iii) US $200,000 of Bonds shall be released on the date
which is eighteen (18) months after the Closing Date; and (iv) US $100,000 of
Bonds shall be released upon the joint written instruction of UBIX and the
Shareholders, which shall be given on the date which is the later of (A) 60 days
after the end of the last quarter for which a Performance Adjustment may be made
pursuant to Section 1.4 or (B) 10 days after all Taxes payable by DSF in
connection with this transaction have been finally determined or (C) the next
business day following the date on which UBIX receives payment of the Working
Capital Adjustment, if any, from the Shareholders pursuant to
Section 1.3(b)(ii).
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1.3. Working Capital Adjustment. The Consideration shall be subject to
adjustment as provided in this Section 1.3 (the "WORKING CAPITAL ADJUSTMENT").
(a) Closing Audit. Following the Closing Date, UBIX shall cause Xxxxxx
Xxxxxxxx ("XXXXXXXX") to audit the accounts of DSF as of the Closing Date, and
to deliver to the Shareholders and UBIX, within 90 days after the Closing Date,
a statement setting forth the calculation of the Working Capital (as hereinafter
defined) as of the Closing Date in accordance with GAAP (as hereinafter defined)
together with an explanation of Xxxxxxxx'x calculation thereof (the "AUDIT
STATEMENT"). The Audit Statement shall be final and binding on the Shareholders
and UBIX.
(b) Payment of Working Capital Adjustment. The amount of the Working
Capital Adjustment, if any, shall be determined and paid as follows:
(i) if the Working Capital on the Audit Statement exceeds the
Working Capital shown on the balance sheets of DSF as of June 30, 2001
(the "TARGET WORKING CAPITAL AMOUNT"), then the Working Capital
Adjustment shall be an amount equal to seventy percent (70%) of such
excess, and such Working Capital Adjustment shall be paid to the
Shareholders by UBIX within 30 days after receipt of the Audit
Statement; or
(ii) if the Working Capital on the Audit Statement is less
than the Target Working Capital Amount, then the Working Capital
Adjustment shall be an amount equal to seventy percent (70%) of such
difference, and such Working Capital Adjustment shall be paid to UBIX
by the Shareholders within 30 days after receipt of the Audit
Statement.
(c) Failure to Pay Working Capital Adjustment. If the Shareholders do
not pay the amount of the Working Capital Adjustment, if any, as required by
Section 1.3(b)(ii) within 30 days following the determination of such Working
Capital Adjustment, UBIX shall be entitled to receive from the Escrow Agent,
Bonds in aggregate denominations that are as close as possible to (but not less
than) the unpaid Working Capital Adjustment.
(d) Definition. For purposes of this Section 1.3, the term "WORKING
CAPITAL" means (i) the aggregate current assets (determined in accordance with
GAAP) of DSF less (ii) the sum of (A) the aggregate current liabilities
(determined in accordance with GAAP) of the Companies plus (B) the aggregate
long- and-short-term debt of DSF.
1.4. Performance Adjustment. The Consideration shall be subject to
further adjustment as provided in this Section 1.4.
(a) Calculation of Performance Adjustment. In the event that, for the
period from the Closing Date through September 30, 2001 and for any of the first
six calendar quarters following the Closing Date commencing with the quarter
ended December 31, 2001, DSF incurs a net loss as shown on DSF's income
statement for such period or quarter as prepared by the Senior Finance Person
(as defined below) and delivered to each of the Shareholders and UBIX within 30
days after the end of such period or quarter, then the amount of the
Consideration shall be reduced by an amount equal to such net loss (the
"PERFORMANCE ADJUSTMENT"). In
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determining whether DSF has incurred a net loss for any such period or quarter,
there shall be excluded from such calculation (i) any expenses related to
capital investments which DSF makes at the request of UBIX, (ii) international
travel expenses incurred by DSF at the request of UBIX, (iii) 50% of the
compensation of DSF's Chief Executive Officer, (iv) the compensation of the
Senior Finance Person, and (v) any tax, up to an aggregate of $60,000, payable
by DSF as a result of the Shareholders reducing their shareholdings in DSF below
50% to this Agreement. Either the Shareholders or UBIX may request that any
income statement delivered by the Senior Finance Person be reviewed by Xxxxxxxx
at the requesting party's expense. Any adjustments made by Xxxxxxxx to such
income statement shall be final and binding on the parties.
(b) Payment of Performance Adjustment. At the Shareholders' option, the
amount of the Performance Adjustment for any period or quarter may be paid to
UBIX either (i) in cash within thirty (30) days after delivery of the income
statement for such quarter or (ii) by instructing the Escrow Agent to deliver,
Bonds to UBIX in aggregate denominations as close as possible to (but not less
than) the amount of all such unpaid Performance Adjustments.
(c) Definition. The term "SENIOR FINANCE PERSON" means the person to be
employed by DSF in accordance with Section 12(a) of the Shareholders Agreement
dated the date hereof among DSF, UBIX, the Shareholders and X.X. Xxxxxx (the
"SHAREHOLDERS AGREEMENT"), to manage DSF's finance and accounting functions.
1.5. Closing Time and Place. The consummation and closing of the
transactions contemplated under this Agreement (the "CLOSING") will take place
on the second business day following the satisfaction of the conditions set
forth in Sections 5.2 and 5.3, or the waiver in writing thereof (to the extent
permitted by applicable law) by the party in whose favor such conditions run, at
the office of DSF in New Delhi, India, or at such other time, date or place as
UBIX and the Shareholders shall mutually agree in writing. The date on which the
Closing occurs is sometimes referred to herein as the "CLOSING DATE."
1.6. Deliveries and Proceedings at the Closing. At the Closing:
(a) Deliveries by the Shareholders. The Shareholders will deliver to
UBIX, (i) free and clear of all Liens, certificates for the Purchased Shares,
together with duly executed share transfer forms relating to such Purchased
Shares, and (ii) the agreements, documents and certificates required to be
delivered by the Shareholders under Section 5.2.
(b) Deliveries by UBIX. UBIX will deliver to the Shareholders (i) the
Closing payment of the Consideration in accordance with Section 1.2(b), and (ii)
the agreements, documents and certificates required to be delivered by it under
Section 5.3, and will deliver to the Escrow Agent the Escrow Funds in accordance
with Section 1.2(c).
(c) Other Deliveries. The closing certificates and other documents
required to be delivered at the Closing pursuant to this Agreement will be
exchanged.
1.7. Waiver of Rights. Each of the Shareholders waives any and all
preemptive rights, rights of first refusal and other similar rights which such
Shareholder may have to acquire the
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Purchased Shares pursuant to the terms of DSF's Articles of Association or any
other instrument, document or agreement to which such Shareholder is a party.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders hereby jointly and severally represent and
warrant to UBIX as follows:
2.1. Organization and Qualification. DSF is a corporation duly
organized, validly existing and in good standing under the laws of India. DSF is
duly qualified to do business and is in good standing in all jurisdictions in
which the ownership of its assets or the nature of its business makes such
qualification necessary, except in those jurisdictions where the failure to be
so qualified has not resulted in, and is not likely to result in, a material
adverse change in, or material adverse effect on, the assets, business,
operations, financial condition or prospects of DSF (a "MATERIAL ADVERSE
EFFECT"). DSF has all requisite power and authority to own, lease and operate
its properties and assets, and to conduct its business as presently conducted.
The Shareholders have previously delivered or made available to UBIX a complete
and correct copy of DSF's Memorandum, Articles of Association and Certificate of
Incorporation, as amended to date, which are in full force and effect as of the
date hereof and have embodied therein or annexed thereto a copy of every
resolution or agreement as is required by law to be embodied in or annexed to
them, and set out completely the rights and restrictions attaching to each class
of authorized equity share capital of DSF.
2.2. Authority and Authorization. Each Shareholder has the full right,
power and authority (a) to execute and deliver this Agreement and each of the
other Transaction Documents to which he or she is a party, and (b) to perform
the Shareholder's obligations hereunder and thereunder. This Agreement and the
other Transaction Documents to which each Shareholder is a party constitute the
valid and legally binding obligations of such Shareholder, enforceable against
him or her in accordance with their respective terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or affecting the enforcement of creditors' rights
generally, now or hereafter in effect and subject to the application of
equitable principles and the availability of equitable remedies.
2.3. Execution and Binding Effect. No approvals or consents are
required before the Shareholders may duly execute, deliver and perform their
obligations under this Agreement and the other Transaction Documents to which
they are parties. Neither Shareholder is a party to, subject to or bound by any
agreement or any judgment, order, writ, prohibition, injunction or decree of any
court or other governmental official or entity which would prevent the
execution, delivery or performance of this Agreement or any other Transaction
Document by him or her.
2.4. No Breach, Default, Violation or Consent. The execution, delivery
and performance by the Shareholders of this Agreement and the other Transaction
Documents do not and will not:
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(a) violate the Memorandum and Articles of Association or Certificate
of Incorporation of DSF;
(b) breach or result in a default (or an event which, with the giving
of notice or the passage of time, or both, would constitute a default) under,
require any consent under or give to others any rights of termination,
acceleration, suspension, revocation, cancellation or amendment of any DSF
Agreement (as defined below) or Permit (as defined below) or of any contract,
agreement, instrument or document to which any Shareholder is a party or by
which any Shareholder or his or her assets are bound;
(c) breach or otherwise violate any order, writ, judgment, injunction
or decree issued by any governmental official or entity (each a "GOVERNMENTAL
ORDER") which names DSF or any Shareholder, or is directed to DSF or any
Shareholder any of their respective assets;
(d) result in the creation of a Lien held by any third party on DSF's
assets or the Purchased Shares;
(e) violate any law, rule, regulation, ordinance or code of any
governmental entity (each a "GOVERNMENTAL RULE") applicable to any Shareholder
or to DSF or its business or assets; or
(f) require any consent, authorization, approval, exemption or other
action by, or any filing, registration or qualification with, any person or
entity (each a "PERSON"), other than the approvals of the Ministry of Commerce
and, following the Closing, the Reserve Bank of India.
2.5. Directors, Ownership, Control and Title.
(a) Xxxx Xxxxxx and Xxxxx Xxxxxx are the only Directors of DSF.
(b) The authorized equity share capital of DSF consists of 15,00,000
equity shares of Rs.10/- each. Exhibit A sets forth a correct and complete list
of (i) the number of equity shares issued and outstanding and (ii) the names of
the record and beneficial owners of the equity shares and the number of shares
owned by such persons.
(c) All of the issued and outstanding equity shares of DSF have been
duly authorized and validly issued in compliance with applicable Governmental
Rules and are fully paid and non-assessable. There are no outstanding (i)
options, warrants, agreements or other rights for the acquisition of any of
DSF's equity shares, (ii) securities or other obligations of DSF which are
convertible into or exchangeable for such shares or (iii) options, sale
agreements, shareholder agreements, pledges, proxies, voting trusts, powers of
attorney, restrictions on transfer or other agreements or instruments which are
binding on either of the Shareholders of DSF and which relate to the ownership,
voting or transfer of any of such shares.
(d) Each Shareholder has good and marketable title to the equity shares
shown on Exhibit A as owned by the Shareholder, free and clear of any and all
Liens. Each Shareholder
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is not a party to or bound by any option, sale agreement, shareholder agreement,
pledge, proxy, voting trust, power of attorney, restriction on transfer or other
agreement or instrument which relates to the ownership, voting or transfer of
any of the equity shares owned by the Shareholder. Each Shareholder has the sole
and absolute right, power and authority to sell, assign and transfer the
Purchased Shares as provided in this Agreement. UBIX will acquire good and
unencumbered title to the Purchased Shares, free and clear of all Liens, and not
subject to any adverse claim when acquired by UBIX pursuant to this Agreement.
2.6. Subsidiaries. DSF has no subsidiaries. As used in this Agreement,
a "SUBSIDIARY" of a party hereto means any corporation, partnership, limited
liability company, joint venture or other business entity with respect to which
such party or any Subsidiary of such party owns or controls, directly or
indirectly, more than 50% of the outstanding stock, equity shares or other
equity interests.
2.7. Financial Statements; Liabilities.
(a) DSF has previously delivered to UBIX correct and complete copies of
its unaudited balance sheets and statements of income, retained earnings and
cash flows as of and from the date of incorporation, February 11, 2000, to March
31, 2001, and the three (3) month period ended June 30, 2001 (the "FINANCIAL
STATEMENTS"). The Financial Statements present fairly the financial condition of
DSF as at the end of the periods covered thereby and the results of its
operations and the changes in its cash flows for the periods covered thereby,
and were prepared in accordance with generally accepted accounting principles in
India ("GAAP") applied on a consistent basis throughout the periods covered
thereby. All references in this Agreement to the "BALANCE SHEET" shall mean that
balance sheet of DSF as of June 30, 2001 included in the Financial Statements
and all references to the "BALANCE SHEET DATE" shall mean June 30, 2001.
(b) DSF has no material Liabilities (as hereinafter defined) of any
nature, whether accrued, absolute, or contingent, except for Liabilities that
are (i) reflected or reserved against on the Balance Sheet, (ii) incurred in the
ordinary course of business since the Balance Sheet Date, or (iii) incurred in
connection with or as a result of the transactions contemplated by this
Agreement. "LIABILITIES" means (x) all indebtedness (whether for borrowed money
or otherwise), obligations, Liens, penalties, fines, costs, expenses and other
liabilities, whether direct or indirect, fixed or contingent (including any loss
contingency), and (y) any guarantees, surety arrangements or endorsements (other
than endorsements for deposits or collection of checks in the ordinary course of
business) with respect to any of the Liabilities described in clause (x) of any
other Person, in any case whether or not the amount thereof is currently
ascertainable.
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2.8. Tax Matters.
(a) All tax returns and reports required to be filed by DSF have been
properly prepared and timely filed and were complete and correct when filed.
(b) DSF has paid, or has made adequate reserves on its books for the
payment of, all Taxes (as defined below), interest, penalties, assessments and
deficiencies shown to be due on such tax returns and reports or which DSF is
required to withhold on behalf of any other Person.
(c) The reserves and provisions for Taxes on the books of DSF are
adequate in all material respects for all open years and for its current fiscal
period and properly classify such Tax obligations as either current or deferred.
(d) There are no assessments of any additional Taxes on DSF by any
governmental entity (whether or not reserved against).
(e) DSF is not currently being audited by any governmental entity, and
no such audit is pending or, to the best of the Shareholders' knowledge,
threatened.
(f) DSF has not made any tax elections which (i) were in effect in any
past year for which the time for audit has not expired, (ii) are currently in
effect or (iii) will be in effect at any future time.
(g) DSF has not given any waiver or extension of any period of
limitation governing the time of assessment or collection of any Tax.
(h) DSF is not a party to any agreement providing for the allocation or
sharing of Taxes.
"TAXES" means any and all taxes, charges, fees, levies or other
assessments, including, without limitation, income, gross receipts, excise, real
or personal property, sales, withholding, social security, occupation, service,
value added, license, net worth, payroll, franchise, transfer and recording
taxes, fees and charges imposed by a Tax Authority, whether computed on a
separate consolidated, unitary, combined or any other basis; and such term shall
include any interest, penalties or additional amounts attributable to, or
imposed upon, or with respect to, any such taxes, charges, fees, levies or other
assessments. "TAX AUTHORITY" any governmental authority responsible for the
administration or collection of any Taxes.
2.9. Litigation. There is no pending or, to the best of the
Shareholders' knowledge, threatened investigation, action or proceeding
("ACTION") by or before any court, governmental entity or arbitrator (a) against
DSF or any of the DSF's assets or against the directors or officers of DSF with
respect to their role as an officer or director of DSF, or (b) adversely
affecting the Purchased Shares or the Shareholders' rights thereto. There are no
show-cause notices or adjudication proceedings pending against DSF under the
Income Tax Act, Central Excise Act, Customs Act, Central Sales Tax Act, Service
Tax or any other fiscal statutes issued to DSF.
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There are presently no outstanding judgments, decrees, injunction or orders of
any court or any governmental official or entity against or adversely affecting
DSF or any of the its assets or its business as currently conducted or adversely
affecting the Purchased Shares or any of the Shareholders' rights thereto. As
used in this Agreement, the term "KNOWLEDGE" means the actual knowledge after
due inquiry of the Shareholders.
2.10. Absence of Certain Changes and Events. Except as otherwise
disclosed in the Financial Statements, since the Balance Sheet Date:
(a) DSF has not incurred any material obligation or liability except
for normal obligations incurred in the ordinary course of business;
(b) no casualty, loss or damage has occurred with respect to DSF's
assets, whether or not the same is covered by insurance, except for those
casualties, losses or damages which would not, individually or in the aggregate,
be reasonably expected to exceed Rs 500,000;
(c) DSF has not sold, transferred, pledged, encumbered or otherwise
disposed of any of its assets or any interest therein, or agreed to do any of
the foregoing, except for sales of assets for aggregate proceeds not in excess
of Rs 500,000;
(d) DSF has not written off as uncollectible any of its accounts
receivable, or written down the value of any of its assets, except in each case
in the ordinary course of business consistent with past practice;
(e) DSF has not waived or released any of its rights with respect to
its business or assets or permitted any of such rights to lapse except to the
extent that such actions are in the ordinary course of business or, in the
exercise of DSF's reasonable business judgment, are otherwise in its best
interests;
(f) no executive officer or other key employee of DSF has left his or
her employment with DSF;
(g) DSF has not granted, and is not committed to grant, any salary or
wage increases to any of its employees, except for individual salary or wage
increases which will not exceed Rs 500,000 in the twelve (12) month period
commencing on the date hereof;
(h) DSF has not made, or committed to make, any capital expenditures in
excess of Rs 500,000 in the aggregate;
(i) there has been no payment, discharge or other satisfaction of DSF's
liabilities, whether direct or indirect, fixed or contingent or otherwise, other
than the satisfaction, in the ordinary course of business, of liabilities
reflected on the Financial Statements or incurred in the ordinary course of
business since the Balance Sheet Date;
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(j) DSF has not introduced any material change with respect to its
business, including without limitation with respect to the products or services
it sells, the areas in which such products or services are sold, its marketing
techniques or its accounting methods;
(k) neither DSF nor any of the Shareholders have taken any actions
which, if taken after the date hereof, would violate Section 4.1(a) hereof; and
(l) no Material Adverse Effect, and no event which is likely to result
in a Material Adverse Effect, has occurred.
2.11. Constituent Documents and Governmental Rules. Except as set forth
on Schedule 2.11, DSF is in compliance, in all material respects, with (a) its
Memorandum and Articles of Association and (b) all Governmental Rules applicable
to it, or its business or assets. DSF has from time to time complied with all
the statutory requirements under The Companies Act, 1956, and with applicable
provisions of relevant statutes.
2.12. Governmental Orders. There are no Governmental Orders which name
DSF or are directed to or apply to DSF or any of its respective assets. DSF is
in compliance with all such Governmental Orders.
2.13. Permits. DSF has all permits, licenses, franchises, certificates,
authorizations, consents and approvals of governmental entities which are
necessary for the ownership or operation of its business or the ownership,
operation or use of any of its assets (collectively, "PERMITS"). Such Permits
are in full force and effect and represent all governmental permits, licenses,
franchises, certificates, authorizations, consents and approvals necessary under
applicable Governmental Rules for DSF to carry on its business as now being
conducted and to own, occupy or use their respective assets, except for those
that the failure to hold, either individually or in the aggregate, would not
result in a Material Adverse Effect. DSF has not received any notice from any
governmental entity that it intends to cancel, revoke, terminate, suspend or not
renew any such Permit. DSF is in compliance in all material respects, with all
Permits.
2.14. Environmental Matters.
(a) DSF is in compliance in all material respects with all applicable
Environmental Rules (as defined below) which compliance includes, without
limitation, the possession by DSF of permits and other governmental
authorizations required under applicable Environmental Rules, and compliance
with the terms and conditions thereof except where the failure to comply, either
individually or in the aggregate, would not result in a Material Adverse Effect.
(b) DSF has not received written notice of, or is the subject of, any
actions, causes of action, claims, investigations, demands, or notices by any
person or entity alleging liability under or noncompliance with any
Environmental Rule ("ENVIRONMENTAL CLAIMS").
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(c) No Hazardous Substances (defined below) are being or have been
generated, used, processed, treated, stored, released, transported or disposed
of by DSF except in compliance with applicable Environmental Rules.
(d) To the Knowledge of the Shareholders, no Hazardous Substances are
present on or under any real property (including without limitation in any body
of water located thereon or adjacent thereto or any groundwater located
thereunder) now or previously owned, leased, occupied or used by DSF, or in any
improvement located thereon, in quantities or at levels which require reporting
or remediation under any applicable Environmental Rule.
(e) No event has occurred and no condition exists with respect to DSF
or its business or assets which has resulted in, or is likely to result in, any
material liability, cost or expense to DSF under any applicable Environmental
Rule, and DSF has not received any notice from any governmental entity or other
Person of its intention to impose any such liability, cost or expense upon DSF.
As used in this Agreement the following terms have the following
meanings:
"ENVIRONMENTAL RULE" shall mean any Governmental Rule which relates to
Hazardous Substances, pollution or protection of the environment, natural
resources or public health or safety, including without limitation any
Governmental Rule relating to the generation, use, processing, treatment,
storage, release, transport or disposal of Hazardous Substances, together with
all rules, regulations and orders issued thereunder, as any of the same may be
amended.
"HAZARDOUS SUBSTANCE" shall mean any substance which constitutes, in
whole or in part, a pollutant, contaminant or toxic or hazardous substance or
waste under, or the generation, use, processing, treatment, storage, release,
transport or disposal of which is regulated by, any Governmental Rule.
2.15. Real Property. DSF has sufficient title, leaseholds or rights to
real property to conduct its business as currently conducted. DSF does not own
or have the right to acquire any real property. Schedule 2.15 sets forth a
correct and complete list of all leases, subleases and other agreements or
rights pursuant to which DSF has the right to occupy or use any real property
owned by others.
2.16. Personal Property.
(a) There are no leases or other agreements pursuant to which DSF
leases any equipment, machinery, trade fixtures, tools, vehicles, computer
hardware, computer software or furniture (collectively, "EQUIPMENT").
(b) All Equipment owned or leased by DSF, is in good repair and
operating condition, reasonable wear and tear excepted, and is suitable for the
purposes for which it is used.
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(c) As of the Balance Sheet Date all accounts receivable of DSF (i)
represent amounts receivable for goods actually delivered or services actually
provided (or, in the case of non-trade receivables, represent amounts receivable
in respect of other bona fide business transactions); (ii) to the best knowledge
of the Shareholders, are not subject to any material defenses, counterclaims or
rights of setoff, (iii) have been billed and are generally due and payable
within 60 days after billing, and (iv) are expected to be fully collectible in
the ordinary course of business except, in the case of receivables arising prior
to the Balance Sheet Date, to the extent of the reserves set forth in the
Financial Statements.
2.17. Intellectual Property. For the purposes of this Agreement, the
following terms have the following definitions:
"INTELLECTUAL PROPERTY" shall mean any or all of the following and all
rights in, arising out of, or associated therewith: (i) all domestic,
international and foreign patents and applications therefor and all reissues,
divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof; (ii) all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary information,
know how, technology, technical data and customer lists, and all documentation
relating to any of the foregoing; (iii) all copyrights, copyrights registrations
and applications therefor, and all other rights corresponding thereto throughout
the world; (iv) all industrial designs and any registrations and applications
therefor throughout the world; (v) all trade names, logos, URLs, common law
trademarks and service marks, trademark and service xxxx registrations and
applications therefor throughout the world; (vi) all databases and data
collections and all rights therein throughout the world; (vii) all moral and
economic rights of authors and inventors, however denominated, throughout the
world, and (viii) any similar or equivalent rights to any of the foregoing
anywhere in the world.
"DSF INTELLECTUAL PROPERTY" shall mean any Intellectual Property that
is owned by, or exclusively licensed to, DSF.
"REGISTERED INTELLECTUAL PROPERTY" means all domestic, international
and foreign: (i) patents and patent applications (including provisional
applications); (ii) registered trademarks, applications to register trademarks,
intent-to-use applications, or other registrations or applications related to
trademarks; (iii) registered copyrights and applications for copyright
registration; and (iv) any other Intellectual Property that is the subject of an
application, certificate, filing, registration or other document issued, filed
with, or recorded by any state, government or other public legal authority.
"DSF REGISTERED INTELLECTUAL PROPERTY" means all of the Registered
Intellectual Property owned by, or filed in the name of, DSF.
(a) No material DSF Intellectual Property or product or service of DSF
is subject to any proceeding or outstanding decree, order, judgment, agreement,
or stipulation restricting in any manner the use, transfer, or licensing thereof
by DSF, or which may affect the validity, use or enforceability of such DSF
Intellectual Property.
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(b) Schedule 2.17 is a complete and accurate list of all DSF Registered
Intellectual Property and specifies, where applicable, the jurisdictions in
which each such item of DSF Registered Intellectual Property has been issued or
registered or in which an application for such issuance and registration has
been filed, including the respective registration or application numbers. Each
material item of DSF Registered Intellectual Property is valid and subsisting,
all necessary registration, maintenance and renewal fees currently due in
connection with such Registered Intellectual Property have been made and all
necessary documents, recordations and certificates in connection with such
Registered Intellectual Property have been filed with the relevant patent,
copyright, trademark or other authorities in the United States or foreign
jurisdictions, as the case may be, for the purposes of maintaining such
Registered Intellectual Property.
(c) DSF owns and has good and exclusive title to, or has license
(sufficient for the conduct of its business as currently conducted and as
proposed to be conducted) to, each material item of DSF Intellectual Property or
other Intellectual Property used by DSF free and clear of any lien or
encumbrance (excluding licenses and related restrictions); and DSF is the
exclusive owner of all trademarks and trade names used in connection with the
operation or conduct of the business of DSF, including the sale of any products
or the provision of any services by DSF.
(d) DSF owns exclusively, and has good title to, all copyrighted works
that are DSF products or which DSF otherwise expressly purports to own.
(e) To the extent that any material Intellectual Property has been
developed or created by a third party for DSF, DSF has a written agreement with
such third party with respect thereto and DSF thereby either (i) has obtained
ownership of, and is the exclusive owner of, or (ii) has obtained a license
(sufficient for the conduct of its business as currently conducted and as
proposed to be conducted) to all such third party's Intellectual Property in
such work, material or invention by operation of law or by valid assignment, to
the fullest extent it is legally possible to do so.
(f) DSF has not transferred ownership of, or granted any exclusive
license with respect to, any Intellectual Property that is or was material to
DSF Intellectual Property, to any third party.
(g) The Disclosure Schedule lists all material contracts, licenses and
agreements to which DSF is a party (i) with respect to DSF Intellectual Property
licensed or transferred to any third party (other than end-user licenses in the
ordinary course); or (ii) pursuant to which a third party has licensed or
transferred any material Intellectual Property to DSF.
(h) All material contracts, licenses and agreements relating to the DSF
Intellectual Property are in full force and effect. The consummation of the
transactions contemplated by this Agreement will neither violate nor result in
the breach, modification, cancellation, termination, or suspension of such
contracts,
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licenses and agreements. DSF is in material compliance with, and has not
materially breached any term any of such contracts, licenses and agreements and,
to the Knowledge of the Shareholders, all other parties to such contracts,
licenses and agreements are in compliance with, and have not materially breached
any term of, such contracts, licenses and agreements.
(i) The operation of the business of DSF as such business currently is
conducted, including DSF's design, development, manufacture, marketing and sale
of the products or services of DSF (including with respect to products currently
under development) has not, does not and will not infringe or misappropriate the
Intellectual Property of any third party or constitute unfair competition or
trade practices under the laws of any jurisdiction.
(j) DSF has not received notice from any third party that the operation
of the business of DSF or any act, product or service of DSF, infringes or
misappropriates the Intellectual Property of any third party or constitutes
unfair competition or trade practices under the laws of any jurisdiction.
(k) To the Knowledge of the Shareholders, no person has or is
infringing or misappropriating any DSF Intellectual Property.
(l) DSF has taken reasonable steps to protect DSF's rights in DSF's
confidential information and trade secrets that it wishes to protect or any
trade secrets or confidential information of third parties provided to DSF, and,
without limiting the foregoing, DSF has and enforces a policy requiring each
employee and contractor to execute a proprietary information/confidentiality
agreement substantially in the form provided to UBIX and all current and former
employees and contractors of DSF have executed such an agreement, except where
the failure to do so is not reasonably expected to be material to DSF.
(m) DSF does not use any development tool other than UNIX, LINUX
Platforms and GNU Compilers. DSF has all licenses, permissions and other rights
necessary to use such tools.
2.18. Title to Assets. DSF has (a) good and marketable title to all
assets purported to be owned by it and (b) good leasehold title to all assets
purported to be leased by it, in each case free and clear of all Liens, except
inchoate Liens for taxes not yet due and payable and Liens on assets in
connection with indebtedness reflected on the DSF Financial Statements and
except for any defects in title or Liens which, individually or in the
aggregate, would not result in a Material Adverse Effect.
2.19. Employee Benefit Plans.
(a) The following terms, as used herein, having the following meanings:
"BENEFIT ARRANGEMENT" means each employment, severance or other similar
contract, arrangement or policy (written or oral) and each plan or arrangement
(written or oral) providing for severance benefits, insurance coverage
(including any self-insured arrangements), workers' compensation, disability
benefits, supplemental unemployment benefits,
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vacation benefits, retirement benefits or for deferred compensation,
profit-sharing, bonuses, share options, share appreciation rights or other forms
of incentive compensation or post-retirement insurance, compensation or benefits
that (i) is entered into, maintained or contributed to, as the case may be, by
DSF and (ii) covers any employee or former employee of DSF.
(b) Schedule 2.19 includes a list of each Benefit Arrangement of DSF,
copies or descriptions of which have been made available or furnished previously
to UBIX.
(c) Each Benefit Arrangement has been maintained in material compliance
with its terms and with the requirements prescribed by any and all Governmental
Rules and Governmental Orders which are applicable to such Benefit Arrangement.
(d) With respect to the employees and former employees of DSF, there
are no employee post-retirement medical or health plans in effect.
(e) There has been no amendment to, written interpretation of or
announcement (whether or not written) by DSF relating to, or change in employee
participation or coverage under, any Benefit Arrangement that would increase
materially the expense of maintaining such Benefit Arrangement above the level
of the expense incurred in respect thereof for the fiscal year ended prior to
the date hereof.
(f) Except as disclosed on Schedule 2.19, no employee of DSF will
become entitled to any material bonus, retirement, severance or similar benefit
or enhanced benefit solely as a result of the transactions contemplated hereby.
(g) DSF does not maintain records in respect of or participate in
Employees Provident Fund and Employees State Insurance Fund as the monthly
salary of each of its employees is above Rs.5,000.
2.20. Personnel Matters.
(a) Schedule 2.20 sets forth a correct and complete list of (i) all
directors and executive officers of DSF, (ii) all other employees of or
consultants to DSF, (iii) the current job title or relationship to DSF of each
such Person described in clauses (i) and (ii) above, (iv) the amount of
compensation (including bonuses and commissions) paid to each such Person during
the year ended March 31, 2001 (DSF has made no commitments to any such Person
regarding the compensation which each of them is to receive in the year ending
March 31, 2002) and (v) any employee benefits or perquisites available to any
such Person that are not generally available to employees of DSF.
(b) Except as otherwise disclosed on Schedule 2.20, DSF is not a party
to any written employment, consulting, noncompete or similar agreement with any
Person.
(c) Except as otherwise disclosed on Schedule 2.20, (i) no employees of
DSF are represented by any labor union or similar organization, (ii) DSF is not
party to any collective bargaining or similar agreement covering any of its
employees and (iii) no labor union or similar
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organization or group of employees has made a demand for recognition filed a
petition seeking a representation proceeding, or given DSF notice of any
intention to hold an election of a collective bargaining representative at any
time during the past three years.
(d) Except as otherwise disclosed on Schedule 2.20, (i) no strike, work
stoppage, contract dispute or other labor disturbance involving any employees of
DSF currently exists or, to the knowledge of the Shareholders, is threatened and
(ii) no investigation, action or proceeding by or before any governmental entity
which relates to allegedly unfair or discriminatory employment or labor
practices or the violation of any Governmental Rule relating to employment or
labor practices is pending against DSF or, to the knowledge of the Shareholders
threatened against DSF.
(e) Except as set forth on Schedule 2.20, DSF has complied in all
material respects with all Governmental Rules pertaining to the employment and
terminating of employees, the hiring and terminating of contractors and
sub-contractors, and the immigration and employment of foreign nationals,
including, without limitation all such Governmental Rules relating to labor
relations, equal employment practices, fair employment practices, entitlements,
prohibited discrimination, terms and conditions of employment, wages and hours,
independent contractor classification, withholding requirements, worker's
compensation or other similar employment or hiring practices or acts, and DSF is
not engaged in any unfair labor practices or is a party to any Action involving
a violation or alleged violation of any of the foregoing Governmental Rules.
2.21. Insurance. Schedule 2.21 sets forth a correct and complete list
of all insurance policies of which DSF is the owner, insured or beneficiary (the
"INSURANCE POLICIES") and indicates for each such policy any pending claims
thereunder. DSF has provided to UBIX complete and correct copies of all
Insurance Policies. There is no default with respect to any material provision
contained in any of the Insurance Policies, nor has there been any failure to
give any notice or present any material claim under any such policy in a timely
fashion or as otherwise required by any such policy. Except as otherwise
disclosed on Schedule 2.21: (i) all premiums under the Insurance Policies which
were due and payable on or prior to the date hereof have been paid in full; and
(ii) DSF has not received notice of any material increase in the premium under,
cancellation or non-renewal of or disallowance of any claim under any such
policy.
2.22. Indebtedness
(a) There are no agreements, documents, instruments and securities
which are currently in effect and which create, evidence or secure any
indebtedness of DSF (exclusive of trade payables) or pursuant to which DSF has
guaranteed any indebtedness or other obligations of any other Person or has any
other contingent liability.
(b) There are no outstanding trade payables of DSF owed to any single
vendor which, individually or in the aggregate, exceed Rs 500,000 and payment of
which is more than 60 days overdue.
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2.23. Other Material Agreements. All written agreements and contracts
to which DSF is a party or by which DSF or any of its assets are bound are set
forth on Schedule 2.23 other than (a) agreements listed on any other Schedule,
(b) agreements involving the payment by or to DSF, or creating any liability of
DSF (whether direct or indirect, fixed or contingent), of less than Rs 400,000
over the term thereof, and (c) agreements which are cancelable by DSF on 30
days' notice or less without any material liability to DSF. The agreements and
contracts to which DSF is a party listed on the Schedules hereto are referred to
herein as the "DSF AGREEMENTS"
2.24. Status of DSF Agreements. Each DSF Agreement is in full force and
effect and is enforceable against DSF and, to the Knowledge of the Shareholders,
the other parties thereto, in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and (b) applicable equitable principles, whether considered in a
proceeding at law or in equity. DSF is in compliance with each DSF Agreement to
which it is a party, except, in each case, for such non-compliance as does not
(x) constitute a breach or default (or an event which, with the giving of notice
or the passage of time, or both, would constitute a default) thereunder, (y)
give to others any rights of termination, acceleration, suspension, revocation,
cancellation or amendment thereof or (z) cause, either individually or in the
aggregate, a Material Adverse Effect. To the Knowledge of the Shareholders, all
other parties to such DSF Agreements are in material compliance with the terms
thereof. No consent of any other Person party to such DSF Agreements is required
in connection with this Agreement.
2.25. Transactions with Affiliates.
(a) None of the customers, suppliers, or contractors of DSF are
Affiliates of DSF or any of their respective officers, directors or
shareholders.
(b) None of DSF's assets are owned or used by or leased to any
Affiliates of DSF or any of their respective officers, directors or
shareholders.
(c) No Affiliate of DSF or any of its officers, directors or
shareholders is a party to any DSF Agreement.
(d) No Affiliate of DSF or any of their respective officers, directors
or shareholders provides any legal, accounting or other services to DSF.
2.26. Customers and Suppliers. Schedule 2.26 sets forth a correct and
complete list of each of the customers and suppliers of DSF whose purchases from
or sales to DSF constituted five percent or more of DSF's net sales or net
purchases, respectively, during the fiscal year ended March 31, 2000 or during
the three months ended June 30, 2001, (collectively "MATERIAL CUSTOMERS AND
SUPPLIERS) and indicates with respect to each the name of the party and the
respective dollar volume. DSF is not required to provide any material bonding or
other financial security arrangements in connection with any transactions with
any of the Material Customers and Suppliers.
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2.27. Brokers. Except as set forth on Schedule 2.27, neither DSF nor
any of the Shareholders has employed or retained, or have any liability to, any
broker, agent or finder on account of this Agreement or any of the other
Transaction Documents or the transactions contemplated hereby or thereby.
2.28. Bank Accounts. Schedule 2.28 sets forth a correct and complete
list of the names and locations of all banks and other financial institutions at
which DSF maintains accounts of any nature, the type and number of all such
accounts and the names of all persons authorized to draw thereon or make
withdrawals therefrom.
2.29. Ability to Increase Staff and Infrastructure. The Shareholders
have no Knowledge of any event, condition or circumstance which would restrict,
inhibit or materially delay DSF's future ability to increase its staffing levels
and add to its infrastructure as required to meet future demand for DSF's
services.
2.30. Delivery of Documents; Accurate Disclosure. The Shareholders have
previously delivered to UBIX correct and complete copies or forms of each DSF
Agreement. None of the information furnished or to be furnished by DSF and the
Shareholders to UBIX or any of its representatives in connection with this
Agreement and the other Transaction Documents, and none of the representations
and warranties of the Shareholders set forth herein, in any other Transaction
Document or in any certificate delivered in connection herewith or therewith,
(a) is or will be false or misleading in any material respect, (b) contains or
will contain any untrue statement of a material fact or (c) omits or will omit
any statement of material fact necessary to make the same not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF UBIX
UBIX hereby represents and warrants to the Shareholders as follows:
3.1. Organization and Qualification. UBIX is a corporation duly
organized, validly existing and in good standing under the laws of Mauritius.
3.2. Authority and Authorization. UBIX has the corporate power and
authority to own, lease and operate its properties and assets, to conduct its
business as presently conducted and to execute, deliver and perform this
Agreement and the other Transaction Documents.
3.3. Execution and Binding Effect. This Agreement, the other
Transaction Documents and the transactions contemplated hereby and thereby, have
been, and on the Closing Date will be, duly authorized and approved by the
Directors of UBIX, and no other approvals are required before UBIX may duly
execute, deliver and perform its obligations under this Agreement and each of
the other Transaction Documents. This Agreement has been, and on the Closing
Date the other Transaction Documents will be, duly and validly executed and
delivered by UBIX and constitutes (or upon such execution and delivery will
constitute) legal, valid and binding obligations of UBIX enforceable against
UBIX in accordance with their respective terms, except as such enforceability
may be limited by (a) applicable bankruptcy, insolvency, reorganization,
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moratorium or other similar laws affecting creditors' rights generally and (b)
applicable equitable principles, whether considered in a proceeding at law or in
equity.
3.4. No Breach, Default, Violation or Consent. The execution, delivery
and performance by UBIX of this Agreement and the other Transaction Documents do
not and will not:
(a) violate the Memorandum and Articles of Association or Certificate
of Incorporation of UBIX;
(b) breach or result in a default (or an event which, with the giving
of notice or the passage of time, or both, would constitute a default) under,
require any consent under or give to others any rights of termination,
acceleration, suspension, revocation, cancellation or amendment of any material
note, bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which UBIX is a party or by which it or any of its
properties or assets may be bound;
(c) breach or otherwise violate any Governmental Order which names UBIX
or is directed to UBIX or any of its assets;
(d) result in the creation of a Lien held by any third party on any of
UBIX's assets;
(e) violate any Governmental Rule applicable to any of UBIX or
respective its business or assets; or
(f) require any consent, authorization, approval, exemption or other
action by, or any filing, registration or qualification with, any Person.
ARTICLE IV
TRANSACTIONS PRIOR TO CLOSING
4.1. Conduct of Business of DSF. Except with the prior written consent
of UBIX (which shall not be unreasonably withheld or delayed), at all times
prior to the Closing Date, the Shareholders shall cause DSF to:
(a) operate its business only in the ordinary course and consistent
with past practice and will not amend its Memorandum, Articles of Association or
Certificate of Incorporation;
(b) use its best efforts to preserve its business organization intact,
to keep available the services of its present officers and employees and to
preserve the good will of customers, subcontractors, suppliers and others having
business relations with it;
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(c) maintain, in the exercise of its reasonable business judgment, all
assets consisting of real or personal property in good repair and operating
condition, ordinary wear and tear excepted;
(d) maintain in full force and effect, in the exercise of its
reasonable business judgment, all Permits and insurance policies;
(e) not enter into any contract or commitment except those made in the
ordinary course of business the terms of which are consistent with past practice
and reasonable in light of current conditions, it being understood that DSF
enters into employment and consulting agreements in the ordinary course of its
business;
(f) not terminate, cause the termination of, amend, renew or extend any
DSF Agreement, unless in each case such action is in Shareholders' best
interest;
(g) not waive, release or compromise any of its rights or permit any of
such rights to lapse, unless in each case such action is in the Shareholders'
best interest;
(h) not sell, transfer, encumber, pledge or otherwise dispose of any of
its assets or any interest therein or agree to do any of the foregoing, except
in the ordinary course of business;
(i) not incur, make, assume or suffer to exist any Lien, tenancy or
other matter affecting title to any of its assets, except in the ordinary course
of business;
(j) not make, change or revoke any tax election or make any agreement
or settlement with any taxing authority, unless in each case such action is in
DSF's best interest;
(k) not merge or consolidate DSF with or into any other entity or agree
or enter into negotiations to do any of the foregoing;
(l) comply with applicable Governmental Rules in all material respects;
(m) take no action, and use its best efforts to prevent the occurrence
of any event or the existence of any condition, which would result in any of the
Shareholders' representations and warranties herein not being true and correct;
(n) promptly inform UBIX of the occurrence of any event or the
existence of any condition which constitutes or, with the giving of notice or
the passage of time, or both, is likely to constitute, a Material Adverse
Effect;
(o) not issue any debt securities or equity securities; and
(p) not declare, set aside or pay dividends on equity securities.
4.2. Access to Information. At all times prior to the Closing Date, the
Shareholders shall furnish to UBIX and its employees, counsel, accountants and
other authorized
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representatives (a) full access during normal business hours to its properties,
books and records and personnel and (b) upon reasonable advance notice, to DSF's
plants, properties, contracts, commitments, books and records (including,
without limitation, tax returns) and the Shareholders shall use their reasonable
best efforts to cause DSF's representatives to furnish promptly to UBIX such
additional financial and operating data and other information as to DSF's
business and properties as UBIX or its authorized representatives may from time
to time reasonably request.
4.3. No Solicitation. For so long as this Agreement is in effect, DSF
and the Shareholders will not, and will use their best reasonable efforts to
cause their respective officers, directors, employees and investment bankers,
attorneys or other agents retained by or acting on behalf of them not to, (i)
initiate, solicit or encourage, directly or indirectly, any inquiries or the
making of any proposal that constitutes or is reasonably likely to lead to any
Acquisition Proposal (as defined below), (ii) engage in negotiations or
discussions with, or furnish any information or data to any third party relating
to an Acquisition Proposal, or (iii) enter into any agreement with respect to
any Acquisition Proposal or approve any Acquisition Proposal.
"ACQUISITION PROPOSAL," shall mean any bona fide proposal, whether in
writing or otherwise, made by a third party to acquire ownership of all or a
material portion of the assets of, or any material equity interest in, DSF
pursuant to a merger, consolidation or other business combination, sale of
equity shares, sale of assets, tender offer or exchange offer or similar
transaction involving DSF including, without limitation, any single or
multi-step transaction or series of related transactions which is structured to
permit such third party to acquire ownership of any material portion of the
assets of, or any material portion of the equity interest in, DSF (other than
the transactions contemplated by this Agreement).
4.4. Publicity. The initial press releases with respect to the
execution of this Agreement shall be acceptable to UBIX and the Shareholders.
Thereafter, neither UBIX, the Shareholders nor any of their respective
Affiliates shall issue or cause the publication of any press release or other
public announcement with respect to this Agreement or the other transactions
contemplated hereby (including, without limitation, the failure to execute this
Agreement or the failure to consummate the transactions contemplated hereby)
without the prior agreement of the other party (which shall not be unreasonably
withheld or delayed), except as may be required by law or by the NASDAQ National
Market ("NASDAQ"), in which case each party will use reasonable efforts to
consult with the other party prior to any such issuance.
4.5. Best Efforts; Notification.
(a) The parties agree to use their reasonable best efforts to take or
cause to be taken and to do or cause to be done all such actions and things as
shall be necessary or advisable, or as shall be reasonably requested by the
other party, in order to consummate the transactions contemplated hereby and by
the other Transaction Documents. Without limiting the generality of the
foregoing, the parties agree to cooperate with each other and take all
reasonable actions necessary in order to obtain any consent or approval of any
third party, including without
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limitation any governmental entity, which is required in connection with this
Agreement or the other Transaction Documents or any of the transactions
contemplated hereby or thereby.
(b) The Shareholders shall give prompt notice to UBIX of (i) the
occurrence of any Material Adverse Effect, and (ii) the occurrence or failure to
occur of an event that would, or with the lapse of time would, reasonably be
expected to cause any condition to the Closing not to be satisfied.
4.6. Confidentiality.
(a) As used in this Section, the "CONFIDENTIAL INFORMATION" of a party
shall mean all information concerning or related to the business, operations,
financial condition or prospects of such party or any of its Affiliates,
regardless of the form in which such information appears and whether or not such
information has been reduced to a tangible form, and shall specifically include
(i) all information regarding the officers, directors, employees, equity
holders, customers, suppliers, distributors, sales representatives and licensees
of such party and its Affiliates, in each case whether present or prospective,
(ii) all inventions, discoveries, trade secrets, processes, techniques, methods,
formulae, ideas and know-how of such party and its Affiliates and (iii) all
financial statements, audit reports, budgets and business plans or forecasts of
such party and its Affiliates; provided, that the Confidential Information of a
party shall not include (A) information which is or becomes generally known to
the public through no act or omission of the other party and (B) information
which has been or hereafter is lawfully obtained by the other party from a
source other than the party to whom such Confidential Information belongs (or
any of its Affiliates or their respective officers, directors, employees, equity
holders or agents) so long as, in the case of information obtained from a third
party, such third party was or is not, directly or indirectly, subject to an
obligation of confidentiality owed to the party to whom such Confidential
Information belongs or any of its Affiliates at the time such Confidential
Information was or is disclosed to the other party.
(b) Except as otherwise permitted by subsection (c) below, each party
agrees that it will not, without the prior written consent of the other party,
disclose or use for its own benefit any Confidential Information of the other
party.
(c) Notwithstanding subsection (b) above, each of the parties shall be
permitted to:
(i) disclose Confidential Information of the other party to
its officers, directors, employees, equity holders, lenders, agents,
accountants, attorneys and Affiliates, but only to the extent
reasonably necessary in order for such party to perform its obligations
and exercise its rights and remedies under this Agreement, and such
party shall take all such action as shall be necessary or desirable in
order to ensure that each of such Persons maintains the confidentiality
of any Confidential Information that is so disclosed;
(ii) make additional disclosures of or use for its own benefit
Confidential Information of the other party, but only if and to the
extent that such disclosures or use are specifically contemplated by
this Agreement; and
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(iii) disclose Confidential Information of the other party to
the extent, but only to the extent, required by Governmental Rules;
provided, that prior to making any disclosure pursuant to this
subparagraph, the party required to make such disclosure (the
"DISCLOSING PARTY) shall notify the other party (the "AFFECTED PARTY)
of the same, and the Affected Party shall have the right to participate
with the Disclosing Party in determining the amount and type of
Confidential Information of the Affected Party, if any, which must be
disclosed in order to comply with Governmental Rules.
4.7. Noncompetition and Nonsolicitation.
(a) During the period commencing on the date hereof and ending on the
expiration of four years following the date hereof (the "TERM"), the
Shareholders shall not, directly or indirectly, as a partner, investor,
stockholder, creditor, guarantor, advisor, officer, director, employee or
consultant, (i) own, manage, operate, join, advise, control, or otherwise engage
or participate in the business of providing information technology services in
the Restricted Area (as hereinafter defined) that would be competitive with the
services provided by DSF as currently being conducted on the date hereof (the
"BUSINESS"), (ii) induce or attempt to induce any customer or supplier of DSF to
reduce the business done by such supplier or customer with DSF, or (iii) solicit
any employee of DSF to leave the employ of DSF. Notwithstanding the foregoing,
this Agreement does not prohibit the Shareholders from acquiring or holding the
outstanding shares of capital stock of any entity engaged in the Business if
such shares are publicly traded and the Shareholders' ownership is less than
four percent (4%) of such outstanding shares. "RESTRICTED AREA" means India, the
United States of America and any other country in the world where DSF conducts
the Business.
(b) The Shareholders acknowledge that without their covenants set forth
in this Section, UBIX would not be willing to consummate the transactions
contemplated by this Agreement. The Shareholders expressly agree that the
character, duration and Restricted Area of this Section 4.7 are reasonable in
light of the circumstances as they exist on the date of this Agreement and are
necessary to protect the legitimate business interests of UBIX because of the
geographic scope of DSF's business.
4.8. Injunctive Relief. The Shareholders acknowledge and agree that the
covenants and agreements set forth in Sections 4.6 and 4.7 are necessary to
protect the legitimate business interests of UBIX and that any breach of such
covenants and agreements will cause immediate and irreparable harm to UBIX. The
Shareholders acknowledge that damages for the violation of any such covenant or
agreement will not give full and sufficient relief to UBIX and agrees that, in
the event of any violation of any such covenant or agreement, UBIX shall be
entitled to seek injunctive relief with respect to any such breach, which remedy
shall be in addition to any other remedy which UBIX may have on account of such
breach, including, without limitation, the recovery of damages from the
Shareholders. None of these remedies shall be mutually exclusive, and all of
them may be pursued concurrently and cumulatively.
4.9. Transactions with Affiliates. At or prior to the Closing Date, the
Shareholders will take such action as may be necessary to transfer to DSF title
to all assets owned by the
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Shareholders and used in the business of DSF. Within 90 days following the
Closing Date, UBIX and the Shareholders shall cause DSF to satisfy all loans
payable to the Shareholders, as of the date hereof. The Shareholders represent
and warrant that the amount of all such loans as of the date hereof is as set
forth on Schedule 4.9. The parties further agree that such loans shall not
accrue any interest from and after the date hereof.
4.10. Reserve Bank of India. Promptly following the Closing Date, the
Shareholders shall take all actions necessary or desirable to obtain the
requisite approval of the Reserve Bank of India to this transaction at the
earliest practicable date.
ARTICLE V
CLOSING AND CLOSING CONDITIONS
5.1. Closing. The closing of the transactions contemplated by this
Agreement (the "CLOSING) will take place at 10:00 a.m., local time, on a date to
be specified by the parties, which shall be no later than two business days
after satisfaction or waiver of all of the conditions set forth in this Article
V (the "CLOSING DATE), at the offices of DSF unless another time, date or place
is agreed to in writing by the parties hereto.
5.2. Conditions Precedent to Obligations of UBIX. The obligations of
UBIX hereunder to proceed with the Closing shall be subject to the satisfaction
on or prior to the Closing Date of each of the following conditions precedent
(unless otherwise waived by UBIX):
(a) Accuracy of Representations and Warranties. The representations and
warranties of the Shareholders set forth herein shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as though made on and as of such date.
(b) Performance and Compliance. The Shareholders shall have performed
or complied in all material respects with each covenant and agreement to be
performed or complied with by them hereunder on or prior to the Closing Date.
(c) Consents and Approvals. All authorizations, approvals or consents
required to permit the purchase and sale of the Purchased Shares and the other
transactions contemplated hereby, including without limitation, the approval of
the Ministry of Commerce shall have been obtained and be in full force and
effect, with no conditions that are unacceptable to UBIX in its reasonable
discretion.
(d) Litigation. There shall be no pending or threatened action by or
before any governmental entity or arbitrator seeking to restrain, prohibit or
invalidate any of the transactions contemplated hereby or by any of the other
Transaction Documents or seeking monetary relief against UBIX or any of its
Affiliates by reason of the consummation of such transactions, and there shall
not be in effect any Governmental Order which has such effect.
(e) Material Adverse Effect. No event shall have occurred and no
condition shall exist which constitutes or, with the giving of notice or the
passage of time, or both, is likely to constitute, a Material Adverse Effect.
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(f) Certificate. The Shareholders shall have delivered to UBIX a
certificate dated the Closing Date and certifying that each of the conditions
specified in subsections (a), (b), (c), (d) and (e) above have been met.
(g) Other Transaction Documents. The Shareholders and any other parties
thereto (other than UBIX) shall have executed and delivered to UBIX the Escrow
Agreement (together with this Agreement, and the agreements referred to in
Section 5.2 (h), (i) and (j), the "TRANSACTION DOCUMENTS").
(h) Employment Agreement. An employment agreement between DSF and Xxxxx
Xxxxxx dated as of the Closing Date and in form acceptable to UBIX, shall have
been executed and delivered by the parties thereto (the "EMPLOYMENT AGREEMENT").
(i) Shareholders Agreement. The Shareholders and UBIX shall have each
entered into the Shareholders Agreement.
(j) Transfer Pricing Agreement. UBICS, Inc. and DSF shall have executed
and delivered a letter agreement regarding the transfer pricing of work to be
done by DSF.
(k) Consent. X. X. Xxxxxx shall have consented to the sale of the
Purchased Shares pursuant to this Agreement.
5.3. Conditions Precedent to Obligations of the Shareholders. The
obligations of the Shareholders hereunder to proceed with the Closing shall be
subject to the satisfaction on or prior to the Closing Date of each of the
following conditions precedent (unless otherwise waived by the Shareholders):
(a) Accuracy of Representations and Warranties. The representations and
warranties of UBIX set forth herein shall be true and correct in all material
respects on and as of the Closing Date with the same force and effect as though
made on and as of such date.
(b) Performance and Compliance. UBIX shall have performed or complied
in all material respects with each covenant and agreement to be performed or
complied with by it hereunder on or prior to the Closing Date.
(c) Consents and Approvals. All authorizations, approvals or consents
required to permit the consummation of the transactions contemplated hereby
shall have been obtained and be in full force and effect.
(d) Litigation. There shall be no pending or threatened action by or
before any governmental entity or arbitrator seeking to restrain, prohibit or
invalidate any of the transactions contemplated hereby or by any of the other
Transaction Documents or seeking monetary relief against the Shareholders by
reason of the consummation of such transactions, and there shall not be in
effect any Governmental Order which has such effect.
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(e) Officer's Certificate. UBIX shall have delivered to the
Shareholders a certificate of its President dated the Closing Date and
certifying that each of the conditions specified in subsections (a), (b), (c)
and (d) above have been met.
(f) Other Transaction Documents. UBIX and any other parties thereto
(other than the Shareholders) shall have executed and delivered the Escrow
Agreement and the other Transaction Documents to which they are parties.
(g) Employment Agreement. DSF shall have executed and delivered the
Employment Agreement.
ARTICLE VI
INDEMNIFICATION
6.1. Survival of Representations and Warranties. The representations
and warranties of the Shareholders and UBIX contained in Articles II and III
shall survive the Closing for a period of two years, provided that any covenant,
agreement, representation or warranty in respect of which indemnity may be
sought under Section 6.2 shall survive the time at which it would otherwise
terminate pursuant to the preceding sentence, if notice of the inaccuracy or
breach thereof giving rise to such right to indemnity shall have been given to
the party against whom such indemnity may be sought prior to such time;
provided, however that such covenant, agreement, representation or warranty
shall survive until, but only for the purposes of, the resolution of such claim.
Notwithstanding the foregoing, the representations and warranties set forth in
each of Section 2.5(c) and Section 2.14 shall survive until the expiration of
the statute of limitations applicable to the subject matter addressed
thereunder. The covenants and agreements of the Shareholders on the one hand,
and of UBIX on the other hand, contained in this Agreement will survive the
Closing until, by their own respective terms, they have been fully performed.
Notwithstanding anything herein, any breach of representation or warranty
contained in this Agreement made by any party or any written information
furnished by any party that was made by such party fraudulently or with intent
to defraud or mislead or with gross negligence shall indefinitely survive the
Closing.
6.2. Indemnification. The Shareholders, jointly and severally, shall
indemnify UBIX, and its Affiliates and their respective officers, directors,
employees, agents, and representatives (the "INDEMNIFIED PARTIES" against, and
agree to hold the Indemnified Parties harmless from, any and all liabilities,
losses, costs, claims, damages (including consequential damages), penalties and
expenses (including attorneys' fees and expenses and costs of investigation and
litigation) ("LOSSES") incurred or suffered by them relating to or arising out
of or in connection with any of the following:
(a) any breach of or any inaccuracy in any representation or warranty
made by the Shareholders in this Agreement, the Transaction Documents or any
other document delivered at the Closing;
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(b) any breach of or failure by the Shareholders to perform any
covenant or obligation of such parties set out or contemplated in this
Agreement, the other Transaction Documents or any other document delivered at
the Closing; or
(c) any failure of the Shareholders to have good, valid and marketable
title to the Purchased Shares free and clear of all Liens; or
(d) obligations in respect of pension or other retirement benefits, or
severance or other termination payments, with respect to all employees of DSF
that ceased to be employees of DSF prior to Closing; or
(e) the amount of any Tax payable by DSF in excess of Sixty Thousand
U.S. Dollars ($60,000) as a result of the Shareholders reducing their
shareholdings in DSF below fifty percent (50%) pursuant to this Agreement; or
(f) the conduct of the business or affairs of DSF prior to the Closing
Date; or
(g) the failure to disclose, register or have stamped in accordance
with applicable law the agreements listed on Schedule 6.2(g); or
(h) the amount of any accounts receivable of DSF as of June 30, 2001
which are not subsequently collected by December 31, 2001; or
(i) the amount of any xxxxxxx money deposit made by DSF in connection
with the submission of a tender to a government agency which is not subsequently
refunded by such agency if the applicable contract is not awarded to DSF.
6.3. Claims. The provisions of this Section shall be subject to
Section 6.4. As soon as is reasonably practicable after becoming aware of a
claim for indemnification under this Agreement, the Indemnified Party claiming
indemnification shall promptly give notice to the Shareholders and the Escrow
Agent of such claim and the amount the Indemnified Party will be entitled to
receive hereunder from the Shareholders; provided, however that the failure of
the Indemnified Party to give notice shall not relieve the Shareholders of their
obligations under this Article VI, except to the extent (if any) that the
Shareholders shall have been prejudiced thereby. If the Shareholders do not
object in writing to such indemnification claim within thirty (30) calendar days
of receiving notice thereof, the Indemnified Party shall be entitled to recover
from the Shareholders within five (5) Business Days after such thirty (30) day
period, the amount of such claim (but such recovery shall not limit the amount
of any additional indemnification to which the Indemnified Party may be entitled
pursuant to Section 6.2. If the Shareholders agree that they have an
indemnification obligation, but object in writing that they are obligated to pay
only a lesser amount, the Indemnified Party shall nevertheless be entitled to
recover from the Shareholders within five (5) Business Days of the receipt of
such objection, the lesser amount, without prejudice to the Indemnified Party's
claim for the difference.
6.4. Notice of Third Party Claims; Assumption of Defense. The
Indemnified Party shall give notice as promptly as is reasonably practicable to
the Shareholders and the Escrow
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Agent of the assertion of any claim, or the commencement of any suit, action or
proceeding, by any person not a party hereto in respect of which indemnity may
be sought under this Agreement; provided, however that the failure of the
Indemnified Party to give notice shall not relieve the Shareholders of their
obligations under this Article VI, except to the extent (if any) that the
Indemnifying Parties shall have been prejudiced thereby. The Shareholders may,
at their own expense participate in the defense of any claim, suit, action or
proceeding, provided, however that (i) the Shareholders' counsel is reasonably
satisfactory to the Indemnified Person, and (ii) the Shareholders shall
thereafter consult with the Indemnified Party upon the Indemnified Party's
reasonable request for such consultation from time to time with respect to such
claim, suit, action or proceeding. If the Shareholders assume such defense, the
Indemnified Party shall have the right (but not the obligation) to participate
as counsel of record in the defense thereof and to employ counsel, at its own
expense, separate from the counsel employed by the Shareholders. If, however,
the Indemnified Parties reasonably determine in their judgment that
representation by the Shareholders' counsel of both the Shareholders and the
Indemnified Party would present such counsel with a conflict of interest, then
such Indemnified Party may employ separate counsel to represent or defend it in
any such claim, action, suit or proceeding, and the Shareholders shall pay the
fees and disbursements of such separate counsel. Whether or not the Shareholders
choose to defend or prosecute any such claim, suit, action or proceeding, all of
the parties hereto shall cooperate in the defense or prosecution thereof.
6.5. Settlement or Compromise. Any settlement or compromise made or
caused to be made by the Indemnified Party or the Shareholders, as the case may
be, of any such claim, suit, action or proceeding of the kind referred to in
Section 6.4 shall also be binding upon the Shareholders or the Indemnified
Party, as the case may be, in the same manner as if a final judgment or decree
had been entered by a court of competent jurisdiction in the amount of such
settlement or compromise; provided, however that no obligation, restriction or
Loss shall be imposed on the Indemnified Party as a result of such settlement
without its prior written consent. The party defending the claim shall give the
other party at least 30 calendar days' notice of any proposed settlement or
compromise of any claim, suit, action or proceeding it is defending, during
which time the other party may reject such proposed settlement or compromise;
provided, however that from and after such rejection, the other party shall be
obligated to assume the defense of and full and complete liability and
responsibility for such claim, suit, action or proceeding and shall be
responsible for any and all Losses in connection therewith in excess of the
amount of the proposed settlement amount.
6.6. Failure of Shareholders to Act. In the event that the Shareholders
do not elect to assume the defense of any claim, suit, action or proceeding,
then any failure of the Indemnified Party to defend or to participate in the
defense of any such claim, suit, action or proceeding or to cause the same to be
done, shall not relieve the Shareholders of their obligations hereunder.
6.7. Escrow. If during the duration of the Escrow Agreement, an
Indemnified Party is entitled to receive an indemnification amount from the
Shareholders pursuant to this Agreement, such amount shall be satisfied to the
extent possible by a transfer to the Indemnified Party by the Escrow Agent of a
portion of the Bonds held in escrow, pursuant to the Escrow Agreement.
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ARTICLE VII
MISCELLANEOUS PROVISIONS
7.1. Filing Fees; Stamp Duty. All filing and other fees shall be borne
by the party responsible therefor. The stamp duty payable in respect of the
Purchased Shares will be paid by UBIX.
7.2. Amendments. This Agreement may be amended only by a writing signed
by each of the parties, and any such amendment shall be effective only to the
extent specifically set forth in such writing.
7.3. Assignment. Neither this Agreement nor any right, interest or
obligation hereunder may be assigned, pledged or otherwise transferred by any
party, whether by operation of law or otherwise, without the prior consent of
the other party or parties.
7.4. Counterparts; Telefacsimile Execution. This Agreement and all
agreements, certificates and documents to be delivered in connection herewith
(each an "INSTRUMENT") may be executed in any number of counterparts, and by
each of the parties on separate counterparts, each of which, when so executed,
shall be deemed an original, but all of which shall constitute but one and the
same instrument. Delivery of an executed counterpart of an Instrument by
telefacsimile shall be equally as effective as delivery of a manually executed
counterpart of an Instrument. Any party delivering an executed counterpart of an
Instrument by telefacsimile also shall deliver a manually executed counterpart
of such Instrument, but the failure to deliver a manually executed counterpart
shall not affect the validity, enforceability or binding effect of such
Instrument.
7.5. Entire Agreement. This Agreement, together with the other
agreements referred to herein and the schedules and exhibits attached hereto,
contains the entire agreement of the parties with respect to the transactions
contemplated hereby and supersedes all prior written and oral agreements, and
all contemporaneous oral agreements, relating to such transactions.
7.6. Expenses. Except as otherwise specifically provided herein or in
any other Transaction Document, each party shall be responsible for such
expenses as it may incur in connection with the negotiation, preparation,
execution, delivery, performance and enforcement of this Agreement and the other
Transaction Documents.
7.7. Further Assurances. The parties shall from time to time do and
perform such additional acts and execute and deliver such additional documents
and instruments as may be required by applicable Governmental Rules or
reasonably requested by any party to establish, maintain or protect its rights
and remedies or to effect the intents and purposes of this Agreement and the
other Transaction Documents. Without limiting the generality of the foregoing,
each party agrees to endorse (if necessary) and deliver to the other, promptly
after its receipt thereof, any payment or document which it receives after the
Closing Date and which is the property of the other.
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7.8. Governing Law. This Agreement shall be a contract under the laws
of India and for all purposes shall be governed by and construed and enforced in
accordance with the laws of India.
7.9. Notices. Unless otherwise specifically provided herein, all
notices, consents, requests, demands and other communications required or
permitted hereunder:
(a) shall be in writing;
(b) shall be sent by messenger, certified or registered mail, a
reliable express delivery service or telecopier (with a copy sent by one of the
foregoing means), charges prepaid as applicable, to the appropriate address(es)
or number(s) set forth below; and
(c) shall be deemed to have been given on the date of receipt by the
addressee (or, if the date of receipt is not a business day, on the first
business day after the date of receipt), as evidenced by (i) a receipt executed
by the addressee (or a responsible person in his or her office), the records of
the Person delivering such communication or a notice to the effect that such
addressee refused to claim or accept such communication, if sent by messenger,
U.S. mail or express delivery service, or (ii) a receipt generated by the
sender's telecopier showing that such communication was sent to the appropriate
number on a specified date, if sent by telecopier.
All such communications shall be sent to the following
addresses or numbers, or to such other addresses or numbers as any party may
inform the others by giving five business days' prior notice:
If to the Shareholders:
-----------------------
Xxxxx Xxxxxx and Xxxx Xxxxxx
X-00 Xxxxx Xxxx
Xxx Xxxxx, 000000, Xxxxx
Telecopier No.: 00-00-000-0000
If to UBIX: With a copy to:
------------ ---------------
UBIX Computer Services Limited UBICS, Inc.
c/o International Financial Services Limited 000 Xxxxxxxxxx Xxxxx, Xxxxx 0000
0XX Xxxxx, Xxx Xxxxxxxx Building Canonsburg, PA 15317
Xxxxx Xxxxxx Street Attn: President
Port-Louis, Mauritius Telecopier No.: (000) 000-0000
Telecopier No.:
and
Xxxxxx Xxxxxxxx LLP
000 Xxxxx Xxxxxx
50th Floor, Xxx Xxxxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx
Telecopier No.: (000) 000-0000
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7.10. Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
7.11. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of each of the parties and their respective legal
representatives, heirs, successors and permitted assigns.
7.12. Termination.
(a) This Agreement may be terminated at any time prior to the Closing:
(i) by mutual agreement of UBIX and the Shareholders;
(ii) by UBIX if there has been a material misrepresentation by
the Shareholders hereunder or a material breach by the Shareholders of
any of their warranties set forth herein, a material breach by the
Shareholders of any of their covenants set forth herein or if any of
the conditions specified in Section 5.2 shall not have been fulfilled
within the time required and shall not have been waived by UBIX;
(iii) by the Shareholders if there has been a material
misrepresentation by UBIX hereunder or a material breach by UBIX of any
of their warranties set forth herein, a material breach by UBIX or
UBICS of any of their covenants set forth herein or if any of the
conditions specified in Section 5.3 shall not have been fulfilled
within the time required and shall not have been waived by the
Shareholders; or
(iv) by UBIX and the Shareholders if the Closing shall not
have occurred prior to September 30, 2001; provided, that UBIX and the
Shareholders may terminate this Agreement pursuant to this subparagraph
only if the Closing shall not have occurred on or prior to such date
for a reason other than a failure by such party to satisfy the
conditions to Closing of the other party set forth in Section 5.2 or
5.3.
(b) If this Agreement is terminated by either Shareholders or UBIX as
provided above, then neither party shall have any further obligations or
liabilities hereunder except for obligations or liabilities arising from a
breach of this Agreement prior to such termination or which survive such
termination by their own terms and except for obligations under Section 4.6.
7.13. Waivers. The due performance or observance by the parties of
their respective obligations hereunder and under the other Transaction Documents
shall not be waived, and the rights and remedies of the parties hereunder and
under the other Transaction Documents shall not
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be affected, by any course of dealing or performance or by any delay or failure
of any party in exercising any such right or remedy. The due performance or
observance by a party of any of its obligations hereunder or under any other
Transaction Document may be waived only by a writing signed by the party against
whom enforcement of such waiver is sought, and any such waiver shall be
effective only to the extent specifically set forth in such writing.
7.14. Arbitration. If any dispute or difference shall at any time arise
between the parties with respect to the meaning or effect of any clauses of this
Agreement or the rights or obligations of the parties hereto hereunder, or
connected herewith, such dispute or difference shall be referred to the
Arbitration of a Sole Arbitrator to be appointed jointly by the parties. In the
event of the parties not being able to concur on the appointment of a Sole
Arbitrator, then such Sole Arbitrator to be appointed in the manner provided for
in Arbitration and Conciliation Act, 1996. Such Arbitration shall be governed by
the provisions of the Arbitration and Conciliation Act, 1996, or any enactment,
modification or re-enactment thereof. The award of the Arbitrator shall be final
and binding on the parties hereto.
7.15. Exchange Rate. Any amounts payable to UBIX pursuant to this
Agreement which are paid in Indian Rupees will be paid based on the prevailing
exchange rate on the Closing Date.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Share Purchase
Agreement as of the date first written above.
UBIX COMPUTER SERVICES LIMITED
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Title: President and CEO
-----------------------------
SHAREHOLDERS:
/s/ Xxxxx Xxxxxx
-----------------------------------
Xxxxx Xxxxxx
/s/ Xxxx Xxxxxx
-----------------------------------
Xxxx Xxxxxx
00
00
Exhibit A
SHAREHOLDERS
Name and Address Shares of DSF Owned Shares of DSF to be Sold to UBIX
---------------- ------------------- --------------------------------
Xxxxx Xxxxxx 1,40,900 0
Xxxx Xxxxxx 10,11,000 8,06,400
X. X. Xxxxxx 000 0
--------- --------
11,52,000 8,06,400