PERSONAL GUARANTEE
This Personal Guarantee (hereinafter referred to as the "Guarantee") is executed
by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ Oswal, s/o ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ Oswal, r/o/ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ (hereinafter referred to as the "Guarantor") which
expression shall, unless repugnant to the context or meaning thereof deemed to
include his successors, heirs and permitted assigns.
IN FAVOUR OF
WORLD WIDE WIRELESS COMMUNICATION INC., a Nevada corporation having its
registered office at ▇▇▇- ▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇ Of America (hereinafter referred to as "WWW") which expression shall,
unless repugnant to the context or meaning thereof deemed to include its
successors in business and permitted assigns.
WHEREAS, WWW and the Guarantor have entered into a Shareholders Agreement dated
August 17,2000 (hereinafter referred to as "SHA") for combining their efforts to
provide high speed (fixed and wireless) broadband internet and related services
to customers in India ("Services") through an Indian Company (hereinafter
referred to as the "Joint Venture Company" or "JVC") incorporated under the name
World Wide Wireless (India) Limited.
WHEREAS, pursuant to Article 4.5 of the SHA, WWW has agreed to provide a bank
guarantee for a sum of Rs.20,000,000/- (Rupess twenty million only) ("Guarantee
Amount") to the Department of Telecom to enable the JVC to obtain the Internet
Service Provider ("ISP") license for providing the Services in the territory
classified as Category --A in the policy of the Government of India related to
ISP's.
WHEREAS, under Article 4.5 of the SHA Guarantor has agreed to secure the
Guarantee Amount by giving a personal Guarantee to WWW and has agreed to pay the
Guarantee Amount (Rs.20,000,000/- ) unconditionally to WWW upon receiving a
notice of demand from WWW.
NOW THIS DEED OF GUARANTEE, witnesses as follows:
1. The Guarantor do hereby unconditionally undertakes to pay to WWW in US
Dollars an amount equivalent to the Guarantee Amount of Rs.20,000,000/-
(Rupess twenty million only), in the event the JVC is not granted the
License and the Frequency License (as defined in the SHA) by February 16,
2001, notwithstanding whether or not the Department of Telecom invokes or
encashes the guarantee provided by WWW.
2. The Guarantor do hereby undertakes to pay to WWW the Guarantee Amount due
and payable under the Guarantee without any demur, protest, correctly on
demand to be made upon him by WWW in respect of the Guarantee Amount
claimed which would be due to non-fulfillment of the terms, conditions and
obligations embodied under the SHA.
3. Be it declared and confirmed that any demand made on the Guarantor by WWW
under this Guarantee shall be conclusive and final as regards the Guarantee
Amount due and payable by the Guarantor under these presents PROVIDER
HOWEVER that the liability of the Guarantor shall be restricted to
Guarantee Amount { not exceeding Rs. 20,000,000/- (Rupess twenty million
only )} covered by this Guarantee.
4. The Guarantor do hereby further agree that the guarantee herein contained
shall remain in full force and effect up to February 16, 2001 or such
extended period as may be agreed between WWW and Guarantor in writing
considering a period that would be taken for the fulfillment of his
obligations under the SHA and this shall continue to be enforceable till
all the dues and /or claims of WWW have been duly and satisfactorily met
and performed in full by the Guarantor and accordingly the WWW discharges
this Guarantee.
5. The Guarantor do hereby undertakes and agrees that this is an unconditional
and irrevocable guarantee and undertakes not to revoke this Guarantee
during its currency.
IN WITNESS WHEREOF, the Guarantor has signed this Guarantee on the ______ day of
August, 2000.
N.K. Oswal
S/o ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ Oswal
R/o 396, Maharani Jhansi Road,
Ludhiana (Punjab)
India
Witnesses:
1.
2.
WHEREAS WWW is an internationally recognized provider of high speed (fixed and
wireless) broadband internet and related services with a significant global
presence and has over the years developed expertise in the same;
WHEREAS the INDIAN PARTNER and WWW are desirous of combining their efforts to
provide high speed (fixed and wireless) broadband internet and related services
to customers in India (hereinafter referred to as the "Services") and
accordingly the Parties have agreed for a joint participation through an Indian
company (hereinafter referred to as the "Joint Venture Company" or "JVC")
incorporated under the name World Wide Wireless (India) Limited. The INDIAN
PARTNER had taken care of the responsibility of incorporating the JVC and has
incorporated the same through its nominee(s);
WHEREAS the Parties have agreed to participate in the ownership, management and
operation of the JVC and desire to set out in writing their understanding in
relation thereto and their rights and obligations inter se; and
WHEREAS the Parties have therefore set forth in this Agreement the terms,
conditions and covenants governing their joint participation in the JVC.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the Parties agree as follows:
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1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, unless the subject or the context otherwise
requires, the following words and expressions shall have the following
meanings:
"Act" shall mean the Companies Act, 1956, and includes where the
context so requires any re-enactment or statutory modifications thereof
for the time being in force.
"Affiliate(s)" shall mean with respect to any Party to this Agreement
any entity which controls, is controlled by, or is under common control
with such Party. An entity controls another entity when it owns or
controls, directly or indirectly, fifty-one percent (51%) or more of
the equity share capital issued and outstanding of the other entity or
when it controls the composition of the majority of the Board of
Directors of such other entity.
"Agreement" or "this Agreement" shall mean this Shareholders' Agreement
along with all attachments annexed hereto and shall include any
modifications, alterations, additions or deletions thereto made in
writing after the date of execution of this Agreement.
"Approval(s)" shall mean Government of India permissions, consents,
validations, confirmations and other authorizations required to be
obtained in order to implement the provisions of this Agreement
including all permissions and/or registrations from the Reserve Bank of
India and/or other authorities.
"Alternate Director" shall mean the director appointed in terms of
Article 6.1.4 herein to act for a director during his absence for a
period of not less than three (3) months from the State in which
meetings of the Board are ordinarily held and such Alternate Director
shall not hold office as such for a period longer than that permissible
to the director in whose place the Alternate Director has been
appointed and shall vacate office if and when the director returns to
the State in which meetings of the Board are ordinarily held.
"Articles" or "Articles of Association" shall mean the Articles of
Association of the JVC.
"Board" or "Board of Directors" shall mean the Board of Directors of
the JVC.
"Distributable Profits" shall mean the profits derived after providing
for depreciation, tax or any other charge against the profits.
"Effective Date" means the date on which all the conditions precedent
under Article 11 have been fulfilled to the satisfaction of WWW.
"FIPB" shall mean the Foreign Investment Promotion Board constituted
under the auspices of the Ministry of Commerce and Industry, Government
of India.
"Finder" shall mean ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇/▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇.
"Frequency Licenses" shall mean the license to use the 28 MHz up and 28
MHz down MMDS frequency with a minimum separation of 60 MHz and
preferably 100 MHz or such other frequency in accordance with the
National Allocation Frequency Plan, 2000 (as amended from time to time)
issued by the Ministry of Communications, subject to the satisfaction
and business requirements of WWW, for providing the Services to
customers in India.
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"General Meeting" shall mean the duly convened meeting of the
shareholders of the JVC.
"Joint Venture Company" or "JVC" shall mean the company incorporated
under the Act with the name `World Wide Wireless (India) Limited'.
"License" shall mean and include the Internet Service Provider ("ISP")
license for providing the Services in the territory classified as
Category-A in the policy of the Government of India regarding ISP's.
"Memorandum" or "Memorandum of Association" shall mean the Memorandum
of Association of the JVC.
"Parties" shall mean WWW and the INDIAN PARTNER collectively and the
term "Party" shall individually refer to WWW or the INDIAN PARTNER.
"RBI" shall mean the Reserve Bank of India.
1.2 In this Agreement, headings are for convenience only and shall not
affect its interpretation.
1.3 Where a word or phrase is defined, other parts of speech and
grammatical forms of that word or phrase shall have corresponding
meanings.
1.4 Any reference to a part, clause, exhibit, article, annexure, appendix
and schedule shall be construed as a reference to a part, clause,
exhibit, article, annexure, appendix and schedule of this Agreement,
and reference to this Agreement includes an exhibit, annexure, appendix
and schedule attached to this Agreement.
2. MEMORANDUM AND ARTICLES OF ASSOCIATION
2.1 It is the understanding between the Parties that their rights and
obligations in the JVC including the operation and management of the
JVC shall be interpreted, acted upon and governed in accordance with
the terms and conditions of this Agreement.
2.2 The Parties agree that the Memorandum and the Articles of the JVC
shall, inter alia, to the extent possible, incorporate and reflect the
understanding contained in this Agreement.
2.3 It is expressly agreed that whether or not the Memorandum and the
Articles fully incorporate the stipulations hereof or any of them, the
Parties' rights and obligations inter se shall be governed by this
Agreement and shall prevail in the event of any ambiguity or
inconsistency between the two.
3. JOINT VENTURE COMPANY
3.1 The INDIAN PARTNER has represented that the JVC, World Wide Wireless
India Ltd., having its registered office at IIIrd Floor, Nego Complex,
Pokhowal Road, ▇▇▇▇▇▇ Nagar, Ludhiana, Punjab, has been incorporated as
a public limited company. The INDIAN PARTNER has agreed to convert the
JVC into a private limited company at the earliest possible date after
the execution of this Agreement.
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3.2 The JVC shall be run as an independent company based on usual
commercial practices subject to any directions which may from time to
time be given by the Board of Directors in accordance with the spirit
of this Agreement.
3.3 The Parties agree that it will be their endeavor and that they shall
use best efforts to build a good image for the JVC. The Parties will
develop the JVC to enable it to provide the quality and level of
services which are equivalent to the quality of the services provided
by WWW in overseas markets.
4. CAPITAL AND PARTICIPATION
4.1 Capital
4.1.1 It is acknowledged that the existing authorized share capital of the
JVC is Rs.10,000,000/- (Rupees ten million) comprising 1,000,000 (one
million) equity shares of Rs. 10/- (Rupees ten) each. It is agreed that
the authorized share capital of the JVC would be increased to Rs.
250,000,000/-(Rupees two hundred and fifty million) divided into
25,000,000_ (twenty five million) equity shares of Rs. 10/- (Rupees
ten) each within a period of six (6) months from the execution of this
Agreement, or within such extended period as the Parties may mutually
decide.
4.2 Shareholding Pattern and Contributions
4.2.1 Unless otherwise agreed by the Parties in writing, the shareholding of
the JVC shall be held in the following proportion:
INDIAN PARTNER and his nominee(s): 51%
WWW or its nominee(s) 49%
It is agreed that the Parties shall ensure that the nominee(s)
appointed by each Party shall be bound by and shall abide with the
terms and conditions of this Agreement.
In the event of a change in the policy of the Government of India
permitting WWW to increase its shareholding, WWW shall have the right
to increase its shareholding to 51% in the JVC. In the event of WWW
exercising the aforesaid right to increase its shareholding in the JVC,
the Indian Partner undertakes to take all steps necessary and required
to enable WWW to increase its shareholding in the JVC including making
necessary filings with the concerned Government authorities as well as
providing no objection letters.
It is also agreed that the voting rights of the Parties will be in
proportion to their respective shareholding and on poll each equity
share will have one vote.
4.2.2 Since the JVC has been incorporated by the INDIAN PARTNER with his
nominees as the shareholders, it is agreed that out of the existing
paid up share capital of ▇▇▇ (▇▇▇▇▇ ▇▇▇▇▇▇▇) shares of Rs. 10/- (Rupees
ten) each total amounting to Rs. 7,000/- (Rupees seven thousand), the
INDIAN PARTNER (either singularly or through his nominees) shall hold
353 (Three hundred fifty three) shares of Rs. 10/- (Rupees ten) each,
representing fifty one percent (51%) of the total paid-up share capital
and WWW on its own or through its nominees shall acquire 347 (Three
hundred forty seven) equity shares of Rs. 10/- (Rupees ten) each
representing forty
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nine percent (49%) of the total paid-up share capital of the JVC for a
total consideration of Rs. 3,470 (Rupees three thousand four hundred
and seventy).ideration of Rs. 3,470 (Rupees three thousand four hundred
and seventy).
4.2.3 It is agreed between the Parties that subject to the INDIAN PARTNER
obtaining the License as well as the Frequency Licenses, WWW shall
remit a maximum amount of US$ 2,800,000 (US Dollar two million eight
hundred thousand only) ("the Maximum Amount") in installments to the
JVC. The amount to be paid as each installment would be determined as
per the Schedule- I annexed hereto.
4.2.4 (a) The obligation of WWW to invest the first installment in the JVC
out of the Maximum Amount as mentioned in Article 4.2.3 shall arise
only after the INDIAN PARTNER has obtained the License and the
Frequency Licenses in respect of the following cities on or prior to
the Effective Date:
1. Delhi
2. Mumbai
3. Chennai
4. Bangalore
5. Ludhiana
(b) Thereafter, the installments out of the Maximum Amount mentioned shall
be invested by WWW in the JVC as per Schedule I on procurement of
Frequency Licenses by the INDIAN PARTNER.
(c) It is agreed between the Parties that WWW (AT shall bear the actual
incorporation expenses of the JVC amounting to Rs. 180,000/- (Rupees
one hundred eighty thousand) as has been incurred by the INDIAN
PARTNER.
4.2.5 That it is agreed between the Parties that after the acquisition of the
initial 347 (three hundred forty seven) shares by WWW or its nominees
in accordance with Article 4.2.2, upon any investment made by WWW in
the JVC, the JVC shall issue equity shares to WWW and/or its nominees
against such amount invested by WWW. The equity shares so issued to WWW
and/or its nominees shall be equivalent to 49% of the paid-up capital
of the JVC. In addition to the issue of equity shares by the JVC to WWW
and/or its nominees, the JVC shall correspondingly issue fully paid-up
equity shares as sweat equity, amounting to 51% of the paid-up capital
of the JVC, to the INDIAN PARTNER or his nominees for his efforts in
obtaining the License and the Frequency Licenses.
4.2.6 The aforesaid mechanism of contributing to the capital and subscribing
to the equity shares of the JVC would continue till such time the
paid-up share capital of the JVC reaches the rupee equivalent of US$
5,800,000 (US Dollars five million eight hundred thousand only).
4.2.7 In the event of the JVC requiring any further funds after the paid-up
share capital reaching the rupee equivalent of US$ 5,800,000 (US
Dollars five million eight hundred thousand only), WWW shall make all
contributions in a manner other than capital contribution such that the
shareholding remains as per Article 4.2.1. However, in the event of the
JVC procuring Frequency Licenses in respect of cities in addition to
those specified in Schedule -- I, all investments towards the build out
costs in respect of the infrastructure and equipment required by the
JVC for such cities shall be funded by the Parties in proportion to
their respective shareholding.
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4.2.8 Notwithstanding the other provisions of this Agreement, if at any stage
in the future, after the Frequency Licenses for the twenty one (21)
cities mentioned in Schedule -- I annexed hereto are obtained and the
built out in respect thereto is substantially completed, the JVC
decides to increase its paid-up share capital by inviting capital
contribution, the Parties will subscribe to fresh equity in the JVC in
proportion to their shareholding. In the event either Party fails to
subscribe to the equity, the other Party, subject to the necessary
Approval(s), if any, shall have the first right to subscribe to and
acquire such unsubscribed equity either by itself or through an
Affiliate or nominee.
The Parties agree that at the time of closure of any issue of
subscription of shares, the Party not subscribing to the equity (in
full or in part) issued to it shall undertake all steps necessary and
required to enable the other Party to subscribe to the unsubscribed
portion of the equity of the Party not so subscribing and to give full
effect to the terms of this Article 4.2.8. In case of either Party so
subscribing to the unsubscribed portion of equity of the other Party,
such subscription shall be on the same terms and conditions as would be
applicable to the Party not so subscribing. Further, in case WWW is not
permitted to hold such shares due to Governmental regulations, it shall
have a right to nominate a third party to subscribe to such shares.
4.3 Transfer of Shares
4.3.1 The Parties hereto shall not, except as specifically provided
hereinafter, sell or transfer their shares in the JVC. Any purported
sale or transfer of shares by either of the Parties not in accordance
with this Article shall be deemed null and void and the JVC shall not
register any such transfer or sale.
4.3.2 If at any time the INDIAN PARTNER desires to sell, transfer or
otherwise dispose of any or all of his shares in the JVC, he shall
offer such shares in the first instance by a notice in writing ("Offer
Notice") to WWW who shall have the right of pre-emption to purchase all
of such shares either itself or through its Affiliate(s) or nominee(s)
at the price to be determined in accordance with Article 4.3.4. WWW may
exercise its right of first refusal within a period of thirty (30) days
after receipt of the Offer Notice. If WWW accepts the offer, the
transfer of shares shall be completed within a period of sixty (60)
days after the expiry of the aforesaid thirty (30) day period. In the
event the offer is not accepted by WWW and or its Affiliate(s) or its
nominee(s) within the said period, the INDIAN PARTNER shall be entitled
to sell such shares to a third party within a period of sixty (60) days
after the expiry of aforesaid thirty (30) days period at a price which
is not lower than the price offered to WWW.
4.3.3 In the event WWW desires to sell, transfer or otherwise dispose of any
or all of its shares of the JVC, it shall offer such shares by a notice
in writing ("Offer Notice") in the first instance to the INDIAN PARTNER
at a price to be determined in accordance with Article 4.3.4. Such
offer must be accepted with a period of thirty (30) days from the date
of the Offer Notice. If the offer is accepted, then the Parties shall
proceed to complete the sale purchase transaction within a period of
sixty (60) days after the expiry of the aforesaid thirty (30) day
period. If the offer is not accepted by the INDIAN PARTNER, then WWW
shall be entitled to sell such shares to a third party within a period
of sixty (60) days at a price which is not lower than the price offered
to the INDIAN PARTNER.
4.3.4 A Party shall offer its shares for sale/transfer under the aforesaid
Articles at the fair market price which shall be determined in
accordance with the relevant RBI guidelines by an
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independent international accounting firm selected mutually by the
Parties. In the event the Parties are unable to decide the independent
international accounting firm, the price shall be determined by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or Price Waterhouse Coopers.
4.3.5 If any transfer of shares under this Article is subject to the
Approvals (including final approvals from the RBI), then such transfer
shall not become effective until such Approvals have first been
obtained. If such Approvals are required, the time period(s) as
prescribed in the preceding paragraphs for the completion of the sale
and purchase transaction(s) shall be extended by the number of days
required for obtaining the Approvals.
4.3.6 In case of transfer of shares by either Party to any third party in
pursuance of the above Articles, the following conditions will apply:
i) Such third party shall enter into a deed of adherence agreeing to be
bound by the provisions of this Agreement; and
ii) Such third party shall be someone who, in the opinion of the Party
not selling its shares, does not have a conflict of interest or is
strategically incompatible or is otherwise unacceptable for good and
sufficient reasons to the Party not selling its shares.
Notwithstanding the restriction on transfer of shares stipulated
hereinabove, WWW may transfer any of its shares to an Affiliate,
without requiring the consent of the INDIAN PARTNER, provided that such
an Affiliate shall also be bound by the provisions of this Agreement
and shall execute a deed of adherence as mentioned above. Further,
notwithstanding anything contained in Articles 4.3.1 to 4.3.6, the
aforesaid restrictions shall not apply in the event of change in the
ownership or control or constitution of WWW.
4.3.7 It is expressly agreed by the INDIAN PARTNER that in order to give
effect to the provisions of Articles 4.3.1 to 4.3.6, they shall provide
all necessary cooperation to WWW, including but not limited to
assistance for obtaining the RBI/FIPB approvals. Further, the INDIAN
PARTNER agrees to sign/execute/file any and all documents with the
Government of India or its agencies, departments or any other third
party to give effect to any transfer of shares in accordance with the
provisions of this Agreement.
4.4 Pledge of shares
4.4.1 The Parties agree that the shares held by them shall not be pledged to
a third party or otherwise encumbered during the term of this
Agreement. In the event the pledge of shares of any Party is
necessitated for the purposes of the JVC, such pledge will be made only
with the prior written consent and on terms acceptable to the other
Party.
4.5 Bank Guarantee
4.5.1 At the request of the INDIAN PARTNER, WWW has agreed to provide a bank
guarantee or guarantee(s), as may be required by the Government of
India, of an amount of Rs. 20,000,000/- (Rupees Twenty Million)
("Guaranteed Amount") to the concerned governmental authority(ies) for
the purpose of procuring the License required by the JVC for providing
the Services to customers. However, it is agreed by the Parties that
the Guaranteed Amount shall not be more than Rs. 20,000,000/- (Rupees
Twenty Million) in any event.
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4.5.2 In the event the JVC is not granted the License and the Frequency
Licenses in respect of the cities specified in Article 4.2.4(a), on the
Effective Date or any extension thereof, the INDIAN PARTNER shall be
obliged to pay in US Dollars an amount equivalent to the Guaranteed
Amount to WWW, notwithstanding whether or not the Department of Telecom
invokes or encashes the Bank guarantee provided by WWW. The INDIAN
PARTNER agrees to take all necessary actions and procure all Approvals
including RBI approvals to ensure that the Guaranteed Amount is
refunded to WWW. In the event the RBI approvals are not forthcoming
despite best efforts of the INDIAN PARTNER, the INDIAN PARTNER shall be
under an obligation to transfer the Guaranteed Amount at the request of
WWW to its nominee(s) in India.
4.5.3 Further, the INDIAN PARTNER agrees to secure the Guaranteed Amount by
way of personal guarantee. However, the personal guarantee of the
INDIAN PARTNER shall cease upon receipt of the Frequency Licenses in
respect of the cities stipulated in Article 4.2.4(a).
5. NAME AND TRADE ▇▇▇▇ OF THE JVC
5.1 Subject to the approval of the Registrar of Companies, and as per
Article 3.1 hereinabove, the JVC shall be converted into a private
limited company under the Act and the name shall be changed to "World
Wide Wireless (India) Private Limited".
5.2 The Parties agree that since the name of the JVC includes the words
[`World Wide Wireless'] and uses the trade ▇▇▇▇ of WWW, the said name
and trade ▇▇▇▇ will be used only with the consent of and upon the terms
stipulated by WWW, who shall have the right and option to require the
words [`World Wide Wireless'] eliminated from the name of the JVC and
surrender the trade ▇▇▇▇, at any time. In the event WWW exercises such
an option and instructs the JVC to delete the words [`World Wide
Wireless'] from its corporate name and surrender the trade ▇▇▇▇, the
Parties agree to vote favorably both in the meetings of the Board
through their respective nominee Directors, and in the meetings of the
shareholders through their respective representatives/proxies in taking
necessary and appropriate action and in meeting the requirements to
delete the words [`World Wide Wireless'] from the corporate name of the
JVC and surrender the trade ▇▇▇▇.
5.3 The Parties agree to cause the JVC to enter into a Corporate Name and
Trade ▇▇▇▇ License Agreement with WWW granting the JVC the right to use
the words [`World Wide Wireless'] and the trade ▇▇▇▇ upon the terms and
conditions set out therein.
6. TECHNOLOGY TRANSFER AND SHARING OF PROFITS
6.1 Technology Transfer
6.1.1 WWW will provide the technical know-how, information and technology to
the JVC, as may be required for providing the Services. The INDIAN
PARTNER agrees that in the event of termination of this Agreement, he
shall cause the JVC to return all documents pertaining to the technical
know-how, information and technology and to desist from using the same.
6.1.2 Additionally, WWW will also provide the necessary plant, machinery and
other equipment along with the incidental and ancillary spares and
parts as may be necessary for the purpose of providing the Services.
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6.2 Sharing Of Profits
6.2.1 It is agreed between the Parties that since WWW will make all capital
expenditure and other investments in the JVC, WWW shall be entitled to
seventy percent (70%) of the Distributable Profits of the JVC till such
time all the capital expenditure and investment made by WWW is
recovered. After the capital expenditure and investment made by WWW is
recovered, the Distributable Profits of the JVC would be distributed
among the Parties in proportion to their shareholding in the JVC.
6.2.2 The Parties agree to arrive at a mutually acceptable mechanism for
giving effect to the aforesaid understanding.
7. BOARD OF DIRECTORS OF THE JVC
7.1 Directors
7.1.1 Unless otherwise agreed between the Parties, the Board of Directors of
the JVC shall initially consist of five (5) directors. However, after
the commencement of the commercial operation of the JVC, the Parties
shall have a right to simultaneously nominate one whole time director
each and increase the number of directors on the Board of Directors to
seven (7).
7.1.2 WWW shall have three (3) nominee directors and the INDIAN PARTNER shall
have two (2) nominee directors on the Board. It is further agreed
between the Parties that out of the three (3) nominee directors of WWW,
two (2) directors shall be whole time directors and out of the two (2)
nominee directors of the INDIAN PARTNER, one (1) director shall be a
whole time director.
7.1.3 The nominee directors shall hold office at the pleasure of the Party
who nominated them and shall be subject to removal by the respective
nominating Party. The Parties shall at all times, exercise their
respective voting power to support each other in having the nominee
director(s) appointed to or removed from the Board in accordance with
this Article.
7.1.4 In the event any original director is away for a continuous period of
not less than three (3) months from the State in which the registered
office of the JVC is located, the Board of Directors shall appoint an
Alternate Director for such original director. The person to be
appointed as an Alternate Director shall be selected by the Party who
had nominated the original director.
7.1.5 Any casual vacancy in the office of a director who is liable to retire
by rotation, or for any other reason, may be filled by the Board of
Directors provided however that the person to be appointed to fill the
vacancy shall be a person nominated by the Party who had nominated the
original director.
7.1.6 The representation of the Parties on the Board shall be in the
proportion as may be decided by the Parties. It is agreed that in the
event the shareholding of the INDIAN PARTNER or WWW reduces below
fifty-one percent (51%) and forty-nine percent (49%), respectively, of
the total paid-up equity capital, the representation of the nominees of
the INDIAN PARTNER or WWW on the Board shall reduce in the following
manner:
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Shareholding of INDIAN PARTNER / WWW No. of nominees on the
Board
Less than 49% but more than 25% 2 (Two)
25% or less but not less than 10% 1 (One)
Less than 10% 0 (Zero)
7.2 Proceedings of the Board
7.2.1 At least fourteen (14) clear days' notice of every meeting of the Board
shall be given in writing to every Director. Such notice shall be
accompanied by the agenda setting out the business proposed to be
transacted at the meeting of the Board, provided however that with the
consent of at least one (1) nominee director of WWW, a meeting of the
Board may be convened by a shorter notice in case of an emergency or if
special circumstances so warrant.
Notice of all meetings of the Board shall also be given in writing to
directors resident outside India by telex or facsimile transmission and
confirmation copy by courier and a copy of such notice shall also be
served at the address within India specified by such directors in
writing to the JVC.
7.2.2 The quorum for a meeting of the Board shall be three (3) directors,
provided that there shall be no quorum unless at least one (1) nominee
director of WWW is present. If within half an hour from the time
appointed for holding a meeting of a Board, a quorum as specified above
is not present, the meeting of the Board shall stand adjourned by seven
(7) days on the same day, time and place and if at such adjourned
meeting of the Board, a quorum is not present within half an hour from
the time appointed for holding the meeting of the Board, the directors
present shall constitute a valid quorum provided at least one nominee
director representing WWW is present.
7.2.3 The INDIAN PARTNER shall have the right to nominate the Chairman of the
Board and WWW shall have a right to nominate the Vice-Chairman. The
Chairman shall not have a second or casting vote. It is clarified that
the Chairman will have the authority to represent the JVC before
various Governmental authorities.
7.2.4 Subject to the provisions of the Act, a resolution by circulation shall
be as valid and effectual as a resolution duly passed at a meeting of
the Directors called and held in accordance with the provisions of Act
and the Articles, provided it has been circulated in draft form,
together with the relevant papers, if any, to all the Directors (then
in India not being less in number than the quorum required) and has
been approved by a majority of the Directors entitled to vote thereon
provided always that such majority shall include an affirmative vote of
at least one (1) nominee director of WWW.
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7.3 Management
7.3.1 The JVC shall be managed by the Board of Directors who shall be
responsible for making decisions relating to corporate policy on
marketing, systems build out and expansion, management salaries,
investments etc.
7.3.2 The Parties agree that there shall be two (2) Managing Directors in the
JVC, one (1) to be appointed by each Party:
1. Managing Director (Finance/Administration/Legal) to be appointed by
WWW.
2. Managing Director (Technical/Operations/Marketing) to be appointed
by the INDIAN PARTNER.
The Board shall, as far as permissible under the Act and subject to the
terms and conditions of this Agreement, delegate the authority upon the
Managing Directors to execute and implement the policies of the JVC and
to take appropriate steps and measures for the effective management of
the JVC.
8. PROCEEDINGS AT GENERAL MEETINGS
8.1 The quorum for a General Meeting shall be two (2) members present in
person or through a duly authorized representative in case of a member
which is a company, provided that there shall be no quorum unless one
(1) representative of WWW is present.
8.2 If within half an hour from the time decided for holding a General
Meeting a quorum as specified above is not present, the General Meeting
shall stand adjourned by seven (7) days on the same day, time and place
as provided by law and if at such adjourned General Meeting a quorum is
not present within half an hour from the time decided for holding the
General Meeting, the members present shall constitute a valid quorum
provided at least one (1) representative of WWW is present.
8.3 The Chairman of the Board will be the Chairman of the General Meeting
who shall not have a casting or second vote.
8.4 All matters discussed/proposed in the shareholders meeting shall not be
adopted except upon the affirmative vote of the nominee of WWW.
9. UNDERTAKING OF THE PARTIES
9.1 The Parties jointly and severally undertake to ensure:
i) that they, their representatives, proxies, agents and nominees
representing them at General Meetings of the JVC shall at all times
exercise their votes and through their respective nominee Directors (or
Alternate Directors) at Board Meetings and, otherwise, act in such
manner so as to comply with, and to fully and effectually implement the
spirit, intent and specific provisions of this Agreement; and
ii) that if any resolution is proposed contrary to the terms of this
Agreement they, their representatives,
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proxies and agents representing them shall vote against it. If for any
reason such a resolution is passed, the Parties shall, if necessary,
join together and convene an Extraordinary General Meeting of the JVC
for implementing the terms of this Agreement.
10. RECORDS, REPORTS AND INSPECTION
10.1 Books and Records
The Parties shall cause the JVC to maintain, in accordance with Indian
laws, satisfactory financial accounting procedures and books and
records which, in reasonable detail, accurately and fairly reflect its
operations and transactions. The JVC shall also maintain a second set
of books of accounts, accounting statements and accompanying reports in
accordance with the international accounting standards applied within
WWW.
10.2 Auditors
The Parties agree that WWW and the INDIAN PARTNER shall jointly appoint
the auditors of the JVC ("Auditors") from among the top five accounting
firms of the world.
10.3 Audits
An annual audit of the books of account, records and affairs of the JVC
shall be made at the JVC's expense each year immediately following the
close of the financial year by the Auditors. A signed copy of the
report of the annual audit shall be submitted to each member of the
Board of Directors.
10.4 Special Audit
The Parties will have the right at any time to have a special audit of
the books of account, records and affairs of the JVC but any special
audit shall be at the expense of the Party requesting the same, unless
material discrepancies in any of the JVC's accounts, records or affairs
are discovered as a result of such audit, in which event the expenses
for such audit shall be paid for by the JVC.
10.5 Right of Access
Each Party through its nominated Directors or representatives shall at
its own expense be entitled to have:
i) reasonable access at all reasonable times to inspect and obtain
copies of statutory records under the control of the JVC;
ii) reasonable access at all reasonable times with prior notice to
observe and inspect operations of the JVC; and
iii) access to and right to make inquiry of employees of the JVC
through the Managing Directors; and
iv) The Managing Directors shall have the right of day to day access to
verification (including verification by others on their/his behalf) of
all financial, management accounting and other information relating to
the JVC's activities and provide such information in such
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form as each Party may reasonably require after taking appropriate
steps where applicable to safeguard confidentiality vis-a-vis third
parties.
10.6 Financial Statements
The INDIAN PARTNER shall cause the JVC to deliver to WWW yearly
financial statements in relation to the conduct of the affairs and
activities of the JVC within forty-five (45) days after the expiration
of each year.
11. CONDITIONS PRECEDENT
11.1 It is agreed between the Parties that prior to the commencement of the
activities of the JVC, all the following conditions precedent must have
been fully satisfied:
i) The Approvals have been obtained;
ii) The License has been obtained;
iii) The Frequency Licenses have been obtained in respect of the cities
stipulated in Article 4.2.4 (a);
iv) Technical Collaboration Agreement has been executed between the JVC
and WWW; and
v) The Corporate Name and Trade ▇▇▇▇ License Agreement has been
executed between the JVC and WWW.
11.2 It is agreed that the INDIAN PARTNER will ensure the fulfillment of the
conditions precedent by February 16, 2001 ("Effective Date") or such
other date as may be mutually extended by the Parties in writing.
11.3 If any of the conditions referred to hereinabove are not fulfilled by
the Effective Date, WWW in its sole discretion shall have the following
options:
i) If, in WWW's opinion, the conditions referred to in Article 11.1 are
likely to be satisfied in the near future, allow an additional period
of time to the INDIAN PARTNER to cause the JVC to fulfill the
conditions; or
ii) Terminate this Agreement in accordance with Article 13.3 and exit
from the JVC in accordance with Article 13.4.
12. NON-COMPETE
12.1 The Parties hereby agree that during the term of this Agreement and for
a period of one (1) year after its termination for any reason
whatsoever, the INDIAN PARTNER shall not, either themselves or through
any of his nominee(s) or Affiliate(s) or subsidiary(ies) or any entity
owned and/or controlled by him, have any business or commercial
interest, directly or indirectly, and whether as a principal, agent,
shareholder, director, partner, contractor, consultant, employee or in
any other capacity be engaged in or otherwise be involved in any other
business which competes or its susceptible to compete with the business
of the JVC existing or for future.
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13. TERMINATION
13.1 This Agreement shall be binding upon the Parties from the Effective
Date hereof and shall remain in force and effect until terminated
pursuant to the provisions of this Agreement.
13.2 Either Party shall be entitled, at its option, to forthwith terminate
this Agreement on the happening of any of the following events:
i) If the other Party (the "Defaulting Party") commits any material
breach or, default of the terms, conditions, undertakings and covenants
of this Agreement so that the proper fulfillment of the Agreement is
jeopardized to such a degree that the Non-Defaulting Party can no
longer be expected to adhere to this Agreement. Provided however that
if the breach can be remedied, the right herein shall be exercisable
only upon the failure of the Defaulting Party to remedy the breach
within ninety (90) days of receipt by it of a written notice from the
Non-Defaulting Party requiring it to do so.
ii) An event of Force Majeure preventing the JVC from carrying on its
business for a continuous period of three (3) months.
iii) If such a Party is required, other than in accordance with the
provisions of this Agreement, to transfer all or part of its shares or
to reduce its percentage of shareholding in the JVC due to a change in
or enactment of any law or regulation in India.
13.3 In addition to its right to terminate as provided in Article 13.2
above, this Agreement may be terminated by WWW as follows:
i) in the event of enactment of any law or regulation in India, or the
adoption by the Government of India or any political subdivision
thereof of any policy, guideline or other similar direction which would
have the effect of requiring any change in the terms of this Agreement
adverse to WWW; or
ii) in the event that all or any portion of the facilities or other
assets of the JVC are nationalized or expropriated by, or taken over
for a period in excess of one (1) month by the Government of India or
any political subdivisions thereof; or
iii) in the event WWW loses majority control over the Board of
Directors of the JVC following any law, regulation, enactment or action
of the Government of India; or
iv) Non fulfillment of any of the conditions precedent as mentioned in
Article 11.1 within the time period stipulated in Article 11.2.
13.4 In the event of termination of this Agreement by WWW due to any of the
reasons mentioned in Article 13.2 and/or 13.3 above, WWW shall within a
period of thirty (30) days have the right and the sole discretion to
exercise the following options:
i) Require the INDIAN PARTNER to sell all its shares in the JVC to WWW
at a fair market price determined in accordance with the provisions of
Article 13.7; provided, however, that the INDIAN PARTNER has been
allowed to remedy the breach within a period of ninety (90) days from
the date of notification of such breach in accordance with Article 22.
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ii) Require the INDIAN PARTNER to buy all its shares in the JVC at a
fair market price determined in accordance with the provisions of
Article 13.7.
iii) In the event the INDIAN PARTNER is not willing to purchase the
shares of WWW, WWW will have the right to sell its shares to a third
party at a price mutually agreed between WWW and the third party.
13.5 If this Agreement is terminated by the INDIAN PARTNER due to a material
breach by WWW in accordance with Article 13.2(i), the INDIAN PARTNER
shall within a period of thirty (30) days have the right to exercise
the following options:
i) Require WWW to sell its shares in the JVC to the INDIAN PARTNER at a
fair market price determined in accordance with the provisions of
Article 13.7. Provided, however, that WWW has been allowed to remedy
the breach within a period of ninety (90) days from the date of
notification of such breach in accordance with Article 22.
ii) Require WWW to buy all its shares in the JVC at a fair market price
determined in accordance with the provisions of Article 3.7.
iii) In the event the WWW is not willing to purchase the shares of the
INDIAN PARTNER, the INDIAN PARTNER will have the right to sell its
shares to a third party at a price mutually agreed between the INDIAN
PARTNER and the third party.
13.6 In the event of exercise of an option by any Party in pursuance of
Articles 13.4 and 13.5 hereof, the sale and purchase shall be completed
within a period of a sixty (60) days after the expiry of the aforesaid
thirty (30) day period. In the event WWW is prevented from exercising
its option to purchase shares due to any laws or regulations in India,
such Party shall have the right to nominate any nominee(s) who are not
prohibited from such shares and such shares shall be sold to such
nominee(s).
13.7 The sale of shares pursuant to this Article shall be at the fair market
price. The market price of shares for the purposes of this Agreement
shall be determined by an independent international accounting firm who
shall act as experts and not arbitrators and shall be selected by
mutual agreement of the Parties. The determination of the market price
of the shares by the said firm shall be final.
The time taken for determination of the market price shall be excluded
from the time required for acceptance and/or completion of the share
transfer. The time taken by the accounting firm to determine the market
price shall not extend beyond sixty (60) days.
Further, if any transfer of shares under this Article is subject to the
Approvals (including final approvals from the RBI), then such transfer
shall not become effective until such Approvals have first been
obtained. If such Approvals are required, the time period(s) as
prescribed in Article 13.6 for the completion of the sale and purchase
transaction(s) shall be extended by the number of days required for
obtaining the Approvals.
13.8 Neither termination of this Agreement nor exercise of any option
provided for in this Article shall:
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i) relieve either Party from any liability for any failure to perform
or comply with the terms of this Agreement; or
ii) terminate any right or obligation set forth herein which in
accordance with the terms hereof survives such expiration or
termination, or which must necessarily survive such expiration or
termination in order to give effect to any rights granted hereunder.
13.9 Upon the termination of this Agreement, the Parties hereto shall
refrain from any acts, indications, publicity or advertisements which
may mislead any third party into the belief that the Parties hereto
still maintain business relationships with each other with reference to
the JVC and no Party hereto shall commit any act detrimental to the
business or reputation of the other Party.
14. DISCLAIMER OF AGENCY AND PARTNERSHIP
14.1 Nothing in this Agreement is intended to constitute, or shall be
construed to constitute, the Parties as partners of each other or of
the JVC. Nothing contained herein will constitute any Party or the JVC
an agent of any other Party or the JVC. Except as may otherwise be
explicitly agreed in writing, no Party will have the authority to act
on behalf of any other Party or the JVC, nor will the JVC have the
authority to act on behalf of any Party. Neither the JVC nor either
Party will incur or accept any liability or enter into commitments or
contracts on behalf of any Party or the JVC without the express prior
written approval of the party to be bound. The employees of each Party
will remain the employees solely of such Party, except to the extent
that the JVC may agree in writing with a Party that a specified
employee is to be an employee of the JVC for a period of time.
15. FINDER'S ROLE
It is agreed between the Parties that the Finder and/or his nominees,
representatives, agents and assignees shall not in any manner
whatsoever be a part of the management and/or any other committee(s) of
the JVC, including but not limited to the Board of Directors of the
JVC. It is further agreed that the Finder shall not be considered as an
employee, agent, representative or advisor of the JVC.
16. ASSIGNMENT
16.1 No Party shall assign or transfer any of its rights and obligations
hereunder without the prior written consent of the other Party, except
as expressly provided for in connection with a transfer referred to in
Article 4.3.6 hereof. This Agreement shall inure to the benefit of and
be binding upon the respective successors and permitted assigns.
17. ARBITRATION
17.1 All disputes arising in connection with this Agreement shall, to the
extent possible, be settled amicably by prompt good faith negotiations
between the representatives of the Parties. In default of such amicable
settlement within sixty (60) days of the commencement of discussions,
the dispute shall be finally settled under the (Indian) Arbitration and
Conciliation Act, 1996 (the "Arbitration Act") by three (3) arbitrators
appointed in accordance with said Arbitration Act, whose decision the
Parties shall recognize and respect as final and binding upon the
Parties without any right of appeal or review on any grounds whether in
law or equity before
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any judicial or Government body. Any such arbitration proceeding shall
be held at New Delhi in the English language.
Either Party hereby recognizes the right of the other Party to petition
any court for an order to confirm or enforce any arbitral decision
rendered pursuant to the terms of this Article and agrees to submit to
the jurisdiction of any court to which such a petition has been made.
Either Party further agrees that it shall not commence or maintain any
suit or legal proceeding concerning a dispute hereunder until such
dispute has been finally settled in accordance with the arbitration
procedure provided for herein and then only for enforcement of the
arbitral award, if any.
17.2 Notwithstanding the aforesaid, either Party shall have the right to
institute judicial proceedings against the other Party or any one
acting through or under such Party in order to enforce the instituting
Party's rights hereunder through reformation of contract, specific
performance, injunction or similar equitable relief.
18. GOVERNING LAW
This Agreement shall be governed and construed in accordance with the
laws of India.
19. CONFIDENTIALITY
19.1 For the purposes of this Agreement, "Confidential information" shall
mean all know-how and other technical, commercial or other information
of any kind, whether or not patented or patentable or copyrighted or
copyrightable, developed or acquired by a Party hereto or its
Affiliates and disclosed to the other Party or its Affiliates or to the
JVC provided that such know-how and information shall not constitute
Confidential Information if it (a) was in the possession of the
receiving party or known thereby (as shown by written records) prior to
disclosure to the receiving party by the disclosing party; (b) was in
the public domain when disclosed to the receiving party by the
disclosing party or thereafter comes into the public domain through no
fault of the receiving party; (c) was made known to the receiving party
by one who had the right to disclose such information and who had not
received the same from the disclosing party under an obligation of
confidentiality; or (d) was developed independently by the receiving
party as shown by written record.
19.2 The Parties and their Affiliates shall hold in confidence and shall not
disclose in whole or part to any third party other than their
Affiliates this Agreement or any contents thereof, except (i) as
required by applicable law; (ii) as necessary to obtain Government
approvals; or (iii) as part of necessary disclosures to the Parties' or
the JVC's lenders, investment bankers, legal counsel and accountants.
The Parties and their Affiliates shall consult with each other as to
the form of any announcements or disclosures relating to this Agreement
and shall confine any disclosures made to unaffiliated third parties to
the form and substance so agreed upon between the Parties.
19.3 Notwithstanding disclosures by a Party hereto or its Affiliates of any
Confidential Information to the other Party, the JVC or the employees
thereof, the Parties agree that the Confidential Information of each
Party or its Affiliates shall remain such Party's or its Affiliates'
own Confidential Information.
19.4 The Parties agree that, during the term of this Agreement and for a
period of five (5) years thereafter, the JVC and the Parties to whom
Confidential Information may be disclosed (i) shall
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not without the prior written consent of the disclosing party disclose
such Confidential Information to any third party (including their
Affiliates) and (ii) shall use best efforts to safeguard such
Confidential Information from misuse or unauthorized disclosure.
19.5 It is further agreed that during the term of this Agreement and for a
period of five (5) years thereafter, the JVC and the Party to whom
Confidential Information may be disclosed shall not use such
Confidential Information other than to further the authorized
activities of the JVC or to fulfill the obligations of such Party set
forth in this Agreement or any of its Schedules.
20. WAIVER
20.1 Except where time limitations are specifically provided, no failure or
delay by either Party (i) to exercise any right hereunder or (ii) to
insist upon the strict and punctual performance of any term hereof
shall operate as a waiver thereof. Further, a single or partial
exercise of any right shall not preclude an additional or further
exercise thereof or the exercise of any other right. To be effective,
each waiver of any right hereunder must be in writing and signed by the
Party waiving its right, and such waiver may be made subject to any
conditions specified therein.
21. EXCLUSIVE AGREEMENT, AMENDMENT
21.1 This Agreement including its Exhibits and/or Schedules (which
constitute an integral part of this Agreement) constitutes the entire
agreement between the Parties with respect to the subject matter hereof
and supersedes all prior or contemporaneous agreements, negotiations,
correspondence and undertakings, whether verbal or written, express or
implied. This Agreement cannot be changed, amended, modified or
terminated except by a written instrument executed by the Parties.
22. NOTICE
22.1 Notices, consents and other communications hereunder shall be in
writing, signed by the Party giving notice, and shall be deemed
delivered and received (i) if sent by telecopy confirmed by registered
mail, one day after transmission (ii) if personally delivered, upon
receipt and (iii) if mailed, seven (7) days after being sent by
registered or certified mail (return receipt requested) and properly
addressed to the other Party at the address given at the beginning of
this Agreement or at such other address as a Party may direct by notice
in accordance with this Article.
23. PARTIAL INVALIDITY
23.1 In the event any term of this Agreement is declared by a judicial or
Government authority to be legally invalid, non-binding or
unenforceable, such term shall be deemed deleted herefrom and shall
neither affect the Agreement in other respects nor the validity and
enforceability of the remaining terms. In the event of a conflict,
inconsistency or discrepancy between the terms of this Agreement and
those of its Exhibits attached hereto, the terms of this Agreement
shall prevail.
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24. COMPLIANCE WITH THE AGREEMENT
i) The Parties shall cause the JVC to acknowledge, undertake and
perform all obligations intended under this Agreement.
ii) The Parties represent and undertake that they shall, at all times,
act, and cause their representatives to act (in Board meetings and/or
General Meetings or otherwise) and to exercise their respective rights
to implement at all times the underlying spirit, intent and obligations
set forth in this Agreement.
IN WITNESS WHEREOF, the Parties hereto have signed this Agreement in two (2)
original copies as of the date first set forth above.
For WORLD WIDE WIRELESS COMMUNICATIONS INC.
------------------------------
Name:
Title:
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ OSWAL
WITNESSES:
1.
2.
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SCHEDULE-I
SCHEDULE FOR PAYMENT* FOR FREQUENCY LICENSES
A. Major Cities
Sr. No. Cities Value
1. New Delhi US $280,000
2. Mumbai US $280,000
3. Chennai US $280,000
4. Calcutta US $280,000
5. Ahmedabad US $280,000
6. Bangalore US $280,000
7. Hyderabad US $280,000
8. Prune US $280,000
B. Major Cities
Sr. No. Cities Value
1. Ludhiana US $40,000
2. Jaipur US $40,000
3. Vadodara US $40,000
4. Trivandrum US $40,000
5. Bhopal US $40,000
6. Amritsar US $40,000
7. Kanpur US $40,000
8. Chandigarh US $40,000
9. Surat US $40,000
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10. Lucknow US $40,000
11. Indore US $40,000
12. Kochi US $40,000
13. Patna US $40,000
*Note: The obligation of WWW to invest the first installment in the JVC out of
the Maximum Amount (as mentioned in Article 4.2.3) shall arise only after the
INDIAN PARTNER has obtained the License and the Frequency Licenses in respect of
the following cities:
1. Delhi
2. Mumbai
3. Chennai
4. Bangalore
5. Ludhiana
--------------------
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