SHAREHOLDERS AGREEMENT
This Agreement is made on this 22nd day of May, 2000, between:
Research Engineers Pvt. Ltd., a Company incorporated under the laws of
India and having its Principal office at X0-0, Xxxxx XX, Xxxxxx 0, Xxxxxxxx,
Xxxxxxxx 700 091 (hereinafter referred to as the REPL which expression shall
unless contrary to the context hereof include its successors, legal
representatives and permitted assigns) of the FIRST PART
AND
Xx. Xxxx Xxx son of Xx. Xxxxxxx X. Xxx resident of GD 337, Salt Lake,
Calcutta 700 091 for himself and for Xxx. Xxxxxx Xxx wife of Xx. Xxxx Xxx,
resident of GD-337, Salt Lake, Calcutta 700 091 (hereinafter called the A Das
which expression unless contrary to the context hereof shall include their
successors, legal representatives and permitted assigns) of the SECOND PART.
WHEREAS:
(a) Research Engineers Pvt. Ltd. is in the business of Software
development and related services in India and other countries.
(b) Netguru India Pvt. Ltd. (the Company) is incorporated under the
laws of India and is in the business of Software development and provider of
internet related services.
(c) Mr. A Das presently holds along with Xxx. Xxxxxx Xxx 100% of equity
consisting of 2 equity shares of INR 10 each fully paid up of the Company and
Xxx. Xxxxxx Xxx holding 1 (one) equity share of the Company has expressly
authorized Xx. Xxxx Xxx to enter into this agreement on his behalf.
(d) The parties hereto have agreed to enter into a cooperation for
conduct of the business of the Company as set out hereinafter.
IN CONSIDERATION OF MUTUAL COVENANTS CONTAINED HEREIN, THE PARTIES
AGREE AS FOLLOWS:
DEFINITIONS
1. The "Company" shall mean Netguru India Private Limited incorporated
under the Indian Companies Act, 1956 as per Registration No. 21-80986 of 1996 at
Calcutta.
2. "Shares" shall mean equity shares of the Company subscribed for and
to be subscribed for by the parties hereto upon the terms thereof.
SHARES
3. The Company will have an initial Authorized Share Capital of INR
10,000,000 divided into 1,000,000 Equity Shares of INR 10 each. The initial
Issued/Subscribed and Paid up Capital will be INR 1,000,000 divided into 100,000
Equity Shares of INR 10 each.
4. A Das shall subscribe to and fully pay for 50,998 equity shares of
INR 10 each at par aggregating to INR 509,980 (Rupees five hundred nine thousand
and nine eighty only) of the Company, the calls on the shares shall be made as
the Board of the Company may decide taking into account the financial
requirements of the Company and the shares to be subscribed by A Das being 51%
of the total shares issued. REPL shall subscribe to and fully pay for 49,000
equity shares of INR 10 each at a premium of INR 190 per share aggregating to
INR 9,800,000 (Rupees Nine million eight hundred thousand only) of the Company,
the calls on the shares shall be made as the Board of the Company may decide
taking into account the financial requirements of the Company and the shares to
be subscribed by REPL being 49% of the total shares issued.
5. After the above issue the capital structure of the Company shall be
as under:
SHAREHOLDER NUMBER OF SHARES AMOUNT
REPL 49,000 49%
A Das 51,000 51%
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Total 100,000 100%
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6. Further shares of the Company shall be issued and the amount payable
in respect thereof shall be called from time to time as may be decided, taking
into account the financial requirements of the Company, by the Company's Board
of Directors and/or General Body Meeting of the members, as may be necessary.
Members of the Company shall be entitled to subscribe to such further shares in
proportion to their existing holding of shares.
7. A Das has agreed that it shall allow the REPL to increase its
shareholding stake up to 100% in the event the Government of the India permits
higher shareholding by non-residents in the Company after due compliance with
applicable rules and regulations as per fair value determined by Auditors of the
Company.
8. The parties shall not assign, pledge, mortgage, charge or otherwise
encumber all or any equity shares in the Company held by them except with the
prior consent of the other party.
9. Both the parties would be entitled to initially subscribe or
otherwise transfer or part with ownership in the Equity Share to one or more of
associated entities after the consent of the other party.
10. In case there is any change in the Shareholders as per the
provisions of this agreement, the parties hereto agree that all new shareholders
shall be bound by the provisions of this agreement and the interested party
shall obtain an acknowledgment/agreement of their consent to this effect in
advance from any such new shareholder(s).
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DIRECTORS
11. The parties hereto agree that the number of Directors shall always
be an even number and that the Directors shall be appointed by A Das and REPL in
equal number and the parties hereto shall vote accordingly.
12. Minimum of two directors out of which at least one director
nominated by the REPL shall be the quorum of all Board meetings. The decisions
at the Board meeting without the presence of at least one director from the REPL
throughout the meeting shall be null and void.
13. The parties hereto agree that in case a Director dies, resigns or
is otherwise removed prior to the completion of his term, then the respective
party will take such other action as may be necessary to appoint or cause to be
appointed, as replacement for such deceased, resigned or removed Director.
14. The parties hereto agree that at all times during the effective
period of this Agreement that the parties shall to cause their representatives
on the Board of Directors of the Company to exercise their voting rights in
consonance with and in compliance of the terms of this Agreement.
15. Both the parties shall have the right to change their nominee
directors on the Board at their discretion. Both parties shall support each
other on the Board to get effected such appointment or change. 16. Notices of
all Board meeting shall be served to all directors at their specified address in
India or overseas. Overseas director may at his discretion specify any address
in India for receipt of Board meeting notices or any other intimations.
MUTUAL UNDERSTANDING ON CERTAIN MATTERS
17. All decisions pertaining to following matters of the Company shall
be taken only with the consent of at least one director representing A Das and
at least one director representing REPL at the Board Meeting:
(i) Any change in the capital structure of the Company or to
any issue of further shares (of whatever class) or the creation of any
options or other rights to subscribe for, acquire or call for shares or
redemption or purchase by the Company of Shares or a reduction in the
share capital of the Company.
(ii) Alterations in the Memorandum and Articles of
Association.
(iii) Appointment or changes in any directors, additional
director or alternate director.
(iv) Appointment or changes of Chairman, Managing Director,
whole time director or Executive Director.
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(v) Entering into any arrangements or agreement conferring
sole rights to any third party.
(vi) Dissolve or liquidate, or sell, lease, transfer, mortgage
or otherwise dispose of all or a substantial part of its business and
assets and undertakings.
(vii) merge or consolidate with another Company.
(viii) Create, acquire or control, directly or indirectly, any
subsidiary or make any substantial investment in any other Company or
venture.
(ix) Acquisition of businesses, patent rights.
(x) Give loans or stand guarantee or extend credit to any
person, firm or Company.
(xi) Grant any loans to any associate companies or any
Director or any relative of director.
(xii) Investment in any associate companies.
(xiii) The entering into of (including amendments to) any
license, distribution, management, marketing, technical agreement.
(xiv) The approval or disapproval of share transfers or
allotment of shares.
(xv) A change in the corporate title of the Company.
(xvi) To enter into any business other than Internet Service
Provider and related activities.
(xvii) Granting of powers of attorney except for matters in
the ordinary course of business.
(xviii) To acquire or sell shares, debentures, bonds or any
other financial instruments in any other Company.
(xix) Any restructuring of its operations.
(xx) Appointment and/or any changes in Statutory Auditors.
(xxi) Entering into of any contract which is not in the
ordinary course of business of the Company.
(xxii) Change in the accounting period of the Company.
(xxiii) Delegation of authority or power by the Board to an
individual, director or a committee of the Board.
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(xxiv) To make a gift or donation exceeding INR 20,000.
(xxv) To issue bonus shares.
(xxvi) To declare dividends.
(xxvii) To make any distribution out of capital profits or
capital reserves including share premium account.
(xxviii) To frame and implement any Stock option scheme and
any amendments thereof.
(xxix) Termination of any agreements.
(xxx) To file/withdraw suits by the company in any court of
law.
(xxxi) To settle with debtors otherwise than in ordinary
course of business.
(xxxii) Any other matter having material impact on the
business of the Company.
Both the parties agree that authority for any of above mentioned
activities shall always be exercised through a properly conducted Board meeting.
BOOKS AND RECORDS
18. The Company shall give to each of the parties hereto and its
representatives full opportunity, so long as such party is a shareholder of the
Company, full access during normal business hours to all of the premises,
physical properties, books, records and agreements of the Company, including the
right to make copies of or abstracts from any such books, records and
agreements.
19. The Company shall have its accounts audited by an independent firm
of qualified Chartered Accountants in accordance with the Indian Companies Act.
TERMINATION
20. In the event of either party committing a breach of any of the
provisions of this Agreement, the other party shall, without prejudice to other
rights and remedies available, have the right to terminate this Agreement, by
giving the defaulting party a notice in writing, specifying, the nature of the
default and the intention of termination unless such default is cured by the
defaulting party within three weeks following receipt of the said notice. In the
event of the termination of this agreement, the parties hereto shall endeavor in
good faith to reach an agreement as to the treatment of the Company or for
transfer of the stake to other party at fair value decided by Auditors of the
Company and failing such agreement within 60 days after the date of termination
or such extended time to which the parties hereto may agree, the Company shall
be taken into liquidation after completion of all Commitments/contacts for work
in hand as on the date of termination.
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21. In case either party shall be adjudged bankrupt or insolvent, or
shall file a voluntary petition in any court in India/Overseas for bankruptcy or
make an assignment for the benefit of its creditors or shall admit in writing
its inability to pay or meet its debts as they mature or if a receiver of all or
any substantial part of its property shall be appointed, this Agreement shall be
terminated and the other party shall be entitled to purchase its shares in the
Company at a fair value decided by Auditors of the Company.
NON-COMPETITION
22. The A Das undertakes not to be involved in or allow any of their
subsidiaries/affiliates/direct relatives to be involved in, any business which
competes, directly or indirectly with Company in India during the currency of
this Agreement.
23. The REPL hereto undertake and agree not to associate or enter into
any business in India which directly conflicts with the interests of the
Company.
MISCELLANEOUS
24. This Agreement shall be governed by and construed in accordance
with the Laws applicable in India.
25. Any notices required or permitted to be given hereunder shall be in
writing and sent by registered post postage prepaid and shall be addressed to
the parties at the addresses mentioned in the beginning of this Agreement or
such other addresses as either of the parties may from time to time designate by
notice in writing to the other.
26. Notice as provided herein shall be deemed to be served when
received.
27. Any dispute or difference or claim arising out of or in relation to
this Agreement including the construction, validity, performance or breach
thereof, which the parties hereto cannot settle by reaching a mutual
understanding, shall be settled as per the provisions of Indian Arbitration &
Reconciliation Act of 1996.
28. A Das and REPL shall obtain from the appropriate agencies of the
Indian and U.S. Governments respectively all consents, approvals permissions or
authorizations in form and substance satisfactory to both parties that may be
required and necessary for the execution, delivery, performance and observance
of all the provisions of this Agreement by the Company.
29. In the event that any one or more of the provisions contained in
this Agreement shall be invalid, illegal or unenforceable in any respect under
any applicable law, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby, provided, however, that in the event of either party seeking to enforce
such invalid, illegal or unenforceable provision, the other party may terminate
this Agreement by notice.
30. No variation, amendment or revision of this agreement shall be
valid or effective unless made by any one or more instruments, in writing,
referring to this Agreement and signed by the parties hereto.
31. Both the parties agree to take necessary steps for amending the
Memorandum and Articles of Association of the Company to give affect to the
provisions of this Agreement.
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IN WITNESS WHEREOF the parties hereto have here into set and subscribed
their respective hands and seals the day and year first hereinabove written.
For RESEARCH ENGINEERS PVT. LTD.
/s/ Guruda Sarkar
-----------------
(XXXXXXX XXXXXX)
CHIEF OPERATING OFFICER
in the presence of [ILLEGIBLE SIGNATURE]
address
For A Das
/s/ Xxxx Xxx
------------
(XXXX XXX)
in the presence of
[ILLEGIBLE SIGNATURE]
address
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