EXHIBIT 2
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of October 7, 2002 (the
"AGREEMENT"), by and among Xxxxxx Infoway Limited, a limited liability company
formed under the laws of the Republic of India (the "COMPANY"), SAIF Investment
Company Limited, a company incorporated in Mauritius ("SAIF") and any other
party who may hereafter become a "Holder" provided for in this Agreement.
RECITALS
WHEREAS, the Company provided certain registration rights to South Asia
Regional Fund, a company incorporated in Mauritius ("SARF") in a Share
Subscription and Shareholders Agreement, dated February 5, 1999 (the "SARF
SUBSCRIPTION AGREEMENT");
WHEREAS, in connection with the issuance and sale by the Company, and
the purchase by Sterling Commerce, Inc., a Delaware corporation ("STERLING
COMMERCE"), of 481,000 Equity Shares (the "STERLING COMMERCE SHARES"), the
Company, SARF and Sterling Commerce entered into a Registration Rights
Agreement, dated as of September 14, 1999 (the "EXISTING AGREEMENT"), that
superseded the SARF Subscription Agreement regarding the registration of Equity
Shares by SARF in the United States;
WHEREAS, in connection with the acquisition of the Sterling Commerce
Shares by Venture Tech Solutions Pvt. Limited ("VENTURE TECH"), the Sterling
Commerce Shares shall no longer be covered by, and neither Venture Tech nor any
subsequent holder of the Sterling Commerce Shares shall have any rights under,
the Existing Agreement; and
WHEREAS, in connection with the issuance and sale by the Company, and
the purchase by SAIF of ADSs (as defined below) representing Equity Shares (as
defined below) pursuant to the Subscription Agreement, dated October 7, 2002
(the "SAIF SUBSCRIPTION AGREEMENT"), by and between the Company and SAIF, the
parties desire to provide registration rights to SAIF.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. The following terms shall have the meanings
ascribed to them below:
"ADR FACILITY" means the ADR facility with the Depositary Bank
established by the Company pursuant to the Deposit Agreement as amended or
replaced from time to time.
"ADSS" means the American Depositary Shares issued under the Deposit
Agreement, each of which presently represents one equity share, par value Rs.10
per share, of the Company.
"AGREEMENT" shall have the meaning set forth in the preamble.
"ARBITRATION BOARD" shall have the meaning set forth in Section
6.13(a).
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"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which commercial banks in the State of New York or Chennai, India are
authorized or required by law or executive order to close.
"CLOSING DATE" means the date on which the transactions contemplated by
the SAIF Subscription Agreement are consummated.
"COMMISSION" means the United States Securities and Exchange Commission
or any successor agency then having jurisdiction to administer the Securities
Act.
"COMPANY" shall have the meaning set forth in the preamble.
"CONTROLLING PERSONS" shall have the meaning set forth in Section 5.1.
"DAMAGES" shall have the meaning set forth in Section 5.1.
"DEMAND REGISTRATION" means a registration of Registrable Securities
under the Securities Act pursuant to a request made under Section 3.1(a).
"DEPOSIT AGREEMENT" means the agreement between the Company and the
Depositary Bank in relation to the establishment of the ADR Facility, dated
October 18, 1999, filed as an exhibit to the Company's registration statement on
Form F-6, as amended or replaced from time to time.
"DEPOSITARY BANK" means Citibank, N.A., or any successor thereto as
appointed under the Deposit Agreement.
"DISPUTES" shall have the meaning set forth in Section 6.14.
"EQUITY SHARES" means the equity shares, par value Rs.10 per share, of
the Company and any other equity securities representing, or received in
exchange for, such equity shares, including, without limitation, American
Depositary Shares.
"EQUITY SHARE EQUIVALENTS" means any security or obligation which is by
its terms, directly or indirectly convertible into or, exchangeable or
exercisable for Equity Shares, and any option, warrant or other subscription or
purchase right with respect to the Equity Shares or any Equity Share Equivalent.
"EXISTING AGREEMENT" shall have the meaning set forth in the Recitals.
"HOLDER" shall mean (a) a holder of Registrable Securities entitled to
rights and subject to obligations hereunder, with the initial Holder being SAIF
and (b) to the extent provided in the Existing Agreement or Section 3.4 of this
Agreement, SARF (it being recognized that additional parties may be admitted as
Holders hereunder pursuant to Section 3.5).
"ICC" shall have the meaning set forth in Section 6.13(a).
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 5.3.
"INDEMNIFYING PARTY" shall have the meaning set forth in Section 5.3.
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"LIQUIDATED DAMAGES" shall have the meaning set forth in Section 2.3.
"NASD" shall have the meaning set forth in Section 4.1(j).
"PIGGY-BACK REGISTRATION" shall have the meaning set forth in Section
3.2.
"REGISTRABLE SECURITY" means each Equity Share until (i) it has been
effectively registered under the Securities Act and disposed of pursuant to an
effective registration statement, (ii) it is sold under circumstances in which
all of the applicable conditions of Rule 144 (or any similar provisions then in
force) under the Securities Act are met, including a sale pursuant to the
provisions of Rule 144(k), (iii) it has been otherwise transferred and the
certificate or other evidence of ownership for it is not required to bear a
restricted legend and it may be resold by the person receiving such certificate
without registration under the Securities Act or (iv) the Holder thereof ceases
to hold at least one percent (1.0%) of the outstanding Equity Shares and all of
such Holder's Equity Shares may be resold in one 90-day period without (x) a
volume limitation or (y) reliance on Rule 144(k).
"REGISTRATION EFFECTIVENESS DEFAULT" shall have the meaning set forth
in Section 2.3.
"REGISTRATION EXPENSES" shall have the meaning set forth in Section
4.6.
"RULES" shall have the meaning set forth in Section 6.13(a).
"SAIF" shall have the meaning set forth in the preamble.
"SAIF SHELF REGISTRATION STATEMENT" shall have the meaning set forth in
Section 2.1.
"SAIF SUBSCRIPTION AGREEMENT" shall have the meaning set forth in the
Recitals.
"SARF" shall have the meaning set forth in the preamble.
"SARF SUBSCRIPTION AGREEMENT" shall have the meaning set forth in the
Recitals.
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"STERLING COMMERCE" has the meaning set forth in the preamble.
"SUSPENSION PERIOD" shall have the meaning set forth in Section 2.2.
"UNDERWRITER" means a securities dealer who purchases any Registrable
Securities as principal in an underwritten offering or other transaction.
Section 1.2 INTERPRETATION. In this Agreement, unless the context
otherwise requires:
(a) ACCOUNTS. Any reference to a balance sheet, profit and
loss statement or other financial statement or accounts shall include a
reference to any note thereto.
(b) DIRECTLY OR INDIRECTLY. The phrase "directly or indirectly"
means directly, or indirectly through one or more intermediate persons or
through contractual or other legal arrangements, and
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"direct or indirect" has the correlative meaning.
(c) GENDER AND NUMBER. Unless the context otherwise requires, all
words (whether gender-specific or gender neutral) shall be deemed to include
each of the masculine, feminine and neuter genders, and words importing the
singular include the plural and vice versa.
(d) HEADINGS. Headings are included for convenience only and shall
not affect the construction of any provision of this Agreement.
(e) INCLUDE NOT LIMITING. "Include," "including," "are inclusive
of" and similar expressions are not expressions of limitation and shall be
construed as if followed by the words "without limitation."
(f) STATUTORY REFERENCES. A reference to a statute or statutory
provision includes, to the extent applicable at any relevant time: (i) that
statute or statutory provision as from time to time consolidated, modified,
re-enacted or replaced by any other statute or statutory provision; (ii) any
repealed statute or statutory provision which it re-enacts (with or without
modification); and (iii) any subordinate legislation or regulation made under
the relevant statute or statutory provision.
(g) TIME. If a period of time is specified and dates from a given
day or the day of a given act or event, such period shall be calculated
exclusive of that day. If the day on or by which something must be done is not a
Business Day, that thing must be done on or by the Business Day immediately
following such day. References to a time of day shall be references to Indian
Standard time.
(h) SHARE CALCULATIONS. In calculations of share numbers, (i)
references to a "fully diluted basis" mean that the calculation is to be made
assuming that all outstanding options, warrants and other Equity Share
Equivalents (whether or not by their terms then currently convertible,
exercisable or exchangeable), have been so converted, exercised or exchanged and
(ii) references to a "non-diluted basis" mean that the calculation is to be made
taking into account only Equity Shares then in issue.
ARTICLE II
SHELF REGISTRATION STATEMENT
Section 2.1 REGISTRATION STATEMENT. On the Closing Date, the
Company shall release for filing with the Commission a registration statement on
the appropriate form (the "SAIF SHELF REGISTRATION STATEMENT") covering the
resale to the public by SAIF of the Registrable Securities purchased by SAIF
pursuant to the SAIF Subscription Agreement, such registration statement to be
filed on the Business Day after the Closing Date. The Company shall use its
reasonable best efforts (subject to the receipt of necessary information from
SAIF) to cause the SAIF Shelf Registration Statement to (i) be declared
effective by the Commission within 90 days after the Closing Date after the
Closing Date or as soon thereafter as reasonably practicable and in any event
with 120 days of the Closing Date, and (ii) remain effective until the first to
occur of (w) termination of this Agreement in accordance with the Section 6.10,
(x) such time as all of the Registrable Securities covered by the SAIF Shelf
Registration Statement have been sold pursuant thereto, (y) the securities
registered pursuant to the Shelf Registration Statement shall cease to be
Registrable Securities and (z) the 42-month anniversary of the Closing Date;
PROVIDED, HOWEVER, that in the event that the Company suspends the use of the
SAIF Shelf Registration Statement for a period in excess of 90 days in any
twelve-month period pursuant to Section 2.2, then the date until which the
Company shall be obligated to keep the SAIF Shelf Registration Statement
effective pursuant to this clause (z) shall be extended on a day-for-day basis
to the extent that any such suspensions exceeded such 90-day periods.
Thereafter, the Company shall be entitled to withdraw the SAIF Shelf
Registration Statement and SAIF shall have no
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further right to offer or sell any Registrable Securities pursuant to the SAIF
Shelf Registration Statement (or any prospectus relating thereto). The
Registrable Securities subject to the SAIF Shelf Registration Statement shall
not be underwritten unless the Company shall otherwise consent in its sole
discretion (which consent shall not be unreasonably withheld), in which case
SAIF shall select one or more nationally recognized firms of investment bankers
to act as the book-running managing Underwriter or Underwriters in connection
with such offering and shall select any additional investment bankers and
managers to be used in connection with the offering; PROVIDED that such
investment bankers and managers must be reasonably satisfactory to the Company.
Section 2.2 NOTICE PROCEDURES. SAIF shall provide written notice to the
Company of any proposed sale of Registrable Securities pursuant to the SAIF
Shelf Registration Statement at least five Business Days' prior to any such
sale. Notwithstanding any other provision of this Agreement, if the Company
reasonably determines that continued use by SAIF of the SAIF Shelf Registration
Statement would (a) require the disclosure of material non-public information
concerning the Company, which disclosure would be reasonably expected to
materially adversely affect the Company or (b) prevent, delay or otherwise
adversely affect the Company from making an offering of equity securities for
its own account (which offering the Company has a good faith intention to
consummate), then the right of SAIF to use the SAIF Shelf Registration Statement
(and the prospectus relating thereto) for purposes of effecting offers or sales
of Registrable Securities pursuant thereto shall be suspended for a period (the
"SUSPENSION PERIOD"), PROVIDED that the aggregate number of days covered by
Suspension Periods shall not exceed an aggregate of 110 days in any twelve month
period. In the event that the Company receives written notice from SAIF with
regard to a proposed sale of Registrable Securities during any Suspension
Period, the Company shall provide written notice thereof to SAIF within three
Business Days after receipt of such notice from SAIF. During the Suspension
Period, SAIF shall not offer or sell any Registrable Securities pursuant to or
in reliance upon the SAIF Shelf Registration Statement (or the prospectus
relating thereto). The Company shall not be required to disclose to SAIF the
reasons for requiring a suspension of sales under the SAIF Shelf Registration
Statement, and SAIF shall not disclose to any third party the existence of any
such suspension. The Company agrees that, as promptly as practicable after the
consummation, abandonment or public disclosure of the event or transaction that
caused the Company to suspend the use of the SAIF Shelf Registration Statement
(and the prospectus relating thereto) pursuant to this Section 2.2, the Company
will provide SAIF with a revised prospectus, if required, and will notify SAIF
of its ability to effect offers or sales of Registrable Securities pursuant to
or in reliance upon the SAIF Shelf Registration Statement.
Section 2.3 LIQUIDATED DAMAGES. The parties agree that SAIF will suffer
damages if the Company fails to fulfill its obligation under Section 2.1
promptly and diligently to obtain effectiveness of the SAIF Shelf Registration
Statement and that it would not be feasible to ascertain the extent of such
damages. Accordingly, if the Commission fails to declare the SAIF Shelf
Registration Statement effective within 120 days of the Closing Date for any
reason (such event, a "REGISTRATION EFFECTIVENESS DEFAULT"), then the Company
shall pay, as liquidated damages and not as a penalty, to SAIF, an amount equal
to (i) $583 per day for each day after the 120-day anniversary of the Closing
Date and through and including the 150-day anniversary of the Closing Date that
the SAIF Shelf Registration Statement has not been declared effective by the
Commission; (ii) $3,000 per day for each day after the 150-day anniversary of
the Closing Date and through and including the 180-day anniversary of the
Closing Date that the SAIF Shelf Registration Statement has not been declared
effective by the Commission, and (iii) $5,000 per day for each day after the
180-day anniversary of the Closing Date that the SAIF Shelf Registration
Statement has not been declared effective by the Commission ("LIQUIDATED
DAMAGES"). The payment of Liquidated Damages shall constitute the sole and
exclusive remedy in damages for a Registration Effectiveness Default.
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ARTICLE III
ADDITIONAL REGISTRATION RIGHTS
Section 3.1 DEMAND REGISTRATION.
(a) REQUEST FOR REGISTRATION. Subject to Section 4.7, at any time
after the date hereof, (i) SAIF may make two written requests for a Demand
Registration pursuant to a registration statement on the appropriate form and
(ii) in the event the Company is eligible to use Form F-3 in connection with a
Demand Registration, SAIF may make two additional written requests for a Demand
Registration pursuant to a registration statement on Form F-3. Any subsequently
identified Holder may be allocated the right to demand registration hereunder by
the Company so long as no reduction is made in the demand rights allocated to
SAIF. The request for a Demand Registration shall specify the number of
Registrable Securities proposed to be sold (which shall be at least the lesser
of (i) U.S. $3.5 million in fair market value (or in the event of a registration
statement on Form F-3, $1.0 million in fair market value) or (ii) in the case of
SAIF, all Equity Shares then beneficially owned by it, and will also specify the
intended method of disposition thereof. The Company shall not be required to
keep any shelf registration requested pursuant to a Demand Registration
continuously effective for more than 120 days.
(b) EFFECTIVE REGISTRATION. A registration will not be deemed to
have been effected as a Demand Registration unless it has been declared
effective by the Commission and the Company has complied in all material
respects with its obligations under this Agreement with respect thereto;
PROVIDED that if, after it has become effective, the offering of Registrable
Securities pursuant to such registration is or becomes the subject of any stop
order, injunction or other order or requirement of the Commission or any other
governmental or administrative agency, or if any court prevents or otherwise
limits the sale of Registrable Securities pursuant to the registration (for any
reason other than the acts or omissions of the Holder who commenced the Demand
Registration), such registration will be deemed not to have been effected. If
(i) a registration requested pursuant to this Section 3.1 is deemed not to have
been effected, (ii) the registration requested pursuant to this Section 3.1 does
not remain effective for a period of at least 120 days beyond the effective date
thereof or until the earlier consummation of the distribution by the Holder who
commenced the Demand Registration of the Registrable Securities included in such
registration statement by it or (iii) the number of Registrable Securities
offered are reduced by 10% or more pursuant to clause (z) of Section 3.3(a),
then such registration statement shall not count as a Demand Registration
pursuant to Section 3.1(a) and the Company shall continue to be obligated to
effect the registrations pursuant to this Section 3.1 as though the request for
such Demand Registration had never been made. At the request of the Holder who
commenced the Demand Registration, the Company shall withdraw the Demand
Registration at any time prior to the time it becomes effective, PROVIDED that
such Holder shall reimburse the Company for all reasonable out-of-pocket
expenses (including reasonable counsel fees and expenses) incurred prior to such
withdrawal and shall thereafter be entitled to the Demand Registration rights
that existed prior to such withdrawal.
(c) SELECTION OF UNDERWRITER. If the Holder commencing the Demand
Registration so elects, the offering of Registrable Securities pursuant to a
Demand Registration shall be in the form of an underwritten offering. The Holder
commencing the Demand Registration shall select one or more nationally
recognized firms of investment bankers to act as the book-running managing
Underwriter or Underwriters in connection with such offering and shall select
any additional investment bankers and managers to be used in connection with the
offering; PROVIDED that such investment bankers and managers must be reasonably
satisfactory to the Company.
(d) PRICE DETERMINATION. In connection with a Demand Registration
under this Section 3.1 only, the Holders participating in the Demand
Registration shall have the sole right to determine the
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offering price per share and underwriting discount, if applicable, in connection
with any resales of Registrable Securities by them, after consultation with the
Company and due regard for the Company's views relating thereto.
Section 3.2 PIGGY-BACK REGISTRATION. If at any time the Company
proposes to file a registration statement under the Securities Act with respect
to an offering by the Company for its own account or for the account of any
security holders of any class of its equity securities for cash, including
without limitation, a registration statement filed in response to a request for
Demand Registration pursuant to Section 3.1 (other than (a) the SAIF Shelf
Registration Statement, (b) a registration statement filed in connection with a
business combination or an exchange offer, (c) an offering of securities solely
to the Company's existing security holders or (d) an offering related to any
compensatory benefit plan, to which this Section 3.2 shall not apply), then the
Company shall give written notice of such proposed filing to each Holder as soon
as practicable (but in no event less than 14 days before the anticipated filing
date), and such notice shall offer each other Holder the opportunity to register
such number of Registrable Securities as such Holder may request (which request
shall specify the Registrable Securities intended to be disposed of by such
Holder and the intended method of distribution thereof) (a "PIGGY-BACK
REGISTRATION").
The Company shall use its reasonable best efforts to cause the managing
Underwriter or Underwriters of a proposed underwritten offering to permit the
Registrable Securities requested by each other Holder to be included in a
Piggy-Back Registration to be included on the same terms and conditions as any
similar securities of the Company or any other security holder included therein
and to permit the sale or other disposition of such Registrable Securities in
accordance with the intended method of distribution thereof. A Holder shall have
the right to withdraw its request for inclusion of its Registrable Securities in
any registration statement pursuant to this Section 3.2 by giving written notice
to the Company of its request to withdraw.
No registration effected under this Section 3.2, and no failure to
effect a registration under this Section 3.2, shall relieve the Company of its
obligations pursuant to Section 3.1, and no failure to effect a registration
under this Section 3.2 and to complete the sale of Equity Shares in connection
therewith shall relieve the Company of any other obligation under this
Agreement.
Section 3.3 REDUCTION OF OFFERING.
(a) DEMAND REGISTRATION. As provided for in Section 3.2, the
Company may include in a Demand Registration Equity Shares for the account of
the Company, the other Holders or other holders thereof exercising contractual
piggy-back or demand rights, on the same terms and conditions as the Registrable
Securities to be included therein for the account of the Holder commencing the
Demand Registration; PROVIDED, HOWEVER, that (i) if the managing Underwriter or
Underwriters of any underwritten offering described in Section 3.1 have informed
the Company in writing that it is their opinion that the total number of Equity
Shares which the Company and the Holders and any other holders participating
therein intend to include in such offering is such as to materially and
adversely affect the success of such offering, then (x) the number of Equity
Shares to be offered for the account of such other holders (if any) shall be
reduced (to zero, if necessary), in the case of this clause (x) PRO RATA in
proportion to the respective number of Equity Shares requested to be registered,
(y) thereafter, if necessary, the number of Equity Shares to be offered for the
account of the Company (if any) shall be reduced (to zero, if necessary) and (z)
thereafter, if necessary, the number of Equity Shares to be offered for the
account of the Holders (including the Holder commencing the Demand Registration)
shall be reduced PRO RATA in proportion to the respective number of Equity
Shares requested to be registered to the extent necessary to reduce the total
number of Equity Shares requested to be included in such offering to the number
of Equity Shares, if any, recommended by such managing Underwriters and (ii) if
the offering is not underwritten, no other party, including the Company,
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shall be permitted to offer securities under any such Demand Registration unless
the Holder commencing the Demand Registration consents to the inclusion of such
Equity Shares therein, such consent not to be unreasonably withheld.
(b) PIGGY-BACK REGISTRATION. Subject to the provisions of Section
3.4(b), if the managing Underwriter or Underwriters of any underwritten offering
described in Section 3.2 have informed the Company in writing that it is their
opinion that the total number of Equity Shares that the Company and the Holders
and any other Persons desiring to participate in a registration other than a
Demand Registration intend to include in such offering is such as to materially
and adversely affect the success of such offering, then the number of Equity
Shares to be offered for the account of the Holders and all such other Persons
(other than the Company) participating in such registration shall be reduced (to
zero if necessary) or limited PRO RATA in proportion to the respective number of
Equity Shares requested to be registered to the extent necessary to reduce the
total number of Equity Shares requested to be included in such offering to the
number of Equity Shares, if any, recommended by such managing Underwriters;
PROVIDED, HOWEVER, that if such offering is effected for the account of any
security holder of the Company other than a Holder pursuant to the demand
registration rights of such security holder, then (x) the number of Equity
Shares to be offered for the account of the Company (if any) shall be reduced
(to zero, if necessary) and (y) thereafter, if necessary, the number of Equity
Shares to be offered for the account of the Holders and any other holders that
have requested to include Equity Shares in such registration (but not such
security holders who have exercised their demand registration rights) shall be
reduced (to zero, if necessary), in the case of this clause (y) PRO RATA in
proportion to the respective number of Equity Shares requested to be registered,
to the extent necessary to reduce the total number of Equity Shares requested to
be included in such offering to the number of Equity Shares, if any, recommended
by such managing Underwriters.
Section 3.4 EXISTING AGREEMENT; TREATMENT OF SARF.
(a) The Holders acknowledge that they shall not have any rights
under the Existing Agreement, including without limitation, in connection with
any purported assignment of rights thereunder. In connection with the
acquisition of the Sterling Commerce Shares by Venture Tech, the Sterling
Commerce Shares shall no longer be covered by, and neither Venture Tech nor any
subsequent holder of the Sterling Commerce Shares shall have any rights under,
the Existing Agreement.
(b) The Holders acknowledge that, by the terms of the Existing
Agreement, SARF is eligible to be treated as a "Holder" hereunder for purposes
of being included as a Holder in any offering described in Section 3.1 or 3.2 of
this Agreement (including, without limitation, for purposes of any "Reduction of
Offering" by the terms of Section 3.3). Notwithstanding the foregoing and the
provisions of Section 3.3(b), in the event of a piggy-back registration under
Section 3.2 in which SARF is eligible under applicable law to sell Registrable
Securities, it is expressly agreed that the rights of the Holders to include
Registrable Securities in such registration shall be subordinated to the rights
of SARF to include Registrable Securities in such registration pursuant to the
provisions of the Existing Agreement.
Section 3.5 ADDITIONAL HOLDERS. The Company may from time to time
designate additional persons that, upon the execution of a counterpart signature
page hereto, shall be deemed to be "Holders" for purposes of this Agreement,
PROVIDED that no such additional Holders shall have any rights of any sort
whatsoever under Article II or in respect of the SAIF Shelf Registration
Statement.
ARTICLE IV
REGISTRATION PROCEDURES
Section 4.1 FILINGS; INFORMATION. In connection with the registration
of Registrable
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Securities pursuant to Section 2.1 or 3.1, the Company will use its reasonable
best efforts (subject to receipt of necessary information from the applicable
Holders) to effect the registration and the sale of such Registrable Securities
in accordance with the intended method of disposition thereof as quickly as
practicable, and in connection with any such registration:
(a) FILING. The Company will as expeditiously as reasonably
practicable (and with respect to the SAIF Shelf Registration Statement, within
one Business Day after the Closing Date) prepare and file with the Commission a
registration statement on an appropriate form for the sale of the Registrable
Securities to be registered thereunder in accordance with the intended method of
distribution thereof. With respect to the SAIF Shelf Registration Statement, the
Company shall use reasonable best efforts to cause such filed registration
statement to become and remain effective for the periods specified in Sections
2.1 and 2.2. With respect to a Demand Registration, the Company shall use its
reasonable best efforts to cause such filed registration statement to become and
remain effective for a period of not less than 120 days (or such shorter period
as is required to complete the distribution of the Equity Shares); PROVIDED that
the Company may postpone the filing of a registration statement with respect to
a Demand Registration for a period of not more than 120 days from the date of
receipt of the request in accordance with Section 3.1 if the Company reasonably
determines that such a filing would (i) require the disclosure of material
non-public information concerning the Company, which disclosure would be
reasonably expected to materially adversely affect the Company or (ii) prevent,
delay or otherwise adversely affect the Company from making an offering of
equity securities for its own account (which offering the Company has a good
faith intention to consummate) in which case the Holders shall have the
piggy-back registration rights set forth in Section 3.2; PROVIDED that the
Company shall only be entitled to postpone any such filing two times in any
twenty-four month period. The Company shall not be required to disclose to any
Holder the reasons for postponing the filing of a Registration Statement, and
the Holders shall not disclose to any third party the occurrence of any such
postponement. If the Company postpones the filing of a Registration Statement,
it shall promptly notify the Holders in writing when the events or circumstances
permitting such postponement have ended.
(b) AMENDMENTS AND SUPPLEMENTS. The Company will as expeditiously
as reasonably practicable prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
continuously effective for a period of not less than 120 days or such shorter
period which will terminate when all securities covered by such registration
statement have been sold (and with respect to the SAIF Shelf Registration
Statement for the period specified in Sections 2.1 and 2.2) and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the Holders participating
therein as set forth in such registration statement.
(c) REVIEW OF FILINGS. Upon request, the Company will, prior to
filing a registration statement or prospectus or any amendment or supplement
thereto, furnish to each Holder participating in such offering, counsel
representing each Holder (if requested), and each Underwriter, if any, of the
Registrable Securities covered by such registration statement copies of such
registration statement as proposed to be filed, together with exhibits thereto,
which documents will be subject to review and comment by the foregoing (and the
Company and its counsel shall give due regard to such comments) promptly after
delivery, and thereafter furnish to such Holders, counsel and Underwriter, if
any, for their review and comment such number of copies of such registration
statement, each amendment and supplement thereto (in each case including all
exhibits thereto and documents incorporated by reference therein), the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents or information as such Holder, counsel or
Underwriter may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by the participating Holders.
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(d) NOTICE OF CERTAIN EVENTS. After the filing of the registration
statement, the Company will promptly notify each Holder participating in such
offering, and (if requested by any Holder) confirm such notice in writing, (i)
when a prospectus or any prospectus supplement or post-effective amendment has
been filed and, with respect to a registration statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the
Commission or any other Federal or state governmental authority for amendments
or supplements to a registration statement or related prospectus or for
additional information, (iii) of the issuance by the Commission or any other
Federal or state governmental authority of any stop order suspending the
effectiveness of a registration statement or the initiation of any proceedings
for that purpose, (iv) if at any time when a prospectus is required by the
Securities Act to be delivered in connection with sales of the Registrable
Securities the representations and warranties of the Company contained in any
agreement contemplated by Section 4.1(h) (including any underwriting agreement)
cease to be true and correct in all material respects, (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (vi) of the happening of any event which makes any statement made in
such registration statement or related prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material respect
or which requires the making of any changes in a registration statement,
prospectus or documents incorporated therein by reference so that, in the case
of the registration statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and that in the case
of the prospectus, it will not contain any untrue statement of a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and (vii)
of the Company's reasonable determination that a supplement to a prospectus or a
post-effective amendment to a registration statement would be necessary.
(e) BLUE SKY QUALIFICATION. The Company will use its reasonable
best efforts to (i) register or qualify the Registrable Securities under such
other securities or blue sky laws of such jurisdictions in the United States as
the Holders participating in the offering reasonably (in light of the intended
plan of distribution) requests and (ii) cause such Registrable Securities to be
registered with or approved by such other governmental agencies or authorities
in the United States as may be necessary by virtue of the business and
operations of the Company and do any and all other acts and things that may be
reasonably necessary or advisable to enable the participating Holders to
consummate the disposition of the Registrable Securities owned by them; PROVIDED
that the Company will not be required to (A) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify but for
this paragraph (e), (B) subject itself to taxation in any such jurisdiction or
(C) consent to general service of process in any such jurisdiction.
(f) NO STOP ORDERS. The Company will take all reasonable actions
required to prevent the entry, or obtain the withdrawal, of any order suspending
the effectiveness of a registration statement, or the lifting of any suspension
of the qualification (or exemption from qualification) of any Registrable
Securities for sale in any jurisdiction, at the earliest moment.
(g) UPDATING. Upon the occurrence of any event contemplated by
paragraph 4.1(d)(iv), (vi) or (vii) above (but subject to Sections 2.2 and
4.1(a)), the Company will (i) prepare a supplement or post-effective amendment
to such registration statement or a supplement to the related prospectus or any
document incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable Securities
being sold thereunder, such prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (ii) promptly make available to the
Holders any such supplement or amendment.
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(h) COMPANY AGREEMENTS. The Company will enter into customary
agreements (including, if applicable, an underwriting agreement in customary
form and which is reasonably satisfactory to the Company) and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities in accordance with this Agreement and
applicable legal requirements.
(i) OPINIONS. In the case of an underwritten offering, the Company
will furnish to each Holder participating in the offering and to each
Underwriter, if any, a signed counterpart, addressed to such Holder or
Underwriter, of (i) an opinion or opinions of counsel to the Company, and (ii) a
comfort letter or comfort letters from the Company's independent public
accountants, each in customary form and covering such matters of the type
customarily covered by opinions or comfort letter, as the case may be, as such
Holder(s) or the managing Underwriter therefor reasonably requests so long as
consistent with the professional standards then applicable to such letters.
(j) LISTING. The Company will use its reasonable best efforts (a)
to cause any class of Registrable Securities (including, as appropriate, related
American Depositary Shares) to be listed on a U.S. national securities exchange
(if such Equity Shares are not already so listed) and on each additional U.S.
national securities exchange on which similar securities issued by the Company
are then listed (if any), if the listing of such Registrable Securities is then
permitted under the rules of such exchange or (b) to secure designation of all
such Registrable Securities covered by such registration statement as a Nasdaq
"national market system security" within the meaning of Rule 11Aa2-1 of the
Commission or, failing that, to secure Nasdaq authorization for such Registrable
Securities and, without limiting the generality of the foregoing, to use its
reasonable best efforts to arrange for at least two market makers to register as
such with respect to such Registrable Securities with the National Association
of Securities Dealers, Inc. (the "NASD").
Section 4.2 HOLDER INFORMATION. The Company may require each Holder
participating in an offering covered by this Agreement to furnish promptly in
writing to the Company such information regarding the Holder, the distribution
of the Registrable Securities by such Holder as the Company may from time to
time reasonably request and such other information as may be legally required in
connection with such registration including, without limitation, all such
information as may be requested by the Commission or the NASD. The Company may
delay or withdraw such registration, or exclude a Holder from participating, if
a Holder fails to provide such information.
Section 4.3 SUSPENSION. Each Holder agrees that in connection with any
Demand Registration or Piggy-Back Registration, upon receipt of any notice from
the Company of the happening of any event of the kind described in Sections
4.1(d)(iii), (iv), (v), (vi) and (vii) hereof, the Holder will forthwith
discontinue disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended prospectus contemplated by Section
4.1(g) hereof, and, if so directed by the Company, each Holder will deliver to
the Company all copies, other than permanent file copies, then in such Holder's
possession of the most recent prospectus covering such Registrable Securities at
the time of receipt of such notice. In the event the Company shall give such
notice, the Company shall extend the period during which such registration
statement shall be maintained effective (including the period referred to in
Section 4.1(a) hereof) by the number of days during the period from and
including the date of the giving of notice pursuant to Section 4.1(d)(iii),
(iv), (v), (vi) or (vii) hereof to the date when the Company shall make
available to the Holder(s) a prospectus supplemented or amended to conform with
the requirements of Section 4.1(g) hereof. No Holders shall disclose to any
third party the happening of any event of the kind described in Sections
4.1(d)(iii), (iv), (v), (vi) and (vii) or the receipt of any notice from the
Company in respect thereof.
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Section 4.4 PIGGY-BACK REGISTRATION PROCEDURES. In connection with any
registration of Registrable Securities pursuant to Section 3.2, the Company will
take the actions contemplated by paragraphs (c), (d), (e), (i) and (j) of
Section 4.1 above.
Section 4.5 MARKETING EFFORTS. In connection with any underwritten
Demand Registration pursuant to Section 3.1, the Company will participate in a
reasonable manner in any marketing efforts reasonably requested by the
underwriters.
Section 4.6 REGISTRATION EXPENSES. In connection with a Demand
Registration pursuant to Section 3.1 hereof and any registration statement filed
pursuant to Section 3.2 hereof, the Company shall pay the following registration
expenses incurred in connection with the registration hereunder (the
"REGISTRATION EXPENSES"): (i) all registration and filing fees, (ii) fees and
expenses of compliance with securities or blue sky laws (including reasonable
fees and disbursements of counsel in connection with blue sky qualifications of
the Registrable Securities), (iii) printing expenses, (iv) the Company's
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties) and all fees
and expenses incident to the performance of or compliance with this Agreement by
the Company, (v) the fees and expenses incurred in connection with the listing
of the Registrable Securities, (vi) reasonable fees and disbursements of counsel
for the Company, (vii) in connection with a Demand Registration pursuant to
Section 3.1 only, reasonable fees and disbursements of counsel for the Holder
commencing the demand registration (not to exceed $40,000 in the aggregate),
(viii) customary fees and expenses for independent certified public accountants
retained by the Company (including the expenses of any comfort letters or costs
associated with the delivery by independent certified public accountants of a
comfort letter or comfort letters in customary form if such letter may be
rendered under then-applicable standards of professional conduct), and (ix) the
reasonable fees and expenses of any special experts retained by the Company in
connection with such registration. The Company shall have no obligation to pay
(A) any fees and expenses of counsel for the Holders (except as specified in
clause (vii) above), or (B) any underwriting fees, discounts or commissions
attributable to the sale of Registrable Securities.
Section 4.7 LIMITATION. Notwithstanding any other provision of this
Agreement, the Company's obligations under this Agreement to register
Registrable Securities shall apply only with respect to jurisdictions where such
registration enables the Holder thereof to sell such Registrable Securities in
accordance with applicable law. The parties acknowledge that, as of the date of
this Agreement, the only established market for the trading of the Company's
equity securities is on Nasdaq through the ADR Facility.
ARTICLE V
INDEMNIFICATION AND CONTRIBUTION
Section 5.1 INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless each Holder, its officers, directors, employees and
agents, and each Person, if any, who controls such Holder within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, together
with the partners, officers, directors, employees and agents of such controlling
Person (collectively, the "CONTROLLING PERSONS"), from and against any loss,
claim, damage, liability, reasonable attorneys' fees, cost or expense and costs
and expenses of investigating and defending any such claim (collectively, the
"DAMAGES"), joint or several, and any action in respect thereof to which any
such Holder, its officers, directors, employees and agents, and any such
Controlling Person may become subject under the Securities Act or otherwise,
insofar as such Damages (or proceedings in respect thereof) arise out of,
12
or are based upon, any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating to
the Registrable Securities or any preliminary prospectus, or arises out of, or
are based upon, any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as the same are based upon information furnished
in writing to the Company by such Holder or Control Person expressly for use
therein, and shall reimburse, as incurred, each Holder, its officers, directors,
employees and agents, and each such Controlling Person for any legal and other
expenses reasonably incurred by such Holder, its officers, directors, employees
and agents, or any such Controlling Person in investigating or defending or
preparing to defend against any such Damages or proceedings; PROVIDED, HOWEVER,
that the Company shall not be liable to a Holder to the extent that (a) any such
Damages arise out of or are based upon an untrue statement or omission made in
any preliminary prospectus if (i) the Holder failed to send or deliver a copy of
the final prospectus with or prior to the delivery of written confirmation of
the sale by or on behalf of the Holder to the Person asserting the claim from
which such Damages arise, and (ii) the final prospectus would have corrected
such untrue statement or such omission; or (b) any such Damages arise out of or
are based upon an untrue statement or omission in any prospectus if (x) such
untrue statement or omission is corrected in an amendment or supplement to such
prospectus, and (y) having previously been furnished by or on behalf of the
Company with copies of such prospectus as so amended or supplemented, the Holder
thereafter fails to deliver such prospectus as so amended or supplemented prior
to or concurrently with the sale of a Registrable Security to the Person
asserting the claim from which such Damages arise.
Section 5.2 INDEMNIFICATION BY HOLDERS. Each Holder agrees to indemnify
and hold harmless the Company, along with its officers, directors, employees and
agents and each Person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, together
with the partners, officers, directors, employees and agents of such controlling
Person, to the same extent as the foregoing indemnity from the Company to the
Holders, but only with reference to information related to such Holder, or its
plan of distribution, either (a) furnished in writing by the Holder or on its
behalf expressly for use in any registration statement or prospectus relating to
the Registrable Securities, or any amendment or supplement thereto, or any
preliminary prospectus, or (b) omitted by the Holder from any registration
statement or prospectus relating to the Registrable Securities, or any amendment
or supplement thereto, or any preliminary prospectus, and necessary to make the
statements contained therein with respect to the Holder or its plan of
distribution not misleading. In case any action or proceeding shall be brought
against the Company or its officers, directors, employees or agents or any such
controlling Person or its partners, officers, directors, employees or agents, in
respect of which indemnity may be sought against a Holder, such indemnifying
Holder shall have the rights and duties given to the Company, and the Company or
its officers, directors, employees or agents, controlling Person, or its
partners, officers, directors, employees or agents, shall have the rights and
duties given to such Holder, under Section 5.1. Each Holder also agrees to
indemnify and hold harmless any other Person selling Registrable Securities and
their respective officers and directors and each Person who controls each other
such other Person on substantially the same basis as that of the indemnification
of the Company provided in this Section 5.2. In no event shall the liability of
any Holder be greater in amount than the dollar amount of the proceeds (net of
payment of all expenses) received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
Section 5.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after
receipt by any Person in respect of which indemnity may be sought pursuant to
Section 5.1 or 5.2 (an "INDEMNIFIED PARTY") of notice of any claim or the
commencement of any action, the Indemnified Party shall, if a claim in respect
thereof is to be made against the Person against whom such indemnity may be
sought (an "INDEMNIFYING PARTY") notify the Indemnifying Party in writing of the
claim or the commencement of such action, PROVIDED that the failure to notify
the Indemnifying Party shall not relieve it from any liability except to the
extent of any material prejudice resulting therefrom. If any such claim or
action shall be brought against an Indemnified Party, and it shall notify the
Indemnifying Parry thereof, the Indemnifying Party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any other
similarly notified
13
Indemnifying Party, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party; PROVIDED, that the Indemnifying Party
acknowledges, in a writing in form and substance reasonably satisfactory to such
Indemnified Party, such Indemnifying Party's liability for all Damages of such
Indemnified Party to the extent specified in, and in accordance with this
Article V. After notice from the Indemnifying Party to the Indemnified Party of
its election to assume the defense of such claim or action, the Indemnifying
Party shall not be liable to the Indemnified Party for any legal or other
expenses subsequently incurred by the Indemnified Party in connection with the
defense thereof other than reasonable costs of investigation; PROVIDED that the
Indemnified Party shall have the right to employ separate counsel to represent
the Indemnified Party and its controlling Persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the Indemnified Party against the Indemnifying Party, but the fees and
expenses of such counsel shall be for the account of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) in the reasonable judgment of
the Indemnified Party, representation of both parties by the same counsel would
be inappropriate due to actual or potential conflicts of interest between them,
it being understood, however, that the Indemnifying Party shall not, in
connection with any one such claim or action or separate but substantially
similar or related claims or actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the fees and expenses
of more than one separate firm of attorneys (together with appropriate local
counsel) at any time for all Indemnified Parties, or for fees and expenses that
are not reasonable. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any claim or pending
or threatened proceeding in respect of which the Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability arising out of such claim or
proceeding. Whether or not the defense of any claim or action is assumed by the
Indemnifying Party, such Indemnifying Party will not be subject to any liability
for any settlement made without its consent, which consent will not be
unreasonably withheld.
Section 5.4 CONTRIBUTION. If the indemnification provided for in this
Article V is unavailable to the Indemnified Parties in respect of any Damages
referred to herein, then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Damages in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and the
Indemnified Party in connection with such statements or omissions, as well as
any other relevant equitable considerations. The relative fault of the
Indemnifying Party on the one hand and the Indemnified Party on the other shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.4 were determined by PRO RATA allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the Damages
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 5.4, no Holder shall be required to contribute any amount in excess of
the amount by which the total price at which the Registrable Securities of the
Holder were offered to the public (less underwriting discounts and commissions)
exceeds the amount of any damages which the Holder has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
14
The indemnity, contribution and expense reimbursement obligations
contained in this Article V are in addition to any liability any Indemnifying
Party may otherwise have to an Indemnified Party or otherwise. The provisions of
this Article V shall survive for a period equal to the statute of limitations of
the underlying claim under applicable law, notwithstanding any transfer of the
Registrable Securities by a Holder or any termination of this Agreement.
ARTICLE VI
MISCELLANEOUS
Section 6.1 PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any underwritten registration hereunder unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements, and (b) completes and executes all questionnaires,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements and these registration rights;
PROVIDED that (i) a Holder shall not be required to make any representations or
warranties except those which relate solely to such Holder and its intended
method of distribution, and (ii) the liability of a Holder to any Underwriter
under such underwriting agreement will be limited to liability arising from
misstatements or omissions regarding such Holder and its intended method of
distribution and any such liability shall not exceed an amount equal to the
amount of net proceeds the Holder derives from such registration; PROVIDED,
HOWEVER, that in an offering by the Company in which a Holder requests to be
included in a Piggy-Back Registration, the Company shall use its reasonable best
efforts to arrange the terms of the offering such that the provisions set forth
in clauses (i) and (ii) of this Section 6.1 are true; PROVIDED FURTHER, that if
the Company fails in its reasonable best efforts to so arrange the terms, the
Holder may withdraw all or any part of its Registrable Securities from the
Piggy-Back Registration and the Company shall reimburse the withdrawing Holder
for all reasonable out-of-pocket expenses (including reasonable out-of-pocket
counsel fees and expenses) incurred prior to such withdrawal.
Section 6.2 AMENDMENT AND MODIFICATION. Any provision of this Agreement
may be waived, PROVIDED that such waiver is set forth in a writing executed by
the party against whom the enforcement of such waiver is sought. Except for a
waiver applicable to a single party and consented to by that party, this
Agreement may not be amended, modified or supplemented other than by a written
instrument signed by the Company and SAIF. No course of dealing between or among
any Persons having any interest in this Agreement will be deemed effective to
modify, amend or discharge any part of this Agreement or any rights or
obligations of any Person under or by reason of this Agreement.
Section 6.3 SUCCESSORS AND ASSIGNS; ENTIRE AGREEMENT.
(a) This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors. Except as otherwise specifically permitted pursuant to this
Agreement, neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by the Company without the prior written
consent of SAIF. The rights to cause the Company to register securities granted
to any party hereto under this Agreement may be assigned to a transferee or
assignee of Registrable Securities by such party, PROVIDED that (i) such
transfer may otherwise be effected in accordance with applicable securities laws
and any agreements to which the transferee is a party, (ii) notice of such
assignment is given to the Company (which notice shall include the name and
address of the transferee or assignee and identify the Registrable Securities
with respect to which rights are to be transferred or assigned), (iii) such
transferee or assignee (x) is a subsidiary, affiliated partnership, affiliate or
partner of such party or (x) acquires from such party at least 250,000 Equity
Shares constituting
15
Registrable Securities (subject to adjustment for stock splits, combinations,
dividends and similar transactions occurring after the date hereof) and (d) such
transferee agrees in writing to be bound hereby. If a Holder shall acquire
additional Equity Shares, such Equity Shares shall, except as otherwise
expressly provided herein, be held subject to (and entitled to all the benefits
of) all of the terms of this Agreement.
(b) This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges and
supersedes all prior discussions, agreements and understandings of any and every
nature among them.
Section 6.4 SEPARABILITY. In the event that any provision of this
Agreement or the application of any provision hereof is declared to be illegal,
invalid or otherwise unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall not be affected except to the extent necessary
to delete such illegal, invalid or unenforceable provision unless that provision
held invalid shall substantially impair the benefits of the remaining portions
of this Agreement.
Section 6.5 NOTICES.
All notices and other communications provided for or permitted
hereunder shall be made by hand-delivery, telecopier, or overnight air courier
guaranteeing next day delivery:
(a) if to SAIF, at c/o SB Asia Infrastructure Fund, L.P., Suite
2115-2118, Two Pacific Place, 00 Xxxxxx Xxx, Xxxx Xxxx, Xxxxxxxxx Xxxxxxx H.P.
Xxx, Esq., Fax: (000) 0000-0000, with a copy to Xxxx, Weiss, Rifkind, Xxxxxxx &
Xxxxxxxx, 00xx Xxxxx, Xxxx Xxxx Club Building, 0X Xxxxxx Xxxx Xxxxxxx, Xxxx
Xxxx, Xxxxxxxxx, Xxxxxxx Xxxxx, Fax (000) 0000-0000; and
(b) if to the Company, at Tidel Park, 2nd Floor, No. 4, Canal Bank
Road, Taramani, Chennai - 600 113, India, with a copy to IInd Floor, Mayfair
Centre, 1-8-303/36, X.X. Xxxx, Xxxxxxxxxxxx - 000 000, Xxxxx, with a copy to
X.X. Xxxxxxxxxxxx, B 12 Xxxxxxx Xxxxxx, Xxx Xxxxx - 000 000, Xxxxx, and to
Xxxxxx & Xxxxxxx, 000 Xxxxxxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000,
Attention: Xxxxxxx X. Xxxxxxxx, Esq., Fax: (000) 000-0000.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
The parties may change the addresses to which notices are to be given by giving
five days' prior notice of such change in accordance herewith.
Section 6.6 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal law of New York, without giving effect
to principles of conflicts of law.
Section 6.7 HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement,
nor shall they affect their meaning, construction or effect.
Section 6.8 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original instrument and
all of which together shall constitute one and the same instrument.
Section 6.9 FURTHER ASSURANCES. Each party shall cooperate and take
such action as may be reasonably requested by another party in order to carry
out the provisions and purposes of this Agreement
16
and the transactions contemplated hereby.
Section 6.10 TERMINATION. Unless sooner terminated in accordance with
its terms or as otherwise herein provided, this Agreement shall terminate upon
the earlier to occur of (i) the mutual agreement by the parties hereto or (ii)
such time as no Holder holds at least one percent (1.0%) of the outstanding
Equity Shares and all of each such Holder's Equity Shares may be resold in one
90-day period without (x) a volume limitation or (y) reliance on Rule 144(k).
Section 6.11 REMEDIES. In the event of a breach or a threatened breach
by any party to this Agreement of its obligations under this Agreement, any
party injured or to be injured by such breach will be entitled to specific
performance of its rights under this Agreement or to injunctive relief, in
addition to being entitled to exercise all rights provided in this Agreement and
granted by law. The parties agree that the provisions of this Agreement shall be
specifically enforceable, it being agreed by the parties that the remedy at law,
including monetary damages, for breach of any such provision will be inadequate
compensation for any loss and that any defense or objection in any action for
specific performance or injunctive relief that a remedy at law would be adequate
is waived. Notwithstanding the foregoing, it is expressly agreed that the
payment of Liquidated Damages shall constitute the sole and exclusive remedy in
damages for a Registration Effectiveness Default.
Section 6.12 RECAPITALIZATION, EXCHANGES, ETC. If any capital stock or
other securities are issued in respect of, in exchange for, or in substitution
of, any Equity Shares by reason of any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, stock dividend, split-up, sale of assets, distribution to
stockholders or combination of the Equity Shares or any other change in capital
structure of the Company, then appropriate adjustments shall be made with
respect to the relevant provisions of this Agreement so as to fairly and
equitably preserve, as far as practicable, the original rights and obligations
of the parties hereto under this Agreement and the term "Equity Shares" as used
herein, shall be deemed to include shares of such capital stock or other
securities, as appropriate. Without limiting the foregoing, whenever a
particular number of Equity Shares is specified herein, such number shall be
adjusted to reflect stock dividends, stock-splits, combinations or other
reclassifications of stock or any similar transactions.
Section 6.13 ARBITRATION.
(a) Any dispute or claim arising out of or in connection with or
relating to this Agreement, or the breach, termination or invalidity hereof
(including the validity, scope and enforceability of this arbitration
provision), shall be finally resolved by arbitration by the International
Chamber of Commerce ("ICC") or its successor pursuant to the ICC's then
prevailing Rules of Arbitration of the International Chamber of Commerce (the
"RULES") and as are in force at the time of any such arbitration and as may be
amended by the rest of this Section 6.13. For the purpose of such arbitration,
there shall be three arbitrators appointed in accordance with the Rules
("ARBITRATION BOARD").
(b) The place of arbitration shall be in Singapore. All
arbitration proceedings shall be conducted in the English language. The
arbitrators shall decide any such dispute or claim strictly in accordance with
the governing law specified in Section 6.6. Judgment upon any arbitral award
rendered hereunder may be entered in any court having jurisdiction, or
application may be made to such court for a judicial acceptance of the award and
an order of enforcement, as the case may be.
(c) The parties agree to facilitate the arbitration by (i)
cooperating in good faith to expedite (to the maximum extent practicable) the
conduct of the arbitration, (ii) making available to one another and to the
Arbitration Board for inspection and extraction all documents, books, records,
and personnel under
17
their control or under the control of a person controlling or controlled by such
party if determined by the Arbitration Board to be relevant to the dispute,
(iii) conducting arbitration hearings to the greater extent possible on
successive Business Days and (iv) using their best efforts to observe the time
periods established by the rules of the ICC or by the Arbitration Board for the
submission of evidence and briefs.
(d) The costs and expenses of the arbitration, including, without
limitation, the fees of the arbitration, including, without limitation, the fees
of the Arbitration Board, shall be borne equally by each party to the dispute or
claim, and each party shall pay its own fees, disbursements and other charges of
its counsel.
(e) Any award made by the Arbitration Board shall be final and
binding on each of the parties that were parties to the dispute. The parties
expressly agree to waive the applicability of any laws and regulations that
would otherwise give the right to appeal the decisions of the Arbitration Board
so that there shall be no appeal to any court of law for the award of the
Arbitration Board, and a Party shall not challenge or resist the enforcement
action taken by any other Party in whose favor an award of the Arbitration Board
was given.
Section 6.14 Effective Date. This Agreement (other than this Section
6.14 and Section 1) shall become effective on and from the date of Closing (as
defined in the SAIF Subscription Agreement). Section 6.14 and Section 1 are
effective on and from the date hereof. If the SAIF Subscription Agreement is
terminated this Agreement shall be void ab initio.
(SIGNATURE PAGES FOLLOW)
18
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first above written.
XXXXXX INFOWAY LIMITED
By: /s/ X. Xxxxxxx
----------------------------
Name: X. Xxxxxxx
Title: Managing Director
SAIF INVESTMENT COMPANY LIMITED
By: /s/ Xxxxxx Xxx
----------------------------
Name: Xxxxxx Xxx
Title: Director
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