Exhibit 10.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of this
8thday of November, 2005, is by and among WNS HOLDINGS LTD., a Jersey
corporation having its office at 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX
(the "Buyer"); FIRST MAGNUS FINANCIAL CORPORATION, an Arizona corporation with
its principal place of business at 000 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxx 00000, XXX
("First Magnus-I"); FIRST MAGNUS CONSULTING LLC, an Arizona limited liability
company with its principal place of business at 000 Xxxxx Xxxxxx Xxxx, Xxxxxx,
Xxxxxxx 00000, XXX ("First Magnus-II"; and First Magnus-I and First Magnus-II
are referred to herein collectively as "First Magnus"); MR. VIVEK SHIVPURI, an
individual whose address is at 0000 Xxxx Xxxxxxx Xxxxxxx Nayes, Xxxxxx, Xxxxxxx
00000, XXX ("Mr. Shivpuri"); XX. XXXX XXXXXX, an individual whose address is at
0000 Xxxx Xxxxxxx Xx XxXxxx, Xxxxxx, Xxxxxxx 00000, XXX ("Xx. Xxxxxx"); XX.
XXXXXX XXXXXXXXXX, an individual whose address is at X.X.X. Xxx #0000, Xxxxxxx
Xxxx Xxxxxx, Xxxxxxx Xxxx Xxxx ("Xx. Xxxxxxxxxx"); XX. XXXXXXXXX XXXXX, an
individual whose address is at 0000 Xxxx Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxxx 00000,
XXX ("Mr. Paola"); (Mr. Paola, Mr. Shivpuri, Xx. Xxxxxx and Xx. Xxxxxxxxxx being
collectively referred to in this Agreement as the "Core Members"); each of the
individuals identified on Exhibit A to this Agreement (each a Shareholder, and
collectively the "Shareholders"); Mr. Shivpuri, in his capacity as the
Shareholder Representative (as hereinafter defined) of the Sellers listed on
each of Annexure 1; First Magnus-I, in its capacity as the Shareholder
Representative (as hereinafter defined) of First Magnus-I and First Magnus-II;
and TRINITY PARTNERS INCORPORATED., a Delaware corporation having its office at
0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000 (the "Company"). The
Core Members, First Magnus-I, First Magnus-II and the Shareholders are
collectively referred to in this Agreement as the "Sellers" and each
individually sometimes as the "Seller."
RECITALS
A. As of the date of this Agreement, the Sellers in the aggregate are
the registered and beneficial owners of all of the share capital of the Company.
The share capital of the Company consists of: (i) 9,806,388 shares of common
stock, par value $0.01 per share (the "Common Stock"), which are authorized, of
which 883,838 shares are issued and outstanding, subject to the issue of
additional shares of the Company between the execution of this Agreement and the
Closing in accordance with the terms of this Agreement based upon the exercise
of options contemplated by this Agreement; (ii) 8,922,555 shares of preferred
stock, par value $0.01 per share (the "Preferred Stock"), which are authorized,
of which (x) 3,367,000 shares have been designated Series A Preferred Stock (the
"Series A Preferred Stock"), and of which 3,367,000 shares are issued and
outstanding; and (y) 5,555,555 shares have been designated Series B Preferred
Stock (the "Series B Preferred Stock"), and of which 5,555,550 shares are issued
and outstanding (the Common Stock and the Preferred Stock being collectively
referred to in this Agreement as the "Shares").
B. The Sellers desire to sell to the Buyer and the Buyer desires to
purchase from the Sellers, all of the Shares, upon the terms and subject to the
conditions set forth in this Agreement.
1
C. Certain of the Sellers and the Buyer and/or one or more of its
Subsidiaries shall also enter into certain of the Ancillary Agreements.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
AGREEMENT
ARTICLE 1: DEFINITIONS AND INTERPRETATION
1.1 Definitions. In this Agreement, the following terms shall have the
meanings set forth in this Section 1.1, unless the context requires otherwise:
"Accredited Sellers" means (i) the Representing Sellers; (ii) First
Magnus-I; and (iii) First Magnus-II.
"Affiliate" of any Party means any Person directly or indirectly
controlling, controlled by, or under common control with, any such Person and
any officer, director or controlling person of such Party. The term "Affiliate"
also includes any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, of such
Person and any heirs, successors, assigns of a Party. A Person shall be deemed
to be "controlling" or in "control" of another Person if such first referred
Person, alone or together with one or more of its Affiliates (a) owns, directly
or indirectly, more than 50% (fifty percent) of the voting securities of such
other Person, (b) has the right or power, directly or indirectly, to appoint a
majority of the board of directors or other management body of such other
Person, or (c) has the right or power, directly or indirectly, to direct or
cause the direction of the management and policies of such other person, whether
through the ownership of voting securities, by contract or otherwise; and the
term "common control" shall be construed accordingly.
"Agreement" has the meaning set forth in the preamble to this Agreement.
"Ancillary Agreements" means the Escrow Agreement, the Employment
Agreements, the First Magnus Master Services Amendment Agreement, and the Deed
of Adherence, and each agreement, document, instrument or certificate
contemplated by this Agreement or to be executed by the Buyer and/or certain of
the Sellers in connection with the consummation of the transactions contemplated
by this Agreement, in each case only as applicable to the relevant party or
parties to such Ancillary Agreement, as indicated by the context in which such
term is used.
"Acquisition Proposal" has the meaning set forth in Section 8.1.3.
"Business", in respect of the Company and its Subsidiaries, means the
business of business process outsourcing, IT outsourcing and consulting
services.
2
"Business Day" shall mean a day other than a Saturday or Sunday, on which
the principal commercial banks located in Mumbai, India and Tucson Arizona, USA
are open for business during normal banking hours.
"Buyer" has the meaning set forth in the preamble to this Agreement.
"Buyer Financial Statements" has the meaning set forth in Section 6.15(a).
"Buyer Indemnified Parties" has the meaning set forth in Section 11.1.
"Buyer Interim Financial Statements" has the meaning set forth in Section
6.15(a).
"Buyer Real Property Lease" and "Buyer Real Property Leases" has the
meaning set forth in Section 6.7.
"Claims Notice" has the meaning set forth in Section 11.3(a).
"Closing" has the meaning set forth in Section 3.1.
"Closing Date" has the meaning set forth in Section 3.1.
"Code" means the U.S. Internal Revenue Code of 1986, as amended.
"Common Stock" has the meaning set forth in the recitals to this Agreement.
"Company" has the meaning set forth in the preamble to this Agreement.
"Company Financial Statements" has the meaning set forth in Section
4.17(a).
"Company Interim Financial Statements" has the meaning set forth in Section
4.17(a).
"Company Material Customers" has the meaning set forth in Section 4.22(a).
"Company Material Suppliers" has the meaning set forth in Section 4.22(b).
"Company Real Property Lease" has the meaning set forth in Section 4.7(b).
"Company Tangible Personal Property" has the meaning set forth in Section
4.7(c).
"Confidential Information" has the meaning set forth in Section 8.3.3.
"Contracts" means all contracts, agreements (including, without limitation,
employment agreements), leases (whether real or non-real property), commitments,
understandings, instruments, guarantees, bids, orders and proposals.
"Core Members" has the meaning set forth in the preamble to this Agreement.
"Encumbrance" shall mean any mortgage, pledge, equitable interest,
assignment by way of security, conditional sales contract, hypothecation, right
of other Persons, claim, security interest, encumbrance, title defect, title
retention agreement, voting trust agreement, interest,
3
option, lien, charge, commitment, restriction or limitation of any nature
whatsoever, including restriction on use, voting rights, transfer, receipt of
income or exercise of any other attribute of ownership, right of set-off, any
arrangement (for the purpose of, or which has the effect of, granting security),
or any other security interest of any kind whatsoever, or any agreement, whether
conditional or otherwise, to create any of the same;
"Employment Agreements" has the meaning set forth in Section 3.2(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agreement" means that certain escrow agreement in the form of
Exhibit B attached hereto relating to the deposit of the Escrow Shares of the
Core Members by the Buyer pursuant to this Agreement. Such Escrow Agreement
shall be executed on the Closing Date and shall be by and among the Buyer, each
of the Core Members and Mourant & Company.
"Escrow Shares" has the meaning set forth in Section 2.2(a).
"First Magnus-I" has the meaning set forth in the preamble to this
Agreement.
"First Magnus-II" has the meaning set forth in the preamble to this
Agreement.
"First Magnus Master Services Agreement Amendment" means the amendment to
the First Magnus Amendment Agreement set forth on Exhibit C hereto between First
Magnus Financial Corporation and the Company.
"GAAP" means U.S. generally accepted accounting principles unless otherwise
expressly indicated.
"Governmental Authority" means any government or political subdivision or
regulatory authority, whether federal, state, local or foreign, or any agency or
instrumentality of any such government or political subdivision or regulatory
authority, or any federal, state, local or foreign court or arbitrator.
"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing or otherwise supporting in whole
or in part the payment of any Indebtedness or other obligation of any other
Person and, without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person (a) to purchase or
pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation of such other Person (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) and/or (b) entered into for the purpose of
assuring in any other manner the obligee of such Indebtedness or other
obligations of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part). The term "Guarantee" used as a verb has a
correlative meaning.
"Indebtedness" of any Person means: (a) any liability of any Person (i) for
borrowed money (including the current portion thereof), or (ii) under any
reimbursement obligation relating to a letter of credit, bankers' acceptance or
note purchase facility, or (iii) evidenced by a
4
bond, note, debenture or similar instrument (including a purchase money
obligation), (iv) for the payment of money relating to leases that are required
to be classified as capitalized lease obligations in accordance with GAAP, or
(v) for all or any part of the deferred purchase price of property or services
(other than trade payables) and/or (b) any liability of others described in the
preceding clause (a) that such Person has Guaranteed, that is recourse to such
Person or any of its assets or that is otherwise its legal liability or that is
secured in whole or in part by the assets of such Person. For purposes of this
Agreement, Indebtedness of any Person shall include (A) any and all accrued
interest, success fees, prepayment premiums, make-whole premiums or penalties,
and fees or expenses actually incurred (including attorneys' fees) associated
with the prepayment of any Indebtedness, (B) all "cut" but uncashed checks
issued by such Person that are outstanding as of the date of this Agreement or
as of the Closing Date as the case may be and (C) any and all amounts owed by
such Person to any of its Affiliates.
"Indemnified Party" has the meaning set forth in Section 11.3(a).
"Indemnifying Party" has the meaning set forth in Section 11.3(a).
"India Returns" has the meaning set forth in Section 4.21(q).
"India Tax" has the meaning set forth in Section 4.21(q).
"Intellectual Property" means the rights associated with or arising out of
any of the following:
(i) domestic and foreign patents and patent applications, together with all
reissuances, divisionals, continuations, continuations-in-part, revisions,
renewals, extensions, and re-examinations thereof, and any identified invention
disclosures ("PATENTS");
(ii) trade secret rights and corresponding rights in confidential
information and other non-public information (whether or not patentable),
including ideas, formulas, compositions, inventor's note, discoveries and
improvements, know-how, manufacturing and production processes and techniques,
testing information, research and development information, inventions, invention
disclosures, unpatented blueprints, drawings, specifications, designs, plans,
proposals and technical data, business and marketing plans, market surveys,
market know-how and customer lists and information ("TRADE SECRETS");
(iii) all copyrights, copyrightable works, rights in databases, data
collections, "moral" rights mask works, copyright registrations and applications
therefore and corresponding rights in works of authorship ("COPYRIGHTS");
(iv) all trademarks, service marks, logos, trade dress and trade names and
domain names indicating the source of goods or services, and other indicia of
commercial source or origin (whether registered, common law, statutory or
otherwise), all registrations and applications to register the foregoing
anywhere in the world and all goodwill associated therewith ("TRADEMARKS");
(v) all computer software and code, including assemblers, applets,
compilers, source code, object code, development tools, design tools, user
interfaces and data, in any form or format, however fixed ("SOFTWARE");
5
(vi) all Internet domain names and all registrations for any of them
("DOMAIN NAMES"); and
(vii) any similar, corresponding or equivalent rights to any of the
foregoing any where in the world.
"Investment" means any ownership of securities or other equity interest,
directly or indirectly, in any Person.
"Investment Agreement" means that Investment Agreement dated as of 8 March
2002, including any and all deeds of variation, deeds of adherences and any
amendments through the date of the Closing by and among the Buyer and certain of
its shareholders as specified therein.
"IRS" means the U.S. Internal Revenue Service.
"Key Employees" shall mean the executives of the Company or its
Subsidiaries that hold the title of or are above the rank of an Assistant Vice
President ("AVP's").
"Knowledge of First Magnus" or "First Magnus' Knowledge" means the actual
knowledge of Xx. Xxxxxxxx X. Xxxxx, the President and Chief Executive Officer of
First Magnus-I and Xx. Xxxxxxxx X. Xxxxx, the Manager of First Magnus-II.
"Knowledge of the Buyer" or "Buyer's Knowledge" means the actual knowledge
of Xx. Xxxxxx Xxxxxxxx and Xx. Xxxxx Xxxxxx, which shall be imputed to each
other.
"Knowledge of the Representing Sellers" or "Representing Sellers'
Knowledge" means to the actual knowledge of the Representing Sellers, and the
knowledge of one Representing Seller shall be imputed to the others.
"Law" means any law, statute, code, ordinance, regulation or other
requirement of any Governmental Authority.
"Leased Real Property" means all real property leased or licensed by a
Party.
"Liability Claim" has the meaning set forth in Section 11.3(a).
"Losses" has the meaning set forth in Section 11.1.
"Material Adverse Effect" means, with respect to a Person, any change,
event or effect that, when taken together with any other adverse changes, events
or effects that have occurred, (a) is materially adverse to the business,
operations, properties, condition (financial or otherwise), assets or
liabilities, business, or results of operations of the business of a Person,
together with its Subsidiaries taken as a whole it being understood that any
change, event or effect arising out of or relating from any of the following
shall not be deemed to constitute a Material Adverse Effect: (i) announcement of
this Agreement or any of the Ancillary Agreements or the transactions
contemplated under this Agreement or any of the Ancillary Agreements, (ii)
general industry conditions not specifically relating to or having a materially
6
disproportionate effect on the Person and (iii) general economic market,
regulatory or political conditions.
"Order" means any written order, judgment, injunction, award, decree,
ruling, charge or writ of any Governmental Authority.
"Ordinary Course of Business" means the Ordinary Course of Business
consistent with past custom and practice (including with respect to quantity and
frequency) and policies.
"Parties" means the Persons that are parties to this Agreement
collectively; and "Party" means any of them individually.
"Permitted Encumbrances" means (a) Encumbrances for Taxes or governmental
assessments, charges, or claims the payment of which are not yet due, (b)
statutory liens of landlords and liens of carriers, warehousemen, mechanics,
materialmen and other similar Persons and other liens imposed by applicable Law
incurred in the Ordinary Course of Business for sums not yet delinquent or
immaterial in amount and being contested in good faith, and (c) other
imperfections of title or Encumbrances, if any, which imperfections of title or
other Encumbrances would not result in the creation of a Liability or obligation
of a Person after the Closing Date.
"Person" means any individual, sole proprietorship, partnership,
corporation, limited liability company, unincorporated society or association,
trust, or other entity.
"Pre-Closing Dividend" has the meaning set out in Section 4.21(b).
"Post-Closing Tax Period" means any Tax period beginning after the Closing
Date.
"Post-Closing Straddle Period" has the meaning set forth in Section 7.1.
"Pre-Closing Tax Period" means any Tax period ending on or before the
Closing Date.
"Pre-Closing Straddle Period" has the meaning set forth in Section 7.1.
"Preferred Stock" has the meaning set forth in the recitals to this
Agreement.
"Proceeding" means any claim, demand, charge, compliant, action, suit,
proceeding, hearing, audit, hearing or investigation, whether judicial or
administrative, of any Person or Governmental Authority.
"Representing Sellers" means collectively the Core Members, and
"Representing Seller" means any of them individually.
"Returns" means all Tax returns, statements, reports, elections, schedules,
claims for refund, and forms (including estimated Tax or information returns and
reports), including any schedule or supplement thereto.
"Restraints" has the meaning set forth in Section 9.1(d).
7
"Sellers" has the meaning set forth in the preamble to this Agreement.
"Selling Expenses" means all costs, fees, and expenses of outside
professionals incurred by the Company or any of its Subsidiaries relating to the
process of selling the Company whether incurred in connection with this
Agreement or otherwise, including, without limitation, all legal fees,
accounting, tax, investment banking fees and expenses.
"Seller Material Contract" has the meaning set forth in Section 4.13.
"Seller Nominee Directors" shall mean Xx. Xxxxxxxxxx, Mr. Shivpuri and Xx.
Xxxxxx, collectively of Trinity India.
"Series A Preferred Stock" has the meaning set forth in the recitals to
this Agreement.
"Series B Preferred Stock" has the meaning set forth in the recitals to
this Agreement.
"Shares" has the meaning set forth in the recitals to this Agreement.
"Shareholders" has the meaning set forth in the preamble to this Agreement.
"Shareholder Representative" in respect of all of the Sellers (other than
First Magnus I and First Magnus II) means Mr. Shivpuri; provided however that
First Magnus-I shall be the "Shareholder Representative" of First Magnus-I and
First Magnus-II unless otherwise expressly specified herein. The term
"Shareholder Representatives" shall mean Mr. Shivpuri and First Magnus-I
collectively.
"Stock Option Plan" shall mean the Company's 2003 Stock Option and Stock
Issuance Plan.
"Straddle Period" has the meaning set forth in Section 7.1.
"Straddle Period Tax Matter" has the meaning set forth in Section 7.5(b).
"Subsidiary" means any Person of which at least 50% of the outstanding
shares or other equity interests having ordinary voting power for the election
of directors or comparable managers of such Person, whether or not at the time
the shares of any other class or classes or other equity interests of such
Person shall have or might have voting power by reason of the happening or
occurrence of any contingency.
"Tax" or "Taxes" means (a) any foreign, United States federal, state, or
local income, alternative or add-on-minimum tax, gross or net income, gross
receipts, sales, use, ad valorem, value added, transfer, franchise, profits,
license, withholding on amounts paid to or by a Person, payroll, employment,
excise, severance, stamp, occupation, premium, property, environmental or
windfall profit tax, custom, duty or other tax, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest,
penalty, addition to tax or additional amount imposed by any Law or Taxing
Authority, whether disputed or not, (b) any liability for the payment of any
amounts of any of the foregoing type as a result of being a member of an
affiliated, consolidated, combined or unitary group, and (c) any liability for
the payment of any amounts as a result of being a party to any tax sharing
agreements or arrangements (whether or
8
not written) or with respect to the payment of any amounts of any of the
foregoing types as a result of any express or implied obligation to indemnify
any other Person.
"Taxing Authority" means any Governmental Authority responsible for the
administration or the imposition of any Tax.
"Transaction Consideration" has the meaning set forth in Section 2.2(a).
"Transfer" and variations of such term have the meaning set forth in
Section 2.1.
"Transfer Taxes" has the meaning set forth in Section 7.3.
"Trinity India" means Trinity Business Process Management Private Limited,
an Indian company incorporated under the (Indian) Companies Act, 1956, as
amended, with its registered office at 0, Xxxxxxx Xxxx, Xxxx Xxxx, Xxxxx, Xxxxx
000000.
"Trinity India Remaining Shareholder" means Xx. Xxxxxx Xxxxxxxxxx holding 1
fully paid-up Trinity India Share as a nominee on behalf of the Company.
"Trinity India Shares" means the entire authorized, issued, subscribed and
paid-up equity share capital of Trinity India of Rs. 1,000,000 divided into
100,000 equity shares of Rs. 10 each (such equity shares, collectively, the
"Trinity India Shares", and each such share, a "Trinity India Share").
"WNS Shares" has the meaning set forth in Section 2.2(a).
1.2 Interpretation. In this Agreement:
(i) reference to a Party hereunder shall include such Party's
successors, permitted assigns and any persons deriving title under it;
(ii) references to any agreement or document including this Agreement
shall include such agreement or document as amended, modified, varied,
novated, supplemented or replaced from time to time in writing signed by
the duly authorized representatives of each Party;
(iii) the descriptive headings of Sections are inserted solely for
convenience of reference and are not intended as complete or accurate
descriptions of the content of such Sections;
(iv) the use of words in the singular or plural, or with a particular
gender, shall not limit the scope or exclude the application of any
provision of this Agreement to such person or persons or circumstances
unless the context requires otherwise;
(v) the terms "hereof", "hereto" and "hereunder" and similar
expressions mean and refer to this Agreement and not to any particular
Section of this Agreement. The terms "Recital", "Schedule", "Exhibit" or
"Section" mean and refer to the specified Schedule or Exhibit to, and
Recital or Section, of this Agreement;
9
(vi) any grammatical form of a defined term herein shall have the same
meaning as that of such term;
(vii) the words "including" and "includes" herein shall always mean
"including, without limitation" and "includes, without limitation",
respectively;
(viii) any notice to be provided to, or any consent to be obtained
from, the Sellers shall mean that such notice shall be provided to, or such
consent shall be obtained from, the Shareholder Representatives, acting for
and on behalf of the Sellers who they represent; it being understood,
acknowledged and agreed that the Buyer shall be entitled to deal with and
to send notices to the Shareholder Representatives as the authorized
representative of all of the Sellers who they represent in respect of all
matters under this Agreement, and the Shareholder Representatives shall be
(and shall be deemed to be) the sole and exclusive authorized
representative of all of the Sellers who they represent under this
Agreement, with the result that such notice or dealing by the Buyer and/or
consent obtained from the Shareholder Representatives shall be (and shall
be deemed to be) conclusive and binding in all respects on the Sellers who
they represent in connection with any matter hereunder and of the authority
of the Shareholder Representatives to represent and bind all of the Sellers
who they represent hereunder; and
(ix) unless otherwise indicated, all references to "$" in this
Agreement shall mean the lawful currency of the United States of America
and all references to "Rs." or "Rupees" in this Agreement shall mean the
lawful currency of the Republic of India and GB or Pound shall mean British
Pound Sterling.
ARTICLE 2: PURCHASE AND SALE; RELATED MATTERS
2.1 Purchase and Sale of the Shares. At the Closing, the Buyer shall
purchase from the Sellers, and the Sellers shall sell, transfer, assign, convey
and deliver (collectively, "Transfer") to the Buyer, subject to payment of the
Transaction Consideration, all of the Shares, free and clear of any
Encumbrances.
2.2 Purchase Price and Issue of WNS Shares.
(a) In full consideration for the Transfer of the Shares to the Buyer
at the Closing, the Buyer shall, on the Closing Date:
(i) pay or cause to be paid, by bank wire transfer of immediately
available funds to an account or accounts designated in writing by
each of the Shareholder Representatives, an amount in cash equal to
United States $6,465,564 (Six Million Four Hundred Sixty-Five Thousand
Five Hundred Sixty-Four) (the "Accredited Seller Cash Purchase
Price");
(ii) 2,266,022 shares of Common Stock of the Buyer, each such
share valued at British Pound Sterling Three and Xxxxx Fifty only
(GB Pound3.50) (such shares, collectively, the "WNS Shares" or the
"Stock Consideration") out of which ten percent (10%) of the total
number of WNS Shares to be received by each Core Member as part of the
Stock Consideration that is payable to such Core
10
Member under this Agreement in consideration for the Transfer of the
Shares by such Core Member to the Buyer shall be deposited in an
escrow account,(the "Escrow Shares") and subject to the provisions of
Section 2.2(c) below; and
(iii) pay or cause to be paid, by bank wire transfer of
immediately available funds to an account designated in writing by
each of the Shareholder Representatives, and amount in cash equal to
United States $348,499 (Three Hundred Forty Eight Thousand Four
Hundred Ninety-Nine) (the "Unaccredited Seller Cash Purchase Price")
The total of the Accredited Seller Cash Purchase Price, the
Unaccredited Seller Cash Purchase Price and the Stock Consideration is
referred to in this Agreement as the "Transaction Consideration". The
Parties to this Agreement understand, acknowledge and agree that (x)
all of the Sellers (other than the Accredited Sellers) will receive
only cash consideration for the Transfer to the Buyer of the Shares
held by them; and (y) the Accredited Sellers will receive both cash
and WNS Shares as consideration for the Transfer to the Buyer of the
Shares held by them. The Parties to this Agreement expressly agree
that this Agreement does not provide for, and in no event shall any
WNS Shares be received by the Sellers (other than the Accredited
Sellers) under this Agreement. In accordance with the instructions of
the Sellers and the Company's Third Amended and Restated Certificate
of Incorporation, holders of the Preferred Shares and the holders of
the Common Shares will be paid out as set forth on Schedule 2.2(iii).
(b) Subject to the terms and conditions of this Agreement and
satisfaction of all the conditions (except those specifically waived in
writing by the Buyer) set forth herein with respect to Closing, Buyer shall
issue and allot the WNS Shares to the Sellers in the proportion set forth
in Schedule 2.2(b) and deliver the share certificates representing the WNS
Shares held by each of the Sellers to the Shareholders Representative on
the Closing Date, as modified through the Closing, provided, however, that
the Escrow Shares shall be held in Escrow in accordance with the terms of
the Escrow Agreement until the first anniversary of the Closing Date.
(c) On the first anniversary of the Closing Date, the Buyer shall
cause the Escrow Agent, subject to applicable Law and the terms of the
Escrow Agreement to distribute the Escrow Shares to each of the Core
Members in the proportion set forth in Schedule 2.2(c) in accordance with
each of their respective Employment Agreements. For the avoidance of doubt
it is hereby agreed that, if the employment of a Core Member with the
Company, its Subsidiary or its Affiliate, as the case may be, is terminated
for Cause (the term "Cause" as defined in his Employment Agreement) or if a
Core Member terminates his employment (other than for "Termination Without
Cause," as defined), then the Buyer shall instruct the Escrow Agent to
transfer the Escrow Shares to a third party purchaser or a nominee or
Affiliate of the Buyers for such consideration as determined by the Buyer
at the Buyer's sole discretion all of the Escrow Shares to which such Core
Member is entitled as set forth in Schedule 2.2(c), provided that the third
party purchaser of the Escrow Shares shall be instructed to pay the
consideration net of Taxes directly to the Buyer.
11
2.3 Company Distributed Amounts. Prior to Closing, the Company will
distribute an aggregate amount of approximately United States $2,500,000 to the
Sellers as set forth on Exhibit 2.3 by way of the Pre-Closing Dividend.
ARTICLE 3: CLOSING; DELIVERIES AND OTHER ACTIONS
3.1 Closing. The closing of the transactions contemplated hereby (the
"Closing") shall take place at a place mutually agreed by the Parties
immediately following the satisfaction or waiver of the conditions set forth in
Article 9 hereof, or on such other date or at such other time as the Buyer and
the Shareholder Representatives shall mutually agree in writing. The date on
which the Closing actually occurs is herein referred to as the "Closing Date."
3.2 Deliveries by the Sellers. At the Closing, the Shareholder
Representatives on behalf of all the Sellers shall deliver originals or actual
and bona fide true and correct copies or facsimile copies (except as otherwise
specified herein) which in the case of any copies or facsimile copies will be
followed by delivery of original documents within thirty (30) days from the
Closing, or cause to be delivered, to the Buyer the following:
(a) a receipt from the Shareholder Representatives evidencing receipt
by the Sellers of the Purchase Price subject to the receipt of funds, and a
receipt evidencing receipt by the Sellers of the WNS Shares subject to the
receipt of the WNS Shares;
(b) the employment agreements, in the form of Exhibit D attached
hereto, duly executed by each of the Core Members (the "Employment
Agreements");
(c) the Escrow Agreement, duly executed by each of the Buyer, the Core
Members and the Escrow Agent;
(d) the First Magnus Agreement Amendment duly executed by First
Magnus-I and the Company;
(e) original stock certificates representing all of the Shares with
duly executed stock powers attached in proper form for Transfer to the
Buyer;
(f) a copy of the current long-form good standing certificate (or
equivalent document) for the Company issued by the Xxxxxxxxx xx Xxxxx xx
xxx Xxxxx xx Xxxxxxxx, XXX;
(g) a copy of the Certificate of Incorporation of the Company,
certified by the Secretary of State of Delaware, and a copy of the Bylaws
(or equivalent document) of the Company, certified by a duly authorized
officer of the Company;
(h) a copy of the corporate record books and stock record books of the
Company certified as true and correct as of the Closing Date by the
Company's Secretary or Assistant Secretary;
(i) any other instruments as may be reasonably requested by the Buyer
no later than five (5) days prior to Closing to extinguish all Indebtedness
(other than as
12
prohibited by applicable Laws) in excess of $100,000 of the Company and any
security interests related thereto to the extent directed by the Buyer;
(j) all of the consents, if any, listed on Schedule 4.6 and Schedule
4.7;
(k) written resignations of each director and officer of the Company
and each officer and each of the Seller Nominee Directors of Trinity India
to be with effect on the Closing Date and subject to the Closing and with
regard to Trinity India and the Company each such resignation to contain an
expres but standard acknowledgement that the director or officer has no
claim against Trinity India or the Company for compensation for loss of
office, redundancy, unfair dismissal or otherwise arising from such
resignation;
(l) the common seal and all registers and minute books of Trinity
India, completed through the Closing Date, to be delivered at the place of
Closing;
(m) a copy of the memorandum of association and articles of
association of Trinity India certified by the Company Secretary of Trinity
India as a true and complete and accurate copy as of the Closing Date;
(n) a copy of the letter submitted to the Department of
Telecommunications of the Government of India seeking approval for change
in control resulting from the Transfer of the Shares
(o) evidence to the reasonable satisfaction of the Buyer of the
Transfer of the Trinity India Share to the Trinity India Remaining
Shareholder as nominee for the Company;
(p) a certificate duly executed by each of the Shareholder
Representatives, in a form reasonably satisfactory to the Buyer, stating
that (a) to their Knowledge, the Sellers who they represent have performed
and complied with all the covenants and agreements required to be performed
by the Sellers that they represent, under this Agreement on or prior to
Closing, (b) to their Knowledge, there has been no event or occurrence
having a Material Adverse Effect on the Company and Trinity India taken as
a whole, and (c) each of the representations and warranties set forth in
Article 4 hereof to the extent made by them or on behalf of the Sellers
they represent, are true and correct at and as of the Closing Date;
(q) a certificate duly executed by an officer of the Company on behalf
of the Company, in a form reasonably satisfactory to the Buyer, stating
that (a) there has been no event or occurrence having a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole, Trinity India
or their respective businesses, and (b) that each of the representations
and warranties set forth in Article 4 hereof are true and correct at and as
of the Closing Date;
(r) such other documents and instruments as the Buyer shall request as
being reasonably necessary to effect the Closing.
13
(s) a certificate addressed to the Buyer in the form and substance set
forth on Exhibit E hereto to be provided by each Seller certifying their
title to Shares held by each of them in the Company
(t) copies, certified as true by the company secretary of or by a
director of Trinity India, of written revocations of such powers of
attorney granted by each of the Company and Trinity India in favor of its
directors, officers, employees or agents, as may be requested by Buyer in
writing not less than 7 (seven) days prior to the Closing Date, such
revocations to take effect conditional on and as at Closing; and (ii)
copies, certified as true by the company secretary of or by a director of
each of the Company and Trinity India, of revocations of such bank mandates
and other authorizations for signatories of bank accounts of each of the
Company and Trinity India, as the case may be, as may be requested by Buyer
in writing not less than seven (7) days prior to the Closing Date, such
revocations to take effect conditional on and as at Closing.
(u) A Deed of Adherence to the Investment Agreement in the form or
forms attached hereto as Exhibit F executed First Magnus, the Core Members
and the Shareholder Representative.
(v) Each Seller shall execute and deliver an appropriate waiver and
release to specify that he/it irrevocably and forever waives and releases
the Company, its Subsidiaries and Affiliates and the Buyer, and their
respective officers and directors, from any and all claims now or hereafter
arising (i) in respect of the consideration received or receivable by such
Seller pursuant to the transactions contemplated hereby, and (ii) regarding
any claim based upon or relating to unfair treatment in connection with the
payment of the Transaction Consideration or any portion thereof and such
Seller's entitlement thereto or discrimination in the determination of the
amount payable or paid or to be paid to such Seller or the nature of the
consideration received or receivable by such Seller.
(w) The Shareholder Representatives shall have delivered, or cause to
be delivered, to the Buyer a complete and correct copy of the unaudited
balance sheet of the Company and its Subsidiaries as of October 31, 2005,
and the related unaudited statement of income for the three-month period
then ended (the "Company Interim Financial Statements") prepared in
accordance with US GAAP.
(x) evidence to the reasonable satisfaction of the Buyer that the
Pre-Closing Dividend has been paid by the Company.
3.3 Deliveries by the Buyer. At the Closing, the Buyer shall deliver to the
Shareholder Representatives the following:
(a) the Transaction Consideration payable as set forth in Section 2.2;
(b) the Escrow Agreement, duly executed by the Buyer;
(c) the Employment Agreements, duly executed by the Buyer or an
Affiliate of Buyer if Buyer is not the contracting party;
14
(d) an acknowledgement of the acceptance the resignations of the
directors and officers the Company and the Seller Nominee Directors of
Trinity India;
(e) a certificate, in a form reasonably satisfactory to the
Shareholder Representatives, stating that (a) to the Knowledge of the
Buyer, the Buyer has performed and complied with all the covenants and
agreements required to be performed by the Buyer under this Agreement on or
prior to Closing, and (b) to the Knowledge of the Buyer, each of the
representations and warranties set forth in Article 6 hereof are true and
correct at and as of the Closing Date; and
(f) share certificates to the concerned Sellers representing the
number of WNS Shares that are set forth against their name on Schedule
2.2(b) other than the Escrow Shares;
(g) a consent/waiver of pre-emption rights under Section 14.5 of the
Investment Agreement for the issuance the WNS Shares to the Sellers signed
by the requisite parties who are necessary to effect the consent/waiver;
(h) a certificate from a duly authorized officer of the Company
attaching certified true copies of (i) the Investment Agreement, as amended
with all deeds of adherence, (ii) the charter documents of the Buyer and
certifying that they are correct and complete copies of such documents
effective immediately prior to the Closing, without any modification,
amendment or change in any manner whatsoever and, (iii) any board or
shareholder consents required for entry into and performances by the Buyer
of this Agreement and each of the Ancillary Agreements; and
(i) such other documents and instruments as the Sellers shall
reasonably request as being reasonably necessary to effect the Closing.
ARTICLE 4: REPRESENTATIONS AND WARRANTIES OF THE REPRESENTING SHAREHOLDERS
(OTHER THAN FIRST MAGNUS)
The Representing Sellers hereby jointly but not severally, represent and
warrant to the Buyer (a) on the date of this Agreement and (b) at Closing,
subject only to the specific qualifications made in the schedules that
correspond with each individual representation and warranty set forth herein,
and subject to any updates to such schedules that are made by the Representing
Sellers at Closing, as follows:
4.1 Existence and Good Standing.
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, USA, and is duly
authorized, qualified or licensed to do business as a foreign corporation
in all jurisdictions other than those jurisdictions in which the failure to
be so qualified would not have a Material Adverse Effect on it. The
jurisdictions where the Company is qualified to do business are identified
on Schedule 4.1(a).
15
(b) Trinity India is a private limited company duly incorporated and
validly existing under the Laws of the Republic of India.
(c) Each of the Company and Trinity India have the corporate power and
authority to (i) own, operate and lease its properties and assets as and
where currently owned, operated and leased, and (ii) carry on its Business
as currently conducted.
(d) The Company has the requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
effect the transactions contemplated hereby, and the execution, delivery
and performance of this Agreement has been duly authorized by all requisite
corporate action. Each of the Company and Trinity India has the requisite
corporate power and authority to execute, deliver and perform its
respective obligations under each Ancillary Agreement to which it is a
party and to effect the transactions contemplated hereby and thereby. The
execution, delivery and performance of each Ancillary Agreement to which
the Company and/or Trinity India is a party has been duly authorized by all
requisite corporate action on the part of the Company and Trinity India.
(e) The Company and Trinity India are not engaged in any business
other than the Business. No consent, approval or authorization of any
Person or Governmental Authority is required to be obtained by the Company
or Trinity India in connection with this Agreement or any Ancillary
Agreement, to authorize the execution, delivery or performance of this
Agreement or any Ancillary Agreement or to consummate any of the
transactions contemplated hereby or thereby.
(f) This Agreement has been duly executed and delivered by the Company
and constitutes the valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms. Each
Ancillary Agreement executed by the Company has been or will be duly
executed and delivered by the Company and constitute the valid and legally
binding obligation of the Company, enforceable against the Company in
accordance with its terms. Each Ancillary Agreement executed by Trinity
India has been or will be duly executed and delivered by Trinity India and
constitute the valid and legally binding obligation of Trinity India,
enforceable against Trinity India in accordance with its terms.
4.2 Good Title.
(a) Each of the Representing Sellers under this Agreement, and each of
the other Sellers under the certificates provided to the Buyer as specified
in Section 3.2, represents and warrants that (i) he, she or it, owns the
Shares specified opposite his, her or its name on Schedule 4.2(a) and has
good and valid title to such Shares, free and clear of any and all
Encumbrances and (ii) such Shares on Transfer at Closing shall transfer
free and clear of any and all Encumbrances.
(b) There are no outstanding or authorized, and neither the Company
nor Trinity India is a party to (and none of the Representing Sellers is a
party to any and to the Knowledge of the Representing Sellers, none of the
other Sellers are parties to) options, warrants, rights, contracts, calls,
puts, rights to subscribe, conversion rights or
16
other agreements or commitments that are binding upon any of them providing
for the issuance, disposition, acquisition or transfer of any Shares (or
creating any rights on or in connection with the Shares) or any shares of
Trinity India nor has the Company nor Trinity India nor any Representing
Seller received notice of, nor to the Knowledge of the Representing
Sellers, have any claims been made by any Person entitled or claiming to be
entitled to any of the foregoing.
(c) Except as disclosed in Schedule 4.2(c), none of the Representing
Sellers is a party to any voting trust, proxy or other agreement or
understanding with respect to the voting or ownership or any rights in
respect of any of the Shares or any shares of Trinity India or any
agreement that requires or may require additional Shares of the Company or
additional shares of Trinity India to be issued or allotted beyond the
Shares of the Company and Trinity India that currently are issued and
outstanding; nor have any claims been made by any Person entitled or
claiming to be entitled to any of the foregoing.
4.3 Validity and Enforceability. Each Representing Seller represents in
respect of himself that he has the capacity or the requisite power and authority
to execute, deliver and perform his obligations under this Agreement and each of
the Ancillary Agreements to which he is a party. This Agreement and each of the
Ancillary Agreements have been duly executed and delivered by each Representing
Seller that is a party to such agreement. Assuming due authorization, execution
and delivery by the Buyer, such agreement represents the legal, valid and
binding obligation of such Representing Seller that is a party to it,
enforceable against him, if and to the extend he is a party to such an
agreement, in accordance with its respective terms.
4.4 Capitalization of the Company.
(a) Trinity Partners, Inc. The authorized capital of the Company
consists of (i) 8,922,555 shares of Preferred Stock (comprising of
3,367,000 shares of Series A Preferred Stock and 5,555,555 Series B
Preferred Stock), all of which 3,367,000 of Series A Preferred Stock are
issued and outstanding and 5,555,550 shares of Series B Preferred Stock
which are issued and outstanding; and (ii) 9,806,388 shares of Common Stock
are authorized, of which as of the time this Agreement is executed 883,838
shares of Common Stock are issued and outstanding and all of which shall
Transfer to the Buyer at Closing pursuant to this Agreement. The shares
that are issued and outstanding of Common Stock and Preferred Stock are
owned by the Sellers in the amounts specified opposite their respective
names on Schedule 4.4(a). Except as set forth on Schedule 4.4(a), no shares
of capital stock of the Company are issued and outstanding. The outstanding
shares of Common Stock and Preferred Stock are all duly and validly
authorized and issued, fully paid and non-assessable, and were issued in
compliance with all applicable US state and federal laws. There are no
outstanding or authorized options, stock appreciation rights, phantom
stock, warrants, or, except as set forth on Schedule 4.4(a), any other
rights (including conversion or preemptive rights) or agreements for the
purchase or acquisition from the Company of any shares of its capital
stock. Other than as set forth on Schedule 4.4(a), the Company is not a
party or subject to any agreement or understanding, and, to the Knowledge
of the Representing Sellers, there is no agreement or understanding with
any Person that affects or relates to the voting or giving of written
consents with respect to any security or by a director of the Company.
Except as set forth in Schedule 4.4(a), the Company has no Investments
17
other than in Trinity India and those arising in the Ordinary Course of
Business or that are not material in amount or substance.
(b) Trinity India. The authorized equity share capital of Trinity
India is Rs. 1 million divided into 100,000 shares of Rs. 10 each. The
Trinity India Shares comprise the entire allotted and issued share capital
of Trinity India. All Trinity India Shares have been duly authorized, are
validly issued and fully paid, and were issued in compliance with all
applicable Laws. Except for one (1) Trinity India Share held by the Trinity
India Remaining Shareholder as nominee for the Company, all Trinity India
Shares are owned beneficially and of record by the Company free and clear
of any Encumbrances. There are no issued or outstanding or authorized (and
Trinity India is not a party to (and to the Knowledge of the Representing
Sellers, none of the Sellers is a party to any) options, stock
appreciation; rights, phantom stock, warrants, rights (including conversion
or preemption rights), contracts, calls, puts, rights to subscribe,
conversion rights or any other agreements or commitments in each case that
are binding upon any of them or Trinity India providing for the issuance,
disposition, acquisition or Transfer of any of the Trinity India Shares (or
creating any rights on or in connection with the Trinity India Shares), nor
has Trinity India received any claims by any Person entitled or claiming to
be entitled to any of the foregoing. Trinity India is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any of the Trinity India Shares. Neither the Company nor the Trinity
India Remaining Shareholder is a party to any voting trust, proxy or other
agreement or understanding with respect to the voting or ownership of any
rights in respect of any of the Trinity India Shares or any agreement that
requires or may require additional Trinity India Shares to be issued or
allotted beyond the Trinity India Shares that currently are issued and
outstanding, nor has Trinity India received any claims by any Person
entitled or claiming to be entitled to any of the foregoing.
(c) Stock Option Plan. The Stock Option Plan is the only employee
stock option plan of the Company in effect on the date hereof and the only
employee stock option plan adopted by the Company. All stock options held
by any employee of the Company or Trinity India have been issued pursuant
to the Stock Option Plan. Except for stock options issued under the Stock
Option Plan, there are no other stock options that have been issued by the
Company. All stock options that had been issued by the Company prior to the
date hereof have been exercised in full by the stock option holders, and
such stock option holders have been issued Shares of the Company.
4.5 No Conflict.
(a) Except for as set forth on Schedule 4.5, no approval,
authorization, consent, license, clearance or order of, declaration or
notification to, or filing or registration with, any Governmental Authority
or any other Person is required for the Sellers (other than First Magnus,
for which no representation or warranty is made) to sell the Shares to the
Buyer and/or otherwise for the Company, Trinity India and the Sellers
(other than First Magnus, for which no representation or warranty is made)
to perform their respective obligations under this Agreement or the
Ancillary Agreements to which they are a party.
18
(b) Neither the execution and delivery of this Agreement and the
Ancillary Agreements, nor the consummation of the transactions contemplated
hereby and thereby, will (i) conflict with, result in a breach of any of
the provisions of, (ii) constitute a default under, (iii) result in the
violation of, or (iv) give any third Person the right to terminate or to
accelerate any obligation (other than under the Stock Option Plan) under,
the provisions of any indenture, mortgage, lease, loan agreement or other
agreement or instrument that is material to the Company or Trinity India
and to which the Company or Trinity India is bound or affected, or pursuant
to any Laws. Neither the execution and the delivery of this Agreement nor
any of the Ancillary Agreements to which any of the Representing Sellers,
or to the Knowledge of the Representing Sellers, which any Seller (other
than First Magnus, for which no representation or warranty is made) or to
which the Company or Trinity India is or will be a party, nor the
consummation of the transactions contemplated hereby, will (A) result in
the creation of any Encumbrance upon the Shares or any assets or properties
of the Company or any of its Subsidiaries or Trinity India or (B) require
any authorization, consent, approval, execution or other action by or
notice to any Governmental Authority by the Company or Trinity India.
(c) The transactions contemplated by this Agreement will, at the
Closing, effect a transfer of the full unencumbered legal and beneficial
ownership of the Shares to the Buyer.
(d) Neither the execution or delivery of this Agreement or any
Ancillary Agreement by the Company or Trinity India, as the case may be,
nor the performance by the Company or Trinity India of their respective
obligations hereunder or thereunder, nor the consummation of the
transactions contemplated hereby or thereby, will result in a breach or
violation of, conflict with or constitute a default under or constitute
(with notice or lapse of time, or both) an occurrence of default under any
provision of, result in the acceleration or cancellation of any obligation
hereunder, give rise to any claim, give any Person additional rights or
compensation under or give rise to any right by any party to terminate or
amend its obligations under (i) any provision of the Certificate of
Incorporation of the Company, the Bylaws of the Company, the Memorandum of
Association of Trinity India or the Articles of Association of Trinity
India, or other similar organizational documents, (ii) any mortgage, deed
of trust, conveyance to secure debt, note, loan, indenture, Encumbrance,
Contract, Permit, order, judgement, decree or other arrangement to which
the Company or Trinity India is a party or by which it is bound, or (iii)
violate any Law of any Governmental Authority having jurisdiction over the
Company or Trinity India. The Representing Sellers have provided the Buyer
with true and complete copies of the Certificate of Incorporation of the
Company, the Bylaws of the Company, the Certificate of Incorporation of
Trinity India, Memorandum of Association of Trinity India and the Articles
of Association of Trinity India.
4.6 Consents. Except for the consent of the Department of
Telecommunication, of the Government of India and as set forth on Schedule 4.6,
no consent, approval or authorization of any third party or Governmental
Authority is required to be obtained by the Company or any of the Representing
Sellers in connection with the execution, delivery and performance by the
Representing Sellers, or, to the Knowledge of the Representing Sellers and any
of the other Sellers (other than First Magnus-I and First Magnus-II for which no
representation is made with
19
regard to the Representing Sellers) of this Agreement or the Ancillary
Agreements or the consummation of the transactions contemplated hereby or
thereby.
4.7 Property.
(a) Title. Neither the Company nor any of its Subsidiaries owns any
real property. Each of the Company and its Subsidiaries have a valid
leasehold interests in or license to the Leased Real Property it occupies.
(b) Real Property Leases. Schedule 4.7(b) hereto contains a list of
all Leased Real Property of the Company and any of its Subsidiaries with
the address thereof, the annual fixed rental, the expiration of the term,
any extension options and any security deposits. A true and correct copy
of each such lease, license and/or occupancy agreement, and any amendments
thereto, with respect to such Leased Real Property (each a "Company Real
Property Lease," and collectively, the "Company Real Property Leases") has
been delivered or made available to the Buyer, and no changes have been
made thereto since the date of delivery. All of the Leased Real Property of
the Company and any of its Subsidiaries is used or occupied by the Company
or such Subsidiary pursuant to a Company Real Property Lease. Each of the
Company or Trinity India, as the case may be, has to the Knowledge of the
Representing Sellers, a valid leasehold interest in or license to each of
its Leased Real Property, free and clear of all Encumbrances other than
Permitted Encumbrances. Each Company Real Property Lease is valid and
binding on the Company or its Subsidiaries as the case may be, and is being
performed by the Company or its Subsidiaries in accordance with its terms
and is in full force and effect. There are no existing defaults by the
Company or any of its Subsidiaries that would be material individually or
in the aggregate under any of the Company Real Property Leases, and no
event has occurred which (with notice, lapse of time or both) could
reasonably be expected to constitute a material breach or default under any
of the Company Real Property Leases by any party or give any party the
right to terminate, accelerate or modify any Company Real Property Lease.
(c) Tangible Personal Property. Schedule 4.7(c) contains a copy of the
fixed assets registers for each of the Company and Trinity India which list
out all of the material tangible assets owned by them (the "Company
Tangible Personal Property"). The Company and its Subsidiaries have good
and marketable title to and are in possession of or have the right to use
all items of Company Tangible Personal Property used in their respective
business, whether or not listed on Schedule 4.7(c) hereto, and such
property is free and clear of all Encumbrances other than Permitted
Encumbrances or those associated with equipment leases or being purchased.
The machinery, equipment and other tangible assets that the Company or its
Subsidiaries own and lease are generally in good operating condition and
repair (subject to normal wear and tear consistent with the age of the
assets).
(d) No Condemnation. To the Knowledge of the Representing Sellers,
there is not now any pending any condemnation, expropriation, eminent
domain, or similar proceeding affecting the Company Leased Real Property.
Neither any Representing Sellers nor the Company has received any written
notice or oral notice of any of the
20
same, and the Representing Sellers have no knowledge that any such
proceeding is contemplated.
4.8 Litigation. There is no instance in which the Company or any of its
Subsidiaries is or has been since its inception (a) subject to any unsatisfied
Order or (b) made by a party or received a threat to be made a party to any
complaint, action, suit, proceeding, hearing or investigation of any Person or
U.S. Governmental Authority. Except as set forth on Schedule 4.8, there is no
suit, action, litigation, investigation, claim, complaint, grievance or
proceeding, including appeals and applications for review, in progress, or
pending, or to the Knowledge of the Representing Sellers, threatened against or
relating to the Company or any of its Subsidiaries or any Representing Sellers,
or involving any of the assets or properties of the Company and any of its
Subsidiaries or any Representing Seller (or to the Knowledge of the Representing
Sellers, any Seller) and/or any of the officers or directors of the Company or
any of its Subsidiaries before any U.S. Governmental Authority, commission,
board, bureau, agency or arbitration panel that, if determined adversely to the
Company or any of its Subsidiaries, such Seller, and/or the officers or
directors of the Company or any of its Subsidiaries (i) would enjoin, restrict
or prohibit the transfer of all or any part of the transactions as contemplated
by this Agreement or Ancillary Agreement to which it is a party, or (ii) prevent
any Seller or the Company from fulfilling all or any of its obligations set out
in this Agreement or Ancillary Agreement to which it is a party.
4.9 Compliance with Laws. Each of the Company and its Subsidiaries is now,
and has been in material compliance with all Laws and Orders.
4.10 Brokers. Except for Avendus Advisors Pvt Ltd ("Avendus"), no Person
has acted directly or indirectly as a broker, finder or financial advisor for
the Company, Trinity India, any of the Representing Sellers, or, to the
Knowledge of the Representing Sellers, any of the Sellers in connection with the
transactions contemplated by this Agreement (or the negotiations relating to the
transactions) other than auditors, legal counsel to the Company, its
Subsidiaries and certain of the Sellers, and Avendus, and no Person is entitled
to any fee or commission (other than auditors, legal counsel to the Company, its
Subsidiaries and certain of the Sellers and Avendus) or like payment in respect
thereof based in any way on any agreement, arrangement or understanding made by
or on behalf of the Company, any of its Subsidiaries, any of the Representing
Sellers, or, to the Knowledge of the Representing Sellers, any of the other
Sellers other than for Selling Expenses.
4.11 Conduct of Business. Since August 30, 2005, the business and
operations of the Company and its Subsidiaries have been conducted in the
Ordinary Course of Business and there has not been any material change in the
operation of the Business of the Company or its Subsidiaries or the performance
or financial condition of the Company or any of its Subsidiaries. In particular,
and except as set forth on Schedule 4.11, neither the Company nor any of its
Subsidiaries has:
(a) borrowed any amount or incurred or become subject to any liability
outside the Ordinary Course of Business of the Company and its Subsidiaries
in excess of US$50,000 except borrowings under lines of credit existing on
such date or inter-company loans or Selling Expenses;
21
(b) sold, assigned or transferred (including, without limitation,
transfers to any employees, any Seller or any of their respective
Affiliates) any assets or properties, or canceled any debts or claims, in
each case, other than in the Ordinary Course of Business of the Company and
its Subsidiaries or the policies and procedures of the Company and its
Subsidiaries as previously disclosed to the Buyer;
(c) waived any material rights of value or suffered any material
losses;
(d) declared or paid any dividends or other distributions to
Shareholders as such, other than the Pre-Closing Dividend, with respect to
any shares of its capital stock or redeemed or purchased, directly or
indirectly, any shares of its capital stock or any options (other than
repurchases of stock from departing employees in accordance with the terms
of the Stock Option Plan);
(e) increased materially the salary, wages or other compensation rates
of any officer, employee, director or consultant or made or granted any
increase in any Employee Plan, or amended or terminated any existing
Employee Plan, or adopted any new Employee Plan or made any commitment or
incurred any liability to any labor organization outside the Ordinary
Course of Business of the Company and its Subsidiaries, or Company policies
and procedures as previously disclosed to the Buyer;
(f) made any capital expenditures or commitments therefor in excess of
US$ 50,000;
(g) made any change in accounting or Tax principles, practices or
policies from those utilized in the preparation of the Financial Statements
other than those required to comply with US GAAP, Buyer's accounting
policies or as indicated and agreed by Buyer;
(h) made any write-off or write-down of or made any determination to
write-off or write-down any of its assets and properties in excess of US$
50,000,;
(i) made any change in its general pricing practices or policies or
any change in its credit or allowance practices or policies;
(j) entered into any amendment, modification, termination (partial or
complete) or granted any waiver under or given any consent with respect to
any agreement involving payments in excess of US$ 50,000 annually for any
agreement that is required (or had it been in effect on the date hereof
would have been required) to be disclosed in the Schedules to this
Agreement other than in the Ordinary Course of Business of the Company and
its Subsidiaries, or with respect to the First Magnus Amendment Agreement
or any waiver in respect of the transactions contemplated hereunder;
(k) commenced or terminated any line of its Business;
(l) authorized, agreed or otherwise become committed to do any of the
foregoing, or adopted or pursued any step or actions, the implementation or
taking of
22
which would result in (or has resulted in) a breach of any of the
representations, warranties and/or covenants contained in this Agreement.
4.12 Labor Matters.
(a) Union and Employee Contracts. (i) Except as set forth in Schedule
4.12, neither the Company nor any of its Subsidiaries is a party to or
bound by any union contract, collective bargaining agreement, employment
contract, independent contractor agreement, consultation agreement, or
other similar type of contract, (ii) neither the Company nor any of its
Subsidiaries has agreed to recognize any union or other collective
bargaining unit, and (iii) no union or collective bargaining unit has been
certified as representing the employees of the Company or any of its
Subsidiaries and to the Knowledge of the Representing Sellers no
organizational attempt has been made or threatened by or on behalf of any
labor union or collective bargaining unit with respect to any employees of
the Company or any of its Subsidiaries. Neither the Company nor any of its
Subsidiaries has experienced any labor strike, dispute, slowdown or
stoppage or any other material labor difficulty since inception.
(b) Employees. The Representing Sellers have not been informed that an
employee of the Company or its Subsidiaries of the designation of AVP or
above is terminating or leaving the employment of the Company or its
Subsidiaries.
(c) Compliance with Law. The Company and any of its Subsidiaries are
in compliance in all material respects with all Laws applicable to employee
related matters, including, without limitation, the deduction of tax at
source and the deposit thereof with the appropriate Governmental Authority,
the payments of all statutory or non-statutory liabilities or payments
towards gratuity, provident fund, bonus, superannuation or other similar
requirements, immigration and work permit laws and have made adequate
provisions for the foregoing in its accounts wherever required.
(d) Employee Benefit Plans. Except as disclosed in Schedule 4.12(d),
there are no other employee benefit plans of the Company or its
Subsidiaries provided to its employees. The Company or its Subsidiaries
does not have any liability with respect to any employee benefit plans
except as provided for in the Company's Financial Statements.
4.13 Contracts. All of the Contracts, including, without limitation, any
contract, agreement, lease, instrument, guarantee, bid, order or proposal to
which the Company or any of its Subsidiaries is a party or to which any of the
assets of the Company or any of its Subsidiaries are bound that, (a) govern the
borrowing of money or the Guarantee or the repayment of Indebtedness (other than
accounts receivable or payable in the Ordinary Course of Business of the Company
and its Subsidiaries) or granting of Encumbrances (other than Permitted
Encumbrances) on any property or asset of the Company or any of its
Subsidiaries; (b) contracts with the Company Materials Customers (as defined)
(c) contain covenants limiting the freedom of the Company or any of its
Subsidiaries to compete in any line of business or with any Person or in any
geographic area or market; (d) which restrict the use of its Intellectual
Property (and excluding licenses of commercially available software) less than
US$ 25000 in value; (e) are
23
with any Directors, officers, employees, any Seller or Stock Option Holder
(other than the Stock Option Plan and any agreements and notice forms
thereunder) of the Company or any of its Subsidiaries or Affiliates of any of
the Sellers; (f) provide for the purchase, maintenance or acquisition, or the
sale or furnishing, of materials, supplies, merchandise or equipment (including
but not limited to computer hardware or software or other property or services)
in excess of US$ 50,000; (g) grant to any Person a first-refusal, first-offer or
similar preferential right to purchase or acquire any right, asset or property
of the Company or any of its Subsidiaries (other than the agreement with First
Magnus-I which is being amended in connection with the Transaction) and the
agreements entered into in Company's Series B Preferred Stock financing round
which the rights under such agreements shall terminate at Closing; (h) pertain
to the lease of any individual equipment or other individual personal property
in excess of US$ 50,000; (i) provide for any counter trade or barter
arrangement; (j) involve a material distributor, sales representative, broker or
advertising arrangement that by its express terms is not terminable by the
Company or any of its Subsidiaries at will or by giving notice of 30 days or
less, without liability; (k) involve a joint venture; or (l) involve the
acquisition of any business enterprise whether via stock or asset purchase or
otherwise; and each of the foregoing Contracts are hereby defined as a "Seller
Material Contract." The Company and each of its Subsidiaries (as applicable) has
provided or made available to the Buyer true, correct and complete copies of
each such Contract, as amended through the date of this Agreement. Each Seller
Material Contract listed on Schedule 4.13 (or required to be listed on Schedule
4.13) is a valid and binding obligation of the Company or any of its
Subsidiaries that is a party to such Material Contract. With respect to the
Seller Material Contracts listed on Schedule 4.13 (or required to be listed on
Schedule 4.13): (i) neither the Company nor any of its Subsidiaries or any other
party thereto is to the Knowledge of the Buyer in material default under or in
material violation of any such Seller Material Contract; (ii) to the Knowledge
of the Representing Sellers, no event has occurred which, with notice or lapse
of time or both, would constitute such a material default or material violation;
and (iii) neither the Company nor any of its Subsidiaries has released any of
its material rights under any such Seller Material Contract.
4.14 Licenses and Permits. Schedule 4.14 sets forth a complete and accurate
list and description of all material licenses, permits and other authorizations
of any Governmental Authority held by the Company or any of its Subsidiaries and
used by it in the conduct of its business. The Company and its Subsidiaries are
in full compliance with all of the material terms of such licenses, permits and
authorizations and there is no pending or threatened termination, expiration or
revocation thereof. Except for the licenses, permits, and authorizations set
forth and described in Schedule 4.14, there are no licenses, permits or other
authorizations, whether written or oral, necessary or required for the conduct
of the business of the Company or any of its Subsidiaries which, if not had,
would have a Material Adverse Effect on the Company or any of its Subsidiaries
taken as a whole.
4.15 Intellectual Property.
(a) All of the Intellectual Property practiced or used by the Company
or any of its Subsidiaries that is essential to the conduct of their
respective businesses and not widely commercially available is owned by the
Company or its Subsidiaries, as the case may be, and the Company and, if
applicable, Trinity India as the case may be, have the right to use and are
the sole and exclusive owners (as between themselves and any third
24
Person that is not a Subsidiary) of all right, title and interest in and to
such Intellectual Property. All other Intellectual Property that is not
owned by the Company or any of its Subsidiaries is being used by the
Company or its Subsidiaries, as the case may be, only with the consent of
or license from, and in material compliance with such license or consents
from the rightful owner thereof and all such consents and licenses are in
full force and effect. Neither the Company nor any of its Subsidiaries have
licensed or otherwise granted any right to any person under any
Intellectual Property owned by or licensed to the Company or any of its
Subsidiaries or have otherwise agreed not to assert any such Intellectual
Property against any person.
(b) The Intellectual Property owned by the Company or any of its
Subsidiaries has not been used or enforced or failed to be used or enforced
by it, or to the Knowledge of the Representing Seller, by other Persons in
a manner that would result in the abandonment, cancellation or
unenforceability of any such Intellectual Property.
(c) Neither the Company nor its Subsidiaries have received, nor to the
Knowledge of the Representing Sellers, is there any claim of adverse
ownership, invalidity or other opposition to or conflict with any
Intellectual Property of the Company or any of its Subsidiaries with those
of another party, nor any pending, or, to the Knowledge of the Representing
Sellers, threatened suit, proceeding, claim, demand, action or
investigation of any nature or kind against the Company or any of its
Subsidiaries relating to the Intellectual Property of the Company or any of
its Subsidiaries and which (i) challenges the rights of the Company or any
of its Subsidiaries in respect of any Intellectual Property, (ii) asserts
that the operation of the business of the Company and/or any of its
Subsidiaries is, was or will be infringing or otherwise in violation of any
Intellectual Property of a third party, or is (except as set forth in a
Contract) required to pay any royalty, license fee, charge or other amount
with regard to any Intellectual Property and (iii) none of the Intellectual
Property is or has been subject to any order of any court or statutory
authority, and neither the Company nor any of its Subsidiaries has been
subject to any order of any court or statutory authority in respect of any
other entity's Intellectual Property.
(d) The Company or each of its Subsidiaries, as the case may be, has
taken all commercially reasonable actions to protect and maintain its
Intellectual Property including the use of all commercially reasonable
measures and precautions necessary to safeguard and maintain the
confidentiality and value of its Trade Secrets.
(e) To the Knowledge of the Representing Sellers, neither the Company
nor any of its Subsidiaries, nor any activity in which the Company or any
of its Subsidiaries is engaged, breaches, violates, infringes or interferes
with any Intellectual Property rights of any third party or requires
payment for the use of any Intellectual Property of another that is not
already set forth under a Contract with it.
(f) Other than under the First Magnus-I Master Services Agreement and
the Ecloser Master Services Agreement, neither the Company nor any of its
Subsidiaries has transferred ownership of, or granted any exclusive license
or exclusive right to use, or authorized the retention of any rights in or
to joint ownership of, any Intellectual Property to any other Person.
25
(g) To the Knowledge of the Representing Sellers, there is no
information, materials, facts, or circumstances, including any information
or fact that would constitute prior art, that would render any application
it has for registration of any of the Intellectual Property of the Company
or any of its Subsidiaries invalid or unenforceable, or would adversely
affect any pending application for any Intellectual Property of the Company
or any of its Subsidiaries, and the Company and its Subsidiaries have not
misrepresented or failed to disclose and to the Knowledge of the
Representing Sellers, there has not been any misrepresentation or failure
to disclose any fact or circumstance in any application for any
Intellectual Property of the Company or any of its Subsidiaries that would
constitute fraud or a misrepresentation with respect to such application or
that would otherwise affect the validity or enforceability of any such
Intellectual Property under any applications of the Company or any of its
Subsidiaries.
4.16 Insurance. To the Knowledge of the Representing Sellers, the insurance
maintained by the Company and its Subsidiaries and set out Schedule 4.16, is
sufficient to comply with all applicable Laws and Contracts to which the Company
or any of its Subsidiaries are a party. No insurance carrier providing insurance
to the Company or any of its Subsidiaries is, to the Knowledge of the
Representing Sellers, in receivership, conservatorship, liquidation or similar
proceedings and no such proceeding with respect to any such carrier is imminent.
4.17 Financial Statements.
(a) Attached as Schedule 4.17 are correct and complete copies of the
audited balance sheet of the Company and its Subsidiaries as of August 30,
2005, and the related audited statements of income, stockholders' equity
and cash flows for the fiscal years then ended, together with the notes
thereto, and the other financial information included therewith
(collectively, the "Company Financial Statements").
(b) The Company Financial Statements present fairly, in all material
respects, the financial position, results of operations, stockholders'
equity and cash flows of the Company and its Subsidiaries at the dates and
for the time periods indicated, and have been prepared and reviewed by the
management of the Company and its Subsidiaries in accordance with US GAAP,
consistently applied throughout the periods indicated. The Company Interim
Financial Statements present fairly in all material respects the financial
position and results of operations of the Company and its Subsidiaries at
the date and for the period indicated and have been prepared and reviewed
by the management of the Company. The Company Financial Statements and the
Company Interim Financial Statements were derived from the books and
records of the Company and its Subsidiaries.
4.18 Undisclosed Liabilities. Except as set forth in Schedule 4.18, neither
the Company nor any of its Subsidiaries have any material liabilities, claims,
obligations or Indebtedness (whether accrued, absolute, contingent, unliquidated
or otherwise, whether due or to become due, whether known or unknown, regardless
of when asserted) except liabilities reflected and provided for in the Financial
Statements and Selling Expenses. To the Knowledge of the Representing Sellers,
there exists no conditions, facts or circumstances for any such claims,
obligations, liabilities or Indebtedness.
26
4.19 Accounts Receivable. All accounts and notes receivable of the Company
and each of its Subsidiaries represent sales actually made in the Ordinary
Course of Business or valid claims for cost reimbursements. The reserve on the
Financial Statements against the accounts receivable for returns and bad debts
has been calculated in a manner consistent with past practice. All of the
accounts and notes receivable of the Company or any of its Subsidiaries are, in
the aggregate, to the Knowledge of the Representing Sellers, collectible in
full, net of the reserve therefor, in the Ordinary Course of Business of the
Company or its Subsidiaries. No counter claims, defenses or offsetting claims
with respect to the accounts or notes receivable of the Company or any of its
Subsidiaries are pending or, to the Knowledge of the Representing Sellers,
threatened. All of the accounts and notes receivable of the Company or any of
its Subsidiaries relate solely to sales of goods or services to customers of the
Company or its Subsidiaries, as the case may be, none of which are Affiliates of
the Sellers other than First Magnus-I and Trinity India.
4.20 Bank Accounts. Schedule 4.20 sets forth a list showing the name and
address of (a) each bank with which the Company or any of its Subsidiaries have
an account or safe deposit box and the name of each person authorized to draw
thereon or have access thereto, and (b) the name of each person holding a power
of attorney on behalf of the Company or any of its Subsidiaries.
4.21 Taxes.
(a) No Return of the Company or any Subsidiary with respect to any
Pre-closing Tax period has ever been audited by any Taxing Authority.
(b) Neither the Company nor any Subsidiary has any unpaid Tax
liabilities (whether due or to become due) with respect to the income,
property and operations of the Company and the Subsidiaries that relate to
any Pre-Closing Tax Period, except for (i) Tax liabilities reflected in the
Financial Statements, (ii) that have arisen after the date of the Financial
Statements in the Ordinary Course of Business of the Company and its
Subsidiaries or (iii) Tax liabilities arising from the planned distribution
of a dividend by Trinity India to the Company or by the Company to its
Shareholders of a dividend or any share redemption by the Company having a
similar effect (such distribution or redemption, the "Pre-Closing
Dividend"). Any such Tax liability arising due to the Pre-Closing Dividend
shall be paid by the Company or Trinity India to the relevant authorities
or will be left behind in the Company.
(c) Neither the Company nor any Subsidiary is a party to any Contract,
arrangement or plan that has resulted or would result, separately or in the
aggregate, in the payment of any "excess parachute payments" within the
meaning of Section 280G of the Code, other than payments for which
stockholder approval satisfying the exemption under Section 280G(b)(5) and
the Treasury Regulations thereunder will have been obtained prior to the
Closing.
(d) All Taxes owed by the Company and the Subsidiaries (whether or not
shown as due and payable on any Return) have been timely paid or withheld
and
27
remitted to the appropriate Taxing Authority, other than any Taxes for
which adequate reserves in accordance with GAAP are reflected in the
Financial Statements.
(e) Neither the Company nor any Subsidiary has granted any extension
or waiver of the statute of limitations period applicable to any Return or
Tax, which period (after giving effect to such extension or waiver) has not
yet expired.
(f) There is no Proceeding now pending or, to the Company's Knowledge,
threatened against or with respect to the Company or any Subsidiary in
respect of any Tax.
(g) There are no Encumbrances for Taxes upon the assets or properties
of the Company and the Subsidiaries, except for Taxes not yet due and
payable.
(h) Neither the Company nor any Subsidiary has been a member of an
affiliated, consolidated, combined or unitary group or participated in any
other arrangement whereby any income, revenues, receipts, gain or loss was
determined or taken into account for Tax purposes with reference to or in
conjunction with any income, revenues, receipts, gain, loss, asset or
liability of any other Person other than a group of which the Company or
the Subsidiary was the parent. Neither the Company nor any Subsidiary has
any liability for the Taxes of any Person as a transferee or successor, by
contract or otherwise.
(i) Schedule 4.21(i) contains a list of jurisdictions (whether foreign
or domestic) to which any Tax imposed on overall net income is properly
payable by the Company or any Subsidiary, other than jurisdictions for
which Returns based on overall net income have been timely filed and made
available upon request to Buyer.
(j) Neither the Company, any Subsidiary, the Representing Sellers, nor
to the Knowledge of the Representing Sellers, any of the Sellers has
received notice of any claim by a Governmental Authority in a jurisdiction
where the Company or a Subsidiary, as the case may be, does not file
Returns that the Company or such Subsidiary, as applicable, is or may be
subject to taxation by that jurisdiction.
(k) The Company and each Subsidiary has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, member or other
third party.
(l) Neither the Company, any Subsidiary nor any Person on behalf of
the Company or any Subsidiary has entered into any agreement or consent
pursuant to Section 341(f) of the Code. To the Knowledge of the
Representing Sellers, none of the Sellers, other than Xx. Xxxxxx
Xxxxxxxxxx, is a foreign person within the meaning of Section 1445 of the
Code.
(m) Except as set forth on Schedule 4.21(m), neither the Company nor
any Subsidiary will be required to include any item of income in, or
exclude any item of deduction from, taxable income for any taxable period
(or portion thereof) ending after the Closing Date as a result of any: (i)
change in method of accounting for a taxable
28
period ending on or prior to the Closing Date, (ii) "closing agreement" as
described in Section 7121 of the Code ( or any corresponding or similar
provision of state, local or foreign law), (iii) installment sale or open
transaction disposition made on or prior to the Closing Date, or (iv)
prepaid amount received on or prior to the Closing Date.
(n) Neither the Company nor any Subsidiary is a party to any Tax
allocation or sharing agreement, other than any such agreement to which
only the Company and its Subsidiaries are parties.
(o) Neither the Company nor any Subsidiary has distributed the
securities of another Person, or had its securities distributed by another
Person, in a transaction that was purported or intended to be governed in
whole or in part by Section 355 or Section 361 of the Code.
(p) Neither the Company nor any Subsidiary has participated in a
reportable transaction within the meaning of Section 6707A of the Code or
Treasury Regulation Section 1.6011-4 (or any predecessor provision
thereto).
(q) Trinity India has in a timely manner filed all tax returns,
statements, reports and forms (including estimated tax or information
returns and reports) (collectively, the "India Returns") that are required
to be filed, and all such India Returns are true, complete and accurate in
all material respects and have been prepared in compliance with applicable
Laws. All India Taxes owed by Trinity India (whether or not shown as due
and payable on any tax return) have been timely paid or withheld and
remitted to the appropriate Taxing Authority, other than any India Taxes
for which adequate reserves in accordance with GAAP are reflected in the
Financial Statements and other than any India Tax required to be withheld
with respect to the planned distribution of a dividend by Trinity India to
the Company in connection with the Pre-Closing Dividend described in
Section 4.21(b). There is no action, suit, proceeding, claim, audit or
investigation now pending, or any action, suit, claim, audit or
investigation threatened against or with respect to Trinity India in
respect of any India Tax. There are no Encumbrances for India Taxes upon
the assets or properties of Trinity India, other than Encumbrances for
India Taxes not yet due and payable. Trinity India has complied with all
conditions of the consents, approvals, licenses for Tax concessions,
exemptions, deductions, incentives and benefits that Trinity India has been
entitled to and has availed itself of as of the Closing Date or anytime
prior thereto, and to the Knowledge of the Representing Sellers, Trinity
India has not done or failed to do anything that would prevent Trinity
India from being entitled to and being able to continue to be entitled on
or after the Closing Date to such Tax concessions, exemptions, deductions,
incentives and benefits resulting from consents, approvals and licenses.
For purposes of this Agreement, "India Tax" means (a) any net income,
alternative or add on minimum tax, gross income, gross receipts, sales,
use, ad valorem, value added, transfer, franchise, profits, license,
withholding on amounts paid to or by Trinity India, payroll, employment,
excise, severance, stamp, occupation, premium, property, environmental or
windfall profit tax, custom, duty or other tax, governmental fee or other
like assessment or charge of any kind whatsoever, together with any
interest, penalty, addition to tax or additional amount imposed by any
Taxing Authority, whether disputed or not, (b) any liability of Trinity
29
India for the payment of any amounts of any of the foregoing types as a
result of being a member of an affiliated, consolidated, combined or
unitary group, or being a party to any agreement or arrangement whereby
liability of Trinity India for payment of such amounts was determined or
taken into account with reference to the liability of any other entity, and
(c) any liability of Trinity India for the payment of any amounts as a
result of being a party to any Tax sharing agreements or arrangements
(whether or not written) binding on Trinity India or with respect to the
payment of any amounts of any of the foregoing types as a result of any
express or implied obligation to indemnify any other Person.
4.22 Customers and Suppliers.
(a) Schedule 4.22(a) sets forth all customers that accounted for 10%
or more of the revenues of the Company or any of its Subsidiaries for the
year ended August 31, 2005 ("Company Material Customers"). Except as set
forth in Schedule 4.22(a), (i) all Company Material Customers continue to
be customers of the Company or any of its Subsidiaries, as the case may be,
and none of such Company Material Customers has reduced materially its
business with the Company or any of its Subsidiaries, as the case may be,
from the levels achieved during the year ended August 31, 2005, and to the
Knowledge of the Representing Sellers, no such reduction is currently
expected to occur; (ii) no Company Material Customer has terminated its
relationship with the Company or any of its Subsidiaries, as the case may
be, or has threatened to do so; (iii) neither the Company nor any of its
Subsidiaries is involved in any claim, dispute with any Company Material
Customer; and (iv) neither the Company nor any of its Subsidiaries is
involved in any claim, dispute or controversy with any of its other
customers that, individually or in the aggregate, could reasonably be
anticipated to have a Material Adverse Effect on the Company or any of its
Subsidiaries taken as a whole.
(b) Schedule 4.22(b) sets forth the five (5) largest suppliers of the
Company or any of its Subsidiaries for each of the years ended August 31,
2005 ("Company Material Suppliers"). Except as set forth in Schedule
4.22(b), (i) all Company Material Suppliers are currently suppliers of the
Company or its Subsidiaries, as the case may be, and none of such Company
Material Suppliers has reduced materially its business with the Company or
any of its Subsidiaries, as the case may be, from the levels achieved
during the year ended August 31, 2005, and, to the Knowledge of the
Representing Sellers, no such reduction will occur; (ii) no Company
Material Supplier has terminated its relationship with the Company or any
of its Subsidiaries, as the case may be, or has threatened to do so; (iii)
neither the Company nor any of its Subsidiaries is involved in any claim,
dispute or controversy with any Company Material Supplier; and (iv) neither
the Company nor any of its Subsidiaries is involved in any claim, dispute
or controversy with any of its other suppliers that, individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect on
the Company and its Subsidiaries taken as a whole.
4.23 Related Party Transactions. Except as set forth in Schedule 4.23, none
of the Company or any of its Subsidiaries, any of the Representing Sellers, or
to the Knowledge of the Representing Sellers, none of the Sellers or any of
their respective Affiliates, nor any current or former director or officer of
the Company or its Subsidiaries, (a) has or since inception has had
30
any direct or indirect interest (i) in, or is or during at anytime since
inception was, a director, officer or employee of, any Person that is a client,
customer, supplier, lessor, lessee, debtor, creditor or competitor of the
Company, or (ii) in any material property, asset or right which is owned or used
by the Company in the conduct of its business, or (b) is or at any time since
inception has been a party to any agreement or transaction with the Company.
Except as set forth in Schedule 4.23, there is no outstanding Indebtedness of
any current or former director, officer, employee or consultant of the Company
or any of its Subsidiaries or any Seller or to the Knowledge of the Representing
Sellers, any Affiliates of a Seller to the Company.
ARTICLE 5: REPRESENTATIONS AND WARRANTIES AND CERTAIN COVENANTS AND AGREEMENTS
OF FIRST MAGNUS AND ACCREDITED SELLERS
5A. First Magnus hereby jointly but not severally, represents and warrants to
the Buyer (i) on the date of this Agreement and (ii) at Closing, subject only to
the specific qualifications made in the schedules that correspond with each
individual representation and warranty set forth herein, and subject to any
updates to such schedules that are made by First Magnus at Closing, as follows:
5A.1 Existence and Good Standing FM-I. First Magnus-I is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Arizona, USA and has the requisite corporate power and authority and capacity
to, enter into this Agreement and the Ancillary Agreements to which it is a
party.
5A.2 Existence and Good Standing FM-II. First Magnus-II is an LLC duly
organized, validly existing and in good standing under the laws of the State of
Arizona, USA and has the requisite corporate power and authority to enter into
this Agreement and the Ancillary Agreements to which it is a party.
5A.3 Good Title. Each of First Magnus-I and First Magnus-II owns the Shares
specified opposite its name on Schedule 4.2(a) and has good and valid title to
such Shares, free and clear of any and all Encumbrances. Except as set forth on
Schedule 4.2(c), neither First Magnus-I nor First Magnus-II is a party to any
options, warrants, rights, contracts, calls, puts, rights to subscribe,
conversion rights or other agreements or commitments that are binding upon it
providing for the issuance of any further Shares by the Company or the
disposition, acquisition or transfer of any of the Shares held by it (or
creating any rights on or in connection with the Shares) nor has it received
notice of any claims by any Person entitled or claiming to be entitled to any of
the foregoing. Except as set forth on Schedule 4.2(c), neither First Magnus-I
nor First Magnus-II are a party to any voting trust, proxy or other agreement or
understanding with respect to the voting or ownership or any rights in respect
of any of their Shares or any agreement that requires or may require additional
Shares to be issued or allotted beyond the Shares that currently are held by
First Magnus-I or First Magnus-II other than the written agreements provided to
the Buyer; nor has it received notice of any claims being made by any Person
entitled or claiming to be entitled to any of the foregoing. Each of First
Magnus-I and First Magnus-II will at Closing Transfer its Shares (and full legal
and beneficial ownership thereof) to the Buyer free from any Encumbrance.
31
5A.4 Validity and Enforceability. Each of First Magnus-I and First
Magnus-II has the capacity or the requisite power and authority, as the case may
be, to execute, deliver and perform such First Magnus-I and First Magnus-II
obligations under this Agreement and under any Ancillary Agreements to which it
is a party. This Agreement and each of the Ancillary Agreements to which a party
has been duly executed and delivered by First Magnus-I and First Magnus-II, as
applicable, and, assuming due authorization, execution and delivery by the Buyer
and all parties hereunder, represents the legal, valid and binding obligation of
each of First Magnus-I and First Magnus-II respectively, enforceable against
each of First Magnus-I and First Magnus-II, respectively, in accordance with
their terms to the extent that such entity or entities are party to such
agreements.
5A.5 No Conflict. No U.S. approval, authorization, consent, license,
clearance or order of, declaration or notification to, or filing or registration
with, any U.S. Governmental Authority or any other Person is required for each
of First Magnus-I or First Magnus-II to sell the Shares to the Buyer or
otherwise to perform its obligations under this Agreement or any Ancillary
Agreement to which it is a party. Neither the execution and delivery of this
Agreement and the Ancillary Agreements, nor the consummation of the transactions
contemplated hereby and thereby, will (i) conflict with, result in a breach of
any of the provisions of, (ii) constitute a default under, (iii) result in the
violation of or (iv) give any third Person the right to terminate or to
accelerate any obligation under, the provisions of any indenture, mortgage,
lease, loan agreement or other agreement or instrument to which First Magnus-I
or First Magnus -II, is bound, or pursuant to any Laws or the charter documents
of First Magnus-I and First Magnus-II, as may be applicable. Neither the
execution and the delivery of this Agreement and the other documents
contemplated hereby to which either First Magnus-I or First Magnus-II is or will
be a party, nor the consummation of the transactions contemplated hereby, will
(A) result in the creation of any Encumbrance upon their Shares or (B) require
any authorization, consent, approval, execution or other action by or notice to
any U.S. Governmental Authority with respect to the obligations of either First
Magnus-I or First Magnus-II hereunder. The transactions contemplated by this
Agreement will, at the Closing, effect a transfer of the full unencumbered legal
and beneficial ownership of the Shares held by First Magnus-I and First
Magnus-II to the Buyer.
5A.6 Financial Statements.
(a) Attached as Schedule 4.17 are correct and complete copies of (i)
the audited balance sheet of the Company and its Subsidiaries as of August
30, 2005, and the related audited statements of income, stockholders'
equity and cash flows for the fiscal years then ended, together with the
notes thereto, and the other financial information included therewith
(collectively, the "Company Financial Statements"), and (ii) the unaudited
balance sheet of the Company and its Subsidiaries as of October 31, 2005,
and the related unaudited statement of income for the three-month period
then ended (the "Company Interim Financial Statements").
(b) The Company Financial Statements present fairly, in all material
respects, the financial position, results of operations, stockholders'
equity and cash flows of the Company and its Subsidiaries at the dates and
for the time periods indicated, and have been prepared and reviewed by the
management of the Company
32
and its Subsidiaries in accordance with GAAP, consistently applied
throughout the periods indicated. The Company Interim Financial Statements
present fairly in all material respects the financial position and results
of operations of the Company and its Subsidiaries at the date and for the
period indicated and have been prepared and reviewed by the management of
the Company and its Subsidiaries in accordance with GAAP, and consistent
with the Company Financial Statements. The Company Financial Statements and
the Company Interim Financial Statements were derived from the books and
records of the Company and its Subsidiaries.
5A.7 Undisclosed Liabilities. Neither the Company nor any of its
Subsidiaries have any material liabilities, claims, obligations or Indebtedness
(whether accrued, absolute, contingent, unliquidated or otherwise, whether due
or to become due, whether known or unknown, regardless of when asserted) except
liabilities reflected and provided for in the Financial Statements and Selling
Expenses. To the Knowledge of First Magnus, there exists no conditions, facts or
circumstances for any such claims, obligations, liabilities or Indebtedness.
5B. Each of the Accredited Sellers hereby represents and warrants to the Buyer
and covenants and agrees with the Buyer on behalf of himself or itself (as
applicable) but not the other Accredited Investors that (i) on the date of this
Agreement, and (ii) at Closing as follows:
5B.1 He or it is an Accredited Seller is acquiring WNS Shares solely for
his own account, for investment purposes and without any intention or view
towards the distribution of such WNS Shares received by him/it in violation of
the Securities Act, 1933, and the rules and regulations promulgated there under,
as in effect from time to time (the "Securities Act"). Such Accredited Seller
understands and acknowledges that the WNS Shares received hereunder by him/it
will not, as of the time of acquisition and/or delivery thereof to him/it, be
registered under the Securities Act or state securities laws and blue sky laws,
and that, subject to registration under the Securities Act, such Accredited
Seller may not sell, Transfer or otherwise dispose of such WNS Shares unless (i)
such sale, Transfer or other disposition is made in conformity with the holding
period and other limitations and requirements of the Securities Act; or (ii)
such Accredited Seller delivers to the Buyer a written opinion, in the form and
substance satisfactory, to the Buyer, of counsel reasonably acceptable to the
Buyer, to the effect that such sale, Transfer or other disposition is exempt
from registration under the Securities Act and state securities laws and blue
sky laws; or (iii) such Accredited Seller receives the Buyer's written waiver of
the requirements of this Section 5B.1. Such Accredited Seller understands that
the WNS Shares have not been registered under the Securities Act or applicable
state and other securities laws by reasons of a specific exemption from the
registration provisions of the Securities Act and applicable state and other
securities laws, the availability of which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of such Accredited
Seller's representations as expressed herein.
5B.2 Such Accredited Seller understands and acknowledges and agrees that
the Buyer is neither subject to any obligation to him/it to register (under the
Securities Act and state securities laws and blue sky laws) the sale, Transfer
or other disposition by him (or on his behalf) of the WNS Shares issued to and
delivered to him/it (or to be delivered to him/it pursuant to the Escrow
Agreement) nor subject to any other obligation to him to take any other action
necessary in order to make compliance with an exemption from such registration
available. Such
33
Accredited Seller understands that no public market now exists for any of the
securities issued by the Buyer and that there is no assurance that a public
market will ever exist for the securities of the Buyer.
5B.3 Such Accredited Seller (other than First Magnus) hereby represents and
warrants to the Buyer that (A) he is a natural Person whose individual net
worth, or joint net worth with such Person's spouse, on the date of this
Agreement is and as of the Closing will be in excess of US$1,000,000 (US Dollars
One Million Only); and/or (B) he had an individual income in excess of
US$200,000 in each of the two most recent years or joint income with such
Accredited Seller's spouse in excess of US$300,000 in each of the two most
recent years and has a reasonable expectation of reaching the same income level
in the current year. Such Accredited Seller hereby represent and warrant to the
Buyer that (x) it is a corporation (in the case of First Magnus-I) or a limited
liability company (in the case of First Magnus-II); (y) that it was not formed
for the specific purpose of acquiring the WNS Shares; and (z) it has total
assets in excess of US$ 5,000,000 (US Dollars Five Million Only). Such
Accredited Seller further represents and warrants to the Buyer that (1) he/it
will not require the services of a "purchaser representative" as defined in Rule
501(h) of Regulation D under the Securities Act; (2) he/it has such knowledge
and experience in financial and business matters that he/it is capable of
evaluating the merits and risks of the prospective investment in the WNS Shares
issued or delivered (or to be issued or delivered) hereunder; (3) he/it has
received the Buyers annual reports and audited financial accounts for the years
ended March 31, 2003, March 31, 2004 and March 31, 2005; (4) he/it has all
information or has been provided access to all information regarding the
business and financial condition of the Buyer, its expected plans for future
business activities, material contracts, intellectual property, and the merits
and risks of an investment in the WNS Shares which such Accredited Seller has
requested or otherwise needs to evaluate an investment in the WNS Shares; (5)
he/it has had an opportunity to discuss the Buyer's business, management and
financial affairs with directors, officers and management of the Buyer and has
had the opportunity to review the Buyer's operations and facilities; (6) he/it
has also had the opportunity ask questions of, and receive answers from, the
Buyer and its management regarding the terms and conditions of this investment
and all such questions have been answered to such Accredited Seller's
satisfaction; and (7) he/it has had the opportunity to consult with independent
counsel concerning the transactions contemplated by this Agreement and has
reviewed the terms and conditions carefully with such counsel, and acknowledges
and fully understands the restrictions imposed under this Agreement and that the
certificates for the WNS Shares issued or delivered (or to be issued or
delivered) to him/it or any substitutions therefore, will have the following
legend:
THE SHARES REPRESENTED BY THE WITHIN CERTIFICATES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 IN RELIANCE UPON THE REPRESENTATIONS OF THE
RECIPIENT THAT THEY ARE RECEIVED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION. THEY MAY NOT BE OFFERED OR SOLD AND NO TRANSFER OF THEM WILL BE
MADE BY THE COMPANY OR ITS TRANSFER AGENT UNLESS (I) THEY ARE REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR (ii) THERE IS PRESENTED TO THE COMPANY AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS
NOT NECESSARY.
34
5B.4 Such Accredited Seller acknowledges and understands that (a) the Transfer
of the WNS Shares held by him/it will be subject to the terms and conditions of
the Investment Agreement, and he/it must bear the economic risk of this
investment for an indefinite period of time because the WNS Shares must be held
indefinitely unless an exemption from such registration is available. Such
Accredited Seller further understands that any transfer agent of the Buyer will
be issued stop-transfer instructions with respect to the WNS Shares unless any
Transfer thereof is (x) subsequently registered under the Securities Act and
applicable state and other securities laws or unless an exemption from such
registration is available and (y) made in accordance with the terms of this
Agreement and the Investment Agreement.
ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby, represents and warrants to each of the Sellers (a) at the
signing of this Agreement and (b) at Closing, subject only to the specific
qualifications made in the schedules that correspond with each individual
representation and warranty set forth herein, and subject to any updates to such
schedules that are made by the Buyer at Closing, as follows:
6.1 Existence and Good Standing. The Buyer is a private limited company
duly organized, validly existing and in good standing under the laws of the Isle
of Jersey and is duly authorized, qualified or licensed to do business as a
foreign corporation in all jurisdictions other than those jurisdictions in which
the failure to be so qualified would not have a Material Adverse Effect on the
Buyer and its Subsidiaries taken as a whole. The Buyer has the corporate power
and authority to (a) own, operate and lease its properties and assets as and
where currently owned, operated and leased, and (b) carry on its business as
currently conducted. The Buyer is not engaged in any business other than the
business process outsourcing business.
6.2 WNS Shares. The Buyer will at Closing issue the WNS Shares to the
Sellers free and clear of any and all Encumbrances. Such WNS Shares will be duly
authorized, fully paid and non-assessable and will be issued in compliance with
applicable Laws, with a then current value of Pound3.50 to each Seller in the
amounts as designated on Schedule 2.2. Except for Warburg Xxxxxx, XX and
Xxxxxxxx Xxxxx who have been granted certain additional rights under the
Investment Agreement, the WNS Shares to be issued to the Sellers pursuant to
this Agreement, will have the same rights, privileges and preferences as those
held by the other shareholders of WNS (other than Warburg Pincus, British
Airways and Xxxxxxxx Xxxxx).
6.3 Validity and Enforceability. Each of the Buyer and its Subsidiaries has
the capacity or the requisite power and authority, as the case may be, to
execute, deliver and perform its obligations under this Agreement and the each
of the Ancillary Agreements to which it is a party and to effect the
transactions contemplated hereby and thereby. The execution, delivery and
performance of each of these agreements has been duly authorized by all
requisite corporate action. This Agreement and each of the Ancillary Agreements
have been duly executed and delivered by the Buyer and any of its Subsidiaries
that are a party to such agreements and, assuming due authorization, execution
and delivery by the Sellers, represents the legal, valid and binding obligation
of the Buyer and any of its Subsidiaries that are party to such agreements,
enforceable against the Buyer and any of its Subsidiaries that are party to such
agreements in accordance with their respective terms.
35
6.4 Capitalization of the Buyer.
(a) WNS Holdings Ltd. The authorized capital of the Buyer consists of
40,000,000 equity shares of GPB 10p each, all of which are issued and
outstanding. The stock options of the Buyer are issued and outstanding as
of the date of this agreement are 5,670,391. The stock options authorized
to the employees by the Board of Directors of the Buyer but not issued to
the employees are 381,172 as of the date of this agreement. In accordance
with a term sheet executed by the Buyer with respect to a proposed
acquisition by the Buyer, 30,000 equity shares of GBP 10p each and stock
options convertible into 70,000 equity shares of GBP 10p each of the Buyer
may be issued. Except as specifically set forth above in this Section 6.4,
there are no authorized or outstanding options, rights or other securities
of the Buyer. The outstanding shares of common stock are all duly and
validly authorized and issued, fully paid and non-assessable, and were
issued in compliance with all applicable Laws. There are not outstanding or
authorized options, stock appreciation rights, phantom stock, warrants,
rights (including pre-emptive or conversion rights, other than those in the
Investment Agreement) or agreements for the purchase or acquisition of
capital stock (or with respect thereto) from or with the Buyer or any of
its Subsidiaries. Other than the Investment Agreement, the Buyer is not a
party to any agreement or understanding with any Person that affect or
relates to the voting of any securities of the Buyer. Other than the
Investment Agreement, the Buyer is not a party to any other binding
agreement with any shareholders of the Buyer and/or its Subsidiaries, as
the case may be, limiting the transfer of the Buyer's shares.
6.5 No Conflict. No approval, authorization, consent, license, clearance or
order of, declaration or notification to, or filing or registration with, any
Governmental Authority or any other Person is required for the Buyer to purchase
the Shares and for Buyer to issue the WNS Shares to the Sellers and/or otherwise
for the Buyer and/or any of its Subsidiaries to perform its respective
obligations under this Agreement or the Ancillary Agreements. Neither the
execution and delivery of this Agreement and the Ancillary Agreements, nor the
consummation of the transactions contemplated hereby and thereby, will (i)
conflict with, result in a breach of any of the provisions of (ii) constitute a
default under, (iii) result in the violation of or (iv) give any third Person
the right to terminate or to accelerate any obligation under, the provisions of
any indenture, mortgage, lease, loan agreement or other agreement or instrument
that is material to the Buyer or any of its Subsidiaries and to which the Buyer
is bound or affected, or pursuant to any Laws. Neither the execution and the
delivery of this Agreement nor any of the Ancillary Agreements to which the
Buyer or any of its Subsidiaries is or will be a party, nor the consummation of
the transactions contemplated hereby or thereby, will (a) result in the creation
of any Encumbrance upon the WNS Shares or any assets or properties of the Buyer
or any of its Subsidiaries or (b) require any authorization, consent, approval,
execution or other action by or notice to any Governmental Authority. Neither
the execution and the delivery of this Agreement nor any of the Ancillary
Agreements to which the Buyer or any of its Subsidiaries is or will be a party,
nor the consummation of the transactions contemplated hereby or thereby, will
conflict with the charter documents of the Buyer. The transactions contemplated
by this Agreement will, at the Closing, effect a transfer of the full
unencumbered legal and beneficial ownership of the WNS Shares to the Sellers.
36
6.6 Consents. No consent, approval or authorization of any third party or
Governmental Authority is required in connection with the execution, delivery
and performance by the Buyer, or, to the Knowledge of the Buyer and any of its
Subsidiaries, of this Agreement or the Ancillary Agreements or the consummation
of the transactions contemplated hereby or thereby.
6.7 Property. Neither the Buyer nor any of its Subsidiaries owns any real
property. To the Knowledge of the Buyer, the Buyer and its Subsidiaries have a
valid leasehold interest in, or a valid license to, all of their tangible assets
and properties. Any real property occupied by the Buyer or any Subsidiary of the
Buyer is so occupied pursuant to a lease, license and/or occupancy agreement,
and amendments thereto (each a "Buyer Real Property Lease," and collectively,
the "Buyer Real Property Leases." The Buyer and each of its Subsidiaries have
good and marketable title to or have the right to use all items of all
equipment, machinery, and other similar tangible personal property that are
material to its business, and such tangible assets that are material to Buyer's
or any of its Subsidiaries' business are generally in good operating condition
and repair (subject to normal wear and tear consistent with the age of the
assets).
6.8 Litigation. Except as disclosed in Schedule 6.8, there is no instance
in which the Buyer or any of its Subsidiaries is or has been within the
three-year period prior to the date of this Agreement, (a) subject to any
unsatisfied Order or (b) been made by a party or received a threat threatened to
be made a party to any complaint, action, suit, proceeding, hearing or
investigation of any Person or Governmental Authority that would, if determined
adversely to the Buyer, be material to Buyer or any of its Subsidiaries, or the
business of Buyer or any of its Subsidiaries. Except as disclosed in Schedule
6.8, there is no suit, action, litigation, investigation, claim, complaint,
grievance or proceeding, including appeals and applications for review, in
progress, or pending or threatened against or relating to the Buyer, or any of
its Subsidiaries, or involving any of the assets or properties of the Buyer and
any of its Subsidiaries (or to the Knowledge of the Buyer) and/or any of the
officers or directors of the Buyer or any of its Subsidiaries before any
Governmental Authority, commission, board, bureau, agency or arbitration panel
that, if determined adversely to the Buyer, or any of its Subsidiaries, (i)
would enjoin, restrict or prohibit the transfer of all or any part of the
transaction as contemplated by this Agreement, or (ii) prevent the Buyer from
fulfilling all of its obligations set out in this Agreement.
6.9 Compliance with Laws. Each of the Buyer and its Subsidiaries is now,
and has been in material compliance with all Laws and Orders.
6.10 Conduct of Business. Since March 31, 2005, the business and operations
of the Buyer and each of its Subsidiaries have been conducted in the Ordinary
Course of Business of the Buyer and its Subsidiaries taken as a whole and there
has not been any material adverse change in the operation of the business of the
Buyer and its Subsidiaries or the performance or financial condition of the
Buyer and its Subsidiaries.
6.11 Labor Matters.
(a) Neither the Buyer nor any of its Subsidiaries is a party to or
bound by any union contract, collective bargaining agreement;
37
(b) neither the Buyer nor any of its Subsidiaries has agreed to
recognize any union or other collective bargaining unit; and
(c) no union or collective bargaining unit has been certified as
representing the employees of the Buyer or any of its Subsidiaries and no
organizational attempt has been made or threatened by or on behalf of any
labor union or collective bargaining unit with respect to any employees of
the Buyer or any of its Subsidiaries. Neither the Buyer nor any of its
Subsidiaries has experienced any labor strike, labor dispute, labor
slowdown or labor stoppage or any other material labor difficulty during
the past five years.
6.12 Contracts. The Contracts to which the Buyer or any of its Subsidiaries
is a party and to which a material portion of the assets of the Buyer or any of
its Subsidiaries are bound and that (a) govern the borrowing of money or the
Guarantee or the repayment of Indebtedness other than accounts receivable or
payable in the Ordinary Course of Business or granting of Encumbrances (other
than Permitted Encumbrances) on any property or asset of the Buyer or any of its
Subsidiaries; (b) contain covenants limiting the freedom of the Buyer or any of
its Subsidiaries to compete in any line of business or with any Person or in any
geographic area or market; (c) are for the use of or which restrict the use of a
material portion of its Intellectual Property; (d) with any directors, officers,
employees or any shareholders of the Buyer or any of its Subsidiaries or
Affiliates; (e) provide for the purchase, maintenance or acquisition, or the
sale or furnishing, of materials, supplies, merchandise or equipment (including
but not limited to computer hardware or software or other property or services)
in excess of US$ 100,000 (f) grant to any Person a first-refusal, first-offer or
similar preferential right to purchase or acquire any material right, asset or
property of the Buyer or any of its Subsidiaries (other than under the
Investment Agreement); (g) pertain to the lease of any individual equipment or
other individual personal property in excess of $100,000; (h) provide for any
counter trade or barter arrangement; (i) involve a material distributor, sales
representative, broker or advertising arrangement that by its express terms is
not terminable by the Buyer or any of its Subsidiaries at will or by giving
notice of 30 days or less, without liability; (j) involve a joint venture; (k)
involve the acquisition of any business enterprise whether via stock or asset
purchase or otherwise are hereby defined as a "Buyer Material Contract." Each
Buyer Material Contract is a valid, binding and enforceable obligation of the
Buyer or each of its Subsidiaries, as the case may be, enforceable in accordance
with its terms and each copy of such Contract that has been furnished to the
Shareholder Representatives or their advisors (which includes the Investment
Agreement) were true, correct and complete copies of it. With respect to the
Buyer Material Contracts: (a) neither the Buyer nor any of its Subsidiaries or,
to the Knowledge of the Buyer, any other party thereto is in material default
under or in material violation of any Buyer Material Contract; (b) to the
Knowledge of the Buyer, no event has occurred which, with notice or lapse of
time or both, would constitute such a material default or material violation;
and (c) neither the Buyer nor any of its Subsidiaries has released any of its
material rights under any such Buyer Material Contract.
6.13 Intellectual Property.
(a) All of the Intellectual Property practiced or used by the Buyer or
any of its Subsidiaries that is essential to the conduct of their
respective businesses and not widely
38
commercially available either is owned by the Buyer or its Subsidiaries, as
the case may be, or the Buyer, and if applicable, its Subsidiaries, as the
case may be, have the right to use or are the sole and exclusive owners (as
between themselves and any third person that is not a Subsidiary) of all
right, title and interest in and to such Intellectual Property. All other
Intellectual Property that is not owned by the Buyer or any of its
Subsidiaries is being used by the Buyer or each of its Subsidiaries, as the
case may be, only with the consent of or license from (and in accordance
with such consent or license) the rightful owner thereof and all such
consents and licenses are in full force and effect.
(b) To the Knowledge of the Buyer, neither the Buyer nor its
Subsidiaries are infringing the Intellectual Property of any third party.
To the Knowledge of the Buyer, no third party is infringing the
Intellectual Property of the Buyer or any of its Subsidiaries.
6.14 Insurance. To the Knowledge of the Buyer, the insurance maintained by
the Buyer and each of its Subsidiaries are sufficient to comply with all
applicable Laws and Contracts to which the Buyer or any of its Subsidiaries are
a party.
6.15 Buyer Financial Statements.
(a) Attached as Schedule 6.15 are correct and complete copies of (i)
the audited balance sheet of the Buyer and of its Subsidiaries as of March
31, 2003, March 31, 2004, and March 31, 2005, and the related audited
statements of income, stockholders' equity and cash flows for the fiscal
years then ended, together with the notes thereto, and the other financial
information included therewith (collectively, the "Buyer Financial
Statements"), and (ii) the unaudited consolidated management accounts of
the Buyer as of September 30, 2005, and the related unaudited statement of
income for the three-month period then ended (the "Buyer Interim Financial
Statements").
(b) The Buyer Financial Statements present fairly, in all material
respects, the financial position, results of operations, stockholders'
equity and cash flows of the Buyer and each of its Subsidiaries at the
dates and for the time periods indicated, and have been prepared and
reviewed by the management of the Buyer and its each of Subsidiaries in
accordance with GAAP, consistently applied throughout the periods indicated
The Interim Buyer Financial Statements present fairly in all material
respects the financial position and results of operations of the Buyer and
any of its Subsidiaries at the date and for the period indicated and have
been prepared and reviewed by the management of the Buyer and each of its
Subsidiaries. The Buyer Financial Statements and the Interim Buyer
Financial Statements were derived from the books and records of the Buyer
and each of its Subsidiaries.
6.16 Undisclosed Liabilities. Neither the Buyer nor any of its Subsidiaries
have any material liabilities, claims, obligations or Indebtedness (whether
accrued, absolute, contingent, unliquidated or otherwise, whether due or to
become due, whether known or unknown, regardless of when asserted) except
liabilities reflected and provided for in the Buyer Financial Statements. To the
Knowledge of the Buyer, there exist no conditions, facts or circumstances for
any such claims, obligations, liabilities or Indebtedness.
39
6.17 Taxes.
(a) All Returns required to be filed by or on behalf of the Buyer and
the Subsidiaries have been filed when due in accordance with all applicable
Laws. All such Returns (i) correctly reflect the facts regarding the
income, business, assets, operations, activities and status of the Buyer
and the Subsidiaries and (ii) were correct and complete in all respects and
(iii) have been prepared in accordance with all applicable Laws. All Taxes
owed by the Buyer and the Subsidiaries (whether or not shown as due and
payable on any Return) have been timely paid or withheld and remitted to
the appropriate Taxing Authority.
(b) Neither the Buyer nor any of its Subsidiaries has received notice
of any claim by a Governmental Authority in a jurisdiction where the Buyer
or a Subsidiary, as the case may be, does not file Returns that the Buyer
or such Subsidiary, as applicable, is or may be subject to taxation by that
jurisdiction.
6.18 Customers and Suppliers.
Except as disclosed in Schedule 6.18, (a) none of the customers of the
Buyer representing more than 10% of the gross revenues of the Buyer has
reduced by more than 25% its business with the Buyer from the levels
achieved during the year ended March 31, 2005, and except as disclosed in
Schedule 6.18, to the Knowledge of the Buyer, no such material reduction is
currently expected to occur; (b) no material customer of the Buyer has
terminated its relationship with the Buyer or any of its Subsidiaries, as
the case may be, or, to the Knowledge of the Buyer, has threatened to do
so; and (c) neither the Buyer nor any of its Subsidiaries is involved in
any claim, dispute or controversy with any of its other customers that,
individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect on the Buyer and its Subsidiaries taken as a whole.
ARTICLE 7: TAX MATTERS
7.1 Apportionment of Taxes. All Taxes and Tax liabilities with respect to
the Company or any Subsidiary that relate to any Tax period that begins on or
before the Closing Date and ends after the Closing Date (a "Straddle Period")
will be apportioned between the portion of the Straddle Period that extends from
the first of day of such Straddle Period through the Closing Date (the
"Pre-Closing Straddle Period") and the portion of the Straddle Period that
extends from the day after the Closing Date to the end of the Straddle Period
(the "Post-Closing Straddle Period") as follows: (a) in the case of Taxes that
are either (i) based upon or measured by reference to income, receipts or
profits (but not including sales and use Taxes), (ii) imposed in connection with
any sale or other transfer or assignment of property (real or personal, tangible
or intangible) (other than conveyances pursuant to this Agreement, as provided
under Section 7.3), or (iii) required to be withheld such Taxes shall be deemed
equal to the amount which would be payable if the Tax year ended at the end of
the day on the Closing Date; and (b) in the case of Taxes imposed on a periodic
basis with respect to the Company or any Subsidiary, or otherwise measured by
the level of any item, such Taxes shall be deemed to be the amount of such Taxes
for the entire period (or, in the case of such Taxes determined on an arrears
basis,
40
the amount of such Taxes for the immediately preceding period), multiplied by a
fraction the numerator of which is the number of calendar days in the period
ending on the Closing Date and the denominator of which is the number of
calendar days in the entire period.
7.2 Returns. The Buyer shall prepare and timely file, or cause to be
prepared and timely filed, all Returns of the Company and the Subsidiaries that
are due with respect to any Pre-Closing Tax Period and Straddle Period other
than Returns for which the due date (with applicable extensions) fall son or
before the Closing Date, provided that (a) such Returns shall be prepared
consistent with past practice, and (b) the Shareholder Representative shall
review and approve such Returns prior to filing, which approval will not be
unreasonably withheld or delayed. The Buyer shall pay or cause to be paid all
Taxes imposed on the Company and the Subsidiaries shown as due and owing on such
Returns subject to reimbursement by the Sellers pursuant to Article 11.
7.3 Transfer Taxes. All transfer, real estate, income, capital gains,
sales, use, value added and other such Taxes and fees (including any penalties
and interest) imposed on the Buyer, the Company or any Subsidiary in connection
with this Agreement and the Escrow Agreement due to the Transfer of the Shares
and due to receipt by the Sellers of the WNS shares (other than as set forth in
Section 2.2(c)) shall be borne by the Sellers ("Seller Transfer Taxes"), provide
however that any stock transfer or similar taxes, however denominated shall be
borne by the Buyer ("Buyer Transfer Taxes"), and either party, at their own
expense, will cause to be filed all necessary Returns and other documentation
(if any) with respect to all such Taxes. All taxes, duties, cesses, levies or
charges relating to the Pre-Closing Dividend by the Company shall be borne by
the Company.
7.4 Cooperation; Audits. In connection with the preparation of Returns,
audit examinations, and any administrative or judicial proceedings relating to
the Tax liabilities imposed on the Company and the Subsidiaries for all
Pre-Closing Tax Periods, the Buyer, the Company and the Subsidiaries, on the one
hand, and the Shareholder Representative, on the other hand, shall cooperate
fully with each other, including, without limitation, furnishing or making
available during normal business hours of records, personnel (as reasonably
required), books of account, powers of attorney or other materials necessary or
helpful for the preparation of such Returns, the conduct of audit examinations
or the defense of claims by Taxing Authorities as to the imposition of Taxes.
Sellers shall deliver, within ten (10) days of Buyer's request, any information
required to reported by Buyer or the Company under Section 6043A of the Code.
7.5 Controversies.
(a) The Buyer shall notify the Shareholder Representative upon receipt
by the Buyer or any Affiliate of the Buyer of any notice of any inquiries,
assessments, Proceedings or similar events received from any Governmental
Authority with respect to Taxes of the Company or any Subsidiary for which
the Representing Sellers would be required to indemnify the Buyer, the
Company, any such Subsidiary or any of their Affiliates pursuant to Article
11 other than a Straddle period Tax Matter (any such inquiry, assessment,
Proceeding or similar event, a "Tax Matter"). The Shareholder
Representative may, at the expense of the Sellers, participate in and, upon
notice to the
41
Buyer, assume the defense of any such Tax Matter. If the Shareholder
Representative assumes such defense, the Shareholder Representative will
have the authority, with respect to any Tax Matter, to represent the
interests of the Company and the Subsidiaries before the relevant
Governmental Authority and shall have the right to control the defense,
compromise or other resolution of any such Tax Matter, including responding
to inquiries, and contesting, defending against and resolving any
assessment for additional Taxes or notice of Tax deficiency or other
adjustment of Taxes of, or relating to, such Tax Matter. The Buyer has the
right (but not the duty) to participate in the defense of such Tax Matter
and to employ counsel, at its own expense, separate from the counsel
employed by the Shareholder Representative. The Shareholder Representative
must not enter into any settlement of or otherwise compromise any such Tax
Matter to the extent that it adversely affects the Tax liability of the
Buyer, the Company, any Subsidiary or any Affiliate of the foregoing for a
Post-Closing Tax Period or Post-Closing Straddle period without the prior
written consent of the Buyer, which will not be unreasonably withheld or
delayed. The Shareholder Representative must keep the Buyer informed with
respect to the commencement, status, and nature of any such Tax Matter, and
will, in good faith, allow the Buyer to consult with it regarding the
conduct of or positions taken in any such proceeding.
(b) The Buyer shall have the right to represent the interests of the
Company and the Subsidiaries before the relevant Governmental Authority
with respect to any inquiry, assessment, Proceeding or other similar event
relating to a taxable period that begins before but does not end on the
Closing Date (a "Straddle Period Tax Matter") and shall have the right to
control the defense, compromise or other resolution of any such Straddle
Period Tax Matter, including responding to inquiries, filing Tax Returns
and contesting, defending against and resolving any assessment for
additional Taxes or notice of Tax deficiency or other adjustment of Taxes
of, or relating to, such Straddle Period Tax Matter. If the Representing
Sellers would be required to indemnify the Buyer, the Company, any
Subsidiary or any of their Affiliates with respect to such Straddle Period
Tax Matter then: (i) the Shareholder Representative has the right (but not
the duty) to participate in the defense of such Straddle Period Tax Matter
and to employ counsel, at its own expense, separate from counsel employed
by the Buyer, (ii) the Buyer must not enter into any settlement of or
otherwise compromise any such Straddle Period Tax Matter to the extent that
it adversely affects the Tax liability of the Sellers without the prior
written consent of the Shareholder Representative, which consent shall not
be unreasonably withheld or delayed, and (iii) the Buyer must keep the
Shareholder Representative informed with respect to the commencement,
status, and nature of any such Straddle Period Tax Matter, and will, in
good faith, allow the Shareholder Representative to consult with it
regarding the conduct of or positions taken in any such proceeding.
ARTICLE 8: COVENANTS
8.1 Seller Covenants
8.1.1 Conduct of Business by the Company. Except as otherwise expressly
contemplated by this Agreement, during the period from the date of this
Agreement to the
42
earlier of (a) the termination of this Agreement pursuant to Article 10, or (b)
the Closing Date, the Seller shall not, and shall cause the Company and its
Subsidiaries not to do any or all of the acts listed hereunder, during the
period from the date of this Agreement to the Closing Date, except as expressly
contemplated by any other provision of this Agreement, without prior written
consent of the Buyer (which can be provided by email).
(i) other than the Pre-Closing Dividend, declare, set aside or pay any
dividends on (or make any other distributions in respect of), any of its
share capital, split, combine, exchange, recapitalize or reclassify any of
its share capital or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for its share
capital;
(ii) issue, deliver, sell, pledge or otherwise encumber or subject to
any Encumbrance any shares of its share capital, any other voting
securities or any securities convertible into, or any rights, warrants or
options to acquire, any such share capital, voting securities or
convertible securities;
(iii) amend its certificate of incorporation or by laws or the
memorandum and articles of association of Trinity India (or equivalent
constitutional and charter documents);
(iv) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the assets or capital stock of, or
by any other manner, any business or any Person;
(v) sell, lease, license, mortgage or otherwise encumber or subject to
any Encumbrance (other than Permitted Encumbrances) or otherwise dispose of
any of its properties or assets outside the Ordinary Course of Business of
the Company and its Subsidiaries;
(vi) (A) grant to any current or former director, officer or other
employee any increase in compensation, bonus or other benefits, except as
required by Law or under any bonus or compensation or stock option plans or
employment agreement in effect as of the date of this Agreement, (B) grant
to any such current or former director, officer or employee any increase in
severance or termination pay, or (C) enter into, or amend, any employment,
deferred compensation, consulting, severance, termination or
indemnification agreement with any such current or former director, officer
or employee, in each case outside the Ordinary Course of Business of the
Company and its Subsidiaries;
(vii) incur or become subject to any liability outside the Ordinary
Course of Business of the Company and its Subsidiaries in excess of
US$100,000 in the aggregate;
(viii) incur or commit to incur any capital expenditures or any
obligations or liabilities in excess of US$100,000 that will not be fully
performed or discharged prior to the Closing Date;
43
(ix) (A) enter into, amend, modify or consent to the termination of
any Seller Material Contract; or (B) amend, waive, modify or consent to the
termination of any material right under any Seller Material Contract;
(x) commence or settle any litigation;
(xi) grant any loans to others or purchase debt securities of others
or amend the terms of any outstanding loan agreement (except as expressly
contemplated by this Agreement) in excess of an aggregate amount of US$
20,000;
(xii) revalue any of its assets (whether tangible or intangible),
including without limitation writing down the value of inventory or writing
off notes or accounts receivable;
(xiii) pay, discharge or satisfy any claim, liability or obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction in the Ordinary Course of
Business of the Company and its Subsidiaries, or if outside the Ordinary
Course of Business of the Company and its Subsidiaries, pay, discharge or
satisfy amounts in excess of $100,000 in the aggregate, if such amounts are
for liabilities that are not reflected or reserved against in the Financial
Statements;
(xiv) make or change any material election in respect of Taxes or
India Taxes, adopt or change any accounting method in respect of Taxes or
India Taxes, enter into any closing agreement, settle any claim or
assessment in respect of Taxes or India Taxes that was not reserved for on
the Financial Statements, or consent to any extension or waiver of the
limitation period applicable to any claim or assessment in respect of Taxes
or India Taxes;
(xv) change any of the accounting methods used by it unless required
by US GAAP;
(xvi) enter into any strategic alliance or joint marketing arrangement
or agreement;
(xvii) terminate any Key Employees, or encourage any Key Employees to
resign outside the Ordinary Course of Business of the Company and its
Subsidiaries;
(xviii) authorize, or commit or agree to take, any of the foregoing
actions.
Provided that, if the Shareholder Representative, the Company and/or any of
its Subsidiaries gives a notice to the Buyer under Section 8.1.1, then the Buyer
shall have the right not to consummate the transactions contemplated in this
Agreement, and in such circumstances the Buyer shall have no remedy against the
Sellers or the Company or any of its Subsidiaries for any breach of the
covenants contained in this Section 8.1.1. The Buyer shall have a remedy against
the Sellers for any breach of the foregoing covenants if a notice was not given
on behalf of the Sellers to the Buyer under this Section 8.1.1, unless the
Closing occurs.
44
8.1.2 Advice of Changes; Other Actions. During the period from the date
hereof until the earlier of the termination of this Agreement pursuant to
Article 10 or the Closing Date, the Representing Sellers and the Company shall
promptly advise the Buyer orally and in writing to the extent the Representing
Sellers have Knowledge of any change or event having, or which could reasonably
be expected to (A) imminently have a Material Adverse Effect on the Company and
its Subsidiaries taken as a whole, (B) materially and adversely affect the
accuracy of the representations and warranties of the Representing Sellers
contained herein, or (C) cause the conditions set forth in Article 9 not to be
satisfied.
8.1.3 No Solicitation of Alternative Transactions. During the period from
the date hereof until the earlier of the termination of this Agreement pursuant
to Article 10 or the Closing Date, none of the Company, First Magnus or the
Representing Sellers shall, and each of them shall cause the Company and/or any
of its Subsidiaries not to authorize or permit any of its respective directors,
officers or employees or any investment banker, financial advisor, attorney,
accountant or other representative retained by it to, directly or indirectly
through another Person, (a) solicit, initiate or encourage (including by way of
furnishing information), or take any other action designed to facilitate, any
inquiries or the making of any proposal which constitutes any Acquisition
Proposal or (b) participate in any discussions or negotiations regarding any
Acquisition Proposal. For purposes of this Agreement, "Acquisition Proposal"
means, other than the transactions contemplated by this Agreement, any inquiry,
proposal or offer from any Person relating to any (i) direct or indirect
acquisition or purchase of all or substantially all of the business or assets of
the Company or any of its Subsidiaries, (ii) direct or indirect acquisition or
purchase of any equity securities of the Company or any of its Subsidiaries,
(iii) tender offer or exchange offer that if consummated would result in any
Person beneficially owning any equity securities of the Company or any of its
Subsidiaries, or (iv) merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its Subsidiaries. None of the Company, First Magnus or the
Representing Sellers shall, and the Sellers shall cause the Company and its
Subsidiaries not to, enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement related to any Acquisition
Proposal.
8.1.4 Access to Information and Premises. The Representing Sellers shall
cause the Company and each of its Subsidiaries to afford to the Buyer and to the
officers, employees working on the transaction, accountants, counsel, financial
advisors and other representatives of the Buyer with a "need to know" reasonable
access during normal business hours and on reasonable notice to the Company
during the period prior to the Closing Date to its respective documents and
records concerning its respective properties, books, contracts, commitments,
personnel, customers, vendors and records and all other information concerning
its respective business, properties and personnel as the Buyer may reasonably
request.
8.1.5 Intercompany Indebtedness and Certain Payments. All of the
Indebtedness of any Core Member to the Company or Trinity India shall be repaid
to the Company or Trinity India, as the case may be, in full prior to the
Closing. All of the inter-company Indebtedness between the Company on the
one-hand and the Trinity India on the other shall be fully paid prior to the
Closing, except as otherwise prohibited by applicable Law.
45
8.1.6 Issue of Shares. The Sellers shall ensure that the Company shall not,
from the date of execution of this Agreement till the Closing Date, issue any
Shares including the common stock of the Company.
8.1.7 Update of Disclosure Schedules. The Sellers shall have the right to
update the schedules to this Agreement until the Closing Date;. provided,
however, if any such change or modification to the schedules discloses a
Material Adverse Effect or is reasonably expected to have a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole from the
disclosures, the Buyer shall have a right to terminate this Agreement (without
any liability whatsoever pursuant to Article 10 of this Agreement).
8.1.8 Cash Retention. The Representing Sellers shall cause the Company and
Trinity India as a whole, and in addition to the existing net working capital
reflected in the Company's Interim Financial Statements, to retain as cash in
hand, net of Selling Expenses and any unreserved Taxes, penalties and fines, at
least United States $2.1 million on the Closing Date. The remainder amounts
possessed by the Company on the Closing Date after setting aside the aforesaid
amounts shall be paid to the Sellers.
8.1.9 Form 5471. The Representing Sellers shall cause the Company to file a
return under Form 5471 under the IRS, and shall cause the Company to pay all
associated costs, taxes, liabilities in this regard.
8.2 Buyer Covenants
8.2.1 Conduct of Business by Buyer and each of its Subsidiaries. Except as
otherwise expressly contemplated by this Agreement, during the period from the
date of this Agreement to the earlier of (a) the termination of this Agreement
pursuant to Article 10, or (b) the Closing Date, Buyer and any of its
Subsidiaries shall not, during the period from the date of this Agreement to the
Closing Date, except as expressly contemplated by any other provision of this
Agreement, without prior written notice to the Shareholder Representatives:
(i) amend its memorandum and articles of association or by-laws (or
equivalent constitutional and charter documents) or the Investment
Agreement (except as expressly contemplated by this Agreement);
(ii) terminate any Key Employees, or encourage any Key Employees to
resign;
provided that, if the Buyer and/or any of its Subsidiaries gives a notice
to the Sellers under Section 8.2.1 of either (i) or (ii) or if one or both of
British Airways or Warburg Pincus have ceased to be shareholders of, or if
Warburg Pincus has sold off a majority of its shareholding in the Buyer shall
give the Shareholder Representatives notice of this, and, in each case of the
foregoing, the Sellers shall have the right not to consummate the transactions
contemplated in this Agreement, and in such circumstances the Sellers shall have
no remedy against the Buyer and/or any of its Subsidiaries for any breach of the
covenants. The Sellers shall have a remedy against the Buyer for any breach of
covenants if a notice is not given on behalf of the Buyer to the Sellers under
this Section 8.2.1.
46
8.2.2 Advice of Changes; Other Actions. During the period from the date
hereof until the earlier of the termination of this Agreement pursuant to
Article 10 or the Closing Date, the Buyer shall promptly advise the Shareholder
Representatives and the Company orally and in writing to the extent the Buyer
has knowledge of any change or event having, or which could reasonably be
expected to (A) imminently have a Material Adverse Effect on the Buyer and any
of its Subsidiaries taken as a whole, (B) materially and adversely affect the
accuracy of the representations and warranties of the Buyer contained herein, or
(C) cause the conditions set forth in Article 9 to be satisfied.
8.2.3 Investment Agreement. The Buyer agrees that the Sellers receiving
Stock Consideration will become a party to the Investment Agreement through the
Deed of Adherence and will take on record with effect from the Closing such Deed
of Adherence at a meeting of the Board of Directors to be first held subsequent
to the Closing Date. In addition, if the Buyer or one or more of its
Subsidiaries engages in a public offering or flotation or change of control
transaction with a listed or quoted company, the Buyer agrees that if there is
an exchange or conversion of any Shares, then subject to applicable Law, the
Accredited Sellers will be included in such an exchange and have the right to
receive the same type of securities as the other shareholders of the Buyer.
8.2.4 Issue of Shares. The Buyer agrees that after the Closing Date for so
long as Warburg Pincus holds more than 50% of the issued and outstanding share
capital of the Buyer, the Buyer will not issue on a preferential basis to
Warburg Pincus (except for any rights issues made to all holders of the
Company's Common Stock) any additional shares of its Common Stock at a price
less than the fair market value of such shares as on the date of such issue of
shares, provided, however, that the Buyer shall no longer be bound by this
obligation upon the occurrence of an initial public offering of any of the
shares of the Buyer.
8.2.5 Update of Disclosure Schedules. The Buyer shall have the right to
update the schedules to this Agreement until the Closing Date; provided,
however, if any such change or modification to the schedules discloses an event
or circumstance or facts that has had or is reasonably expected to have a
Material Adverse Effect on the Buyer and its Subsidiaries taken as a whole, the
Shareholder Representatives shall, subject to Article 10, have a right to
terminate this Agreement without any liability whatsoever.
8.2.6 Filings for resignation of Seller Nominee Directors. The Buyer shall,
or shall cause the Company and its Subsidiaries, as soon as practicable after
Closing, to file all necessary forms with the concerned Registrar of Companies
to effect the resignation of the Seller Nominee Directors and appoint
replacement directors.
8.3 Reciprocal Covenants
8.3.1 Access to Information and Premises. Each party shall (and cause each
of its subsidiaries and affiliates as applicable) to afford to the other (and
its officers, employees, accountants, counsel, financial advisors and other
representatives) access during normal business hours and on reasonable notice
during the period prior to the Closing Date to all of its respective documents
and records concerning its respective properties, books, contracts,
47
commitments, personnel, customers, vendors and records and all other information
concerning its respective business, properties and personnel as Company or Buyer
may reasonably request.
8.3.2 Cooperation. Each of the Parties shall use its reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to cause the conditions set forth in Article 9 to
be satisfied and otherwise to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement;
provided, however, that the obligations of each Party under this Section 8.3.2
shall not limit or otherwise affect any remedies available to the other Parties.
8.3.3 Confidentiality. Any communications between the Parties, the terms
and conditions of this Agreement, the documents contemplated hereby and the
transactions contemplated hereunder, and any other information and other
material supplied to or received by one party from the other party which is
either marked "Confidential" or is by its nature intended to be exclusively for
the knowledge of the recipient alone and any information concerning the business
of Buyer or the Company, or either party's Subsidiaries or Affiliates or the
business, transactions, operations or financial arrangements of the disclosing
party or of any Person with whom any of them has a confidential relationship
(together, the "Confidential Information"), shall not be disclosed by the
recipient to any third Persons (other than to the recipient's Affiliates or
their officers, employees and advisers on a need to know basis) unless or until:
(i) such information is received from a third Person without any
condition of confidentiality; or
(ii) the recipient is compelled to disclose such information by any
Governmental Authority or pursuant to any Law; or
(iii) the recipient can reasonably demonstrate that the information is
available in the public domain, whereupon, to the extent that it is public,
this obligation shall cease; or
(iv) it is required to be furnished to the bankers of or investors or
potential bankers or investors in Buyer and in such case such disclosure
shall only be made in confidence after the Closing and the recipient shall
procure that each such Person to whom disclosure is made shall before such
disclosure give an undertaking on the same terms as this or otherwise be
bound by appropriate confidentiality obligations or restrictions.
8.3.4 Public Announcement. The Parties shall not issue, or cause the
issuance or publication of, any press release or other announcement or public
communication concerning this Agreement, their negotiations or the transactions
contemplated by this Agreement or any of the Ancillary Agreements, except (i)
with the prior approval of the other Parties (except that the approval of the
Shareholder Representative and First Magnus-I shall constitute approval of all
the Sellers and the Company, or (ii) when required by Law, after intimation (of
not less than forty eight (48) hours prior to such press release, announcement
or communication unless
48
otherwise required by any Governmental Authority) to the other parties hereto,
and then only to the extent required by Law.
8.3.5 Reliance. Each Party acknowledges that the other Parties have entered
into this Agreement upon the basis of, and in reliance upon the representations,
warranties and covenants herein contained.
8.3.6 Reasonable Best Efforts; Cooperation. Each of the Parties shall use
all commercially reasonable efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to cause the
conditions set forth in Article 9 to be satisfied and otherwise to consummate
and make effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement; provided, however, that the obligations of each
Party under this Section 8.3.6 shall not limit or otherwise affect any remedies
available to the other Parties.
ARTICLE 9: CLOSING CONDITIONS
9.1 Conditions to the Obligations of the Buyer to Effect the Transactions
Contemplated under this Agreement. The obligations of the Buyer to effect the
transactions contemplated under this Agreement are subject to the satisfaction
or waiver in writing at or prior to the Closing of the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Representing Sellers and First Magnus-I set forth herein shall be
true and correct in all material respects (except for such representations
and warranties that are qualified by their terms by a reference to
materiality, which representations and warranties as so qualified shall be
true and correct in all respects) both when made and at and as of the
Closing Date, as if made at and as of such time.
(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of the Sellers (including the Shareholder
Representative) to be performed and complied with pursuant to this
Agreement at or prior to Closing shall have been duly performed in all
material respects.
(c) Delivery of Documents. The Sellers shall have delivered, or cause
to be delivered, to the Buyer all of the documents required by Section 3.2,
and each such document shall be in form or substance reasonably
satisfactory to Buyer.
(d) No Injunctions or Restraints. No judgment, Order, decree, statute,
Law, ordinance, rule or regulation, entered, enacted, promulgated, enforced
or issued by any court or other Governmental Authority of competent
jurisdiction or other legal restraint or prohibition (collectively,
"Restraints") on the transactions contemplated under this Agreement, or
seeking to prohibit the transactions contemplated under this Agreement
shall be in effect.
(e) No Material Adverse Change. There shall not have occurred any
Materially Adverse Effect on the Company or its Subsidiaries taken as a
whole.
49
(f) Board and Shareholder Approval. The approvals of the directors and
shareholders of the Company and each of its Subsidiaries contemplated by
Section 3.2 and shall have been duly obtained as so contemplated.
(g) Advance. The xxxxxxx money/advance payment made by Trinity India
to VLS Capital Limited under the terms of a Memorandum of Understanding
dated January 27, 2005 and the Agreement to Sell dated February 25, 2005,
will have been repaid by VLS Capital Limited to Trinity India along with
interest, if any.
(h) Core Members Indebtedness. All of the Indebtedness of any Core
Member to the Company or Trinity India shall have been repaid in full.
(i) Company and Trinity India Indebtedness. All of the inter-company
Indebtedness between the Company on the one-hand and the Trinity India on
the other shall have been paid in full, except for those listed on Schedule
9.1(i).
9.2 Conditions to the Sellers' Obligations to Effect the Transactions
Contemplated under this Agreement. The obligation of the Sellers to effect the
transactions contemplated under this Agreement are subject to the satisfaction
or waiver in writing by each of the Shareholder Representative and First Magnus
at or prior to the Closing of the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Buyer set forth herein shall be true and correct in all material
respects (except for such representations and warranties that are qualified
by their terms by a reference to materiality, which representations and
warranties as so qualified shall be true and correct in all respects) both
when made and at and as of the Closing Date, as if made at and as of such
time.
(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of the Buyer to be performed and complied with
pursuant to this Agreement at or prior to Closing shall have been duly
performed and complied with in all material respects.
(c) Delivery of Documents. The Buyer shall have delivered, or caused
to be delivered, to the Sellers all of the documents required by Section
3.3, each in form and substance reasonably satisfactory to the Shareholder
Representative and First Magnus.
(d) No Injunctions or Restraints. No Restraints affecting the
transactions contemplated under this Agreement or seeking to prohibit the
transactions contemplated under this Agreement shall be in effect.
(e) No Material Adverse Change. There shall not have occurred any
Material Adverse Effect on the Buyer or its Subsidiaries taken as a whole.
(f) Board and Shareholders Approval. The approvals of the directors
(and shareholders if applicable) of the Buyer contemplated by Section 3.3
shall have been duly obtained as so contemplated.
50
ARTICLE 10: TERMINATION
10.1 Termination of this Agreement. Notwithstanding any provision contained
in the Agreement to the contrary, this Agreement may be terminated at any time
prior to the Closing as follows, and in no other manner:
(a) Written Agreement. By written agreement executed by the Buyer, on
the one hand, and each of the Shareholder Representatives, on the other
hand, at any time prior to the Closing.
(b) End Date. By the Buyer or the Shareholder Representatives acting
collectively if the Closing shall not have occurred by November 18, 2005 or
such other date as mutually agreed by the parties (the "End Date");
provided, however, that the right to terminate this Agreement under this
Section 10.1(b) shall not be available to any Party whose action or failure
to act has been a principal cause of or resulted in the failure of the
Closing Date to occur on or before such date and such action or failure to
act constitutes a breach of this Agreement, or (ii) if the delay is due to
a requirement of Law or the inquiry of a Governmental Authority then the
parties shall mutually agree a new End Date.
(c) Material Breach by the Sellers. By the Buyer, if any of the
Sellers shall have breached or failed to perform in any material respect
any of its/his/her respective representations, warranties, covenants or
other agreements contained in this Agreement, and such breach or failure to
perform (A) is not cured within 30 days after written notice thereof or (B)
is incapable of being cured by the Sellers, as the case may be.
(d) Material Breach by the Buyer. By the Shareholder Representatives
acting collectively, if the Buyer shall have breached or failed to perform
in any material respect any of its respective representations, warranties,
covenants or other agreements contained in this Agreement, and such breach
or failure to perform (A) is not cured within 30 days after written notice
thereof or (B) is incapable of being cured by the Buyer, as the case may
be.
10.2 Effect of Termination. Notwithstanding any provision of this
Agreement, no Shareholder Representative alone or acting singly shall be
entitled to or shall terminate this Agreement. Where any provision entitles a
Shareholder Representative to terminate this Agreement, the exercise of such
right will be effective if and only if both Shareholder Representatives together
execute a written notice of termination. In the event that this Agreement is
terminated pursuant to Section 10.1, all obligations of the Parties under this
Agreement shall terminate and none of the parties shall have any liability or
obligation to any of the other Parties other than (i) under the provisions of
this Section 10.2, Article 11 and Article 12 or (ii) on account of and only to
the extent of any breach hereunder arising prior to such termination.
ARTICLE 11: REMEDIES
11.1 Indemnification by the Representing Sellers and First Magnus. The
Representing Sellers and First Magnus, as the case may be, shall jointly but not
severally indemnify and hold harmless the Buyer, and its respective officers,
directors, employees, agents and Affiliates (the
51
"Buyer Indemnified Parties") from and against any and all losses, liabilities,
claims, damages, penalties, fines, judgments, awards, settlements, taxes, costs,
fees, expenses (including, but not limited to, reasonable attorneys' fees) and
disbursements (collectively "Losses") actually sustained by any of such Buyer
Indemnified Parties based upon, arising out of or otherwise in respect of:
(a) any inaccuracies in or any breach of any representation or
warranty made by him or it in this Agreement, as the case may be;
(b) any breach of any covenant, obligation or agreement of him or it
under this Agreement as the case may be;
(c) any claims for Taxes (or the non-payment thereof) of the Company
and the Subsidiaries for any Pre-Closing Tax Period and any Pre-Closing
Straddle Period including (i) all Taxes of any member of an affiliated,
combined or unitary group of which the Company or any Subsidiary is or was
a member on or prior to the Closing Date, including pursuant to Treasury
Regulation Section 1.1502-6 or any analogous or similar state, local or
foreign law; and/or (ii) any and all Taxes of any other Person imposed on
the Company or any Subsidiary, as a transferee or successor or otherwise,
by contract or pursuant to any Law, which Taxes relate to an event or
transaction occurring on or before the Closing Date, but the Taxes subject
to this subsection (c) of this Section 11.1 shall not include (A) any Taxes
for which adequate reserves in accordance with US GAAP are reflected in the
Financial Statements, and/or (B) any Taxes incurred as a result of the
actions or inactions taken or not taken at the express direction of the
Buyer or one of its Affiliates in anticipation of the transactions
contemplated by this Agreement and the other Ancillary Agreements (but
excluding any Taxes resulting from any gains on the sale by any Sellers of
their Shares for which the Sellers shall remain liable); and
(d) any Selling Expenses not fully paid on or prior to the Closing
Date.
11.2 Indemnification by Buyer. The Buyer shall indemnify and hold harmless
the Sellers and their respective members, agents, employees and Affiliates (the
"Seller Indemnified Parties") from and against any and all Losses actually
sustained by any of such Seller Indemnified Parties based upon, arising out of
or otherwise in respect of:
(a) any inaccuracies in or any breach of any representation or
warranty of the Buyer contained in this Agreement;
(b) any breach of covenant, obligation or agreement of the Buyer
contained in this Agreement;
(c) for any Post-Closing Tax matters; and
(d) for any Buyer Transfer Taxes.
11.3 Notice and Opportunity to Defend
52
(a) Notice of Asserted Liability. As soon as is reasonably practicable
and in any case not more than thirty (30) calendar days after a Seller
Indemnified Party, on the one hand, or the Buyer, on the other hand,
becomes aware of any claim that it has or they have under Section 11.1 or
Section 11.2 hereof, as the case may be, that may result in a Loss (a
"Liability Claim"), such party (the "Indemnified Party") shall give notice
thereof (a "Claims Notice") to the other party (the "Indemnifying Party").
A Claims Notice shall describe the Liability Claim in reasonable detail,
and shall indicate the amount (estimated to the extent feasible) of the
Loss that has been or is reasonably likely to be suffered by the
Indemnified Party. No delay in or failure to give a Claims Notice by the
Indemnified Party to the Indemnifying Party pursuant to this Section
11.3(a) shall adversely affect any of the other rights or remedies which
the Indemnified Party has under this Agreement, or alter or relieve the
Indemnifying Party of its obligation to indemnify the Indemnified Party
except to the extent that such delay or failure results in prejudice to the
Indemnifying Party.
(b) Opportunity to Defend. The Indemnifying Party shall have the
right, exercisable by written notice to the Indemnified Party within thirty
(30) calendar days after receipt of a Claims Notice from the Indemnified
Party of the commencement or assertion of any Liability Claim in respect of
which indemnity may be sought hereunder, to assume and conduct the defense
of such Liability Claim in accordance with the limits set forth in this
Agreement with counsel selected by the Indemnifying Party and reasonably
acceptable to the Indemnified Party. If the Indemnifying Party does not
assume the defense of a Liability Claim in accordance with this Section
11.3(b), the Indemnified Party may continue to defend the Liability Claim
with counsel of its choice. If the Indemnifying Party has assumed the
defense of a Liability Claim as provided in this Section 11.3(b), the
Indemnifying Party will not be liable for any legal expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof
and shall control the defense; provided, however, that if the Indemnifying
Party fails to take reasonable steps necessary to defend diligently such
Liability Claim, the Indemnified Party may assume and control its own
defense, and the Indemnifying Party shall be liable for all reasonable
costs or expenses paid or incurred in connection therewith. The
Indemnifying Party or the Indemnified Party, as the case may be, shall at
all times have the right to participate in (but not control), at its own
expense, the defense of any Liability Claim which the other is defending as
provided in this Agreement but not to the extent it would or would be
reasonably likely to result in prejudice to the Indemnifying Party unless
the Indemnifying Party either fails to assume the defense of a Liability
Claim or fails to take reasonable steps necessary to defend diligently such
Liability Claim. The Indemnifying Party, if it shall have assumed the
defense of any Liability Claim as provided in this Agreement, shall not,
without the prior written consent of the Indemnified Party, which shall not
be unreasonably withheld, consent to a settlement of, or the entry of any
judgment arising from, any such Liability Claim which (1) does not include
as an unconditional term thereof, the giving by the claimant or the
plaintiff to the Indemnified Party a complete release from all liability
under such Liability Claim, or (2) grants any injunctive or equitable
relief against such Indemnified Party or its Affiliates The Indemnified
Party shall have the right to settle any Liability Claim, the defense of
which has not been assumed by the Indemnifying Party.
53
(c) Other Actions. Indemnified Persons shall act in a commercially
reasonable manner in addressing any Losses that may provide the basis for
an indemnifiable claim (that is, the Indemnified Person shall respond to
such Losses in the same manner that it would respond to such Loss in the
absence of the indemnification provided for in this Agreement). Any request
for indemnification of specific costs shall include invoices and supporting
documents containing reasonably detailed information about the Losses for
which indemnification is being sought.
11.4 Indemnity Payments. Any payment made by any Sellers pursuant to
Section 11.1 and any payment made by the Buyer pursuant to Section 11.2 shall be
made free and clear of and without deduction for or on account of any Taxes,
charges, fees, costs, expenses or duties except as may be required by any Law.
If any Taxes or amounts in respect of such charges, fees, costs, expenses or
duties must be deducted, or any other deductions must be made, from any amounts
payable or paid pursuant to Section 11.1 or Section 11.2, such additional
amounts must be paid by the applicable Party as may be necessary to ensure that
the receiving party receives a net amount equal to the full amount which it
would have received had payment not been made subject to such Taxes, charges,
fees, costs, expenses or duties, provided that the parties will treat any
indemnification payments as an adjustment to purchase price unless otherwise
expressly required by Law.
11.5 Survival. All of the representations and warranties contained in this
Agreement shall survive for a period of eighteen (18) months from the Closing
Date; provided, however, that representations and warranties relating to Taxes
will survive until one (1) month following the expiration of the applicable
period of time specified in the relevant statute during which the relevant
authorities may bring a claim or make an assessment for Taxes ("Survival
Period"). No Indemnified Party shall be entitled to make or give notice of any
Loss with respect to the representations or warranties contained in this
Agreement after the expiration of the applicable Survival Period, except that
each Liability Claim initiated by an Indemnified Party prior to the expiration
of the applicable Survival Period shall survive until it is settled or resolved.
11.6 Limitations on Indemnity
(a) None of First Magnus or the Representing Sellers will have any
obligation to indemnify the Buyer Indemnified Parties pursuant to
Section 11.1(a) (Breach of Representation or Warranty) for a claim
(regardless of whether the claim arises or results from any claim from
any third party or otherwise) until the amount of the Losses for a
claim actually suffered by the Buyer Indemnified Parties in respect of
such claim exceeds US$200,000 (the "SB Claim Threshold"). If the Buyer
Indemnified Parties:
(i) make a claim under Section 11.1(a) (Breach of Representation
and Warranty) (regardless of whether such claim arises or results from
any claim from any third party or otherwise) for any Losses actually
suffered by the Buyer Indemnified Parties that exceed the SB Claim
Threshold, the Representing Sellers or First Magnus, as the case may
be, shall indemnify the Buyer Indemnified Parties for the entire
amount of such Losses (including, without limitation, in
54
respect of any Losses below the SB Claim Threshold) for the claim,
subject to the limitations set forth below in Section 11.6(c); or
(ii) make a claim under Section 11.1(b) (Breach of Covenant or
Agreement) in respect of any Losses actually suffered for breach of
any covenant, obligation or agreement of First Magnus or the
Representing Sellers or under Section 11.1(c) (Taxes) or 11.1(d)
(Selling Expenses), the Representing Sellers and First Magnus shall
indemnify the Buyer Indemnified Parties for the entire amount of such
Losses subject to the limitations set forth below in Section 11.6(c);
it being understood, acknowledged and agreed by the Parties that the
SB Claim Threshold shall not apply to such claims.
(b) The Buyer will have no obligation to indemnify the Seller
Indemnified Parties pursuant to Section 11.2 of this Agreement for a
claim (regardless of whether such claim arises or results from any
claim from any third party or otherwise):
provided however if the Seller Indemnified Parties;
(i) make a claim (other than a Third Party Claim (as defined)
under Section 11.2(a) (Breach of Representation or Warranty) for any
Losses actually suffered by a Seller Indemnified Parties, or for
purposes of measuring the Loss, the Buyer or its Affiliates that
exceed the SB Claim Threshold, the Buyer shall indemnify the Seller
Indemnified Parties for the entire amount of such Losses (including,
without limitation, in respect of any Losses below the SB Claim
Threshold) provided the fair market value of a WNS Share (or if
exchanged or converted, its equivalent) at the time such claim arises
(and not at the time the claim is made, notified, processed or
otherwise) is below GBP 3.50 per WNS Share (or if exchanged or
converted, its equivalent) (the "Pound3.50 Seller Claim Condition")
and subject to the limitations set forth below in Section 11(d); or
(ii) make a claim under any part of Section 11.2 based on a Loss
resulting to a Seller Indemnified Party from a claim on a Seller
Indemnified Party from a Third Party (a "Third Party Claim"), for any
Losses actually suffered by the Seller Indemnified Parties that
exceeds the SB Claim Threshold, the Buyer shall indemnify the Seller
Indemnified Parties for the entire amount of such Losses (including,
without limitation, in respect of any Losses below the SB Claim
Threshold); provided, however that the Buyer will have the opportunity
to defend the claim in accordance with Section 11.3(b); and provided
further that if the Buyer does proceed diligently to defend such claim
pursuant to Section 11.3(b) and satisfies such Losses then the Buyer
shall not be further obligated to indemnify the Seller Indemnified
Parties unless the Pound3.50 Seller Claim Condition is satisfied; or
(iii) make a claim under Section 11.2(b) (Covenants and
Agreements) in respect of any Losses actually suffered for breach of
any covenant, obligation or agreement of the Buyer under Section
11.2(c) (Post-Closing Tax Matters) or
55
Section 11.2(d) (Buyer Transfer Taxes), in each case arising as a
result of a non-Third Party Claim, the Buyer shall indemnify the
Seller Indemnified Parties for the entire amount of such Losses
subject to the limitations set forth below at the end of this
subsection (c) and Section 11.6(d) and provided that the Pound3.50
Seller Claim Condition is satisfied; it being understood, acknowledged
and agreed by the Parties that the SB Claim Threshold shall not apply
to such claims.
Notwithstanding the foregoing, the maximum amount that the Seller
Indemnified Parties may claim hereunder in respect of a single claim under
Section 11.6(b) shall not exceed the Sellers, percentage shareholding of
the total issued and outstanding shares of the Buyer at the time the claim
arises (and not at the time the claim is made, notified, processed or
otherwise); provided, however, that such amount shall not exceed six
percent (6%) of the total value of the Loss suffered by the Buyer as a
result of the matter that forms the basis of such claim.
(c) The obligations of First Magnus and the Representing Sellers to
indemnify the Buyer Indemnified Parties under Sections 11.1(a) (Breach of
Representation and Warranty) and 11.1(b) (Breach of Covenants) in respect
of all claims under Sections 11.1(a) (Breach of Representation and
Warranty) and 11.1(b) (Breach of Covenants) shall not exceed the lower of
(the "Indemnity Cap"):
(i) US $19,000,000 and
(ii) an amount in US dollars (at the then-prevailing US
Dollar-GBP exchange rate published in the European Wall Street
Journal) that is the product of:
(1) the then-current fair market value of a WNS Share at the
time the claim arises (and not at the time the claim is made,
notified, processed or otherwise) and
(2) the total number of WNS Shares issued to the Sellers
under this Agreement.
Notwithstanding any provision of this Agreement, the Indemnity Cap
shall not apply to any claims
(i) in respect of any inaccuracy in or a breach of the
representations and warranties contained in Sections 4.2 (Good Title)
and Section 4.4 (Capitalization of the Company) and Section 5A.3 (Good
Title Representation and Warranty by First Magnus) (but only vis-a-vis
First Magnus);
(ii) in respect of a breach of the covenants, obligations and/or
agreements contained in Section 8.1(vii)(Liabilities Outside the
Ordinary Course of Business), (viii)(Capital Expenditures) and
(x)(Litigation) and a breach of this Article 11;
56
(iii) based on fraud in connection with this Agreement, the
Escrow Agreement, any officers certificates delivered hereunder or the
transactions contemplated hereby and thereby; and/or
(iv) under Sections 11.1(c) (Pre-Closing Taxes) and 11.1(d)
(Selling Expenses).
(d) The obligations of the Buyer to indemnify the Seller
Indemnified Parties under Sections 11.2(a) (Breach of Representation
and Warranty) and 11.2(b) (Breach of Covenants) in respect of all
claims under Sections 11.2(a) and Section 11.2(b) shall not exceed US$
19,000,000; provided, however, that, notwithstanding any provision of
this Agreement, this limitation shall not apply to any claims (W) in
respect of any inaccuracy in or a breach of the representations and
warranties contained in Sections 6.2 (WNS Shares) and 6.4
(Capitalization of the Buyer), (X) in respect of a breach of this
Article 11; (Y) based on fraud in connection with this Agreement and
the Escrow Agreements, any officers certificates delivered hereunder
or the transactions contemplated hereby and thereby; and/ or (Z) under
Sections 11.2(c) (Post-Closing Taxes) and 11.2(d) (Buyer Transfer
Taxes).
11.7 Adjustment for Insurance Benefit. Any indemnification payable in
accordance with this Section 11.7 shall be net of any amounts actually recovered
(after deducting related costs and expenses) by the Indemnified Party for the
Losses for which such indemnification payment is made under any insurance
policy, warranty or indemnity from any Person other than a party hereto. Each
Party agrees to waive as against the other any rights of subrogation (if
applicable) it may have with regard to insurance, and an Indemnified Person
shall use reasonable efforts to collect any amounts available under any such
insurance policy, warranty or indemnity from any Person other than a party
hereto.
11.8 Sole and Exclusive Remedy. Except in respect of breaches of the
representations, warranties and covenants contained in Section 5(B) (Accredited
Investor Representations), the indemnities provided for in this Article 11 shall
be the sole and exclusive remedies of the Indemnified Parties under this
Agreement. The Parties shall not be entitled to a rescission of this Agreement,
or to any further indemnification rights or other claims of any nature
whatsoever in respect thereof (whether by contract, common law, statute, law,
regulation or otherwise, including, without limitation, under the Racketeer
Influence and Corrupt Organizations Act of 1970, as amended), all of which the
Parties hereby waive; provided, however, nothing herein is intended to waive any
claims for fraud.
ARTICLE 12: MISCELLANEOUS
12.1 Further Assurances. From and after the date of this Agreement, at the
request of the Buyer, the Shareholder Representative shall execute and deliver
or cause to be executed and delivered to the Buyer or the Company such deeds,
bills of sale, assignments or other instruments to the Buyer or the Company in
addition to those required by this Agreement, as the Buyer or the Company may
reasonably request, in order to implement the transactions contemplated by this
Agreement.
57
12.2 Expenses. Except and unless as specifically noted herein, each of the
parties hereto shall bear their respective expenses incurred or to be incurred
in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
12.3 No Assignment. The rights and obligations of the Parties hereunder may
not be assigned without the prior written consent of the other Party hereto.
Notwithstanding the previous sentence, the Buyer may, without the consent of the
Sellers, assign its rights under this Agreement to any lender of the Buyer or to
any Affiliate or any Subsidiary of the Buyer so long as Buyer shall remain
responsible for its obligations hereunder.
12.4 Headings. The headings contained in this Agreement are included for
purposes of convenience only, and shall not affect the meaning or interpretation
of this Agreement.
12.5 Integration, Modification and Waiver. This Agreement, together with
the Exhibits, Schedules and certificates or other instruments delivered
hereunder, constitutes the entire agreement between the Parties with respect to
the subject matter hereof and supersedes all prior understandings of the
Parties. No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by the Buyer. No waiver of any of the
provisions of this Agreement shall be deemed to be or shall constitute a
continuing waiver unless otherwise specified in an express written waiver signed
by each of the party or parties to be bound by it. No waiver shall be binding
unless executed in writing by the Party making the waiver.
12.6 Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local or
foreign statute or Law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. Any reference to the
singular in this Agreement shall also include the plural and vice versa. Any
notice to be provided to, or any consent to be obtained from, the Sellers shall
mean that such notice shall be provided to, or such consent shall be obtained
from, the Shareholder Representative, acting for and on behalf of the Sellers.
12.7 Severability. If any provision of this Agreement or the application of
any provision hereof to any Party or circumstance shall, to any extent, be
adjudged invalid or unenforceable, the application of the remainder of such
provision to such Party or circumstance, the application of such provision to
other Parties or circumstances, and the application of the remainder of this
Agreement shall not be affected thereby.
12.8 Notices. Except as expressly set forth herein, all notices and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered in person or when dispatched by
electronic facsimile transfer (if confirmed in writing by mail simultaneously
dispatched) or four (4) Business Days after having been dispatched by an
internationally recognized overnight courier service to the appropriate party at
the address or facsimile number specified below (unless being sent from
58
and to an address in the United States, in which case the length of the time
shall be one (1) Business Day (instead of four (4)):
If to the Sellers (Other than First Magnus):
Mr. Vivek Shivpuri
Attn: Shareholder Representative
0000 Xxxx Xxxxxxx Xxxxxxx Xxxxx,
Xxxxxx, Xxxxxxx 00000, XXX
Facsimile No.: x0 000 000-0000
If to First Magnus:
First Magnus Financial Corporation
000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000, XXX
Attn: General Counsel - Xxxxxxx Xxxxx
Facsimile: x0 000 000-0000
with a copy in each case to:
Xxxxxxxx Legal Advisory Services
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxxxxxxx, XX 00000, XXX
Attention: Xxxxxx X. Xxxxxxxx
Facsimile: + 1 415 896-5166
If to the Buyer:
WNS Global Services (P) Ltd.
Gate Xx. 0, Xxxxxx & Xxxxx Xxxxxxx,
Xxxxxxxxxxxxx, Vikhroli(W),
Mumbai 400079, INDIA.
Attention: Xx. Xxxxx Xxxxxx
Facsimile No.: x00 00 0000 0000
with a copy to:
P&A Law Offices
1st Floor, Dr. Xxxxx Xxx Bhavan
28, Xxxxxxxxxx Xxxx
Xxx Xxxxx 000 000, XXXXX
Attention: Xx. Xxxxx Xxxxxx
Facsimile: x00 00 0000 0000
59
Any Party hereto may change its address or facsimile number for the
purposes of this Section 12.8 by giving notice as provided herein.
12.9 Dispute Resolution.
(a) All disputes arising directly under or in connection with this
Agreement, the validity of this Agreement or the grounds for termination
thereof, including whether any payments may be due under this Agreement and
if so on what terms and value, shall be resolved as follows: A
representative of the senior management of the Buyer and the Shareholder
Representative shall meet within 30 (thirty) calendar days of such dispute
arising at the head office of the Company in USA to attempt to resolve any
such dispute. The meetings shall be conducted in English. If the dispute
cannot be resolved within 30 calendar days of such meeting, either of the
representatives may make a written demand for formal dispute resolution and
specify therein the scope of the dispute. Within thirty (30) days after
such written notification, the Parties shall meet for one day at the head
office of the Company in USA with an impartial mediator who is conversant
in the English language jointly selected by such representatives and
consider dispute resolution alternatives other than litigation. The
meetings shall be conducted in English. If an alternative method of dispute
resolution is not agreed upon within thirty (30) days after such one-day
meeting, either representative may begin litigation proceedings in the
courts of Delaware, which shall have exclusive jurisdiction in relation to
all such disputes referred to in this Section 12.9(a).
(b) Notwithstanding the provisions of Section 12.9(a), each of the
Buyer and the Shareholders or the Shareholder Representatives shall have
the right, without the requirement of first seeking a remedy through any
dispute resolution alternative (including arbitration) that has been agreed
upon, only to seek preliminary injunctive or other equitable relief in any
proper court in the event that such Person determines that eventual redress
through the dispute resolution alternative will not provide a sufficient
remedy for any violation of this Agreement.
(c) In no event shall disputes under any employment agreements, or
relating to any offers of employment to current employees of the Company,
be governed by this Section 12.9.
12.10 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware in the United
States of America without regard to principles of conflicts of law. The Parties
hereto expressly submit to the exclusive jurisdiction of the courts of the State
of Delaware subject to Section 12.9(a) and (b). Upon the rendering of a judgment
by a court of competent jurisdiction in the State of Delaware against any Party,
the other Parties shall be entitled to enforce such judgment against such other
Party wherever the assets of such first Party are located (including, if
necessary or advisable, by seeking an order from a court of competent
jurisdiction in the jurisdiction where such assets are located).
60
12.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.12 Waiver and Release. Each Representing Sellers and First Magnus hereby
irrevocably and forever waives and releases the Company, its Subsidiaries and
Affiliates and the Buyer and their respective officers and directors, (i) from
any and all claims now or hereafter arising in respect of the consideration
received by him or it (as the case may be) pursuant to the transactions
contemplated hereby, and (ii) regarding any claim based upon or relating to
unfair treatment in connection with the payment of the Transaction Consideration
or any portion thereof and his or its (as the case may be) entitlement thereto
or discrimination in the determination of the amount paid to him or it (as the
case may be)or the nature of the consideration received by him or it (as the
case may be) so long as in each case, the consideration specified in Schedule
2.2 (iii) of the Agreement against his or its (as the case may be) name is paid
to him or it (as the case may be).
61
IN WITNESS WHEREOF, the Parties have executed or caused their duly
authorized representatives to execute this Stock Purchase Agreement as of the
day and year first above written.
WNS HOLDINGS LTD.
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
----------------------------------
Title: Group CFO
---------------------------------
TRINITY PARTNERS INCORPORATED
By: /s/ Vivek Shivpuri
------------------------------------
Name: Vivek Shivpuri
Title: President
FIRST MAGNUS FINANCIAL CORPORATION
By: /s/ Xxxxxxxx X.Xxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: President
FIRST MAGNUS CONSULTING LLC
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Manager
/s/ Vivek Shivpuri
----------------------------------------
VIVEK SHIVPURI
/s/ Xxxxxx Xxxxxxxxx
----------------------------------------
XXXXXX XXXXXXXXX
/s/ Xxxx Xxxxxx
----------------------------------------
XXXX XXXXXX
/s/ Francesco Paola
----------------------------------------
FRANCESCO PAOLA
SIGNATURE PAGE TO THE WNS TRINITY STOCK PURCHASE
AGREEMENT (PAGE 1 OF 2)
62
/s/ Vivek Shivpuri
----------------------------------------
VIVEK SHIVPURI, IN HIS CAPACITY AS THE
SHAREHOLDER REPRESENTATIVE FOR
THE SHAREHOLDERS LISTED ON
ANNEXURE 1
SIGNATURE PAGE TO THE WNS TRINITY STOCK PURCHASE
AGREEMENT (PAGE 2 OF 2)
63
ANNEXURE 1
64
EXHIBIT A
CORE MEMBERS
65
EXHIBIT B
ESCROW AGREEMENT
66
EXHIBIT C
FIRST MAGNUS MASTER SERVICE AGREEMENT AMENDMENT
67
EXHIBIT D
EMPLOYMENT AGREEMENTS
68
EXHIBIT E
SELLERS TITLE CERTIFICATE
69
EXHIBIT F
DEED OF ADHERENCE
70
