Exhibit 99.1
Xxxxxx Computer Services Limited, a company established under the Companies Act, 1956 of India and
having its registered office located at 0xx Xxxxx, Xxxxxxx Xxxxxx, X.X. Xxxx, Xxxxxxxxxxxx —
500003 (hereinafter referred to as the “Xxxxxx” or “the Company”, which expression shall, unless
repugnant to the context or meaning thereof, be deemed to mean and include its successors in
interest and permitted assigns); and
Xxxxxx & Toubro Limited, a company incorporated under the laws of India and having its registered
office located at L&T House, Xxxxxxx Estate, Mumbai 400001 (hereinafter referred to as the
“Bidder”, which expression shall, unless repugnant to the context or meaning thereof, be deemed to
mean and include its successors in interest).
Xxxxxx and the Bidder are hereinafter collectively referred to as the “Parties” and individually as
a “Party”.
WHEREAS:
| A |
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Xxxxxx is a public limited company engaged in the business of
information technology services and business process outsourcing
services. The shares of Xxxxxx are listed on the Bombay Stock
Exchange Limited and National Stock Exchange of India Limited. Xxxxxx
has also issued American Depositary Shares, representing equity
shares of the Company, which are listed and traded on the New York
Stock Exchange (“NYSE”) and NYSE Euronext‘s Amsterdam
Exchange. |
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| B |
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The Bidder is a company engaged in the business of engineering,
construction, electrical & electronic products, machinery &
industrial products, financial services & information technology. |
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| C |
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Pursuant to the proceedings instituted by the Union of India before
the Hon’ble Company Law Board (“CLB”) under Sections 388B,
397 and 398 read with Sections 401 to 408 of the Companies Act, 1956
(“Act”), the CLB on January 9, 2009, suspended the then existing
board of directors of Xxxxxx and authorized the Government of India
to nominate up to ten (10) directors in the name of the CLB on the
board of directors of Xxxxxx (“Board”). |
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| D |
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On February 19, 2009, the CLB permitted the Company to make an
application to the Securities and Exchange Board of India (“SEBI”)
for infusing fresh capital and introducing a new promoter into the
Company, as well as eliminating the requirement of shareholder
approval to increase the Company‘s authorized equity share
capital and to make a preferential allotment in favor of the new
promoter for the additional capital to be issued. |
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| E |
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In keeping with the order of the CLB and the relaxations granted by SEBI, the Company has
commenced a competitive bidding process (“Bid Process”) for the purpose of selecting a new
promoter or investor into the Company. The Company launched the Bid Process and issued a
press release announcing the same on March 9, 2009. The Bid Process includes the selection
of a successful bidder to subscribe to 31% of the enhanced share capital of the Company
through a preferential allotment of equity shares (the “Preferential Allotment”), make a
consequent public offer under the SEBI (Substantial Acquisition of Shares and
Takeovers) |
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Regulations, 1997 (“Public Offer”) and if, upon closing of the Public Offer, the investor
has acquired less than 51% of the enhanced share capital of the Company pursuant to the
Preferential Allotment and Public Offer, at the successful bidder‘s option,
subscribe to a subsequent preferential allotment (collectively the “Proposed Transaction”). |
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| F |
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The Bidder has registered its interest in participation in the Bid
Process and has submitted an expression of interest (“EOI”) in
response to the request for proposal (“RFP”) provided by the Company
in respect of the Proposed Transaction. |
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| G |
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In order to participate in the due diligence process for the Proposed
Transaction including, without limitation, access to certain business,
financial and legal materials relating to the Company, a management
presentation conducted by employees of the Company and an opportunity
to seek information and related clarifications as privileged and
confidential communication between the lawyers of the Company in the
United States and the lawyers of the Bidder and/or the Bidder in
connection with the pending class action suits against the Company in
the United States (“Due Diligence”), the Company has requested the
Bidder and the Bidder has agreed to execute this Agreement to record
the standstill obligations of the Bidder in connection with the
receipt of information of the Company in the course of the Due
Diligence and the Bid Process. |
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| H |
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The Bidder has also executed a non-disclosure and non-solicitation
agreement (the “NDA”) separately and simultaneously with the Company. |
NOW, THEREFORE, in consideration of the foregoing and the covenants hereinafter set forth, and for
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
the Parties intending to be legally bound agree as follows:
1. STANDSTILL OBLIGATIONS
| 1.1 |
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In consideration of the Bidder being permitted to participate in the Due Diligence, the
Bidder hereby irrevocably and unconditionally undertakes and agrees that, during the
Standstill Period (as hereinafter defined), the Bidder shall not and shall cause that none of
its Affiliates or Representatives (as hereinafter defined who have received or accessed the
Evaluation Material as defined in the NDA) shall, directly or indirectly, acting alone or in
concert with others, without the prior written consent of the Company, acquire, sell or
otherwise transfer or deal with, agree to acquire, sell or otherwise transfer or deal with, in
any manner, ownership or control of any shares, securities, or options to acquire any
securities, voting rights of the Company or any of its Affiliates, including by way of open
market purchases, proxies or powers of attorney granting voting rights, business combination,
merger or other consolidation, recapitalization, restructuring, or other extraordinary
transaction, except, in each case, as expressly permitted in this Agreement. |
| 1.2 |
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Nothing contained in Clause 1.1 shall prohibit the Bidder, if declared as the successful
bidder pursuant to the Bid Process, from (a) subscribing to the equity shares of the Company
under the Proposed Transaction pursuant to participation in the Bid Process and execution of a
share subscription agreement with the Company; or (b) acquiring shares of the Company pursuant
to the Public Offer or by way of purchases during the offer period as may be permitted under
and in full compliance with the SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 1997 (“Takeover Regulations”) during the Standstill Period. |
| 1.3 |
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Notwithstanding anything to the contrary herein, the Bidder hereby acknowledges and agrees
that, |
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| 1.3.1 |
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it is aware (and its Representatives are aware or, upon receipt of the Evaluation
Material (as defined in the NDA), will be advised by it) that (i) the Evaluation Material
being furnished to it or its Representatives in connection with the Proposed Transaction may
contain material, non-public information and (ii) the United States securities laws prohibit
any persons who have material, nonpublic information concerning the Company or the Proposed
Transaction from purchasing or selling securities of the Company or from communicating such
information to any person under circumstances in which it is reasonably foreseeable that
such person is likely to purchase or sell such securities in reliance upon such information;
and |
| 1.3.2 |
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neither the Bidder nor any of its Affiliates or Representatives (who have received or
accessed the Evaluation Material as defined in the NDA), shall subscribe to, buy, sell or deal
in (or agree to subscribe to, buy sell or deal in) any securities of the Company, or take any
other action, either as a principal or as an agent, in contravention of (i) the provisions of
the SEB I (Prohibition of xxxxxxx Xxxxxxx) Regulations, 1992; or (ii) the laws of the United
States, including, but not limited to, Rule 10b-5 promulgated under the Securities Exchange
Act of 1934, as amended, or any other applicable jurisdiction. |
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The obligation under this Clause 1.3 shall remain valid and binding beyond the date of
expiry of this Agreement for so long as applicable United States or Indian laws continue to
apply to the Bidder and its Affiliates and its Representatives. |
| 1.4 |
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In the event of a material breach of the terms of this Agreement, the Company shall be
entitled to, without prejudice to the other rights and remedies available to the Company under
applicable law, disqualify the Bidder from the Bid Process and to invoke the performance bank
guarantee submitted by the Bidder during the Bid Process as liquidated damages for the breach. |
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| 1.5 |
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For the purpose of this Agreement, |
| 1.5.1 |
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the term “Standstill Period” will mean the period commencing from the date of execution
of this Agreement and until the expiry of a period of six month from the date of the public
announcement of the Public Offer by the successful bidder selected pursuant to the Bid
Process. |
| 1.5.1A |
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In the event the Bid Process is cancelled or that no bidder is selected by the Company or
approved by the Hon’ble Company Law Board then the Company shall notify the stock exchanges,
SEBI, NYSE and the SEC of the termination of the Bid Process and in such circumstances this
Agreement shall remain valid for a period of six months from the date of announcement of
termination of the Bid Process. |
| 1.5.1B |
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If the process of selection of the successful bidder does not conclude by April 30, 3009,
which is the outer limit as set out in the bid process letter dated March 23, 2009, then the
Company shall notify the stock exchanges, SEBI, NYSE and the SEC of the same and in such
circumstances, the Standstill Period shall expire six months from April 30, 2009, i.e.,
November 1, 2009. |
| 1.5.2 |
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the term “Representative” will mean any director, officer, employee,
agent, or advisor (including, without limitation, attorneys, accountants, consultants, bankers
and employees of financial advisors), who have received or accessed the Evaluation Materials
of the Company. |
| 1.5.3 |
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the term ‘Affiliate’ will mean, with respect to any party, any other
person that directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with the party and shall include a” person
acting in concert¶ as defined under the SEBI Takeover Regulations. The term
“control” (including its correlative meanings “controlled by” and “under common control with”)
shall mean possession, directly or indirectly, of power to appoint majority of the board of
directors or direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by contract or
otherwise). |
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2. TERM AND EXPIRY
| 2.1 |
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This Agreement shall be effective from the date of execution and shall be valid until it
automatically expires on the expiry of the Standstill Period. |
3. INDEMNITY
| 3.1 |
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The Bidder agrees to defend, indemnify, and hold harmless the Company, its Affiliates and
Representatives from any and against all damages, losses, claims, costs, liabilities, or
expenses, including all out-of-pocket costs, incurred, whether based in claims of tort or
contract (including, without limitation, legal fees, investigation costs and the cost of
enforcing this indemnity) incurred or sustained by the Company, its Affiliates or
Representatives due to the Bidder’s breach of any covenants or obligations under this
Agreement. |
4. MISCELLANEOUS
| 4.1 |
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This Agreement shall be governed by and is to be construed in accordance with the laws of
India and the courts at New Delhi, India shall have exclusive jurisdiction with respect to any
dispute arising from this Agreement. |
| 4.2 |
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It is understood and agreed that monetary damages would not be a sufficient remedy for any
breach of this Agreement and that the Company shall be entitled to seek specific performance
and injunctive or other equitable relief as a relief for any breach of this Agreement by the
Bidder. Such remedy shall not be deemed to be the exclusive remedy for breach of this
Agreement but shall be in addition to all other remedies available at law or equity to the
Company. |
| 4.3 |
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The Bidder shall not assign any of their rights, liabilities or obligations under this
Agreement, without the prior written consent of the Company. |
| 4.4 |
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If any provision of this Agreement shall be held to be illegal, invalid or unenforceable, in
whole or in part, under any enactment or applicable law, such provision or part shall to that
extent be deemed not to form part of this Agreement, and the legality and enforceability of
the remainder of this Agreement shall not be affected. |
| 4.5 |
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This Agreement may only be amended, supplemented or modified by execution of an instrument in
writing signed by the Parties. |
| 4.6 |
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This Agreement may be executed by the Parties in separate counterparts each of which when so
executed and delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Any counterpart may be executed by facsimile signature
and such facsimile signature shall be deemed an original. |
| 4.7 |
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This Agreement embodies the complete agreement and understanding among the Parties with
respect to the matters covered therein and shall supersede any prior understandings,
agreements or representation by or among the Parties, written or oral, which may have related
to such matters. |
| 4.8 |
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All notices, requests, demands or other communication required or permitted to be given under
this Agreement and the provisions contained herein shall be written in English and shall be
duly sent by registered post, postage prepaid or courier to the Parties at the address
indicated below:- |
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| (a) |
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In the case of notices to Xxxxxx, to: |
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Attention:
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Xx. Xxxxxxx X. Xxxxxx / Xxx. Xxxxxxx X. Xxxxxx |
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Address:
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Amarchand Mangaldas & Xxxxxx X. Xxxxxx & Co, |
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Xxxxxxxxx Xxxxxx, 000, Xxxxx Xxxxxxxxxx Xxxxxx, |
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Xxxxx XXX, Xxx Xxxxx — 110020 India |
| (b) |
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In the case of notices to the Bidder, to: |
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Attention: Xx. X. Xxxxxxxxx, Vice President &
Company Xxxxxxxxx |
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Xxxxxxx: X&X Xxxxx, X.X Xxxx, Xxxxxxx Xxxxxx, Xxxxxx 000000 |
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Ph: x000000000000 / FAX: x000000000000 / xx-xxx@xxx.xxxxxxx.xxx |
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or at such other address as the Party to whom such notices, requests, demands or other
communication are to be given shall have last notified the Party giving the same in the
manner provided in this clause, but no such change of address shall be deemed to have been
given until it is actually received by the Party sought to be charged with the knowledge of
its contents. Any notice, request, demand or other communication delivered to the Party to
whom it is addressed as provided in this clause shall be deemed to have been given and
received on the day of its receipt at such address. |
| 4.9 |
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Nothing herein expressed or implied is intended, nor shall it be construed to confer upon or
give to any third party any right, remedy or claim under or by reason of this Agreement or any
part hereof. |
| 4.10 |
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This standstill agreement does not grant any rights of priority or exclusivity to the Bidder.
The Company shall at all times have the right to discuss and transact with other bidders or
any other party, including with regard to the possibility of such party‘s
investment in the Company. Nothing contained in this standstill agreement shall obligate the
Company to maintain negotiations or transact with the Bidder in relation to the Proposed
Transaction or otherwise. |
| 4.11 |
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Each Party acknowledges and agrees that no failure or delay by another Party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise thereof or the
exercise of any right, power or privilege hereunder. |
IN WITNESS WHEREOF the Parties have caused this
Standstill Agreement to be duly executed by their
duly authorized representatives on the date and year hereinabove:
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Xxxxxx Computer Services Limited
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Xxxxxx & Toubro Limited
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/s/
Xxxxx Xxxxxx
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/s/ X.X.
Xxxxxxxxxx
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Name:
Xxxxx Xxxxxx
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Name: X.X.
Xxxxxxxxxx
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Title:
Chairman of the Board
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Title: General
Manager
Corporate M&A Cell
Xxxxxx & Toubro Limited
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