EXHIBIT 10.5
(VEDANTA LOGO)
REPRESENTATIVE OFFICE AGREEMENT
BETWEEN
VEDANTA RESOURCES PLC
AND
STERLITE INDUSTRIES (INDIA) LIMITED
(VEDANTA LOGO)
REPRESENTATIVE OFFICE AGREEMENT
THIS AGREEMENT made at London, United Kingdom this 29th day of March, 2005,
between Vedanta Resources plc, a Company incorporated under the laws of England
& Wales and having its registered office at Hill Street, 0 Xxxxxx Xxx Xxxxxx,
Xxxxxx, XX0X 0XX (hereinafter called 'VR plc', which expression shall, unless
repugnant to the context or meaning thereof, be deemed to include its
successors) of the One Part and Sterlite Industries (India) Limited, a company
registered under the provisions of the Companies Act, 1956 and having its
Registered Office at X-00/0, Xxxxx, XXXX Xxxxxxxxxx Xxxx, Xxxxx, Dist.
Aurangabad 431 133, Maharashtra (hereinafter called 'SIIL' which expression
shall, unless repugnant to the context or meaning thereof, be deemed to include
its successors) of the Other Part;
W H E R E A S
A) VR plc is a body corporate incorporated in England & Wales. VR plc is a
London based listed metals and mining company having business interests in
India. VR plc is the ultimate parent company of SIIL. VR plc has a pool of
qualified and well-experienced managerial, financial and technical
personnel.
B) SIIL, is a leading non-ferrous metals player in India. Its business
comprises the manufacture of copper anode, copper cathode and continuous
cast copper rods. SIIL's copper operations include a smelter at Tuticorin
in Southern India, a refinery and two copper rod plants at Silvassa in
Western India and two copper mines in Australia, in which indirect wholly
owned subsidiaries of SIIL hold interests. The smelter and
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refinery each have an installed capacity of approximately 180,000 tpa of
copper anode and copper cathode, respectively, from which SIIL produced
approximately 179,000 tonnes of copper cathode and approximately 95,000
tonnes of copper rods in the year ended 31st March, 2004. In the six months
ended 30 September 2004, SIIL produced approximately 93,000 tonnes of
copper cathodes and approximately 59,000 tonnes of copper rods. SIIL's
Australian copper mines currently supply approximately 22 per cent of
SIIL's copper concentrate requirements. SIIL is a leading copper producer
in India with a share of approximately 40% in the domestic market. In the
financial year ended 31 March 2004, SIIL exported approximately 40% of its
copper products to a range of countries including China, Japan, the
Philippines, Singapore, South Korea, Taiwan and Thailand. In early 2003,
the London Metal Exchange listed the metal produced by SIIL and gave the
copper a 'Grade A' label. SIIL's turnover for the year ended 31st March,
2004 was over USD400 million. It has made down stream investment in Bharat
Aluminium Company Limited, Hindustan Zinc Limited and Indian Foils Limited.
Considering the size of its business, SIIL requires a presence in the
United Kingdom to represent it in its dealings with lawyers, bankers,
consultants and revenue and other authorities. In the past, SILL had a
Chairman's office in the United Kingdom which fulfilled these needs.
However, the Chairman's office in the United Kingdom has been discontinued
and SIIL is seeking a presence overseas to expand its business operations,
augment its financial resources and represent it before consultants and
legal authorities.
C) VR plc has indicated that it would be willing to act as a representative
for SIIL;
D) The parties have agreed that VR plc shall render such services to SIIL on
the terms and conditions hereinafter mentioned.
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NOW IT IS AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS:
1. REPRESENTATIVE OFFICE DUTIES
1.1. VR plc will provide technical and commercial materials to SIIL to enable
the latter to promote its business and/or raise funds overseas.
1.2. VR plc is hereby appointed as a non-exclusive representative of SIIL
overseas during the term of this Agreement to enable it to perform these
duties.
1.3. VR plc will use various methods in order to fulfil its obligations under
this agreement which will include attending meetings with, preparing with
and providing information/documentation for all parties that SIIL directs
VR plc to assist them with and also with those parties whom VR plc
nominates to SIIL as potential business counterparty.
1.4. Without the written consent of SIIL, VR plc shall not enter into any
contracts or agreements on behalf of SIIL which shall impose any liability.
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2. FEES
2.1. In consideration of VR plc performing its duties as a representative office
under this Agreement, SIIL shall pay VR plc an amount of USD 2 million per
annum.
2.2. The said fees shall be paid six monthly in arrears starting with the period
commencing from 1st April 2004.
2.3. SIIL shall pay to VR plc the full amount of each invoice no later than 45
days following receipt of the same. Invoices shall be issued in March and
September in each year during the Term. If SIIL disputes any amount set
forth in any such invoice, SIIL shall pay the undisputed portion within the
specified period, and SIIL and VR plc shall attempt in good faith to
resolve all disputed items as soon as reasonably practicable.
2.4. On specific expenses being incurred by VR plc, VR plc shall be entitled to
reimbursement thereof upon providing adequate supporting documentation to
SIIL.
2.5. The gross fee under this agreement is exclusive of any Value Added Tax
(VAT), if any, chargeable under the Value Added Tax 1994 (including all
associated regulation and European Community Directives and Regulations
pertaining thereto) ('VAT'). If VAT is chargeable, SIIL shall pay this VAT
in addition to any amount due under this agreement and VR plc will provide
a valid VAT invoice to SIIL. VR plc will provide all reasonable assistance
to SIIL to enable it to recover any VAT so charged.
2.6. SIIL will pay the gross fee to VR plc. If the fee is subject to any
withholding tax then VR plc may require SIIL, at its sole discretion, to
increase the fee to such an extent that the net fee after the deduction of
withholding tax shall equal the gross fee as referred to above. If any such
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(VEDANTA LOGO)
withholding is made, SIIL will provide the necessary vouchers certifying
the tax withheld to VR plc.
3. CONFIDENTIALITY
Both parties undertake to maintain strict confidentiality of all
information that they may have access to or that comes to their knowledge
during the course of rendering or supplying of the said services to SIIL
and its subsidiaries. Neither of the parties shall disclose such
information to any person save and except its employees and other
professional advisers on a need-to-know basis and obtaining from them an
assurance of confidentiality.
4. TERM
This Agreement shall come into force upon the execution hereof and shall
take effect from 1st April, 2004 and unless terminated as herein provided,
shall remain in force for a period of five years.
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5. TERMINATION
5.1. This Agreement shall stand terminated forthwith if a party is unable to pay
any debt as it becomes due and has liabilities which exceed its assets.
5.2. This Agreement may be terminated by either of the parties forthwith, if the
other party shall happen to be in breach of any of its terms and shall have
failed to rectify such breach within sixty days of a notice in this behalf
regard having been served upon it.
5.3. This Agreement can be terminated by mutual agreement after 31 March 2005 by
either party providing written notice of its intention to terminate the
Agreement.
6. TRANSITION
Upon termination or expiration of this Agreement, each party shall
diligently cooperate with the other to effect a smooth and orderly
transition. From the time that a notice of termination is received by
either party until the effective termination date, each party shall
cooperate fully with any newly appointed party performing the duties
contemplated hereunder.
7. LIMITATION OF LIABILITY
In the event of termination by either party in accordance with any of the
provisions of this Agreement, neither party shall be liable to the other
because of such termination for compensation, reimbursement or damages on
account of the loss of prospective profits or anticipated sales or on
account of expenditure, investment, leases or commitments in connection
with the business or goodwill of SIIL or VR plc.
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8. FORCE MAJEURE
In the event of a party's obligations hereunder have been prevented from
being carried out due to a governmental restriction, act of God, war, civil
war, riot or any other cause similar to the foregoing which is beyond its
control, it shall not be responsible to the other party for failure or
delay of performance of the obligations under this Agreement; provided,
however, if such failure or delay continues for more than six months, the
other party hereto may terminate this Agreement by notice in writing to
that effect.
9. RETURN OF CONFIDENTIAL INFORMATION
Upon termination, either party shall return to the other all documents and
papers which it may have in its custody belonging to the other in
connection with this Agreement the services rendered or supplied hereunder.
10. NOTICES
All notices required to be given shall be deemed to have been sufficiently
served if sent by registered post acknowledgement due or by any other means
of recorded delivery, including telex or fax, at the address of the party
mentioned herein above, or at any other address as may be communicated in
writing.
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11. NON ASSIGNABILITY
Neither of the parties may assign this Agreement or any rights or
obligations hereunder without the prior consent in writing of the other.
12. CHANGES TO AGREEMENT
This Agreement shall be modified only by the mutual consent of both parties
expressed in writing.
13. INVALIDITY
If any provision of this Agreement is or becomes invalid, illegal or
unenforceable, the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or impaired.
14. ENTIRE AGREEMENT
This Agreement comprises the entire agreement between the Parties relating
to the subject matter hereof and each of the Parties acknowledges that it
has not entered into this Agreement relying on any representation,
statement or agreement, whether oral or in writing, other than those
expressly incorporated into this Agreement.
15. PARTNERSHIP
Nothing contained herein shall be construed to constitute a joint venture
or an arrangement for sharing of profits or partnership between the
parties.
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(VEDANTA LOGO)
16. DISPUTES
In the event of any dispute or difference arising between the parties
concerning the interpretation of this Agreement or the rights and
obligations of the parties, the same shall be referred to a single
arbitrator in case the parties so agree, failing which each party shall
nominate an arbitrator in writing and the arbitrators so appointed shall,
before entering upon reference, appoint a third arbitrator who shall act as
the presiding arbitrator and thereafter proceed to determine the matter of
difference or dispute. The decision of the arbitrators by majority shall be
conclusive. The arbitration shall be in accordance with the UNCITRAL
Arbitration Rules as in force and effect on the date of service of a Notice
of Dispute. The tribunal shall consist of a sole arbitrator and the
appointing authority shall be the Secretary General of the Permanent Court
of Arbitration of the Hague. Such arbitration shall be held at London and
the language of the arbitration shall be English.
17. LAW
This Agreement shall be construed and given effect to in accordance with
the laws of England and Wales. Subject to the provisions of Clause 17
hereinabove, any dispute or difference arising out of this Agreement or any
claim by either party against the other party shall be adjudicated upon and
decided by a Court of competent jurisdiction in England and Wales.
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(VEDANTA LOGO)
IN WITNESS WHEREOF this Agreement has been entered into the day and year first
above written.
SIGNED for and on behalf of )
VEDANTA RESOURCES plc ) /s/ XXXXX XXXXXX XXXXX
Director )
Director /Company Secretary ) /s/ XXXXXX XXXXXXX
SIGNED for and on behalf of )
STERLITE INDUSTRIES (INDIA) LIMITED ) /s/ XXXXX XXXX
Director )
Director /Company Secretary ) /s/ XXXXXX XXXXXX
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