Exhibit 4
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement is executed this 30th day of April
2003 by and among Sify Limited, a company incorporated under the laws of India
(the "Company"), Venture Tech Solutions Private Limited, a company incorporated
under the provision of the Companies Act, 1956 of India ("Venture Tech"), and
Venture Tech Asset Limited, a company incorporated under the laws of the British
Virgin Islands ("VT BVI"). Capitalized terms used herein without definition
shall have the meanings given to them in the Subscription Agreement, dated as of
October 7, 2002 (the "Subscription Agreement"), by and between the Company and
Venture Tech.
RECITALS
A. Pursuant to the Subscription Agreement, Venture Tech (i) purchased
from the Company, and the Company sold and issued to Venture Tech,
2,034,884 equity shares of the Company on December 16, 2002 and (ii)
irrevocably agreed to purchase from the Company, and the Company
agreed to sell and issue to Venture Tech, 2,034,883 additional equity
shares of the Company (the "Second Tranche Equity Shares") on or prior
to April 30, 2003.
B. In accordance with the Subscription Agreement, Venture Tech desires to
assign its right under the Subscription Agreement to purchase a
portion of the Second Tranche Equity Shares (which shall be in the
form of American Depositary Shares ("ADSs")) to VT BVI (the
"Assignment"), and VT BVI desires to accept the Assignment.
C. In order to obtain the approval of the Government of India (including
the Foreign Investment Promotion Board of India (the "FIPB")), the
parties desire to postpone the closing (the "Second Tranche Closing")
with regard to the sale and issuance of the VT BVI ADSs.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration the receipt and
adequacy of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Assignment. Venture Tech hereby assigns to VT BVI rights under the
Subscription Agreement to purchase from the Company at the Second Tranche
Closing an aggregate of 1,017,441 ADSs (the "VT BVI ADSs") representing
1,017,441 Second Tranche Equity Shares, and VT BVI hereby assumes the
obligations of Venture Tech to purchase the VT BVI ADSs at the Second Tranche
Closing and agrees to purchase the VT BVI ADSs upon the terms and subject to the
conditions set forth in the Subscription Agreement, as amended by this
Assignment and Assumption Agreement. In reliance on the representations and
warranties and the agreements of VT BVI contained in this Assignment and
Assumption Agreement, the Company hereby consents to the assignment of rights by
Venture Tech described in this Paragraph 1.
2. No Novation. This Assignment and Assumption Agreement modifies and
amends the obligations of Venture Tech under Section 2.9 of the Subscription
Agreement to the extent set forth in Paragraph 1; provided, however, that if
this Assignment and Assumption Agreement is terminated pursuant to Paragraph 5,
then Venture Tech shall continue to be obligated to purchase the Second Tranche
Equity Shares pursuant to the Subscription Agreement. Venture Tech shall cause
VT BVI to perform all of its obligations under the Subscription Agreement and
this Assignment and Assumption Agreement.
3. Rights Under the Share Purchase Agreement. Venture Tech, VT BVI and the
Company agree that, with respect to the VT BVI ADSs, VT BVI shall have all of
the rights and privileges, and all of the obligations and liabilities, of
Venture Tech under the Subscription Agreement as if VT BVI was a party to the
Subscription Agreement. Without limiting the generality of the foregoing, (a) VT
BVI shall be deemed to be the beneficiary of (i) each of the representations and
warranties of the Company set forth in Article III of the Subscription Agreement
and (ii) each of the covenants of the Company set forth in Article VIII of the
Subscription Agreement, (b) VT BVI shall be deemed to have made (i) as of the
date hereof and as of the Second Tranche Closing, each of the representations
and warranties of Venture Tech set forth in Article IV of the Subscription
Agreement (including as set forth in Paragraph 4 below) and (ii) each of the
covenants of Venture Tech set forth in Article VIII of the Subscription
Agreement, (c) the obligation of VT BVI to purchase the VT BVI ADSs at the
Second Tranche Closing shall be subject to the fulfillment by the Company or
waiver by VT BVI on or before the Second Tranche Closing of each of the
conditions set forth in Article V of the Subscription Agreement and (d) the
obligations of the Company to sell and issue the VT BVI ADSs at the Second
Tranche Closing shall be subject to the fulfillment by VT BVI or waiver by the
Company on or before the Second Tranche Closing of each of the conditions set
forth in Article VI of the Subscription Agreement.
4. Additional Representations by Venture Tech and VT BVI. Each of Venture
Tech and VT BVI hereby represents and warrants to the Company that Venture Tech
is an Affiliate of VT BVI. In addition, without duplication of Paragraph 3
above, VT BVI hereby represents and warrants to the Company as follows:
a. VT BVI is acquiring the VT BVI ADSs and the underlying Second Tranche
Equity Shares for investment for VT BVI's own account and not with the view to,
or for resale in connection with, any distribution thereof in the United States,
except for transfers to affiliated fund partnerships or following registration
thereof under the Securities Act or as otherwise permitted under the Securities
Act;
b. VT BVI understands that, as of the Second Tranche Closing, the
issuance of neither the VT BVI ADSs nor the underlying Second Tranche Equity
Shares shall have been registered under the Securities Act by reason of a
specific exemption from the registration provisions of the Securities Act which
depends upon, among other things, the bona fide nature of the investment intent
as expressed herein;
c. VT BVI does not have any contract, undertaking, agreement or
arrangement with any Person to sell, transfer or grant participation to any
third Person with respect to any of the VT BVI ADSs or the underlying Second
Tranche Equity Shares other than pursuant to the Investor Rights Agreement;
d. VT BVI is a Non-U.S. person and acknowledges that this Assignment and
Assumption Agreement is made by the Company in reliance upon VT BVI's
representations, warranties and covenants made in this Paragraph 4;
e. VT BVI has been advised and acknowledges that (i) neither the VT BVI
ADSs nor the underlying Second Tranche Equity Shares have been, and when issued
will not be, registered under the Securities Act, the securities laws of any
state of the United States or the securities laws of any other country, (ii) in
issuing and selling the VT BVI ADSs and the underlying Second Tranche Equity
Shares, the Company is relying upon the "safe harbor" provided by Regulation S
and/or on Section 4(2) under the Securities Act, (iii) it is condition to the
availability of the Regulation S "safe harbor" that neither the VT BVI ADSs nor
the underlying Secondary Tranche Equity Shares may be offered or sold in the
United States or to a U.S. person until the expiration of a period of one year
following the Second Tranche Closing Date and (iv) notwithstanding the
foregoing, prior to the expiration of one year after the Second Tranche Closing
Date (the "Restricted Period"), neither the VT BVI ADSs nor the underlying
Second Tranche Equity Shares may be offered and sold by the holder thereof
unless such offer and sale
is made in compliance with the terms of this Assignment and Assumption Agreement
and the Subscription Agreement and either (A) if the offer or sale is within the
United States or to or for the account of a U.S. person (as such terms are
defined in Regulation S), the securities are offered and sold pursuant to an
effective registration statement or pursuant to Rule 144 under the Securities
Act or pursuant to an exemption from the registration requirements of the
Securities Act or (B) the offer and sale is outside the United States and to
other than a U.S. person;
f. VT BVI will not engage in hedging transactions will regard to the VT
BVI ADSs or the underlying Second Tranche Equity Shares unless in compliance
with the Securities Act;
g. VT BVI has not engaged, nor is it aware that any party has engaged,
and VT BVI will not engage or cause any third party to engage, in any directed
selling efforts (as such term is defined in Regulation S) in the United States
with respect to the VT BVI ADSs or the underlying Second Tranche Equity Shares;
h. VT BVI (i) is domiciled and has its principal place of business
outside the United States, (ii) certifies it is not a U.S. person and is not
acquiring the VT BVI ADSs or the underlying Second Tranche Equity Shares for the
account or benefit of any U.S. person and (iii) at the time of the Second
Tranche Closing, it or persons acting on its behalf in connection therewith will
be located outside the United States;
i. at the time of offering to VT BVI and communication of its order to
purchase the VT BVI ADSs and the underlying Second Tranche Equity Shares and at
the time of its execution of this Assignment and Assumption Agreement, VT BVI or
persons acting on its behalf in connection therewith were located outside the
United States;
j. VT BVI is not a "distributor" (as defined in Regulation S) or
"dealer" (as defined in the Securities Act);
k VT BVI acknowledges that the Company shall make a notation in its
stock books and/or instruct the depositary regarding the restrictions or
transfer set forth in this Paragraph 4 and shall transfer such shares on the
books of the Company only to the extent consistent therewith; and
l. VT BVI understands and agrees that each certificate held by it
representing the VT BVI ADSs or the underlying Second Tranche Equity Shares, or
any equity shares usable upon any stock split, stock dividend, recapitalization,
merger, consolidation or similar event, shall bear the following legend:
THIS RESTRICTED DEPOSITARY RECEIPT HAS BEEN ISSUED PURSUANT, AND IS
SUBJECT, TO THE TERMS OF THE LETTER AGREEMENT, DATED MAY ___, 2003 (THE
"LETTER AGREEMENT"), BY AND BETWEEN THE DEPOSITARY AND SIFY LIMITED (THE
"COMPANY"). THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR QUALIFIED
UNDER ANY APPLICABLE STATE SECURITIES LAWS, HAVE BEEN SOLD BY THE COMPANY
FOR INVESTMENT AND NOT FOR RESALE AND MAY NOT AT ANY TIME BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1)(A) IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT (I.E., PURSUANT TO RULE 144 OR
REGULATION S UNDER THE SECURITIES ACT) OR (B) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT COVERING SUCH SALE AND (2)
IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES. THE DEPOSITARY SHALL NOT AT ANY TIME REGISTER
THE TRANSFER OF THIS ADR OR THE ADSs REPRESENTED HEREBY UNLESS IT HAS
RECEIVED A SATISFACTORY OPINION OF COUNSEL THAT SUCH SALE IS EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OR A WRITTEN NOTIFICATION FROM THE
COMPANY THAT SUCH SALE WAS MADE IN ACCORDANCE WITH AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT COVERING SUCH SALE. NO
REPRESENTATION IS MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY
RULE 144 OR REGULATION S UNDER THE SECURITIES ACT FOR RESALE OF THE
RESTRICTED ADSs. THE DEPOSITARY SHALL NOT AT
ANY TIME CANCEL THIS RESTRICTED ADR OR THE RESTRICTED ADSs EVIDENCED HEREBY
FOR THE PURPOSE OF WITHDRAWAL OF THE SHARES REPRESENTED BY THE RESTRICTED
ADSs EVIDENCED HEREBY UNLESS IT SHALL HAVE RECEIVED A SIGNED WITHDRAWAL
CERTIFICATION (AS DEFINED IN THE LETTER AGREEMENT).
5. Second Tranche Closing; Escrow; Termination of Assignment and Assumption
Agreement. The parties agree that the Second Tranche Closing shall occur as soon
as reasonably practicable after receipt of approval from the FIPB. In the event
that the Second Tranche Closing shall not have occurred by July 31, 2003 (the
"Termination Date") for any reason (including as a result of failure to receive
approval from the FIPB), this Assignment and Assumption Agreement shall be null
and void and Venture Tech shall be obligated to purchase from the Company, and
the Company shall be obligated to sell and issue to Venture Tech, the Second
Tranche Equity Shares within 7 days after the Termination Date upon the terms
and subject to the conditions set forth in the Subscription Agreement.
6. Investor Rights Agreement. In addition to the conditions to the
obligations of the parties set forth in Articles V and VI of the Subscription
Agreement, the obligation of VT BVI to purchase the VT BVI ADSs and the
underlying Second Tranche Equity Shares and the obligation of the Company to
sell and issue the VT BVI ADSs and the underlying Second Tranche Equity shares
shall be subject to the condition that the Investors Rights Agreement, dated as
of October 7, 2002 (the "Investor Rights Agreement"), by and among Xxxxxx
Computer Services Limited, SAIF Investment Company Limited, Venture Tech and the
Company shall have been amended to make VT BVI a party thereto (as an affiliate
of Venture Tech) with all the rights and obligations of a "Shareholder" within
the meaning of such term under the Investor Rights Agreement. Each party agrees
to use its reasonable efforts to amend the Investor Rights Agreement in
accordance with this Paragraph 6.
7. Notices. The address of VT BVI for all notices required or permitted to
be given pursuant to Section 11.1 of the Subscription Agreement shall be Venture
Tech Assets Limited, 00/000 Xxxxxxxxx Xxx, Xxxxxx XX-0X-0XX, Xxxxxx Xxxxxxx.
8. Miscellaneous. This Assignment and Assumption Agreement shall be
governed by, and construed in accordance with, the laws of India, without regard
to the principles of conflicts of law of any jurisdiction. This Assignment and
Assumption Agreement and the rights and obligations of the parties hereunder
shall not be assignable by any party without the prior written consent of the
other parties hereto. This Assignment and Assumption Agreement constitutes the
full and entire understanding and agreement among the parties with regard to the
subject hereof. Any prior agreements, understandings or representations with
respect to the subject matter hereof are superseded hereby and shall have no
further force or effect. Except as expressly set forth herein, neither this
Assignment and Assumption Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the party
against whom enforcement of any such amendment, waiver, discharge or termination
is sought. This Assignment and Assumption Agreement may be executed in any
number of counterparts and signatures may be delivered by facsimile, each of
which may be executed by less than all parties, each of which shall be
enforceable against the parties actually executing such counterparts and all of
which together shall constitute one instrument.
(Signature page follows)
IN WITNESS WHEREOF, the parties have executed this Assignment and
Assumption Agreement as of the date first above written.
SIFY LIMITED
By: /s/ X Xxxxxxx
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Name: X Xxxxxxx
Title: Managing Director
VENTURE TECH SOLUTIONS PRIVATE LIMITED
By: /s/ N Xxx Xxxxx
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Name: N Xxx Xxxxx
Title: Director
VENTURE TECH ASSETS LIMITED
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: Director
