SWAP AGREEMENT
THIS AGREEMENT is made the 18th day of January, 0000
X X X X X X X :
WEB2U Limited a United Kingdom Company having its registered office at Elder
House, 000-000 Xxxxx Xxxx, Xxxxxx Xxxxxx, XX0 0XX, Xxxxxxx ('WEB2U'); and
XxxxxXxx.xxx Limited a company organised and existing under the laws of
India, whose registered office is at Mathurdas Mill Compound Ground Floor SB
Marg Lower Parel Bombay 4000013 ('JADOO')
RECITALS
(a) WEB2U is the owner of the Intellectual Property Rights in the ISP Chip Set
and the Product.
(b) WEB2U agrees to license to JADOO and JADOO agrees to accept from WEB2U the
Software, the Hardware Components and the ISP Chip Set ("Goods").
(c) The Parties have agreed to enter into the commitments of this Agreement and
regulate their rights in the manner appearing below.
IT IS AGREED as follows :
1. Interpretation
1.1.1 "Valuation" shall mean the valuation of each of the Shares to be
carried out by the appointed auditor in the Valuation Report at a date
3, 12, 15 and 24 months from the date of this agreement.
1.2 "ISP Chip Set" shall mean the WEB2U propriety Internet Services
Processor as described in the ISP Chip Set reference manual.
1.3 "Shares" shall mean the shares of JADOO to be subscribed by WEB2U in
accordance with clause4 (a) herein below.
1.4 "Product" shall mean the WEB2U proprietary Internet Access Device
incorporating the ISP Chip Set
1.5 "Software" shall mean WEB2U proprietary Internet Access Devise
software including operating system, Browser, e-mail, printer driver
and enhancements
1.6 "Valuation Report" shall mean the valuation report of Xxxxxxxx.xxx Ltd
to be prepared by one of the First Five global accountancy firms in
relation to the value from time to time of the Shares.
1.7 "Product Know-How Agreement" shall mean the Agreement of even date
between the Parties hereto under which WEB2U has agreed to license
the Know-How to JADOO.
1.7. "Software Agreement" shall mean the Agreement of even date between the
Parties hereto under which WEB2U has agreed to license the Software
to JADOO.
1.8 "First Valuation " shall mean the valuation of the Shares to be
carried out by the appointed auditor in the Valuation Report at a date
3 months from the date of this agreement
Any term not defined in this Agreement shall bear the meaning assigned
to it in the Software Agreement and the Product Know-How Agreement.
2. Commencement Date and Term
2.1. This Agreement shall be effective only upon execution by the
authorised representative of both Parties on the date first above
shown ("Commencement Date").
2.2. The term of this Agreement shall be for an initial period of five
years from the Commencement Date and shall automatically renew for
further periods of one year unless three months prior notice in
writing of termination is given by either Party.
2.3 This Agreement is subject to the receipt of all relevant
regulatory/governmental approvals in India including under Exchange
Control laws.
3. Software/Product
3.1 In accordance with the provisions of the Software Agreement and the
Product Know-How Agreement:
3.1.1 JADOO shall place orders from time to time on WEB2U for
the Software, and the Product, ("the Goods").
3.1.2 WEB2U shall execute such orders not later than 30 days from
receiving the same and despatch the Goods to JADOO.
3.1.3 The price of ISP chip set will be communicated from time to time
(quarterly basis) by WEB2U to JADOO.
3.2 It is the express understanding of the Parties that notwithstanding
the provisions of the Software Agreement and the Product Know-How
Agreement, the price of the Software and the Know-How fees for the
Product shall be paid in cash subject to the undertaking of WEB2U
subscribing to the Shares in the manner provided herein.
3.5 The Goods shall be dispatched on f.o.b. basis
4. Mode of discharge of Price of the Software and the Product Know-How fees
(a) Subject to regulatory approvals relating to foreign investment in
India from time to time a sum equivalent to [ ** ] of the Product
know-how fees payable for the Product and a sum equivalent to [ ** ]
of the Software Royalty for the first [ ** ] units of the Product
manufactured in India and received by WEB2U, shall be invested by
WEB2U in JADOO by WEB2U
** The omitted information is confidential and is being filed separately with
the Securities and Exchange Commission.
subscribing to and such number of Shares as may be determined by the
Valuation Report.
(b) Following the production of the initial [ ** ] units WEB2U will
determine at its option whether to invest a sum equivalent to [ ** ]
of the Product Know how fees payable for the Product and a sum
equivalent to [**] of the Software Royalty by subscribing the Shares
as set out in clause 4(a) above or to retain the cash with WEB2U.
After the production of [ ** ] units, WEB2U shall not have an option
to invest a sum equivalent to [ ** ] of Software and the sum
equivalent to [ ** ] of the product Know How fee in the Shares.
The Valuation Report shall be prepared and the number of Shares
calculated in the third and twelfth month of each of the first two
years of this agreement. The number of Shares to be issued shall be
calculated by taking a mean average of these prices in each year of
this agreement discounted by [ ** ].
(c) In an event that JADOO does not list the Shares on a suitable stock
exchange during a period of 24 months from the date of signing the
agreement, WEB2U may at its option require JADOO to repurchase the
Shares from WEB2U at the price at which they were issued to WEB2U,
subject to regulatory approvals in India. WEB2U shall have further
option to deal with the Shares in a manner it deems fit, if JADOO
fails to repurchase the Shares.
** The omitted information is confidential and is being filed separately with
the Securities and Exchange Commission.
(d) JADOO hereby warrants to WEB2U that it is a company in good standing
duly organised and validly existing under the laws of India and has
all corporate and legal authority to issue the Shares.
(e) JADOO hereby agrees that during the term of this Agreement and for so
long as WEB2U is the owner of any of the Shares, JADOO will adopt and
comply with the minimum corporate governance requirements necessary
for listing on the Nasdaq/National Markets
5 Limitation of Liabilities
5.1 Force Majeure.
Neither party shall be liable to the other for any delay, loss, damage
or injury caused by acts of God, governmental order or regulation,
restraining imposed by governmental action, national strikes,
commotion, riots, war, war like situations, hostilities, governmental
disposal, mobilisation, blockage, embargo, custody, revolution, fire,
earthquake, tornado, explosion, storm, flood or for any other cause
beyond its reasonable control (hereinafter referred to as Force
Majeure).
5.2 Notification of such delay, loss, damage, or injury arising solely
from circumstances attributable to the Force Majeure shall be given as
soon as possible and followed in writing to the other party within
seven days of the occurrence of such an event.
order or part thereof of effected and such cancellation shall be
without any liability on the part of WEB2U to pay for any costs or
cancellation charge arising from such cancellation.
6 Severability
If any section or subsection of this Agreement is found by competent
authority to be void, voidable, illegal or otherwise unenforceable, the
remaining provisions of this Agreement shall remain in full force and
effect.
7 Whole Agreement.
This Agreement contains the whole agreement between the Parties and
supersedes any prior written or oral agreements between them in relation to
its subject matter and the Parties confirm that they have not entered into
this Agreement on the basis of any representations that are not expressly
incorporated into this Agreement.
8 No Modification.
This Agreement may not be modified except by an instrument in writing signed
by both of the Parties of their duly authorised representatives.
9 Survival of Term.
The warranties an indemnities and obligations of confidentiality contained
in this Agreement and the provision for payment of any accounting in respect
of continuing fees and other sums due to either party under this Agreement
shall survive the termination or expiry of this Agreement.
10 Arbitration.
Any question or difference which may arise concerning the construction
meaning or effect of this agreement or concerning the rights and liabilities
of the parties or any other matter arising out of or in connection with this
agreement shall be referred to a single arbitrator in London to be agreed
between the parties. Failing such agreement within 30 days of the request by
one party to the other that the matter be referred to arbitration in
accordance with this clause such reference shall be to the to an arbitrator
appointed by the President for the time being of the Law Society, London.
The Arbitrator shall neither be an Indian or UK national. The decision of
the arbitrator shall be binding upon the parties. Any reference under this
clause shall be deemed to be a reference to arbitration within the meaning
of the Arbitration Act 1996(UK)
11 Governing Law.
11.1 This Agreement shall be governed in accordance with the laws of
England and Wales.
11.2 Where either Party has any complaint of the other under this Agreement
it may at its option commence proceedings in any Court of competent
jurisdiction in the Courts of England and Wales
SIGNED /s/ Xxxxxxx X. Xxxxxxx
..............................................
WEB2U LIMITED
SIGNED [illegible signature]
..............................................
XxxxxXxx.xxx Limited
