CITIUS POWER LIMITED SHARE SUBSCRIPTION AGREEMENT March 1, 2008
CITIUS
POWER LIMITED
March
1, 2008
-
i -
CITIUS
POWER LIMITED
This
agreement (the “Agreement”)
is
entered into as of March 1, 2008 (the “Effective
Date”)
by and
between:
1.
|
Citius
Power Limited,
a
limited liability company incorporated under the laws of the Republic
of
Mauritius with a Category 1 Global Business Licence and having its
registered office at x/x Xxxxx Xxxxxxx, Xxxxx 000 0xx
Xxxxx, Xxxxxxx Front Building, President Xxxx Xxxxxxx Street, Port
Louis,
Mauritius (the “Company”);
|
2.
|
Phoenix
India Acquisition Corp.,
a
Delaware corporation having its registered office at 000 Xxxxxxx
Xxxxxx,
0xx Xxxxx, Xxx Xxxx, XX 00000, XXX (“PIAC,”
which expression shall, unless inconsistent with the subject or context,
be deemed to include its successors and permitted assigns);
and
|
3.
|
The
persons named in Schedule I hereto (hereinafter referred to collectively
as the “Promoters”
and individually as a “Promoter”),
indirectly holding Equity Shares in the Company through its wholly
owned
subsidiaries set forth opposite each such Promoter’s name in Schedule I
hereto.
|
The
Company, PIAC and the Promoters are hereinafter referred to individually as
a
“Party”
and
collectively as the “Parties”.
Unless
the context otherwise requires, all capitalized terms used but not otherwise
defined herein shall have the meanings set forth in Schedule II. Other terms
may
be defined elsewhere in the text of this Agreement and, unless otherwise
indicated, shall have such meaning throughout this Agreement.
WHEREAS,
A.
|
The
Company desires to allot, issue and deliver to PIAC, and PIAC desires
to
subscribe to 4,500,000 (Four Million Five Hundred Only) Convertible
Preference Shares; and
|
B.
|
The
Parties hereto desire to enter into this Agreement and the Shareholders’
Agreement to record their respective representations, warranties,
covenants and agreements with respect to the transactions contemplated
hereby, as set forth herein.
|
NOW,
THEREFORE,
in
consideration of the representations, promises and mutual covenants and
agreements set forth herein, the Parties agree as follows:
1. |
Authorization,
Allotment And Issuance Of Convertible Preference
Shares
|
Amendment
of Constitutional Documents; Authorization of Issuance of Convertible Preference
Shares
The
Company and the Group Company (to the extent required) will, before Closing,
adopt the restated Memorandum and Articles of Association to make such changes
as are necessary or appropriate to carry out the provisions of this Agreement
and to incorporate the provisions of the Shareholders’ Agreement, in form and
substance satisfactory to PIAC. The Company will, before Closing, authorize
the
issuance to PIAC of 4,500,000 (Four Million Five Hundred Thousand Only)
Convertible Preference Shares.
Allotment
and Issuance of Convertible Preference Shares
Subject
to the terms and conditions of this Agreement, PIAC agrees to subscribe to,
and
the Company agrees to allot, issue and deliver to PIAC, 4,500,000 (Four Million
Five Hundred Thousand Only) Convertible Preference Shares at the subscription
price of USD 10 per Convertible Preference Share
and thus
an aggregate subscription price of USD 45,000,000 (the “Aggregate
Subscription Price”).
2. |
Closing
of the Convertible Preference Shares;
Use of Proceeds
|
Closing
The
Company shall allot, issue and deliver 4,500,000 (Four Million Five Hundred
Only) Preference Shares to PIAC at closing (“Closing”).
Closing shall take place at a time and place mutually agreed between the Parties
on a date to be specified by the Company and PIAC, which date shall be no later
than two (2) Business Days after the satisfaction or waiver (subject to
Applicable Law) of the latest to occur of the conditions set forth in Sections
4
and 5 (other than those conditions that by their nature are to be satisfied
or
waived at Closing), unless extended by mutual agreement of the Company and
PIAC.
Delivery
At
Closing, the Company shall deliver to PIAC a share certificate duly stamped
and
registered in PIAC’s name representing the number of Convertible Preference
Shares that PIAC is subscribing at Closing against payment of the Aggregate
Subscription Price, by wire transfer in accordance with the Company’s
instructions, which instructions the Company shall deliver to PIAC not less
than
five (5) Business Days prior to Closing.
Within
five (5) Business Days of Closing, the Company shall deliver to PIAC a certified
copy of all relevant filings which shall have been made pursuant to Applicable
Law by the Company in relation to the Convertible Preference Shares that PIAC
is
subscribing at Closing.
2
Use
of Proceeds
The
Company will use the proceeds from Closing in the following manner:
(i)
|
retain
USD 2,500,000 in its bank accounts in
Mauritius;
|
(ii)
|
pay
expenses, advisers’ fees and other costs incurred by the Company and its
Affiliates in connection with the transactions contemplated by the
Transaction Agreements, including previously contemplated asset
acquisition and financing efforts, as disclosed in writing to
PIAC;
|
(iii)
|
investing
USD 42,500,000 in the Group Company in order that the Group Company
shall
acquire wind energy assets and develop new wind and other renewable
energy
generation facilities in return for which the Group Company shall issue
16,955,375 equity shares of par
value Rs. 10 at a premium of Rs. 90 and thus an issue price of Rs.
100
each to the Company, to be calculated with reference to the daily
average
exchange rate published in the Financial Times newspaper in
London.
|
The
Company and each Promoter shall procure that the funds are utilized for
acquisition of assets in accordance with the terms and conditions set out in
this Agreement and the Shareholders’ Agreement and as may be agreed upon with
PIAC.
3. |
Conversion
of the Convertible Preference
Shares
|
Conversion
3.1 PIAC
shall have the right to convert the Convertible Preference Shares, at its
option, at any time after twenty four (24) months following Closing, if an
IPO
or other Liquidity Event has not taken place; provided however, the Convertible
Preference Shares shall mandatorily convert into Equity Shares at the time
of an
IPO.
3.2 The
Convertible Preference Shares owned by PIAC shall be convertible into Equity
Shares in the ratio of 8.25 Equity Shares for every Convertible Preference
Share. Accordingly, upon conversion of all of the Convertible Preference Shares
in issue, PIAC will own 37,142,857 Equity Shares. At Closing the Equity
Shareholders will own all outstanding Equity Shares aggregating to 20,000,000
(Twenty Million Only) shares with a combined value of USD 20,000 (USD Twenty
Thousand Only). After Closing, PIAC will own 65% of the Shares of the Company
and the Equity Shareholders will own 35% of the Shares of the Company on a
Fully
Diluted Basis. This Section shall be without prejudice to the Promoters’ rights
to subscribe to additional Equity Shares at par value pursuant to Schedule
III
of the Shareholders’ Agreement.
3.3 The
Promoters and the Company shall, on a best efforts basis, endeavour to achieve
an IPO within twenty four (24) months of Closing on any recognised stock
exchange, or other Liquidity Event, as may be mutually agreed upon by the
Promoters and PIAC in light of prevailing market conditions and the state of
the
Company’s business and financial condition. The terms, timing and final pricing
as well as the selection of the investment banker or merchant banker shall
be
subject to the approval of the Board of Directors of the Company.
3
4. |
Conditions
to PIAC’s Obligations to Subscribe to the Convertible Preference
Shares
|
PIAC’s
obligation to subscribe to the Convertible Preference Shares at Closing is
subject to the satisfaction on or before Closing of the following conditions,
unless waived in writing by PIAC:
Representations
and Warranties
The
representations and warranties made by the Company and the Promoters in Section
6 herein shall be true and correct when made and as at Closing (unless stated
to
relate to a specific earlier date, in which case such representations and
warranties shall be true and correct as of such earlier date).
Covenants
All
covenants, agreements and conditions contained in the Transaction Agreements
to
be performed by the Company or the Promoters on or before Closing shall have
been performed or complied with.
Shareholders’
Agreement
Each
of
the Company and the Promoters shall have duly stamped and executed and delivered
the Shareholders’ Agreement and the same shall be in full force and effect and
shall be legal, valid, binding and enforceable against the parties thereto
in
accordance with the terms thereof.
Memorandum
and Articles
The
restated Memorandum and Articles, in
form
and substance satisfactory to PIAC,
shall
have been duly adopted by the Company and the Group Company, by all requisite
Board and shareholder action, shall have been filed with the respective
Registrar of Companies, shall be in full force and effect and all requisite
approvals, consents and authorizations related thereto shall have been
obtained.
Ownership
At
Closing, all of the outstanding Equity Shares and options, if any, shall be
owned by the Equity Shareholders and all the outstanding Convertible Preference
Shares shall be owned by PIAC.
4
Closing
Deliverables
The
Company shall have delivered to PIAC the following:
i.
|
duly
executed copies of all Transaction Agreements (and any amendments
thereto);
|
ii.
|
appropriate
corporate documents authorizing the allotment, issuance and delivery
of
the Convertible Preference Shares;
|
iii.
|
a
certificate, dated as of Closing, certifying as to the incumbency
and
signatures of certain Directors and/or officers of the Company and
a
certificate from the Company, dated as of Closing, certifying as
to the
effectiveness of the restated Memorandum and Articles and Board and
shareholders resolutions attached thereto, all of them required to
be
adopted and delivered in order to carry out the transactions contemplated
by this Agreement and the other Transaction Agreements, including,
without
limitation, the authorization, allotment, issuance and delivery and
execution of the Convertible Preference Shares, authorizations and
execution of this Agreement and the other Transaction Agreements
to which
the Company is a party and appointment of the PIAC Directors (as
defined
in the Shareholders’ Agreement) to the Board in accordance with the
Shareholders’ Agreement;
|
iv.
|
a
certificate from an officer of the Company, dated as of Closing,
certifying as to the accuracy of the representations and warranties
of the
Company herein and in the other Transaction Agreements at and as
of
Closing and as to the compliance of the Company with all agreements
and
conditions hereunder and under the other Transaction Agreements required
to be performed or complied by at or prior to
Closing;
|
v.
|
an
opinion of counsel for the Company and the Promoters, in form and
substance satisfactory to PIAC, addressing matters as are customarily
addressed in transactions contemplated by the Transaction Agreements,
including, without limitation, to the effect
that:
|
a.
|
The
Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the Republic of Mauritius,
with full corporate power and authority to own or lease, as the case
may
be, and to operate its properties and conduct its business and to
enter
into and to perform its obligations under the Transaction
Agreements;
|
b.
|
The
Convertible Preference Shares have been duly authorized and, when
issued
and delivered in accordance with the terms of this Agreement, will
be
validly issued, fully paid and non-assessable, and the issuance of
the
Convertible Preference Shares will not be subject to any pre-emptive
rights, rights of first refusal or similar rights, and, to the best
of
such Counsel’s knowledge, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to
convert
any obligations into or exchange any securities for, shares of capital
stock of the Company are
outstanding;
|
5
c.
|
The
Transaction Agreements have been duly authorized, executed and delivered
by the Company and the Promoters and constitute legal, valid and
binding
obligations of the Company and the Promoters, enforceable against
the
Company and the Promoters in accordance with the terms thereunder
except:
(i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement
of
creditors’ rights generally; and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other
equitable
remedies or by general principles of
equity;
|
d.
|
The
execution and delivery of the Transaction Agreements by the Company,
the
performance by the Company of its obligations pursuant to the Transaction
Agreements, the consummation of the transactions contemplated by
the
Transaction Agreements and the allotment, issuance and delivery of
the
Convertible Preference Shares will not result in any violation of,
or
conflict with, or constitute a default under, the Articles or Memorandum,
each as amended to date, or any Applicable Law or any agreement or
other
instrument binding upon the Company that is material to the Company;
|
e.
|
The
execution and delivery of the Transaction Agreements by the Promoters
and
the performance by the Promoters of their obligations pursuant to
the
Transaction Agreements will not result in any violation of any Applicable
Law;
|
f.
|
The
Shares outstanding prior to the issuance of the Convertible Preference
Shares have been duly authorized and are validly issued, fully paid
and
non-assessable;
|
g.
|
There
is no pending or, to the best of such counsel’s knowledge, threatened
action, suit or proceeding by or before any Governmental Entity or
any
arbitrator involving the Company or its property;
and
|
h.
|
The
Company has complied, and is in compliance with, all Applicable Laws,
and
the Company has all Permits (as defined below in Section 6.11) to,
and
necessary in, the conduct of its business as currently conducted
and as
currently planed to be conducted;
and
|
6
i.
|
The
restated Memorandum and Articles have been duly adopted by the Company
by
all requisite Board and shareholder action, are in full force and
effect,
have been filed with the applicable Governmental Entity and all requisite
approvals, consents and authorizations related thereto have been
obtained.
|
vi.
|
drafts
of all relevant filings to be made by the Company in relation to
the
Convertible Preference Shares that PIAC is subscribing to at
Closing.
|
No
Material Adverse Event
No
event,
occurrence, fact, condition, change or development shall exist or have occurred
or come to exist since the Effective Date that, individually or in the
aggregate, has had or could reasonably be expected to have a material adverse
effect on the business, prospects, operations, properties, condition (financial
or otherwise) or results of operations of the Company or the Group Company
(a
“Material
Adverse Effect”).
No
Injunctions or Restraints; Illegality
No
order
issued by any court of competent jurisdiction or other legal or regulatory
restraint or prohibition preventing the consummation of the transactions
contemplated by this Agreement shall be in effect, nor shall any proceeding
seeking any of the foregoing be pending, nor shall there be any action taken,
or
any statute, rule, regulation or order enacted, entered, enforced or threatened,
which makes the consummation of the transactions illegal.
Absence
of Proceedings
There
shall not be pending or, with reasonable likelihood of success, threatened
any
suit, action or proceeding (a “Proceeding”)
(i) seeking to prohibit or limit the ownership by PIAC of any securities of
the Company, or to compel PIAC, its Affiliates or the Company to dispose of
or
hold separate any securities of the Company as a result of the transactions
contemplated by the Transaction Agreements or (ii) seeking to impose
limitations on the ability of PIAC to acquire or hold, or exercise full rights
of ownership of, the Shares or (iii) seeking to prohibit PIAC or any of its
Affiliates from participating in any material respect the business or operations
of the Company.
Due
Diligence
Completion
of the due diligence with respect to the Company and the Group Company to the
satisfaction of PIAC.
7
Co-operation
The
Company and the Promoters having extended all reasonable cooperation to PIAC
in
obtaining all approvals and other corporate authorisations in connection with
the consummation of the transactions contemplated by this Agreement and the
Shareholders’ Agreement.
5. |
Conditions
to the Company’s Obligations to Issue the Convertible Preference
Shares
|
The
Company’s obligation to allot, issue and deliver the Convertible Preference
Shares at Closing is subject to the satisfaction on or before Closing of the
following conditions, unless waived in writing by the Company:
Representations
and Warranties
The
representations and warranties made by PIAC in Section 7 hereunder and in
the other Transaction Agreements shall be true and correct when made and as
of
the date of Closing (unless stated to relate to a specific earlier date, in
which case such representations and warranties shall be true and correct as
of
such earlier date).
Covenants
All
covenants, agreements and conditions contained in this Agreement and the other
Transaction Agreements to be performed by PIAC on or before the date of Closing
shall have been performed or complied with.
Approvals
PIAC
having obtained all approvals and other corporate authorisations as may be
necessary in connection with its subscription to the Convertible Preference
Shares under this Agreement; provided that, to the extent required, the Company
and the Promoters shall extend all reasonable cooperation to PIAC in obtaining
such approvals.
Shareholders’
Agreement
PIAC
shall have duly executed and delivered the Shareholders’ Agreement and the same
shall be in full force and effect and shall be legal, valid, binding and
enforceable against the parties thereto in accordance with the terms
thereof.
No
Injunctions or Restraints; Illegality
No
order
issued by any court of competent jurisdiction or other legal or regulatory
restraint or prohibition preventing the consummation of the transactions
contemplated by this Agreement shall be in effect, nor shall any proceeding
seeking any of the foregoing be pending, nor shall there be any action taken,
or
any statute, rule, regulation or order enacted, entered or enforced, which
makes
the consummation of the transactions illegal.
8
6. |
Representations
and Warranties of the Company and the Promoters
|
The
Company and each of the Promoters represent and warrant to PIAC, as of the
date
hereof and as of the date of Closing (with reference to the facts and
circumstances then existing), as follows:
Organization,
Good Standing
(a)
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the Republic of Mauritius, and has made all filings and
secured all approvals necessary for the conduct of its business and as required
by law, other than such filings and approvals, the absence of which would not
result in a Material Adverse Effect. The Company has requisite corporate power
and authority to own, lease and operate its properties and assets, to carry
on
its business as currently conducted or currently proposed to be conducted and
to
execute and deliver, and to perform its obligations pursuant to the Transaction
Agreements to which it is a party. The Company has requisite corporate power
and
authority to allot, issue and deliver the Convertible Preference Shares and
to
perform its obligations pursuant to the Articles and the Memorandum.
(b)
The
Group
Company is a corporation duly organized, validly existing and in good standing
under the laws of the Republic of India, and has made all filings and secured
all approvals necessary for the conduct of its business and as required by
law,
other than such filings and approvals, the absence of which would not result
in
a Material Adverse Effect. The Group Company has requisite corporate power
and
authority to own, lease and operate its properties and assets, to carry on
its
business as currently conducted or currently proposed to be conducted and to
execute and deliver, and to perform its obligations pursuant to the Transaction
Agreements.
Capitalization
(a)
As of
the date hereof, the issued, subscribed and paid up capital of the Company
is
USD 20,000 (Twenty Thousand Only) comprising 20,000,000 (Twenty Million Only)
Equity Shares and no Convertible Preference Shares have been issued. At Closing,
all of the outstanding Equity Shares will be owned by the Equity Shareholders,
as set forth in Schedule I. Following Closing, all of the outstanding Equity
Shares will be owned by the Equity Shareholders, and all of the outstanding
Convertible Preference Shares will be owned by PIAC.
(b) As
of the
date hereof, the issued, subscribed and paid up capital of the Group Company
is
Rs. 500,000 of which 50,000 equity shares have been issued. At Closing, all
of
the issued and outstanding shares of the Group Company will be owned as set
out
in Schedule I.
9
(c) All
issued and outstanding Shares have been duly authorized and validly issued
and
allotted in compliance with Applicable Law, including without limitation
Applicable Laws concerning the issuance of securities, are fully paid and
non-assessable and free of all Liens.
(d) The
rights, preferences, privileges and restrictions of the Shares will be as stated
in the Articles, the Memorandum and the Transaction Agreements.
(e) The
Shares will be, as at Closing, duly authorized, validly issued, fully paid,
non-assessable and in compliance with the provisions of this Agreement and
Applicable Law. As at Closing, the Shares will be free of any Liens; provided,
however, that the Shares are subject to restrictions on Transfer as set forth
in
the Shareholders’ Agreement. As at Closing, except as set forth in the
Shareholders’ Agreement and the Articles, the Shares will not be subject to any
pre-emptive rights, rights of first refusal or any similar rights.
(f) Except
for the rights provided pursuant to this Agreement and the Shareholders’
Agreement, there are no options, warrants or other rights or agreements to
subscribe to, or based on the value of, any of the Company’s unissued share
capital. There are no other securities, including any bonds, debentures, notes
or other indebtedness of the Company which carry the right to vote (or
convertible into, or exchangeable for, securities having the right to vote)
on
any matters on which holders of shares of the Company may vote (“Voting
Company Debt”).
Except
as set forth above and in the Shareholders’ Agreement, as at Closing, there will
not be any options, warrants, rights, convertible or exchangeable securities,
“phantom” stock rights, stock appreciation rights, stock-based performance
units, commitments, agreements, arrangements or undertakings of any kind to
the
Company is a party or by which it is bound (i) obligating the Company to
issue or deliver, or cause to be issued or delivered, additional shares of
capital stock or other equity interests in, or any security convertible or
exercisable for or exchangeable into any capital stock of or other equity
interest in, the Company or any Voting Company Debt or (ii) obligating the
Company to issue, grant, extend or enter into any such option, warrant, call,
right, security, commitment, contract, arrangement or undertaking. As at
Closing, there will not be any outstanding contractual obligations of the
Company and / or the Group Company to repurchase, redeem or otherwise acquire
any shares.
Authorization
(a)
The
Company has all requisite power and authority to execute and deliver the
Transaction Agreements, to carry out and perform its obligations under the
terms
hereunder and to allot, issue and deliver the Convertible Preference Shares
hereunder. All action on the part of the Company necessary for the
authorization, execution, delivery and performance of the Transaction
Agreements, and the performance of all of the Company’s obligations thereunder,
has been taken or will be taken before the authorization, execution, delivery
and performance of the relevant Transaction Agreement.
(b) As
at
Closing, the Transaction Agreements, when executed and delivered by the parties
thereto, will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of
general application affecting enforcement of creditors’ rights generally and
(ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies or by general
principles of equity.
10
Material
Contracts
The
Company and / or the Group Company have not entered into any contract with
any
third parties that are material to the business, condition (financial or
otherwise), operations, performance, properties or prospects of the Company
and
/ or the Group Company,
except
for the contracts set out in Schedule III.
Intellectual
Property
(a)
The
Company and the Group Company own or possess the legal rights to the “Citius
Power” trade name and/or trademark and internet domain “xxxxxxxxxxx.xxx” (the
“Intellectual
Property”)
as is
necessary to the conduct of the business of the Company as currently conducted
and as currently proposed to be conducted, without any material conflict with
or
infringement of the rights of others.
(b)
All
the
Intellectual Property has been duly registered in, filed in or issued by the
appropriate Governmental Entity where such registration, filing or issuance
is
necessary for the conduct of the business of the Company as presently conducted
or as currently proposed to be conducted and the Company has the right to use
all of such Intellectual Property. The consummation of the transactions
contemplated by the Transaction Agreements do not and will not conflict with,
alter or impair any such rights. The Company has not received any communication
from any person asserting any ownership interest in any of the Company’s
Intellectual Property and, to the best knowledge of the Company and each
Promoter, as the case may be, no other person is violating, conflicting with
or
infringing the Intellectual Property of the Company.
(c) The
Company has not received any written notice that the conduct of its business
as
currently conducted or currently proposed to be conducted is violating or
infringing the Intellectual Property of any other person or entity. To the
best
knowledge of the Company and each Promoter, as the case may be, no such written
notice is expected or threatened and the conduct of its business as currently
conducted or currently proposed to be conducted does not and will not violate
or
infringe the Intellectual Property of any other person or entity.
(d) The
Company is not obligated to make any payments by way of royalties, fees or
otherwise to any owner or licensor of or claimant to any Intellectual Property
with respect to the use thereof in connection with the conduct of its business
as currently conducted or currently proposed to be conducted.
11
Title
to Properties and Assets; Liens
The
Company and the Group Company have good and marketable title to all its
properties and assets, and has good title to all its leasehold interests, in
each case free and clear of all Liens, except (i) Liens for current Taxes
(as defined below) not yet due and payable and (ii) Liens imposed by
Applicable Law. With respect to the property and assets it leases, the Company
and the Group Company are in compliance with such leases in all material
respects and holds a valid leasehold interest free of any Liens, subject to
clauses (i) and (ii) above. All facilities, machinery, equipment, fixtures,
vehicles and other properties owned, leased or used by the Company and the
Group
Company are in good operating condition and repair (ordinary wear and tear
excepted) and are reasonably fit and usable for the purposes for which they
are
being used.
Compliance
with Applicable Law and Other Instruments
The
Company and the Group Company are not in violation in any material respect
of:
(i) any term of the Articles or Memorandum; (ii) any Applicable Law in respect
of the conduct of its business or the ownership of its properties; or
(iii) any term or provision of any permit, license, agreement, contract,
mortgage, indebtedness, instrument, judgment, order or decree to which it is
party or by which it or its properties is bound. The Company and the Group
Company are not in violation in any material respect of any Applicable Law.
The
Company and the Group Company have not received any written communication that
alleges that it is not in compliance with any Applicable Law.
No
Conflicts
The
execution and delivery of the Transaction Agreements by the Company, the
performance by the Company of its obligations pursuant to the Transaction
Agreements, the consummation of the transactions contemplated by the Transaction
Agreements and the allotment, issuance and delivery of the Convertible
Preference Shares will not result in any violation of, or conflict with, or
constitute a default under, (i) the Articles or Memorandum, each as amended
to
date or (ii) any Applicable Law or, to the best knowledge of the Company and
each Promoter, as the case may be, result in the suspension, revocation,
impairment, forfeiture or non-renewal of any permit, license, authorization
or
approval applicable to the Company, its business or operations or any of its
assets or properties.
Litigation
There
are
no private and governmental actions, suits, proceedings, claims, arbitrations,
investigations or show cause notices pending or, to the best knowledge of the
Company and the Promoters, as the case may be, threatened against the Company,
the Group Company or their respective properties before any Governmental Entity.
The Company and / or the Group Company are not a party or subject to the
provisions of any order, writ, injunction, judgment or decree of any
Governmental Entity. There is no action, suit or proceeding initiated by the
Company or the Group Company currently pending or which the Company or the
Group
Company currently intends to initiate.
12
Consent
No
consent, approval or authorization of or designation, declaration or filing
(other than the filings set out in this Agreement) with any Governmental Entity
or third party on the part of the Company is required in connection with the
valid execution and delivery of the Transaction Agreements, the performance
by
the Company of its obligations thereunder, the allotment, issuance or delivery
of the Convertible Preference Shares or the consummation of any other
transaction contemplated by the Transaction Agreements, except such filings
with
Governmental Entities as may be required under Applicable Laws, which will
be
timely filed within the applicable periods therefor.
Permits
Each
of
the Company and the Group Company has all franchises, permits, licenses,
approvals and any similar authority (“Permits”)
necessary for the conduct of its business as now being conducted and as
currently planned to be conducted. The Company and the Group Company are
currently not in default under any of its Permits, and are in compliance with
all the material terms and conditions of its Permits, including payment of
any
license fees, amounts and charges thereunder to, and the making of filings,
reporting and submissions required to be made with, any Governmental Entity.
Neither the Company nor the Group Company has received written notice of any
suit, action or proceeding relating to the revocation or modification of any
of
its Permit and none of such Permits will be subject to suspension, modification,
revocation or non-renewal as a result of the execution and delivery of the
Transaction Agreements or the consummation of the transaction contemplated
therein.
Offering
The
allotment, issuance and delivery of the Convertible Preference Shares to be
issued in conformity with the terms of this Agreement, constitute transactions
exempt from the registration or qualification requirements of all applicable
securities laws in Mauritius, and none of the Company, the Group Company or
any
authorized agent acting on their behalf has taken or will take any action
hereafter that would cause the loss of such exemption. None of the Company,
the
Group Company or any agent on their behalf has solicited or will solicit any
offers to allot and issue or has offered to allot and issue or will offer to
allot and issue all or any part of the Shares to any person or persons so as
to
bring the allotment of such Convertible Preference Shares by the Company within
the registration provisions of all applicable securities laws in
Mauritius.
13
Voting
Rights
Other
than the Shareholders’ Agreement, no shareholder of the Company or the Group
Company has entered into any agreement with respect to the voting of its
shares.
Obligations
to Related Parties
No
employee, officer, director or stockholder of the Company nor any entity
controlled by any such individual or entity or in the case of an individual,
member of his or her immediate family, is indebted or obligated to the Company,
nor is the Company indebted or obligated (or committed to make loans or extend
or guarantee credit) to any of them other than (i) for payment of salary
for services rendered, (ii) reimbursement for reasonable expenses incurred
on behalf of the Company and (iii) for other standard employee benefits
made generally available to all employees. To the best knowledge of the Company
and each Promoter, as the case may be, none of such persons has any direct or
indirect ownership interest in any firm or corporation with which the Company
is
an Affiliate or has a business relationship, or any firm or corporation that
competes with the Company, except in connection with the ownership of stock
in
publicly-traded companies. To the best knowledge of the Company and each
Promoter, as the case may be, no employee, officer, director or stockholder,
nor
any member of their immediate families, is, directly or indirectly, interested
in any property or contract of the Company (other than as separately disclosed
in writing to PIAC and such contracts as relate to any such person’s ownership
of capital stock or other securities of the Company or the employment agreements
with the Company in the ordinary course of business).
Employees
Neither
the Company nor the Group Company is a party to any collective bargaining
agreements with respect to any of their employees. There is no labour strike,
dispute, slowdown or stoppage actually pending or threatened against or
affecting the Company or the Group Company. There is no industrial or trade
dispute or any dispute or negotiation regarding a claim with any trade union
that relates to or involves the Company or the Group Company. No employee of
the
Company or the Group Company has been granted the right to continued employment
or to any compensation following termination of employment. No current or former
director, officer or employee of the Company or the Group Company will be
entitled to (i) any severance, separation, change of control, termination,
bonus
or additional compensation or benefits or (ii) any acceleration of the time
of payment or vesting of any compensation or benefits or the forgiveness of
indebtedness owed by such current or former director, officer or employee,
in
each case as a result of the transactions contemplated by the Transaction
Agreements (alone or in connection with any other event) or in connection with
the termination of such person’s employment on or after Closing. The Company is
not aware that any officer, key employee or group of employees intends to
terminate his, her or their employment with the Company or the Group Company.
There are no actions pending or, to the best knowledge of the Company and the
Promoters, as the case may be, threatened by any former or current employee
concerning such person’s employment by the Company before any Governmental
Entity. Neither the Company nor the Group Company has violated any labour
laws.
14
Disclosure
Neither
the Transaction Agreements nor any other documents or certificates delivered
in
connection therewith, when taken as a whole, contain any untrue statement of
a
material fact or omit to state a material fact necessary to make the statements
contained herein or therein not misleading in any material respect in light
of
the circumstances under which they were made. The financial projections relating
to the proposed business of the Company and the Group Company delivered to
PIAC
were prepared on the basis of assumptions the Company and each Promoter, as
the
case may be, reasonably believed in good faith at the time of preparation to
be
reasonable and the Company and each Promoter, as the case may be, have no
knowledge of any fact or information that would lead it to believe that such
assumptions are incorrect or misleading in any material respect; it being
recognized by PIAC that such financial projections as they relate to future
events are not to be viewed as fact and that actual results during the period
or
periods covered by such financial projections may differ from the projected
results set forth therein.
Existing
Indebtedness
Neither
the Company nor the Group Company has any existing indebtedness except
liabilities arising or incurred in connection with the organisation of the
Company and the Group Company and financing efforts and in connection with
proposed asset acquisitions as separately disclosed in writing to
PIAC.
Financial
Statements
(a)
The
audited financial statements of the Company and the Group Company for the period
ended December 31, 2007 and a balance sheet of the Company as of February 28,
2008 (the “Financial
Statements”),
true
and correct copies of which have been provided to PIAC, have been prepared
in
conformity with International Financial Reporting Standards, consistently
applied and followed throughout the period indicated (except for any notes
to
the Financial Statements which indicate to the contrary therein), and on that
basis present fairly and accurately in all respects the financial condition,
and
results of operations and cash flows of the Company and the Group Company as
of
date and for the respective periods indicated.
(b) The
Company and the Group Company have no liabilities or obligations of any nature,
whether known or unknown, accrued, contingent or otherwise, except (i) for
liabilities and obligations in the respective amounts reflected or reserved
against in the Financial Statements and (ii) for liabilities and
obligations incurred in the ordinary course of business consistent with past
practice since.
(c) The
balance sheets reflected in the Financial Statements present true and complete
representations of the assets and liabilities of the Company and the Group
Company as of the dates specified therein.
15
(d) The
Company and the Group Company have established and maintains, adheres to and
enforces a system of internal accounting controls that are effective in
providing assurance regarding the reliability, completeness and accuracy of
financial reporting and the preparation of its Financial Statements in
accordance with Applicable Law and International Financial Reporting Standards.
(e) The
Company and the Group Company keep books, records and accounts in reasonable
detail that accurately and fairly reflect the acquisitions and dispositions
and
all other transactions and the value of inventory is calculated in accordance
with International Financial Reporting Standards.
Insurance
The
Company and the Group Company maintain policies of fire and casualty, liability
and other forms of insurance in such amounts, with such deductibles and against
such risks and losses as are, in its reasonable judgment, reasonable for the
business and assets. The Company and the Group Company are insured by
institutions that the Company believes to be financially sound and reputable
with insurance policies in full force and effect. All premiums due and payable
under all such policies have been paid. The Company and the Group Company are
in
no default with respect to any of the material provisions contained in any
such
insurance policy and has not failed to give any notice or present any claim
under any such insurance policy in due and timely fashion, and no notice of
cancellation or termination has been received with respect to any such policy
which has not been replaced on substantially similar terms prior to the date
of
such cancellation. The Company is not aware of any matters with respect to
which
it may claim under any such insurance policy. The consummation of the
transactions contemplated in the Transaction Agreements will not cause a
cancellation or reduction in the coverage of such policies. There are no
insurance claims and liabilities outstanding or otherwise payable to any Person
by the Company or the Group Company.
Business
Neither
the Company nor the Group Company has, since the date of incorporation, carried
on any business, conducted any operations or owned, directly or indirectly,
any
capital stock, membership interest, partnership interest, joint venture interest
or other equity interest in any other person.
Unlawful
Practices
None
of
the Company, the Group Company or any of their respective directors, officers,
agents, employees or any other persons acting on their behalf has, in connection
with the operation of the its business, (i) used any corporate or other
funds for unlawful contributions, payments, gifts or entertainment, or made
any
unlawful expenditures relating to political activity, to government officials,
candidates or members of political parties or organizations, or established
or
maintained any unlawful or unrecorded funds in violation of Applicable Law,
(ii) paid, accepted or received any unlawful contributions, payments,
expenditures or gifts, or (iii) violated or operated in non-compliance with
any export restrictions, anti-boycott regulations, embargo regulations or other
Applicable Laws.
16
Taxes
(a) |
As
used in this Agreement,
|
“Taxes”
means
all (i) federal, national, state and local, domestic and foreign, taxes,
assessments, duties or similar charges of any kind whatsoever, including all
corporate franchise, income, sales, service, use and occupation, ad
valorem,
receipts, value added, profits, wealth, license, withholding, employment,
excise, property, net worth, capital gains, transfer, stamp, documentary, social
security, payroll, environmental, alternative minimum, occupation, recapture
and
other taxes, and including any interest, penalties and additions imposed with
respect to such amounts; (ii) liability for the payment of any amounts of
the type described in clause (i) as a result of being a member of an affiliated,
consolidated, combined, unitary or aggregate group; and (iii) liability for
the
payment of any amounts as a result of an express or implied obligation to
indemnify any other person with respect to the payment of any amounts of the
type described in clause (i) or (ii).
“Taxing
Authority”
means
any federal, national, state or local, domestic or foreign, governmental body
(including any subdivision, agency or commission thereof), or any
quasi-governmental body, in each case, exercising regulatory authority in
respect of Taxes.
“Tax
Return”
means
all returns, declarations of estimated payments of Taxes, reports, estimates,
information returns and statements, including any related or supporting
information with respect to any of the foregoing, filed or to be filed with
any
Taxing Authority in connection with the determination, assessment, collection
or
administration of any Taxes.
(b)
|
The
Company and the Group Company have timely filed all Tax Returns required
to be filed in the manner prescribed by law. All such Tax
Returns are complete and correct in all material respects. The Company
and
the Group Company have timely paid all Taxes due from it with respect
to
the taxable periods covered by such Tax Returns and all other Taxes
for
which it is liable other than Taxes not yet due, for which adequate
reserves, in accordance with International Financial Reporting Standards,
have been established. The Company and the Group Company have no
liability
for any Taxes of any person other than itself (i) as a result of
being a
member of an affiliated, consolidated, combined, unitary or aggregate
group, (ii) as a transferee or successor or (iii) by contract or
otherwise.
|
17
(c)
|
No
Tax Return of the Company or the Group Company is or has ever been
under,
or, to the best knowledge of the Company and the Promoters, as the
case
may be, has been threatened with, audit or examination by any Taxing
Authority, and no written notice of such an audit or examination
has been
received.
|
(d)
|
No
Liens for Taxes exist with respect to any assets or properties of
the
Company or the Group Company.
|
(e)
|
There
is no Tax deficiency outstanding or assessed or proposed against
the
Company or the Group Company, nor has the Company or the Group Company
extended the period for the assessment or collection of any Tax.
|
(f)
|
Neither
the Company nor the Group Company is not a party to or bound by any
tax
sharing agreement, tax indemnity obligation or similar agreement,
arrangement or practice with respect to
Taxes.
|
(g)
|
The
Company and the Group Company have complied with all Applicable Laws
relating to the payment and withholding of Taxes (including withholding
against employees) and has, within the time and the manner prescribed
by
Applicable Law, withheld from and paid over to the proper Taxing
Authority
all amounts required to be so withheld and paid over under Applicable
Laws.
|
Foreign
Exchange Regulations
The
execution of this Agreement and the other Transaction Agreements and the
consummation of the transactions contemplated under this Agreement and the
other
Transaction Agreements is in compliance with all applicable foreign exchange
regulations and the issue, allotment and delivery of Convertible Preference
Shares to PIAC hereunder is permissible under the foreign exchange regulations
and requires no prior approvals from or filings with any Governmental
Entity.
Subsidiaries
Except
as
disclosed in Schedule IV, the Company does not own or control, directly or
indirectly, any equity interest in any Person.
7. |
Representations
and Warranties of
PIAC
|
PIAC
hereby represents and warrants to the Company, as of the date hereof and as
at
Closing, as follows:
18
Authorization
(a)
PIAC
has
all requisite power and authority to execute and deliver the Transaction
Agreements to which it is a party, to carry out and perform its obligations
under the terms thereunder and to subscribe to the Convertible Preference Shares
hereunder. All action on the part of PIAC necessary for the authorization,
execution, delivery and performance of the Transaction Agreements to which
it is
a party, and the performance of all of PIAC’s obligations thereunder, has been
taken or will be taken before Closing.
It is
specifically noted and understood that the authorisation of the shareholders
of
PIAC is required prior to PIAC subscribing to the Convertible Preference Shares
and transferring the funds necessary for the purchase of the Convertible
Preference Shares. PIAC intends to file the requisite proxy asking for such
approval.
(b) As
at
Closing, the Transaction Agreements to which PIAC is a party, when executed
and
delivered by the parties thereto, will constitute valid and legally binding
obligations of PIAC, enforceable in accordance with their terms, except:
(i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors’ rights generally; and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies or by general principles of equity.
(c) Subject
to shareholder approval as set out in Section 7.1(a), PIAC has the requisite
legal ability and possesses all requisite approvals to subscribe to the
Convertible Preference Shares. No consent, approval, authorization, order,
filing, registration or qualification of or with any court, Governmental Entity
or third person is required to be obtained by PIAC in connection with the
execution and delivery of this Agreement by PIAC or the performance of PIAC’s
obligations hereunder.
8. |
Indemnification
|
Indemnification
From
and
after Closing, the Company shall indemnify and hold harmless PIAC from and
against any and all actual losses, claims, damages, liabilities, fines,
penalties and reasonable fees and expenses but excluding any consequential
loss
or loss of profit (“Losses”)
to
PIAC in connection with or as a result of:
(a)
|
any
breach of, any representation or warranty of the Company or the Promoters
contained in this Agreement, or in any certificate, instrument, document
or agreement delivered by the Company or the Promoters pursuant to
this
Agreement or in connection with the transactions contemplated hereby,
or
any such representation or warranty being untrue or incorrect as
of the
applicable date;
|
(b)
|
the
failure by the Company to perform any covenant or agreement in this
Agreement or in any certificate, instrument, document or agreement
delivered by the Company, up to Closing, pursuant to or in connection
with
this Agreement,
|
19
(c)
|
any
and all actions, suits, proceedings, demands, assessments, judgments,
damages, awards, costs and expenses (including fees) incident to
any of
the foregoing or incurred in connection with the enforcement of the
rights
of PIAC under this Section 8.1 with respect to the
foregoing.
|
The
maximum liability of the Company to PIAC in connection with or resulting from
the causes set out in Section 8.1(a) shall be USD 35,000,000 (USD Thirty Five
Million Only), except that any Losses in connection with, or resulting from,
fraud shall not be subject to or included in such limits. There will be no
liability for any Loss unless the amount of any single head of Loss is at least
USD 150,000 (USD One Hundred and Fifty Thousand Only) and all Losses in
aggregate amount to at least USD 500,000 (USD Five Hundred Thousand
Only).
The
obligations of the Company under this Section 8 will survive the payment or
Transfer of any of the Shares or the enforcement, amendment or waiver of any
provision of this Agreement but shall expire twenty four (24) months after
Closing; provided, however, that claims of PIAC based on fraud shall survive
indefinitely, subject to Applicable Law, and, provided further, that the
Company’s obligations to indemnify and hold harmless shall not terminate with
respect to any item as to which PIAC shall have, before its expiration,
previously made a claim by delivering a written notice of such claim to the
Party to be providing the indemnification.
9. |
Miscellaneous
|
Termination
Notwithstanding
anything to the contrary in this Agreement, this Agreement may be terminated
and
the transactions contemplated by this Agreement abandoned at any time prior
to
Closing:
i.
|
by
mutual written consent of the Company and
PIAC;
|
ii.
|
by
the Company if any of the conditions set forth in Section 5 shall
have
become incapable of fulfilment, and shall not have been waived by
the
Company;
|
iii.
|
by
PIAC if any of the conditions set forth in Section 4 shall have become
incapable of fulfilment, and shall not have been waived by PIAC;
or
|
iv.
|
by
either the Company or PIAC, if Closing does not occur by May 15,
2008;
|
provided,
however,
that
the Party seeking termination pursuant to clause (ii), (iii) or (iv) is not
then
in material breach of any of its representations, warranties, covenants or
agreements contained in this Agreement.
20
(a)
|
In
the event of termination by the Company or PIAC pursuant to this
Section
9.1, written notice thereof shall forthwith be given to the other
Parties
and the transactions contemplated by this Agreement shall be terminated,
without further action by any Party.
|
(b)
|
If
this Agreement is terminated and the transactions contemplated hereby
are
abandoned as described in this Section 9.1, this Agreement shall
become
null and void and of no further force and effect, except for the
provisions of Sections 9.4, 9.7, 9.8, 9.9, 9.10 and 9.11. Nothing
in this
Section 9.1 shall be deemed to release any Party from any liability
for
any breach by such Party of the terms and provisions of this Agreement
prior to such termination or to impair the right of any Party to
compel
specific performance by any other Party of its obligations under
this
Agreement.
|
Advise
of Changes
The
Company shall promptly advise PIAC in writing of the occurrence of any Material
Adverse Effect.
Access
to Information
The
Company shall afford to PIAC and its accountants, counsel and other
representatives reasonable access, upon reasonable notice during normal business
hours during the period prior to Closing, to all the personnel, properties,
books, contracts, commitments, Tax Returns and records of the Company and,
during such period, shall furnish promptly to PIAC any information concerning
the Company, as PIAC may reasonably request.
Publicity
No
announcements or other disclosure concerning the transactions contemplated
by
this Agreement or any ancillary matter shall be made before Closing by any
Party
save in the form agreed between the Parties or where required by Applicable
Law
or regulation or any Governmental Agency or authority. The Parties shall consult
with each other in advance in connection with the content and timing of the
announcement to be made on the Effective Date and Closing.
Best
Efforts; Conduct of Business
(a)
On
the
terms and subject to the conditions of this Agreement, each Party shall use
its
best efforts to cause Closing to occur, including taking all reasonable actions
necessary to comply promptly with all legal requirements that may be imposed
on
it with respect to each Closing.
21
(b) From
the
Effective Date to Closing, each of the Company and the Group Company shall
conduct its business in the usual, regular and ordinary course in substantially
the same manner as previously conducted and use all reasonable efforts to keep
intact its business, keep available the services of its current employees and
preserve its relationships with customers, suppliers, licensors, licensees
and
others with whom it deals to the end that its business shall be unimpaired
at
the date of the valid and binding execution and delivery of the Shareholders’
Agreement. Without prejudice to the foregoing, from the Effective Date until
the
date that the Shareholders’ Agreement is in full force and effect, legal, valid,
binding and enforceable, neither the Company nor the Group Company shall take
and/or implement without approval of PIAC any of the following actions (except
for actions taken to implement, or in pursuance of, provisions of this Agreement
or the other Transaction Agreements):
(i)
|
Entry
into any new lines of business, which are unrelated to the business,
or
making any substantial change in the
business;
|
(ii)
|
Change
to the company’s constitutional
documents;
|
(iii)
|
Winding
up or liquidating the company or take any action in furtherance
thereof;
|
(iv)
|
Any
merger, consolidation, amalgamation, scheme or other similar transaction
involving the company;
|
(v)
|
The
sale of assets of the Company for consideration greater than USD
300,000
(USD Three Hundred Thousand Only) or the equivalent of the assets
of the
company except for the sale of products or services in the ordinary
course
of the business;
|
(vi)
|
Issuance
of additional securities, any recapitalization, reclassification
or other
change in the company’s capital structure, including changing the rights
and preferences of securities;
|
(vii)
|
Declaration
of any dividend or any buy back of securities of the
company;
|
(viii)
|
Issuance
or guarantee of any indebtedness or undertaking any leasehold obligations
by the company in excess of USD 25,000 (USD Twenty Five Thousand
Only);
|
(ix)
|
Entering
by the company or any subsidiary into any major agreements whose
total net
present value exceeds USD 50,000 (USD Fifty Thousand Only) or the
equivalent.
|
22
Post-Closing
Covenants
9.6 Unless
otherwise set forth in this Agreement, immediately after Closing, but in no
event later than five (5) Business Days from each Closing, the Company shall
make all applicable filings under Applicable Law.
Notices
9.7 Notices,
demands or other communication required or permitted to be given or made under
this Agreement shall be in writing and delivered by hand or sent by prepaid
post
with recorded delivery or by telefax to the intended recipient at its address
set forth herein, or to such other address or telefax number as each Party
may
from time to time duly notify to the others:
if
to the
Company:
Citius
Power Limited, x/x Xxxxx Xxxxxxx, Xxxxx 000 0xx Xxxxx, Xxxxxxx Xxxxx Building,
President Xxxx Xxxxxxx Street, Port Louis, Mauritius. Fax x000 000 0000 Attn:
Xx. Xxxxx Xxxxx;
with
a
copy to: Mr. L. Xxxxx Xxxxxx, Xxxxx & XxXxxxx, Xx.0 Xxxxxxx Xxxxx, Xxxxxxx
Xxxx, Xxxxxx XX0X 0XX, XX. Fax: x00 00 0000 0000 (Attn: Mr. L. Xxxxx Xxxxxx);
if
to
PIAC: 000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000, XXX. Fax + 0
000
000 0000
Attn:
Xx. Xxxxxx Xxxxxx;
if
to the
Promoters: Xx. Xxxx Xxxxxx and Xx. Xxxxxx Xxxxxxx, 618 Maker Xxxxxxxx V, Xxxxxxx
Xxxxx, Xxxxxx 000000, Xxxxx. Fax: x00 00 0000 0000
Any
such
notice, demand or communication shall, unless the contrary is proved, be deemed
to have been duly served at the time of delivery in the case of service by
delivery in person or by post, and at the time of dispatch in the case of
service telefax. For the avoidance of doubt, electronic mail shall not be a
valid means of making a communication required by this Section.
Governing
Law
9.8 This
Agreement shall be governed and interpreted by, and construed in accordance
with
English law.
Arbitration
9.9(a) Any
and
all disputes or differences, arising out of or in connection with this Agreement
or its performance shall, so far as it is possible, be settled amicably through
consultation between the disputing Parties.
(b) If
after
30 (thirty) days of consultation, the disputing Parties have failed to reach
an
amicable settlement, on any or all disputes or differences arising out of or
in
connection with this Agreement or its performance, such disputes or differences
shall be submitted to final and binding arbitration at the request of any of
the
disputing Parties upon written notice to that effect to the
other(s).
23
(c) Such
arbitration shall be in accordance with the Rules of Conciliation and
Arbitration of the International Chamber of Commerce and shall be held in
London. All proceedings of such arbitration shall be in the English
language.
(d) The
arbitration panel shall consist of three arbitrators, one each appointed by
the
disputing Parties and the two arbitrators so appointed shall agree on a
chairman.
(e) The
applicable procedural rules shall be the Rules of Conciliation and Arbitration
of the International Chamber of Commerce.
(f) Arbitration
awards rendered shall be final and binding and shall not be subject to any
form
of appeal. The losing Party shall pay all reasonable out-of-pocket expenses
(including, without limitation, reasonable attorneys’ fees) incurred by the
prevailing Party(ies), as determined by the arbitrators, in connection with
any
dispute unless the arbitrators direct otherwise.
(g) Any
controversy concerning whether a dispute is an arbitrable dispute, whether
arbitration has been waived or as to the interpretation or enforceability of
this Section 9.9 shall be determined by the arbitration panel.
Expenses
9.10 Each
Party shall bear its own expenses incurred in connection with this Agreement,
including all professional and advisory fees.
Survival
9.11 The
representations, warranties, covenants and agreements made in this Agreement
shall survive for the period indicated in Section 8.3 and shall not be limited
or otherwise affected by or as a result of any investigation made by any Party
hereto and the closing of the transactions contemplated hereby.
However,
any Party aware of a breach shall have the duty to notify the other Parties
promptly upon becoming so aware.
Assignment;
Benefit; Amendment and Waivers
9.12(a) Subject
to the provisions of the Shareholders’ Agreement, the rights and obligations
hereunder shall not be assignable without the prior written consent of the
other
Parties except that PIAC may assign its rights, obligations and duties hereunder
to any of its Affiliates without consent of the other Parties; provided
that the
assignee is bound by the Shareholders’ Agreement. Each of the Parties
understands, acknowledges and hereby affirms that such assignment may be by
novation that will release PIAC from all of its obligations and duties
hereunder.
24
(b) This
Agreement shall be binding upon and shall inure to the benefit of the Parties
hereto, and their respective successors and permitted assigns, and there shall
be no third-party beneficiaries to this Agreement.
(c) No
amendment or waiver of any provision of this Agreement will be valid and binding
unless it is in writing and signed, in the case of an amendment, by each Party
or, in the case of waiver, by the Party against whom the waiver is to be
effective.
Entire
Agreement
9.13 This
Agreement supersedes all prior discussions and agreements (whether oral or
written, including all correspondence), if any, between the Parties with respect
to the subject matter of this Agreement, and this Agreement (together with
any
amendments or modifications thereof) contains the sole and entire agreement
between the Parties hereto with respect to the subject matter hereof, subject
to
the Shareholders’ Agreement.
Severability
9.14 Any
provision of this Agreement which is invalid or unenforceable shall be
ineffective to the extent of such invalidity or unenforceability, without
affecting in any way the remaining provisions hereof.
Counterparts
9.15 This
Agreement may be executed in any number of counterparts, all of which together
shall constitute a single instrument.
Specific
Performance
9.16 This
Agreement shall be specifically enforceable at the instance of any Party. The
Parties agree that any Party not in default will suffer immediate, material,
immeasurable, continuing and irreparable damage and harm in the event of any
material breach of this Agreement and the remedies at law in respect of such
breach will be inadequate (each Party hereby waives the claim or defense that
an
adequate remedy at law is available) and that such Party shall be entitled
to
seek specific performance against the Party in default for performance of its
obligations under this Agreement in addition to any and all other legal or
equitable remedies available to it.
Further
Actions
9.17(a) Each
of
the Parties shall execute and deliver all such future instruments and take
such
other and further action as may be reasonably necessary or appropriate to carry
out the provisions of this Agreement and the intention of the Parties as
expressed herein.
25
(b) As
soon
as possible after the Effective Date, the Company shall furnish to PIAC the
audited financial statements of the Company and the Group Company for the period
ended December 31, 2007 and a balance sheet of the Company as of February 28,
2008.
Third
Party Rights
9.18 No
Person
other than a Party may enforce this Agreement by virtue of the Contracts (Rights
of Third Parties) Xxx 0000.
Headings;
Schedules
9.19 All
Article and Section headings herein are for convenience of reference only and
are not part of this Agreement, and no construction or inference shall be
derived therefrom. The Schedules attached hereto and referred to herein are
a
part of this Agreement as if fully set forth herein. All references to Sections
and Schedules shall be deemed references to such parts of this Agreement, unless
the context shall otherwise require.
[THE
REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
26
IN
WITNESS WHEREOF,
the
Parties have entered into this Agreement the day and year first above
written.
Citius
Power Limited
|
|
By:
|
/s/
Xxxx Xxxxxx
|
Name:
|
Xxxx Xxxxxx |
Title:
|
CEO |
By:
|
/s/ Xxxxxx X. Xxxxxx |
Name:
|
Xxxxxx X. Xxxxxx |
Title:
|
President |
Xxxx
Xxxxxx
|
/s/ Xxxx Xxxxxx |
Xxxxxx
Xxxxxxx
|
/s/
Xxxxxx Xxxxxxx
|
27
SCHEDULE
I
PROMOTERS
Promoter
Name
|
Indirect
Holding of Equity Shares on Effective Date (%)
|
Xxxx
Xxxxxx
|
47.5
|
Xxxxxx
Xxxxxxx
|
47.5
|
EQUITY
SHAREHOLDERS
Shareholder
Name
|
Holding
of Equity Shares on Effective Date (%)
|
RSK
Holdings (BVI) Limited
|
47.5
|
DVK
Holdings (BVI) Limited
|
47.5
|
Xxxxx
Xxxxxxxxxx
|
5
|
TOTAL
|
100%
|
CITIUS
POWER INDIA
Shareholder
Name
|
Number
of Shares held at Closing
|
Percentage
of Equity Shares held at Closing
|
Citius
Power Limited, Mauritius
|
49,994
|
99.99
|
Xxxx
Xxxxxx
|
0
|
<0.01
|
Xxxxxxxx
Xxxxxx
|
0
|
<0.01
|
Rama
Xxxxxxx Xxxxxxxx
|
1
|
<0.01
|
Xxx
Xxxxxxxx
|
1
|
<0.01
|
Sree
Xxxxx Xxxxxx
|
1
|
<0.01
|
Xxxxxxxx
Xxxxxx
|
0
|
<0.01
|
TOTAL
|
50,000
|
100%
|
28
SCHEDULE
II
DEFINITIONS
“Affiliate”
shall
mean with respect to any Person, any company, corporation, association or other
entity, which, directly or indirectly, Controls, is Controlled by or is under
Common Control with, such Person. If such Person is an individual, the term
Affiliate shall include the spouse and lineal ascendants and descendants of
such
Person;
“Applicable
Law” shall
mean any statute, law, regulation, ordinance, rule, judgment, order, decree,
by-law, approval from the concerned authority, government resolution, directive,
guideline, policy, requirement, or other governmental restriction or any similar
form of decision of, or determination by, or any interpretation or adjudication
having the force of law of any of the foregoing as may from time to time be
the
case in the jurisdictions of India, Mauritius, or any other jurisdiction in
which the Company carries out a material part of its business or in which the
Company owns any material asset or assets;
“Articles
of Association” or
“Articles”
shall
mean the Articles of Association of the company, as amended;
“Board
of Directors” or
“Board”
shall
mean the Board of Directors of the Company in office at applicable times and
as
appointed in accordance with the terms of the Shareholders’
Agreement;
“Business
Day” shall
mean a day on which the scheduled commercial banks are open for business in
Mauritius and New York;
“Control”,
“Controlled” or “Common Control” for
these
purposes shall mean the power to direct the management and policies of a Person
whether through the ownership of over 50% of the voting power of such Person,
through the power to appoint more than half of the members of the board of
directors or similar governing body of such Person, through contractual
arrangements or otherwise;
“Convertible
Preference Shares” shall
mean convertible preference shares of the Company, of face value USD 10 each,
issued in accordance with the terms and conditions of this Agreement and as
set
out in Schedule V;
“Director”
shall
mean a director of the Company or his or her alternate director appointed in
accordance with the provisions of the Shareholders’ Agreement;
“Equity
Shares” shall
mean the Class A Ordinary Shares of the Company with no par value;
“Equity
Shareholders” shall
mean holders of the Equity Shares;
29
“Fully
Diluted Basis”
means
the total of all classes and series of Equity Shares outstanding on a particular
date, combined with all options (that have been granted), warrants, convertible
securities of all kinds, including the Convertible Preference Shares, debentures
or any other arrangements relating to the Company’s equity, and the effect of
any anti-dilution protection regarding previous financings, all on an “as if
converted” basis. For the purpose of this definition, “as if converted” basis
shall mean as if such instrument, option or security had been issued and
converted into Equity Shares;
“Governmental
Entity” shall mean
any
agency, commission, authority, central bank, department, legislature, minister,
ministry, official or public, regulatory or statutory Person or state-owned
organization (whether autonomous or not) of, the government of, that state
or
any political sub-division in or of that state, any Person who in any capacity
whatsoever then owns, holds, administers or controls any of the reserves of
that
state, any court, tribunal or judicial body or any other governmental authority
or instrumentality, in each case, domestic or foreign;
“Group
Company” shall
mean and include Citius Power India;
“IPO”
shall
mean an initial public offering of Shares or other securities (including
depository receipts), either domestic or overseas, of the Company and consequent
listing of the Shares or other securities of the Company on one or several
stock
exchanges, domestic or overseas with minimum offering proceeds of at least
Rupees 1,500,000,000;
“Liens”
shall
mean all mortgages, liens, security interests, charges, easements, leases,
subleases, covenants, rights of way, options, claims, restrictions or
encumbrances of any kind;
“Liquidity
Event” shall
mean any of: (a) an IPO; or (b) a trade or a strategic sale of the
Company;
“Memorandum”
shall
mean the Memorandum of Association of the company, as amended;
“Person”
shall
mean any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, company, institution,
public benefit corporation, other entity, government (whether federal, central,
state, county, city, municipal, local, foreign, or otherwise, including any
instrumentality, division, agency, body or department thereof), Governmental
Entity or any other entity that may be treated as a person under Applicable
Law;
“Rupees”
or
“Rs.”
shall
mean the lawful currency of the Republic of India;
“Share
Capital” shall
mean the total paid up share capital of the Company determined on a Fully
Diluted Basis taking into consideration the Equity Shares, the Convertible
Preference Shares and any other securities of the Company, entitled to vote
generally in any General Meeting which is called to seek shareholder approval
or
in any other circumstances upon which a vote, consent or other approval
(including by written consent) is sought from the shareholders of the
Company;
30
“Shareholders”
shall
mean the shareholders of the Company;
“Shareholders’
Agreement”
shall
mean the shareholders’ agreement of even date between the Company, PIAC and the
Promoters;
“Shares”
shall
mean the Equity Shares, the Convertible Preference Shares and any other equity
securities into which such shares are reclassified or reconstituted;
“Transaction
Agreements” shall mean
the
Shareholders’ Agreement and the Subscription Agreement;
“Transfer”
shall
mean to directly or indirectly transfer, sell, assign, pledge, hypothecate,
create a security interest in or lien on, place in trust (voting or otherwise),
transfer by operation of law or in any other way subject to any encumbrance
or
dispose of, whether or not voluntarily;
“US
Dollars”
or
“USD”
or
“$”
shall
mean the lawful currency of the United States.
31
SCHEDULE
III
MATERIAL
CONTRACTS
32
SCHEDULE
IV
SUBSIDIARIES
1.
|
Citius
Power Limited (“Citius
Power India”).
|
33
SCHEDULE
V
TERMS
OF ISSUE OF CONVERTIBLE PREFERENCE SHARES
The
terms
of issue contained herein shall apply to the Convertible Preference Shares
issued at par pursuant to this Agreement.
1. |
Definitions
|
Capitalised
terms not defined herein shall have the meaning as set out in the
Agreement.
2. |
Voting
|
The
Convertible Preference Shares shall be entitled to the same voting rights as
are
available to the Equity Shares.
3. |
Dividends
|
The
Convertible Preference Shares shall not be entitled to any
dividend.
4. |
Conversion
|
(a)
|
PIAC
shall have the right to convert the Convertible Preference Shares,
at its
option, at any time after twenty four (24) months following Closing,
if an
IPO or any other Liquidity Event has not taken place; provided however,
the Convertible Preference Shares shall mandatorily convert into
Equity
Shares at the time of the IPO or the occurrence of any other Liquidity
Event, whichever is earlier.
|
(b)
|
The
Convertible Preference Shares owned by PIAC shall be converted into
Equity
Shares in the ratio of 8.25 Equity Shares for every Convertible Preference
Share, which if converted at Closing would represent 65% of the Share
Capital.
|
5. |
Liquidation
Preference
|
(a)
|
Subject
to Applicable Law (in particular the provisions of the Act), in the
event
of a liquidation, dissolution or winding-up (voluntary or otherwise)
(“Liquidation
Event”)
the holders of the Convertible Preference Shares will be entitled
to
receive in priority of, and in preference to, the holders of any
other
shares of the Company, an amount per Convertible Preference Share
equal to
the Aggregate Subscription Price (“Liquidation
Preference”).
|
(b)
|
If,
upon the occurrence of such a Liquidation Event, the assets of the
Company
are not sufficient to permit the payment of the Liquidation Preference
in
full to all of the holders of Convertible Preference Shares, then
the
entire assets of the Company available for distribution (after repayment
of debt) shall be distributed rateably among the holders of the
Convertible Preference Shares.
|
6. |
Notices
|
Any
notice or other communication given or made in respect of the Convertible
Preference Shares or the exercise of any right in relation to them or any amount
payable in respect of them shall be given in the same manner as a notice is
required to be given to the holders of the Convertible Preference Shares
pursuant to this Agreement.
34