SHARE PURCHASE AGREEMENT

BETWEEN

XYZ LTD
ABC LTD
AND
______________________________________
[]

Dated October [], 2007

TABLE OF CONTENTS
Section

Page No

ARTICLE I.........................................................................................................................
Definitions and Interpretation..........................................................................................
Section 1.1. Definition and Interpretations...............................................................
ARTICLE II.......................................................................................................................
Purchase of the Purchase Shares......................................................................................
ARTICLE III......................................................................................................................
Closing and Deliveries.......................................................................................................
Section 3.1. Closing....................................................................................................
Section 3.2. Closing Date............................................................................................
Section 3.3. Closing Agenda.......................................................................................
ARTICLE IV......................................................................................................................
Conditions Precedent.........................................................................................................
ARTICLE V.......................................................................................................................
Covenants and Undertakings of the Company and/or the Seller .................................
Section 5.1. Contract before Closing...........................................................................
Section 5.2. Notification of Material Event................................................................
Section 5.3. Amendment of Charter Documents........................................................
Section 5.4. No Favorable Terms..............................................................................
Section 5.5. Post Closing Obligations.......................................................................
Section 5.6. Taxes.......................................................................................................
Section 5.7. Exercise of Voting Rights......................................................................
Section 5.8. Post IPO Adjustment.............................................................................
Section 5.9. Repatriation.............................................................................................
ARTICLE VI....................................................................................................................
Covenants and Undertakings of the Purchaser ............................................................
ARTICLE VII...................................................................................................................
Rights of the Purchaser During the Special Rights Period..........................................
Section 7.1. Anti Dilution.........................................................................................
Section 7.2. Information Rights...............................................................................
Section 7.3. Access Rights........................................................................................
ARTICLE VIII.................................................................................................................
Rights of the Purchaser in the Event that the Proposed IPO is not completed
prior to the final IPO Date..............................................................................................

Page ii of 38

ARTICLE IX....................................................................................................................
Representation and Warranties......................................................................................
ARTICLE X.....................................................................................................................
Indemnification................................................................................................................
Section 10.1. Indemnification Obligation..................................................................
ARTICLE XI....................................................................................................................
Confidentiality..................................................................................................................
ARTICLE XII..................................................................................................................
Intent and Effect of this Agreement...............................................................................
ARTICLE XIII.................................................................................................................
Costs and Expenses..........................................................................................................
ARTICLE XIV.................................................................................................................
Sunset Clause....................................................................................................................
ARTICLE XV..................................................................................................................
Notices...............................................................................................................................
Section 15.1. Service of Notice.................................................................................
Section 15.2. Details for Notices..............................................................................
ARTICLE XVI.................................................................................................................
Termination......................................................................................................................
ARTICLE XVII...............................................................................................................
Governing Law, Jurisdiction and Dispute Resolution..................................................
Section 17.1. Governing Law...................................................................................
Section 17.2. Jurisdiction.........................................................................................
Section 17.3. Dispute Resolution..............................................................................
ARTICLE XVIII..............................................................................................................
Miscellaneous Provisions ................................................................................................
Section 18.1. Not a Promoter...................................................................................
Section 18.2. No Partnership or Agency.................................................................
Section 18.3. Announcements.................................................................................
Section 18.4. Entire Agreement...............................................................................
Section 18.5. Amendments.......................................................................................
Section 18.6. Further Assurances...........................................................................
Section 18.7. Assignment.........................................................................................
Section 18.8. Change in Law...................................................................................
Section 18.9. Severability.........................................................................................
Section 18.10. Waivers and Remedies......................................................................
Section 18.11. Counterparts......................................................................................

Page iii of 38

SIGNATURE PAGES......................................................................................................
ANNEXURES..................................................................................................................
ANNEXURE 1..................................................................................................................
Promoters of Company.............................................................................................
ANNEXURE 2.................................................................................................................
Capital Structure of the Company...........................................................................
ANNEXURE 3..................................................................................................................
Warranties.................................................................................................................

Page iv of 38

SHARE PURCHASE AGREEMENT

THIS SHARE PURCHASE AGREEMENT is made on this ___ day of October,
2007:
BETWEEN:
(1)

XYZ LTD, a company incorporated in India under the provisions of the

Companies Act, 1956, having its registered office, India and having its (the
Seller which expression shall, unless it be repugnant to the context or
meaning thereof, be deemed to mean and include its successors and permitted
assigns) of the ONE PART;

(2)

ABC LTD, a company incorporated in India under the provisions of the

Companies Act, (the "Company", which expression shall, unless it be
repugnant to the context or meaning thereof, be deemed to mean and include
its successors and permitted assigns) of the SECOND PART.
AND

(3)

_________________________________________________, a company
incorporated under the laws of Mauritius and having its office at ______
______________ __________ _______________________ (the "Purchaser",
which expression shall, unless it be repugnant to the context or meaning
thereof, be deemed to mean and include its successors in office and assigns) of
the THIRD PART;
The Seller, Purchaser and the Company may, wherever the context so permits,
be referred to as Parties and individually as a Party.

WHEREAS
A.

The Company is a public limited company engaged in the business of

operating commodities exchanges in terms of Section 2(a) of Forward
Contracts (Regulation) Act, 1952 and its Charter Documents. The Companys
equity shares are currently not listed on any stock exchange;

B.

The capital structure of the Company, as on 30 June, 2007, is as provided in

Annexure 2 hereto;

C.

The Company is promoted by the Promoters (as defined hereinafter), and,

currently, the Promoters, which include the Seller, legally and beneficially
own Equity Shares as more particularly set out in Annexure 1 hereto and are

in Control (as defined hereinafter) of the Company and the management of

the Company;
D.

The Seller has discussed with the Purchaser and the Company, the sale, by the
Seller to the Purchaser, of certain equity shares of the Company currently
owned by the Seller;

E.

The Purchaser has agreed to acquire the shares from the Seller, upon the terms
and subject to the conditions contained herein;

F.

Upon purchase of the equity shares of the Company from the Seller, the
Purchaser will be a minority shareholder of the Company, with certain rights
as detailed in this Agreement; and

G.

The Parties are entering into this Agreement in order to set out the rights and
obligations of the Parties in relation to the acquisition of the Purchase Shares
(as defined hereinafter) by the Purchaser and other matters in connection
therewith, which they agree will be interpreted, acted upon and governed
solely in accordance with the terms and conditions of this Agreement.

THE PARTIES HERETO AGREE AS FOLLOWS:

1

DEFINITIONS AND INTERPRETATION

1.1

Definitions. In this Agreement, unless the context otherwise requires, the

following expressions shall have the following meanings:
"Act" means the Companies Act, 1956 (1 of 1956), as amended from time to
time and shall include any statutory replacement or re-enactment thereof;
"Affiliate" shall mean and include, in respect of a Party, any Person existing as
of the date of this Agreement or at any time in the future:
(a)
(b)

who Controls, is Controlled by, or is under the common Control of,

the relevant Party; or
where 50% or more of the voting securities of the Party are directly or
indirectly owned, legally and beneficially, by such Person;

"Agreement" means this Share Purchase Agreement together with its

annexures and schedules, as may be amended from time to time in accordance
with the provisions contained herein;
"Board" means the board of directors of the Company which shall be deemed

Page 2 of 38

to include any Committee of the Board;

"Business Day" means any day excluding Saturdays and Sundays and
holidays declared under the provisions of the Negotiable Instruments Act,
1881;
"Charter Documents" mean the Memorandum of Association and the Articles
of Association, or equivalent under applicable law;
"Claim" shall have the meaning ascribed to it in Clause 10.1.1;
"Confidential Information" means any and all confidential or proprietary
information and materials, as well as all trade secrets, belonging to a Party to
this Agreement and/or its Affiliates or customers which is furnished to the
other Party(s) to this Agreement (the Receiving Party), in relation to or
pursuant to this Agreement, with expectations of confidentiality to the extent
the Receiving Party(s) knows or reasonably should know of such expectations,
regardless of whether such information or material is expressly identified as
confidential or proprietary or not or whether it is stored in any medium or not.
Parties agree that such Confidential Information may include
(a)

technical information and materials, including but not limited to

computer programs, software, databases, methods, know-how,
formulae, compositions, molecular compositions, technological data,
technological prototypes, processes, discoveries, machines, inventions,
and similar items;

(b) business information and materials, including but not limited to financial
information, business plans, business proposals, customer contract
terms and conditions, pricing and bidding methodologies and data,
sales data, customer or Purchaser lists, customer or contact
information, customer preferences and other business information,
supplier lists, supplier contact information, supplier preferences and
other business information, vendor lists, vendor contact information,
vendor preferences and other business information, business partner
lists, business partner contact information, business partner preferences
and other business information, and similar items;
(c)

information and materials relating to future plans, including but not

limited to marketing strategies, new materials research, pending
projects and proposals, proprietary production processes, research and
development strategies, and similar items;

(d)

personnel information and materials, including but not limited to

employee lists and contact information, employee performance

Page 3 of 38

information, employee compensation information, recruiting sources,

contractor and consulting information, contacts, and cost, and similar
information;
(e)

any information or material that gives the Company (or other discloser
of information, as applicable) an advantage with respect to its
competitors by virtue of not being known by those competitors;

(f) original information supplied by the Company, the Subsidiaries or the

Purchaser;
(g) information relating to the Company or the Subsidiaries or the Purchaser
which is obtained whether (without limitation) in writing, pictorially,
in machine-readable form, on floppy diskettes or orally, and whether or
not marked "confidential" by any Party or its representatives from
either the Company, the Subsidiaries or any of their representatives, in
each case in connection with the business relationship between the
Company, the Subsidiaries, and the Purchaser;
(h) other valuable, confidential information and materials and/or trade secrets
that are customarily treated as confidential or proprietary, whether or
not specifically identified as confidential or proprietary;
Provided, however that, no information shall constitute a Confidential
Information if it is independently developed by a Receiving Party or its
Affiliates or was otherwise publicly known and/or is in the public domain at
the time when it is disclosed to the Receiving Party(s), or comes into the
public domain due to no fault of the Receiving Party(s);
"Control" together with its grammatical variations when used with respect to
any Person, means and includes the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of the vote carrying securities, by contract or otherwise howsoever;
"Designated Account" shall have the meaning ascribed to it in Clause 3.3.1;
"Designated Bank Account" shall have the meaning ascribed to it in Clause
3.3.2;
"Dispute" shall mean any dispute, controversy or claim between the Parties
arising out of or in connection with this Agreement, including the breach,
termination or invalidity thereof;
"Equity Shares" means the issued and fully paid up equity shares of the
Company, having a face value of Rs.10/- (Rupees ten only) each;

Page 4 of 38

"Encumbrance" means any encumbrance including but not limited to any

claim, mortgage, pledge, charge (fixed or floating), hypothecation, lien,
deposit by way of security, bill of sale, option or right of pre-emption,
beneficial ownership, right of retention of title or any form of security interest
or any obligation (including any conditional obligation) to create any of the
same, including without limitation, any discretion on the use, voting, transfer,
receipt of income or other attributes of ownership;
"Excess Purchase Price" means such amount in Rupees as is determined in
accordance with Clause 5.8;
Final Closing means Transfer of title of the Purchase Shares in favour of the
Purchaser;
Final Closing Date shall have the same meaning ascribed to it in Clause 3.4
hereto;
"Final IPO Date" means one year from the date of execution of this
Agreement or such other date as may be mutually agreed upon by the Parties.
The Parties agree that Final IPO Date shall be the date prior to which
allotment of Shares, issued pursuant to the IPO of the Company, should be
completed;
"Financial Year" means the twelve month period commencing on April 1 of a
calendar year and ending on March 31 of the immediately succeeding calendar
year;
"Fully-Diluted" means the total of all classes and series of shares outstanding
on a particular date, combined with all options (issued and un-issued), options
under the Employee Stock Option Scheme (issued and unissued), warrants
(both issued and un-issued), convertible securities of all kinds, any other
arrangements relating to the Company's equity, and the effect of any antidilution protection regarding previous financings, all on an "as if converted"
basis;
"Governmental Authority" means and includes the President of India, the
Government of India, the Governor and the Government of any State in India,
any Ministry or Department of any of the foregoing or any governmental or
political subdivision thereof, any legislative, executive, governmental or
administrative body or agency, municipality or any local or other authority,
trade agency, regulatory authority, court, tribunal or arbitral tribunal,
exercising powers conferred by law in India or any other applicable
jurisdiction (including the jurisdictions in which the Company and/or its

Page 5 of 38

Subsidiaries are incorporated and/or carry on any business or activities), and

shall include, without limitation, the Securities and Exchange Board of India
("SEBI"), the Reserve Bank of India ("RBI"), Forward Markets Commission
and the Foreign Investment Promotion Board ("FIPB");
"Government Approvals" means any consent, approval, authorization, waiver,
permit, grant, franchise, concession, agreement, license, certificate,
exemption, order, registration, declaration, filing, report or notice, of, with or
to any Governmental Authority;
"Initial Closing" means the deposit of the Purchase Shares by the Seller with
the Purchaser, and the deposit of Purchase Price by the Purchaser with the
Seller;
"Initial Closing Date" shall have the meaning ascribed to it in Clause 3.2;
"Intellectual Property" means and includes any registered and/or applied for
registration and pending, patents, trademarks, service marks, designs,
copyrights, moral rights and neighbouring rights, trade or business names,
internet domain names, inventions, processes, geographical indications, trade
secrets, know-how, integrated circuits, exploitation of any present or future
technologies, proprietary information, and other industrial property rights;
"IPO" means an offering to the public, in any applicable jurisdiction, of the
Equity Shares of the Company and listing of the Equity Shares on recognised
stock exchanges in India, of which at least one must be either the Bombay
Stock Exchange Limited or the National Stock Exchange of India Limited;
"Losses" means and includes all losses, claims, costs, and damages (whether
direct, indirect, general or special, absolute, accrued, conditional or otherwise
and whether or not resulting from third party claims), including interests and
penalties with respect thereto and out-of-pocket expenses, including
reasonable attorneys' and accountants' fees and disbursements;
"Material Adverse Effect" means any:
(a)

event, occurrence, fact, condition, change, development or effect that

is or may be materially adverse to the business, operations, prospects,
condition (financial or otherwise), substantial properties (whether
tangible or intangible) or liabilities of the Company or any of its
Subsidiaries; or

(b)

material impairment of the ability of the Company or the Seller to

perform their obligations hereunder.

Page 6 of 38

"Person" means any individual, corporation, company, partnership, limited

liability company, joint venture, association or trust or any other entity or
organisation;
"Promoters" means the Persons mentioned under Annexure 1 hereto;
"Purchase Price" means a sum of Rs. XXXXXXXXXXonly to be paid by the
Purchaser to the Seller as an aggregate consideration for the purchase of the
Purchase Shares.
"Purchase Shares" means the _________ Equity Shares each currently held by
the Seller and representing five (_) % of the Fully Diluted equity share capital
of the Company;
"Revised Purchase Price" shall have the meaning ascribed to it in Clause 5.8;
"Rupees" or "Rs." means the currency of the Republic of India;
"Special Rights Period" means the period commencing on the Initial Closing
Date until the Final Closing Date;
"Subsidiary" shall have the meaning ascribed to such term under the Act;
"Tax" or "Taxation" means all forms of taxation, duties, levies, imposts and
social security charges, including without limitation corporate income tax,
wage withholding tax, stamp duties payable in any jurisdiction, fringe benefit
tax, provident fund, employee state insurance and gratuity contributions, value
added tax, customs and excise duties, and other legal transaction taxes,
dividend withholding tax, real estate taxes, other municipal taxes and duties,
environmental taxes and duties and any other type of taxes or duties in any
relevant jurisdiction, together with any interest, penalties, surcharges or fines
relating thereto, due, payable, levied, imposed upon or claimed to be owed in
any relevant jurisdiction;
"Transfer" shall mean (in either the noun or the verb form including, with
respect to the verb form, all conjugations thereof within their correlative
meanings) with respect to any Purchase Shares, the sale, assignment, transfer,
conveyance, setting over, or delivery (whether for or without consideration,
whether directly or indirectly, and whether voluntary, involuntary or by
operation of law) of any such Purchase Shares and all interest therein;
"US$" or "USD" means the currency of the United States of America.
"Warranties" means the representations and warranties provided by the
Company and the Seller, including those set out in Clause 10 (Representations

Page 7 of 38

and Warranties) and Annexure 3 hereto.

2

PURCHASE OF THE PURCHASE SHARES

2.1

Upon the terms and subject to the conditions set forth in this Agreement, in
consideration of the mutual rights and obligations of the Parties hereunder and
relying on the Warranties, undertakings and indemnities to and for the benefit
of the Purchaser under this Agreement, the Purchaser agrees to purchase, and
the Seller agrees to transfer and deliver, the Purchase Shares, free and clear of
all Encumbrances and with all attached and accrued rights, for the
consideration of, as full and final payment for the Purchase Shares, the
Purchase Price, to the Purchaser.

2.2

The Purchase Shares transferred to the Purchaser by the Seller shall rank pari
passu with the other Equity Shares of the Company in all respects, including,
entitlement to receive proportionately the dividends and other distributions
declared or to be declared in respect of the equity capital of the Company.

CLOSING AND DELIVERIES

3.1

Initial Closing. Subject to the terms and conditions of this Agreement, the
Initial Closing shall take place at 10 A.M. (Indian Standard Time) on the
Initial Closing Date at Mumbai or such other place as the Seller and the
Purchaser may mutually agree.

3.2

Initial Closing Date. Subject to the terms and conditions of this Agreement,
the Initial Closing shall occur on a date (the "Initial Closing Date") which
shall be 3 (three) Business Days after the satisfaction and/or waiver of all the
Initial Conditions Precedent set forth under Clause 4.1, or such other date,
time and place as may be mutually agreed between the Seller and the
Purchaser.

3.3

Initial Closing Agenda. On the Initial Closing Date, the following events shall
take place:

3.3.1

The Seller shall transfer the Purchase Shares to such dematerialised account of
the Purchaser with the Purchasers depositary as the Purchaser may designate
(Designated Account); provided, however, that written notice regarding
details of such designated dematerialised account shall be sent to the Seller at
least 2 (two) Business Days prior to the Initial Closing Date.
The Purchaser does hereby agree, and confirm that pending the Final Closing;
the Purchaser shall hold the Purchase Shares, deposited by the Seller with the
Purchaser on the Initial Closing Date, in escrow for the period from the Initial

Page 8 of 38

Closing Date till the Final Closing Date. The Purchaser does hereby further
agree, declare and confirm that the Purchase Shares shall not be deemed to
have absolutely vested in the Purchaser till the Final Closing occurs. In the
event, the Final Closing does not occur on or before the Final Closing Date,
the consequences as set out in Clause 8 shall follow.
3.3.2

Upon receiving the Purchase Shares in the Designated Account, the Purchaser
shall transfer the Purchase Price by telegraphic transfer to such bank account
of the Seller that has been notified to the Purchaser in writing on the corporate
letterhead of the Seller by its authorised signatory at least 3 (three) Business
Days prior to the Initial Closing Date (Designated Bank Account).
The Seller does hereby agree, and confirm that pending the Final Closing the
Seller shall be holding the Purchase Price, deposited by the Purchaser with the
Seller on the Initial Closing Date, in escrow for the period from the Initial
Closing Date till the Final Closing Date. The Seller does hereby further agree,
declare and confirm that the Purchase Price shall not be deemed to have
absolutely vested in the Seller till the Final Closing occurs. In the event, the
Final Closing does not occur on or before the Final Closing Date, the
consequences as set out in Clause 8 shall follow.

3.3.3

The Purchaser shall provide to the Seller, an acknowledgement receipt

evidencing receipt by the Purchaser of the Purchase Shares in the Designated
Account.

3.3.4

The Seller shall provide to the Purchaser, an acknowledgement receipt, in a

form and manner acceptable to the Purchaser, evidencing receipt by the Seller
of the Purchase Price in the Designated Bank Account.

3.4

Final Closing: the Final Closing Shall deemed to have taken place
immediately on date of receipt of an intimation from the Company by the
Purchaser and the Seller that the red herring prospectus has been filed by the
Company with Securities and Exchange Board of India and the Registrar of
Companies in respect of IPO of the Companys Equity Shares, which shall, in
no case, be later than Final IPO Date (Final Closing Date). For the sake
of clarification, the Seller and the Purchaser hereby agree and confirm that till
the Final Closing has happened, the legal and beneficial title to the Purchase
Shares shall not be deemed to have been transferred in favour of the
Purchasers, nor shall the Seller be entitled to the Purchase Consideration.
CONDITIONS PRECEDENT

Initial Condition Precedent:

4.1

This Agreement and the obligation of the Seller to deposit the Purchase Shares

Page 9 of 38

with the Purchaser and the Purchaser to deposit the Purchase Price with the
Seller is subject to the relevant Party having met the conditions precedent set
out in this Sub-Clause (Initial Condition Precedent) in a form and
substance reasonably satisfactory to the Purchaser, unless otherwise expressly
waived by the Purchaser in its sole discretion:
4.1.1

Receipt of all corporate approvals and sanctions, including without limitation

approval by the Board or shareholders, as may be required, of the Company
and the Seller, for sale of the Purchase Shares to the Purchaser for the
Purchase Price agreed upon;

4.1.2

Receipt by the Purchaser and the Seller of all the Government Approvals,
including but not limited to, any FIPB or RBI approval, as and to the extent
required, for the Purchaser to acquire the Purchase Shares and to exercise its
right and perform its obligations respectively under this Agreement;

4.1.3

Receipt by the Purchaser of the audited accounts of the Company for the year
ended 31.03.2007.

4.1.4

The proposed Transfer of the Purchase Shares being determined as in

compliance with all applicable laws, including without limitation, any
proposed law or regulation as considered applicable;

4.1.5

No Governmental Authority in India,

(i)

having, or having indicated an intention to,

(ii)

having requested (in writing or by way of any oral communication),

any information in connection with, or instituting or threatening, any
action or investigation which could,

restrain, prohibit or otherwise challenge or adversely affect the Transfer of

Purchase Shares in a manner as contemplated under this Agreement, the
ownership of the Purchase Shares or any similar transactions or ownership;
4.1.6

The Seller having performed and complied in all material respects with all
covenants and undertakings required to be performed or complied with by it at
or prior to the Initial Closing Date;

4.1.7

The Seller having delivered an incumbency certificate of the officer(s) of the

Seller executing this Agreement and any other documents furnished to the
Purchaser hereunder or pursuant hereto;

4.1.8

The Company having delivered to the Purchaser a certificate, in a form and

manner acceptable to the Purchaser, that the Company and its Subsidiaries

Page 10 of 38

have conducted their business in the normal course and have complied with
the obligations imposed under Clause 5.1 and Clause 5.2, and that there has
been no Material Adverse Effect on the Company and/or its Subsidiaries
and/or the Seller until the Initial Closing Date; and
4.1.9

The Seller having delivered certificate, in a form and manner acceptable to the
Purchaser, certifying that the Warranties and representations, by whatever
name called and howsoever described, made under this Agreement are true
and complete in all respects as of the Initial Closing Date.
Final Condition Precedent:

4.2

The Transfer of title the Purchase Shares in favour of the Purchaser and
absolute vesting of the Purchase Price in favour of the Seller shall take place
subject to the condition that the Company shall and the Seller shall cause the
Company to file a red herring prospectus with Securities and Exchange Board
of India and Registrar of Companies in respect of IPO of the Companys
Equity Shares on or before Final IPO Date (Final Conditions Precedent).

COVENANTS AND UNDERTAKINGS OF THE COMPANY AND/OR

THE SELLER

5.1

Conduct before Final Closing: The Seller and the Company agree, undertake
and covenant that during the period between the signing of this Agreement
and the Final Closing Date, the Company will not (and the Seller shall cause
the Company to ensure that it does not) without the prior written consent of
the Purchaser:

5.1.1

enter into any commitment or transaction that could potentially adversely

impact the Transfer of the Purchase Shares or have a Material Adverse Effect;
or

5.1.2

do or permit anything which would constitute a breach of any of the

Warranties or covenants.

5.2

Notification of Material Event: If, during the period between the signing of
this Agreement and the Final Closing Date, the Company and/or the Seller
becomes aware that:

5.2.1

there has been or there is likely to be a Material Adverse Effect; or

5.2.2

the Company is involved in, or has been threatened with, any material
litigation filed or threatened to be filed against the Company; or

Page 11 of 38

5.2.3

there has been or is likely to be any breach of any of the Warranties;

then the Company and/or the Seller shall immediately notify the Purchaser of
that fact or event, as the case may be, in writing and shall provide all
information in their possession in relation to such fact and/or event to the
Purchaser.

5.3

Amendment of the Charter Documents. The Company shall (and the Seller
shall cause the Company to) amend its Charter Documents appropriately,
within 7 Business Days of the Final Closing Date, so as to incorporate the
terms of this Agreement therein.

5.4

No Favorable Terms. The Company and the Seller shall not provide any new
or potential purchaser, desirous of making an investment in the Equity Shares
of the Company, with (a) a purchase or investment price per Equity Share,
which is less than the price of an Equity Share as agreed under this
Agreement; and (b) rights which are more favorable than those granted to the
Purchaser under this Agreement, including without limitation, rights relating
to voting and entitlement to dividend.

5.5

Post Final Closing Obligations.

5.5.1

The Company and the Seller shall, no later than seven (7) days from Final
Closing Date, file all forms, declarations and reports with such Governmental
Authority as may be required under applicable laws, in relation to or pursuant
to the Transfer of the Purchase Shares in a manner contemplated under this
Agreement and shall provide the Purchaser with documentary evidence
thereof.

5.5.2

The Company and the Seller shall, no later than thirty (30) days from the Final
Closing Date, provide to the Purchaser a statement of the shareholding pattern
of the Company reflecting the Equity Shares held by the Purchaser, in a
format as set out in Annexure 2-Part B of this Agreement which shall be duly
certified by its Company Secretary;

5.6

Taxes. The Purchaser shall be responsible for the payment of all stamp duty
charges attributable to the execution of this Agreement.

5.7

Exercise of Voting Rights. The Seller agrees and undertakes that it shall
exercise its voting rights in a meeting of shareholders of the Company, in such
manner, and cause the directors nominated by it on the Board of the Company
to exercise their votes in such manner, so as to cause the Company to give full
legal effect to the terms of this Agreement, including but not limited to, for the
purposes of amending the Charter Documents of the Company, if required, to

Page 12 of 38

incorporate the terms of this Agreement.

5.8

Post IPO Adjustment. The Seller and the Purchaser agree and understand that
the Purchase Price under this Agreement has been determined on the
understanding that total valuation of the overall equity of the Company is
USD One billion. In the event the proposed IPO of the Company is done at a
valuation which is less than USD One billion, then it shall be deemed that the
valuation of the Purchase Shares at the Purchase Price was higher than the
actual value of the Purchase Shares, and the Seller shall return to the
Purchaser or its nominee (identified by the Purchaser) the additional
consideration paid by the Purchaser to the Seller for the Purchase Shares in the
following manner:

5.8.1

Within 3 (three) Business Days of valuation of the overall equity of the

Company, in relation to the proposed IPO, being determined, the Seller and
the Purchaser shall recalculate the consideration for a Purchase Share, in
accordance with the valuation of the Company as determined at the time of the
proposed IPO (the Revised Purchase Price).

5.8.2

Along with the determination of the Revised Purchase Price, the Seller and the
Purchaser shall also calculate the Excess Purchase Price on the same day. The
Excess Purchase Price shall be equal to (a) the consideration paid hereunder
for each Purchase Share less the Revised Purchase Price multiplied by (b) the
total number of Purchase Shares.

5.8.3

The Seller and the Purchaser agree that calculation of the Revised Purchase
Price and the Excess Purchase Price shall be done at the Forex Conversion
Rate.

5.8.4

Within 3 (three) Business Days of determination of the Excess Purchase Price,

the Seller shall pay the Excess Purchase Price to the Purchaser by depositing
the same in such account of the Purchaser as the Purchaser may designate in
writing to the Seller.

5.8.5

The Seller and the Purchaser agree that, if the Purchaser in its sole discretion,
for any reason whatsoever, desires to adopt a method, other than what is
described under this Clause, for the purposes of receiving the refund of the
Excess Purchase Price, then the Seller and the Purchaser shall enter into
discussions based on good faith for such purposes and the Excess Purchase
Price shall be paid to the Purchaser accordingly.

COVENANTS AND UNDERTAKINGS OF THE PURCHASER

6.1

Till the earlier of (i) the completion of allotment of shares issued pursuant to

Page 13 of 38

the IPO of the Company; or (ii) the Final IPO Date (in the event that the
allotment of shares issued pursuant to the IPO of the Company is not
completed prior to the Final IPO Date), the Purchaser shall not be entitled to
Transfer and/or deal with any or all of Purchase Shares, either directly or
indirectly, to or for the benefit of, a Person engaged in the business of
operating commodity exchanges, in India or otherwise, or any Affiliate of such
Person.
7

RIGHTS OF THE PURCHASER DURING THE SPECIAL RIGHTS

PERIOD

7.1

Anti-Dilution. The Company agrees and undertakes (and the Seller agrees
and undertakes that it shall cause the Company to ensure) that during the
Special Rights Period:

7.1.1

the Company shall not, without prior written consent of the Purchaser, issue
any Equity Shares (with the exception of the Equity Shares to be issued in
connection with the proposed IPO, and pursuant to the exercise of options
outstanding at the date of this Agreement under the Employee Stock Option
Scheme as referred to in Annexure 2), preference shares or any rights, options,
warrants, debentures, securities, appreciation rights or instruments entitling
the holder to receive any Equity Shares or any options to purchase or rights to
subscribe to securities, by their terms convertible into, or exchangeable for,
Equity Shares or any other securities which would have an actual or potential
dilutive effect on the Purchaser's share holding in the Company; and

7.1.2

in the event that, pursuant to the written consent of the Purchaser, the
Company does issue an instrument to any Person (including without
limitation, by way of a preferential issue) which, in terms of the Clause 7.1.1
above, does have an actual or potential dilutive effect on the Purchaser's shareholding in the Company, the Purchaser shall, subject to applicable law, have
the right but not an obligation to subscribe to and receive such number of
additional Equity Shares of the Company so as to maintain the equity
shareholding of the Purchaser, in the Company at five (5) % of the total paidup and issued share capital of the Company (on a Fully Diluted basis). The
price payable by the Purchaser for subscription of such additional Equity
Shares shall be the lowest possible price payable by the Purchaser in
accordance with and subject to applicable law.

7.2

Information Rights. The Company and the Seller shall, at all times during the
Special Rights Period:

7.2.1

keep the Purchaser appraised as to the process and progress of the proposed
IPO (including, without limitation, providing copies, if requested by the

Page 14 of 38

Purchaser of all drafts of the offer document, copies of all filings made with
SEBI and responses received and updates as to the progress made with the
marketing of the Equity Shares); and
7.2.2

deliver to the Purchaser, copies of any and all reports filed by the Company
(or any Subsidiary, if any) or the Promoters, with any relevant securities
exchange, or Governmental Authority, as may be requested by the Purchaser
from time-to-time.

7.3

Access Rights. The Company shall (and the Seller shall ensure that the
Company does) give reasonable access to the Purchaser and its authorized
representatives (including lawyers, accountants, auditors and other
professional advisors) to visit and inspect all properties, assets, corporate,
financial and other records, reports, books, contracts and commitments of the
Company, and to discuss and consult its business, actions plans, budgets and
finances with the directors and executive officers of the Company, upon
reasonable notice. All costs incurred in connection with such inspection shall
be borne by the Purchaser.

8.

RIGHTS OF THE PURCHASER IN THE EVENT THAT THE

PROPOSED IPO IS NOT COMPLETED PRIOR TO THE FINAL IPO
DATE
In the event that the proposed IPO is not completed on or prior to the Final
IPO Date (No IPO Event), the Purchaser shall at his option return the
Purchase Shares back to the Seller and in such case the Seller shall be bound
to return the Purchase Price back to the Purchaser within [] days from the No
IPO Event. In such event, this Agreement shall stand terminated and all the
rights and obligations of the Parties under this Agreement shall come to an
end, except for the rights and obligations, which are expressly mentioned in
this Agreement to survive.

9.

REPRESENTATIONS AND WARRANTIES

9.1 The Company and the Seller, each for itself represents and warrants to, and for
the benefit of the Purchaser, on the date of this Agreement which
representations and Warranties shall be deemed repeated and be true, complete
and accurate in all respects on a continuing basis, that:
9.1.1

It has been duly organized, and is validly existing and in good standing under
the laws of India;

9.1.2

It has the power to execute, deliver and perform its obligations under this
Agreement and all necessary corporate, shareholder and other approvals
(where applicable) have been validly obtained to authorise such execution,

Page 15 of 38

delivery and performance, and this Agreement constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms;
9.1.3

The execution, delivery and performance of any of their obligations under this
Agreement does not and will not:

9.1.3.1

contravene any law or breach or constitute a default under its Charter

Documents;

9.1.3.2 result in any violation or breach of, or constitute (with or without notice or
lapse of time, or both) a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any material benefit)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, contract or other agreement, instrument or obligation to
which it is a party or by which any of its properties or assets may be bound;
or
9.1.3.3 conflict with or violate any permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to the
Seller or any of its properties or assets;
9.1.4

There are no pending actions, investigations, suits or proceedings against it or

affecting any of its assets and there has been no event or occurrence, which in
each case, might reasonably be expected to give rise to a Material Adverse
Effect;

9.1.5

Any factual information provided by it or on its behalf for the purposes of this
Agreement is true and accurate in all material respects as at the date it was
provided or as at the date (if any) at which it is stated.

9.1.6

No Governmental Authority in India has:

(i)

indicated an intention to,

(ii)

requested (in writing or by way of any oral communication), any

information in connection with, or instituting or threatening, any
action or investigation which could,

restrain, prohibit or otherwise challenge or adversely affect Transfer of the

Purchase Shares in a manner as contemplated under this Agreement, the
ownership of the Purchase Shares or any similar transactions or ownership;
9.1.7

The Seller and the Company are aware and made known to the Purchaser that
all the /shareholders
without the prior approval of the
Government/Commission.

Page 16 of 38

9.1.8

The Seller and the Company is aware and made known to the Purchaser that.
A Copy of the letter was handed over to the Purchaser by the Seller.

9.1.9

The Seller and the Company is aware and made known to the Purchaser that
the Forward Markets Commission vide its letter No. xxxxxxxxxxxxxxxxxx
has given approval for divestment of Companys equity by the Seller subject
to the conditions contained therein to the Purchaser.

9.1.10 The representations and Warranties set out under Annexure 3 are true and
correct.
9.1.11 Notwithstanding anything contained in this Agreement, after the Final
Closing Date, the Purchase Shares are not subject to any restriction or
limitation on Transfer, except the statutory lock-in that may apply under the
then prevailing laws (which lock-in under the currently applicable law is one
year from the date of allotment of equity shares of the Company pursuant to
the IPO). Subject to such lock-in, the Purchaser shall be free at any time, after
the Final Closing Date, to Transfer the Purchase Shares or any part thereof, in
one or more tranches to any person of its choice except to the persons/ entities
who are, as understood by the Company or Promoters, competitors of the
Company in India or internationally,
9.1.12 After the Final Closing Date, the Purchase Shares shall be entitled to the same
voting rights and shall be voted on together with the Equity Shares and not as
a separate class.
9.2

The Company and the Seller agree and acknowledge that each of the
Warranties is separate and independent and none of the Warranties shall be
treated as qualified by any actual or constructive knowledge on the part of the
Purchaser or any of its agents, representatives, officers, employees or advisers.

9.3

The Company and the Seller agree and acknowledge that the Purchaser would
not proceed with the investment contemplated herein but for the Warranties
and covenants hereunder including to ensure the protection of the value of the
Company.

9.4

The Company and the Seller undertake to notify the Purchaser in writing
promptly if any of them become aware of any fact, matter or circumstance
(whether existing on or before the date of this Agreement or arising
afterwards) which would cause any of the Warranties given by it, to become
untrue or inaccurate or misleading in any respect.

10

INDEMNIFICATION

Page 17 of 38

10.1

Indemnification Obligation: The Company and the Seller shall jointly and
severally indemnify, defend and hold harmless, the Purchaser, its Affiliates,
directors, officers, representatives, employees and agents (collectively the
"Indemnified Parties"), promptly upon demand at any time and from time to
time, against any and all Losses relating to or arising out of or in connection
with:

10.1.1 any actual or threatened claim, legal action, proceeding, suit, litigation,
prosecution, mediation, arbitration or enquiry (together, a "Claim") by or
against any Indemnified
Parties arising out of or in connection with
(collectively referred to as "Indemnification Events"):
10.1.1.1 an inaccuracy, misrepresentation or any breach of any Warranty;
10.1.1.2 a breach of any covenant or obligation of the Company or the Seller
contained herein; and/or
10.1.1.3 any liabilities (including contingent liabilities, whether or not known or
contemplated at the time of execution of this Agreement) of the Company,
the Seller and/or its Subsidiaries not completely disclosed to the Purchaser
in writing prior to the Initial Closing Date; and/or
10.1.1.4 any pending or threatened claims against the Company, the Seller and/or its
Subsidiaries or any claims which may be made against the Company, the
Seller and/or its Subsidiaries and which relate to or arise out of, the period
prior to the Initial Closing Date not completely disclosed to the Purchaser in
writing prior to the Initial Closing Date.
10.1.2

a breach of any representation or Warranty or undertaking or covenant

made by the Seller or the Company in this Agreement;

10.1.3

the non-performance (in whole or in part) by the Seller or the Company of

any of its covenants or agreements contained in this Agreement;

10.2

In the event that the Company makes any payment to the Purchaser
hereunder, the same shall be grossed up by the Seller to the extent of
any loss suffered by the Purchaser as a consequence of such payment
being made by the Company on account of the Equity Shares held in
the Company by the Purchaser.

10.3

The Purchaser shall be entitled, in its absolute discretion, to take such

action as it may deem necessary to avoid, dispute, deny, resist,
appeal, compromise or contest or settle any Claim (including without

Page 18 of 38

limitation, making claims or counterclaims against third parties).

10.4

11

Indemnification rights of the Purchaser under this Agreement are

independent of, and in addition to, such other rights and remedies as
the Purchaser may have at law or in equity or otherwise, including the
right to seek specific performance, rescission, restitution or other
injunctive relief, none of which rights or remedies shall be affected or
diminished thereby.
CONFIDENTIALITY

11.1

The Parties undertake that they shall at all times keep confidential
(and shall use best endeavours to procure that their respective
employees and agents keep confidential) any Confidential Information
which is in their possession or which they may acquire and shall not
disclose such information except in their usual course of business.

11.2

The obligations of each of the Parties contained in the Clause 11 shall

continue without limit in point of time, but shall cease to apply to any
Confidential Information required to be disclosed by an order of a
court or under law.
Provided, however, that, the Company and/or the Seller shall provide the
Purchaser with prior written notice thereof so that the Purchaser may seek
(with the cooperation and best efforts of the other Party(ies)) a protective
order, confidential treatment or other appropriate remedy, and in any event
shall furnish only that portion of the information which is reasonably
necessary for the purpose at hand and shall exercise best efforts to obtain
reliable assurance that confidential treatment will be accorded to such
information to the extent reasonably requested by the Purchaser.

11.3

The Company shall not without the prior written consent of the
Purchaser make any disclosure other than as required under law or by
any stock exchange, in which case the disclosure will be made in
compliance with provisions of Clause 11.2 above;

11.3.1

issue any press release or make any public announcement or advertise or

otherwise publicize in any manner whatsoever, the existence or
consummation of this Agreement except in their statutory disclosures and
operational brochures; or

12

INTENT AND EFFECT OF THIS AGREEMENT

12.1

The Company and/or the Seller shall not act in any matter that is prejudicial

Page 19 of 38

to the rights of the Purchaser under this Agreement and the Company and/or
the Seller shall not act in any manner or do any deed or thing under this
Agreement that would derogate or adversely affect the rights of the
Purchaser hereunder.
12.2

Each Party undertakes to fully and promptly observe and comply with the
provisions of this Agreement to the extent and effect that each and every
provision thereof shall be enforceable by the Parties hereto inter se and in
whatever capacity. In the event of any conflict between this Agreement and
the Articles of Association of the Company, the provisions of this
Agreement shall prevail as between the Purchaser and the Company.

13

COSTS AND EXPENSES

13.1

Other than the stamp duty charges to be paid on this Agreement, which
shall be borne by the Purchaser, each Party shall bear its own costs and
expenses incurred in relation to this Agreement and the Transaction
proposed herein.

14

SUNSET CLAUSE

14.1

The rights stated in Clause 9 (Representations and Warranties), Clause 10

(Indemnification), Clause 11 (Confidentiality), Clause 15 (Notices) and
Clause 17 (Governing Law, Jurisdiction and Dispute Resolution) shall
survive termination of this Agreement.

15

NOTICES

15.1

Service of Notice. All notices or other communications to be given under

this Agreement shall be made in writing and by letter or facsimile
transmission (save as otherwise stated) and shall be deemed to be duly
given or made when delivered (in the case of personal delivery), when
despatched (in the case of facsimile transmission, provided that the sender
has received a receipt indicating proper transmission and a hard copy of
such notice or communication is forthwith sent by prepaid post to the
relevant address set out below) or 10 (ten) days after being despatched in
the post, postage prepaid, by the quickest mail available and by registered
mail if available (in the case of a letter) to such Party at its address or
facsimile number specified in Clause 15.2, or at such other address or
facsimile number as such Party may hereafter specify for such purpose to
the others by notice in writing.

15.2

Details for Notices. The details for notices for the purpose of this
Agreement are as follows:

Page 20 of 38

The Company:
ABC Ltd

The Purchaser:
[]
[]
For the attention of: []
The Seller:
XYZ ltd
16

TERMINATION

16.1

This Agreement may be terminated forthwith on or prior to the

Initial Closing as follows:

16.1.1

by the Purchaser in the event that the Initial Closing Date does not occur on
or prior to _____________ or any other date as mutually decided by the
parties.

16.1.2

by mutual written consent of the Purchaser and the Seller; or

16.1.3

by the Purchaser in the event of any breach of this Agreement on part of

either the Company or the Seller; or by the Company or the Seller, in the
event of a breach of this Agreement on part of the Purchaser.

16.2

This agreement shall stand terminated automatically in accordance with

Clause 8 hereto in the No IPO Event.

16.3

The Party terminating this Agreement (in accordance with Sub-clause 16.1
above) shall do so by way of a written notice of such termination to the
other Party(s) hereto. If this Agreement so terminates, it shall become null
and void and have no further force or effect, except for the provisions that
are intended to survive termination.

17

GOVERNING LAW, JURISDICTION AND DISPUTE RESOLUTION

17.1

Governing Law. This Agreement shall be governed by, and construed in

Page 21 of 38

accordance with the laws of the Republic of India.

17.2

Jurisdiction. Subject to Clause 17.3, the competent courts in Mumbai, India

shall have exclusive jurisdiction to settle any Dispute arising out of or in
connection with this Agreement. The Parties agree that such courts are the
appropriate and convenient court to settle any Dispute and accordingly no
Party will argue to the contrary.

17.3

Dispute Resolution.

17.3.1

Any and all claims, disputes, questions or controversies involving any or all
Parties arising out of or in connection with this Agreement, or the
execution, interpretation, validity, performance, breach or termination
hereof shall be first attempted to be resolved amicably through conciliation
and negotiation between the Parties.

17.3.2

In case the dispute has not been resolved by the Parties within fifteen (15)
calendar days of the arising of a dispute by conciliation and negotiation as
mentioned above, the same shall be resolved by final and binding
arbitration held in Mumbai in accordance with the Indian Arbitration and
Conciliation Act, 1996 and the rules made there under. Each disputing Party
shall appoint 1 (one) arbitrator and the two (2) arbitrators so appointed shall
together shall select and appoint the third arbitrator; provided, however, that
if the two (2) arbitrators so appointed are unable to appoint the third
arbitrator by mutual consent or if the second arbitrator is not appointed
within ten (10) days of the appointment of the first arbitrator, then the
second arbitrator or the third arbitrator, as the case may be, shall be
appointed in accordance with the rules under the Indian Arbitration and
Conciliation Act, 1996. In connection with the arbitration proceedings, the
disputing Parties hereby agree to cooperate in good faith with each other
and the arbitral tribunal and to use their respective best efforts to respond
promptly to any reasonable discovery demand made by such party and the
arbitral tribunal.

17.3.3

All arbitration proceedings shall be conducted in the English language.

17.3.4

Except as otherwise required by law, the arbitration proceedings and the

arbitration award shall not be made public without the joint consent of the
disputing Parties and they shall maintain the confidentiality of such
proceedings and the award.

17.3.5

Each disputing Party shall bear its respective costs incurred for arbitration,
unless otherwise determined by the arbitral tribunal, and in case of common
costs, the same shall be borne equally by the parties to the dispute.

Page 22 of 38

17.3.6

All notices and other communications by any disputing Party to the other or
by the arbitral tribunal to any such disputing Party in connection with the
arbitration hereunder shall be in accordance with the provisions of Clause
15.

17.3.7

Each of the Parties expressly understands and agrees that the arbitration
award shall be final, conclusive and binding upon the Parties.

18

MISCELLEANEOUS PROVISIONS

18.1

Not a Promoter. The Parties acknowledge and agree that the Purchaser is
entering into the transaction hereunder merely as a purchaser of a minority
shareholding in the Company and shall not acquire Control and
management of the Company. The Company shall not classify the
Purchaser as a 'promoter' of the Company for any reason whatsoever and
the Purchase Shares shall also accordingly not be subject to any transfer
restriction or lock-in conditions which are applicable to promoters under
any applicable law; provided, however, that the foregoing understanding
shall be without prejudice to any rights or privileges that the Parties have
agreed the Purchaser is entitled to pursuant to its investment in the
Company.

18.2

No Partnership or Agency. Nothing in this Agreement (or any of the

arrangements contemplated by it) shall be deemed to constitute a
partnership between the Parties, nor, except as may be expressly set out in
it, constitute any Party as the agent of another Party for any purpose, or
entitle any Party to commit or bind another Party in any manner.

18.3

Announcements. Subject to applicable securities laws and regulations, each

Party hereto agrees that it shall make no written or other public disclosures
regarding the transaction contemplated by this Agreement or regarding the
Parties hereto, to any person without the prior written consent of the other
Party, provided that disclosures to advisors, agents, banks, employees and
representatives of the Parties hereto shall be permitted hereby. The
Company and/or the Seller will not use or refer to the name of the
Purchaser in any public statement or disclosure without the consent of the
Purchaser (which consent shall not be unreasonably withheld), including
any disclosures required to be made in the proposed draft Red Herring
prospectus to be filed by the Company with regard to an initial public
offering of its securities with the SEBI.

18.4

Entire Agreement. This Agreement sets out the entire agreement and
understanding between the Parties with respect to the subject matter of it.

Page 23 of 38

This Agreement supersedes all prior discussions and correspondence, which

shall not have any further force or effect.
18.5

Amendments. This Agreement may be amended only by an instrument in

writing signed by duly authorised representatives of each of the Parties.

18.6

Further Assurances. The Parties agree to do all such further and other
things, execute and deliver all such additional documents, to give full effect
to the terms of this Agreement. The Company and the Seller each
undertakes that it will do or procure to be done all such further acts and
things, execute or procure the execution of all such other documents and
exercise all rights and powers, direct and indirect, available to it in relation
to any Person so as to ensure the complete and punctual fulfilment,
observance and performance of the provisions of this Agreement and
generally that full effect is given to the provisions of this Agreement.

18.7

Assignment. No Party shall be entitled to, nor shall they purport to, assign,
transfer, charge or otherwise deal with all or any of its rights and/or
obligations under this Agreement nor grant, declare, create or dispose of
any right or interest in it, in whole or in part provided, however, that the
Purchaser shall be entitled to assign any or all of its rights and/or transfer
any or all of its obligations hereunder to any of its Affiliates and/or any
purchaser or prospective purchaser and for this purpose the other Parties to
this Agreement shall without demur execute such instrument as may be
requested by the Purchaser.

18.8

Change in Law. This Agreement is subject to any change/amendment of the

applicable law from time to time. In case of any change in law that has an
effect on the terms of this Agreement, the Parties are at liberty to review,
and if deemed necessary amend and/or renegotiate in good faith so as to
reflect the mutual commercial understanding between the Parties.

18.9

Severability. Each of the provisions and restrictions as set out in this

Agreement is separate and distinct and is to be construed separately from
the other such restrictions. The Company and the Seller each, acknowledges
that it considers such provisions to be reasonable both individually and in
aggregate and that the Purchase Price for the Purchase Shares as paid by the
Purchaser adequately compensates the Seller. However, if any such
restriction shall be found to be void or unenforceable, but would be valid or
enforceable if some part of it were deleted or the period or area of
application reduced, the Company and the Seller each, agrees that such
restriction shall apply with such modifications as may be necessary to make
it valid. If any provision of this Agreement is held to be invalid or
unenforceable, it shall not invalidate the remaining provisions of this
Agreement.

Page 24 of 38

18.10

Waivers and Remedies. No failure or delay by the Parties in exercising any

right or remedy provided by law under or pursuant to this Agreement shall
impair such right or remedy or operate or be construed as a waiver or
variation of it or preclude its exercise at any subsequent time and no single
or partial exercise of any such right or remedy shall preclude any other or
further exercise of it or the exercise of any other right or remedy. The rights
and remedies of the Parties under or pursuant to this Agreement are
cumulative, may be exercised as often as such Party considers appropriate
and are in addition to its rights and remedies under general law.

18.11

Counterparts. This Agreement may be executed in any number of

counterparts and by the Parties to it on separate counterparts, each of which
shall be an original but all of which together shall constitute one and the
same instrument.

[INTENTIONALLY LEFT BLANK]

Page 25 of 38

IN WITNESS WHEREOF, the Parties hereto have caused their duly authorized
representatives to execute this Agreement on the day and year first hereinabove
written.

Witnessed by:

XYZ LTD

Name:_____________________
Address:___________________

By:____________________________

Witnessed by:

ABC LTD

Name:_____________________
Address:___________________

By:____________________________

Witnessed by:

[]

Name:_____________________

By:____________________________

Address:___________________

Name: Mr. []
Title:

Page 26 of 38

ANNEXURE 1
PROMOTERS OF THE COMPANY
No. NAME OF THE
PROMOTER
1.

XYZ ltd

Page 27 of 38

ADDRESS OF THE PROMOTER

SHAREHOLDING
IN THE COMPANY
2,50,50,000

ANNEXURE 2
CAPITAL STRUCTURE OF THE COMPANY
Authorised Share Capital on the date of the Agreement
Rs.500 million consisting of 50,000,000 equity shares of a face value of Rs.10 each.
Issued and Paid-Up Shareholding Pattern as on 30th June 2007:
Name Of the
Allottee/Transferee
Xyz (I) Ltd.

No.Of Shares

Face
Value(Rs)

25,050,
000

10

Amount
%
Paid
Shareholding
-up(Rs)
10

64.11

Part B
Issued and Paid-Up Shareholding Pattern immediately post Final Closing
Proposed Issued and Paid-Up Shareholding Pattern immediately post the Final
Closing as per clause 5.5.2 hereinabove.
Name of Shareholders

Page 28 of 38

Number of
Shares

Face value of
holding
(Rs. Million)

Percentage

Total

Page 29 of 38

100.00%

ANNEXURE 3
WARRANTIES
I.

Standard Representations and Warranties:

1.

Organisation and Authority: The Company is a company limited by shares

duly incorporated and validly existing under the laws of India and has the
corporate power, and has obtained all necessary authority, to own its assets,
conduct its business as presently conducted and to enter into, and comply
with its obligations under this Agreement;

2.

Validity:
This Agreement has been, or will be, duly authorized and
executed by the Company and constitutes, or will, when executed
constitute, a valid and legally binding obligation of the Company,
enforceable in accordance with its terms;

3.

No Conflict: Neither the execution of this Agreement nor the compliance

with its terms by the Company will conflict with or result in a breach of
any of the terms, conditions or provisions of, or constitute a default or
require any consent under, any indenture, mortgage, agreement or other
instrument or arrangement to which the Company is a party or by which it
is bound, or violate any of the terms or provisions of the Company's
Charter Documents or any Authorization, judgment, decree or order or any
statute, rule or regulation applicable to the Company;

4.

Status of Government Approvals: The Company has all Government

Approvals (other than Government Approvals that are of a routine nature,
are obtained in the ordinary course of business and the absence of which
will not have any Material Adverse Effect on the Business) needed by the
Company to conduct its Business and to comply with its obligations under,
this Agreement, and all such Government Approvals and are in full force
and effect;

5.

No Amendments to Charter Documents: The Company's Charter

Documents have not been amended since 10th June, 2006;

6.

Authorised Share Capital: The authorised, issued and paid up share capital
of the Company is as provided in Annexure 2 of the Agreement. The Equity
Shares presently registered in the name of the Promoters are, fully paid-up
and legally and beneficially owned by them, and there is no option, right to
acquire, mortgage, charge, pledge, lien or other form of security or
Encumbrance on, over or affecting these Equity Shares or any of them or
any agreement or commitment to give or create any of the foregoing in
respect of these Equity Shares, and the Promoters have not received notice
of any claim by any Person to be entitled to any of the foregoing in respect
of these Equity Shares. There is no outstanding subscription, option,
warrant, puts, calls, privileges, commitments, convertible security, right or
other agreement or commitment (other than this Agreement and ESOP (as

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set out in paragraph 7 below) obligating the Company to issue or buy-back

any of its Equity Shares or securities convertible into its Equity Shares;
7.

ESOP: The Company has granted options to its employees under the
Employee Stock Option Scheme (ESOS) scheme and as on the date of this
Agreement, 650,000 (six lakhs fifty thousand) options carrying the right to
purchase to an equal number of Equity Shares are outstanding;

8.

Shares duly authorised and freely transferable. The Purchase Shares are,
and will be, in compliance with law. Upon Transfer of the Purchase Shares
in favour of the Purchaser on the Final Closing Date, the Purchase Shares
will rank pari passu with the other Equity Shares, the Purchaser will be the
absolute legal and beneficial owners of 1,953,770 Equity Shares and the
Purchaser will have a clear title thereto and will hold the Purchase Shares
free and clear of all Encumbrances. After Final Closing Date, the
Purchaser will have good right, full power and absolute authority to
Transfer the Purchase Shares, free from any restriction in the Charter
Documents or any third party claim or demand of any nature, subject to a
lock in period, upon the Proposed IPO or the IPO (as the case may be) as
per Securities and Exchange Board of India (Disclosure and Purchaser
Protection) Guidelines, 2000;

9.

No Immunity: Neither the Company nor any of its property or asset enjoys
any right of immunity from set-off, suit or execution proceedings with
respect to its assets or its obligations under this Agreement;

10.

Financial Statements: The financial statements of the Company for the

period ending on March 31, 2007 (the "Accounts"):
(i)
have been prepared in accordance with the Accounting Principles, and give
a true
and fair view of the financial condition of the Company as of the date
as of which they were prepared and the results of the Company's
operations during the period then ended; and
(ii)
disclose all liabilities (contingent or otherwise) of the Company, and the
reserves,
if any, for such liabilities and all unrealized or anticipated liabilities
and losses arising from commitments entered into by the Company
(whether or not such commitments have been disclosed in such
financial statements);

11.

Management Accounts: The management accounts of the Company have

been prepared with due care and attention in accordance with accounting
principles used by the Company in the course of preparing management
accounts for the Company during the two year period ending on the date of
this Agreement and on a basis consistent with that used in preparing the
Accounts;

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12.

Taxes: The Company has duly filed all tax returns and reports of the
Company required by law to be filed and all Taxes, obligations, fees and
other governmental charges upon the Company, or its properties, or its
income or assets, which are due and payable or to be withheld, have been
paid or withheld, other than those presently payable without penalty or
interest;

13.

Litigation: The Company is not engaged in nor, to the best of its

knowledge after due inquiry, threatened by, any litigation, arbitration,
investigations or administrative proceedings that, if decided adversely, can
be expected to have a Material Adverse Effect nor aware of any
circumstances that may give rise to such litigation, arbitration or
administrative proceedings;

14.

Compliance with Law: The Company has conducted its business and
corporate affairs in accordance with the Charter Documents and in
accordance with all laws and in full compliance with all the terms and
conditions of all Governmental Approvals. The Company is not in default
of any law and has not received any notice or other communication alleging
any such default;

15.

Insurance: The Company has obtained all insurance policies that it is

required to obtain under any contracts or agreements with third Persons.
The Companys insurance policies are in full force and effect and there are
no circumstances, which might lead to any liability under such insurance
policy being avoided by the insurers or the premiums being increased. No
claim is outstanding by the Company under any such policy of insurance
and there are no circumstances likely to give rise to such a claim;

16.

All material facts disclosed. There are no facts or circumstances relating to

the affairs of the Company having, or likely to lead to, a Materially Adverse
Affect which has not been disclosed to the Purchaser which might
reasonably have been expected to influence the decision of the Purchaser to
enter into this Agreement.

II

Operational Representations:

17.

No Judgement Restricting the Company's Business: There are no actions,

suits, claims, proceedings or investigations pending or threatened against or
by the Company, in equity or otherwise, and whether civil or criminal in
nature in, before, or by, any court, commission, arbitrator or other
Government Authority, and there are no outstanding judgments, decrees,
orders or awards of any such court, commission, arbitrator or other
Governmental Authority that, in the case of any of the above, individually
or in the aggregate, could be expected to have a Material Adverse Effect on
the Company and its Business, or that seek to prevent, restrict or delay
consummation of the transactions contemplated by this Agreement.

18.

No Affiliate transaction: Except as set out in two (2) agreements between

the Company and XYZ ltd both effective 14 October 2006 and relating to
software upgrades and modifications in the one case and option software in
the other case , neither the Promoters nor any Promoters' Affiliates is or has

Page 32 of 38

at any time been a party to or interested in (directly or indirectly including

by the provision of any security by or in favour of or for securing
obligations of the Company) any agreement or arrangement in any way
relating to the Company or its activities, including, without limitation, any
agreement or arrangement for the provision of finance, goods, services or
other facilities to or by the Company or ownership of any property or assets
used by the Company, nor are any amounts owed to or receivable from
(whether contingently or otherwise) the Company by the Founder or any
Founder Affiliates and no contracts or arrangements, whether entered into
during the past three years or otherwise, are currently pending. So far as
the Company is aware, having made all reasonable enquiries, no Founder or
any Founder Affiliate is, at the date of this Agreement, either individually
or with any other person or persons (a) engaged or concerned or interested
(and whether by a holding of shares or otherwise) in any other business
transacted with the Company. No amounts or obligations are currently
owed or outstanding between the Company and the Promoters.
19.

Title to Assets and Permitted Liens: Except as expressly disclosed in the

notes to the Accounts and as set out in the Disclosure Schedule, the
Company has good and marketable title to all its properties, including, the
assets which are reflected in the Accounts or acquired by it after March 31,
2005 and the Intellectual Property Rights owned and used by the Company,
free and clear of any Encumbrance (except as expressly disclosed in the
notes to the Financial Statements). Except as set out in the Disclosure
Schedule, no Person has or claims any Encumbrance in or over any of the
assets of the Company or any relevant deeds or documents.

20.

Books And Records complete: All statutory books, statutory registers and
minutes books of the Company are complete in all respects and have been
kept properly and in compliance with law and no notice or allegation that
any of them is incorrect or should be rectified has been received. All such
statutory books, statutory registers and minutes books are in the possession
or under the control of the Company.

21.

Contracts Enforceable: Each agreement or arrangement to which the

Company is a party has been duly authorised, executed and delivered by the
Company and constitutes a valid and binding obligation of the Company,
enforceable against it in accordance with its terms. No agreement or
arrangement to which the Company is a party is invalid or ultra vires and
there are no grounds for rescission, breach, avoidance or repudiation of any
agreement or arrangement to which the Company is a party. The Company
is not in default of the performance, observance or fulfilment of any of its
obligations, covenants or conditions contained in any of agreement or
arrangement to which it is a party.

22.

Labour Matters: The Company has been and is in material compliance with
all laws relating to employment and employment practices, labor relations,
immigration, and the Company has been in compliance with the terms and
conditions of employment contracts. Apart from the employee benefits
disclosed in the Disclosure Schedule, and as set out in the sample
employment letter and human resources manuals provided to the Purchaser,
there are no other benefits that are being provided to the employees

Page 33 of 38

including deferred compensation agreement, incentive plan, profit sharing

plan, retirement agreement or other employee compensation agreement.
The Company has no collective bargaining agreements, arrangements and
other similar understanding with any trade union, staff association or other
body representing the employees of the Company and no labour union has
requested or sought to represent any employees, representatives or agents
of the Company. There has been and is no strike or other labour dispute
involving the Company nor is such strike or similar action pending, nor to
the Promoters' knowledge, threatened.
23.

Complete Disclosure: All representations, warranties, information,

documents or statements relating to or provided by the Company to the
Purchaser are true, accurate, complete and correct in all respects. All
information and documents material to the affairs of the Company or the
proposed purchase of the Purchase Shares have been disclosed to the
Purchaser and the Company has not omitted to disclose any matter the
omission of which makes any of such representations and warranties
misleading.

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