Exhibit 10.70
SHAREHOLDERS AGREEMENT
DATED
APRIL 9TH 2004
BETWEEN
Asian Telecommunication Investments (Mauritius) Limited
AND
UMT Investments Limited
AND
▇▇▇▇ ▇▇▇▇▇▇ Telematics LIMITED
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In respect of
▇▇▇▇ ▇▇▇▇▇▇ Telematics LIMITED
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[GRAPHIC]
Description [Indian Banknote Specimen]
SHAREHOLDERS AGREEMEMT
THIS SHAREHOLDERS AGREEMENT (this "Agreement") is made the 9TH day of April
2004:
BETWEEN:
A. Asian Telecommunication Investments (Mauritius) Limited, a company
incorporated in Mauritius whose registered office is at 4th floor Les
Cascades Building, ▇▇▇▇▇ ▇▇▇▇▇▇ Street, Port Louis, Mauritius ("ATIM") of
the FIRST PART; and
B. UMT Investments Limited, a company incorporated in India whose registered
office is at 2A, Landmark, ▇▇▇▇. ▇.▇.▇. ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ 700 020 (
"UMTI"); Jaykay Finholding (India) Private Limited, a company incorporated
under the Companies Act, 1956 whose registered office is at 240, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ("UMTI") of the SECOND
PART.
C. ▇▇▇▇ ▇▇▇▇▇▇ Telematics Limited, a company incorporated in India whose
registered office is at ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇. A.J.C. Bose Road, Kolkata 700
020 (the "Company") of the THIRD PART;
(ATIM and UMTI shall be hereinafter referred to as "Party" and collectively as
"Parties")
WHEREAS:
A. The Company has been incorporated with the main object of making
investments in Indian companies.
B. The present shareholding of the Company is as follows:
ATIM: Representing 49% of the share capital of the Company
UMTI: Representing 51% of the share capital of the Company
C. UMTI, a company incorporated in India holds 51% of the share capital of the
Company, and the balance 49% of the share capital of the Company is held by
ATIM.
D. The Parties are desirous of entering into this Agreement to confirm their
understanding regarding the regulation of the affairs and management of the
Company, and the relationship of the Shareholders thereof.
E. The Company is being joined as a confirming party, inter alia as to the
matters contained in this Agreement materially affect the administration of
the Company.
NOW THEREFORE, the Parties hereby agree as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions.
In this Agreement, the following words and expressions shall, except where
the context otherwise requires, have the following meanings:
"Act" means the Indian Companies Act, 1956, as amended from time to time,
or any statutory modification or re-enactment thereof,
"Affiliate" when used with reference to any corporate entity shall mean
another company controlled by, controlling or under common control with
that entity, where "control" means either (i) the ownership, either
directly or indirectly, of more than fifty percent (50%) of the voting
shares or comparable interests in such entity or other company, as the case
may be, or (ii) the right to elect the majority of the directors of such
entity or other company, as the case may be, where such rights may be
exercised without the consent of any third party.
"AGM" means the annual general meeting of the Company;
"Alternate Director" shall have the meaning set forth in Clause 6.6;
"Arbitration Act" shall have the meaning set forth in Clause 12.2(a);
"Articles" means the Articles of Association of the Company in the form
attached as Schedule 1 hereto and to be adopted at a meeting of the
Shareholders;
"ATIM Director(s)" shall have the same meaning set forth in Clause 6.1;
"ATIM Shares" means the equity shares of the Company held by ATIM,
constituting 49% of the total issued and paid up equity share capital of
the Company at the date hereof, and shall include any further shares issued
under the terms hereof;
"Auditors" means the statutory auditors of the Company appointed from time
to time;
"Board" means the board of directors of the Company;
"Business" means the business of the Company being the investment in the
telecom sector in India and matters incidental thereto;
"Business Day" means a day on which scheduled banks are open for business
in Mumbai;
"Chairman" shall have the same meaning set forth in Clause 6.4;
"Change of Control" means with respect to a Shareholder:
(a) the acquisition by a person or a related group of persons after the
date of this Agreement of 50% or more of the issued capital (with
ordinary voting powers) of a Shareholder or ultimate holding of that
Shareholder; or
(b) substitution of the person or group of persons holding the power (as
at the date of this Agreement), whether directly or indirectly, to
direct or cause the direction of management and policies of that
shareholder, whether through ownership of shares, contract or
otherwise.
"Director" means a director of the Company from time to time;
"Effective Date" means the date of this Agreement.
"EGM" means the extraordinary general meeting of the Company;
"Event of Default" shall have the meaning set forth in Clause 9.2(a);
"Fascel" means Fascel Limited, a company incorporated under the Companies
Act, 1956 which is presently carrying on the business of providing cellular
telephone services in the state circle of Gujarat;
"HTEL" means ▇▇▇▇▇▇▇▇▇ Telecom East Limited, a company incorporated under
the Companies Act, 1956 which is presently carrying on the business of
providing cellular telephone services in the metro city of Kolkata;
"Offeror" shall have the meaning set forth in Clause 4.5 (a);
"Offeree" shall have the meaning set forth in Clause 4.5 (a);
"Original Director" shall have the meaning set forth in Clause 6.6;
"Person" shall mean any natural person, limited or unlimited liability
company, corporation, general partnership, limited partnership,
proprietorship, trust, union, association, court, tribunal, agency,
government, ministry, department, commission, self-regulatory organisation,
arbitrator, board, or other entity, enterprise, authority or business
organisation;
"Rupees" or "Rs." means the lawful currency for the time being of India;.
"Sectoral Cap" shall mean the maximum prescribed limits of foreign
investment in the telecom sector imposed by the Government of India from
time to time (which at present limits foreign direct investment to 49% of
the equity share capital of any company in the telecom sector);
"Share" or "Shares" means, as applicable, equity share or shares of par
value of Rs. 10 (Rupees ten) each in the Company;
"Shareholder" means a holder of Shares in the Company;
"Termination Notice" shall have the meaning set forth in Clause 9.2;
"Transfer" means to 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;
"Transfer Notice" shall have the meaning set forth in Clause 4.5; and
"Transfer Price" shall have the meaning set forth in Clause 4.6;
"UMTI Directors" shall have the meaning set forth in Clause 6.1;
"UMTI Shares" means the equity shares of the Company held by UMTI,
constituting 51% of the total issued and paid up equity share capital of
the Company at the date hereof, and shall include any further shares
issued under the terms hereof;
1.2 Interpretation.
In this Agreement, unless the context otherwise requires:
(a) words denoting the singular number shall include the plural and vice
versa;
(b) words denoting a person shall include an individual, corporation,
company, partnership, trust or other entity;
(c) heading and bold typeface are only for convenience and shall be
ignored for the purposes of interpretation;
(d) references to the word "include" or "including" shall be construed
without limitation;
(e) references to this Agreement or to any other agreement, deed or other
instrument shall be construed as a reference to such agreement, deed
or other instrument as the same may from time to time be amended,
varied, supplemented or noted;
(f) reference to any party to this Agreement or any other agreement or
deed or other instrument shall include its successors or permitted
assigns;
(g) a reference to an article, clause, paragraph or schedule is, unless
indicated to the contrary, a reference to an article, clause,
paragraph or schedule of this Agreement;
(h) the schedules attached to this Agreement form an integral part of this
Agreement and will be of full force and effect as though they were
expressly set out in the body of this Agreement;
2. CONDITIONS PRECEDENT
2.1 This Agreement shall come into effect on the Effective Date but is
conditional upon receipt of certified true copies of all and any
resolutions authorising each party respectively to enter into this
Agreement and sign and do all necessary acts incidental thereto;
3. SHARE CAPITAL
3.1 Issued Share Capital
On the Effective Date the issued and paid up share capital of the Company,
shall be in the proportion of 49:51 by ATIM and UMTI respectively in
respect of the Shares.
3.3 Additional Capital Contribution
The Board may from time to time call for and issue additional capital
contribution, which may, in the determination of the Board, be required for
funding the Business or the operations or growth of the Company. Any such
call shall not be in breach of the Sectoral Caps. In the absence of any
agreement to the contrary, the Parties shall alone be required to
contribute such additional capital.
3.4 Shareholding Pattern
Unless otherwise agreed between the Parties, they shall maintain a ratio
of 49:51 amongst ATIM and UMTI respectively in the issued and paid up
equity share capital of the Company.
4. TRANSFERS
4.1 Restrictions on Transfer
Except as otherwise provided in this Agreement, or as otherwise agreed
between the Parties;
(a) any Transfer of the Shares shall be subject to the provisions of this
Clause 4.
(b) no Transfer of any Shares shall be made which would result in any
breach of the Sectoral Cap.
4.2 Transfer to Affiliates
Subject only to Clause 4.1, at any time during the term of this Agreement,
any Party shall have the right to Transfer its Shares to one or more
Affiliates, which Transfer may be effected in one or more separate
transactions, provided that:
(a) prior to any such Transfer:
(i) the transferring Shareholder shall provide written notice of
such Transfer to the other Shareholders, such notice to specify
the number of Shares to be transferred and the name or names of
the Affiliates to whom the Shares are to be transferred; and
(ii) the Affiliate shall have unconditionally undertaken to be bound
by the terms of this Agreement and shall have executed a deed of
adherence; and
(b) if at any time during the term of this Agreement, any such transferee
ceases to be an Affiliate of the transferor, the Shares held by it
shall be transferred back to the original Shareholder or any
Affiliates thereof of the transferor, except as otherwise agreed by
the Parties.
4.3 Put Option
UMTI shall have the right to require ATIM to purchase the UMTI Shares
in accordance with the procedure laid down in Clause 4.5 below and at
a fair market value determined in accordance with Clause 4.6 below,
4.4 Call Option
(a) ATIM shall have the right at any time to purchase the UMTI Shares or
any of them in accordance with the procedure laid down in Clause 4.5
below and at a fair market value determined in accordance with Clause
4.6 below.
(b) ATIM may nominate a third party as a transferee or purchaser of the
UMTI Shares which, to the extent required by the Sectoral Cap shall be
an Indian party.
4.5 Transfer Procedure
(a) The options an specified in Sections 4.3 4.4 and 4.7 shall be
exercised by a written notice ("Transfer Notice") from the party
exercising such option/right ("Offeror") to the other Party
("Offeree") and the effective date of its exercise shall be the date
of the said written notice. Any resulting sale or acquisition shall be
subject to the approval of any other competent regulatory agencies and
shall be completed within the periods stipulated by Clause 4.5(c) or
such other extended time which may be required for any determination
under Clause 4.6 or to comply with applicable laws (including the
obtaining of requisite approvals).
(b) Any notice given by ATIM (or response to any notice by UMTI) shall
stipulate the name of any third party nominated to purchase or take a
transfer of the UMTI Shares in question.
(c) Any Transfer of the Shares shall, subject to any agreement between the
Parties to the contrary and Clause 4.5(a), be completed within a
period of 90 days from the Transfer Notice in question.
(d) Upon the failure of the Offeree to comply with the provisions of this
Clause 4 (or of any extension thereof necessary to obtain requisite
approvals) or any determination of the Transfer Price under Clause 4.6
whichever is later, the Offeree shall be deemed to have irrevocably
appointed the Company as its attorney to deal with the matter in
accordance with the directions of the Offeror. The Offeree hereby
agrees to abide by the directions of the Offeror and undertakes to do
or procure all necessary things and execute all necessary forms,
documents and agreements to implement such directions.
4.6 Transfer Price
Except as stipulated by Clause 4.7 and subject to the requirements of
regulatory provisions, the Transfer Price on any Transfer pursuant to this
Agreement shall be as determined below:
(a) such fair market value as may be agreed between the Parties; and
failing such agreement
(b) such fair market value as may be determined by the overseas offices of
▇▇▇▇▇▇▇ Sachs whose decision shall be final and, for which purpose,
▇▇▇▇▇▇▇ ▇▇▇▇▇ shall act as an expert and not as an arbitrator and
shall not be bound to disclose reasons for its determination.
4.7 Default Option
(a) Following any Event of Default on the part of UMTI, ATIM shall have
the right to require UMTI to sell to ATIM or any person that ATIM
nominates all (but not part only) of the UMTI Shares at ninety percent
(90%) of the Transfer Price determined in
accordance with Clause 4.6 and as per the procedure laid down in
Clause 4.5
(b) Following any Event of Default on part of ATIM, UMTI shall have the
right to require ATIM or any person that ATIM nominates to purchase
all (but not part only) of the UMTI Shares at one hundred and ten
percent (110%) of the Transfer Price determined in accordance with
Clause 4.6 and as per the procedure laid down in Clause 4.5;
4.8 Repayment of Loans etc.
Upon a Transfer of all the Shares held by any Party in accordance with the
terms of this Agreement:
(a) that Party shall repay all loans, loan capital, borrowing and
indebtedness in the nature of borrowing owed by it to the Company
(together with any accrued interest);
(b) the Company shall repay all loans, loan capital, borrowing and
indebtedness in the nature of borrowing outstanding to the Company
from that Party (together with any accrued interest), to the extent
that any such loans, borrowings, and indebtedness are not transferred
to any purchaser or transferee of Shares in question; and
(c) the continuing Parties shall use all reasonable efforts to secure the
release of any guarantees or indemnities given by the other Party to
or in respect of the Company.
4.9 Stamp Duty
The purchaser of any Shares pursuant to the provisions of this Agreement
shall be liable to bear and pay the stamp duty for the transfer/purchase
of such Shares.
5. SHAREHOLDER MATTERS
5.1 Meetings of Shareholders
(a) An AGM of the Company shall be held each calendar year, provided that not
more than fifteen months shall have elapsed between one AGM and the next.
Any meeting of the Shareholders other than an AGM shall be an EGM. An AGM
or EGM may be called by giving at least twenty-one (21) days' written
notice to the Shareholders.
(b) The quorum for an AGM or EGM with respect to any agenda shall be at least
two (2) Shareholders present in person, provided that at least one
representative of UMTI and ATIM shall be present in order to constitute a
valid quorum. If a proposed AGM or EGM with respect to any agenda is not
validly constituted as required by this sub-clause (b), or if a quorum is
not maintained throughout such meeting, the meeting shall be adjourned to a
subsequent day which shall be no later than seven (7) days after the
previous adjourned meeting. In the event that no quorum is present at the
adjourned meeting, the Shareholder(s) present shall constitute a quorum and
proceed with the meeting.
(c) The Chairman (appointed in accordance with Clause 6.4) shall be chairman of
each AGM or EGM. If the Chairman is not present, the Shareholders present
may elect any other director present as the chairman of the said AGM or
EGM. The chairman of the AGM or EGM shall not have a casting vote.
(d) Subject to Clause 7.2, all resolutions shall, unless otherwise required by
the Act or other applicable law, be passed by a simple majority of
the total votes of all the Shareholders present and voting at the AGM or
EGM, as the case may be.
5.2 Covenants of Parties.
The Parties agree, covenant and undertake
(a) not to exercise or fail to exercise any of its voting or other rights
in the Company available either under this Agreement or by law, in a
manner which may have an adverse effect on the business and operations
of the Company or the interests of the other Party;
(b) not to exercise or fail to exercise any of its voting or other rights
in the Company available either under this Agreement or by law, in a
manner which may be inconsistent with the terms of this Agreement.
to take all necessary action (corporate or otherwise) to cause the
Company at all times to retain the investment made in the shares of
Fascel and HTEL, unless otherwise agreed.
6. BOARD OF DIRECTORS.
6.1 Constitution of the Board.
(a) Subject to the provisions of the Act and the provisions of sub-clause (b)
of this Clause 6.1 and this Agreement generally, the Board shall consist of
five Directors of which two shall be nominated by ATIM ("ATIM Directors"),
and three shall be nominated by UMTI (the "UMTI Directors"). The Board
shall have the overall responsibility for management of the Company and may
appoint and delegate such day to day functions to the Chairman, the
Managing Director, the Manager or to a committee, as it deems fit and as
may be mutually agreed between ATIM and UMTI.
(b) The appointment or removal of any Director shall be subject to majority
approval of the Board, for which purpose the Director in question shall not
be entitled to vote.
(c) If at any time the Act or any other applicable law should require an
increase or decrease in the number of directors constituting the Board,
such increase or decrease shall be effected in a way that preserves the
proportional representation on the Board between the Parties in accordance
with the provisions of this Agreement.
(d) Save the Managing Director if any, the rest of the Directors shall be
liable to retire by rotation in accordance with the Articles.
6.2 Meetings of the Board.
(a) Any meeting of the Board shall be held in accordance with the Articles. The
Chairman shall, at the request of any Director, convene a Board meeting
(unless waived by all Directors) by giving at least fourteen (14) Business
Days' prior written notice of the meeting specifying the place, date and
time thereof to all the other Directors together with the agenda and
details pertaining to the meeting including the nature of the business to
be transacted. The notice of the Board meeting shall be given to each
Director at the address of the Director whether in or outside India
provided to the Company for the said purpose. Such notice of Board meetings
may however be waived with the consent of all the Directors. The meetings
of the Board shall be held in India, or at any place outside India with the
consent of all the Directors. Any resolution passed at a Board meeting
shall not be binding on the Company if the notice of the Board meeting has
not been given in the manner prescribed herein or the matter decided was
not included in the agenda, provided that
these requirements may be waived with the consent of all the Directors.
(b) The quorum for any Board meeting shall be at least two Directors, provided
that the presence of an ATIM Director and UMTI Director shall be necessary
to constitute quorum. If the quorum is not present throughout the meeting,
then the meeting may be adjourned to a Business Day not less than seven (7)
days from the date of the original meeting; on the same day of the week,
time and place, unless otherwise notified. In the event that no quorum is
present at the adjourned meeting, any two Directors (including always
an ATIM Director) present shall constitute the quorum and proceed with the
meeting.
(c) Subject to Clause 7.1, all decisions of the Board shall be taken by a
majority vote of the Directors present or represented and voting at a Board
meeting.
6.3 Resolutions by Circulation.
Subject to the provisions of the Act, resolutions of the Board may be
passed by circulation, if the resolution has been circulated in draft,
together with necessary papers, if any, to all the Directors, and has been
approved and signed by all Directors entitled to vote on the resolution.
6.4 Chairman.
The Board shall appoint a Chairman who shall be one of the UMTI Directors.
Each meeting of the Board shall be chaired by the Chairman. The Chairman
shall not have a casting vote. In the absence of the Chairman at any
meeting the Directors shall appoint one of their number to chair the
meeting in question.
6.5 Managing Director/Manager
UMTI shall, subject to the provisions of Clause 7.1, have the power to
nominate any Managing Director or Manager of the Company, who shall have
such powers as may be decided by the Board from time to time.
6.6 Alternate Director.
In the event that any Director (an "Original Director") is away for a
continuous period of not less than three (3) months from the state in which
the meetings of the Board are ordinarily held, the Board shall appoint
another Director (an "Alternate Director") for and in place of the Original
Director. The Board shall only appoint such Alternate Director nominated by
the Party that nominated the Original Director who shall be deemed to be
nominated by the Original Director for this purpose.
6.7 Casual Vacancies
In the event that any seat on the Board becomes vacant for any reason, the
Board shall appoint as a Director a person nominated by the Party that
nominated the director formerly filling the vacant seat.
6.8 Directors to act in accordance with instructions of the Board
Any Director of the Company nominated by it as a director of any other
company shall act in accordance with the instructions of the Board, to the
extent that those are consistent with the best interests of the investee
company in question.
7. VOTING PROVISIONS
7.1 Votes at Board Level
Notwithstanding any other provisions in this Agreement, the Parties agree
that the following matters shall not be implemented without the passing
of a resolution of the Directors of the Company in accordance with Clauses
6(2) or 6(3), which resolution is approved:
(i) by all the Directors, except as to sub-clause 7.1 (e), excluding
interested Directors who are prohibited at law to vote thereon;
and
(ii) as to sub-clause 7.1 (e) alone, by a majority of Directors
excluding the Directors in question,
(a) any issue or agreement to Issue or grant or agreement to grant any
option over or right to acquire any shares or any other security or
purchase or redeem any security or issue or agree any debenture or
convertible security;
(b) establishment, acquisition or engagement in any business, venture or
real estate or any interest therein other than those provided in this
Agreement, or disposal of the same including without limitation taking
up of shares in any company;
(c) approval of any business plan or budget or any amendments to such
business plan or budget;
(d) appointment of any Managing Director/Manager of the Company;
(e) appointment or removal of any Director; or additional Directors (other
than Alternate Directors);
(f) execution of any contracts or agreements between the Company and any
Party or Affiliate thereof.
(g) any borrowing by the Company;
(h) any single extension of credit or the incurring or making of any
capital expenditure, other than provided for in the approved business
plan or budget;
(i) the registration of any transfer of any Shares (other than a transfer
permitted by the terms of this Agreement);
(j) recommendation of final dividends or declaration and payment of
interim dividends;
(k) issuance or furnishing of any guarantee or indemnity by the Company in
favour of lenders or regulatory authorities; and
(l) any decision to sell any shares in Fascel or HTEL or investment
comprising an investment by the Company and/or any direct or indirect
involvement in an IPO;
(m) any increase or decrease in the amount of the authorised or paid-up
capital of the Company, and any public issue or private placement of
Shares.
7.2 Votes at Shareholders Level
Notwithstanding any other provisions in this Agreement, the Parties agree
that the following matters requiring shareholder's approval shall require a
special resolution of the Shareholders of the Company:
(a) any amendments to the Articles;
(b) any increase or decrease in the amount of the authorised or paid-up
capital of the Company, and any public issue or private placement of
Shares;
(c) any merger or consolidation or any other manner of reorganisation
involving the Company;
(d) winding up or dissolution of the Company, or making of any composition
or arrangement with creditors whether generally or specifically;
(e) other than in the ordinary course of business, sale, transfer,
assignment, lease, creation of any right, title or interest in favour
of any other person or other disposal of any part of the Company's
undertaking, property or assets (or any interest therein) or entry
into a contract to do so, or creation of any pledge, encumbrance or
any security interest over the whole or any part of the Company's
undertaking, property or assets; and
(f) remove or replace the Company's auditors.
8. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
8.1 General
Save as disclosed, each of the Parties severally represents and warrants to
the others that as of the date hereof and as of the Completion Date that:
(a) each has full power and authority to enter into this Agreement and to
perform its obligations under this Agreement;
(b) the execution and delivery of this Agreement by each of the Parties
and the performance by such Party of its obligations under this
Agreement have been duly and validly authorised by all necessary
corporate action on the part of such Party;
(c) this Agreement constitutes a legal, valid, and binding obligation of
each of the Parties and is enforceable against such Party in
accordance with its terms;
(d) the Parties are not precluded by the terms of any contract, agreement
or other instrument by which it is bound from entering into this
Agreement, and the documents and agreements provided for under this
Agreement or the consummation by the Parties of the transactions
contemplated under this Agreement;
(e) to the best of knowledge and belief of each of the Parties, there are
no claims, suits, investigations or other proceedings, pending or
threatened against it and there are no judgements, orders or decree
of any governmental authority or court against it, and there are no
facts or circumstances which could reasonably be expected to give rise
to a claim, action, suit or proceeding which could materially and/or
adversely affect the Company or the transactions contemplated under
this Agreement;
(f) the execution, delivery and performance by each of the Parties of this
Agreement and the compliance by it with the terms and provisions
hereof and thereof do not:
(i) contravene any provision of any law, statute, rule or regulation
or any order, writ, injunction or decree of any competent court
or governmental instrumentality to which it is subject; or
(ii) conflict or be inconsistent with or result in any breach of any
of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any lien
upon any of its property or assets pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement, loan
agreement or any other agreement, contract or instrument to which
it is a party or by which it or any of its property or assets is
bound or to which it may be subject to.
8.2 Corporate Status
Save as disclosed, each of the Parties severally represents and warrants to
all other Parties that, as of the date hereof and as of the Completion
Date:
(a) it is duly incorporated and organised and validly existing under the
laws of the country of its incorporation; and
(b) the execution, delivery and performance by each of the Parties to this
Agreement and the compliance by it with the terms and provisions
hereof and thereof, will not violate its certificate of incorporation
or memorandum or articles of association.
9. TERM AND TERMINATION
9.1 Term.
This Agreement shall become effective in accordance with Clause 2.1 and
shall remain in full force and effect:
(a) until terminated by mutual consent of the Parties; or
(b) until ATIM and UMTI cease to be Shareholders of the Company (except by
reason of any transfer to Affiliates under Clause 4.2); or
(c) until terminated under the provisions of Clause 9.2.
9.2 Termination.
(a) Each of the following events shall constitute an Event of Default:
(i) any Party breaches or fails to perform any material term, covenant,
agreement or undertaking contained in this Agreement and such breach
or failure, if capable of remedy, is not remedied within thirty (30)
days after written notice of such breach or failure is received from
any other Party; or
(ii) any representation or warranty made by a Party in this Agreement is
found to be false, inaccurate or misleading in any material respect;
or
(iii) either of ATIM or UMTI is adjudicated or declared bankrupt or
insolvent, proposes or makes any arrangement or composition with, or
any assignment for the benefit of its creditors or if an administrator
or receiver is appointed over any part of the assets or undertaking of
such Party; or
(iv) if a Change of Control has occurred in respect of any Party, and such
Change of Control has been communicated to the other Party in writing
provided that the other Party notifies objection to such Change of
Control within six (6) months thereof.
(b) Upon the occurrence of an Event of Default as specified in Clause 9.2(a)
above attributable to the acts or omissions of ATIM then UMTI shall be
entitled to give notice of termination of this Agreement (a "Termination
Notice") to ATIM and this Agreement shall be deemed to have been terminated
with effect from the date of the Termination Notice.
(c) Upon the occurrence of an Event of Default as specified in Clause 9.2(a)
above attributable to the acts or omissions of UMTI, then ATIM shall be
entitled to give notice of termination of this Agreement (a "Termination
Notice") to UMTI, and the Agreement shall be deemed to have been terminated
with effect from the date of the Termination Notice.
9.3 Consequences of Termination.
(a) In addition to any other remedy available to it in law, the rights of the
Parties under the Default Options comprised in the provisions of Clause 4.7
may be invoked by:-
(i) UMTI in the event of a Termination Notice given by it under Clause
9(2)(b); or
(ii) ATIM in the event of a Termination Notice given by either it under
Clause 9(2)(c).
(b) Failing any exercise of the powers under sub-clause (a) above, within a
time of 30 days of any Termination Notice the winding up of the Company may
be requested by:-
(i) UMTI in the event of a Termination Notice given by it under Clause
9(2)(b); or
(ii) ATIM in the event of a Termination Notice given by it under Clause
9(2)(c).
(c) In the case of any Event of Default whereby the Company suffers any
expenses, liabilities or losses, the Party or Parties responsibility shall
indemnify the Company for all such expenses, liabilities or losses caused
by its default. All costs of determining the Transfer Price of the Shares
to be sold or acquired pursuant to Clause 4.8 and other costs and expenses
relating to the sale or acquisition of the Shares, including registration,
transfer and stamp fees shall also be borne entirely by that Party or
Parties.
10. SURVIVAL OF PROVISIONS
10.1 Survival of Representations and Warranties
The representations and warranties respectively made by the Parties in this
Agreement will survive the Completion Date, and will remain in full
force-and effect thereafter until the term of this Agreement.
10.2 Survival of Termination
The provisions of Clauses 4, 9.3, 11, 12, and 13 shall survive termination
of this Agreement.
11. CONFIDENTIALITY
(a) Each Party shall;
(i) refrain, and will cause any respective officers, directors, employees,
agents, consultants, advisers, and other representatives to refrain,
from disclosing to any other Person any confidential documents or
confidential information concerning the other party hereto furnished
to it in connection
with this Agreement or the transactions contemplated hereby, and
(ii) will refrain, and will cause its Affiliates and its or their
respective officers, directors, employees, agents, and other
representatives to refrain, from disclosing to any Person any
confidential documents or confidential information concerning the
Company unless;
(A) such disclosure is compelled by judicial or administrative
process or by other requirements of law and notice of such
disclosure is furnished to such other Party; or
(B) such confidential documents or information can be shown to have
been:
(i) known by the Party hereto previous to it receiving such
documents or information;
(ii) in the public domain through no fault of such receiving
Party; or
(iii) later acquired by such receiving party from other public
sources.
(b) Each Party shall use its reasonable endeavours to ensure observance of the
obligation of confidentiality under this Agreement by all its officers,
advisors, employees, servants and agents who have access to the
confidential information in the course of their duties. Each Party agrees
and undertakes to be responsible to the other Parties, in the event of the
breach of the obligation of confidentiality under this Agreement by any of
its officers, advisors, employees, servants or agents.
12. DISPUTE RESOLUTION
12.1 Consultation
In the case of any dispute arising out of or in connection with this
Agreement or its performance, including any question regarding its
existence, validity or termination, the Parties shall first endeavour to
reach an amicable settlement through mutual consultations and negotiations.
If the Parties are unable to reach an amicable settlement within 30 days
from the date on which the dispute arose (except as to any matter for which
express provisions are made in this Agreement), any of the Parties may make
a reference to arbitration in accordance with Clause 12.2.
12.2 Arbitration
(a) In the absence of any settlement of disputes under Clause 12.1 any and all
disputes or differences arising out of or in connection with this Agreement
or its performance shall be submitted to arbitration at the request of any
of the Parties' upon written notice to that effect to the other Party or
Parties, as the case may be, and such arbitration shall be conducted in
accordance with the Indian Arbitration and Conciliation Act, 1996 (the
"Arbitration Act") by a panel consisting of three (3) arbitrators.
(b) While submitting the dispute or difference to arbitration in accordance
with sub-Clause (b) above, the Party, while so submitting shall, in its
notice, specify the name of one arbitrator appointed by it. Within 30 days
of the receipt of notice, the other Party shall appoint an arbitrator. The
third arbitrator (who will act as the chairman) shall be nominated by the
two arbitrators appointed as aforesaid or, failing such nomination within
30 days of the appointment of the second arbitrator, shall be appointed in
accordance with the Arbitration Act.
Each of the arbitrators shall be either a retired judge of the Supreme
Court of India or a retired judge of one of the High Court of India or a
reputed member of the Bar Council of India having at least 15 years of
experience as an advocate.
(c) The language of the arbitration shall be English. The venue of the
arbitration shall be at Mumbai, India.
(d) The Parties agree that the award of the arbitrators shall be final and
binding upon the Parties, and that none of the Parties shall be entitled to
commence or maintain any action in a court of law upon any matter in
dispute arising from or in relation to this Agreement, except for the
enforcement of an arbitral award granted pursuant to this Clause 12.2.
13. NOTICES
(a) All notices or other communication to be given under this Agreement shall
be in writing and shall either be personally delivered or sent by
registered post, courier, telex or facsimile transmission and shall be
addressed for the attention of the persons addressed below:
If to ATIM:
Address: ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
Fax:
Attention: Director
If to UMTI:
Address: 2A, Landmark, ▇▇▇▇. ▇.▇.▇. ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
700 020
Fax: ▇▇-▇▇-▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Director
If to the Company:
Address: 2A, Landmark, ▇▇▇▇. ▇.▇.▇. ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
700 020
Fax: ▇▇-▇▇-▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Director
(b) Any Party may by notice change the address to which such notices and
communication are to be delivered or transmitted.
(c) A notice shall be deemed to have been served as follows:
(i) if personally delivered, at the time of delivery;
(ii) if sent by registered post or courier, at the time of delivery thereof
to the person receiving the same; or
(iii) if sent by facsimile transmission, in the absence of any indication
that the facsimile transmission was distorted or garbled, at the time
of production of a transmission report by the machine from which the
facsimile was sent which indicates that the facsimile was sent in its
entirety to the facsimile number of the recipient notified for the
purposes of this Clause 13.
14. MISCELLANEOUS PROVISIONS
14.1 No Waiver
No waiver of any provision of this Agreement nor consent to any departure
from it by any Party is effective unless it is in writing. A waiver or
consent will be effective only for the purpose for which it was given. No
default of delay on the part of any Party in exercising any rights, powers
or privileges operates as a waiver of any right, nor does a single or
partial exercise of a right preclude any exercise of other rights, powers
or privileges. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
14.2 Amendment
No amendment, variation, alteration or modification of this Agreement shall
be effective unless made in writing and signed by all the Parties to this
Agreement.
14.3 Assignment
Neither Party shall assign or transfer or purport to assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the other Parties.
14.4 Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of India.
14.5 Severability
If any provision of this Agreement or any part thereof is declared or held
to be invalid, illegal or unenforceable in any respect under applicable
law, such invalidity, illegality or unenforceability shall not invalidate
this entire Agreement. In that case, this Agreement shall be construed so
as to limit any term or provision so as to make it enforceable or valid
within the requirements of applicable law, and, in the event that such term
or provision cannot be so limited, this Agreement shall be construed to
omit such invalid, illegal or unenforceable provision.
14.6 Counterparts
This Agreement is executed in counterparts by each of the Parties and each
of the counterparts shall constitute an original but all of them shall
constitute only one document.
14.7 Costs
Each party to this Agreement shall bear and pay its own legal costs and
other expenses in connection with the preparation, execution and completion
of this Agreement.
14.8 No Agency or Partnership
(a) This Agreement shall not constitute the appointment of any Party as the
legal representative or agent of any other, nor will any Party have right
or authority, to assume, create or incur any liability or obligation
express or implied, against, in the name of, or on behalf of another party
or the Company.
(b) Nothing in this Agreement creates or constitutes a partnership between the
parties to it or any one of them.
(c) Each party to this Agreement acknowledges that nothing in this Agreement
gives it the right or authority to and undertakes not to
represent or hold itself out as representing the other party to this
Agreement, whether to bind it contractually or for any other purpose.
14.9 No Third Party Beneficiary
Nothing expressed or mentioned in this Agreement is intended or will be
construed to give any person other than the Parties and their permitted
assigns and successors any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provisions contained in it.
14.10 Set Off
The Parties shall have the right at any time to set off their debts and/or
financial obligations to one another in any manner as may be agreed between
the Parties.
14.11 Change of Law
In case of any change in law for the time being in force including but not
limited to change or re-enactment of the Act, the Parties shall discuss in
good faith how best to amend this Agreement so as to make its terms
consistent with the provisions of such changed law.
14.12 Entire Agreement
This agreement supersedes and replaces any and all prior contracts,
understandings or arrangements, heretofore made between the Parties and
relating to the Company, and constitute the entire understanding of the
Parties with respect to the Company.
IN WITNESS WHEREOF the Parties hereto have entered into this Agreement the day
and year first above written.
ASIAN TELECOMMUNICATION INVESTMENTS (MAURITIUS) LIMITED
By: /s/ ▇▇▇▇ ▇▇▇▇
-----------------------------
Name ▇▇▇▇ ▇▇▇▇
Title: Director
UMT INVESTMENTS LIMITED
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Name ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: DIRECTOR
▇▇▇▇ ▇▇▇▇▇▇ TELEMATICS LIMITED
By:
-----------------------------
Name
Title:
SCHEDULE 1
Articles of Association
(See Attached)
THE COMPANIES ACT, 1956
PUBLIC COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
OF
▇▇▇▇ ▇▇▇▇▇▇ TELEMATICS LIMITED
1. These Articles are substituted for the original Articles of Association and
have been adopted by a special resolution of the shareholders passed at a
meeting on 9 April, 2004.
2. No regulations contained in Table "A" in the First Schedule to the
Companies Act, 1956 shall apply to this Company, but the regulations for
the management of the Company and for the observance of the members
thereof, and their representatives shall, subject to any exercise of
statutory powers of the Company with reference to the repeal or alteration
or addition to its regulations by Special Resolution, as prescribed by the
Companies Act, 1956 be such as are contained in these Articles.
DEFINITIONS
3. In these Articles the following terms shall bear the following meanings;
"Act" means the Companies Act, 1956 of India as amended from time to time or
any statutory modification or re-enactment thereof,
"Affiliate" when used with reference to any corporate entity shall mean another
company controlled by, controlling or under common control with that entity,
where "control" means either (i) the ownership, either directly or indirectly,
of more than fifty percent (50%) of the voting Shares or comparable Interests in
such -entity or other company, as the case may be, or (ii) the right to elect
the majority of the directors of such entity or other company, as the case may
be, where such rights may be exercised without the consent of any third party
"AGM" means the annual general meeting of the Company;
"Alternate Director" shall have the meaning set forth in Article 81 hereof.
"Articles" means these Articles of Association;
"Auditors" means the statutory auditors of the Company appointed from time to
time;
"Board" means the Board of Directors of the Company;
"Business" means the business of the Company being the Investment in the telecom
sector in India and matters ancillary thereto;
"Business Day" means a day on which the scheduled banks are open for business in
Mumbai.
"Chairman" shall have the meaning as set forth in Article 78 hereof
"Change of Control" means with respect to a Shareholder:
(a) the acquisition by a person or a related group of persons of 50% or more of
the issued capital (with ordinary voting powers) of a Shareholder or
ultimate holding of that Shareholder; or
1
(b) substitution of the person or group of persons holding the power whether
directly or indirectly, to direct or cause the direction of management and
policies of that shareholder, whether through ownership of Shares, contract
or otherwise.
"Company" means ▇▇▇▇ ▇▇▇▇▇▇ Telematics Limited;
"Director" means a director of the Company from time to time;
"EGM" means the extraordinary general meeting of the Company;
"Event of Default" shall have the same meaning set forth in Article 41, hereof;
"Majority Shareholder" shall mean the person for the time being holding 51% or
more of the issued and paid up equity share capital of the Company;
"Minority Shareholder" shall mean the person or persons for the time being
holding 49% or less of the issued and paid up equity share capital of the
Company;
"Original Director" shall have the meaning set forth in Article 81, thereof;
"Person" shall mean any natural person, limited or unlimited liability company,
corporation, general partnership, limited partnership, proprietorship, trust,
union, association, court, tribunal, agency, government, ministry, department,
commission, self-regulatory organization, arbitrator, board, bureau,
instrumentality, or other entity, enterprise, authority, or business
organization;
"Preference Shares" means preference shares of the Company issued in accordance
with Article 12;
"Rupees" or "Rs." the lawful currency for the time being of India;
"Sectoral Cap" shall mean the maximum prescribed limits of foreign investments
in telecom sector imposed by the Government of India from time to time (which at
present limits foreign direct investment to 49% of the equity share capital of
any Company in the telecom sector);
"Share" or "Shares" means, as applicable, equity share(s) of par value of Rs. 10
(Rupees Ten) each in the Company;
"Shareholder" means a holder of Shares in the Company;
"Transfer" means to 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;
"Transfer Notice" shall have the meaning set forth in Article 39;
"Transfer Price" shall have the meaning set forth in Article 40.
4. References to the plural shall include the singular and vice-versa;
reference to one gender shall include other genders; reference to company
shall include foreign companies, corporations and bodies registered,
references to persons shall include bodies registered and unincorporated.
5. Unless the context otherwise requires, words or expressions contained in
these Articles shall bear the same meaning as in the Act or any
statutory modification thereof in force.
SHARE CAPITAL
6. The authorised share capital of the Company is Rs. 130,000,000 divided into
13,000,000 equity shares of Rs. 10.
2
7. The Company has power from time to time to increase or reduce its capital
and to consolidate or divide the Shares in the capital for the time being
into other classes and to attach thereto respectively, such preferential,
qualified, deferred or other special rights, privileges, conditions or
restrictions as regards payment of dividends, distribution of assets,
repayment or reduction of capital, voting or otherwise as may be determined
by or in accordance with the Articles and to vary, modify or abrogate any
such right, privilege, condition or restriction in such manner as may be
permitted from time to time by the Articles of the Company or other
provisions of law for the time being in force. Provided that, the Board has
power from time to time to call for and issue additional capital
contribution, which may in the determination of the Board, be required for
funding the Business or the operation and growth of the Company. Any such
call shall not be in breach of the Sectoral Caps. In the absence of any
agreement to the contrary the Shareholders shall alone be required to
contribute such additional capital
8. Except in so far as otherwise provided as existing capital by the
conditions of issue or by these Articles, any capital raised by the
creation of new Shares or Preference Shares, shall be considered as part of
the existing share capital and shall be subject to the provisions herein
contained with reference to the payment of calls and installments,
forfeiture, lien, surrender, transfer and transmission, voting and
otherwise.
9. Subject to the provisions relating to the issue and allotment of the Shares
in these Articles, the Shares of the Company shall be under the control and
disposal of the Board who may allot or otherwise dispose of the same to
such persons and on such terms as the Board may think fit and to give any
persons any Shares and Preference Shares, whether at par or at a premium
and for such consideration as the Board may think fit.
10. If and to the extent permitted by the relevant provisions of the Act as
amended from time to time, the Company shall, if so authorised by the
resolution of the Shareholders under Section 81(1A) of the Act, and other
relevant provisions of the Act, issue non-voting equity shares not
exceeding twenty five per cent of the issued equity share capital of the
company. Such Shares ("Non Voting Shares") shall not carry voting rights.
However, any holder of such Non Voting Shares shall be entitled to all
rights as a member of the Company (other than the right to vote on
resolutions placed before the Company at any of its general meetings)
including the right to receive a copy of every balance sheet as specified
in sub-article (1) of Section 219 of the Act.
Increase Of Capital
11. The Company may, at its general meeting, from time to time, by a special
resolution, increase the capital by the creation of new Shares, such
increase to be of such aggregate amount and to be divided into such Shares
of such respective amounts, as the resolution shall prescribe. The new
Shares, shall be issued on such terms and conditions and with such rights
and privileges annexed thereto, as the resolution shall prescribe, and in
particular, such Shares may be issued, subject to the Articles with a
preferential or qualified right to dividends, and in the distribution of
assets of the Company and with a right of voting at General Meetings of the
Company in conformity with Section 87 and 88 of the Act. Unless otherwise
stated all new Shares of the same class shall, rank pari passu with
existing Shares of the same class. Whenever the capital of the Company has
been increased under the provisions of this Article, the Directors shall
comply with the provisions of Section 97 of the Act.
Preference Shares
12. Subject to the provisions of the Act the Company shall have the power to
issue either convertible or non convertible, cumulative or non cumulative
preference shares with or without coupon rate of interest, in one or more
series which are, at the option of the Company, liable to be redeemed and
the resolution authorising such issue shall prescribe the manner, terms and
conditions of such redemption as agreed by the shareholders and embodied in
any resolution or agreement in that behalf which shall be deemed to be
incorporated in these Articles to the extent applicable. Such terms shall
be binding on the Company. Any such shares shall (against holders of equity
share) have priority:
(a) in respect of any dividends payable by the Company;
3
(b) over any rights of equity Shareholders in regard to every redemption
of preference shares, including payment of any redemption premium; and
(c) over the equity Shareholders of the Company (but after the creditors)
on any winding up of the company.
Sub-division and consolidation of shares
13. Subject to the provisions of Section 90 of the Act, the Company in general
meeting may from time to time by an ordinary resolution alter the
conditions of its Memorandum as follows:
(a) consolidate and divide all or any of its share capital into Shares or
Preference Shares of larger amount than its existing shares;
(b) sub-divide any class of existing share capital, or any of them into
Shares of smaller amount than is fixed by the Memorandum, so however,
that in the subdivision the proportion between the amount paid and the
amount, if any, unpaid on each reduced share in question shall be the
same as it was in case of the share from which the reduced share is
derived;
(c) cancel any Shares or Preference Shares which, at the date of the
passing of the resolution in that behalf, have not been taken or
agreed to be taken by any person, and diminish the amount of its share
capital by the amount of the Shares or Preference Shares so cancelled.
Cancellation in pursuance of this sub-clause shall not be deemed to be
a reduction of the share capital within the meaning of the Act.
14. Whenever the Company shall do any one or more of the things provided for in
the foregoing sub-clauses (a), (b) and (c), the Company shall, within
thirty (30) days thereafter give notice thereof, to the Registrar of
Companies specifying, as the case may be, the Shares or Preference Shares
consolidated, divided, sub-divided or cancelled.
Modification of rights
15. Whenever the capital, by reason of the issue of Preference Shares or
otherwise is divided into different classes of Shares, all or any of the
rights and privileges attached to each class may, subject to the provisions
of Sections 106 and 107 of the Act, be modified, commuted, affected,
abrogated, dealt with or varied with the consent in writing of the holders
of not less than three-fourth of the issued capital of that class or with
sanction of a special resolution passed at a general meeting of the holders
of the Shares of that class, and all the provisions hereafter contained as
to general meeting shall mutatis mutandis apply to every such meeting. This
Article shall not derogate from any power the Company would have if this
Article was omitted.
16. The rights conferred upon the holders of the Shares and Preference Shares
of any class issued with preferred or other rights or privileges shall,
unless otherwise expressly provided by the terms of the issue of Shares of
that class, be deemed not to be modified, commuted, affected, abrogated,
dealt with or varied by the creation or issue of further Shares of that
class ranking pari passu therewith.
SHARES AND CERTIFICATES
Further issue of Shares
17. (1) Where it is proposed to increase the subscribed capital of the Company
by allotment of further Shares, then:
(a) Such further Shares shall be offered to the persons, who, at the
date of the offer, are holders of the equity Shares in
proportion, as nearly as circumstance admit, to the capital
paid-up on those Shares at that date;
4
(b) Such offer shall be made by a notice, specifying the number of
Shares offered and limiting a time not less than thirty days (or
such other longer period as may be prescribed by the Act) from
the date of the offer, within which the offer if not accepted,
will be deemed to have been declined;
(c) The offer aforesaid shall be deemed to include (subject to the
restrictions on transfer of Shares contained in these Articles) a
right exercisable by the person concerned to renounce the Shares
offered to him or any of them in favour of any other person(s)
and the notice referred to in sub-clause (b) hereof shall contain
a statement of this right PROVIDED THAT the Directors may
decline, without assigning any reason, to allot any Shares to any
person in whose favour any member may renounce the Shares offered
to him;
(d) After the expiry of the time specified in the aforesaid notice,
or on receipt of earlier intimation from the person to whom such
notice is given that he declines to accept the Shares offered,
the Board may dispose of them in such manner as they think most
beneficial to the Company.
(2) Notwithstanding anything contained in sub-clause (1) hereof but
subject to the Sectoral Caps, the further Shares aforesaid, may be
offered to any person(s) (whether or not those persons include the
person referred to in sub-clause (1)(a) hereof) in any manner
whatsoever, if a special resolution to that effect is passed by the
Company in general meeting, at which meeting all the Shareholders of
the company are either present in person or through their proxies.
(3) Nothing in sub-clause (1)(c) hereof shall be deemed to extend the time
within which the offer should be accepted.
18. Subject to the provisions of these Articles and of the Act, the Shares
shall be under the control of the Directors who may allot or otherwise
dispose of the same to such person, on such terms and conditions and at
such times, as they think fit, and with full power, subject to the sanction
of the Company in general meeting, to give any person the option to be
allotted Shares of any class of the Company either at a premium or at par
or at a discount, subject to the provisions of the Act and at such time and
for such consideration as the Directors think fit.
19. Where the Company issues Shares or Preference Shares at a premium, the
Company shall comply with the provisions of the Act. The moneys credited to
the Shares Premium Account shall be dealt with in the manner provided by
the Act.
20. The general meeting, may subject to the provisions of the Act and the
Sectoral Caps, determine that any shares (whether forming part of the
original capital or of any increased capital of the Company) be offered to
such persons (whether members or not) in such proportion and on such terms
and conditions and either at a premium or at par or at a discount (subject
to compliance with the provisions of the Act) as such general meeting shall
determine and with full power to give any person (whether a member or not)
the option to call for or be allotted Shares of any class of the Company
and such option being exercisable at such time and for such consideration
as may be directed by such general meeting or the Company in general
meeting may make any other provision whatsoever for the issue, allotment or
disposal of any such Shares.
21. The Company shall not issue Shares at a discount except in compliance with
the applicable provisions of the Act.
22. If by the conditions of allotment of any class of shares, the whole or any
part of the amount of issue price thereof shall be payable by installments,
every such installment shall, when due, be paid to the Company by the
person who for the time being and from time to time shall be the registered
holder of the share or his legal representative and shall for the purposes
of these Articles be deemed to be payable on the date fixed for payment and
in the case of non-payment, the provisions of these Articles as to payment
of interest and expenses, forfeiture and the like and
5
all other relevant provisions of the Articles shall apply, as if such
installments were a call, duly made and notified as hereby provided.
23. An application signed by or on behalf of an applicant for Shares in the
Company followed by an allotment of any Shares therein shall, be an
acceptance of Shares within the meaning of these Articles, and every person
who thus or otherwise accepts any Shares and whose name is entered on the
register shall, for the purpose of these Articles, be a member.
24. The money, if any, which the Board shall, on the allotment of any Shares
being made by them, require or direct to be paid by way of deposit, call or
otherwise in respect of any Shares allotted by them, shall, immediately on
the inscription of the name of the allottee in the Register of Members as
the holder of such shares become a debt due to and recoverable by the
Company from the allottee thereof and shall be paid by him accordingly.
25. Any two or more joint allottees of a Share shall be treated as a single
member for the purpose of this Article and the certificate of any Share,
which may be subject of Joint ownership, may be delivered to any one of
such joint owners on behalf of all of them.
26. A Director may sign a share certificate by affixing his signature thereon
by means of any machine, equipment or other mechanical means, such as
engraving in metal or lithography, but not by means of a rubber stamp,
provided that the Director shall be responsible for the safe custody of
such machine, equipment or other material used for the purpose.
27. If a certificate be consolidated, worn out, defaced, destroyed or lost or
if there is no further space on the back thereof for endorsement of
transfer, it shall, if requested, be replaced by a new certificate, free of
charge, provided however that, such new certificates shall not be granted
except upon delivery of the original worn-out or defaced or used up
certificates for the purpose of cancellation, in accordance with the
Companies (Issue of Share Certificate) Rules, 1960 or upon proof of
destruction or loss, and on such indemnity as the Board may require in the
case of the certificate having been destroyed or lost.
28. When a new share certificate has been issued in pursuance of Article 27 of
these Articles, it shall state on the face of it and against the stub or
counterfoil to the effect that it is 'issued in lieu of share certificate
No. subdivided / replaced on consolidation of share replaced on
--------
destruction or loss' as the case may be.
29. The Managing Director of the Company for the time being or, if the Company
has no Managing Director, any Director appointed or designated by the Board
of the Company for the said purpose shall be responsible for maintenance,
preservation and safe custody of all books and documents relating to the
issue of share certificates.
30. If any Share stands in the names of two or more persons, the person first
named in the Register shall, as regards receipt of dividends or bonus or
service of notices and all or any other matter connected with the Company,
except voting at meeting and the transfer of the Shares be deemed the sole
holder thereof but the joint holders of share shall be severally as well as
jointly liable for payment of all instalments and calls due in respect of
such share, and for all incidents thereof according to the Company's
regulations.
31. (a) Except as ordered by a court of competent Jurisdiction or as required
by law, the Company shall not (except only as is by these Articles
otherwise expressly provided) be bound to recognise, even when having
notice thereof, any equitable, contingent, further or partial interest
in any Share or any right in respect of a Share other than an absolute
right thereto, in accordance with these Articles, in the person from
time to time registered as holder thereof, but the Board shall be at
liberty at its sole discretion to register any share in the joint
names of any two or more persons (but not exceeding 3 persons) or the
survivor or survivors of them.
(b) Except as otherwise, to the contrary, provided by the Act and in
particular Sections 153B and 187C (if applicable) of the Act, no
notice of any trust (express, implied or constructive) shall be
entered on the Register of Members or of debenture holders.
6
(c) Shares may be registered in the name of an incorporated company or
other body corporate but not in the name of a minor (except in case
where they are fully paid) or in the name of a person of unsound mind
or in the name of any firm or partnership.
32. None of the funds of the Company shall, except in the manner and to the
extent permitted by the Act, be employed in the purchase of its own Shares.
33. The Company shall have the power to pay interest out of capital. For the
purpose, the Company shall comply with the Act.
34. The Company shall have power, by passing a special resolution, to issue
debentures whether with or without the right to allotment of or conversion
into Shares and on such terms and conditions as the Company may determine
in general meeting. The Company shall also have the power to re-issue
redeemed debentures in accordance with the provisions of the Act. The
Company shall not issue any debentures carrying voting rights at any
meeting of the Company whether generally or in respect of any particular
class of business.
TRANSFER OF SHARES
Restrictions on Transfer of Shares by Shareholders.
35. Except as otherwise provided in these Articles:-
(a) any Transfer of Shares shall be subject to the provisions of these
Articles;
(b) no Transfer of any Shares shall be made which would result in breach
of the Sectoral Cap in relation to the Company or otherwise.
Transfer to Affiliates
36. Subject only to Article 35 (b) hereof, any Shareholder shall have the right
to Transfer its Shares to one or more Affiliates, which Transfer may be
effected in one or more separate transactions. Provided that:
(a) prior to any such transfer
(i) the transferring Shareholder shall provide written notice of such
Transfer to the other Shareholders, such notice to specify the
number of Shares to be transferred and the name or names of the
Affiliates to whom the Shares are to be transferred; and
(ii) the Affiliate shall have unconditionally undertaken to be bound
by the terms of these Articles, and shall have executed a deed of
adherence to that effect; and
(b) if at any time thereafter, any such transferee ceases to be an
Affiliate of the transferor, the Shares held by it shall be
transferred back to the original Shareholder or any Affiliate thereof,
except as otherwise agreed between the Shareholders.
Put Option
37. (a) The Majority Shareholder shall have the right at any time to require
the Minority Shareholder to purchase all (but not part) of its Shares
as per the procedure laid out in Article 39 below and at a fair market
value determined in accordance with Article 40 below.
(b) The Minority Shareholder may (and where the Sectoral Cap is applicable
shall) nominate a third party as transferee or purchaser of the said
Shares which, to the extent required by the Sectoral Cap, shall be an
Indian party.
7
Call Option
38. (a) The Minority Shareholder shall have the right at any time to purchase
the Shares of the Majority Shareholder or any of them as per the
procedure laid down in Article 39 below and at a fair market value
determined in accordance with Article 40 below.
(b) The Minority Shareholder may (and where the Sectoral Cap is
applicable shall) nominate a third party as transferee or
purchaser of the said Shares which, to the extent required by the
Sectoral Cap, shall be an Indian party.
Transfer Procedure
39. (a) The options as mentioned in Article 37, 38 and 41 shall be exercised
by a written notice ("Transfer Notice") from the party exercising such
option/right ("Offeror") to the other Party ("Offeree") and the
effective date of its exercise shall be the date of the said written
notice. Any resulting sale or acquisition, shall be subject to the
approval of any other competent regulatory agencies and shall be
completed within the periods stipulated in Article 39 (c) hereof or
such extended time which may be required for any determination of
price under Article 40, or to comply with applicable laws (including
the obtaining of requisite approvals).
(b) Any notice given by the Minority Shareholder (or response to any
notice as the case may be) shall stipulate the name of any third party
nominated to purchase or take a transfer of the Shares in question, if
required.
(c) Any Transfer of the Shares shall, subject to any agreement of the
Shareholders to the contrary and Article 41(a) hereof, be completed
within the 90 days from the transfer notice in question
(d) Upon the failure of the Offeree to comply with the provisions of this
Articles 39, (or of any extension thereof necessary to obtain
requisite approvals) or any fixation of the Transfer Price under
Article 40 hereof, whichever is later, the Offeree shall be deemed to
have irrevocably appointed the Company as its Attorney to deal with
the matter in accordance with the directions of the Offeror. The
Offeree shall abide by the directions of the Offerer and shall
undertake to do or procure all necessary things and execute all
necessary forms, documents and agreements to implement such
directions.
Transfer Price
40. Except as stipulated by Article 41 hereof and subject to the requirements
of regulatory provisions, the Transfer Price on any Transfer pursuant to
the Articles shall be as determined below:
(a) such fair market value as may be agreed between the Shareholders; and
failing such agreement
(b) such fair market value as may be determined by ▇▇▇▇▇▇▇ ▇▇▇▇▇ (Asia)
L.L.C. whose decision shall be final and for which purpose ▇▇▇▇▇▇▇
Sachs (Asia) L.L.C. shall act as an expert and not as an arbitrator
and shall not be bound to disclose any reasons for its determination.
Default Option
41. (a) Following any Event of Default on the part of the Majority
Shareholder, the Minority Shareholder shall have the right to require
the former to sell to it or its nominee all (but not part only) of the
Shares held by the Majority Shareholder at ninety percent (90%) of
the Transfer Price determined in accordance with Article 40 hereof and
as per the procedure laid down in Article 39.
8
(b) Following any Event of Default on the part of the Minority
Shareholder, the Majority Shareholder shall have the right to require
the former or its nominee to purchase all (but not part only) of the
Shares held or beneficially owned by the Majority Shareholder at one
hundred and ten percent (110%) of the Transfer Price determined in
accordance with Article 40 hereof and as per the procedure laid down
in Article 39 hereof.
(c) Each of the following events shall constitute an Event of Default:
(i) the Majority Shareholder or the Minority Shareholder, is
adjudicated or declared bankrupt or Insolvent, proposes or makes
any arrangement or composition with, or any assignment for the
benefit of it's creditors or if an administrator or receiver is
appointed over any part of the assets or undertaken of such
Shareholder; or
(ii) if a Change in Control has occurred in respect of any
Shareholder, and such Change of Control has been communicated to
the other Shareholders, in writing provided that the other
Shareholder notifies objection to such Change of Control within
six (6) months thereof.
Sectoral Cap
42. For so long as the Sectoral Cap shall apply no Shareholder shall make or
purport to make any Transfer or take any other action the effect of which
would be a breach of such Sectoral Cap.
Repayment of Loans etc.
43. Upon a Transfer of all the Shares held by any Shareholder in accordance
with the terms of these Articles:
(a) that Shareholder shall repay all loans, loan capital, borrowing and
indebtedness in the nature of borrowing owed by it to the Company
(together with any accrued interest);
(b) the Company shall repay all loans, loan capital, borrowing and
indebtedness in the nature of borrowing outstanding to the Company
from that Shareholder (together with any accrued interest), to the
extent that any such loans, borrowings, and indebtedness are not
transferred to any purchaser or transferee of Shares in question; and
(c) the continuing Shareholder(s) shall use all reasonable efforts to
secure the release of any guarantees or indemnities given by the other
Shareholder to or in respect of the Company.
Other provisions as to Transfer
44. The Company shall keep a "Register of Transfers" and therein shall be
fairly and distinctly entered particulars of every transfer or transmission
of any Shares or Preference Shares.
45. In respect of any transfer registered in accordance with the provisions of
these Articles, the Board may, at their discretion direct an endorsement of
the transfer and the name of the transferee and other particulars, on the
existing share certificate and authorise any Director or officer of the
Company to authenticate such endorsement on behalf of the Company or direct
the issue of a fresh share certificate, in lieu of and in cancellation of
the existing certificate, in the name of the transferee.
46. The instrument of transfer of any Share or Preference Share shall be in
writing and all the provisions of the Act, shall be duly complied with in
respect of all transfers and registration thereof
47. Every such instrument of transfer shall be executed both by the transferor
and the transferee and the transferor shall be deemed to remain holder of
the Shares in question until the name of the
9
transferee is entered in the Register of Members in respect thereof. The
instrument of transfer shall be in respect of only one class of Shares and
should be in the form prescribed under the Act.
48. In case of the death of any one or more persons named in the Register of
Members as the joint-holders of any class of shares, the survivors shall be
the only person recognised by the Company as having any title to or
interest in such share but nothing therein contained shall be taken to
release the estate of a deceased joint-holder from any liability thereon
held by him jointly with any other person.
49. Subject to Article 48, the executors or administrators or holders of a
Succession Certificate or the legal representatives of a deceased member
(not being one or two joint holder) shall be the only person recognised by
the Company as having any title to the shares registered in the name of
such member, and the Company shall not be bound to recognise such executors
or administrators or holders of a Succession Certificate or the legal
representatives unless they shall have first obtained probate or Letter of
Administration or Succession Certificate, as the case may be, from a duly
constituted Court in the Union of India and a clearance certificate from
the Estate Duty authorities; provided that in any case where the Board in
its absolute discretion, thinks fit, the Board may dispense" with the
production of probate or Letters of Administration or Succession
Certificate, upon such terms as to indemnify of otherwise as the Board in
its absolute discretion may think necessary, and under Article 44 hereof
register the name of any person who claims to be absolutely entitled to the
Shares standing in the name of a deceased member, as a member.
50. No Share shall in any circumstances be transferred to any infant,
insolvent, or person of unsound mind, except fully paid Shares through a
legal guardian.
51. A person entitled to a Share by transmission shall, subject to the right of
the Directors to retain such dividends or money as hereinafter provided, be
entitled to receive and may give discharge for any dividends or other
moneys payable in respect of the share.
52. Every instrument of transfer shall be presented to the Company duly stamped
for registration, accompanied by such evidence as the Board may require to
prove the title of the transferor and his right to transfer the Shares and
every registered instrument of transfer shall remain in the custody of the
Company until destroyed by order of the Board.
53. Before the registration of a transfer, the certificate or certificates of
the Share or Shares to be transferred must be delivered to the Company
along with (save as provided in Section 108 of the Act) a properly stamped
and executed instrument or instruments of transfer.
54. No fees shall be charged for registration of transfers of any Shares or
debentures. No fee shall also be charged for registration of probate,
letters of administration or other similar documents.
55. The Company shall incur no liability or responsibility whatever in
consequence of its registering or giving effect to any transfer of Shares
made or purporting to be made by any apparent legal owner thereof (as shown
or appearing in the Register of Members) to the prejudice of persons having
or claiming any equitable right, title or interest to or in the said
Shares, notwithstanding that the Company may have had notice of such
equitable rights or referred thereto in any books of the Company and the
Company shall not be bound by or required to regard or attend to or give
effect to any notice which may be given to it of any equitable rights,
title to interest or be under any liability whatsoever for refusing or
neglecting to do so, though it may have been entered or referred to in some
book of the Company but the Company shall nevertheless be at liberty to
regard and attend to any such notice and give effect thereto if the Board
shall so think fit.
CONVERSION OF SHARES INTO STOCK AND RECONVERSION
56. The Company in General Meeting may, by an ordinary resolution convert any
fully paid-up Shares into stock, and when any Shares shall have been
converted into stock, the several holders of such stock may henceforth
transfer their respective interest therein, or any part of such interest in
the same manner and subject to the same regulations as, and subject to
which Shares from
10
which the stock arise might have been transferred, if no such conversion
had taken place. The Company may, by an ordinary resolution convert any
stock into fully paid up Shares of any denomination.
57. The holders of stock shall, according to the amount of stock held by them
have the same rights, privileges and advantages as regards dividends,
voting at meetings of the Company, and other matters, as if they held the
Shares from which the stock arose; but no such privileges or advantages
(except participation in the dividends and profits of the Company and in
the assets on winding-up) shall be conferred by an amount of stock which
would not, if existing in Shares, have conferred that privileges or
advantage.
BORROWING
58. The Board may, subject to the provisions of Articles 86 and 91 from time to
time, but with such consent of the Company in General Meeting hereof as may
be required under the Act and/or the provisions of any agreement, raise any
moneys or sums of money for the purpose of the Company; provided that the
moneys to be borrowed by the Company, apart from temporary loans obtained
from the Company's bankers in the ordinary course of business, shall not
without the sanction of the Company at a General Meeting exceed the
aggregate of the paid up capital of the Company and its free reserves being
reserves not set apart for any specific purpose. Subject to the provisions
of the Act, however, the Board may from time to time at their discretion
raise or borrow or secure the payment of any such sum of money for the
purpose of the Company, by the issue of debentures, perpetual or otherwise,
including debentures convertible into Shares of the Company or perpetual
annuities and in security of any such money so borrowed, raised or received
mortgage, pledge or charge, the whole or any part of the property, assets
or revenue of the Company present or future, including its uncalled capital
by special assignment or otherwise or to transfer or convey the same
absolutely or in trust and to give the lenders powers of sale, and other
powers as may be expedient and to purchase, redeem or pay off any such
securities.
Provided that every resolution passed by the Company in General Meeting in
relation to the exercise of the power to borrow as stated above shall
specify the total amount up to which moneys may be borrowed by the Board.
59. The Directors may by a resolution at a meeting of the Board delegate the
above power to borrow money otherwise than on debentures to a Committee of
Directors or the Managing Director, if any, within the limits prescribed by
these Articles.
60. Subject to the provisions of the above sub-clauses, the Directors may, from
time to time, at their discretion, raise or borrow or secure the repayment
of any sum or sums of money for the purpose of the Company, at such time
and in such manner and upon such terms and conditions as they think fit,
and in particular, by promissory notes or by opening current accounts or by
receiving deposits and advances with or without security or by the issue of
bonds, perpetual or redeemable debentures (both present and future)
including its uncalled capital for the time being or by mortgaging or
charging or pledging any lands, buildings, goods or other property and
securities of the Company, or by such other means as may seem expedient.
61. Any debentures, debenture-stock bonds or other securities may be made
assignable free from any equities between the Company and the person to
whom the same may be issued.
62. The Directors shall cause a proper register to be kept, in accordance with
the Act, of all mortgages and charges specifically affecting the property
of the Company and shall duly comply with the requirements of the Act in
regard to the registration of mortgages and charges therein specified.
63. Where any uncalled capital of the Company is charged, all persons taking
any subsequent charge thereon shall take the same, subject to such prior
charge and shall not be entitled, by notice to the Shareholders or
otherwise, to obtain priority over such prior charge.
64. If the Directors or any of them or any other persons, shall become
personally liable for the payment of any sum primarily due from the
Company, the Board may execute or cause to be
11
executed any mortgage, charge or security over or affecting the whole or
any part of the assets of the Company by way of indemnity to secure the
Directors or other persons so becoming liable as aforesaid from any loss in
respect of such liability.
DIRECTORS
Constitution of the Board
65. Unless otherwise determined by the Company in general meeting, and subject
to the provisions of the Act, the number of Directors on the Board shall be
five.
66. Subject to Article 65 above
(a) the Board shall comprise initially five Directors
(b) the appointment or removal of any Director shall be subject to the
provisions of Article 68.
67. Three Directors shall be nominated by the Majority Shareholder and two
shall be nominated by the Minority Shareholder. The Board shall have the
overall responsibility for management of the Company. The Board shall
however appoint and delegate such day to day functions to the Chairman or
the Managing Director or Manager or to a committee, if any, as it deems fit
and as may be agreed upon by the Shareholders.
68. Subject to the approval of the shareholders under section 284 of the Act,
as may be applicable, the appointment or removal of any Director shall be
subject to the majority approval of the Board, for which purpose the
Director in question shall not be entitled to vote.
69. If at any time the Act or any other applicable law should require an
increase or decrease in the number of directors constituting the Board,
such increase or decrease shall be effected in a way that preserves the
proportional representation on the Board between the Shareholders in
accordance with the provisions of these Articles.
70. A Director shall not be required to hold any qualification shares in the
Company and Regulation 66 of Table A shall not apply.
71. The Directors shall be paid such remuneration as may be determined by the
Board of Directors from time to time.
72. Save the Managing Director, if any, the rest of the Directors shall be
liable to retire by rotation in accordance with these Articles
Meetings of the Board
73. Any meeting of the Board shall be held in accordance with the Articles. The
Chairman shall, at the request of any Director, convene a Board meeting
(unless waived by all Directors) by giving at least fourteen (14) Business
Days' prior written notice of the meeting specifying the place, date and
time thereof to all the other Directors together with the agenda and
details pertaining to the meeting including the nature of the business to
be transacted. The notice of the Board meeting shall be given to each
Director at the address of the Director whether in or outside India
provided to the Company for the said purpose. Such notice of Board meetings
may however be waived with the consent of all the Directors. The meetings
of the Board shall be held in India, or at any place outside India with the
consent of all the Directors. Any resolution passed at a Board meeting
shall not be binding on the Company if the notice of the Board meeting has
not been given in the manner prescribed herein or the matter decided was
not included in the agenda, provided that these requirements may be waived
with the consent of all the Directors.
74. Board Meetings shall be held at such places, in or outside of India as the
Board may determine, with the consent of all the Directors. Where a Board
meeting is adjourned it shall be reconvened on the same day of the week,
time and venue not less than seven days from the day of the
12
original meeting. Notices and minutes of Board meetings shall be given to
each Director at their last known address, whether resident in India or
abroad.
75. The quorum for any Board meeting shall be at least two (2) Directors,
provided that the presence of a Director appointed by the Majority and
Minority Shareholder each shall be necessary to constitute quorum. If the
quorum is not present throughout the meeting, then the meeting may be
adjourned to a Business Day not less than seven (7) days from the date of
the original meeting, on the same day of the week, time and place, unless
otherwise notified. In the event that no quorum is present at the adjourned
meeting, any two Directors (including always a Director nominated by the
Minority Shareholder) present shall constitute the quorum and proceed with
the meeting.
76. (a) Subject to Article 76(b) hereof, all decisions of the Board shall be
taken by a majority vote of the Directors present or represented for
voting at a Board meeting.
(b) Subject only to the provisions of the Act, all matters stipulated by
Article 86 hereof shall require the unanimous consent of the Directors
present and voting at the Board Meeting in question (excluding
interested Directors who are prohibited by law from voting).
Resolutions by Circulation
77. Subject to the provisions of the Act, resolutions of the Board may be
passed by circulation, if the resolution has been circulated in draft,
together with necessary papers, if any, to all the Directors, and has been
approved and signed by all Directors entitled to vote on the resolution.
Chairman
78. The Board shall appoint a Chairman who shall be one of the Directors,
nominated by the Majority Shareholder. The Chairman shall chair each
meeting of the Board and shall not have a casting vote. In the absence of
the Chairman at any meeting the Directors shall appoint one of their number
to chair the meeting in question.
Managing Director/Manager
79. The Majority Shareholder shall have the power to nominate any Managing
Director or Manager of the Company, subject to the provisions of Article
86, who shall have such powers as may be decided by the Board from time to
time.
Additional Directors
80. Subject to Article 67, the Board shall have power at any time, and from
time to time, to appoint one or more persons as Additional Directors,
provided that the number of Directors and Additional Directors together
shall not exceed the maximum number fixed by Article 65 above. An
Additional Director so appointed shall hold office up to the date of the
next Annual General Meeting of the Company and shall be eligible for
re-election by the Company at that Meeting.
Alternate Director
81. In the event that any Director (an "Original Director") is away for a
continuous period of not less than three (3) months from the state in which
the meetings of the Board are ordinarily held, the Board shall appoint
another Director (an "Alternate Director") for and in place of the Original
Director. The Board shall appoint such Alternate Director nominated by the
Shareholder that nominated the Original Director who shall be deemed to be
nominated by the Original Director for this purpose.
Casual Vacancies
13
82. In the event that any seat on the Board becomes vacant for any reason, the
Board shall appoint as a Director a person nominated by the Shareholder
that nominated the Director formerly filling the vacant seat.
Directors to act in accordance with instructions of the Board
83. Any Director of the company nominated by it as a director of any company
shall act in accordance with the instructions of the Board, to the extent
that those are consistent with the best interests of the investee company
in question.
Appointment of Committees
84. The Board may subject to the provisions of the Act and other relevant
provisions of the Act and of these Articles delegate any of the powers
other than the powers to make calls and to issue debentures to such
committee or committees and may from time to time revoke and discharge any
such committee of the Board either wholly or in part and either as to the
person or purposes, but every committee of the Board so formed shall, in
exercise of the powers so delegated, conform to any regulation that may
from time to time be imposed on it by the Board. All acts done by any such
committee of the Board in conformity with such regulations and in
fulfilment of the purpose of their appointments, but not otherwise, shall
have the like force and effect, as if done by the Board.
Company Secretary
85. The Secretary of the Company shall be such person as shall from time to
time appointed by the Board.
VOTING PROVISIONS
Votes at Board Level
86. The following matters shall not be implemented in respect of matters
requiring approval of the Board without the passing of a resolution of the
Directors which resolution is approved by:
(i) all the Directors, excluding interested Directors who are
prohibited at law to vote thereon; and
(ii) in respect of Article 86(e), a majority of the Directors
excluding the Director in question.
(a) any issue or agreement to issue or grant or agreement to
grant any option over or right to acquire any Shares or any
other security or purchase or redeem any security or issue
or agree to issue any debenture or convertible security;
(b) establishment, acquisition or engagement in any business,
venture or real estate or any interest therein other than
those provided in the memorandum of the Company, or disposal
of the same including without limitation taking up of Shares
in any company;
(c) approval of any business plan or budget or any amendments to
such business plan or budget;
(d) appointment of any Managing Director or Manager of the
Company;
(e) appointment or removal of any Director, or of additional
Directors other than Alternate Directors;
(f) execution of any contracts or agreements between the Company
and any Shareholder or Affiliate thereof;
14
(g) any borrowing by the Company;
(h) any single extension of credit or the incurring or making of
any capital expenditure other than provided for in the
approved business plan or budget;
(i) the registration of any transfer of any Shares (other than a
transfer permitted by these Articles);
(j) recommendation of final dividends, or declaration and
payment of interim dividends;
(k) issuance or furnishing of any guarantee or indemnity by the
Company in favour of lenders or regulatory authorities;
(l) any decision to sell any Shares or investments comprising
any investment by the Company and/or any direct or indirect
involvement of the Company in any Initial Public Offering;
(m) any increase or decrease in the amount of the authorised or
paid-up capital of the Company, and any public issue or
private placement of Shares.
PREFERENCE CLASS MEETINGS
87. Any matter pertaining to the terms of the Preference Shares of the Company
shall require the consent of a class meeting of the holders of such shares.
GENERAL MEETING
88. An annual general meeting ("AGM") of the Shareholders shall be held each
calendar year, provided that not more than fifteen months shall have
elapsed between one AGM and the next. Any meeting of the Shareholders other
than an AGM shall be an extraordinary general meeting ("EGM"). An AGM or
EGM may be called by giving at least twenty-one (21) days' written notice
to the Shareholders.
89. The quorum for an AGM or EGM with respect to any agenda shall be at least
five (5) Shareholders present in person, provided that at least one
representative of UMTI and ATIM shall be present in order to constitute a
valid quorum. If a proposed AGM or EGM with respect to any agenda is not
validly constituted as required by this sub-clause (b), or if a quorum is
not maintained throughout such meeting, the meeting shall be adjourned to a
subsequent day which shall be no later than seven (7) days after the
previous adjourned meeting. In the event that no quorum is present at the
adjourned meeting, the Shareholder(s) present shall constitute a quorum and
proceed with the meeting.
90. The Chairman (appointed in accordance with Article 78 hereof) shall be
chairman of each AGM or EGM. If the Chairman is not present, the
Shareholders present may elect any other director present as the chairman
of the said AGM or EGM. The chairman of the AGM or EGM shall not have a
casting vote.
Voting at Meeting
Votes at Shareholders Level
91. The following matters requiring Shareholder's approval shall require a
special resolution of the Shareholders of the Company:
(a) any amendments to these Articles;
(b) any increase or decrease in the amount of the authorised or paid-up
equity capital of the Company, and any public issue or private
placement of Shares;
15
(c) any merger or consolidation or any other manner of reorganisation
involving the Company;
(d) winding up or dissolution of the Company, or making of any composition
or arrangement with creditors whether generally or specifically;
(e) other than in the ordinary course of business, sale, transfer,
assignment, lease, creation of any right, title or interest in favour
of any other person or other disposal of any part of the Company's
undertaking, property or assets (or any interest therein) or entry
into a contract to do so, or creation of any pledge, encumbrance or
any security interest over the whole or any part of the Company's
undertaking, property or assets; and
(f) removal or replacement of the Company's auditors.
Decision by poll
92. If a poll is duly demanded, it shall be taken in such manner as the
Chairman directs and the results of the poll shall be deemed to be the
decision of the meeting on the resolution in respect of which the poll was
demanded.
93. Any business other than that upon which a poll has been demanded may be
proceeded with, pending the taking of the poll.
Vote of Members
94. (a) On a show of hands every member holding equity Shares and present in
person shall have one vote;
(b) On a poll, every member holding equity Shares therein shall have
voting rights in proportion to his share of the paid-up equity Share
capital;
(c) On a poll, a member having more than one vote, or his proxy or other
person entitled to vote for him need not use all his votes in the same
way.
Voting by joint-holders
95. In the case of joint holders the vote of the first named of such joint
holders who tenders a vote whether in person or proxy shall be accepted to
the exclusion of the votes of other joint holders.
PROXY
96. On a poll, votes may be given either personally or by proxy.
Instrument of proxy
97. (a) The instrument appointing a proxy shall be in writing under the hand
of the appointer or of his attorney duly authorised in writing or, if
the appointer is a Corporation, either under its Common Seal or under
the hand of its attorney duly authorised in writing. Any person,
whether or not he is a member of the Company, may be appointed as a
proxy.
(b) The instrument appointing a proxy and the Power of Attorney or other
authority (if any) under which it is signed, or a notarially certified
copy of that power or authority, shall be deposited at the registered
office of the Company not less than forty eight hours prior to the
time fixed for the meeting in question, failing which the instrument
of proxy shall be invalid.
16
Form of proxy
98. The form of proxy shall be Two Way Proxy, as given in Schedule IX of the
Act, enabling the shareholders to vote for/against any resolution.
Validity of proxy
99. A vote given under the terms of an instrument of proxy shall be valid,
notwithstanding the previous death or insanity of the principal, or the
revocation of the proxy, or of the authority under which the proxy was
executed, or transfer the Shares in respect of which the proxy is given,
provided that no intimation in writing of such death, insanity, revocation
or transfer shall have been received by the Company at its registered
office before the commencement of the meeting, or adjourned meeting, at
which the proxy is used.
Corporate members
100. Any corporation which is a member of the Company may, by resolution of its
Directors or other governing body, authorise such person as it thinks fit
to act as its representative at any meeting of the Company and the said
person so authorised shall be entitled to exercise the same powers on
behalf of the corporation which he represents as that corporation could
have exercised if it were an individual member of the Company.
WINDING UP
Distribution of assets
101. If the Company shall be wound up, and the assets available for distribution
amongst the members shall be insufficient to repay the whole of the paid-up
capital, such assets shall be distributed so that as nearly as may be, and
any shortfall on distribution shall be borne by the members respectively in
proportion to the capital paid-up by them at the commencement of the
winding up. And if on a winding up the assets available for distribution
among the members shall be exceed the amount necessary to repay the whole
of the capital paid-up at the commencement of the winding up, the excess
shall be distributed amongst the members respectively in proportion to the
capital, paid-up by them on commencement of the winding up. Provided that
this Article is to be without prejudice to the rights of the holder of
shares of any class issued upon special terms and the conditions and the
provisions of Article 12 hereof in particular.
Distribution in specie or kind
102. (a) If the Company shall be wound up, whether voluntarily or otherwise,
the liquidators in accordance with the provisions of law for the time
being in force, may with the sanction of a special resolution, divide
amongst the contributories, in specie or kind, any part of the assets
of the Company and may, with the like sanction, vest any part of the
assets of the Company in trustees upon such trusts for the benefit of
the contributories, or any of them as the liquidators, with the like
sanction shall think fit.
(b) If thought expedient any such division may, subject to the provisions
of the Act and/or any other applicable law for time in force, be
otherwise than in accordance with the legal rights of the
contributories (except where unalterably fixed by the Memorandum of
Association) and in particular any class may be given preferential or
special rights or may be excluded altogether or in part.
(c) In case any Share to be divided as aforesaid involve a liability to
call or otherwise any person entitled under such division to any of
the said Shares may within ten days after the passing of the Special
Resolution by notice in writing direct to the liquidators to sell his
proportion and pay him the net proceeds and liquidators shall if
practicable act accordingly.
Right of shareholders in case of sale
17
103. A special resolution sanctioning a sale to any other Company duly passed
pursuant to Section 494 of the Act may, subject to the provisions of the
Act in like manner as aforesaid, determine that any Shares or other
consideration receivable by the liquidators be distributed amongst the
members otherwise than in accordance with their existing rights and any
such determination shall be binding upon all the members.
BOOKS AND RECORDS
104. The Company shall maintain minutes books (of Board meetings or committees
of the Board and general meetings) and all other statutory records and
books of accounts in accordance with the applicable provisions of the Act.
FINANCE ACCOUNTING AND AUDITING
105. The Company shall appoint as the Company's Auditors, an independent
internationally reputable firm of certified public accountants registered
in India as well as abroad to examine and verify the annual report on the
final accounts. A certificate for auditing has to be formally issued by
such accountant firm, to which the auditor belongs. Such auditing shall be
conducted within a reasonable period of time, prior to the beginning of the
relevant session of the Board, in order that the said accounting statements
and the balance sheets can be audited for the approval procedure.
ACCOUNTS
106. (a) The Board shall cause proper books of account to be maintained under
Section 209 of the Act.
(b) Subject to the provisions of Section 209A of the Act, the Board shall
also, from time to time, determine whether and to what extent and at
what times and places and under what conditions or regulations the
account books of the Company (or any of them) shall be open to the
inspection of members.
(c) Subject to the provisions of Section 209A of the Act, no member (not
being a Director) or other person shall have any right of inspecting
any account book or document of the Company except as conferred by
law or authorised by the Board or by the Company in general
meetings.
AUDIT
Balance Sheet and Profit Loss Account
107. The Balance Sheet and Profit Loss Account of the Company will be audited
once a year by a qualified auditor in accordance with the provisions of the
Act.
Accounts to be Audited
108. Every Balance Sheet and Profit & Loss Account shall be audited by one or
more Auditors to be appointed as hereinafter set out.
Auditors
109. (a) The Company may, at a general meeting, remove any Auditor and appoint
in its place any other person nominated for appointment by any member
of the Company and of whose nomination special notice has been given
to the members of the Company, not less than fourteen days before the
date of the meeting.
(b) The Company at the annual general meeting each year shall appoint an
Auditor to hold office from the conclusion of that meeting until the
conclusion of the next annual general meeting and every Auditor so
appointed shall be intimated of his appointment within seven days.
18
(c) Where at an annual general meeting, no Auditor is appointed, the
Central Government may appoint a person to fill the vacancy.
(d) The Company shall within seven days of the Central Government's power
under sub-clause (c) becoming exercisable, give notice of that fact
to the Government.
(e) The Directors may fill any casual vacancy in the office of an Auditor,
but while any such vacancy continues, the remaining Auditor (if any)
may act. Where such a vacancy is caused by the resignation of an
Auditor, the vacancy shall only be filled by the Company in general
meeting.
(f) A person, other than a retiring Auditor, shall not be capable of being
appointed at an annual general meeting unless special notice of a
resolution of appointment of that person to the office of Auditor has
been given by a member to the Company not less than fourteen days
before the meeting in accordance with Section 190 of the Act. The
Company shall send a copy of any such notice to the retiring Auditor
and shall give notice thereof to the members in accordance with the
provisions of Section 190 and the provisions of Section 225 of the Act
shall also apply in the matter. The provisions of this sub-clause
shall also apply in respect of any resolution to the effect that
retiring auditor shall not be re-appointed.
(g) The persons qualified for appointment as Auditors shall be only those
referred to in Section 226 of the Act.
Audit of Branch Offices
110. The Company shall comply with the provisions of the Act in relation to the
audit of the accounts of Branch Offices of the Company.
Remuneration of Auditors
111. The remuneration of the Auditors shall be fixed by the Board as authorised
in general meeting from time to time.
112. All Accounts of the Company, when audited and approved by a General
Meeting, shall be conclusive except as regards any error discovered therein
within three months following the approval thereof. Any such error
discovered within such three month period shall forthwith be corrected in
accordance with the terms of any Resolution in respect thereof and such
amended Accounts shall henceforth be conclusive.
SECRECY
113. Every Director, manager, auditor, trustee, member of a committee, officer,
servant, agent, accountant or other person employed in the business of the
Company shall, if so required by the Board before entering upon their
duties, sign a declaration pledging to observe strict secrecy respecting
all bona fide confidential information of the Company and its customers
and shall by such declaration pledge not to reveal any of the matters which
may come to their knowledge in the discharge of their duties, except as
required by the directors, or by any general meeting of the Company, or by
the law of the country, or so far as may be necessary in order to comply
with any of the provisions in these presents and the provisions of the Act.
OPERATION OF BANK ACCOUNTS
114. The Board shall have the power to authorise any Director or Directors or
any officers to open bank accounts; to sign cheques on behalf of the
Company; to operate all banking accounts of the Company; and to receive
payments, make endorsements, draw and accept negotiable instruments,
hundies and bills. In addition, the Directors may authorise any other
person or persons to exercise such powers.
19
INDEMNITY
115. Subject to the provisions of Section 201 of the Act, every Director or
Officer, or employee of the Company or any person (whether an officer of
the Company or not) employed by the Company or Auditor shall be indemnified
by the Company out of the assets of the Company against all liabilities
incurred by such Director, Officer or Auditor and it shall be the duty of
the Directors out of the funds of the Company, to pay all costs, charges,
losses and damages which any such person may incur or become liable to by
reason of any contract entered into or any act, deed, matter or thing done,
concurred or omitted to be done by him in any way in or about the execution
or discharge of his duties or supposed duties (except such if any as he
shall incur or sustain through or by his own wrongful act neglect or
default) including expenses and in particular and so as to limit the
generality of the foregoing provisions against all liabilities incurred by
such Director, Officer or Auditor or other employee of the Company in
defending any proceedings whether civil or criminal in which judgement is
given in his favour, or in which he is acquitted or in connection with any
application under Section 633 of the Act in which relief is granted to him
by the Court.
AMENDMENT OF ARTICLES
116. The Articles set out herein above may be altered or amended at any time
subject to the provisions of the Act and/ these Articles
SEAL
117. The Company shall have a Common Seal and the Board shall provide for the
safe custody thereof. The Seal shall not be affixed to any instrument
except by the authority of a resolution of the Board and in the presence of
two Directors or such other persons the Board may appoint for the purpose
and such Director or other persons aforesaid, shall sign every instrument
to which the Seal of the Company is so affixed in their presence.
118. The Board may decide on an official seal for use by the Company outside
India in any place or places where the Company's objects require the
transaction of business outside India. This seal shall be a facsimile of
the official seal of the Company with the addition on its face of the name
of the country where it is to be used. The Board shall decide on the
manner in which the seal shall be used and the person or person in whose
presence it shall be affixed to documents to which the company is a Party.
20
UMT INVESTMENTS LIMITED
Regd. Off: 2A, Landmark, 228-A, A. J. C. Bose Road, Kolkata - 700 020
--------------------------------------------------------------------------------
CERTIFIED COPY OF THE RESOLUTION PASSED BY THE BOARD OF DIRECTORS OF UMT
INVESTMENTS LIMITED AT THE MEETING HELD ON 9 APRIL 2004 AT BAKHTAWAR, ▇▇▇ ▇▇▇▇▇,
▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ 400 021
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"RESOLVED THAT the company do hereby approve entering into a new shareholders
agreement in respect of the Company's investment in ▇▇▇▇ ▇▇▇▇▇▇ Telematics
Limited in place of the existing one with the other investors and that ▇▇.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Director and ▇▇. ▇. ▇. ▇▇▇▇▇▇▇, Director be and are severally
authorised to execute the agreement as per the draft placed before the board."
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For UMT INVESTMENTS LIMITED
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Director
▇▇▇▇ ▇▇▇▇▇▇ TELEMATICS LIMITED
Regd. Off: 2A, Landmark, 228-A, A. J. C. Bose Road, Kolkata - 700 020
--------------------------------------------------------------------------------
CERTIFIED COPY OF THE RESOLUTION PASSED BY THE BOARD OF DIRECTORS OF ▇▇▇▇ ▇▇▇▇▇▇
TELEMATICS LIMITED AT THE MEETING HELD ON 9 APRIL 2004 AT BAKHTAWAR, ▇▇▇ ▇▇▇▇▇,
▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ 400 021
--------------------------------------------------------------------------------
"RESOLVED THAT the Board do hereby approve the shareholders agreement as per the
draft placed before the board and that the Directors of the Company be and are
hereby severally authorised to execute the agreements, documents and to perform
such acts, deeds necessary to give effect to this resolution."
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For ▇▇▇▇ ▇▇▇▇▇▇ TELEMATICS LIMITED
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Director