Share Purchase and Share Holder Agreement

Updated at:September 2010
 
FREE EXCERPT

Share Purchase Agreement

Among

The governor of __________ and

Name of the company and

Name of the strategic partner and

Name of the principal(s)

(On a stamp paper of appropriate value)

Share Purchase Agreement

This Share Purchase Agreement is made and entered into on this.

By and Among:

(1) a company duly incorporated and existing under the provisions of the (Indian) Companies Act, 1956, with its registered office at (the "Strategic Partner" which expression shall include its Affiliates, successors and permitted assigns);

And

(2) (Principal 1) a company duly incorporated and existing under the laws of with its registered office at (hereinafter referred to as which expression shall include its successors and permitted assigns);

And

(3) (Principal 2), a company duly incorporated and existing under the laws of with its registered office at (hereinafter referred to as which expression shall include its successors and permitted assigns);

{Principal 1 and Principal 2 are hereinafter collectively referred to as "Principals"

and "Principal" means any one of them)

And

(4) a private limited company duly incorporated and existing under the provisions of the (Indian) Companies Act, 1956, with its registered office India (the "Company" which expression shall include its successors and permitted assigns).

Whereas

  1. The Company is engaged principally in the business of

  2. Government is the beneficial and legal owner of % (percent) of the

    issued, subscribed and paid up equity share capital of the Company as on date of this

    Agreement.

  3. Pursuant to an international competitive bidding process conducted by and on behalf of the Government, the Principals (now having identified and acting through

    the Strategic Partner) have been selected by the Government to hold the shares of the

    Company.

  4. The Principals have incorporated the Strategic Partner for the purpose of acquiring the Transaction Shares and to fulfill the various obligations set out in this Agreement and the Shareholders Agreement.

  5. The Strategic Partner, the Principals, the Company and the Government are parties to an agreement of even date (the "Shareholders Agreement") to record their agreement as to the manner in which the Company''s affairs shall be conducted after the Strategic Partner acquires the Transaction Shares from the Government and to identify and determine certain rights and obligations with respect to their ownership, directly and indirectly, of the equity shares of the Company.

  6. The Parties have entered into this Agreement whereby the Government has, subject to the terms and conditions stated herein, agreed to sell to the Strategic Partner, and the Strategic Partner has agreed to purchase from the Government

    "Transaction Shares") of the Equity Share Capital of the Company.

    NOW THEREFORE, in consideration of the premises and the covenants and mutual agreements contained herein (the receipt and adequacy of which are hereby mutually acknowledged), the Parties hereby agree as follows:

    Article -- 1

    Definitions and Interpretation

    1.1 In this Agreement (including the recitals above and the Annexures and the schedules attached hereto), except where the context otherwise requires, the following words and expressions mean the following:

    "Act" means the (Indian) Companies Act, 1956, as now enacted or as the same may from time to time be amended, re-enacted or replaced;

    "Additional Disclosed Information" shall have the meaning ascribed to such term in

    Clause 8.8 hereof;

    "Affiliate" means, with respect to a specified Person, any Person which is a holding company or subsidiary of such specified Person, or any Person which, directly or indirectly, (a) owns or controls such specified Person, (b) is owned or controlled by such specified Person, or (c) is owned or controlled by the same Person who, directly or indirectly, owns or controls such specified Person. For the purposes of this Agreement, the terms "holding company" and "subsidiary" shall have the meanings ascribed to them under Section 4 of the Act, and the term "control" shall mean:

    (a) control over the composition of board of directors of a company; or

    (b) control of at least 50% (fifty percent) of the issued equity share capital of a

    company;

    Provided however that in no event shall the Company be deemed to be an Affiliate of either the Government or the Strategic Partner;

    "Agreement" means this Share Purchase Agreement and all attached Schedules and all instruments supplemental to or in amendment or confirmation of this Agreement entered into by the Parties in writing;

    "Aggregate Liability Threshold" shall have the meaning ascribed to such term in Clause

    11.4 hereof;

    "Approvals" means all authorizations, consents, approvals and permissions required under the laws of the Republic of India for or in respect of this Agreement including for performance of any obligation or exercise of any right by a Party;

    "Audited Financial Statement" shall mean the audited accounts of the Company as on Partner,prepared by and that have been made available to the Strategic

    "Arbitration Act" means the (Indian) Arbitration and Conciliation Act, 1996, as now enacted or as the same may from time to time be amended, re-enacted or replaced;

    "Board" means the board of directors of the Company;

    "Business Day" means a day on which the principal commercial banks located in

    are open for business during normal banking hours but excluding a Saturday, Sunday, a gazetted public holiday and any other day that is declared a holiday by the Government

    of India and/or the Government of the:

    "Claim" means any claim, demand, action, cause of action, suit, litigation, damage, loss, costs, liability or expense including, without limitation, reasonable legal fees, professional fees and all costs incurred in pursuing any of the foregoing or proceedings relating to any of the foregoing;

    "Closing" means the payment of the Purchase Price to the Government and the completion of the sale to and purchase by the Strategic Partner of the Transaction Shares, in accordance with the terms of this Agreement;

    "Closing Board Meeting" shall have the meaning ascribed to such term in Clause 3.2 hereof;

    "Closing Date" shall mean the day on which Closing occurs and would be the latter of (a) date of execution of this Agreement; or (b) a date which is mutually agreed to between the Parties but being within seven days from the date of this Agreement;

    "Closing Time" means 1:00 PM, Indian Standard Time, on the Closing Date unless the Parties agree in writing on some other time as the time at which the Closing shall occur, in which case such other time shall be the Closing Time;

    "Company" shall have the meaning ascribed to such term in the Preamble hereof; "Confidential Information" shall have the meaning ascribed to such term in

    Clause 12.1 hereof.

    "Conditions Precedent" means the conditions listed in Article 4 hereof;

    "Data Room" means the rooms located at where documents relating to the Company were made available for review by short listed bidders in connection with the purchase of the Transaction Shares;

    "Data Room Documents" shall have the meaning ascribed to such term in Clause 8.8 hereof;

    "De-Minimis Strategic Partner Losses" shall have the meaning ascribed to such term in

    Clause 11.4 hereof;

    "Depository" means................., a depository within the meaning of the

    Depositories Act, 1996 with whom the Company has an agreement under the

    Depositories Act, 1996;

    "Depository Participant" or "DP" means a depository participant within the meaning of the Depositories Act, 1996 who has an agreement with the Depository under Section 4 of the Depositories Act, 1996;

    "Disclosed Information" means any information that expressly forms part of any Data Room Document or Additional Disclosed Information or is capable of being inferred from any one or more of the Data Room Documents and Additional Disclosed Information;

    "Dispute" shall have the meaning ascribed to such term in Clause 13.13 hereof;

    "Earnest Money" means the bank guarantee of Rs.(Rupees) deposited by the Strategic Partner with the Government as a bid security during the competitive bidding process conducted by the Government pursuant to which the selection of the Strategic Partner to be the purchaser of the Transaction Shares was made;

    "Event of Bankruptcy" means, with respect to any Person (other than Government), any of the following:

    (a) An adjudication that it is bankrupt or insolvent, or the entry of an order for relief under applicable bankruptcy Law;

    (b) The making by it of a general assignment for the benefit of creditors;

    (c) The commencement by it of a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar Law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its assets or property, or consent to any such relief or to the appointment of or taking of possession by any such official in an involuntary case or other proceeding commenced against it; or

    (d) The commencement against it of an involuntary case or other proceeding seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar Law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its assets or property and such involuntary case or other proceeding shall remain undismissed or unstayed for a period of 120 (one hundred and twenty) days from the date of admission of such case or proceeding;

    "Government" shall have the meaning ascribed to such term in the Preamble hereof; "Government Losses" shall have the meaning ascribed to such term in Clause 11.2

    hereof;

    "Government DP" means, the Depository Participant of the Government with...

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