draft joint venture agreement

8/8/2019 Draft Joint Venture AGREEMENT

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AMENDED AND RESTATED

JOINT VENTURE AGREEMENT

BETWEEN

ABC.

AND

BCD


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AMENDED AND RESTATED

JOINT VENTURE AGREEMENT

C O N T E N T S

1. Definitions and Interpretations2. Venture Business3. Incorporation4. Shares and Share Capital5. Board of Directors6. Meetings of the Board7. General Meetings8. Management of the Company9. Business Plans

10. Transfer of Shares11. Representations, Warranties and Covenants of the Parties12. Accounting and Finance13. Effective Date14. Term and Termination15. Confidentiality16. Covenant not to Compete17. Independent Contractors18. Indemnity; Limited Liability19. Severability and Survival20. Entire Agreement21. Modification22. Costs and Expenses23. Mutual Consultation and Goodwill24. Announcements25. Waiver of Rights26. Notification27. Governing Law28. Dispute Resolution29. Option to Purchase Additional Shares30. Carve Out31. Distributions32. Dissolution and Liquidation


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THIS AMENDED AND RESTATED JOINT VENTURE AGREEMENT is entered into as ofthis , 2005

BETWEEN:

I. ABC., a company incorporated and existing under the laws of India, with its registeredoffice at . (hereinafter referred to as "ABC " which expressionshall, unless repugnant to its subject or context, mean and include its successors andpermitted assigns) of the First Part; and

II. CDE Asia, LLC, a limited liability company organized and existing under the laws of the., successor to CDE , and having its principal office at (hereinafter referred to as "CDE" whichexpression shall, unless repugnant to its subject or context, mean and include itssuccessors and permitted assigns) of the Second Part;

WHEREAS:

A. CDE sells, markets and distributes CDE Internationals global electronicdistribution services to the travel industry in . and is a wholly-owned subsidiaryof CDE ., a limited liability company organized and existing under the laws ofthe . (CDE International);

B. ABC owns and operates travel agencies and is CDE appointed .. in India;

C. The Parties have agreed to its shareholding in the Company to 49% of the issuedand capital of the Company, and CDE has agreed to increase its shareholding inthe Company to 51% of the issued and outstanding capital of the Company; and

D. The Parties intend and agree that, as of the Effective Date, this Agreement shallsupersede the Original JV Agreement in all respects, and the Original JVAgreement shall be null and void and of no further force or effect as of such date.

NOW, THEREFORE IN CONSIDERATION OF THE PREMISES AND MUTUALPROMISES AND COVENANTS SET FORTH HEREINAFTER, THE PARTIES HERETOAGREE AS FOLLOWS:

ARTICLE 1 - DEFINITIONS AND INTERPRETATIONS

1.1 In this Agreement, the following words and expressions unless inconsistent with thecontext, shall bear the meanings assigned hereto:

Act shall mean the (Indian) Companies Act, 1956, and the Rules framed thereunderand any subsequent re-enactment thereof for the time being in force.


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Affiliate shall mean, when used in respect to a specified Person, a Person that directly,or indirectly through one or more intermediaries, controls or is controlled by or is undercommon control with the Person specified.

Agreement shall mean this Amended and Restated Joint Venture Agreement.

Ancillary Agreement(s) shall mean the Share Subscription Agreement and theServices Agreements, as the case may be, to be entered into by the Company and theParties.

Articles or Articles of Association shall mean the Articles of Association of theCompany.

Board or Board of Directors shall mean the board of directors of the Company.

Business Plan shall mean the business plans of the Company referred to in Article 9.

Business Process Outsourcing shall mean the delegation of performance of a specific business function (e.g., payroll) to a third party supplier that uses informationtechnology-intensive processes to administer and manage such function in accordancewith customer-defined and measurable performance criteria contained in a writtenagreement.

Chairman shall mean the chairman for the time being of the Board.

Company shall mean .., a company incorporated in Indiaunder the Companies Act, 1956 either known as or by any other name asapproved by the concerned Registrar of Companies under the Companies Act, 1956.

Convertible Preference Share shall mean convertible preference share in the authorised,issued and subscribed convertible preference share capital of the Company, authorised,issued and subscribed in accordance with the terms of issues as specified in Article 4.1(c)of this Agreement and carrying a preferential right:

i) with respect to dividend, a fixed amount of Rs. 5000 (Rupees Five Thousand) onthe entire convertible preference share capital to be allocated pari passu between all theconvertible preference shares; and

ii) with respect to capital, to be repaid the amount of the capital paid up or deemed tohave been paid up on such convertible preference shares on a winding up or repayment of capitalof the Company.

Cost shall mean the fully burdened direct cost of providing the relevant goods and/orservices, excluding any allocation of administrative overhead expenses or cost of capital.

Director shall mean a director for the time being on the Board.

EBITshall mean earnings before interest and taxes.


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Effective Date shall mean the Closing Date as defined in the Share SubscriptionAgreement.

Fair Price shall have the meaning assigned thereto in Article 14.5 hereof.

Fiscal Year shall have the meaning given to that term in Article 12 hereof.

Force Majeure shall include riots, civil commotions, wars, orders or regulations,embargoes, actions by the government or any agency thereof, acts of God, acts ofterrorism, storms, fires, droughts, earthquakes, serious accidents, strikes, sabotages,explosions, or other contingencies beyond the reasonable control of the Party liable toperform.

General Manager shall mean a person appointed by the Board holding the highestrank in the hierarchy of Management of the Company and shall be responsible forcarrying out the responsibilities delegated to him by the Board from time to time.

General Meeting shall mean the duly convened meeting, annual or extraordinary, asthe case may be, of the Parties or the Company.

Government shall mean the government of the Republic of India, the United States,and/or any state government as the case may be.

Management shall comprise of General Manager, deputy general manager, Director ofsales, Director of .., Director of finance, Director of operations, Director ofhuman resources appointed in accordance with the terms of this Agreement, provided thatdeputy general manager may also serve in any other senior management positions of theCompany.

Material Breach shall mean any breach by either Party of any of the provisions of thisAgreement which breaches substantially and materially affects the Parties rights or altersthe purposes of this Agreement.

Memorandum or Memorandum of Association shall mean the Memorandum ofAssociation of the Company, as amended from time to time.

Net Assets Value shall mean the definition ascribed by erstwhile controller of capitalinvestment.

Party shall mean either ABC or CDE, as the case may be, and Parties shall meanboth ABC and CDE.

Person means any natural person, partnership firm, corporate entity or legal entity.

Share shall mean a share in the authorized, issued and subscribed equity share capitalof the Company.

Share Subscription Agreement shall mean the agreement entered among ABC, CDEand the Company for subscribing equity share capital in the Company.


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Service Agreements shall mean all service agreements entered into in connection withthe provision of services to the Company between the Company and any of the Parties (ortheir affiliates).

Subsidiary shall mean in relation to a company (the Holding Company), any other

company in which the Holding Company for the time being directly or indirectly holds orcontrols a majority of the voting rights exercisable at general meetings on all orsubstantially all matters or has the right to appoint or remove a majority of its Directors.

Territory shall mean the geographical area under the jurisdiction of the Republic ofIndia.

Venture Business shall mean the business to be undertaken by the Company as set outin Article 2.

1.2 Except where the context requires otherwise, this Agreement will be interpreted as

follows:

(a) in this Agreement headings are for convenience only and shall not affectinterpretation except to the extent that the context otherwise requires;

(b) where a word or phrase is defined, other parts of speech and grammatical forms ofthat word or phrase shall have corresponding meanings;

(c) words importing the singular shall include plural and vice versa;

(d) words denoting individual shall include corporations and vice versa;

(e) words denoting any gender shall include all genders; and

(f) where any act, matter or thing is required by this Agreement to be performed orcarried out on a certain day and that day is not a business day, then that act, matteror thing shall be carried out or performed on the next following business day.

ARTICLE 2 VENTURE BUSINESS

The business of the Company shall be to undertake development and marketing of diversesoftware products and projects on or in respect of Transactional Processing Facility (TPF)platform, other software languages and platforms and e-commerce and to undertake and performsupport and other services in respect thereof, and such other business as the Parties may approvefrom time to time.

ARTICLE 3 - INCORPORATION

3.1 ABC had caused the Company to be incorporated on ..


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3.2 The Memorandum and Articles of Association of the Company shall be amended toincorporate the terms and conditions of the Agreement to the extent legally permissibleincluding the change of name, if and when decided by CDE, the change of authorisedshare capital of the Company including issue of different class of shares, and authorisingthe shareholders with differential class of shares including Convertible Non VotingShares (as defined in Article 4.1 (a) hereof) and Convertible Preference Shares to vary

the rights attached to such shares with the consent in writing of the holders of not lessthan three-fourths of the issued shares of that class or with the sanction of a specialresolution passed at a separate meeting of the holders of the issued shares of that class.

3.3 In the event of any ambiguity or inconsistency between this Agreement and either theMemorandum or the Articles of Association at any time, this Agreement shall prevail asbetween the Parties.

3.4 The registered office of the Company is located in the National Capital Territory ofDelhi.

ARTICLE 4 - SHARES AND SHARE CAPITAL

4.1 As on the Effective Date,

(a) the Company has an authorised equity share capital, including both voting and nonvoting Shares, of Rs. . comprising of.. equity shares of the face value of Rs. 10 (RupeesTen) each. The present subscribed share capital of the Company comprises of equity shares of Rs.10 each, issued and subscribed for by the Parties as follows:

ABC and its Affiliate/s equity sharesCDE and its Affiliate/s equity shares out of which shares shall be non-voting in nature (Convertible Non Voting Shares). Subjectto the provisions of the Act, CDE shall have the option to convert theseConvertible Non Voting Shares into voting Shares at any time and from time totime following the third anniversary of the date of issue of the Convertible NonVoting Shares. On declaration of dividend in terms of Article 31 of thisAgreement, Convertible Non Voting Shares shall be entitled to 1.584 times theamount of dividend declared on voting Shares.

(b) the Company has an authorised convertible preference share capital, of Rs.. comprising of . ConvertiblePreference Shares of the face value of Rs. 10 (Rupees Ten) each. The presentsubscribed share capital of the Company comprises of . Convertible PreferenceShares of Rs.10 each, issued and subscribed for by the Parties as follows:

ABC and its Affiliate/s Nil CDE and its Affiliate/s ..

(c) Convertible Preference Shares shall have the following terms of issue:


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i) Subject to the provisions of the Act, CDE shall have the option to convert theseConvertible Preference Shares into voting Shares such that each ConvertiblePreference Share is converted into one voting Share.

ii)Convertible Preference Shares shall be converted at the option of CDE at anytime and from time to time after the expiry of three years and before the expiry

of ten years from the date of issue of the Convertible Preference Shares Subjectto the provisions of the Act, before the expiry of three years from the date ofissue of the Convertible Preference Shares, Convertible Preference Shares shallbe automatically converted into voting Shares in the manner provided for in4.2(c)(i) on the occurrence of the events giving rise to termination of thisAgreement under Article 14.2 (a) to (d).

iii) Convertible Preference Shares shall carry a preferential right of fixed amountof dividend of Rs. 5000 (Rupees Five Thousand) on the entire ConvertiblePreference Share capital to be allocated pari passu between all the ConvertiblePreference Shares prior to the payment of dividend declared on Shares.

4.2 ABC shall cooperate to enable the Company to pass suitable resolution to give effect toArticle 4.2.

4.3 The equity shares and convertible preference shares under Article 4.1 shall be allotted to theParties in such a way that upon subscription and allotment of Shares and ConvertiblePreference Shares, ABC shall hold 49% and CDE shall hold 51% of the subscribed and paid up capital of the Company including Convertible Non Voting Shares andConvertible Preference Shares.

4.4 Except as provided in Article 29 of this Agreement or unless otherwise agreed between theParties in writing, any new shares and convertible preference shares of the Company shallbe subscribed by and allotted to the Parties in the same proportion of the subscribed andpaid up capital of the Company as provided in Article 4.3 of this Agreement.

4.5 Each Party shall be entitled to nominate any of its respective Affiliates to subscribe to,acquire and/or hold any Share or Convertible Preference Share which such Party isobliged or entitled to subscribe, acquire or hold, provided always that prior to any suchAffiliate subscribing to, acquiring or holding any Share or Convertible Preference Share,the Affiliate shall have undertaken to be bound by the terms and conditions of thisAgreement. Any Share or Convertible Preference Share so held by an Affiliate of a Partyshall be deemed to be held by such Party for the purposes of this Agreement.

4.6 Unless the Parties otherwise agree in writing, if the Board determines that the Companyrequires financing in excess of the capital provided for in Article 4.1, the additionalfinancing shall be raised in the following order of priority:

(a) Third party debt or equipment lease financing without guarantees by the Parties;

(b) Loans by the Parties;


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(c) Third party debt or equipment lease financing with guarantees by the Parties to beprovided in proportion to their respective shareholdings; and

(d) Equity contribution by the Parties.

ARTICLE 5 - BOARD OF DIRECTORS

5.1 Unless otherwise agreed between the Parties, the Board of Directors of the Company willcomprise of six (6) Directors.

5.2 So long as CDE and/or its Affiliates maintain its 51% shareholding in the Company,CDE shall be entitled to nominate three (3) Directors on the Board.

5.3 So long as ABC and/or its Affiliates maintain its 49% shareholding in the Company,ABC shall be entitled to nominate three (3) Directors on the Board.

5.4 ABC and CDE shall each be entitled to nominate alternate Directors for each of theDirectors it is entitled to nominate. Such appointment as alternate Directors shall takeplace as the first item of business at the next Board meeting following receipt by theCompany of such nomination.

5.5 The Chairman of the Board shall be elected, from time to time, from amongst theDirectors nominated by CDE. Parties agree that the Director chosen by CDE amongst theDirectors nominated by CDE, shall be the Chairman of the Board.

5.6 CDE and ABC shall cause to be elected as Directors the candidates so nominated andshall cause their Directors to appoint as Directors or alternate Directors the candidates sonominated.

5.7 Each Party in its sole discretion shall have the right to replace any Director, including anyalternate Director nominated by it, at any time and without cause, and the Parties shallboth undertake all necessary action to ensure the formal election of such replacementDirector as the first item of business at the next occurring Board meeting.

5.8 The appointment or removal of Directors shall be made by a notice in writing, addressedto the Company by the concerned Party with a copy of such notice being sent to the otherParty.

5.9 Subject to provisions of Articles 6.4 and 7.3, all resolutions and decisions of the Boardshall require the affirmative vote of a majority of Directors present at the meeting. Allother matters of the Company shall be decided by the General Manager in accordancewith the Business Plan.

ARTICLE 6 - MEETINGS OF THE BOARD

6.1 The Board shall meet at least once in every calendar quarter at a location determined bythe Board at its previous meeting, or if no such determination is made, then at the


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registered office of the Company. The Board may meet more often from time to time asit deems necessary.

6.2 Subject to the provisions of the Act, at least twenty one (21) days written notice of everyBoard meeting shall be given to every Director and every alternate Director at their usualaddress whether in India or abroad, provided always that a meeting may be convened by

a notice shorter than twenty one (21) days with consent of all the Directors.

6.3 The notice of each Board meeting shall include an agenda setting out the businessproposed to be transacted at the meeting. Unless waived in writing by all Directors, anyitem not included in the agenda of a meeting shall not be considered or voted upon at thatmeeting of the Board.

6.4 The quorum for a Board meeting shall be four (4) Directors; provided, however, that aslong as CDE and ABC are entitled to appoint or nominate Directors on the Board, thereshall be no quorum unless at least two Directors nominated by ABC and two Directorsnominated by CDE are present at that meeting. A Party may, in writing, waive the

requirement that a Director nominated by it be present to constitute a quorum at anymeeting of the Board. If a proposed meeting of the Board fails to have a quorum, themeeting shall be adjourned and reconvened at the same place and same time 3 businessdays later, or at such other place, time, and date agreed to by all Directors. At theadjourned and reconvened meeting of the Board, two Directors, one Director nominatedby CDE and one Director nominated by ABC, shall constitute a quorum for the meeting..

6.5 Subject to Article 7.3, a resolution by circulation shall be as valid and effectual as aresolution duly passed at a meeting of the Directors called and held, provided it has beencirculated in draft form, together with the relevant papers, if any, to all the Directors thenin India (not being less in number than the quorum fixed for the Board meeting), and toall other directors at their usual address in India and has been approved by such of thedirectors as are then in India or by a majority of the Directors entitled to vote thereon.

6.6 The Chairman shall decide any matter on which the Board is deadlocked. If the Chairmanis not present at a Board meeting in which the Board is deadlocked, the meeting shall beadjourned until such time as the Chairman can be present at the Board Meeting.

ARTICLE 7 - GENERAL MEETINGS

7.1 The Board may convene a General Meeting of the Company. The Board shall proceed toconvene such a General Meeting if so requisitioned in accordance with the provisions ofthe Act by either of the Parties or by at least three Directors.

7.2 Except as otherwise provided in the Act or the Articles, and subject to provisions ofArticle 7.3 hereof, every resolution to be passed at a General Meeting of the Company,shall require the approval by the majority of the shareholders present at such a meeting,subject to an affirmative vote of CDE, whether voted in person or by proxy. ABC shallcast its votes to effect approval of all the resolutions where CDE has cast its affirmativevote.


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7.3 So long as CDE and its Affiliates, on the one hand, and ABC and its Affiliates, on theother hand, each hold not less than 49% of the subscribed and paid up capital of theCompany and except as otherwise provided in the Act,

7.3.1 Neither the Board nor the Company, whether at a meeting of the Board or a

General Meeting or otherwise, shall take any action with respect to the matters

listed below, without the prior written consent of the Parties:

(a) Capital investment exceeding Rs. [];

(b) Increase of authorised, issued and/or paid up capital of the Company orreclassification of capital of the Company;

(c) Amendment(s) to the Memorandum and/or the Articles of Association;

(d) Related party transactions including but not limited to any agreement ormaterial transaction (or amendment thereto) between the Company andeither (i) a Party or any affiliate, officer, director, or employee of a Partyor (ii) a director or executive officer of the Company;

(e) Entry into contract that is material to the Company or any contract thatobligates the Company to incur an amount in excess of Rs. [ ] per annum;

(f) Approval of working rules of the Board and the financial system of theCompany;

(g) Establishment of the Companys offices and departments;

(h) Franchising/licensing trademarks, trade names or products owned by theCompany;

(i) Undertaking any business other than the Venture Business;

(j) Approval of Business Plan or any modifications thereto;

(k) Borrowings or guarantee by the Company in excess of the amountapproved in the Business Plan;

(l) Creation of any mortgage, charge or other encumbrance in respect of theCompanys undertaking, property or assets or any part thereof except inrelation to any approved borrowing;

(m)Granting of loans (as defined in the Act) by the Company to any Personother than employees of the Company, or under terms, conditions or

circumstances inconsistent with the policies and procedures established bythe Board of Directors;

(n) Disposition of the Companys undertaking, properties or assets or any partthereof unless approved in the Business Plan;

(o) Declaration of any dividend other than in accordance with Article 31;

(p) Entering into a joint venture or partnership with any Person and/orsubscribing to or acquiring shares in any other Person or divestment of


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any shareholding interest in any Person;

(q) Registration of any transfer of shares in contravention of this Agreement;

(r) Dissolution, liquidation, merger, amalgamation or restructuring of theCompany or sale of the undertaking of the Company or substantial partthereof; or

(s) Redemption, retirement, purchase or buyback of any equity shares in theCompany, in each case other than as required by applicable law orregulation.

7.3.2 The following matters shall require approval by a majority of the votes of theshareholders subject to an affirmative vote of CDE; provided that ABC shallcast its votes to effect approval of all the items listed below where CDE has castits affirmative vote:

(a) Change of name of the Company;

(b) Appointment, change and fixing of remuneration of the Companysindependent statutory auditors, which shall be Deloitte & Touche LLP asof the Effective Date;

(c) Appointment and removal of the General Manager and his/hercompensation and other benefits;

(d) Appointment and removal of other senior management and employmentand removal of key employees and their respective compensation andbenefits;

(e) Increase the authorised share capital of the Company including share

capital with differential rights; or(f) Issuance of shares at a discount.

ARTICLE 8 - MANAGEMENT OF THE COMPANY

8.1 Subject to the provisions of the Act, the Articles and this Agreement, the Company shallbe managed by the Board, who may exercise all such powers of the Company as are not by the Act or by the Articles required to be exercised by the Company in GeneralMeeting. The Board may delegate its functions to committees or sub-committeesestablished by the Board and/or to officers of the Company. Subject to the provisions ofthis Agreement, the Act and the Articles, the Board may delegate any of its powers,functions or tasks to the Management of the Company.

8.2 Senior managers (other than the General Manager) of the Management shall be nominatedby the General Manager and shall be appointed if approved by the Board. The Partiesmay also propose candidates for senior managers but their appointment shall be subject tothe approval of the Board. The senior managers shall not be removed or replaced at anytime without the approval of the Board.


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8.3 The compensation payable to the General Manager shall be determined by the Board and thecompensation payable to other Management personnel shall be determined as part of theBusiness Plan developed by the General Manager and duly approved by the Board onpresentation.

8.4 The Parties shall both undertake all necessary action to ensure that the Companys corporate

policies and procedures are same as the corporate policies and procedures set by theboard of directors of CDE.

ARTICLE 9 BUSINESS PLANS

9.1 The Company shall conduct its business in accordance with a business plan approved bythe Board (the Business Plan). For each Fiscal Year, the Board shall cause the GeneralManager to prepare a Business Plan, which shall be presented for Boards considerationand approval at least three months prior to the commencement of the Fiscal Year. (In theevent that the Business Plan is not approved prior to the commencement of the Fiscal

Year, the Company shall be operated in accordance with the prior years Business Plan,until a new Business Plan is approved.) The Business Plan shall at minimum include theitems listed in Article 9.2.

9.2 The Business Plan shall include amongst others, the following items:

(a) The goals of the Company for the period to which the Business Plan relates;

(b) The strategies to be employed to achieve those goals;

(c) The areas and types of activities to be conducted and emphasized in achieving thosegoals;

(d) An estimate of the financial results of the previous fiscal year, if available;

(e) The operating budget of the Company, including cash flow and working capitalrequirements, for the performance of its activities;

(f) The capital expenditure budget of the Company;

(g) A financial forecast for the entire year as well as for the three year periodcommencing with the date of the plan, provided that for each then current yearduring such three year period, the financial forecast for the subsequent year(s) maybe revised if appropriate and necessary based on the immediately preceding yearsfinancial results;

(h) Any proposed distribution, reinvestment or other use of the Companys profits; and

(i) The opportunities, risks and contingencies confronting the Company and thepossible impact of and respective plan for such contingencies on the Companysstrategies, proposed activities and budget.


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ARTICLE 10 - TRANSFER OF SHARES

10.1 No Party shall transfer its Shares and/or Convertible Preference Shares except as stated inArticle 10.2 and except with the prior written consent of the other Party.

10.2 Notwithstanding the provisions of Article 10.1, each Party shall have the right to transfer,at any time, all or any portion of the Shares and/or Convertible Preference Shares held byit to one or more of its respective Affiliates, provided that in connection with any suchtransfer, the transferor shall have obtained the written consent of the transferee,confirming that (i) the transferee shall abide by the terms of this Agreement applicable tothe transferor, and (ii) effective provision shall be made whereby the transferee shall berequired, prior to the time when it ceases to be an Affiliate of the Party, to transfer suchShares or Convertible Preference Shares to the Party or another Affiliate of the Party.

10.3 Subject to the provisions of Articles 10.1 and 10.2 above, as and when a Party desires totransfer all (but not less than all) of its Shares and Convertible Preference Shares

(Offeror), it shall first offer all such Shares and Convertible Preference Shares to theother Party (Offeree) and the procedures in sub-Articles 10.3.1 to 10.3.5 shall apply.

10.3.1 The Offeror shall give notice in writing (Transfer Notice) to the Offereestating:

(a) The number of Shares and/or Convertible Preference Shares to be transferred;

(b) The purchase price of each Share and/or Convertible Preference Shares, whichshall be determined consistent with the provisions of Article 29.1(a) and/or29.2(a); and

(c) The material terms of transfer, including payment terms.

10.3.2 The Offeree shall have a period of thirty (30) days to accept the offer for all (andnot a part) of the offered Shares and of Convertible Preference Shares. TheOfferee shall notify the Offeror in writing, of its acceptance (the date of suchacceptance notice being the Acceptance Date) and pay for such Shares andConvertible Preference Shares within thirty (30) days of the Acceptance Date.

10.3.3 Should approval of any authority in India be required for a sale of Shares or ofConvertible Preference Shares pursuant to this Article 10, the Offeree shall makeor have made an application therefore within thirty (30) days of the AcceptanceDate or the date on which Fair Price is determined, as the case may be, and shallpay for such shares within thirty (30) days of the receipt of the approval. If thesaid authority accepts such applications on conditions (as to price and otherwise)different from those stated in the application, each Party shall decide whether it iswilling to conclude the sale on such conditions, but if both Parties do not agree tosuch different terms, the offer shall stand withdrawn. If for any reason,whatsoever, such approval is not received within 180 days of making theapplication or such further period as the Offeror may prior to expiration thereofallow, the Offeror shall be at liberty to withdraw the offer.


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10.3.4 If the Offeree declines the offer, fails to respond to the offer prior to the deadlineindicated in Article 10.3.1(c), or accepts the offer but fails to pay the purchaseprice within the times indicated by Articles 10.3.2, the Offeror may then, withinthe next ninety (90) days sell the Shares and/or Convertible Preference Sharescovered by the offer to any third person upon the same terms offered to the

Offeree. Any subsequently proposed transfer pursuant to this Article 10 shall becommenced as a new offer.

10.4 In the event any Party receives an unsolicited offer from a third party for the purchase ofall (and not less than all) of its Shares and Convertible Preference Shares in the Companyand agrees to sell or transfer all of its Shares and Convertible Preference Shares in theCompany, the procedure prescribed in this Agreement shall apply to such sale or transferof Shares and Convertible Preference Shares and the Transfer Notice shall describe thematerial terms of the third partys offer.

10.5 Except as permitted under Article 10.2, at no time shall either of the Parties transfer or

endeavor to transfer less than all of its Shares and Convertible Preference Shares in theCompany to any Person whatsoever.

ARTICLE 11 - REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE

PARTIES

11.1 ABC represents, warrants and covenants to CDE and to the Company as follows:

(a) ABC is a limited liability company duly organised, validly existing and in goodstanding under the laws of India and has the corporate power and authority toenter into this Agreement and to perform its obligations hereunder.

(b) All corporate actions on the part of officers and directors of ABC necessary forthe authorisation, execution and delivery of this Agreement by ABC and for theperformance of all of its obligations hereunder have been taken.

(c) This Agreement constitutes valid, legally binding and enforceable obligations ofABC.

(d) ABC shall take such further acts, execute and deliver such further instruments anddocuments, and generally do all such other things as may be reasonably necessaryto accomplish the transactions contemplated in this Agreement.

(e) Execution, delivery or performance of this Agreement by ABC does not and willnot conflict with, or result in a default, right to accelerate or loss of rights under,or result in the creation of any lien, charge or encumbrance, pursuant to ABCsmemorandum and articles of association, or any agreement or other document,law, rule, regulation, order, judgment or decree to which ABC is a party or bywhich it may be bound or affected.


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(f) The Company is a private company duly incorporated, validly existing, and ingood standing under the laws of India.

(g) 6,509,016 shares of capital of the Company are issued or outstanding, and all ofsuch shares have been duly authorized, validly issued, fully paid and non-assessable, and have not been issued in violation of, and are not subject to, any

preemptive or subscription rights. Except for this Agreement, there are nooutstanding contracts or agreements, save and except as mentioned in annexure11.1(g), pursuant to which the Company is or may become obligated to issue,deliver or sell any shares of its capital stock. There are no outstanding contracts oragreements, save and except as mentioned in annexure 11.1(g) and as providedfor in this Agreement, pursuant to which the Company is or may becomeobligated to redeem, repurchase or otherwise acquire or retire any shares of itscapital.

(h) The Company has no subsidiaries, save and except as provided in annexure11.1(h), does not own, directly or indirectly, any capital stock or other equity

interest in any Person, and is not a member of or a participant in any partnership, joint venture (except by virtue of this Agreement) or similar entity, and thefinancial statements of the Company are in accordance with the accountingstandards, the provisions laid down in the Act and have been prepared on goingconcern basis depicting true and fair state of affairs of the Company as on theEffective Date.

(i) ABC acknowledges that the Shares and Convertible Preference Shares have not been registered pursuant to any U.S. State or federal securities laws and,therefore, cannot be resold in the U.S. or to a U.S. citizen unless they areregistered under appropriate U.S. State and/or federal securities laws or unless anexemption from registration is available.

(j) ABC covenants that it will assist the Company in obtaining and maintaining theresources necessary to provide the development services required by CDE and itsAffiliates.

(k) There is no suit, action, litigation, investigation, claim, complaint or proceeding in progress or pending or threatened against or relating to ABC, which, ifdetermined adversely to ABC, could prevent ABC from fulfilling any or all of itsobligations set out in this Agreement or arising from this Agreement and ABC hasno knowledge of any existing ground on which any such action, suit, litigation orproceeding might be commenced with any reasonable likelihood of success.

(l) ABC shall exercise the voting rights with respect to Shares, directly or indirectlyheld by it, to ensure that all provisions of this Agreement, to the extent requiredand permissible under law are incorporated in the Articles of Association.

(m) There is no outstanding:

(i) mortgage, charge, pledge, lien,encumbrance or equity on the whole or any part of the undertaking, property


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or assets of the Company save and except as provided in annexure 11.1(m)(i);

(ii) contract for hire or rent, hire purchase or purchase by way of credit sale,conditional sale or periodical payment by the Company in respect ofmovable or immovable property save and except the contract for hire-purchase of a car which is set forth in annexure 11.1(m)(ii);

(iii) guarantee, indemnity or suretyship, by the Company save and except asprovided in annexure 11.1(m)(iii);(iv) power of attorney given by the Company except in the ordinary and usual

course of business save and except as provided in annexure 11.1(m)(iv); or(v) authority to any Person (other than a Director duly authorised) to bind or

commit the Company in any way except in the ordinary and usual course ofbusiness save and except as provided in annexure 11.1(m)(v).

(n) The Company has in force valid insurances, details of which are annexed hereinin annexure 11.1(n), in respect of its property, assets and business against suchrisks as are normally insured against by companies carrying on similar businesses

in India and in such jurisdiction it carries on business for the full reinstatement orreplacement value of such property including, without limitation, adequateinsurance cover against accident or damage. .

(o) All intellectual property used by the Company in connection with its business,including any registered or unregistered trade marks, patents, know-how,computer software (or other intellectual property of any description) isbeneficially owned by or licensed for use to the Company. The Company is not inbreach of any license of any agreement under which any confidential businessinformation was or is to be made available to it.

(i) All rights in all intellectual property and confidential business informationowned or otherwise required for the businesses of the Company as currentlyconducted or contemplated to be conducted are vested in or validly grantedto the Company.

(ii) In carrying on its business in the ordinary and usual course, the Companydoes not infringe any intellectual property rights of any third party or become liable to make any payment of any royalty or fee or becomeinvolved in the unlicensed use of confidential information disclosed to theCompany by any person in circumstances which might entitle that person tomake a claim against the Company.

(iii) The Company is not a party to any confidentiality or other agreement orsubject to any duty which restricts the free use or requires disclosure, ofbusiness information owned by or required for the business of the Company.

(iv) The Company has not granted, nor is it obliged to grant any license, sub-license or assignment in respect of any intellectual property owned orotherwise required for the businesses of the Company, and has not disclosednor is obliged to disclose any confidential business information required forthe business of the Company to any Person, other than in the ordinary


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course of business, subject to standard confidentiality obligations imposedon the receiving Person or its employees for the purpose of carrying on itsbusiness. There are no restrictions on the rights of the Company to license orsub-license any intellectual property owned by it.

(v) All the processes and methods employed, the services provided, the

businesses conducted and the services provided, used or dealt in by theCompany, do not, or at the time of being employed, provided, conducted,manufactured, used or dealt in, did not infringe the rights of any otherPerson in any intellectual property or business information.

(vi) There is not, nor has there been at any time, any unauthorised use orinfringement by any Person of any of the intellectual property orconfidential business information owned or otherwise required for thebusiness of the Company.

(p) The Company is not a party to any contract of employment with any of the

employees, which cannot be terminated by it without damages or compensation(other than that payable by statute or contract) by giving at any time the minimumperiod of notice applicable to that contract.

(i) No employee has given notice terminating his contract of employment or isunder notice of dismissal and no amount due to or in respect of anyemployee is in arrears and unpaid other than his salary for the month currentat the date of this Agreement save and except as provided in annexure11.1(p)(i).

(ii) Since March 31, 2004, no change has been made in the emoluments or otherterms of engagement of any employee, and no such change, and nonegotiation or request for such a change is due or expected within sixmonths from the date of this Agreement other than, in each case, usualannual increment.

(iii) There is no trade union or work council, registered or unregistered, in theCompany and there has been no employee unrest in the past 2 years.

(iv) The Company has no un-discharged liability to pay to any governmental orregulatory authority in any jurisdiction any contribution, taxation or othersums arising in connection with the employment or engagement ofpersonnel by it.

(v) The Company has at all relevant times complied with all its obligationsunder statute and otherwise in respect of its employees, and there are noclaims capable of arising or threatened or pending by any employee or thirdparty.

(vi) Save and except the benefits mentioned in annexure 11.1(p)(vi), theCompany is under no legal or moral obligation to pay or secure any pension


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or other benefit on retirement, death or disability or on the attainment of aspecified age or on the completion of a specified number of years of service.

(vii) There are no liabilities at the time of signing of this Agreement for theprovision of the employees of pension or other retirement benefits or inrespect of death, injury or sickness (including permanent health insurance

and medical insurance) and there is no legal obligation for the provision ofsuch and no promise of such has been made to or discussed with theemployees, other than the schemes specified in annexure 11.1(p)(vi).

(q) The Company is in possession of its certificate of incorporation, certificates ofincorporation on change of name (if applicable), common seals, statutoryregisters, minute books, share certificate books and all other books or recordsrequired to be maintained by the Company under any law or regulation applicableto it or otherwise maintained by the Company, all of which have been dulywritten up to date.

(i) All documents required by law to be filed in respect of the Company withany governmental authority have been properly made, delivered and dulyfiled.

(ii) All title deeds, share certificates, agreements to which the Company is aparty and other documents (including without limitation, accounts, booksand ledgers) owned by or which ought to be in the possession of theCompany are in the possession of the Company.

(iii) The Company has conducted its businesses in all material respects inaccordance with all applicable laws in India and in compliance with theprovisions of various licences so acquired from governmental authoritiesand third party and there is no violation of or default with respect to, anylaw or directions or guidelines of governmental authority.

(r) The Company has obtained all necessary permissions and has all necessaryregistrations for sales tax, income tax, service tax or any other tax applicable tothe Company. There are no un-discharged liabilities to pay to any governmentaldepartments including sales, service tax department, income tax department, etc.The Company has at all relevant times complied with all its obligations understatute and otherwise concerning taxation.

(s) Full and accurate details of all overdrafts, loans or other financial facilitiesoutstanding or available to the Company ("the Facilities") are set out in annexure11.1(s).

(t) ABC has provided to CDE complete copies of all the audited financial statementswhich were prepared in accordance with the Generally Accepted AccountingPrinciples of India (GAAP), together with the related auditors reports and thenames and locations of all banks, trust companies and other financial institutionsat which the Company maintains safe deposit boxes, checking accounts or otheraccounts of any nature and the names of all persons authorised to draw thereon,


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make withdrawals there from and have access thereto.

(u) ABC covenants that the Company has good and valid title to all the properties andassets that it purports to own (tangible and intangible).

(v) ABC covenants that any information technology equipment and systems owned or

used by the Company are structurally sound with no known defects and are ingood operating condition and repair (fair wear and tear excepted taking intoaccount their age) and are adequate for the operation of the business as currentlyconducted. None of such equipment and systems is in need of maintenance orrepairs except for ordinary, routine maintenance and repairs which are notmaterial in nature or cost.

11.2 CDE represents, warrants and covenants to ABC and the Company as follows:

(a) CDE is a limited liability company duly organised, validly existing and in goodstanding under the laws of the State of Delaware, U.S.A. and has the corporate

power and authority to engage in this Agreement and to perform its obligationshereunder.

(b) All corporate action on the part of CDE and its officers and directors necessaryfor the authorisation, execution and delivery of this Agreement and for theperformance of all of its obligations hereunder has been taken.

(c) This Agreement constitutes valid, legally binding and enforceable obligations ofCDE.

(d) CDE shall take such further acts, execute and deliver such further instruments anddocuments, and generally do all such other things as may be reasonably necessaryto accomplish the transactions contemplated in this Agreement.

(e) Execution, delivery or performance of this Agreement by CDE does not and willnot conflict with, or result in a default, right to accelerate or loss of rights under,or result in the creation of any lien, charge or encumbrance, pursuant to CDEscertificate of incorporation or by-laws, or any agreement or other document, law,rule, regulation, order, judgment or decree to which CDE is a party or by which itmay be bound or affected.

(f) CDE is acquiring the Shares and Convertible Preference Shares hereunder for itsown account for the purpose of investment and not with the intent to resell. CDEacknowledges that the Shares and the Convertible Preference Shares have not been registered pursuant to any U.S. State or federal securities laws and,therefore, cannot be resold in the U.S. or to a U.S. citizen unless they areregistered under appropriate U.S. State and/or federal securities laws or unless anexemption from registration is available.

ARTICLE 12 - ACCOUNTING AND FINANCE


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12.1 The Company shall keep true and accurate accounting records of all operations, and suchrecords shall be open for inspection by each Party or by its duly authorisedrepresentatives at all times during normal business hours and with sufficient notice so asnot to disrupt the Companys operations.

12.2 The financial statements of the Company shall be audited at the Companys expense by

an independent certified public accounting firm or equivalent selected in accordance withArticle 7.3.2.

12.3 The Company shall submit to the Parties monthly, quarterly, and annual accountingreports in a form to be mutually agreed upon between the Parties. In addition, theCompany shall promptly provide to the Parties notice of (i) any litigation or anyadministrative proceeding to which the Company may hereafter become a party whichinvolves a potential liability to the Company of at least Five million Dollars(US$5,000,000), or which may result in any material adverse change in the business,operations, property, prospects, results of operation or condition, financial or otherwise,of the Company, (ii) any default by the Company (however defined) with respect to any

indebtedness or (iii) any event or condition that may result in any material adversechange in the business, operations, property, prospects, results of operation or condition,financial or otherwise, of the Company.

12.4 During office hours of the Company, the Parties or their designated representatives shallhave full access to, and right to make copies of all books of account, records and the liketo the Company. Any information obtained by the Parties through exercise of this rightof access shall (i) be used by such Party only for purposes which are consistent with itsstatus as a shareholder and not for the pursuit of business interests outside that of theCompany and (ii) be subject to the confidentiality provisions of Article 15.

12.5 The Fiscal Year of the Company shall comprise a period of twelve months commencingon April 01 and ending on March 31 of the following year.

ARTICLE 13 - EFFECTIVE DATE

13.1 This Agreement shall come into force from the Effective Date.

ARTICLE 14 - TERM AND TERMINATION

14.1 This Agreement is intended to be of enduring nature having regard to the mutualobjectives and stipulations in this Agreement and shall take effect as of its execution andshall continue in force until terminated or further extended in accordance with itsprovisions.

14.2 Without prejudice to any claim for any antecedent breach, any Party shall be entitled atits option, on the happening of any of the following events, to terminate this Agreement:

(a) by giving to the other Party thirty (30) days written notice if the other Party(i) becomes or is declared bankrupt or is subject to bankruptcy petition (and any


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such bankruptcy petition filed by a Person unaffiliated with such Party shall nothave been dismissed within 90 days after filing thereof), (ii) becomes insolvent oradmits publicly or in writing an inability to pay its debts as they become due orhas incurred losses for a period of three (3) consecutive years or (iii) is subject todissolution proceedings or ceases to carry on business or goes into voluntary orcompulsory liquidation, except for the purpose of amalgamation or

reconstruction; or

(b) by giving to the other Party sixty (60) days written notice if any distress orattachment is levied, or any receiver is appointed in respect of the business or asubstantial part of the property or assets of any other Party, or if it takes anysimilar action in consequences of debt; or

(c) by giving to the other Parties thirty (30) days written notice if a ControllingInterest in any other Party is acquired by a third party. For the purpose of thisArticle, Controlling Interest means (a) the ownership or control (directly orindirectly) of more than fifty (50) per cent of the voting share capital of the

relevant Party; or (b) the ability to direct the casting of more than fifty (50) percent of the votes exercisable at general meetings of the relevant Party on all, orsubstantially all, matters; or (c) the right to appoint or remove Directors of therelevant Party holding a majority of the voting rights at meetings of the Board onall, or substantially all, matters; or

(d) by giving to the other Party sixty (60) days written notice if there is a Governmentexpropriation, nationalisation or condemnation of all or substantial part of theassets or capital stock of any other Party; or

(e) by notice in writing to the other Parties (effect upon dispatch) if any other Party isin Material Breach of any provision of this Agreement and such breach has notbeen remedied (to the reasonable satisfaction of the Parties not in breach) withinsixty (60) days of notice of such breach having been served on that Party by anyother Party; or

(f) in the event that the performance of this Agreement or the holding of equityshares by either Party is prohibited by law or an act of State. In such event, theaffected Party shall offer its shares in the Company for sale to the other Party atthe Fair Price, determined as provided herein. If such other Party elects to notpurchase the shares offered, then the Company shall be promptly dissolved andwound up in accordance with applicable law and the assets liquidated anddistributed to the Parties in proportion to their respective shareholdings in theCompany; or

(g) by giving the other Party thirty (30) days written notice if an event of ForceMajeure has occurred and continues for more than six (6) consecutive monthsfollowing the date of such notice and as a result of which the purposes of thisAgreement could not be achieved.

14.3 The termination of this Agreement shall not relieve any Party of any obligation orliability accrued prior to the date of termination.


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14.4 If this Agreement shall terminate pursuant to Article 14.2 then any Party electing toterminate this Agreement shall have, without prejudice to any other rights or remedies itmay have, the option either:

(a) to require the other Party to transfer its and its Affiliates Shares and Convertible

Preference Shares to the terminating Party. The price at which such Shares andConvertible Preference Shares shall be transferred shall be the Fair Price asdefined in Article 14.5; or

(b) to require that the Company be voluntarily dissolved and wound up and thatCompany be liquidated and assets be distributed to the Parties, in proportion totheir shareholdings in the Company, as promptly as reasonably practicable.

14.5 The Auditors shall be instructed by the Company to certify in writing simultaneously toboth Parties the amount which, in their opinion, represents the fair market value of theShares and Convertible Preference Shares (Fair Price) by applying valuation

principles generally accepted and practiced in India. In so certifying, the Auditors shallbe considered to be acting as experts and not as arbitrators. The cost of obtaining suchcertification by the Auditors shall be equally borne and paid for by each of the Parties.

14.6 The Parties shall and shall cause the Company to promptly provide such requiredinformation and documents to the Auditors as are reasonably required to determine theFair Price.

14.7 The Auditors shall determine the Fair Price within forty five (45) days of the instructionbeing received from the Company.

14.8 The Parties and the Company shall make all best endeavors to obtain requisiteGovernmental or statutory approvals required to implement the provisions of this Article.

14.9 During the term of this Agreement and until the Party entitled or obliged to purchaseShares and/or Convertible Preference Shares in accordance with Article 14 actuallypurchases the Shares and/or Convertible Preference Shares, ABC and CDE shall eachuse reasonable efforts to maintain and preserve the business in the best interest of theCompany.

14.10 The foregoing shall not limit the ability of either Party to seek legal and equitableremedies related to a Material Breach by the other Party or the failure of the other Partyto perform any other duty or obligation under this Agreement.

ARTICLE 15 - CONFIDENTIALITY

15.1 Each Party acknowledges that it shall have access to Confidential Information, ashereinafter defined, of the other Party and/or the Company. Each Party covenants andagrees that, other than as expressly provided herein, it shall not divulge, furnish, publishor use for its benefit or for the direct or indirect benefit of any other Person, whether ornot for monetary gain, any Confidential Information of the Company or the other Party.


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Each Party shall exercise a high degree of care to prevent the unauthorized dissemination,disclosure or use, other than as expressly provided herein, of any such ConfidentialInformation and, except as expressly provided for in this Article 15, shall not make orallow any disclosure of the Confidential Information to any other Person. Each Partyshall restrict access to, and use and disclosure of (collectively, Access), theConfidential Information to those of its employees who require such Access in order to

assist the Company in conducting the Venture Business and only to the extent of suchrequirement, and shall advise each such other Person granted such Access that theConfidential Information of the other Party is the property of such other Party and ishighly confidential and that no Access in respect thereof is permitted except as directlyrequired by the use thereof in accordance with this Agreement.

15.2 For purposes of this Agreement, the term Confidential Information shall mean (i) allinformation furnished to the Parties pursuant to Article 12; (ii) the Business Plan; (iii) allintellectual property developed by the Company; (iv) all information and technologydisclosed to the Company by any of the Parties or their respective Affiliates under any ofthe Service Agreements; and (v) all information disclosed by any Party to the other

Parties which is marked as CONFIDENTIAL or, if such information is disclosedorally, is followed within a reasonable time in writing indicating that such orallydisclosed information is confidential.

15.3 Confidential Information shall not include information which:

(a) was known to the receiving Party at the time it was submitted; or

(b) is, or becomes, publicly known through no wrongful act of the receiving Party, orany affiliate, agent or consultant or employee; or

(c) is received by the receiving Party from a third person without similar restrictionsand without breach of this Agreement; or

(d) is approved for release by written authorisation of the disclosing Party; or

(e) is shown to have been independently developed by the receiving Party without theuse of the information disclosed by the other Party hereunder; or

(f) is furnished by the disclosing Party to a third person without a similar restrictionon the third persons rights.

15.4 A Party may make disclosure of Confidential Information:

(a) to an Affiliate, consultant, contractor or subcontractor on a good faith need-to-know basis, after receiving the other Partys consent;

(b) to potential third person purchasers of the Shares including Convertible NonVoting Shares or Convertible Preference Shares of either Party, on a confidentialbasis; or


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(c) to a governmental agency or entity, or to the public, if the disclosing Partysincerely believes such disclosure is necessary under the relevant laws orregulations or pursuant to the standards of any stock exchange, having receivedadvice from its legal counsel that such disclosure is necessary or stronglyrecommended pursuant to such standards or regulations.

15.5 In all such cases where disclosure is made under Article 15.4, the disclosing Party shallgive written notice to the other Party prior to making such disclosure. As to the disclosurereferred to in Article 15.4(a) or (b), only Confidential Information regarding which thethird person has the legitimate need to know may be disclosed, and said third person shallfirst agree in writing to protect the Confidential Information so that it not be disclosedbeyond the extent to which the Parties are obligated under this item. As to disclosuresunder Article 15.4 (c), if the Party to whom notice of disclosure is given raises objectionsto said disclosure, the Parties shall engage in good faith negotiations to try to modify oralter the content or terms of said disclosure in order to limit the proposed disclosure asmuch as possible.

15.6 The provisions of this Article 15 shall apply throughout the term of this Agreement andfor three years following its termination, and if any Party withdraws, is deemedwithdrawn or transfers its Shares, the provisions shall continue to apply to such personfor three years after such event has occurred.

ARTICLE 16 COVENANT NOT TO COMPETE

16.1 Subject to Article 16.2, each Party covenants and agrees with the other Party and theCompany that, during the term of this Agreement, it and its Subsidiaries will not:

(a) directly or indirectly through any other person or entity own, operate, manage,join, control, participate in the ownership, management, operation or control of, orbe paid or employed by, or acquire any securities of, or provide assistance to, inany capacity, any business entity or activity which is directly or indirectlyengaged in the developing and marketing of, products and projects forTransactional Processing Facility (TPF) platform and/or providing support orother services in respect thereof within India; provided, however, that theforegoing limitation shall not apply to any such products, projects, support orservices that (i) the Board of Directors determines the Company should notprovide or (ii) are supplied by either Party or its Subsidiary pursuant to a BusinessProcess Outsourcing arrangement, it being understood by the Parties that theexception in this clause (ii) does not include any Business Process Outsourcingarrangement where the business function primarily relates to informationtechnology;

(b) directly or indirectly through any Person induce any customers to whom theCompany has provided a service or sold products to transfer their patronage fromthe Company to any other Person;

(c) hire, or attempt to hire for employment, in any business enterprise or activity, anyemployee of the other Party or its Affiliate who is rendering or has rendered


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services to the Company under any of the Service Agreements (unless suchemployee leaves the employment of the other Party or its Affiliate in which casethe Party will refrain from hiring or attempting to hire such an employee for six(6) months after such employee leaves the employment of the other Party or itsAffiliate); or

(d) induce any employee of the other Party or its Affiliate who is rendering or hasrendered services to the Company under any of the Service Agreements toterminate his employment with the other Party or its Affiliate.

16.2 Notwithstanding Article 16.1, ABC and the Company acknowledge that development ofsoftware by CDE in the ordinary course of its business for use by its customers shall notconstitute a breach of Article 16, provided that in doing so CDE does not establish orparticipate in a TPF software development facility or venture within a territory prohibitedby Article 16.1.

16.3 Put/Call Option

(a) If a Party (the Affected Party in this Article) makes any acquisition, directly orindirectly, of an entity that prior to such acquisition already had a direct orindirect interest in TPF development activities in violation of the provisions ofArticle 16.1, then the Affected Party shall promptly notify the other Party and theCompany and shall endeavor to, within twelve (12) months from the date of theacquisition of such TPF development business (which shall hereinafter be referredto as the TPF Business, whether constituting a distinct legal entity or a part ofthe operations of another entity), either: (i) migrate the TPF Business to theCompany via merger, sale, or other means (as described below); or (ii) divest itsinterest in the TPF Business. If neither of these alternatives can be accomplishedon a commercially reasonable basis within such twelve-month period (or suchother period of time as the Parties may agree), then the other Party shall have theoption (the Put/Call Option) to either:

(i) purchase all the Shares held by the Affected Party; or

(ii) sell all of its Shares to the Affected Party;

each at a price per share (the Put/Call Option Price) to be determined as setforth in subsection (c) below.

(b) The Company shall (except as hereafter provided) have the option (the PurchaseOption) of purchasing the TPF Business from the Affected Party (or theacquired entity, as the case may be) upon the following terms (or such other termsas the Affected Party and the other Party may agree). Within 30 days from thedate of the acquisition of the TPF Business by the Affected Party, the parties shalljointly select an investment banking firm of international reputation (FinancialAdvisor) for the purpose of: (1) identifying the assets, contracts, personnel, andother resources required to operate the TPF Business (the Assets); and (2)determining the fair market value of the TPF Business, which, absent manifesterror, shall be the purchase price of the Assets. Within 30 days from the date the


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Financial Advisor completes this process and delivers its report, the Companyshall notify the Affected Party whether or not it will exercise its Purchase Option.If the Company elects to exercise its Purchase Option, the closing of the purchase(the Closing) shall occur within 30 days from the date the Affected Partyreceived notice of the election. At the Closing, the Affected Party (or the entitythat owns the Assets, as the case may be) shall convey to the Company all of its

rights, title, and interests in and to the Assets, and the Company shall pay to theAffected Party (or to such entity as it may specify) the purchase price, in cash.The Closing shall be subject to any required government approvals and the timetaken for obtaining such approvals shall be excluded from the time limits set forthherein. Notwithstanding the foregoing, if the TPF Business is jointly owned byone or more third parties not controlled by either Party, or if transfer of the TPFBusiness (or any interest therein) is restricted by contract or law, then thevaluation procedure described above need not be performed; rather, the AffectedParty shall use good faith efforts to effect the transfer of the TPF Business (or aninterest therein) to the Company as contemplated herein upon commerciallyreasonable terms agreeable to all persons having a financial interest in the

transaction.

(c) To exercise the Put/Call Option, the other Party shall provide written notice (thePut/Call Notice) to the Affected Party within 60 days of the date of receipt ofnotice regarding the competing business. Upon receipt of the Put/Call Notice, theParties shall enter into good faith negotiations to determine the Put/Call OptionPrice within fifteen (15) days. If the Parties are unable to agree upon the Put/CallOption Price within fifteen (15) days of receipt of the Put/Call Notice, the Partiesshall jointly appoint a Financial Advisor to determine the fair market value of theShares to be transferred. As soon as practicable following its appointment, theFinancial Advisor shall provide each of the Parties with its written determinationof the fair market value. Absent manifest error, the Financial Advisorsdetermination of the fair market value per share shall be the Put/Call Option Priceand shall be binding upon each of the Parties.

(d) Within ten (10) days of: (i) the Parties agreement upon the Put/Call OptionPrice; or (ii) if applicable, the Financial Advisors delivery of its determination ofthe fair market value, the other Party shall provide the Affected Party with writtennotice (an Exercise Notice) specifying whether it will purchase the AffectedPartys Shares, or sell its Shares to the Affected Party, or waive its Put/CallOption. The closing of the purchase/sale of Shares shall, unless otherwise agreedby the Parties, take place no later than ten (10) days following delivery of theExercise Notice. The Put/Call Option Price shall be paid in cash. The fees of theFinancial Advisor for determining the Put/Call Option Price shall be borne by theParties equally, unless the other Party waives its Put/Call Option, in which casethe other Party shall pay the Financial Advisors fees. The Closing shall besubject to any required Government approvals and the time taken for obtainingsuch approvals shall be excluded from the time limits set forth herein.

16.4 The parties acknowledge that: (i) the foregoing non-competition covenant is a fair andreasonable geographic type of business and temporal restriction and that such covenant isreasonably required for the protection of the Company; and (ii) any breach or threatened


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or attempted breach of any provision of this Article 16 would cause irreparable harm tothe Company and the other Party not compensable in money damages and that the otherParty shall be entitled, in addition to all other applicable remedies, to a temporary andpermanent injunction and a decree for specific performance of the terms of this Article 16or other equitable remedy without being required to prove damages or furnish any bondor other security.

16.5 If any provision of this Article 16 is determined to be invalid by any GovernmentalAuthority of competent jurisdiction, the provisions of this Article 16 shall be deemed tohave been amended, and the Parties hereto agree to execute all documents necessary toevidence such amendment so as to eliminate or modify any such invalid provision so asto carry out the intent of this Article 16 as far as possible and to render the terms of thisArticle 16 enforceable in all respects as so modified.

ARTICLE 17 - INDEPENDENT CONTRACTORS

17.1 Each Party hereto is an independent contractor and nothing contained in this Agreementshall be construed to be inconsistent with this relationship or status. Neither Party owes afiduciary duty to the other. Nothing in this Agreement shall be in any way construed toconstitute either Party as the agent, employee or representative of the other. As anindependent contractor, each Party has relied on its own expertise or the expertise of itslegal, financial, technical or other advisors.

17.2 The Company shall be an independent company from both Parties and shall not beconstrued to be an agent or representative of ABC or CDE. Neither ABC nor CDE shalltake any action on behalf of or binding upon the Company, except as may be specificallyprovided for in this Agreement or as may be specifically consented to in writing by theCompany. The Company shall not be authorised to take any action on behalf of orbinding on either Party without the Partys specific consent in writing.

ARTICLE 18 - INDEMNITY; LIMITED LIABILITY

18.1 Subject to the terms and conditions of this Section 18.1, each Party hereby agrees toindemnify and save the Company, its officers, directors and employees and the otherParty, its shareholders, officers, directors, employees and Affiliates (individually, anIndemnitee) harmless from and against, for and in respect of, any and all liabilitiessuffered, sustained, incurred or required to be paid by any Indemnitee arising out of or inconnection with or as a result of the untruth, inaccuracy or breach or nonfulfillment ofany representation, warranty, covenant or agreement of the other Party contained in ormade pursuant to this Agreement or any Ancillary Agreement. No claim forindemnification shall be made pursuant to this Agreement unless the Person seekingindemnification shall have given the Party from whom indemnification is sought promptwritten notice of the potential loss anticipated, and the nature of the claim, demand, suit,or cause of action against the Indemnitee (including copies of all correspondence,pleadings, etc. related to such claim). The indemnifying Party shall assume and controlthe defense of such action and keep the Indemnitee fully informed of the progress of the


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case. Both Parties shall cooperate fully with one another in connection with the defense,compromise, or settlement of any such claim.

18.2 Except to provide its contribution to capital as provided for in this Agreement, neitherParty shall be required to provide any further funds to or on behalf of the Company byway of capital contribution, loan, advance, guarantee or otherwise. The Company shall

not incur any liability on behalf of either Party and shall not hold itself out as having anyauthority to bind either Party in any way. Creditors of the Company shall have recourseonly to the assets of the Company, and the Company shall ensure that no creditor is led to believe otherwise or in any way to seek repayment from either of the Parties. Notwithstanding the Companys limited liability, and without by this Article 18.2expanding such liability, if for any reason any third person brings a claim against eitheror both of the Parties based on the Parties being a joint venture Party and arising out ofthe operation of the Company or if otherwise either of the Parties incurs any liability forany action or omission taken pursuant to this Agreement or in its role as a shareholder inthe Company other than from willfully wrongful conduct, the Company shall beresponsible for and shall indemnify, hold harmless and defend either Party if either Party

incurs any liability, loss or damage, including attorney costs, as a result of its being aParty to this Agreement or for being a shareholder, if such liability, loss or damage arisesfrom a claim brought by person other than the other Party.

18.3 Neither Party shall be liable to the other Party for any consequential, indirect, exemplary,incidental, special or punitive damages based on any claim arising out of this Agreement.Except for liability arising out of breach of a confidentiality obligation set forth in Article15 or of an indemnification obligation set forth in this Article 18, neither Partysaggregate liability under this Agreement shall exceed such Partys contribution to theregistered capital of the Company.

ARTICLE 19 - SEVERABILITY AND SURVIVAL

19.1 Whenever possible, each provision of this Agreement shall be interpreted in such manneras to be effective and valid under applicable law, but if any provision of this Agreementshould be prohibited or invalid under applicable law, such provision shall be ineffectiveto the extent of such prohibition or invalidity without invalidating the remainder of suchprovision or the remaining provisions of this Agreement. In such event, the Parties shallnegotiate, in good faith, a valid, legal and enforceable substitute provision, which mostnearly effectuates the Parties intent in entering into this Agreement.

19.2 Where the purpose and the text of a provision in this Agreement clearly indicates anintent to survive termination of this Agreement, such as in Articles 15 and 18, theprovision shall survive the termination of this Agreement.

ARTICLE 20- ENTIRE AGREEMENT

This Agreement sets forth the entire agreement of the Parties with respect to the subject matter ofthis Agreement and supersedes all prior and contemporaneous agreements, understandings andrepresentations, written and oral.


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ARTICLE 21 - MODIFICATION

No provisions of this Agreement may be modified or amended unless by mutual agreement inwriting.

ARTICLE 22 - COSTS AND EXPENSES

Each Party shall pay its own expenses, costs and attorneys fees in negotiating, preparing andexecuting this Agreement.

ARTICLE 23 - MUTUAL CONSULTATION AND GOODWILL

The Parties confirm their intention to promote the best interests of the Company and to consult

fully on all matters materially affecting the development of the Business of the Company. EachParty shall act in good faith towards the other Party in order to promote the success of theCompany.

ARTICLE 24 - ANNOUNCEMENTS

Except as may be required by law or the rules of any stock exchange or governmental or otherregulatory authority, whether or not having the force of law, no announcement or circular inconnection with the subject matter of this Agreement shall be made or issued by or on behalf ofany Party before, on or after Closing without the prior written approval of the other Parties, suchapproval not to be unreasonably withheld or delayed.

ARTICLE 25 - WAIVER OF RIGHTS

All waivers under this Agreement must be in writing, and failure at any time to require the otherPartys performance of any obligation under this Agreement shall not affect the rightsubsequently, to require performance of that obligation. No waiver by a Party of any breach ofany provision of this Agreement or of a failure or failures by the other Party to perform anyprovision of this Agreement shall be construed or shall operate as a waiver of any continuing orsucceeding breach of such provision or a waiver or modification of such provision or as a waiverin respect of any other or further failure whether of a like or different character.

ARTICLE 26 - NOTIFICATION

26.1 All notices and other communications required or permitted under this Agreement shallbe in writing signed by (or by some person duly authorised by) the person giving it andmay be served by leaving it or sending it by facsimile, prepaid recorded delivery asregistered post, addressed as follows (or to such other address as shall have been dulynotified in accordance with this Article):


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If to ABC: ABC

Attention: ..]

If to CDE: BCD

Attention: ..

26.2 All notices given in accordance with Article 26.1 shall be deemed to have been served asfollows:

(a) if delivered by hand, at the time of delivery;

(b) if posted, at the expiration of ten (10) days after the envelope containing the same

was delivered into the custody of the postal authorities;

(c) if communicated by facsimile, on receipt of confirmation of successfultransmission.

ARTICLE 27 - GOVERNING LAW

This Agreement shall be governed by, interpreted and construed in accordance with the laws ofIndia.

ARTICLE 28- DISPUTE RESOLUTION

28.1 The Parties shall seek to resolve any dispute, controversy, claim or breach arising out ofor in relation to this Agreement including any dispute as to the existence or validity ofthis Agreement, by amicable arrangement and compromise, and only if the Parties fail toresolve the same by amicable arrangement and compromise within a period of sixty (60)days of receipt of written notice of the same by the other Party, either Party may resort toarbitration as provided for in Article 28.2 hereof.

28.2 Any dispute, controversy or claim arising out of or relating to this Agreement, or thebreach, termination or invalidity thereof, shall be finally settled under the Rules ofArbitration of the International Chamber of Commerce by three arbitrators appointed inaccordance with the said Rules. Judgment upon the award rendered by the arbitrators maybe entered in any Court having jurisdiction thereof and shall be final and binding on theParties. The arbitrators shall have powers to award only such remedy as is contemplatedby this Agreement, including as appropriate, injunctive relief. The Parties renounce theright to claim or receive, and they hereby specifically instruct the arbitrators not to award,indirect, special, consequential or punitive damages, including any damages arising orpotentially arising from loss of time, loss of profits and loss of production.


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28.3 The place of arbitration shall be London. The language of arbitration shall be English.

28.4 Arbitration shall not be deemed as a waiver of any right of termination under thisAgreement and the arbitration panel is not empowered to act or make any award otherthan based solely on the rights and obligations of the Parties prior to and including suchtermination.

28.5 The arbitration panel may not limit, expand or otherwise modify the terms of thisAgreement. The arbitration panel shall have the power to order specific performance ofthis Agreement.

ARTICLE 29 - OPTION TO PURCHASE ADDITIONAL SHARES

29.1 CDE Option. Subject to the conditions set forth in this Article 29.1, on and from April 1,2010, CDE shall have the option (the CDE Option), at any time and from time to time,to increase its proportionate ownership of Shares by purchasing additional Shares in the

Company up to 100% of the subscribed and paid up share capital of the Company.

(a) On exercising of the CDE Option, the Company will be valued at the averagebetween the Net Assets Value of the Company (excluding that portion of NetAssets Value attributable to the Non-Cendant Business (as defined in Section30.1)) and 7X the last 12 months EBIT (excluding that portion of EBITattributable to the Non-Cendant Business).

(i) In order to exercise the CDE Option, CDE shall, within 10 business daysfollowing the Financial Advisors determination of the Net Assets Valueand EBIT, provide written notice (the CDE Exercise Notice) to theCompany and to ABC, specifying the number of Shares with respect towhich it intends to exercise the CDE Option.

(ii) Within thirty (30) days of CDEs delivery of the CDE Exercise Notice,ABC shall provide CDE and the Company with written notice (the ABCParticipation Notice) specifying whether the Shares to be purchased byCDE upon the exercise of the CDE Option shall be purchased from theCompany, or from ABC, either in whole or in part, at ABCs discretion.

(iii) The closing of CDEs purchase of Shares upon exercise of the CDEOption (the CDE Option Closing) shall take place no earlier than sixty(60) days following ABCs delivery of the ABC Participation Notice andreceipt of governmental approval, unless otherwise agreed by the Parties.

(b) CDE shall have the option of paying the purchase price for any Shares it acquiresfrom the Company upon exercise of the CDE Option (i) in cash; (ii) by way of anoffset against CDEs accrued, but unpaid, fees under any Ancillary Agreement; or(iii) by any combination of the above. CDE shall provide the Company with writtennotice no less than three (3) days prior to a CDE Option Closing of the manner inwhich it will pay for the Shares it will acquire. The purchase price of any Shares


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CDE acquires from ABC upon exercise of the CDE Option shall be paid in cash tothe extent required by applicable law.

29.2 ABC Option. Subject to the conditions set forth in this Article 29.2, on and from April 1,2010, ABC shall have the option (the ABC Option), at any time and from time to time,to increase its proportionate ownership of shares by purchasing additional shares in the

Transferee (as defined in Article 30.1) up to 100% of the subscribed and paid up sharecapital of the Transferee.

(a) On exercising of the ABC Option, the Transferee will be valued at the averagebetween the Net Assets Value of the Transferee (including only that portion ofNet Assets Value attributable to the Non-Cendant Business) and 7X the last 12months EBIT (including only that portion of EBIT attributable to the Non-Cendant Business).

(i) In order to exercise the ABC Option, ABC shall, within 10 business daysfollowing the Financial Advisors determination of the Net Assets Value

and EBIT of the Transferee, provide written notice (the ABC ExerciseNotice) to the Transferee and to CDE, specifying the number of shareswith respect to which it intends to exercise the ABC Option.

(ii) Within thirty (30) days of ABCs delivery of the ABC Exercise Notice,CDE shall provide ABC and the Transferee with written notice (the CDEParticipation Notice) specifying whether the shares to be purchased byABC upon the exercise of the ABC Option shall be purchased from theTransferee, or from CDE, either in whole or in part, at CDEs discretion.

(iii) The closing of ABCs purchase of shares upon exercise of the ABCOption (the ABC Option Closing) shall take place no earlier than sixty(60) days following CDEs delivery of the CDE Participation Notice andreceipt of governmental approval, unless otherwise agreed by the Parties.

(b) ABC shall have the option of paying the purchase price for any shares it acquiresfrom the Transferee upon exercise of the ABC Option (i) in cash; (ii) by way of anoffset against ABCs accrued, but unpaid, fees under any Ancillary Agreement; or(iii) by any combination of the above. ABC shall provide the Transferee with writtennotice no less than three (3) days prior to an ABC Option Closing of the manner inwhich it will pay for the shares it will acquire. The purchase price of any sharesABC acquires from CDE upon exercise of the ABC Option shall be paid in cash tothe extent required by applicable law.

ARTICLE 30- CARVE OUT

30.1 Subject to the conditions set forth in these Articles 30.1 and 30.2, at any time on or priorto CDE Option Closing, the Parties shall, upon receipt of written notice from CDE thatCDE wishes to proceed with the carve out of the assets relating to the marketing,development and sale of the Companys products and services to Persons not affiliatedwith CDE (the Non-Cendant Business), cooperate with each other and the Companyto effect the transfer of such assets to a company (which shall be incorporated by the


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Parties prior to such transfer, in which, subject to Article 30.2, 51% of the shareholdingshall be owned by CDE and 49% of the shareholding shall be owned by ABC) (theTransferee), including, but not limited to, the following:

(a) for the period beginning on April 1, 2006, preparation of two income statements inaccordance with GAAP with respect to (i) the Company (excluding the Non-

Cendant Business) and (ii) the Non-Cendant Business, in each case subject toapproval by the Board;

(b) obtaining of consents to assignment of agreements with third parties involved in theNon-Cendant Business, where such consent is required under the terms of suchagreements;

(c) sharing of certain equipment and services between the Transferee and the Company;

(d) transfer of certain employees, real property, equipment, bandwidth to the Transferee;and

(e) any other actions deemed appropriate or necessary by the Board.

30.2 Upon the closing of the carveout specified in Article 30.1, the Parties shall enter into anoncompetition agreement for a period of one year pursuant to which each Party willagree that it and its Subsidiaries will not (a) solicit or hire the employees of the otherParty or its Subsidiaries and (b) solicit or induce customers of the other Party or itsSubsidiaries to transfer their patronage to another Person. Following CDE OptionClosing and the closing of the carveout specified in Article 30.1, CDE shall transfer 2%of its shareholding in the Transferee to ABC for consideration of U

draft joint venture agreement

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