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SHAREHOLDERS AGREEMENT

SHAREHOLDERS AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

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SHAREHOLDERS AGREEMENT

1. DEFINITIONS AND INTERPRETATION...................................................................

 

 

2

2. SHAREHOLDING OF THE COMPANY ....................................................................

 

 

5

3. SUBSCRIPTION TO SHARES..................................................................................

 

 

5

4. CONDITIONS PRECEDENT.....................................................................................

 

 

5

5. COMPLETION AND POST-COMPLETION ACTIONS .............................................

 

 

7

6. WARRANTIES ..........................................................................................................

 

 

8

9. DEADLOCK RESOLUTION ....................................................................................

 

 

16

10. NOTICE OF DEFAULT............................................................................................

 

 

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11. TERM & TERMINATION .........................................................................................

 

 

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12. MISCELLANEOUS ..................................................................................................

 

 

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ANNEXURE A: CONSULTANT .....................................................................................

 

 

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SCHEDULE 7.13: AFFIRMATIVE VOTE MATTERS.....................................................

 

 

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SCHEDULE 8.6 ABOVE: FORM OF DEED OF ADHERENCE....................................

 

 

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SHAREHOLDERS AGREEMENT

This Shareholders Agreement (hereinafter referred to as ‘

 

 

Agreement

’) dated this _______ day of ________,

2008 is executed at ________;

BY AND BETWEEN:

1.

 

 

Madhya Pradesh Urban Infrastructure Fund

, a trust formed and incorporated under the Indian Trusts

Act, 1882 and having its registered office at [

 

 

insert

]

(hereinafter referred to as ‘

 

 

MPUIF

’, which expression shall include its successors and permitted

assigns), of the FIRST PART;

2. The Party as described in

 

 

Annexure A hereto (hereinafter referred to as ‘Consultant

’, which

expression shall its successors and permitted assigns), of the SECOND PART;

3.

 

 

[insert name of company]

, a private limited company incorporated under the Indian Companies Act,

1956, having its registered office at [

 

 

insert address

]

(hereinafter referred to as the ‘Company’, which expression shall, unless contrary to the context hereof

be deemed to include its successors and permitted assigns), of the THIRD PART.

(MPUIF, the Consultant and the Company shall hereinafter be collectively referred to as

 

 

Parties’ and severally as ‘Party

’.)

WHEREAS:

(A) MPUIF is desirous of identifying and developing bankable urban infrastructure projects in the State of

Madhya Pradesh with a view to facilitate financing and implementation of such projects;

(B) The Consultant has represented itself as a body having special expertise and experience in the field of

identifying, developing and financially structuring urban infrastructure projects including with respect to

preparing financial models for the same and plans for successful financial closure of such projects;

(C) MPUIF has been set up by Government of Madhya Pradesh as a trust under the Indian Trusts Act,

1882,

 

 

inter alia

, to encourage and facilitate investment in and implementation of urban infrastructure in

the State of Madhya Pradesh by providing financial assistance to Urban Local Bodies, including

Municipalities for project development, raising of finance from financial institutions or capital market

and/or by providing selective technical assistance for implementation of infrastructure projects in the

State of Madhya Pradesh;

(D) The Company has been incorporated with a view to providing advisory services to MPUIF for achieving

the objectives of MPUIF and shall enter into an Agreement with MPUIF for the same (hereinafter

 

 

Services Agreement

’); and

(E) The Parties are desirous of putting the terms and conditions of their understanding concerning their

participation in the Company and other ancillary aspects.

Page 4 of 20

NOW, THEREFORE, IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES

HERETO AS FOLLOWS:

1. Definitions and Interpretation

1.1. Unless the context otherwise requires, the following terms shall carry the meaning assigned to them

herein below:

(i) ‘

 

 

Act

’ means the Companies Act, 1956, of India and any statutory modification, amendment or

re-enactment thereof from time to time.

(ii) ‘

 

 

Affiliate

’ of a Party means: (i) in the case of any Party other than a natural person, any other

person that, either directly or indirectly through one or more intermediate persons, controls, is

controlled by or is under common control with such Party; and (ii) in the case of any Party that

is a natural person, any other person who is a Relative of such Party. For purposes of this

definition, “control” means possession, directly or indirectly, of the power to direct or cause the

direction of the management or policies of any entity, whether through the ownership of voting

securities, by contract or otherwise.

(iii) ‘

 

 

Agreement

’ means this Shareholders Agreement together with the Annexures, Schedules and

Appendices thereto.

(iv) ‘

 

 

Board

’ means the Board of Directors of the Company.

(v) ‘

 

 

Business Day

’ shall mean a day other than Saturday and Sunday on which banks are open

for normal banking business in Bhopal.

(vi) “

 

 

Charter Documents

” shall mean the Memorandum of Association and the Articles of

Association of the Company as amended from time to time.

(vii) ‘

 

 

Completion

’ shall mean the issue and allotment of the Subscription Shares to the Consultant

in accordance with the terms of this Agreement.

(viii) ‘

 

 

Completion Date

’ shall mean the date on which Completion occurs in accordance with the

terms of this Agreement.

(ix ‘

 

 

CP Confirmation

’ shall have the meaning assigned to it in clause 4.2 below.

(x) ‘

 

 

Effective Date

’ shall mean the date of execution of this Agreement by all the Parties, and in

case of separate dates of execution by the Parties, the date on which the last Party signs this

Agreement.

(xi) ‘

 

 

Event of Default

’ shall mean occurrence of any of the following events:

(a) Breach of any material obligation of a Party under this Agreement;

(b) Breach or inaccuracy of any of the representations and warranties of a Party.

(xii) ‘

 

 

Equity Shares

’ shall mean equity shares of par value Rupees Ten (Rs 10/-) each in the

Company.

(xiii) ‘

 

 

Government Director

’ shall have the meaning assigned to it in clause 7.2(ii) below.

(xiv) ‘

 

 

Long Stop Date

’ shall have the meaning assigned to it in clause 4.2 below.

(xv) ‘

 

 

Related Party

’ means: (i) any shareholder or partner or director or officer of the Consultant or

the Company; (ii) any Relative of any shareholder or partner or director or officer of the

Consultant or the Company; (iii) any person in which any shareholder or partner or director or

officer of the Consultant or the Company has any interest, other than a passive shareholding of

less than 5% in a publicly listed company; and (iv) any other Affiliate of the Company or the

Consultant.

(xvi) ‘

 

 

Related Party Transactions

’ means any contracts, understanding, transactions or proposed

transactions between the Company on the one hand and any Related Party on the other hand.

(xvii) ‘

 

 

Relative

’ shall have the meaning assigned to it under Section 2(41) of the Act.

(xviii) ‘

 

 

Services Agreement

’ shall have the meaning assigned to it in Recital (Whereas clause) (D)

above.

(xix) ‘

 

 

Share Capital

’ means the issued and paid up equity share capital of the Company subsequent

to the issue and allotment of the Subscription Shares calculated on a fully diluted basis.

(xx) ‘

 

 

Share Value

’ shall mean the value of the shares as arrived at by an independent valuer

acceptable to all the Parties acting in his capacity as an expert and not as a conciliator or

arbitrator. The valuer shall not ascribe any value to transfer or non-transfer of controlling

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interest for determination of the value of the shares. In case of failure of the Parties to agree on

an independent valuer within fifteen (15) days of request by one to the other, the value shall be

taken by a majority of a panel of three valuers constituted of one valuer appointed by the

Consultant, one by MPUIF and one by the two valuers together. The respective Party shall

appoint its valuer within seven (7) days of expiry of the fifteen (15) day period. Failure of a Party

to appoint its valuer would be deemed to be acceptance of the other Party’s valuer as the sole

valuer. In case of failure of the two valuers to agree on a third valuer within seven (7) days from

the appointment of the later of the two valuers, the statutory auditor of the Company shall act

as the third valuer.

(xxi) ‘

 

 

Subscription Shares

’ means 74,999 fully paid up Equity Shares, representing 74.999% of the

Share Capital, to be issued by the Company to the Consultant in accordance with this

Agreement

(xxii) ‘

 

 

Subscription Consideration

’ means a sum of Rs 7,49,990/- (Rupees Seven Lakh and Fortynine

Thousand Nine hundred and Ninety only).

(xxiii) ‘

 

 

Transfer

’ means the indirect or direct sale, transfer, assignment, pledge, conveyance,

encumbrance or any other form of alienation or disposal of any Equity Shares of the Company.

1.2. Interpretations:

(i) In calculations of share numbers, references to ‘fully diluted basis’ means that the calculation

should be made assuming that all outstanding options, warrants and other equity and/or debt

securities convertible into or exercisable or exchangeable for Equity Shares (whether or not by

their term then currently convertible, exercisable or exchangeable), have been so converted,

exercised or exchanged.

(ii) References to any statute or statutory provision or order or regulation made there under shall

include that statute, provision, order or regulation as amended, modified, re-enacted or

replaced from time to time whether before or after the date hereof.

(iii) References to persons shall include bodies corporate, unincorporated associations,

partnerships and any organisation or entity having legal capacity.

(iv) Headings to clauses are for convenience only and shall not form part of the operative

provisions of this Agreement and shall not be taken into consideration in its interpretation or

construction.

(v) References to recitals, clauses or appendices are, unless the context otherwise requires,

references to recitals to, clauses of or appendices to this Agreement.

(vi) References to the words “include” or “including” shall be construed as being suffixed by “without

limitation”.

(vii) Any statement or representation made by a Party on the basis of its knowledge, belief or

awareness is made on the basis that the Party has, in order to establish that the statement is

true and not misleading in any respect:

(a) made all reasonable inquiries of the officers, managers, employees and other persons

who could reasonably be expected to have information relevant to the matters to which

the statement relates;

(b) where those inquiries would have prompted a reasonable person to make further I

enquiries made those further inquiries; and (c) and that as a result of inquiries, the

Party has no reason to doubt that the statement is true and not misleading in any

respect.

2. Shareholding of the Company

2.1. The Company has been formed and incorporated under the Act as a private limited company and the

present shareholding of the Company is as under:

Sl. No. Name of Shareholder No. of

Equity

Shares Held

Percentage of

Share Capital

(i) MPUIF 25,000 99.99%

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(ii) MPUIF through nominee ,Principal Secretary Urban Administration & Development 1 0.01%

Total 25,001 100%

2.2. The Consultant agrees to subscribe to shares in the Company in the manner contained herein such that

upon Completion shareholding pattern of the Company shall be as under:

Sl. No. Name of Shareholder No. of

Shares Held

Percentage of

Share Capital

(i) MPUIF (the nominee would sell the 1 share held by him to MPUIF at par) 25,001 25.001

(ii) Consultant 74,999 74.999

 

 

Total 1,00,000 100%

3. Subscription to Shares

3.1. Subject to the terms of this Agreement and the fulfilment of the Conditions Precedent, the Consultant

hereby agrees to subscribe to, and the Company hereby agrees to allot and issue to the Consultant, on

the Completion Date, the Subscription Shares at the Subscription Consideration.

4. Conditions Precedent

4.1. This Agreement and the obligations of the Parties herein shall be subject to the fulfilment (or, where

permissible, waived in writing, as the case may be) of the following Conditions Precedent to Completion:

(i) Each of the Parties having performed in all material respects all of the obligations hereunder

required to be performed by them on or prior to Completion;

(ii) All internal approvals and submissions of each Party, including their respective board

resolutions, having been obtained;

(iii) Approval of the Services Agreement in a form ready for execution between the Trust and the

Company by the Consultant;

(iv) Transfer of the Subscription Consideration by the Consultant to the Company;

(v) Nomination of a person by the Consultant who would act as the Managing Director of the

Company on a full-time basis with such credentials as are acceptable to MPUIF supported by a

consent letter from such person; and

(vi) Nothing shall have occurred which would render (or have the effect of rendering) any of the

warranties and representations contained in clause 6 below hereof untrue in any material

aspect.

4.2. The Consultant shall take all steps to promptly fulfil the Conditions Precedent (insofar as applicable to

the Consultant) by [

 

 

insert

], 2008 (‘Long Stop Date’) and upon the fulfilment of the Conditions Precedent

(or waiver by MPUIF, as case may be), it shall provide written confirmation of the same (‘CP

Confirmation’) to MPUIF and the Company.

4.3. If any condition set forth in clause 4.1 above shall not have been fulfilled or waived by the Long Stop

Date, MPUIF may, at its option, without prejudice to its rights hereunder and under applicable law:

(i) defer Completion to a later date;

(ii) proceed to Completion so far as practicable; and

(iii) t erminate this Agreement.

4.4. In the case of termination, no Party shall have any rights or claims against the other, save for those that

expressly survive termination of this Agreement.

4.5. During the period from the Effective Date till the Completion Date, the Parties shall be bound by the

provisions of this Agreement and each of the Parties agrees that:

(i) It shall not take any action that will render any of its representations and warranties contained

in this Agreement to be incorrect, false, misleading or inaccurate as on the Completion Date;

(ii) It will use its best efforts to obtain, at its own cost and expense, such approvals, permits,

licenses and other authorisations, if any, required for the transactions contemplated herein and

to take all other actions reasonably required for the effectiveness of this Agreement; and

(iii) It will promptly notify the others in writing when any such authorization has been obtained and

such other actions are taken.

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5. Completion and Post-Completion Actions

5.1. The Completion shall take place within ten (10) Business Days following receipt of the CP Confirmation

by MPUIF and the Company (which ever is later).

5.2. At Completion, the following shall occur simultaneously and no such transaction shall be consummated

unless all such transactions are consummated:

(i) The Consultant shall nominate three (3) persons to be appointed as directors on the Board

including the Managing Director in accordance with clause 4.1(v) above and shall provide the

Company with consents of the said persons;

(ii) The Company shall:

(a) allot and issue the Subscription Shares to the Consultant;

(b) deliver to the Consultant one or more original share certificates evidencing the

Subscription Shares, each duly completed in the name of the Consultant, as the case

may be;

(c) duly register the Subscription Shares in the name of the Consultant in the Company’s

register of members and provide evidence thereof to the Consultant;

(d) appoint the three nominees of the Consultant on the Board as directors; and

(e) appoint one of the three nominees of the Consultant on the Board as the Managing

Director; and

(f) pass a resolution of the Board (with participation of the nominees of the Consultant)

and approve the Services Agreement for execution by the Company.

5.3. Within five (5) Business Days of the Completion Date, the Company shall:

(i) file the return of allotment with the Registrar of Companies, Madhya Pradesh & Chhattisgarh,

for the allotment of the Subscription Shares and provide an acknowledged copy of the same to

the Consultant;

(ii) file all necessary forms in relation to appointment of the nominees of the Consultant on the

Board with the Registrar of Companies, Madhya Pradesh & Chhattisgarh, subject to the

Consultant providing the Company with all documents as may be required by the Company for

completing the requirements under law for the appointment as aforesaid and no appointment

shall be made without providing the Company with all such documents as it may require for the

said purpose; and

(iii) execute the Services Agreement with MPUIF.

6. Warranties

6.1. Each Party represents to each other as under:

(i) It is duly incorporated and organised and existing under the applicable laws and is capable of

suing and being sued in its own name in India.

(ii) It has the full power, authority and legal right to own assets and carry on its business.

(iii) All corporate and other action required toauthorise acceptance of the terms and conditions and

the performance of its obligations under this Agreement have been duly taken.

(iv) It is not in liquidation and has taken no steps to enter into liquidation, and no petition has been

presented for the winding-up of the Party. There are no grounds on which a petition or

application could be based for the winding-up or appointment of a receiver of the Party.

(v) The execution, delivery and performance of this Agreement by the Party will not:

(a) violate any provision of the organisational documents of the Party;

(b) conflict with or result in any material breach or violation of any of the terms and

conditions of, or constitute (or with notice or lapse of time or both constitute) a default

under, any agreement to which it is a party or by which it is bound;

(c) violate any court order, judgment, injunction, award, decree or writ against, or binding

upon, the Party or upon its securities, properties or business; and (d) violate any law or

regulation of India or any other jurisdiction in which the Party maintains a business

presence.

(vi) It has the full power and authority to enter into, execute and deliver this Agreement and to

perform the transactions contemplated hereby. The execution and delivery of this Agreement

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by the Party and the performance by the Party of the transactions contemplated hereby have

been duly authorised by all necessary corporate or other action of the Party.

(vii) This Agreement constitutes legal, valid and binding obligations of the Party, enforceable

against it in accordance with its terms.

6.2. The Consultant acknowledges that the Company and MPUIF are entering into this Agreement relying on

the representations and warranties of the Consultant.

6.3. Knowledge: Each Warranty is given subject to the matters disclosed in the

Disclosure Letter

 

 

with respect to such Warranty, and no other information of which the Consultant has

knowledge (actual or constructive) and no investigation by or on behalf of the Consultant or any of their

agents, representatives, officers, employees or advisers, shall prejudice any claim made by MPUIF or

the Company under this Agreement. It shall not be a defence to any claim against the Consultant, that

the other Parties knew or ought to have known or had constructive knowledge of any information

relating to the circumstances giving rise to such claim. Subject to the disclosures made in the Disclosure

Letter, the Warranties shall not be in any manner limited by any information disclosed or made available

to or received by MPUIF or the Company or any of their representative(s).

6.4. Completion Warranties: The Warranties shall be deemed to be repeated as at Completion as if they

were made on and as of the Completion Date and all references therein to the date of this Agreement

were references to the Completion Date. The Warranties shall survive Completion.

7 Corporate Governance

7.1. Authority of the Board. Subject to the provisions of this Agreement and the Act, the Board shall be

responsible for the management, supervision, direction and control of the Company. Subject to the

provisions of this Agreement, the Board shall be entitled to delegate powers to such persons and such

committees that the Board may create to assist it in its business strategy and objectives.

7.2. Size of the Board:

(i) The Board shall consist of four (4) directors.

(ii) From the Completion Date and until such time that MPUIF holds at least 10% of the issued and

paid up equity capital of the Company calculated on a fully diluted basis, MPUIF shall be

entitled to appoint one (1) director on the Board (‘

 

 

Government Director

’). The Consultant shall

at all times exercise their votes on the Board to ensure that the Government Director is

appointed on the Board. The Government Director shall be director whose office is not capable

of being vacated by retirement or by rotation.

The Government Director shall act as the Chairman of the Board only for the purpose of

chairing the meetings of the Board. The Company expressly agrees and undertakes that the

Government Director shall not be in charge of, or responsible for the day to day management of

the Company and shall not be identified as officer in charge/default of the Company or occupier

of any premises used by the Company or an employer of the Company. The Government

Director will also not be required to give any personal guarantee in terms of guaranteeing the

performance or any obligation undertaken by the Company pursuant to any financial

transaction or indebtedness. The costs incurred by a Government Director in attending a

meeting of the Board or committee thereof or a General Meeting shall be borne by the

Company.

(iii) From the Completion Date and until such time that the Consultant holds at least 70% of the

issued and paid up equity capital of the company calculated on a fully diluted basis, the

Consultant shall have the right to nominate three (3) directors one of whom shall be the

Managing Director.

7.3. Election of Directors: The Consultant and MPUIF shall each exercise their votes in relation to all the

equity shares held by them at any Shareholders Meeting called for the purpose of filling the positions on

the Board or in any decision of the Board for such purpose to elect the Government Director to the

Board, and shall take all other actions necessary to ensure the election to the Board of the Government

Director.

7.4. Board Committees: In the event of any committee(s) formed by the Board, MPUIF’s right to appoint its

nominee to such committee shall be the same as it’s right to appoint a Director as set out in clause

7.2(ii) above. The proceedings and decisions of any committee(s) formed by the Board shall be subject

to clause

7.13 below. The provisions of clause 7.10 below relating to quorum in so far as they apply to meetings of the

Board shall apply mutatis mutandis to meetings of any committee(s) of the Board.

Page 9 of 20

7.5. Removal and Replacement of Directors: The Government Director shall be removed from the Board,

with or without cause, upon, and only upon, the affirmative vote of MPUIF. Each shareholder shall

exercise its vote in relation to the equity shares controlled by it for the removal of the Government

Director upon the written request of MPUIF. No shareholder shall exercise its votes in relation to the

equity shares controlled by it for the removal of the Government Director in any other circumstances. In

the event the Government Director resigns or is removed in accordance with this clause, MPUIF will

have the right to nominate such Director’s successor or replacement, and such successor or

replacement Director shall be nominated and elected on or as soon as practicable after the date of such

resignation or removal and in any event within 30 days after such resignation or removal.

7.6. Alternate Director: MPUIF shall be entitled through its Government Director to nominate an alternate

Director to act in accordance with the Act for any Director nominated by MPUIF and shall issue a written

notice to the Company in accordance with clause 12.6 below providing the name and contact address of

such alternate Director (“

 

 

Alternate Director Nomination Notice

”). The Board shall appoint the

alternate Director so nominated within five (5) Business Days of the receipt of such Alternate Director

Nomination Notice. MPUIF shall also have a right to withdraw its nominated alternate Director and

nominate another in his place. MPUIF and the Consultant shall take all such actions, including

exercising their respective votes in relation to the equity shares controlled by it, as may be required to

cause any alternate Director nominated pursuant to this clause to be duly elected or appointed.

7.7. Director’s Access: The Government Director shall be entitled to examine the books, accounts and

records of the Company and shall have free access, at all reasonable times and without prior notice, to

any and all properties and facilities of the Company. The Company shall provide such information

relating to the business affairs and financial position of the Company, as the Government Director may

require.

7.8. Frequency and Location of Board Meetings: Meetings of the Board shall take place at least once in

every three-month period. Meetings shall be held in Bhopal or any other location approved in writing by

a majority of the Directors including the Government Director.

7.9. Notice: A meeting of the Board may be called by the Chairman of the Board or any Director giving notice

in writing to the company secretary of the Company specifying the date, time and agenda for such

meeting. The company secretary shall upon receipt of such notice give a copy of such notice to all

Directors of such meeting, accompanied by a written agenda specifying in reasonable detail the

business of such meeting. The Company shall ensure that notice of a meeting of the Board shall be

accompanied by necessary background and other information and/or supporting documents pertaining

to the business proposed to be transacted thereat. Not less than seven (7) Business Days notice of a

meeting of the Board shall be given to all Directors; provided, however, that such notice period: (i) shall

not apply in the case of an adjourned meeting pursuant to clause 7.10 below; and (ii) may be reduced

with the written consent of a majority of the Directors, provided, however, that such majority shall

include the Government Director.

7.10. Quorum: Subject to the provisions of the Act, all meetings of the Board shall require a quorum of at least

two Directors; provided, however, that the quorum must include the Government Director (present either

in person or by the means specified in clause 7.12 below) in respect of any meeting of the Board. If

such a quorum is not present within one hour from the time appointed for the meeting, the meeting shall

adjourn to such place and time as those Directors who did attend shall decide or, if no such decision is

reached, at the same place and time seven (7) Business Days later. Written notice of such adjourned

meeting shall have been delivered to all Directors at least five (5) Business Days prior to the date of

such adjourned meeting. In the absence of a valid quorum at such adjourned meeting, the Directors

present thereat shall, notwithstanding anything to the contrary herein contained, constitute a quorum

and all business transacted thereat shall be regarded as having been validly transacted provided,

however, that in any such adjourned meeting, no matter listed in

 

 

Schedule 7.13 below

shall be taken

up unless the Government Director is present.

7.11. Voting: At any Board meeting, each Director may exercise one vote. Except as provided in clause 7.13

and 7.15 below, the adoption of any resolution of the Board shall require the affirmative vote of a

majority of the Directors present at a duly constituted meeting of the Board or in the case of a circular

resolution signing by the majority of the Directors to whom the resolution is circulated. Subject to clause

7.13 and 7.15 below, the Board shall not at any meeting adopt any resolution covering any matter that is

not expressly specified on the agenda for such meeting unless a majority of the Directors present at

such meeting, which shall include the Government Director’s, vote in favour of such resolution.

7.12. Telephonic/Video Participation: If permitted by the Act, Directors may participate in Board meetings by

telephone or video conferencing or any other means of contemporaneous communication, provided that

each Director must acknowledge his presence for the purpose of the meeting and any Director not doing

so shall not be entitled to speak or vote at the meeting. A Director may not leave the meeting by

disconnecting his telephone or other means of communication unless he has previously obtained the

express consent of the chairman of the meeting and a Director shall conclusively be presumed to have

Page 10 of 20

been present and formed part of the quorum at all times during the meeting unless he has previously

obtained the express consent of the chairman of the meeting to leave the meeting as aforesaid. The

Parties acknowledge, however, that as of the Effective Date, the Act does not presently deem such

participation to constitute presence “in person” for purposes of quorum.

7.13. Affirmative Voting Matters: Subject to any additional requirements imposed by the Act and to the last

sentence of this clause 7.13, the shareholders agree that neither the Company nor any shareholder,

Director, officer, committee, committee member, employee, agent or any of their respective delegates

shall, without the affirmative written consent or approval of at least a majority of the Directors, including

the affirmative written consent or approval of the Government Director, obtained at a validly convened

Board meeting, take any of the actions set forth in the attached

 

 

Schedule 7.13

, whether by circular

resolution or otherwise. All matters in respect of the actions set forth in

 

 

Schedule 7.13

must be referred

to the Board, and no shareholder, Director, officer, committee, committee member, employee, agent or

any of their respective delegates shall take any actions purporting to commit the Company in relation to

any such matters without the prior approval of the Board in accordance with this clause

7.14. Complete Effect: Each shareholder shall vote at any general or extraordinary general meeting of the

shareholders or matters required to be voted by way of a postal ballot (a “

 

 

Shareholders Meeting

”), and

shall take all other actions necessary, to give effect to the provisions of this Agreement and to ensure

the inclusion in the Charter Documents the rights and privileges of the shareholders included in this

Agreement. In addition, each shareholder shall vote its equity shares at any Shareholders Meeting upon

any matter submitted for action by the shareholders or with respect to which the shareholders may vote

and shall cause its Directors on the Board to vote, in conformity with the specific terms and provisions of

this Agreement to the extent legally permissible to give complete legal effect to the provisions of this

Agreement. The Parties shall use their best efforts to take, or cause to be taken, all actions and to do, or

cause to be done, all things necessary or desirable under the applicable law to consummate or

implement expeditiously the transactions contemplated by, and the agreements and understanding

contained in this Agreement. The shareholders shall vote with respect to their equity shares and shall

take all other action necessary or required, to ensure that at all times the Charter Documents, as the

case may be, facilitate, and do not conflict with, the provisions of this Agreement, and require the

approval of MPUIF for each of the actions set out on

 

 

Schedule 7.13 above

.

7.15. Shareholders Meeting: Subject to the provisions of the Act, all Shareholders Meetings shall require a

quorum of at least two (2) shareholders present in person or through their representative; provided,

however, that such quorum must include MPUIF. If such quorum is not present within one hour from the

time appointed for the meeting, the meeting shall be adjourned to the same time and place not earlier

than ten (10) Business Days but no later than twenty-one (21) Business Days thereafter as the

Chairman may determine after prior consultations with the Government Director. In the absence of a

valid quorum at such adjourned meeting, the shareholders present in person or through their

representative thereat shall, notwithstanding anything to the contrary herein contained, constitute a

quorum and all business transacted thereat shall be regarded as having been validly transacted

provided, however, that in any such adjourned meeting, no matter listed in

 

 

Schedule 7.13 above

shall

be taken up unless a quorum of at least two shareholders is present, which quorum must include

MPUIF.

7.16. The Company shall hold the Government Director harmless from and against any direct losses,

reasonable costs (including without limitation the fees, disbursements and other charges of counsel),

expenses, claims, damages, penalties and liabilities (collectively, “

 

 

Losses

”) that the Government

Director may incur or suffer as a result of, arising out of or in connection with his duties as director on

the Board.

7.17. Within thirty (30) Business Days of exercise by MPUIF of its right to appoint Government Director under

clause 7.2(ii) above, the Company will purchase suitable directors’ and officers’ liability insurance for a

sum of Rs. 2 crores for the Government Director.

7.18. Annual Business Plan

(i) The Board shall, from time to time, develop (or cause to be developed) a Business Plan of the

Company, which will cover all the projected revenues and costs and expenses relating to the

activities of the Company for that period, as well as sources of funding for such costs and

expenses. Each Business Plan will be prepared in accordance with the accounting principles

followed by the Company in accordance with clause 7.20 below herein below and will be

approved by the Board including the Government Director.

(ii) The Business Plan of the Company shall be an annual statement including but not limited to,

the revenue targets, approved operating expenditure, manpower and proposed aggregate

funding needs of the Company. The Business Plan shall highlight the sectors, projects and

Urban Local Bodies that the Company proposes to work on through the plan year. This

Page 11 of 20

Business Plan shall be discussed and approved by the Board of the Company at the beginning

of each Financial Year.

(iii) The Board of the Company may from time to time, as and when required, modify the Business

Plan of the Company during any Financial Year.

7.19. Bank Account: The Company shall maintain one or more bank accounts with such banks as may be

decided by the Board. All such bank accounts shall be operated by such persons and in such manner

as may be authorised by the Board.

7.20. Accounting Matters: The Consultant shall ensure that:

(i) The Company shall at all times maintain accurate and complete accounting and other financial

records in accordance with the requirements of all applicable laws and in accordance with all

relevant Indian statutory and accounting standards and the policies adopted by the Board from

time to time.

(ii) The Company shall prepare and present to the Board the following financial statements and

reports derived from the books of accounts maintained by it:

(a) balance sheet;

(b) profit and loss account;

(c) cash flow statements; and

(d) such other statements/reports as may be decided by the Board and required under any

law, regulatory and/or statutory guidelines.

(iii) The frequency of the above financial statements and reports shall be decided by the Board

from time to time but in no event less than once each calendar quarter.

7.21. The Parties shall ensure that the Business shall be conducted in accordance with the Business Plan.

7.22. Audit

(i) The books of accounts and other records of the Company kept at its Registered Office and all

its branches shall be subject to statutory audit by a reputed firm of chartered accountants, as

the case may be. The Company may also subject its accounts to periodical internal audits at

regular intervals by a reputed firm of chartered accountants as per the scope approved by the

Board.

(ii) The Parties, in their capacity as shareholders, will have the right to obtain from the Company

periodic revenue, expense, and profit and loss statements and balance sheet and cash flow

statements and other financial statements, as may be reasonably necessary to keep advised of

the operations and financial position of the Company.

7.23. Dividends

(i) Dividends shall be declared and paid to the shareholders of the Company only as and when

and in amounts determined by the Board of the Company, and any such dividends will be

distributed to the shareholders on a pro rata basis.

(ii) The Company’s dividend policy shall call for a distribution of each year’s net profit after tax, net

of any and all amounts set aside to meet all statutory requirements, requirements outlined in

the approved Business Plan and business contingencies, as may be recommended by the

Board and in accordance with the provisions of the Act.

(iii) The Board may, at any time, declare and pay interim dividends which shall be paid from the

Company’s net profits determined from the most recent interim unaudited Financial Statement

of the Company.

(iv) Final dividends shall be recommended by a resolution of the Board and approved by the

shareholders at an AGM or an EGM, as the case may be, provided that the shareholders

covenant and undertake to exercise the voting rights attaching to their respective Shares to

declare all dividends required to be declared pursuant to this clause.

8 Restriction on Transfer of Shares

8.1. Save as otherwise expressly provided in this Agreement or with the prior consent of the Parties, none of

the Parties shall, or attempt to Transfer, all or any part of the legal and beneficial interest in any of its

shares for a period of three (3) years (hereinafter referred to as the “

 

 

Lock-in Period

”) from the Effective

Date, except in accordance with this Agreement. Any such Transfer of Equity Shares attempted in

violation of this clause shall be null and void and shall not be binding upon the Company or the Board

and the Company shall not be bound to register such Transfer in its Register of Members.

Page 12 of 20

8.2. If at any time after the expiry of the Lock-in Period, any Party desires to Transfer all or any of the legal

and beneficial interest in the Shares (hereinafter referred to as “

 

 

Sale Shares

”) held by it (hereinafter

referred to as the “

 

 

Selling Party

”), the Selling Party shall inform the other Party and the Company of its

intention by giving it a notice in writing (hereinafter called the “

 

 

Transfer Notice

”). Such Transfer Notice

shall set out the terms and conditions for the Transfer of the Sale Shares including the proposed price

and terms of sale and shall not be revocable. In the event that the Selling Party fails to mention the

proposed price in the Transfer Notice, it shall be deemed that no such Transfer Notice was sent.

8.3. Within fourteen (14) Business Days of the Transfer Notice, the other Party (hereinafter referred to as the

 

 

Continuing Party

”) may express its intention to purchase the Sale Shares by notice expressly stating:

(i) its acceptance of the terms of the Transfer as set forth in the Transfer Notice; or

(ii) its option to purchase the Sale Shares at Share Value.

The choice as exercised by the Continuing Party is hereinafter referred to as ‘

 

 

Sale Consideration

’. The

Purchasing Party shall be entitled to nominate any other person at its choice who would purchase the

Sale Shares in its place.

8.4. In case of failure of the Continuing Party to so issue the notice, it shall be deemed that the Continuing

Party is not desirous of purchasing the Sale Shares.

8.5. In case the Continuing Party decides to purchase the Sale Shares so offered to it, the Selling Party shall

be bound to transfer its Sale Shares to the Continuing Party or its nominee at the Sale Consideration.

Such transaction shall be completed within fourteen (14) days of arriving at the Sale Consideration.

8.6. In case a portion of Sale Shares is not sold after complying with the procedure set out in this clause, the

Selling Party may sell any or all of the Sale Shares (as the case may be), to any other entity as desired

by it, provided such entity is acceptable to the Continuing Party. Provided further that such sale shall not

be on terms more advantageous than those set out in the Transfer Notice. The consent of the

Continuing Parties shall not be unreasonably withheld.

8.7. Any other party who purchases the shares pursuant to clause 8.6 above, shall sign a deed of

adherence, substantially in the form attached herewith as

 

 

Schedule 8.7

hereto, whereby it confirms that

it shall comply with all the provisions of this Agreement.

9. Deadlock Resolution

9.1. For the purposes of this clause, a “deadlock” is deemed to have occurred if:

(i) a matter relating to or affecting the Company has been raised at and/or considered by a

meeting of the Board or a Shareholder meeting; and

(ii) no resolution has been passed by such meeting by reason of any equality of votes for and

against any resolution proposed relating to such matter or by virtue of consent not having been

obtained in accordance with clause 7.13 above.

9.2. In the event of a deadlock, any of the Parties, within ten (10) Business Days after the date of the

deadlock, can serve on the other Party (including the Company), a notice (“Deadlock Notice”) stating the

details and the circumstances of the deadlock and the stand of the Party issuing the Deadlock Notice.

9.3. If a Deadlock Notice is served pursuant to this clause, the matter shall be referred for resolution to the

Chairman of the Consultant and the Chairman of MPUIF (or other person of equivalent status) who shall

endeavour to resolve the matter in good faith through informal discussion.

9.4. In the event that in spite of the above, the Deadlock is not resolved within a period of forty-five (45)

Business Days of the date of service of the Deadlock Notice, then the matter shall be referred to

arbitration in accordance with the provisions of clause 12.5 below.

10. Notice of Default

10.1. Upon the occurrence of any of the Events of Default, the non-defaulting Party shall serve a notice in

writing to the defaulting Party to remedy such default within a period of thirty(30) days from the date of

receipt of the notice detailing therein the Event of Default alleged and the attending circumstances

(‘

 

 

Default Notice

’).

10.2. In the event that the defaulting Party fails to remedy such breach within a period of thirty (30) days from

the date of the receipt of the Default notice, then:

(i) In case the Consultant is the defaulting Party, the Consultant shall, at the option of MPUIF, sell

its shares to MPUIF or a party identified by MPUIF, at Share Value. MPUIF shall be entitled to

call for such transfer at any time within six (6) months of the expiry of the thirty (30) day period.

Provided however that MPUIF shall also be entitled to issue a notice of termination within the

said period of six (6) months.

Page 13 of 20

(ii) In case MPUIF is the defaulting Party, the Consultant may offer to sell its shares to MPUIF or

its nominee at Share Value at any time within six (6) months of the expiry of the thirty (30) day

period. In case of failure of MPUIF to accept the same within the period of six months as

aforesaid shall entitle the Consultant to issue a sixty (60) day notice for termination of this

Agreement.

11. Term & Termination

11.1. This Agreement shall continue to be in effect and bind the Parties until terminated in accordance

herewith.

11.2. This Agreement shall terminate:

(i) if the Parties mutually agree to terminate this Agreement, on the date determined by the

Parties;

(ii) if an event occurs, which restricts or prohibits the Company from conducting its business, on

the date the Company becomes unable to conduct its business; or

(iii) if MPUIF issues a notice terminating this Agreement, in terms of clause 10.2(i) above or the

Consultant issues a notice terminating this Agreement, in terms of clause 10.2(ii) above, on the

expiry of sixty (60) days from the date of receipt of such notice.

11.3. Upon termination of this Agreement, the Company shall be wound up in accordance with law.

11.4. Upon occurrence of an event of default under the Services Agreement which is not resolved to the

satisfaction of MPUIF or in the event of termination of the Services Agreement, MPUIF may, at its

option, buy or nominate another entity to buy, all (but not part) of the Equity Shares of the Consultant at

Share Value or at a price mutually acceptable to MPUIF and the Consultant.

12. Miscellaneous

12.1. Confidentiality

(i) Each Party shall keep confidential all information and other materials passing between it and

the other Party in relation to the transactions contemplated by this Agreement and also in

relation to the business of the Company (including all information concerning the business

transactions and the financial arrangements relating to Company), which was either designated

as confidential or which was by its nature confidential (the “

 

 

Information

”), and shall not without

the prior written consent of the other Party divulge such information to any other person or use

such Confidential Information other than for carrying out the purposes of this Agreement.

Notwithstanding anything in this clause 12.1(i), MPUIF may communicate with any officer of

MPUIF or the Government of Madhya Pradesh or any elected representative information

concerning any and all affairs of the Company.

(ii) Nothing in this clause 12.1 shall restrict any Party from disclosing Information for the following

purposes:

(a) to the extent that such Information is in the public domain other than by breach of this

Agreement;

(b) to the extent that such Information is required to be disclosed by any applicable law or

by any governmental authority to whose jurisdiction the relevant Party is subject or with

whose instructions it is customary to comply, including, where applicable under the

Right to Information Act, 2005;

(c) insofar as it is disclosed to the employees, directors or professional advisers of any

Party, provided that such Party shall procure that such persons treat such Information

as confidential;

(d) to the extent that any of such Information is later acquired by a Party from a source not

obligated to any other Party hereto to keep such Information confidential;

(e) to the extent that any of such Information was previously known or already in the lawful

possession of a Party, prior to disclosure by any other Party hereto; and

(f) to the extent that any information, materially similar to the Information, shall have been

independently developed by a Party without reference to any Information furnished by

any other Party hereto.

(iii) Unless otherwise agreed to by the Parties in writing, none of the Parties to this Agreement shall

make or permit or authorise the making of any press release or other public statement or

disclosure concerning this Agreement or any of the transactions contemplated in it without the

prior written consent of the other Parties.

Page 14 of 20

(iv) The obligations contained in this Clause shall continue to apply for a period of two years from

the date of the termination of this Agreement.

12.2. Right to Information

(i) MPUIF or the Government Director shall be entitled to receive such information and documents

as is reasonably requested by MPUIF or the Government Director, unless prohibited by

applicable law.

(ii) Without prejudice to the generality of the foregoing, MPUIF or the Government Director or their

nominees shall be entitled to receive:

(a) within 120 days of the end of the financial year, the audited consolidated financial

statements of the Company and its subsidiaries; and

(b) within 45 days of the end of each financial quarter in respect of the Company, the

Company’s unaudited quarterly financial statements.

(iii) Each Party (or any person duly authorised by it) shall:

(a) be given an opportunity to discuss the affairs, finances and accounts of the Company

with its officers, other principal executives and external auditors;

(b) be provided promptly by the Company with all information requested by it relating to

the policies, practices and actions of the Company; and

(c) be given full rights to inspect the premises, operations and accounts of the Company

and to have full access to the Company’s advisers.

12.3. Force Majeure

(i) No Party shall be liable for any failure or delay in performance of any obligation under this

Agreement (other than an obligation to pay money) to the extent such failure or delay is due to

fire, strike, lockout, war, civil commotion, labour unrest such as but not limited to gherao, acts of

God, changes in law, regulations or policies of the Government, the Reserve Bank of India or

other regulatory authority acts beyond the control of the Party, or for any other reasons which

cannot reasonably be forecast or provided against.

(ii) The Party having any such cause shall promptly notify the other Parties in writing of the nature

of such cause and the expected delay and take all reasonable steps to prevent occurrence of

the cause and to ensure speedy termination of the cause.

(iii) If, however, it is not feasible for a Party to prevent the occurrence of the Force Majeure event

as a result of which that Party is prevented from performing its obligation, the other Parties may

decide to release that Party from performing its obligation hereunder or may modify the relevant

provisions of this Agreement which have been affected by the Force Majeure event (for so long

as the Force Majeure event continues) in order to enable such Party to perform its obligations

under this Agreement.

(iv) If, however, the Force Majeure event continues for more than six (6) months from its

occurrence, the Parties may elect either to terminate this Agreement with all its consequences

or may suspend operation of this Agreement until the Force Majeure event shall cease to exist.

12.4. Supremacy

(i) If any provisions of the Memorandum or Articles of the Company at any time conflict with any of

the provisions of this Agreement, so far as the provisions of this Agreement are not in

contravention of the provisions of the Act and any other statute, the provisions of this

Agreement shall prevail and the Parties shall, whenever necessary, exercise all voting and

other rights and powers available to them to procure the amendment of the Memorandum

and/or Articles to the extent necessary to permit the Company and its affairs to be carried out

as provided in this Agreement.

(ii) Each of the Parties shall exercise all voting rights and other powers of control available to them

in relation to the Company so as to procure (so far as each is respectively able by the exercise

of such rights and powers) that at all times during the term of this Agreement, the provisions

concerning the structure and organisation of the Company and the regulation of its affairs set

out in this Agreement are duly observed and given full force and effect and all actions required

of the Parties under this Agreement are carried out in a timely manner.

12.5. Arbitration

(i) All matters, questions, disputes, differences or claims arising between the Parties as to the

effect, interpretation or application of this Agreement, or as to their rights, duties or liabilities

Page 15 of 20

thereunder or as to any act, matter or thing arising out of, consequent to or in connection with

this Agreement (hereinafter ‘the Difference’) shall be resolved amicably through negotiations.

Such negotiations shall commence within a period of seven (7) Business Days of the receipt of

notice by either Party calling for the same.

(ii) In the event that the negotiations fail to so resolve the Difference within a period of fourteen

(14) Business Days from the date of receipt of the notice by the other Party, either Party may

invoke this arbitration clause under notice to the other. The Difference shall then be referred to

and finally resolved by arbitration, which shall be governed by the Indian Arbitration and

Conciliation Act, 1996, by a sole arbitrator appointed by mutual consent of the Parties.

(iii) The place of Arbitration shall be Bhopal and the language of Arbitration proceedings shall be

English.

(iv) In absence of a finding in that regard, the cost of any arbitration proceeding between the

Parties shall be borne equally by them.

(v) The Arbitrator shall have the power to award interest on any sum awarded pursuant to the

arbitration proceedings and such sum would carry interest, if awarded, until the actual payment

of such amounts.

(vi) Any award made by the Arbitrator shall be final and binding on each Parties.

12.6. Notices

(i) Any notice to be given by any Party to this Agreement shall be in writing and shall be deemed

duly served if delivered by prepaid speed post acknowledgement due or facsimile at the

address provided below:

(a) MPUIF

Name of the person concerned: [

 

 

insert designation

]

Address: [

 

 

insert address

]

Fax #: [

 

 

insert

]

(b) Consultant

Name of the person concerned: [

 

 

insert designation

]

Address: [

 

 

insert address

]

Fax #: [

 

 

insert

]

(c) Company

Name of the person concerned: [

 

 

insert designation

]

Address: [

 

 

insert address

]

Fax #: [

 

 

insert

]

or at such other address and facsimile numbers as the Party to be served may have notified in

accordance with the provisions of this clause. Any notice served by facsimile shall be followed

by prepaid speed post acknowledgement due to the addressee at its address. Any notice

served by prepaid speed post shall be deemed served seven (7) days after posting. In proving

a service of any notice, it will be sufficient to prove, in the case of a letter, that such letter was

properly stamped, addressed, and placed in the post or delivered or left at the address of

addressee given above or subsequently notified for the purposes of this Agreement.

12.7. No Partnership: The Parties expressly do not intend hereby to form a partnership, either general or

limited, under any jurisdiction's partnership law.

The Parties do not intend to be partners to one another or partners as to any third party, or create any

fiduciary relationship among themselves, solely by virtue of their status as shareholders of the

Company. To the extent that any Party, by word or action, represents to another Person that any other

Party is a partner or that the Company is a partnership, the Party making such representation shall be

liable to any other Parties that incur any losses, claims, damages, liabilities, judgments, fines,

obligations, expenses and liabilities of any kind or nature whatsoever (including but not limited to any

investigative, legal or other expenses incurred in connection with, and any amount paid in settlement of,

any pending or threatened legal action or proceeding) arising out of or relating to such representation.

12.8. No Agency: No Party, acting solely in its capacity as a shareholder of the Company, shall act as an

agent of the other Parties or have any authority to act for or to bind the other Parties. Any Party that

takes any action or binds any other Parties in violation of this clause shall be solely responsible for, and

Page 16 of 20

shall indemnify the other Party against, any losses, claims, damages, liabilities, judgments, fines,

obligations, expenses and liabilities of any kind or nature whatsoever (including but not limited to any

investigative, legal and other expenses incurred in connection with, and any amounts paid in settlement

of, any pending or threatened legal action or proceeding) that such other Party may at any time become

subject to or liable for by reason of such violation.

12.9. Entire Agreement: This Agreement (including the Schedules) contains the entire agreement among the

parties with respect to matters covered by this Agreement, and supersedes all prior agreements, written

or oral, with respect thereto.

Changes in or additions to this Agreement may be made only upon prior written consent of the Parties.

None of the terms of this Agreement shall be deemed to have been waived or altered unless such

waiver or alteration is in writing and is signed by all the Parties.

12.10. Severability: In the event that any one or more of the provisions contained in this Agreement shall be

invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality and

enforceability of the remaining provisions contained herein shall not in any way be affected or impaired

thereby and the Parties agree to attempt to renegotiate such provisions in good faith. In the event that

the Parties cannot renegotiate such provisions, this Agreement may, at the discretion of the Company,

terminate. In the event that the Parties cannot renegotiate such provisions but the Company does not

terminate the Agreement then:

(i) Such provisions shall be excluded from the Agreement;

(ii) The remainder of the Agreement shall be interpreted as if the provisions were so excluded; and

(iii) The remainder of the Agreement shall be enforced in accordance with its terms.

12.11. Binding Effect: All covenants, agreements, representations, warranties and undertakings contained in

this Agreement by and on behalf of any of the Parties hereto shall bind and inure to the benefit of the

respective successors and assigns of the Parties hereto, whether so expressed or not. This Agreement

shall inure to the benefit of and be binding upon the Parties, their successors-ininterest and permitted

assigns, but shall not be assigned by any Party without the prior written consent of the other Parties.

12.12. Costs And Expenses

(i) Each Party agrees that it shall bear by itself all costs and expenses incurred by it in connection

with any discussions, negotiations and investigations undertaken in connection with the subject

matter hereof, including costs and expenses associated with retention of financial, legal, tax

and other professional advisers.

(ii) All costs and expenses in relation to and for the consummation of the transaction including the

expenses relating to issue of the shares, stamp duty and other charges payable in respect of

the issue of the Subscription Shares and the execution of this Agreement shall be paid by the

Company.

12.13. Amendments: No amendment, modification or variation of this Agreement shall be binding on any Party

unless such amendment, modification or variation is recorded in a written document and executed by

the Parties, but where any such document exists and is so signed, no Party shall allege that such

document is not binding by virtue of an absence of consideration.

12.14. Waiver: A waiver by a Party of a provision or of a right under this Agreement is binding on the Party

granting the waiver only if it is given in writing and is signed on behalf of the Party granting the waiver.

No delay in exercising or omission to exercise any right, power or remedy shall impair any such right or

constitute a waiver thereof or any acquiescence by the holder thereof in respect of any default, nor shall

it affect or impair any right, power or remedy of either party in respect of any other default. If at any time

any Party shall waive its rights accruing to it under this Agreement due to breach of any of the

provisions of this Agreement, such waiver shall not be construed as constituting waiver of the rights

accruing to it under this Agreement as regards other breaches or other provisions of this Agreement.

12.15. Counterparts: This Agreement may be executed in one or more counterparts, each of which shall be

deemed to be an original, and all of which, when taken together, shall constitute one and the same

instrument.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first

above written.

[

 

 

insert name

]

Authorised signatory

For and on behalf of Madhya Pradesh Urban Infrastructure

Fund

Page 17 of 20

[

 

 

insert name

]

Authorised signatory

For and on behalf of [

 

 

Company

]

[

 

 

insert name

]

Authorised signatory For and on behalf of

[

 

 

Consultant

]

Page 18 of 20

Annexure A: Consultant

[

 

 

insert name, address and description of entity of the Consultant

]

Page 19 of 20

Schedule 7.13: Affirmative Vote Matters

1 Amendment to the Charter Documents of the Company.

2 Issue, allot, repurchase, redeem, alter, reorganise or retire Equity Shares or convertible securities or

options in respect of such Equity Shares and any rights attached to such Equity Shares or otherwise

permit any change in the share capital of the Company, any changes in class rights for securities,

undertake stock splits or stock consolidations, or modify or adopt any equity option plan.

3 Merger of the Company with another company, consolidation or sale of substantial part of the assets of

the Company.

4 Causing the Company to: (1) commence any case, proceeding or other action (A) under any

bankruptcy, insolvency or similar law seeking to have an order of relief entered with respect to it or

seeking to adjudicate it as bankrupt or insolvent, or seeking reorganisation, arrangement, adjustment,

winding up, liquidation, dissolution, composition or other relief with respect to it or its debts or (B)

seeking appointment of a receiver, trustee, custodian or other similar official for it or all or any

substantial part of its property; (2) make a general assignment for the benefit or its creditors; or (3) admit

in writing its inability to pay its debts when they become due.

5 Change in the number of Directors over and above the limits set out in the Articles of the Company and

changes to any Party’s nominated members of the Board.

6 Any change in the Managing Director of the Company.

7 Any changes in the scope of business outlined in the Business Plan.

8 Any Related Party Transaction.

9 Change the statutory auditors, accounting standards or tax policies or practices employed by the

Company.

10 The acquisition by the Company of any other business or entity or setting up a subsidiary and the

purchase or subscription of shares in any other company.

11 Expansion of the Company’s business, beyond what is outlined in the adopted Business Plan.

12 Matters pertaining to investment in or dis-investment from any real estate or shares or debentures, etc.

13 Declaration of dividend of the Company.

14 Any proposal for change in the Services Agreement.

Page 20 of 20

Schedule 8.7 above: Form of Deed of Adherence

This Deed of Adherence entered into this___________ day of ___________ 20_____

By and Between:

M/s. __________________________, a Company/Partnership/Individual having place of residence and

registered address at ____________________________________;

and

[

 

 

insert name of Company

], a public limited company incorporated under the Indian Companies Act, 1956, having

its registered office at [

 

 

insert address

] (hereinafter referred to as ‘the Company’).

and

Madhya Pradesh Urban Infrastructure Fund

 

 

, a trust formed and registered under the Indian Trusts Act, 1882

and having its office at [

 

 

insert] (hereinafter referred to as ‘MPUIF

’ which expression shall include its successors

and permitted assigns);

AND WHEREAS a Shareholders Agreement (‘Agreement’) dated ______ has been entered into between

MPUIF, the Company and [

 

 

insert name description and address of the Consultant

];

AND WHERAS under the Agreement any person purchasing any shares in the Company shall execute a Deed

of Adherence and be bound by the Agreement;

NOW THIS DEED WITNESSETH AND IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES:-

1. DEFINITIONS AND INTERPRETATION

Capitalised terms used but not defined in this Deed shall, unless the context otherwise requires, have

the respective meanings ascribed thereto in the Agreement.

2. _______ (Name of Affiliate/New Shareholder/Transferee, as the case may be) hereby acknowledge that

it has received a copy of and has read and understood, the Agreement and covenants, thereof and

agrees and confirms that it shall be bound by all provisions of the Agreement as if it was an original

Party thereto, and the Agreement shall have a full force and effect on it and shall be read and construed

to be binding on it.

3. _______ shall be bound by each and all the obligations of M/s. _______ (Name of Party).

4. This Deed shall be governed by and construed in accordance with the laws of the India. The terms and

conditions of the Agreement in relation to the provisions regarding arbitration and other terms and

conditions shall be deemed to have been incorporated in this Deed and expressly agreed to between

the Parties hereto.

IN WITNESS WHEREOF the Parties hereto have executed this Deed as of the date and year first hereinabove

mentioned.

[

 

 

insert name

]

Authorised signatory

For and on behalf of

Madhya Pradesh Urban Infrastructure Fund

[

 

 

insert name

]

Authorised signatory

For and on behalf of [

 

 

Company

]

[

 

 

insert name

]

Authorised signatory

For and on behalf of [

 

 

Consultant

]

[

 

 

insert name

]

Authorised signatory

For and on behalf of [

 

 

new shareholder/ assignee

]

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SHAREHOLDERS AGREEMENT