EXHIBIT 10.24
AGREEMENT FOR SALE AND PURCHASE OF THE
POWER TRANSMISSION LINE DIVISION
BETWEEN
STERLITE INDUSTRIES (INDIA) LIMITED
AND
STERLITE OPTICAL TECHNOLOGIES LIMITED
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AGREEMENT FOR SALE AND PURCHASE
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THIS AGREEMENT is made and entered into this 30th day of August, 2006 at Mumbai
by and between:
STERLITE INDUSTRIES (INDIA) LIMITED, a company within the meaning of the
Companies ▇▇▇, ▇▇▇▇, having its registered office at ▇-▇▇/▇, ▇▇▇▇▇ ▇.▇.▇.▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and a corporate office at
Vedanta, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (▇), ▇▇▇▇▇▇ 400 099 (hereinafter referred to
as "VENDOR", which expression shall, unless contrary to the context or meaning
thereof, be deemed to include its successors and permitted assigns) on the one
hand;
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And
STERLITE OPTICAL TECHNOLOGIES LIMITED, a company within the meaning of the
Companies ▇▇▇, ▇▇▇▇, having its registered ▇▇▇▇▇▇ ▇▇ ▇-▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ (hereinafter referred to as "PURCHASER", which expression shall, unless
contrary to the context or meaning thereof, be deemed to include its successors
and permitted assigns) on the other hand.
Vendor and Purchaser are hereinafter individually referred to as a "PARTY" and
collectively as "PARTIES".
WHEREAS:
1. The Vendor, a flagship company of the Sterlite Group, is principally in
copper smelting and refining business. The product portfolio of the Vendor
consists of copper rods, copper cathode, power transmission line aluminium
conductors, phosphoric acid and sulphuric acid.
2. The Power Transmission Line Division of the Vendor is engaged in the
manufacture of power transmission line aluminium conductors, having two
units, one located in Rakholi at Silvassa and the second one at Karanjwane,
near Pune.
3. The Vendor is desirous to divest the Power Transmission Line Division as a
going concern.
4. The Purchaser is one of the leading developers and manufacturers of Optical
Fibers and Fibers Optical Cables worldwide. It is the India's only fully
integrated Optical Fiber producer and an Indian market leader with over 60%
share in Optical Fiber products.
5. The Purchaser is desirous of acquiring the Power Transmission Line Division
(defined hereinafter) of the Vendor as a going concern.
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6. The Vendor has represented to the Purchaser that it is competent to sell
the said Power Transmission Line Division "as a going concern" to the
Purchaser.
7. The Vendor vide its Board Resolution dated 21ST AUGUST 2006 has agreed to
transfer and sell and the Purchaser has vide its Board Resolution dated
21ST AUGUST 2006 has agreed to purchase and acquire the Power Transmission
Line Division of the Vendor together with its assets, debts and liabilities
as a going concern on "as is where is basis", with effect from the
Appointed Date for a consideration and on the terms and conditions
hereinafter set out.
NOW, THIS AGREEMENT WITNESSESTH AND IT IS HEREBY AGREED BY AND BETWEEN THE
PARTIES HERETO AS FOLLOWS:
1. DEFINITIONS AND INTERPRETATION
DEFINITIONS
In this Agreement, the following expressions shall, unless the context
otherwise requires, have the following meanings:
'ACT' shall mean the Companies Act, 1956 or any statutory modification or
amendment or re-enactment thereof for the time being in force.
'AGREEMENT' shall mean this Agreement for Sale and Purchase of the Power
Transmission Line Division.
'APPOINTED DATE' shall mean 1st day of July, 2006 or such other date as may
be mutually agreed by the Vendor and the Purchaser.
'BUSINESS RECORDS' shall mean in relation to the Power Transmission Line
Division of the Vendor:
a) Originals of all documents of title or other evidence of ownership in
relation to the Business; and
b) All books and records maintained solely in relation to the Business.
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'CLOSING' shall mean the consummation of the transactions contemplated
by this Agreement in accordance with the provisions of Clause 6 of this
Agreement.
'CLOSING DATE' shall mean the date on which the Closing is achieved
which shall not be later than 21 (twenty one) days from the date of the
Vendor fulfilling the Conditions Precedent to Closing in accordance with
the provisions of Clause 5 of this Agreement.
'CONFIDENTIAL INFORMATION' shall mean the know-how, trade secrets,
technical processes, intellectual property, information relating to
products, finances, contractual arrangements with customers or suppliers
and other information relating to the Power Transmission Line Division
which by its nature, or by the circumstances of its disclosure to the
holder of the information, is or could reasonably be expected to be
regarded as confidential.
1.1.8 'CONSIDERATION' shall mean the purchase price being a lump sum amount,
agreed for the sale of the Power Transmission Line Division, as a going
concern including its all assets and liabilities, to be discharged by
the Purchaser to the Vendor in accordance with Clause 3 of this
Agreement.
1.1.9 'EMPLOYEES' shall mean the permanent employees of the Vendor who are
currently engaged in the Power Transmission Line Division and are
employed with the Vendor as on the Appointed Date.
1.1.10 'POWER TRANSMISSION LINE DIVISION' or 'THE BUSINESS' shall mean the
entire undertaking of the Vendor pertaining to the Power Transmission
Line Division both at Rakholi, Silvassa and at Karanjwane, Pune, which
is engaged in the manufacturing of power transmission line aluminium
conductors, including in particular all the assets and liabilities of
the Power Transmission Line Division existing as on the Appointed Date.
Without prejudice to the generality of the above, the Power Transmission
Line Division shall include:
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(a) all the assets and properties, whether tangible or intangible, of
the Power Transmission Line Division, including but without being
limited to deposits, all stocks, investments, cash balances with
banks, contingent rights or benefits, receivables, ▇▇▇▇▇▇▇ moneys,
advances or deposits paid by Vendor relating to the Power
Transmission Line Division, benefit of any security arrangements or
under any guarantees including bank guarantee facilities,
reversions, powers, authorities, allotments, approvals, permits and
consents, quotas, rights, technical know-how including technical
manuals, standard procedures, technical information such as
inventories formulae process, engineering and manufacturing skill,
scientific data, calculations, specifications, drawings, standards,
sketches and all other relevant information and knowledge,
entitlements, contracts, software and other licenses, municipal
permissions, licenses, permits, approvals, authorizations, rights to
use and avail of telephones, telexes, facsimile, email, internet,
leased line connections and installations, utilities, electricity
and other services, reserves, provisions, funds, all records,
files, papers, computer programmes, manuals, data, catalogues, sales
and advertising materials, benefits of assets or other interest held
in trust, registrations, contracts, engagements, arrangements of all
kind, privileges and all other rights including sales tax deferrals,
title, interests, other benefits (including tax benefits),
privileges, liberties and advantages of whatsoever nature and
wherever situate belonging to or in the ownership, power or
possession and in the control of or vested in or granted in favour
of or enjoyed by the Vendor in connection with or relating to Power
Transmission Line Division and all other interests of whatsoever
nature belonging to or in the ownership, power, possession or the
control of or vested in or granted in favour of or held for the
benefit of or enjoyed by the Vendor, whether in India or abroad in
connection with or relating to Power Transmission Line Division,
more specifically provided for in SCHEDULE I hereto. List of Plant
and Machinery used for production being specifically provided for in
SCHEDULE II.
(b) all liabilities and obligations of the Vendor on the Closing Date
which pertain to the Power Transmission Line Division, including all
secured and unsecured debts (whether in Indian Rupees or foreign
currency), liabilities (including contingent liabilities),
litigations and arbitral and other proceedings in respect of the
Power Transmission Line Division, duties and taxes
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including relating to excise, sales tax, ESI, provident fund and all
statutory dues and undertakings and obligations of the Vendor
relating to the Power Transmission Line Division, more specifically
provided for in SCHEDULE III hereto.
1.1.11 'SIGNING DATE' shall mean the date of signing of this Agreement.
1.1.12 All other capitalized terms used in this Agreement but not defined in
this clause shall have the meaning given for them in the preamble or
recitals to this Agreement or wherever such terms first appear in this
Agreement.
1.2 INTERPRETATION
HEADINGS: headings are for convenience only and shall not affect
interpretation of this Agreement.
PLURAL IN SINGULAR: words importing the singular number shall include
the plural and vice versa.
VARIED DOCUMENT: a reference to this Agreement or another instrument
includes any variation, novation or replacement thereof.
CLAUSES, SCHEDULES ETC.: references to clauses and schedules are
references to clauses and schedules of this Agreement and any schedules
referred to, form part of this Agreement.
OBLIGATIONS: any obligation to not do something shall be deemed to
include an obligation not to suffer, permit or cause that thing to be
done. An obligation to do something shall be deemed to include an
obligation to cause that thing to be done.
RIGHTS: a right conferred by this Agreement to do any act or thing shall
be capable of being exercised from time to time.
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STATUTES AND REGULATIONS: references to a statute include references to
regulations, orders, notices, or codes of practice made under or
pursuant to such statute, and references to a statute or regulation
include references to all amendments to that statute or regulation
(whether by subsequent statute or otherwise) and references to a statute
or regulation passed in substitution for that statute or regulation.
1.2.8 PARTY: References to a Party are to a party of this Agreement and
include that Party's successors in title and permitted assigns.
CURRENCY: unless otherwise stated, all amounts referred to in this
Agreement are denominated in Indian Rupees ("Rs.").
2 SALE AND PURCHASE OF THE BUSINESS
2.1 Subject to the terms and conditions set forth in this Agreement, such
other approvals/ consents, as maybe required and/ or as contained in the
provisions of this Agreement, the Vendor agrees to sell and transfer to
the Purchaser and the Purchaser agrees to purchase and acquire from the
Vendor, the Power Transmission Line Division, as a going concern with
effect from the Appointed Date, subject to existing encumbrances and
charges.
3 CONSIDERATION
The Purchaser shall discharge and satisfy the Consideration by payment
to the Vendor a sum of Rs. 148,51,00,000/- (Rupees One Forty Eight
Crores Fifty One Lacs only) as the entire lump sum consideration for the
purchase of the Business as a going concern.
3.2 The Purchaser shall pay an ▇▇▇▇▇▇▇ money of Rs. 50,000,000/- (Rupees
Five Crores only) to the Vendor within seven days of signing the
Agreement.
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3.3 The Purchaser shall discharge the balance Consideration on the Closing
Date or such other extended time frame as may be approved by the Board
of Directors of both the companies.
4 CONDUCT OF BUSINESS BY THE VENDOR
4.1 On and from the Signing Date and till the Closing Date, the Vendor shall
a) carry on and be deemed to have been carrying on the Business and
shall stand possessed of and hold all of the properties and assets
of the Business for and on account of and in trust for the
Purchaser.
b) carry on the Business with reasonable diligence and in the same
manner as it had been doing hithertofore, and shall not alter or
expand the Business except with the concurrence of the Purchaser.
c) not, without the written concurrence of the Purchaser, alienate,
charge or create any encumbrance over any of the assets or
properties of the Business, or destroy, impair, extinguish, waive or
relinquish any of them, except in the ordinary course of business or
pursuant to any pre-existing obligation.
d) not vary or alter, except in the ordinary course of its business and
consistent with the past practice, the terms and conditions of
employment of any of the Employees in relation to the Business
except with the concurrence of the Purchaser.
e) do all acts and execute all documents to facilitate and enable the
achievement of Closing, including in relation to the transfer of
Employees of the Business to the Purchaser.
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4.2 All the profits/ income accruing or arising to the Vendor from the
Business or losses/ expenditure incurred by the Vendor for the Business
on and from the Appointed Date and till the Closing Date shall for all
purposes and intents be treated and be deemed to be profits/ income or
losses/ expenditure of the Purchaser.
5 CONDITIONS PRECEDENT TO CLOSING
5.1 As a condition precedent to the Closing:
a) The Vendor shall obtain approvals/ permissions from any government
or regulatory authority, if required.
b) The Vendor undertakes to obtain consent of the Shareholders of the
Vendor by way of a resolution under section 293(1)(a) of the Act.
c) The Purchaser shall obtain approvals/ permissions from any
government or regulatory authority, if required, in order to enable
it to commence the Business in its own name.
d) The Vendor shall obtain a release of all encumbrances and charges,
if any, subsisting on the assets comprised in the Power Transmission
Line Division or a consent letter from the charge holders to
transfer the Power Transmission Line Division to the Purchaser.
6 CLOSING
6.1 General
Closing shall take place on the Closing Date and will take place at the
office of the Vendor or at such other place as has been mutually agreed
to between the Parties hereto.
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6.2 Closing Deliverables
The Business shall be deemed to be transferred by the Vendor as a going
concern on the Closing Date and consequently the Vendor shall deliver to
the Purchaser the following (hereinafter referred to collectively as the
"Closing Deliveries"):
a) The movable assets of the Business, including but not limited to, the
plant and machinery, inventories, cash balances, tools, equipments,
vehicles and other articles and effects shall be handed over on the
Closing Date to the end and intent that the property therein passes on
to the Purchaser on such delivery/ possession.
b) In respect of other movable assets [other than those specified in
clause 6.2(a) above] including sundry debtors, outstanding loans and
advances recoverable in cash or in kind or for value to be received,
bank balance and deposits or any other claim or award that may accrue
in future, the following modus operandi shall be followed:
The Vendor shall, if required by the Purchaser, give notice in
such form as it may deem fit and proper to each party, debtor or
depositee, as the case maybe, that pursuant to the purchase of
the Business as a going concern on "as is where is basis" by the
Purchaser, the said debt, loan, advance etc be paid or made good
or held on account of the Purchaser, as the person entitled
thereto to the end and intent that the right of the Vendor to
recover or realize the same stands extinguished and that
appropriate entry should be passed in their respective books to
record the aforesaid change.
ii. The Purchaser, if required, shall also give notice in such form
as it may deem fit and proper to each person, debtor or depositee
that pursuant to the purchase of the Business of the Vendor as a
going concern on "as is where is" basis, the said person, debtor
or depositee should pay the debt, loan or advance or make good
the
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same or hold the same to its account and that the right of the
Vendor to recover or realize the same stands extinguished.
iii. The Purchaser alone shall, after the Closing Date, be entitled to
recover and collect various amounts deposited by the Vendor with
the Bank(s), Government authorities and other parties or due to
the Vendor by debtors or others and for this purpose, the Vendor
shall authorize the Purchaser to take all such steps as may be
necessary for realizing such amounts and also agrees that any
such amount as may be realized or paid by any party to the
account of the Vendor shall forthwith be transferred and handed
over to the Purchaser and that the Vendor shall address such
letters as may be required to the debtors, bank(s) and others,
instructing them to make payment to the Purchaser who alone would
become entitled to such amount as may be realized to the end and
intent that the rights to all such amounts shall be transferred
to the Purchaser by novation.
Provided, however that in the event the Purchaser intimates to
the Vendor to have the debt or any part thereof assigned to the
Purchaser, the Vendor undertakes to execute such deed/ document
as required by the Purchaser for assignment of debt. It is agreed
between the Parties that on such assignment, the Vendor will be
fully indemnified by the Purchaser in respect of any claim of any
nature whatsoever raised or to be raised against it by reason of
such assignment.
The bank accounts relatable to the Power Transmission Line
Division shall continue to be maintained in the name of the
Vendor till the Closing Date and on the Closing Date or such
extended date as may be agreed by both the parties, such bank
accounts shall be closed and the balance lying in them along with
accrued interest, if any, shall be transferred to the bank
accounts of the Purchaser. For any amounts relatable to the Power
Transmission Line Division and received by the Vendor after the
Closing Date, the Vendor
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shall deposit the same in the specified current accounts of
various banks. The Vendor shall open such current accounts with
the banks by 30th September, 2006 with a standing instruction to
the banks to transfer the entire amount credited in the said
accounts to the Purchaser's bank accounts. For the purpose of the
transfer of the balance in the said accounts, the Purchaser shall
provide the bank account number before the Closing Date to the
Vendor. The Vendor shall operate the said accounts but shall not
have any right to withdraw any amount from the said accounts.
c) On the Closing Date, the Vendor shall execute and deliver a Deed of
Conveyance (in form and substance acceptable to the Purchaser) in
favour of the Purchaser for the transfer of land and buildings and
assets (other than those referred to in sub-clause (a) and (b) above)
pertaining to the Business.
d) A certificate by a duly authorized officer of the Vendor, dated as of
the Closing Date:
Setting forth the resolutions of the Board of Directors and of
the Shareholders of the Vendor authorizing the execution of this
Agreement and the consummation of the transactions contemplated
by this Agreement;
ii) Certifying that those resolutions were duly adopted and have not
been rescinded or amended.
e) The Business Records as are available with the Vendor and as the
Purchaser may have reasonably requested as being necessary for the
conduct of the Business.
f) Documents and other relevant records of all the pending litigations
pertaining to the Business.
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g) All the registrations, licences, sanctions, consents, permissions,
approvals and no-objection certificates from government/ statutory
authorities and bank, if any, pertaining to the Business.
h) The consents or release of the charge holders as referred in clause
5.1 (d) above.
i) The consents of any third parties, if any, for transfer of the rights
and obligations of the Vendor under any contracts or arrangements
pertaining to the Power Transmission Line Division.
6.3 The Vendor and the Purchaser agree to exchange letters with dealers,
agents, distributors etc of the Vendor so that the arrangement between them
and the Purchaser can continue on the same terms.
7 POST CLOSING OBLIGATIONS
On and after Closing:
a) Any assets and liabilities of the Power Transmission Line Division
realized or incurred by the Vendor on and after the Closing Date, but
pertaining to the period prior to the Closing Date, will be promptly
passed on to the benefit or for discharge by the Purchaser in such
form and manner as may be directed by the Purchaser.
b) Each Party shall be obliged from the Closing Date to promptly pass to
the other any payment, notice, correspondence, information or enquiry/
queries in relation to the Business, which it receives after the
Closing, and which properly belongs or should be directed to the
other.
c) Appropriate applications will be filed with the relevant authorities
for the transfer of the existing Provident Fund, Gratuity Fund,
Pension Fund,
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Superannuation Fund or any other Special Fund or trusts created by the
Vendor, relatable to the Employees of the Business.
d) All proceedings instituted by the Vendor may be continued by the
Purchaser either in its own name or in the name of the Vendor, but in
any case at the cost and risk of the Purchaser and similarly the
Purchaser shall be responsible for all the proceedings instituted
against the Vendor and shall be entitled to defend the same either in
their own name or in the name of the Vendor at the cost and risk of
the Purchaser.
e) The Vendor shall assist the Purchaser in getting financial assistance
by way of transferring to the Purchaser the bank credit facilities
being availed by the Vendor including by providing necessary comfort
to the lenders, London Metal Exchange registered brokers and business
associates for the Business only.
8 THE VENDOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 The Vendor hereby represents, warrants and covenants to the Purchaser as
follows:
a) Subject to the applicable law and the approvals to be obtained under
Clause 5.1, the Vendor has full corporate power and authority to sign
and deliver this Agreement and to perform its obligations under this
Agreement and no other corporate proceedings on its part are necessary
to execute this Agreement or to complete the transaction contemplated
herein and that this Agreement constitutes or will constitute valid
and legally binding obligations of the Vendor enforceable in
accordance with their terms.
b) That (except such of the assets as are subject to existing charges,
hypothecation and mortgages to secure the bank liabilities transferred
to, and assumed by, the Purchaser but only to the extent of the
financial assistance covered by such bank liabilities) all the assets
of the Business to be transferred to the Purchaser are free from all
encumbrances and are owned both legally and beneficially by the Vendor
and/ or are legally transferable by the Vendor. Further, immediately
after the Closing, such assets shall not be
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subject to any liability, commitment or indebtedness, contingent,
known or unknown, matured or unmatured.
c) Upon the passing of the Resolution under Section 293(1)(a) of the Act,
the execution and delivery of this Agreement to the Purchaser and the
sale and transfer of the Business as a running business/ going concern
shall be with the requisite consent of the shareholders of the Vendor.
d) The execution, delivery and performance of this Agreement shall not
result in a breach of or constitute a default under, any instrument to
which the Vendor is a party or to which it is bound.
e) As of the Closing Date, the Vendor shall have withheld proper and
accurate national, state, territorial and local taxes for all periods
for which returns were due with respect to the Business and the
amounts which according to the Vendor were shown thereon to be due and
payable, as on the Closing Date, have been paid in full or will remain
payable by the Vendor.
f) The Vendor agrees to execute all necessary and incidental documents
and writings in favour of the Purchaser in order to completely and
fully grant, transfer, release and assure in favour of the Purchaser
and to completely, fully and effectively transfer the Business in the
name of the Purchaser.
g) The Vendor shall not cause or permit any of their representations and
warranties made in this Agreement, including, without limitation,
their representations and warranties contained in this Clause, to be
untrue or incomplete on the Closing Date or at any time prior thereto.
h) The Vendor has paid and/or agrees to pay and bear all rates, taxes,
assessments, outgoings, impositions, Corporation tax including Sales
tax, Income tax, Property tax, land revenue taxes, insurance premia,
etc in respect of the Business for the period upto the Closing and
will indemnify and keep the Purchaser indemnified from and against the
same and from any proceeding, penalty, claim or demand whatsoever on
account thereof for the period upto the Closing.
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i) The Vendor agrees to pay any liability upto Rs 150,000,000 (Rupees
Fifteen Crores only) that may arise on account of contingent and / or
performance guarantee liability in respect of the Business for the
period upto the Appointed Date. This liability will be enforceable on
the Vendor upto a period of 5 (five) years from the Appointed Date.
j) The Purchaser will be entitled to represent itself as carrying on the
Business in continuation of the Vendor and/ or as successor to the
Vendor.
9 THE PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
9.1 The Purchaser hereby represents and warrants as follows
a) Subject to the applicable law, the Purchaser has full corporate power
and authority to sign and deliver this Agreement and to perform its
obligations under this Agreement and that this Agreement constitutes
or will constitute valid and legally binding obligations on the
Purchaser enforceable in accordance with their terms. The execution
and delivery of this Agreement have been duly authorized by its Board
of Directors and no other corporate proceedings on its part are
necessary to execute this Agreement or to complete the transactions
contemplated herein.
b) The Purchaser shall, in accordance with Clause 3 of this Agreement,
discharge to the Vendor the Consideration payable by it to the Vendor
under this Agreement.
c) After the Closing, the Purchaser shall provide to the Vendor all
co-operation, assistance and access during all reasonable times, to
books and other information of the Business delivered to the
Purchaser, which may be required by the Vendor to meet
statutory/taxation obligations.
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d) This Agreement has been, duly and validly executed and delivered and
constitutes a legal valid and binding agreement and will be
enforceable against it in accordance with its terms.
e) All rates, taxes, assessments, outgoings, impositions, Corporation tax
including Sales tax, Income tax, Property tax, land revenue taxes,
insurance premia, etc in respect of the Business from the day
following the Closing Date shall be borne and paid by the Purchaser.
10 DUTIES, FEES, ETC.
All costs, charges and expenses for stamp duty, registration fees, indirect
taxes including Sales Tax (if any) in connection with this Agreement and
the Deed of Conveyance and other documents to be executed in pursuance
hereof shall be borne by the Purchaser. Income-tax liability, if any,
relating to the Consideration due to the Vendor shall be borne by the
Vendor.
11 CONFIDENTIALITY
The Vendor and the Purchaser recognize that each has or may have, in
respect of their business, built up considerable specialist knowledge and
expertise and wish to record their commitment to respecting each other's
Confidential Information unless compelled to disclose by judicial or
administrative process or by other requirements of law. However, this
clause will not be applicable except to the extent that such information
can be shown to have been previously known on a non-confidential basis by
the Parties and/ or in the public domain though no fault of any Party.
12 EMPLOYEES
12.1 The Vendor shall take all the reasonable endeavor to ensure continuation of
the services of the Employees of the Business on and from the Appointed
Date and the Purchaser undertakes to continue to employ the Employees with
full continuity
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of service and on terms which are no less favorable than the existing terms
of their employment.
The terminal/ retirement and other employment benefit funds maintained by
the Vendor in relation to the Employees shall be transferred to the
corresponding funds of the Purchaser maintained for that purpose.
The Purchaser shall maintain personnel records relating to the Employees
for a period of five years from the Appointed Date.
13 TERMINATION
Right to Terminate. This Agreement and the transaction contemplated hereby
may be terminated by either Party (the "Terminating Party") without being
liable to the other Party (the "Non-Terminating Party") on or before the
Closing Date.
a) forthwith by notice in writing to the Non-Terminating Party, if there
shall be in effect any legal requirement an order, decree or judgement
of a governmental authority, after the execution of this Agreement,
prohibiting or restricting or permitting but only subject to onerous
condition the consummation of all or a material portion of the
transactions contemplated hereby; or
b) forthwith by notice in writing to the Non-Terminating Party, if there
has been a materially false or misleading representation and warranty
made or given by the Non-Terminating Party;
c) by giving thirty (30) days notice in writing to the Non-Terminating
Party, if there has been a breach of covenant or any other provision
of this Agreement by the Non-Terminating Party and such breach has not
been rectified within the 30-day notice period from receipt of the
notice by the Non-Terminating Party; or
d) forthwith by notice in writing to the Non-Terminating Party, if the
Non-Terminating Party becomes insolvent, or an order of admission is
passed
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pursuant to any filing made with the court or competent authorities by
any Person for bankruptcy, winding-up, composition or any other
similar insolvency proceedings or for attachment of the Business or
any part thereof.
e) If both the Vendor and the Purchaser agree mutually then they can
terminate this agreement for any reason whatsoever at any time on or
prior to the Closing Date.
13.2 Effects of Termination. In the event of the termination of this Agreement
by either Party, as provided in the foregoing Clause 13.1:
a) the Vendor shall promptly refund all payments, if any, made to the
Vendor and the Purchaser and expenses incurred in pursuance of this
Agreement, in each case, together with interest thereon at the rate of
9% per annum;
b) all obligations of the Parties hereunder shall stand terminated,
except that termination shall not relieve the Parties of their
respective obligations under those Articles expressed to survive
termination, such as Clause 8 (Vendor's representation and Warranties)
9 (Purchasers Representation and Warranties) 11 (Confidentiality), 14
(Indemnification) and 15 (Miscellaneous Terms) and provided that
termination shall not affect a Party's accrued rights and obligations
at the date of termination;
c) any actual and bona fide damages incurred by the Terminating Party as
a result of termination of this Agreement shall be compensated by
means which shall include, return of the specific property, right or
monetary equivalent thereof as the case may be, except in case of
termination pursuant to the provisions of Clause 13.1.
13.3. Remedies. Neither Party shall be limited to the termination right granted
under this Clause by reason of breach of any condition or obligation by
the other Party but may, in the alternative, elect to do one or more of
the following:
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a) proceed to Closing despite the breach of any condition or obligation,
it being understood that in such an event such Party shall be deemed
to have waived the fulfillment of such condition to that Party's
obligations; or
b) seek specific performance of the obligations of the other Party.
14 INDEMNIFICATION
14.1 The Vendor shall indemnify, defend and hold harmless and shall keep
indemnified the Purchaser from and against any and all direct losses,
costs, damages, claims, penalties, liabilities or expenses (including
reasonable attorney's fees and expenses) that the Purchaser (i) may suffer
or incur arising out of or in connection with or in respect of the
non-payment of any sums of money, which the Vendor is liable to pay or (ii)
any misrepresentations (including, concealment of material facts) or any
inaccuracy, incorrectness or incompleteness in or breach of any Vendor's
Warranties, or (iii) any and all liability (other than the Liabilities) in
relation to the Business (whether accrued, absolute, contingent,
unliquidated or otherwise), relating to the period prior to Appointed Date
and which have not been disclosed to the Purchaser; or (iv) willful breach
or non-performance or non-observance of any covenants, agreements or
conditions entered into by it or which it may be liable to perform or
observe in respect of the Business or in respect of any transaction or
event or occurrence prior to the Appointed Date as well as prior to the
Closing Date (as trustee for the Purchaser).
14.2 The Purchaser shall indemnify, defend and hold harmless and shall keep
indemnified, the Vendor from and against any and all direct losses, costs,
damages, claims or liabilities or expenses (including reasonable attorney's
fees and expenses) that the Vendor (i) may suffer or incur arising out of
or in connection with or in respect of the non-payment of any sums of
money, which the Purchaser is liable to pay or (ii) any misrepresentations
(including, concealment of material facts) or any inaccuracy, incorrectness
or incompleteness in or breach of any Purchaser's Warranties, or (iii)
willful breach or non-performance or non-observance of any covenants,
agreements or conditions entered into by it or
21
which it may be liable to perform or observe in respect of the Business or
in respect of any transaction or event or occurrence subsequent to the
Closing Date.
15 NON COMPETE
For a period of 5 (five) years from the Closing Date, the Vendor shall not
carry on or engage in directly or indirectly whether through partnership or
as a shareholder, joint venture partner, collaborator, consultant or agent
or in any other manner whatsoever, whether for profit or otherwise any
business which competes with the whole or any part of the Power
Transmission Line Division.
For a period of 5 (five) years from the Closing Date, the Vendor will not,
directly or indirectly;
attempt in any manner to solicit from any client/customer, business of
the type carried on by the Purchaser or to persuade any person, firm
or entity which is a client/ customer of the Purchaser to cease doing
business or to reduce the amount of business which any such client/
customer has customarily done or might propose doing with the
Purchaser whether or not the relationship between the Purchaser and
such client/ customer was originally established in whole or in part
through its efforts; or
unless agreed in writing by both the Parties, employ or attempt to
employ or assist anyone else to employ any person who is in the
employment of the Purchaser at the time of the alleged prohibited
conduct, or was in the employment of the Purchaser at any time during
the preceding twelve months.
16 MISCELLANEOUS PROVISIONS
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FORCE MAJEURE. Neither Party shall be liable to the other for failure or
delay in the performance of any of its obligations under this Agreement for
the time and if such failure or delay is caused by riots, civil commotions,
wars, hostilities between nations, governmental laws, orders or
regulations, embargoes, actions by the government or any agency thereof,
acts of god, storms, fires, accidents, strikes, sabotages, explosions or
other similar or different contingencies beyond the reasonable control of
the respective Parties. If, as a result of legislation or government
action, any Party or Parties are precluded from receiving any benefit to
which they are entitled hereunder, the Parties shall review the terms of
this Agreement so as to make best efforts to restore the Party or Parties
to the same relative positions as previously obtained hereunder.
GOVERNING LAW. This Agreement shall be governed by the laws of India and
the competent courts in Mumbai shall have exclusive jurisdiction over any
disputes arising out of this Agreement.
DISPUTE RESOLUTION. All disputes and differences whatsoever arising between
the Parties hereto regarding construction or interpretation of the
provisions of this Agreement or any dispute or difference in connection
with this Agreement shall be referred to arbitration of a sole arbitrator,
if Parties agree upon one, otherwise to three arbitrators of which one each
will be appointed by the Purchaser and the Vendor and the third arbitrator
shall be appointed by the said two arbitrators. The Arbitration and
Conciliation Act, 1996 or any statutory modifications or re-enactment
thereof shall govern such arbitration. The place of Arbitration shall be
Mumbai.
16.4 WAIVERS. No provision of and no default under this Agreement may be waived
except by an instrument in writing signed by the Party waiving the
provision of this Agreement or default committed there under. No waiver of
any provision or default shall be deemed a waiver of any other provision or
subsequent default.
16.5 SEVERABILITY. If any term, clause or provision of this Agreement shall be
judged to be invalid for any reason whatsoever, such invalidity shall not
affect the validity or operation of any other term, clause or provision of
this Agreement and such
23
invalid term, clause or provision shall be deemed to have been deleted from
this Agreement.
NOTICES. Any and all notices, requests and other communications required or
permitted hereunder shall be in writing and shall be sent by registered
post or by facsimile followed by a confirmation letter by such registered
mail, to each of the Parties at the addresses set forth herein:
To the Vendor : Sterlite Industries (India) Limited
SIPCOT Industrial Complex,
T.V Puram ▇.▇
▇▇▇▇▇▇▇▇▇ - ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇
To the Purchaser : Sterlite Optical Technologies Limited
E-1, MIDC Waluj,
Aurangabad 431136
ENTIRE AGREEMENT. This Agreement with the Schedules, if any, hereto and
executed by the Parties hereto constitutes the entire agreement between the
Parties hereto with respect to the subject matter hereto and supersedes and
cancel all previous agreement, negotiations, thereof.
This Agreement and the Schedules, if any, hereto shall not be changed,
altered or amended except in writing and executed by duly authorized
representatives of both Parties hereto.
16.8 ASSIGNMENT OF THE AGREEMENT. Neither Party shall assign its rights or
obligations herein to any person without obtaining prior approval in
writing of the other Party in that behalf.
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IN WITNESS HEREOF, THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE
DULY EXECUTED BY THEIR RESPECTIVE AUTHORIZED OFFICERS AS OF THE DAY AND
YEAR FIRST ABOVE WRITTEN
SIGNED AND DELIVERED BY STERLITE
INDUSTRIES (INDIA) LIMITED by the hands
of Mr. ▇▇▇▇▇ ▇▇▇▇, Director of the
Company, pursuant to the resolution passed
at the meeting of its Board of Directors held
on 21ST AUGUST 2006, in the presence of Mr. /s/ MR. ▇▇▇▇▇ ▇▇▇▇
SIGNED AND DELIVERED BY STERLITE
OPTICAL TECHNOLOGIES LIMITED by the
hands of ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, the
Director of the Company, pursuant to the /s/ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
resolution passed at the meeting of its Board
of Directors held on 21ST AUGUST 2006, in the
presence of Mr.
25
SCHEDULE I
LIST OF ASSETS
DETAILS OF ASSET BALANCE AS ON JUNE 30TH 2006.
(Rs in Lacs)
Particulars Amount Amount
----------- -------- --------
Net Fixed Assets 6211.36
Capital Work-in-Progress 2196.08
Current Assets
Inventories 14676.44
Sundry Debtors 19246.97
Cash and Bank Balances 89.78
Loans and Advances 3513.46
Total Current Assets 37526.66
-------- --------
Total Assets 45934.09
-------- --------
SCHEDULE II
LIST OF PLANT AND MACHINERY
S. NO. NAME OF MACHINERY UNIT QUANTITY
------ ----------------------------------------------------------- ---------- --------
1 RBD - Wire Drawing Machine for Aluminium ▇▇▇▇▇▇▇▇▇▇ ▇
▇ ▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Machine Karanjwane 3
3 Tubular - Steel/Aluminium/Almn Alloy Core Stranding Machine Karanjwane 2
4 Tubular - Aluminium/Almn Alloy Core Stranding Machine Karanjwane 4
5 Solutioninizg cum Age Hardening Furnace Karanjwane 1
6 Age Hardening Furnace Karanjwane 3
7 RBD - Wire Drawing Machine for Aluminium ▇▇▇▇▇▇▇ ▇
▇ ▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Machine Rakholi 5
9 Tubular - Steel/Aluminium/Almn Alloy Core Stranding Machine Rakholi 3
10 Skip - Steel/Aluminium/Almn Alloy Core Stranding Machine Rakholi 3
11 Age Hardening Furnace Rakholi 4
12 Rod Rolling Mill Rakholi
12.1 No. 1 Rakholi 1
12.2 No. 2 Rakholi 1
12.3 No. 3 Rakholi 1
- Each Rod Rolling Mill consisting mainly of:
A Melting Furnace Rakholi 1
B Holding Furnace Rakholi 2
C Caster Rakholi 1
D Rolling Mill Rakholi 1
E Induction Heater Rakholi 1
F Coiler Rakholi 2
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SCHEDULE III
LIST OF LIABILITIES
DETAILS OF LIABILITIES BALANCE AS ON JUNE 30TH 2006.
(Rs in Lacs)
Particulars Amount
----------- --------
Borrowing from Banks 14038.53
Reedemable Non Convertible Bonds 10200.00
(MIBOR Linked)
Sundry Creditors 3596.27
Advances from Customers 1951.27
Statutory Liabilities 875.58
Provision and Other Liabilities 421.44
--------
Total Liabilities 31083.09
--------
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