▇▇▇▇▇▇.▇▇▇ India Limited
3,026,480 American Depositary Shares
Representing 1,513,240 Equity Shares
UNDERWRITING AGREEMENT
----------------------
November 9, 2005
Deutsche Bank Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇.▇▇▇ India Limited, a limited liability company formed under the
laws of the Republic of India (the "Company"), proposes to sell to Deutsche
Bank Securities Inc. (the "Underwriter") an aggregate of 3,026,480 American
Depositary Shares (the "ADSs") representing an aggregate of 1,513,240 equity
shares (par value Rs. 5 per share) (the "Equity Shares"), of the Company (the
"Offered ADSs").
As the Underwriter, you have advised the Company that you are willing
to purchase the Offered ADSs.
The Offered ADSs are to be issued pursuant to a deposit agreement (the
"Deposit Agreement"), dated as of June 13, 2000, among the Company, Citibank,
N.A., as depositary (the "Depositary"), and holders from time to time of the
American Depositary Receipts (the "ADRs") issued by the Depositary and
evidencing the ADSs. Each ADS will initially represent the right to receive
one-half of an Equity Share deposited pursuant to the Deposit Agreement. The
Equity Shares deposited by the Company in connection with the issuance of the
ADSs contemplated by this Agreement are referred to as the "Deposited Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
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1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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The Company represents and warrants to the Underwriter as
follows:
(a) A registration statement on Form F-3 (File No.
333-122536) with respect to the Offered ADSs has been prepared by the Company
in conformity in all material respects with the requirements of the Securities
Act of 1933, as amended (the "Act"), and the rules and regulations (the "Rules
and Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder and has been filed with the Commission. The Company is a "foreign
private issuer," as such term is defined in the Rules and Regulations. The
Company and the transactions contemplated by this Agreement meet the
requirements and comply with the conditions for the use of Form F-3. Copies of
such registration statement, including any amendments thereto, the preliminary
prospectuses (meeting the requirements of the Rules and Regulations) contained
therein and the exhibits, financial statements and schedules, as amended and
revised, have heretofore been delivered by the Company to the Underwriter. Such
registration statement is herein referred to as the "Registration Statement,"
which shall be deemed to include all information omitted therefrom in reliance
upon Rule 430A and contained in the Prospectus referred to below, has become
effective under the Act and no post-effective amendment to the Registration
Statement has been filed as of the date of this Agreement. If the Company files
a registration statement to register a portion of the Offered ADSs and relies
on Rule 462(b) under the Act for such registration statement to become
effective upon filing with the Commission (the "Rule 462 Registration
Statement"), then from the time the 462 Registration Statement is filed, any
reference to the "Registration Statement" shall be deemed to include the Rule
462 Registration Statement, as amended from time to time. "Prospectus" means
the form of prospectus first filed with the Commission pursuant to Rule 424(b).
Each preliminary prospectus included in the Registration Statement prior to the
time it becomes effective is herein referred to as a "Preliminary Prospectus."
Any reference herein to the Registration Statement, any Preliminary Prospectus
or to the Prospectus or to any amendment or supplement to any of the foregoing
documents shall be deemed to refer to and include any documents incorporated by
reference therein, and, in the case of any reference herein to any Prospectus,
also shall be deemed to include any documents incorporated by reference
therein, and any supplements or amendments thereto, filed with the Commission
after the date of filing of the Prospectus under Rules 424(b) or 430A, and
prior to the termination of the offering of the Offered ADSs by the
Underwriter.
(b) A registration statement on Form F-6 (File No. 333-12002)
in respect of the ADSs has been filed with the Commission; such registration
statement in the form heretofore delivered to the Underwriter, has been
declared effective by the Commission in such form; no other document with
respect to such registration statement has heretofore been filed with the
Commission; no stop order suspending the effectiveness of such registration
statement has been issued and, to the Company's knowledge, no proceeding for
that purpose has been initiated or threatened by the Commission (the various
parts of such registration statement, including all exhibits thereto, each as
amended at the time such part of the registration statement became effective,
being hereinafter called the "ADS Registration Statement"); and the ADS
Registration
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Statement when it became effective conformed, and any further amendments
thereto will conform, in all material respects to the requirements of the Act
and the Rules and Regulations, and did not, as of the applicable effective
date, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
(c) The Company has been duly organized and is validly
existing as a limited liability company under the laws of the Republic of
India, with corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement. The Company's
Memorandum of Association and Articles of Association comply with the
requirements of all applicable laws of the Republic of India and are in full
force and effect. Each of the subsidiaries of the Company listed in Exhibit A
hereto (collectively, the "Subsidiaries") has been duly organized and is
validly existing under the laws of the jurisdiction of its incorporation, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement. The Subsidiaries are the
only significant subsidiaries, direct or indirect, of the Company, as defined
in Regulation S-X under the Securities Act. The Company and each of the
Subsidiaries are duly qualified to transact business in all jurisdictions in
which the conduct of their business requires such qualification, except to the
extent such failure to be so qualified would not have a material adverse effect
on the earnings, business, management, properties, assets, rights, operations,
condition (financial or otherwise) or, to the knowledge of the Company, the
prospects of the Company and its subsidiaries taken as a whole (a "Material
Adverse Effect"). The outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company or another Subsidiary free and
clear of all liens, encumbrances and equities and claims; and no options,
warrants or other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into shares of capital stock or
ownership interests in the Subsidiaries are outstanding.
(d) The outstanding Equity Shares of the Company have been
duly authorized and validly issued and are fully paid and non-assessable.
Neither the filing of the Registration Statement nor the offering or sale of
the Offered ADSs as contemplated by this Agreement gives rise to any rights,
other than those which have been waived or satisfied, for or relating to the
registration of any of the Company's outstanding Equity Shares or ADSs, or any
preemptive or similar rights.
(e) The information set forth under the caption
"Capitalization" in the Prospectus is true and correct. All of the Equity
Shares and ADSs conform to the description thereof contained in the
Registration Statement. The form of certificates for the Equity Shares conforms
to the corporate law of the jurisdiction of the Company's organization.
(f) The Deposited Shares have been duly and validly
authorized by the Company and, when issued and delivered against payment for
the Offered ADSs as provided herein, will be duly and validly issued and fully
paid and non-assessable, will be free and clear of all liens, encumbrances,
equities or claims and will conform to the description of the Equity
3
Shares contained in the Prospectus. Such Equity Shares may be freely deposited
by the Company with the Depositary against issuance of ADRs evidencing ADSs.
The Offered ADSs and such Equity Shares are freely transferable by the Company
to or for the account of the Underwriter and, except as described (which term
shall include incorporates by reference) in the Prospectus, there are no
material restrictions on subsequent transfers of such Equity Shares or the
Offered ADSs under the laws of the Republic of India or the United States. The
statements set forth in the Prospectus under the captions "Description of Our
Share Capital," "Description of Our ADSs" and "Taxation--United States Federal
Income Tax Considerations," insofar as they purport to constitute a summary of
the terms of the Equity Shares and the Offered ADSs or insofar as they purport
to describe the provisions of the laws and documents referred to therein,
fairly summarize such terms or provisions in all material respects.
(g) The Deposit Agreement has been duly authorized, executed
and delivered by the Company, and constitutes a valid and legally binding
agreement of the Company, enforceable in accordance with its terms, except as
such enforceability may be subject to the effect of applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally and equitable principles of general applicability; upon issuance by
the Depositary of ADRs evidencing ADSs against the deposit of the Deposited
Shares in respect thereof in accordance with the provisions of the Deposit
Agreement, such ADRs will be duly and validly issued and the persons in whose
names the ADRs are registered will be entitled to the rights specified therein
and in the Deposit Agreement; and the Deposit Agreement and the ADRs conform in
all material respects to the descriptions thereof contained in the Prospectus.
(h) All dividends and other distributions declared and
payable on the shares of capital stock of the Company may, under the current
laws and regulations of the Republic of India, be paid in Indian rupees that
may be converted into foreign currency that may be freely transferred out of
the Republic of India, and, except as disclosed in the Prospectus, all such
dividends and other distributions will not be subject to withholding or other
taxes under the laws and regulations of the Republic of India and are otherwise
free and clear of any other tax, withholding or deduction in the Republic of
India and without the necessity of obtaining any governmental authorization in
the Republic of India.
(i) No holder of any of the Equity Shares or the Offered ADSs
after the completion of the offering contemplated hereby is or will be subject
to any liability in respect of any liability of the Company by virtue only of
its holding of any of such securities. Except as disclosed in the Prospectus,
there are no material limitations on the rights of holders of the Equity Shares
or the Offered ADSs to hold, vote or transfer their securities.
(j) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed offering of the
Offered ADSs nor instituted proceedings for that purpose. The Registration
Statement contains, and the Prospectus and any amendments or supplements
thereto will contain, all statements which are required to be stated therein
by, and will conform to, the requirements of the Act and the Rules and
Regulations in all material respects. The documents incorporated, or to be
incorporated, by reference in the
4
Prospectus, at the time filed with the Commission conformed or will conform, in
all material respects to the requirements of the Securities Exchange Act of
1934 ("Exchange Act") or the Act, as applicable, and the rules and regulations
of the Commission thereunder. The Registration Statement and any amendment
thereto do not contain, and will not, on the Closing Date contain, any untrue
statement of a material fact and do not omit, and will not omit, to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus and any amendments and supplements
thereto do not contain, and will not, on the Closing Date contain, any untrue
statement of material fact; and do not omit, and will not omit, to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representations or
warranties as to information contained in or omitted from the Registration
Statement or the Prospectus, or any such amendment or supplement, in reliance
upon, and in conformity with, written information furnished to the Company by
or on behalf of the Underwriter specifically for use therein, it being
understood and agreed that the only such information is that described in
Section 12 herein.
(k) The consolidated financial statements of the Company and
its subsidiaries, together with related notes and schedules as set forth or
incorporated by reference in the Registration Statement, present fairly in all
material respects the financial position and the results of operations and cash
flows of the Company and its consolidated subsidiaries, at the indicated dates
and for the indicated periods. Such financial statements and related schedules
have been prepared in accordance with generally accepted principles of
accounting in the United States ("U.S. GAAP"), consistently applied throughout
the periods involved, except as disclosed therein. The summary financial and
statistical data included or incorporated by reference in the Registration
Statement presents fairly the information shown therein and such financial data
has been compiled on a basis consistent with the financial statements presented
therein and the books and records of the Company.
(l) Deloitte ▇▇▇▇▇▇▇ & Sells, who have certified certain of
the financial statements filed with the Commission as part of, or incorporated
by reference in, the Registration Statement, are independent public accountants
as required by the Act and the Rules and Regulations and is not in violation of
the auditor independence requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as
amended, and the rules and regulations promulgated by the Commission thereunder
(the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act").
(m) Except as disclosed in the Prospectus, neither the
Company nor any of its Subsidiaries is aware of (i) any material weakness in
its internal control over financial reporting or (ii) change in internal
control over financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company's internal control over financial
reporting.
(n) Solely to the extent that the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act has been
applicable to the Company, there is and has been no failure on the part of the
Company to comply in all material respects with any provision of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The Company is actively taking steps to
5
ensure that it will be in compliance with other provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act not currently in effect or which will become applicable to
the Company.
(o) There is no action, suit, claim or proceeding pending or,
to the knowledge of the Company, threatened against the Company or any of the
Subsidiaries before any court or administrative agency or otherwise which if
determined adversely to the Company or any of its Subsidiaries might result in
a Material Adverse Effect or prevent the consummation of the transactions
contemplated hereby or by the Deposit Agreement, except as set forth in the
Registration Statement.
(p) The Company and the Subsidiaries have good and marketable
title to all of the material properties and assets reflected in the
consolidated financial statements hereinabove described or described in the
Registration Statement, subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except those reflected in such financial statements or
described in the Registration Statement or which are not material in amount or
would not materially interfere with the use to be made of such properties or
assets. The Company and the Subsidiaries occupy their leased properties under
valid and binding leases conforming in all material respects to the description
thereof set forth in the Registration Statement.
(q) The Company and the Subsidiaries have filed all Federal,
State, local and foreign tax returns which have been required to be filed and
have paid all taxes indicated by such returns and all assessments received by
them or any of them to the extent that such taxes have become due, except to
the extent that the failure to file such returns or to pay such taxes and
assessments would not have a Material Adverse Effect. All tax liabilities have
been provided for in the financial statements of the Company in accordance with
U.S. GAAP, and except as disclosed in the notes to the financial statements
incorporated by reference in the Registration Statement, the Company does not
know of any actual or proposed additional material tax assessments.
(r) Since the respective dates as of which information is
given in the Registration Statement, as it may be amended or supplemented,
there has not been any material adverse change or any development involving a
prospective material adverse change in or affecting the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise) or, to the knowledge of the Company, the prospects of the Company
and its subsidiaries taken as a whole, whether or not occurring in the ordinary
course of business, and there has not been any material transaction entered
into or any material transaction that is probable of being entered into by the
Company or the Subsidiaries, other than transactions in the ordinary course of
business and changes and transactions described in the Registration Statement,
as it may be amended or supplemented. The Company and its consolidated
subsidiaries have no material contingent obligations which are not disclosed in
the Company's financial statements which are included or incorporated by
reference in the Registration Statement.
(s) Neither the Company nor any of the Subsidiaries is or
with the giving of notice or lapse of time or both, will be, in violation of or
in default under (i) its charter,
6
memorandum of association, by-laws, articles of association or similar
organizational documents; or (ii) under any agreement, lease, contract,
indenture or other instrument or obligation to which it is a party or by which
it, or any of its properties, is bound and, solely with respect to this clause
(ii), which violation or default would have a Material Adverse Effect. The
execution and delivery of this Agreement and the consummation of the
transactions herein contemplated and the fulfillment of the terms hereof or of
the Deposit Agreement will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument to which the Company
or any Subsidiary is a party or by which the Company or any Subsidiary or any
of their respective properties is bound, or of the memorandum of association or
articles of association of the Company or any law, order, rule or regulation
judgement, order, writ or decree applicable to the Company or any Subsidiary of
any court or of any government, regulatory body or administrative agency or
other governmental body having jurisdiction, except to the extent that such
conflict, breach or default would not have a Material Adverse Effect.
(t) The execution and delivery of, and the performance by the
Company of its obligations under, this Agreement has been duly and validly
authorized by all necessary corporate action on the part of the Company, and
this Agreement has been duly executed and delivered by the Company.
(u) Each of this Agreement, the Deposit Agreement and the
ADRs evidencing the ADSs is in proper form to be legal and valid under the laws
of the Republic of India and to ensure the legality, validity, enforceability
or admissibility into evidence in the Republic of India of such instruments; it
is not necessary that this Agreement, the Deposit Agreement, the ADRs or any
other documents be approved by any court or other authority in the Republic of
India or that any Indian stamp or similar tax be paid on or in respect of this
Agreement, the Deposit Agreement, the ADRs or any other documents to be
furnished hereunder; provided, however, that in order for such documents to be
admissible in evidence in India for purposes of enforcement, they would have to
be stamped as an agreement in accordance with the applicable stamp duty
provisions in the relevant state of India.
(v) Except as disclosed in the Prospectus, no stamp or other
issuance or transfer taxes or duties and no capital gains, income, withholding
or other taxes are payable by or on behalf of the Company to the Republic of
India or any political subdivision or taxing authority thereof or therein in
connection with (i) the creation, allotment and issuance of the Deposited
Shares, (ii) the deposit with the Depositary of the Deposited Shares by the
Company against the issuance of ADRs evidencing ADSs or (iii) the sale and
delivery by the Company of the Offered ADSs to or for the account of the
Underwriter, in each case, as contemplated by this Agreement.
(w) No stamp or other issuance or transfer taxes or duties
are payable by or on behalf of the Underwriter to the Republic of India or any
political subdivision or taxing authority thereof or therein in connection with
(i) the creation, allotment and issuance of the Deposited Shares by the
Company, (ii) the deposit with the Depositary of the Deposited Shares by the
Company against the issuance of ADRs evidencing ADSs, (iii) the sale and
delivery by the
7
Company of the Offered ADSs to or for the account of the Underwriter, (iv) the
execution, delivery and performance of this Agreement or (v) the sale and
delivery outside the Republic of India of the Offered ADSs to the Underwriter,
in each case as contemplated by this Agreement.
(x) Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and delivery
by the Company of this Agreement and the Deposit Agreement and the consummation
of the transactions herein and therein contemplated (except such additional
steps as may be required by the Commission, the National Association of
Securities Dealers, Inc. (the "NASD") or such additional steps as may be
necessary to qualify the Offered ADSs for public offering by the Underwriter
under state securities or Blue Sky laws) has been obtained or made and is in
full force and effect.
(y) The Company and each of the Subsidiaries hold all
material licenses, certificates and permits from governmental authorities which
are necessary to the conduct of their businesses; the Company and the
Subsidiaries each own or possess the right to use all patents, patent rights,
trademarks, trade names, service marks, service names, copyrights, license
rights, know-how (including trade secrets and other unpatented and unpatentable
proprietary or confidential information, systems or procedures) and other
intellectual property rights ("Intellectual Property") necessary to carry on
their business in all material respects; neither the Company nor any of the
Subsidiaries has infringed, and none of the Company or the Subsidiaries have
received notice of conflict with, any Intellectual Property of any other person
or entity, except to the extent that such infringement or notice of conflict
that would not have a Material Adverse Effect. There are no outstanding
options, licenses or agreements of any kind relating to the Intellectual
Property of the Company or any Subsidiary that are required to be described in
the Prospectus and are not described in all material respects. Neither the
Company nor any Subsidiary is a party to or bound by any options, licenses or
agreements with respect to the Intellectual Property of any other person or
entity that are required to be set forth in the Prospectus and are not
described in all material respects. Neither the Company nor any Subsidiary
knows of any infringement by others of Intellectual Property owned by or
licensed to the Company or to a Subsidiary.
(z) Neither the Company, nor to the Company's knowledge, any
of its affiliates, has taken or may take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the ADSs to facilitate the sale or resale of the Offered ADSs. The
Company acknowledges that the Underwriter may engage in passive market making
transactions in the ADSs on the Nasdaq National SmallCap Market in accordance
with Regulation M under the Exchange Act.
(aa) Neither the Company nor any Subsidiary is or, after
giving effect to the offering and sale of the Offered ADSs contemplated
hereunder and the application of the net proceeds from such sale as described
in the Prospectus, will be an "investment company" within
8
the meaning of such term under the Investment Company Act of 1940 (as amended,
the "1940 Act"), and the rules and regulations of the Commission thereunder.
(bb) The Company and each of its Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management's
general or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(cc) The Company and each of its Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as are customary
for companies in their respective businesses and markets.
(dd) The Company and each Subsidiary is in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined
in ERISA) for which the Company and each Subsidiary would have any liability;
the Company and each Subsidiary has not incurred and does not expect to incur
any material liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension plan" for
which the Company or any Subsidiary would have any liability that is intended
to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, that could reasonably be expected to cause the loss of such qualification.
(ee) To the Company's knowledge, there are no affiliations or
associations between any member of the NASD and any of the Company's or any
Subsidiary's officers, directors or 5% or greater securityholders, except as
otherwise notified to the NASD.
(ff) Neither the Company nor any of its Subsidiaries is in
violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, "environmental laws"), owns or operates any
real property contaminated with any substance that is subject to environmental
laws, is liable for any off-site disposal or contamination pursuant to any
environmental laws, or is subject to any claim relating to any environmental
laws, which violation, contamination, liability or claim would individually or
in the aggregate have a Material Adverse Effect on the Company and its
Subsidiaries taken as
9
a whole; and neither the Company nor any Subsidiary is aware of any pending
investigation which might lead to such a claim.
(gg) The Company's ADSs are approved for admission to trading
on the Nasdaq SmallCap Market.
(hh) There are no relationships or related-party transactions
involving the Company or any of its Subsidiaries or any other person required
to be described in the Prospectus which have not been described as required.
(ii) Neither the Company nor any of its Subsidiaries has made
any contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any applicable law which
violation is required to be disclosed in the Prospectus.
2. PURCHASE, SALE AND DELIVERY OF THE OFFERED ADSS.
-----------------------------------------------
(a) On the basis of the representations, warranties and
covenants herein contained, and subject to the conditions herein set forth, the
Company agrees to sell to the Underwriter and the Underwriter agrees, to
purchase, at a price of $14.91 per share, the Offered ADSs.
(b) Payment for the Offered ADSs to be sold hereunder is to
be made in Federal (same day) funds against delivery of certificates therefor
to the Underwriter. Such payment and delivery are to be made through the
facilities of The Depository Trust Company, New York, New York at 9:00 a.m.,
New York time, on the third business day after the date of this Agreement or at
such other time and date not later than five business days thereafter as the
Underwriter and the Company shall agree upon, such time and date being herein
referred to as the "Closing Date." (As used herein, "business day" means a day
on which the Nasdaq SmallCap Market is open for trading and on which banks in
New York are open for business and are not permitted by law or executive order
to be closed.)
3. OFFERING BY THE UNDERWRITER.
---------------------------
It is understood that the Underwriter is to make a public
offering of the Offered ADSs as soon as the Underwriter deems it advisable to
do so. The Offered ADSs are to be initially offered to the public at the
initial public offering price set forth in the Prospectus. The Underwriter may
from time to time thereafter change the public offering price and other selling
terms.
4. COVENANTS OF THE COMPANY.
------------------------
The Company covenants and agrees with the Underwriter that:
10
(a) The Company will (A) prepare and timely file with the
Commission under Rule 424(b) of the Rules and Regulations a Prospectus in a
form approved by the Underwriter (such approval not to be unreasonably withheld
or delayed) containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430A of the
Rules and Regulations, (B) not file any amendment to the Registration Statement
or supplement to the Prospectus or document incorporated by reference therein
of which the Underwriter shall not previously have been advised and furnished
with a copy or to which the Underwriter shall have reasonably objected in
writing or which is not in compliance with the Rules and Regulations and (C)
file on a timely basis all reports required to be filed by the Company with the
Commission subsequent to the date of the Prospectus and prior to the
termination of the offering of the ADSs by the Underwriter.
(b) The Company will advise the Underwriter promptly (A) when
the Registration Statement, the ADS Registration Statement or any
post-effective amendment thereto shall have become effective, (B) of receipt of
any comments from the Commission, (C) of any request of the Commission for
amendment of the Registration Statement or the ADS Registration Statement or
for supplement to the Prospectus or for any additional information and (D) of
the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the ADS Registration Statement or the use of
the Prospectus or of the institution of any proceedings for that purpose. The
Company will use its best efforts to prevent the issuance of any such stop
order preventing or suspending the use of the Prospectus and to obtain as soon
as possible the lifting thereof, if issued.
(c) The Company will cooperate with the Underwriter in
endeavoring to qualify the Offered ADSs for sale under the securities laws of
such jurisdictions as the Underwriter may reasonably have designated in writing
and will make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose, provided the
Company shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction where it is not now
so qualified or required to file such a consent or to become liable for taxes
in any jurisdiction where it is not so liable as of the date of this Agreement.
The Company will, from time to time, prepare and file such statements, reports,
and other documents, as are or may be required to continue such qualifications
in effect for so long a period as the Underwriter may reasonably request for
distribution of the Offered ADSs.
(d) The Company will deliver to, or upon the order of, the
Underwriter, from time to time, as many copies of any Preliminary Prospectus as
the Underwriter may reasonably request. The Company will deliver to, or upon
the order of, the Underwriter during the period when delivery of a Prospectus
is required under the Act, as many copies of the Prospectus in final form, or
as thereafter amended or supplemented, as the Underwriter may reasonably
request. The Company will deliver to the Underwriter at or before the Closing
Date, four signed copies of the Registration Statement and all amendments
thereto including all exhibits filed therewith, and will deliver to the
Underwriter such number of copies of the Registration Statement (including such
11
number of copies of the exhibits filed therewith that may reasonably be
requested), including documents incorporated by reference therein, and of all
amendments thereto, as the Underwriter may reasonably request.
(e) The Company will comply with the Act and the Rules and
Regulations, and the Exchange Act, and the rules and regulations of the
Commission thereunder, so as to permit the completion of the distribution of
the Offered ADSs as contemplated in this Agreement, the Deposit Agreement and
the Prospectus. If during the period in which a prospectus is required by law
to be delivered by the Underwriter or a dealer, any event shall occur as a
result of which, in the judgment of the Company or in the reasonable opinion of
the Underwriter, it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
existing at the time the Prospectus is delivered to a purchaser, not
misleading, or, if it is necessary at any time to amend or supplement the
Prospectus to comply with any law, the Company promptly will either (i) prepare
and file with the Commission an appropriate amendment to the Registration
Statement or supplement to the Prospectus or (ii) prepare and file with the
Commission an appropriate filing under the Exchange Act which shall be
incorporated by reference in the Prospectus so that the Prospectus as so
amended or supplemented will not, in the light of the circumstances when it is
so delivered, be misleading, or so that the Prospectus will comply with the
law.
(f) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not later than
15 months after the effective date of the Registration Statement, an earning
statement (which need not be audited) in reasonable detail, covering a period
of at least 12 consecutive months beginning after the effective date of the
Registration Statement, which earnings statement shall satisfy the requirements
of Section 11(a) of the Act and Rule 158 of the Rules and Regulations and will
advise the Underwriter in writing when such statement has been so made
available.
(g) Prior to the Closing Date, the Company will furnish to
the Underwriter, as soon as they have been prepared by or are available to the
Company, a copy of any unaudited interim financial statements of the Company
for any period subsequent to the period covered by the most recent financial
statements appearing or incorporated by reference in the Registration Statement
and the Prospectus.
(h) No offering, sale, short sale or other disposition of any
of the Company's Equity Shares or ADSs or other securities convertible into or
exchangeable or exercisable for such securities or derivative of such
securities (or agreement for such) will be made for a period of 60 days after
the date of this Agreement, directly or indirectly, by the Company otherwise
than hereunder or with the prior written consent of the Underwriter.
(i) The Company will use its best efforts to ensure that the
Offered ADSs will be admitted to trading on the Nasdaq SmallCap Market.
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(j) The Company has caused each of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, Rediffusion Holdings Private Limited and Quintrol Technologies Private
Limited to furnish to the Underwriter, on or prior to the date of this
Agreement, a letter or letters, substantially in the form attached hereto as
Exhibit B (the "Lockup Agreement").
(k) The Company shall apply the net proceeds of its sale of
the Offered ADSs as set forth in the Prospectus.
(l) The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Offered ADSs in such a
manner as would require the Company or any of the Subsidiaries to register as
an "investment company" under the 1940 Act.
(m) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
for its Equity Shares, and will comply in all material respects with its
obligations under the Deposit Agreement.
(n) The Company will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company.
(o) The Company agrees to indemnify and hold the Underwriter
harmless against any documentary, stamp or similar issuance or transfer taxes,
duties or fees, including any interest and penalties, which are or may be
required to be paid in connection with the creation, allotment, issuance, offer
and distribution of the Equity Shares or the Offered ADSs and the execution,
delivery and performance of this Agreement and the Deposit Agreement; provided,
however, that the Company will neither indemnify nor hold the Underwriter
harmless against any tax, whether on capital gains, income or otherwise,
imposed on the Underwriter in connection with the Underwriter's execution,
delivery and performance of this Agreement.
5. COSTS AND EXPENSES.
------------------
The Company will pay all costs, expenses and fees incident to
the performance of its obligations under this Agreement and the Deposit
Agreement, including, without limiting the generality of the foregoing, the
following: accounting fees of the Company; the fees and disbursements of U.S.
and Indian counsel for the Company; the cost of printing and delivering to, or
as requested by, the Underwriter copies of the Registration Statement,
Preliminary Prospectuses, the Prospectus, this Agreement and any supplements or
amendments thereto; the fees and expenses of the Depositary; the fees and
expenses of the Authorized Agent (as defined in Section 13); the filing fees of
the Commission; and the Listing Fee of the Nasdaq SmallCap Market. In addition,
if this Agreement shall not be consummated because the conditions in Section 6
(other than the conditions set out in Sections 6(d), (e) and (f)) hereof are
not satisfied, or by reason of any failure, refusal or inability on the part of
the Company to perform any undertaking or satisfy any condition of this
Agreement or to comply with any of the terms hereof on its part to be
performed, unless such failure, refusal or inability is due primarily to the
default
13
or omission of the Underwriter, the Company shall reimburse the Underwriter for
reasonable accountable out-of-pocket expenses, including fees and disbursements
of counsel, reasonably incurred in connection with investigating, marketing and
proposing to market the ADSs or in contemplation of performing its obligations
hereunder; but the Company shall not in any event be liable to the Underwriter
for damages on account of loss of anticipated profits from the sale by it of
the Offered ADSs.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITER.
--------------------------------------------
The obligation of the Underwriter to purchase the Offered
ADSs on the Closing Date is subject to the accuracy, as of the Closing Date of
the representations and warranties of the Company contained herein, and to the
performance by the Company of its covenants and obligations hereunder and to
the following additional conditions:
(a) The Registration Statement, the ADS Registration
Statement and all post-effective amendments thereto shall have become effective
and any and all filings required by Rule 424 and Rule 430A of the Act shall
have been made within the applicable time period prescribed by, and in
compliance with, the Rules and Regulations, and any request of the Commission
for additional information (to be included in the Registration Statement, the
ADS Registration Statement or otherwise) shall have been disclosed to the
Underwriter and complied with to its reasonable satisfaction. No stop order
suspending the effectiveness of the Registration Statement or the ADS
Registration Statement, as amended from time to time, shall have been issued
and no proceedings for that purpose shall have been taken or, to the knowledge
of the Company, shall be contemplated or threatened by the Commission and no
injunction, restraining order or order of any nature by a Federal or, state or
foreign court of competent jurisdiction shall have been issued as of the
Closing Date which would prevent the issuance of the Deposited Shares or the
Offered ADSs.
(b) The Underwriter shall have received on the Closing Date
one or more opinion letters of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, U.S.
counsel for the Company, dated the Closing Date, addressed to the Underwriter
as to the matters set forth in Exhibit C.
(c) The Underwriter shall have received on the Closing Date,
the opinion of J. Sagar Associates, Indian counsel for the Company, dated the
Closing Date, addressed to the Underwriter (and stating that it may be relied
upon by counsel to the Underwriter as to matters of Indian law) as to the
matters set forth in Exhibit D.
(d) The Underwriter shall have received on the Closing Date,
the opinion of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for the Depository,
dated the Closing Date, addressed to the Underwriter as to the matters set
forth in Exhibit E.
(e) The Underwriter shall have received from ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriter, an opinion dated the Closing Date,
in such form as shall be agreed to with the Underwriter.
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(f) The Underwriter shall have received at or prior to the
Closing Date from ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP a memorandum or summary, in form and
substance satisfactory to the Underwriter, with respect to the qualification
for offering and sale by the Underwriter of the Offered ADSs under the State
securities or Blue Sky laws of such jurisdictions as the Underwriter may
reasonably have designated to the Company.
(g) The Underwriter shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the
Underwriter, of Deloitte ▇▇▇▇▇▇▇ & Sells confirming that they are independent
public accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating that in their opinion the
financial statements and schedules examined by them and included or
incorporated by reference in the Registration Statement comply in form in all
material respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations; and containing such other
statements and information as are ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and certain
financial and statistical information contained or incorporated by reference in
the Registration Statement and Prospectus.
(h) The Underwriter shall have received on the Closing Date a
certificate or certificates of the Chairman and Managing Director and the Chief
Financial Officer of the Company to the effect that, as of the Closing Date,
each of them certifies on behalf of the Company as follows:
(i) Each of the Registration Statement and the ADS
Registration Statement has become effective under the Act and no stop order
suspending the effectiveness of the Registration Statement or the ADS
Registration Statement has been issued, and no proceedings for such purpose
have been taken or are, to his knowledge, contemplated or threatened by the
Commission;
(ii) The representations and warranties of the
Company contained in Section 1 hereof are true and correct as of the Closing
Date;
(iii) All filings required to have been made
pursuant to Rules 424 or 430A under the Act have been made as and when required
by such rules;
(iv) He has carefully examined the Registration
Statement and the Prospectus and, in his opinion, as of the effective date of
the Registration Statement, the statements contained in the Registration
Statement were true and correct, and such Registration Statement and Prospectus
did not omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, and since the
effective date of the Registration Statement, no event has occurred which
should have been set forth in a supplement to or an amendment of the Prospectus
which has not been so set forth in such supplement or amendment (provided,
however, that such certificate or certificates need not refer
15
to the information provided by the Underwriter, as described in Section 12 of
this Agreement); and
(v) Since the respective dates as of which
information is given in the Registration Statement and Prospectus, there has
not been any material adverse change or any development involving a prospective
material adverse change in or affecting the business, management, properties,
assets, rights, operations, condition (financial or otherwise) or (to the
Company's knowledge) prospects of the Company and the Subsidiaries taken as a
whole, whether or not arising in the ordinary course of business.
(i) The Company shall have furnished to the Underwriter such
further certificates and documents confirming the representations and
warranties, covenants and conditions contained herein and related matters as
the Underwriter may reasonably have requested.
(j) The Company's ADSs are approved for admission to trading
on the Nasdaq SmallCap Market.
(k) The Lockup Agreements described in Section 4(j) are in
full force and effect.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if they are
in all material respects reasonably satisfactory to the Underwriter and to
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriter.
If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by this Agreement
to be fulfilled, the obligations of the Underwriter hereunder may be terminated
by the Underwriter by notifying the Company of such termination in writing or
by telegram at or prior to the Closing Date.
In such event, the Company and the Underwriter shall not be
under any obligation to each other (except to the extent provided in Sections 5
and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
--------------------------------------------
The obligations of the Company to sell and deliver the
portion of the Offered ADSs required to be delivered as and when specified in
this Agreement are subject to the conditions that at the Closing Date, no stop
order suspending the effectiveness of the Registration Statement shall have
been issued and in effect or proceedings therefor initiated or threatened.
8. INDEMNIFICATION.
---------------
(a) The Company agrees:
16
(1) to indemnify and hold harmless the Underwriter and each
person, if any, who controls the Underwriter within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act,
against any losses, claims, damages or liabilities to which the
Underwriter or any such controlling person may become subject under
the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, the ADS Registration Statement, any Preliminary Prospectus,
the Prospectus or any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein in
the light of the circumstances under which they were made not
misleading; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or
alleged untrue statement, or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or
such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by or through the
Underwriter specifically for use therein, it being understood and
agreed that the only such information furnished by the Underwriter
consists of the information described as such in Section 12 herein;
and provided further, that with respect to any such untrue statement
in or omission from any Preliminary Prospectus, the indemnity
agreement contained in this paragraph (a) shall not inure to the
benefit of the Underwriter to the extent that the sale to the person
asserting any such loss, claim, damage or liability of or with respect
to the Underwriter results from the fact that both (i) to the extent
required by applicable law, a copy of the Prospectus was not sent or
given to such person at or prior to the written confirmation of the
sale of the Offered ADSs to such person and (ii) the untrue statement
in or omission from such Preliminary Prospectus was corrected in the
Prospectus unless, in either case, such failure to deliver the
Prospectus was a result of non-compliance by the Company with the
provisions of Section 4 hereof; and
(2) to reimburse the Underwriter and each such controlling
person upon demand for any legal or other out-of-pocket expenses
reasonably incurred by the Underwriter or such controlling person in
connection with investigating or defending any such loss, claim,
damage or liability, action or proceeding or in responding to a
subpoena or governmental inquiry related to the offering of the ADSs,
whether or not the Underwriter or controlling person is a party to any
action or proceeding. In the event that it is finally judicially
determined that the Underwriter is not entitled to receive payments
for legal and other expenses pursuant to this subparagraph, the
Underwriter will promptly return all sums that had been advanced
pursuant hereto.
(b) The Underwriter will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Act, against any losses, claims,
17
damages or liabilities to which the Company or any such director, officer, or
controlling person may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, or (ii) the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made; and will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding; provided, however, that the Underwriter will
be liable in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission has been
made in the Registration Statement, any Preliminary Prospectus, the Prospectus
or such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by or through the Underwriter
specifically for use therein, it being understood and agreed that the only such
information furnished by the Underwriter consists of the information described
as such in Section 12 herein. This indemnity agreement will be in addition to
any liability which the Underwriter may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 8, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a) or (b) shall be available to any
party who shall fail to give notice as provided in this Section 8(c) if the
party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by the failure to give
such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of the
provisions of Section 8(a) or (b). In case any such proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party and shall pay as
incurred the reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel at its own expense. Notwithstanding the foregoing,
the indemnifying party shall pay as incurred (or within 30 days of
presentation) the reasonable fees and expenses of the counsel retained by the
indemnified party in the event (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them or (iii) the indemnifying party
shall have failed to assume the defense and employ counsel acceptable to the
indemnified party within a reasonable
18
period of time after notice of commencement of the action. It is understood
that the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm for all such indemnified parties.
Such firm shall be designated in writing by the Underwriter in the case of
parties indemnified pursuant to Section 8(a) and by the Company in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. In addition, the indemnifying party will not, without the prior
written consent of the indemnified party, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding of which indemnification may be sought hereunder (whether or not any
indemnified party is an actual or potential party to such claim, action or
proceeding) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action or proceeding.
(d) To the extent the indemnification provided for in this
Section 8 is unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or (b) above in respect of any losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriter on the other from the offering of
the Offered ADSs. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company on the one hand and the Underwriter
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriter
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions actually received by
the Underwriter, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriter on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Underwriter agree that it would not be
just and equitable if contributions pursuant to this Section 8(d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to
19
above in this Section 8(d). The amount paid or payable by an indemnified party
as a result of the losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to above in this Section 8(d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), (i) the
Underwriter shall not be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Offered ADSs purchased
by the Underwriter and (ii) no person guilty of fraudulent misrepresentation
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) In any proceeding relating to the Registration Statement,
the ADS Registration Statement, any Preliminary Prospectus, the Prospectus or
any supplement or amendment thereto, each party against whom contribution may
be sought under this Section 8 hereby consents to the jurisdiction of any court
having jurisdiction over any other contributing party, agrees that process
issuing from such court may be served upon it by any other contributing party
and consents to the service of such process and agrees that any other
contributing party may join it as an additional defendant in any such
proceeding in which such other contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 8 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of the Underwriter or any person controlling
the Underwriter, the Company, its directors or officers or any persons
controlling the Company, (ii) acceptance of any Offered ADSs and payment
therefor hereunder, and (iii) any termination of this Agreement. A successor to
the Underwriter, or any person controlling the Underwriter, or to the Company,
its directors or officers, or any person controlling the Company, shall be
entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 8.
9. NOTICES.
-------
All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered, telecopied or
telegraphed and confirmed as follows: (a) if to the Underwriter, to Deutsche
Bank Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇;
Attention: Syndicate Manager, with a copy to Deutsche Bank Securities Inc., ▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, and with a
copy to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., and (b) if to the Company, to
▇▇▇▇▇▇.▇▇▇ India Limited, ▇▇▇▇▇▇▇▇▇ Engineering Estate, 1st Floor, ▇.▇. First
Cross Road, Mahim (West), Mumbai 400 016, India, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
and ▇▇▇ ▇▇▇▇, with a copy to Skadden, Arps, Slate,
20
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
10. TERMINATION.
-----------
This Agreement may be terminated by the Underwriter by notice
to the Company (a) at any time prior to the Closing Date if any of the
following has occurred: (i) since the respective dates as of which information
is given in the Registration Statement and the Prospectus, any material adverse
change or any development involving a prospective material adverse change in or
affecting the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company and
its subsidiaries taken as a whole, whether or not arising in the ordinary
course of business, (ii) any outbreak or escalation of hostilities or
declaration of war or national emergency or other national or international
calamity or crisis or change in economic or political conditions if the effect
of such outbreak, escalation, declaration, emergency, calamity, crisis or
change on the financial markets of the United States or the Republic of India
would, in the Underwriter's reasonable judgment, make it impracticable or
inadvisable to market the Offered ADSs or to enforce contracts for the sale of
the Offered ADSs, (iii) suspension of trading in securities generally on the
New York Stock Exchange, the American Stock Exchange, the Nasdaq National
Market, the Nasdaq SmallCap Market or limitation on prices (other than
limitations on hours or numbers of days of trading) for securities on any of
such exchanges, (iv) the enactment, publication, decree or other promulgation
of any statute, regulation, rule or order of any court or other governmental
authority which in the Underwriter's opinion materially and adversely affects
or may materially and adversely affect the business or operations of the
Company and its subsidiaries, taken as a whole, (v) the declaration of a
banking moratorium by Indian, United States or New York State authorities, (vi)
the suspension of trading of the Company's ADSs by the Nasdaq SmallCap Market,
the Commission, or any other governmental authority, or (vii) the taking of any
action by any governmental body or agency in respect of its monetary or fiscal
affairs which in the Underwriter's reasonable opinion has a material adverse
effect on the securities markets in the United States; or
(b) as provided in Section 6 of this Agreement.
11. SUCCESSORS.
----------
This Agreement has been and is made solely for the benefit of
the Underwriter and the Company and their respective successors, executors,
administrators, heirs and assigns, and the officers, directors and controlling
persons referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the ADSs from the Underwriter
shall be deemed a successor or assign merely because of such purchase.
21
12. INFORMATION PROVIDED BY THE UNDERWRITER.
---------------------------------------
The Company and the Underwriter acknowledge and agree that
the only information furnished or to be furnished by the Underwriter to the
Company for inclusion in any Prospectus or the Registration Statement consists
of the statements in the Prospectus in the section "Underwriting" under the
captions "Commissions and Expenses" (second paragraph), "Stabilization and
Short Positions," and "Passive Market Making."
13. MISCELLANEOUS.
-------------
The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of the Underwriter or controlling person thereof, or by or on behalf of
the Company or its directors or officers and (c) delivery of and payment for
the Offered ADSs under this Agreement.
The Company acknowledges and agrees that the Underwriter in
providing investment banking services to the Company in connection with the
offering, including in acting pursuant to the terms of this Agreement, has
acted and is acting as an independent contractor and not as a fiduciary and the
Company does not intend such Underwriter to act in any capacity other than
independent contractor, including as a fiduciary or in any other position of
higher trust.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York. Each of the parties hereto
irrevocably (i) agrees that any legal suit, action or proceeding arising out of
or based upon this Agreement or the transactions contemplated hereby may be
instituted in any federal or state court located in the Borough of Manhattan (a
"New York Court"), (ii) waives, to the fullest extent it may effectively do so,
any objection which it may now or hereafter have to the laying of venue of any
such proceeding and (iii) submits to the exclusive jurisdiction of such courts
in any such suit, action or proceeding. The Company has appointed Rediff
Holdings Inc. as its authorized agent (the "Authorized Agent") upon whom
process may be served in any such action arising out of or based on this
Agreement or the transactions contemplated hereby which may be instituted in
any New York Court by the Underwriter or by any person who controls the
Underwriter, expressly consents to the jurisdiction of any such court in
respect of any such action, and waives any other requirements of or objections
to personal jurisdiction with respect thereto. Such appointment shall be
irrevocable. The Company represents and warrants that the Authorized Agent has
agreed to act as such agent for service at process and agrees to take any and
all actions, including the filing of any and all documents and instruments,
that may be necessary to continue such appointment in full force and effect as
aforesaid. Service of process upon the Authorized Agent
22
and written notice of such service to the Company shall be deemed, in every
respect, effective service of process upon the Company, in addition to any
other legally valid method.
In respect of any judgment or order given or made for any
amount due hereunder that is expressed and paid by the Company in a currency
(the "judgment currency") other than United States dollars, the Company will
indemnify the Underwriter or any of its controlling persons against any loss
incurred by such party as a result of any variation as between (i) the rate of
exchange at which the United States dollar amount is converted into the
judgment currency for the purpose of such judgment or order and (ii) the rate
of exchange at which the Underwriter is able to purchase United States dollars
with the amount of the judgment currency actually received by the Underwriter.
The foregoing indemnity shall constitute a separate and independent obligation
of the Company and shall continue in full force and effect notwithstanding any
such judgment or order as aforesaid. The term "rate of exchange" shall include
any premiums and costs of exchange payable in connection with the purchase of
or conversion into United States dollars.
23
If the foregoing letter is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the
Underwriter in accordance with its terms.
Very truly yours,
▇▇▇▇▇▇.▇▇▇ INDIA LIMITED
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
--------------------------
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
DEUTSCHE BANK SECURITIES INC.
By /s/ Authorized Officer
__________________________
Authorized Officer
By /s/ Authorized Officer
__________________________
Authorized Officer
EXHIBIT A - SUBSIDIARIES
Rediff Holdings, Inc.
India Abroad Publications Inc.
▇▇▇▇▇▇.▇▇▇ Inc.
A-1
EXHIBIT B
LOCK-UP AGREEMENT
_____________, 2005
▇▇▇▇▇▇.▇▇▇ India Limited
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇.▇. First Cross Road
Mahim (West), Mumbai 400 016
India
Deutsche Bank Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned understands that Deutsche Bank Securities Inc.
("DBSI"), as underwriter (the "Underwriter"), proposes to enter into an
Underwriting Agreement (the "Underwriting Agreement") with ▇▇▇▇▇▇.▇▇▇ India
Limited (the "Company"), providing for the public offering by the Underwriter
of American Depositary Shares ("ADSs") representing equity shares (par value
Rs. 5 per share) (the "Equity Shares"), of the Company (the "Public Offering").
To induce the Underwriter to continue its efforts in connection with
the Public Offering, the undersigned agrees that, without the prior written
consent of DBSI, the undersigned will not, directly or indirectly offer, sell,
pledge, contract to sell (including any short sale), grant any option to
purchase or otherwise dispose of any ADSs or Equity Shares (including, without
limitation, ADSs or Equity Shares of the Company which may be deemed to be
beneficially owned by the undersigned on the date hereof in accordance with the
rules and regulations of the Securities and Exchange Commission, ADSs or Equity
Shares which may be issued upon exercise of a stock option or warrant and any
other security convertible into or exchangeable for such securities) or enter
into any Hedging Transaction (as defined below) relating to such securities
(each of the foregoing referred to as a "Disposition") for a period from the
date hereof until and including the date that is 60 days after the date of the
final prospectus supplement relating to the Public Offering (the "Lock-Up
Period"). The foregoing restriction is expressly intended to preclude the
undersigned from engaging in any Hedging Transaction or other transaction which
is designed to or reasonably expected to lead to or result in a Disposition
during the Lock-Up Period even if the securities would be disposed of by
someone other than the undersigned. "Hedging Transaction" means any short sale
(whether or not against the box) or any purchase, sale or grant of any right
(including, without limitation, any put or call option) with respect to any
security (other than a broad-based market basket or index) that includes,
relates to or derives any significant part of its value from the ADSs or Equity
Shares.
B-1
Notwithstanding the foregoing, the undersigned may transfer (a) ADSs
or Equity Shares acquired in open market transactions by the undersigned after
the completion of the Public Offering, and (b) any or all of the ADSs, Equity
Shares or other Company securities if the transfer is by (i) gift, will or
intestacy, or (ii) distribution to partners, members or shareholders of the
undersigned; provided, however, that in the case of a transfer pursuant to
clause (b) above, it shall be a condition to the transfer that the transferee
execute an agreement stating that the transferee is receiving and holding the
securities subject to the provisions of this letter agreement.
The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of the securities contemplated by this letter agreement, except in
compliance with the foregoing restrictions.
In addition, the undersigned hereby waives any and all notice
requirements and rights with respect to registration of securities pursuant to
any agreement, understanding or otherwise setting forth the terms of any
security of the Company held by the undersigned, including any registration
rights agreement to which the undersigned and the Company may be party,
provided that such waiver shall apply only to the proposed offering, and any
other action taken by the Company in connection with the proposed offering.
The undersigned hereby agrees that, to the extent that the terms of
this letter agreement conflict with or are in any way inconsistent with any
registration rights agreement to which the undersigned and the Company may be a
party, this letter agreement supersedes such registration rights agreement.
The undersigned hereby represents and warrants that the undersigned
has full power and authority (or, in the case of an individual, the legal
capacity) to enter into this letter agreement. All authority herein conferred
or agreed to be conferred shall survive the death or incapacity of the
undersigned and any obligations of the undersigned shall be binding upon the
heirs, personal representatives, successors and assigns of the undersigned.
This letter agreement shall be governed by, and construed in
accordance with, the law of the State of New York.
B-2
Signature: ___________________________
Print Name: __________________________
Number of shares owned Certificate numbers:
subject to warrants, options
or convertible securities:
____________________________ _____________________
____________________________ _____________________
____________________________ _____________________
EXHIBIT C
Matters to Be Covered in the ▇▇▇▇▇▇▇ ▇▇▇▇ U.S. Legal Opinion
1. Rediff Holdings is validly existing in good standing under the laws
of the State of Delaware.
2. India Abroad is validly existing in good standing under the laws of
the State of New York.
3. Each of Rediff Holdings and India Abroad has the status set forth
in Schedule B of such opinion set forth opposite the jurisdictions listed in
such Schedule B to such opinion.
4. The Underwriting Agreement has been duly executed and delivered to
the extent such execution and delivery are governed by the laws of the State of
New York by the Company.
5. The Deposit Agreement has been duly executed and delivered to the
extent such execution and delivery are governed by the laws of the State of New
York by the Company and is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
6. Upon due issuance by the Depositary of the ADSs against the deposit
of Equity Shares by the Company in respect thereof in accordance with the
provisions of the Deposit Agreement, the persons in whose names such ADSs are
registered will be entitled to the rights specified therein and in the Deposit
Agreement.
7. The execution and delivery by the Company of each of the
Underwriting Agreement and the Deposit Agreement and the consummation by the
Company of the transactions contemplated thereby, including the issuance and
sale of the Securities, will not violate or conflict with, or result in any
contravention of, any Applicable Law.
8. No Governmental Approval, which has not been obtained or taken and
is not in full force and effect, is required to authorize, or is required for,
the execution or delivery of each of the Underwriting Agreement and the Deposit
Agreement by the Company or the consummation by the Company of the transactions
contemplated thereby.
9. To our knowledge, there are no legal or governmental proceedings
pending to which the Company is a party or to which any property of the Company
is subject that would have been required to be disclosed in the Prospectus
pursuant to Item 103 of Regulation S-K of the Rules and Regulations, had the
Registration Statement been a registration statement on Form S-1 under the
Securities Act, that are not so disclosed.
C-1
10. The statements in the Base Prospectus under the caption
"Description of our ADSs", insofar as such statements purport to summarize
certain provisions of the Deposit Agreement, fairly summarize such provisions
in all material respects.
11. Under the laws of the State of New York relating to personal
jurisdiction, the Company has validly and irrevocably submitted to the personal
jurisdiction of any state court in the Borough of Manhattan (a "New York
Court") in any action arising out of or relating to the Underwriting Agreement
or the transactions contemplated thereby, has validly and irrevocably waived
any objection to the venue of a proceeding in any such court, and has validly
and irrevocably appointed Rediff Holdings Inc. as its authorized agent for the
purpose described in Section 13 of the Underwriting Agreement; and service of
process effected on such agent in the manner set forth in Section 13 of the
Underwriting Agreement will be effective insofar as the law of the State of New
York is concerned to confer valid personal jurisdiction over the Company.
12. The Company is not required to seek an order permitting
registration under the Investment Company Act of 1940.
Such firm shall also indicate in writing to the underwriter that:
1. (i) the Registration Statement, at the time it became effective and
as of the date of this Agreement, and the Base Prospectus, as supplemented by
the Prospectus Supplement, as of the date of the Prospectus Supplement,
appeared on their face to be appropriately responsive in all material respects
to the requirements of the Securities Act and the Rules and Regulations (except
that in each case we do not express any view as to the financial statements,
schedules and other financial information included or incorporated by reference
therein or excluded therefrom, including the Statement of Eligibility on Form
T-1 (the "Form T-1")) and (ii) no facts have come to our attention that have
caused us to believe that the Registration Statement, at the time it became
effective and as of the date of this Agreement, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Base Prospectus, as supplemented by the Prospectus Supplement, as of the date
of the Prospectus Supplement and as of the date hereof, contained or contains
an untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that in each
case we do not express any view as to the financial statements, schedules and
other financial information included or incorporated by reference therein or
excluded therefrom or the statements contained in the exhibits to the
Registration Statement, including the Form T-1).
2. Under current United States federal income tax law, although the
discussion set forth in the Prospectus Supplement under the caption
"Taxation--United States Federal Income Tax Considerations" does not purport to
summarize all possible United States federal income tax consequences of the
purchase, ownership, or disposition of the Offered ADSs and the Equity Shares,
such discussion constitutes, in all material respects, a fair and accurate
summary of the
C-2
United States federal income tax consequences that are anticipated to be
material to U.S. Holders who purchase the Offered ADSs in offering contemplated
by this Agreement.
C-3
EXHIBIT D
Matters to Be Covered in the J. Sagar Associates Indian Legal Opinion
---------------------------------------------------------------------
[Form provided separately.]
D-1
EXHIBIT E
Matters to Be Covered in the Legal Opinion of Counsel to the Depositary
-----------------------------------------------------------------------
1. The Deposit Agreement has been duly authorized, executed and
delivered by the Depositary and constitutes the valid and legally binding
agreement of the Depositary, enforceable against the Depositary in accordance
with its terms except to the extent that (a) enforcement thereof may be limited
by (1) bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or similar laws now or
hereafter in effect relating to or affecting creditors' rights generally, and
(2) general principles of equity (regardless of whether enforceability is
considered in a proceeding in law or in equity), and (b) rights to indemnity
and contribution may be limited by United States federal or state securities
laws or public policy.
2. Upon issuance by the Depositary of the Offered ADSs against deposit
of the requisite Shares with the Custodian in accordance with the terms and
conditions of the Deposit Agreement and the ADS Registration Statement, the
Offered ADSs will be duly and validly issued and will entitle the Holders
thereof (as defined in the Deposit Agreement) to the rights specified in the
ADRs and in the Deposit Agreement.
3. The ADS Registration Statement has been declared effective under
the United States Securities Act of 1933, as amended, and, to the best of our
knowledge, no stop order suspending the effectiveness of the ADS Registration
Statement has been issued and no proceeding for that purpose has been initiated
or threatened.
4. The ADS Registration Statement and any amendments thereof or
supplements thereto, as of their respective effective dates, complied as to
form in all material respects with the requirements of the United States
Securities Act of 1933, as amended, and the rules and regulations adopted by
the Securities and Exchange Commission thereunder, in each case as interpreted
by the Staff of the Securities and Exchange Commission at such time.
E-1
