SHARE PURCHASE AGREEMENT

 

June 30, 2019

 

mPhase Technologies, Inc.

 

and

 

Alpha Prediction LLP

 

and

 

Anuj Kumar Saxena

 

[As Listed in Schedule I]

 

   

 

 

TABLE OF CONTENTS

 

Sr. No.   Particulars   Page No. 1.   Definitions and Interpretation   3 2.  
Purchase and Sale of Sale Shares   8 3.   Conditions Precedent   9 4.   Pre
Closing Covenants   11 5.   Closing, Delivery and Payment   11 6.  
Representations and Warranties   13 7.   Indemnification and Damages   16 8.  
Termination   17 9.   Miscellaneous.   17 10.   Schedule I- Promoters and Sale
Shares   22 11.   Schedule II- Shareholding Patters   24 12.   Schedule III-
Purchase Price   25 13.   Schedule IV- Representations and Warranties   26 14.  
Schedule V- Disclosure Letter Format   47

 

 1 

 

 

SHARE PURCHASE AGREEMENT

 

This SHARE PURCHASE AGREEMENT (“Agreement”) is entered into on the 30th June
2019, BETWEEN:

 

(1) Alpha Predictions LLP, a limited liability firm registered in India as per
laws governing by ROC and having its registered at 411, Crossroads, NH-48,
Wakad, Pune - 41105 (herein after referred to as the “Company”, and is in
conversion process of Alpha Predictions LLP to Alpha Predictions Pvt Ltd. (Under
Indian Companies act) which expression shall, unless repugnant to the context or
meaning thereof, be deemed to mean and include its successors and assigns) of
the FIRST PART;     (2) mPhase Technologies, Inc., a company duly incorporated
under the laws of New Jersey, USA and having its registered at 9841
Washingtonian Blvd, Suite 390 Gaithersburg MD 20878 USA (herein after referred
to as the “Acquirer”, which expression shall, unless repugnant to the context or
meaning thereof, be deemed to mean and include its successors and assigns) of
the SECOND PART; and     (3) PROMOTERS, the details of whom are provided under
Schedule I PART A, hereinafter for the purpose of this Agreement collectively
referred to as “Promoters/ Sellers” which expression shall, unless repugnant to
the context or meaning thereof, mean and include their respective legal heirs,
successors, legal representatives, administrators, executors and assigns) of the
THIRD PART.

 

(The Acquirer, the Promoters/Sellers and the Company shall be individually
referred to as a “Party” and collectively referred to as the “Parties”, as the
context may require).

 

R E C I T A L S

 

WHEREAS:

 

A. The Company is a limited liability firm engaged in the business of providing
technology based products and services in the Learning Management Solutions
space (“Business”).     B. Post conversion The authorized share capital of the
Company will be INR 10,00,000/- (Indian Rupees Ten Lac Only) and divided into
10,00,000 (Ten Lacs) Equity Shares of INR 1/- (Indian Rupees One Only) each. The
issued and paid up share capital of the Company is INR. 1,00,000/- (Indian
Rupees One Lac only) divided into 1,00,000/- (One Lac) Equity Shares of INR 1/-
(Indian Rupees One Only) each.     C. As on the Effective Date, the Sellers
holds and owns 100% (Hundred percent) Equity (defined below), in the aggregate
constituting 100% of the Share Capital of the Company on a Fully Diluted Basis.
The shareholding pattern of the Company as on the Effective Date is set out in
Schedule II.     D. Acquirer desires to acquire the Sale Shares (Post
Conversion) (defined below), constituting of the 99% of the shareholding of the
Sellers in the Company. Consequently, Acquirer has offered to acquire the Sale
Shares from the Sellers and the Sellers have agreed to sell and transfer the
said Sale Shares (free from all Encumbrances and together with all rights, title
and interest therein on the terms and conditions set forth in this Agreement) to
Acquirer for the Purchase Price (defined below).     E. The Post Conversion Sale
Shares shall represent 99% (ninety nine percent) of the Share Capital on a Fully
Diluted Basis (defined below).     F. The Sellers, the Company, and Acquirer
have agreed to make certain representations, warranties, covenants and
agreements in connection with the transactions contemplated by this Agreement.

 

 2 

 

 

NOW THEREFORE, in consideration of the above recitals, the representations,
warranties, covenants and agreements contained in this Agreement and for other
good and valuable consideration, the receipt and adequacy of which are now
acknowledged, the Parties agree as follows:

 

SECTION 1. DEFINITIONS

 

1.1 Defined Terms

 

The terms below have the following meanings when used in this Agreement in
capitalised form unless otherwise expressed:

 

  a. “Affiliate” of a Person (defined below) (the “Subject Person”) shall mean
(i) in the case of any Subject Person other than a natural Person, any other
Person that, either directly or indirectly through one or more intermediate
Persons, Controls (as defined below), is Controlled by or is under common
Control (defined below) with the Subject Person including without limitation any
general partner, officer or director of such Person and any venture capital fund
now or hereafter existing which is Controlled by or under common Control with
one or more general partners or shares the same management company with such
Person, and (ii) in the case of any Subject Person that is a natural Person,
shall include any Person which is directly Controlled by or is under common
Control with the individual, and a Relative (defined below) of such Subject
Person.;         b. “Agreement” or “the Agreement” or “this Agreement” shall
mean this Share Purchase Agreement and shall include the recitals and/or
schedules attached hereto, and the contracts, certificates, disclosures and
other documents to be executed and delivered pursuant hereto, if any and any
amendments made to this Agreement by the Parties in writing.         c. “Amended
and Restated Articles” means the amended and restated articles of association to
be adopted by the Company at the Closing.         d. “Assets” means assets or
properties of every kind, nature, character and description (whether immovable,
movable, tangible, intangible, absolute, accrued, fixed or otherwise) as
operated, hired, rented, owned or leased by a Person from time to time,
including cash, cash equivalents, receivables, securities, accounts and note
receivables, real estate, plant and machinery, equipment, trademarks, brands,
other intellectual property, raw materials, inventory, furniture, fixtures and
insurance owned or used by the Company as of the relevant date.         e.
“Board” or “Board of Directors” shall mean and include the Board of Directors of
the Company or any committee thereof, as constituted from time to time.        
f. “Business” has the meaning set out in Recital A.         g. “Business Day”
means any day other than a Saturday, a Sunday, a public holiday or a day on
which banking institutions in Bangalore, India are authorised or obligated by
Law to be closed.         h. “Claims” means any demand, claim, action, cause of
action, notice, suit, litigation, prosecution, mediation, arbitration, enquiry,
assessment or proceeding made or brought by or against a Party, however arising
and whether present, unascertained, immediate, future or contingent, losses,
Liabilities, Damages, costs and expenses, including reasonable legal fees and
disbursements in relation thereto;

 

 3 

 

 

  i. “Closing” shall have the meaning ascribed to it in Section 4.1.         j.
“Closing Date” shall mean the date on which the closing occurs, which shall be
or before August 31, 2019.         k. “Companies Act/Act” means the Companies
Act, 1956, to the extent not repealed and the Companies Act, 2013, to the extent
notified, and all amendments or statutory modifications thereto or re-enactment
thereof, except where otherwise expressly provided.         l. “Conditions
Precedent” means the conditions precedent to Acquirer’s purchase of the Sale
Shares as set out in this Agreement.         m. “Control” (including the terms
“Controlled” by or under common “Control” with) , as used with respect to any
Person shall mean the direct or indirect power to direct or cause the direction
of the management or policies of any Person, whether through the ownership of
over 50% (Fifty percent) of the voting power of such Person, by agreement or
otherwise or through the power to appoint more than half of the board of
directors, parties or other individuals or exercising similar authority with
respect to such entity, through contractual arrangements or otherwise or any or
all of the above;         n. “Court Order” means any Judgment, decision, consent
decree, injunction, ruling or order of any Governmental Authority that is
binding on the Company.         o. “Damages” means (a) any and all monetary (or
where the context so requires, monetary equivalent of) damages, fines, fees,
penalties, Losses, and out-of-pocket expenses (including without limitation any
liability imposed under any award, writ, order, judgment, decree or direction
passed or made by any Person), (b) subject to applicable Law, any punitive, or
other exemplary or extra contractual damages payable or paid in respect of any
contract, and (c) amounts paid in settlement, interest, court costs, costs of
investigation, reasonable fees and expenses of legal counsel, accountants, and
other experts, and other expenses of litigation or of any Claim, default, or
assessment.         p. “Effective Date” means the date of execution of this
Agreement.         q. “Encumbrance” with respect to any property or Asset or
securities, shall mean (i) any mortgage, charge (whether fixed or floating),
pledge, Lien, hypothecation, assignment, deed of trust, security interest,
equitable interest, title retention agreement, voting trust agreement,
commitment, restriction or limitation or other encumbrance of any kind securing,
or conferring any priority of payment in respect of, any obligation of any
Person (defined below), including without limitation any right granted by a
transaction which, in legal terms, is not the granting of security but which has
an economic or financial effect similar to the granting of security under
applicable Law (defined below), (ii) any voting agreement, interest, option,
pre-emptive rights, right of first offer, refusal or transfer restriction in
favour of any Person (defined below) and (iii) any adverse claim as to title,
possession or use; “Encumber” and “Encumbered” shall be construed accordingly;  
      r. “Equity Share” means ordinary equity share of face value INR 10/-
(Indian Rupees Ten only) each in the Company.

 

 4 

 

 

  s. “Fully-Diluted Basis” means the total of all classes of shares outstanding
on a particular date, combined with all options (whether exercised or not),
warrants (whether exercised or not), convertible securities of all kinds, any
other arrangements relating to the Company’s equity, and the effect of any
anti-dilution protection regarding previous financings, all on an “as if
converted” basis where “as if converted” basis means as if such instrument,
option or security had been converted into Equity Shares;         t.
“Governmental Approval” means a permit, license, consent, approval, certificate,
qualification, specification, exemption, registration or other authorisation
including filing of a notification, report or assessment obtained or to be filed
as the case may be as per the applicable Laws in India with any governmental,
semi-governmental, administrative, fiscal, quasi-judicial or judicial body or
entity in India;         u. “Governmental Authority” means any governmental,
judicial, quasi-judicial, legislative, executive, administrative or regulatory
authority of any national, state or local government (including municipal
governments), or any ministry, subdivision, agency, commission, office, court
authority or instrumentality of such body, in any part of the world.         v.
“Indebtedness” means with respect to any Person, all indebtedness of such Person
(whether present, future or contingent) and includes without limitation (a) all
obligations of such Person for borrowed money or with respect to advances of any
kind, whether or not evidenced by a contract, note, bond, debenture, letter of
credit, draft or similar instrument; (b) all obligations of such Person for the
deferred purchase price of property, goods or services; (c) all indebtedness of
others secured by (or for which the holder of such indebtedness has an existing
right, contingent or otherwise, to be secured by) any Encumbrance on property of
such Person; (d) all guarantees by such Person; (e) all liabilities or
obligations of such Person to pay any sums or amounts whether under a contract
or otherwise; and (f) that portion of obligations with respect to capital leases
that is properly classified as a liability on a balance sheet in conformity with
Indian GAAP;         w. “INR”, “Indian Rupees” or “Rupees” means the lawful
currency of India.         x. “Indemnified Party” has the meaning set out in
Section 6.1.         y. “Indemnifying Party” has the meaning set out in Section
6.1.         z. “Intellectual Property” means collectively or individually, the
following worldwide rights relating to intangible property, whether or not
filed, perfected, registered or recorded and whether now or hereafter existing,
filed, issued or acquired: (a) patents, patent applications, patent disclosures,
patent rights, (b) rights associated with works of authorship, including without
limitation, copyrights, copyright applications, copyright registrations; (c)
rights in trademarks, trademark registrations, and applications thereof, trade
names, service marks, service names, logos, or trade dress; (d) rights relating
to the protection of trade secrets and confidential information; (e) internet
domain names, Internet and World Wide Web (WWW) URLs or addresses; (f) all other
intellectual, information or proprietary rights anywhere in the world including
rights of privacy and publicity, rights to publish information and content in
any media.         aa. “Judgment” means any judgment, writ, order, decree, award
or injunction of or by any arbitrator, court, judge, justice or magistrate,
including any bankruptcy court or judge and any order, ruling or action of or by
any Governmental Authority.

 

 5 

 

 

  bb. “Law” or “Laws” shall mean any statute, law, regulation, ordinance, rule,
Court Order, notification, order, decree, bye-law, permits, licenses, approvals,
consents, authorisations, government approvals, directives, guidelines,
requirements or other governmental restrictions, or any similar form of decision
of, or determination by, or any interpretation, policy or administration, having
the force of law of any of the foregoing, by any authority having jurisdiction
over the matter in question, whether in effect as of the date of this Agreement
or thereafter;         cc. “Liabilities” means with respect to any person any
direct or indirect liability, Indebtedness, obligation, expense, deficiency,
guaranty or endorsement of or by such person of any type, known or unknown, and
whether accrued, absolute, contingent, unmatured, matured, otherwise due or to
become due.         dd. “Lien” means any Claim, lien, pledge, option, charge,
easement, security interest, deed of trust, mortgage, right-of-way,
encroachment, building restriction, conditional sales agreement, encumbrance or
other right of third parties (including rights of pre-emption), whether
voluntarily incurred or arising by operation of Law, and includes any agreement
to give any of the above in the future, and any contingent sale or other title
retention agreement or Lease in the nature of them.         ee. “Long Stop Date”
shall mean [insert date], or such later date as may be agreed between the
Parties;         ff. “Losses” means any and all losses, Liabilities, Claims,
damages, write downs, reductions in value (including reduction in the value of
the Sale Shares), costs (including costs of any assessment, investigation,
defence, settlement or proceedings in respect of Tax or any other legal
proceedings), expenses (including reasonable legal costs and attorneys’ fees) or
other obligations.         gg. “Material Adverse Effect” shall mean any change
or effect (including but not limited to change in applicable Law) that would
have (or could reasonably be expected to have), or is likely to a materially
adverse impact to (a) the business, operations, Assets, condition (financial or
otherwise), operating results of the Company; or (b) the ability of the Parties
to consummate the transactions contemplated herein; or (c) the validity,
legality or enforceability of the rights or remedies of the Acquirer under the
Transaction Documents; or (d) any effect resulting from changes in general
market, economic, financial, legal or political conditions which has an adverse
effect on the transactions contemplated in the Transaction Documents;        
hh. “Person” means any individual, firm, company, Governmental Authority, joint
venture, association or partnership (whether or not having separate legal
personality).         ii. “Purchase Price” means an amount of INR 99,000 (Rupees
Ninety Nine Thousand (only) to be paid by Acquirer to the Sellers towards the
acquisition of the Sale Shares in the manner as provided in Schedule III.      
  jj. “Related Party/ies” shall mean in respect of a Person, such Person’s
Affiliates, Relatives, associates, Shareholders, Directors and senior management
personnel (including Affiliates and Relatives of the foregoing), it being agreed
that the Promoters (and their Affiliates and Relatives) shall in all cases be
deemed to be Related Parties of the Company;         kk. “Relative” shall have
the meaning as set forth in Section 2(77) of the Companies Act, 2013;        
ll. “Sale Shares” means 100% Equity held by the Sellers in the manner as
provided in Schedule I Part B constituting 99% of the share capital of the
Company on a Fully Diluted Basis.

 

 6 

 

 

  mm. “Shareholders Agreement” means the agreement executed between the Company,
Acquirer and the Sellers as of the Closing Date or to be executed as on 30th
June 2019 setting out the terms governing their relationship inter-se;        
nn. “Shareholders” shall mean the shareholders, from time to time, of the
Company;         oo. “Share Purchase” has the meaning set out in Section 2.1.  
      pp. “Tax” or “Taxes” means all forms of direct and indirect taxation
whatsoever and any levy, charge, impost, duty, fee, deduction or withholding
that is assessed, levied, imposed or collected by any Governmental Authority,
including taxes on income, services, wealth, fringe benefits, gross receipts,
net proceeds, turnover, payroll, consumption, employment, excise, severance,
stamp duty, occupation, premium, windfall profits, environmental, value added,
minimum alternative, customs duties, capital stock, securities, franchise,
profits, social security, unemployment, disability, real property, personal
property, leasing, sales, use, Transfer, licence, registration, advance or
estimated tax of any kind whatsoever, including any interest, penalty, or
addition in connection with it, whether disputed or not.         qq.
“Transaction Documents” means this Agreement and any other agreement, document,
certificate, consent, undertaking or instrument delivered by the Parties and/or
their Affiliates pursuant to or in connection with this Agreement including the
Shareholders Agreement.         rr. “Transfer” (including with correlative
meaning, the terms “Transferred by” and “Transferability”) shall mean to
transfer, sell, assign, pledge, hypothecate, create a security interest in or
lien on, place in trust (voting or otherwise), exchange, gift or transfer by
operation of Law or in any other way subject to any Encumbrance or dispose of,
whether or not voluntarily;

 

1.2 Interpretation.

 

In this Agreement:

 

  a. Words denoting any gender shall be deemed to include all other genders;    
    b. Words importing the singular shall include the plural and vice versa,
where the context so requires;         c. The terms “hereof”, “herein”,
“hereby”, “hereto” and other derivatives or similar words, refer to this entire
Agreement or specified Sections of this Agreement, as the case may be;        
d. Reference to the term “Section” or “Schedule” shall be a reference to the
specified Section or Schedule of this Agreement;         e. Any reference to
“writing” includes printing, typing, lithography and other means of reproducing
words in a permanent visible form.         f. The term “directly or indirectly”
means directly or indirectly through one or more intermediary persons or through
contractual or other legal arrangements, and “direct or indirect” shall have
correlative meanings;         g. All headings and sub-headings of Sections and
Schedules, and use of bold typeface are for convenience only and shall not
affect the construction or interpretation of any provision of this Agreement;

 

 7 

 

 

  h. Reference to any legislation or Law or to any provision thereof shall
include references to any such Law as it may, after the Effective Date, from
time to time, be amended, supplemented or re-enacted, and any reference to
statutory provision shall include any subordinate legislation made from time to
time under that provision;         i. Reference to the word “include” or
“including” shall be construed without limitation;         j. The Schedules
hereto shall constitute an integral part of this Agreement;         k. Terms
defined in this agreement shall include their correlative terms;         l. Time
is of the essence in the performance of the Parties’ respective obligations. If
any time period specified herein is extended, such extended time shall also be
of essence;         m. References to the knowledge, information, belief or
awareness of any Person shall be deemed to include the knowledge, information,
belief or awareness of such Person after examining all information which would
be expected or required from a Person of ordinary prudence;         n. The
Parties acknowledge that they and their respective counsel have read and
understood the terms of this Agreement and have participated equally in the
negotiation and drafting. No provisions of this Agreement shall be interpreted
in favour of, or against, any Party by reason of the extent to which such Party
or its counsel participated in the drafting hereof or by reason of the extent to
which any such provision is inconsistent with any prior draft hereof;         o.
All references to this Agreement or any other Transaction Document shall be
deemed to include any amendments or modifications to this Agreement or the
relevant Transaction Document, as the case may be, from time to time;         p.
Reference to days, months and years are to calendar days, calendar months and
calendar years, respectively, unless defined otherwise or inconsistent with the
context or meaning thereof; and         q. Any word or phrase defined in the
recitals or in the body of this Agreement as opposed to being defined in Section
1.1 shall have the meaning so assigned to it, unless the contrary is expressly
stated or the contrary clearly appears from the context.

 

SECTION 2. PURCHASE AND SALE OF sale SHARES

 

2.1 Subject to the satisfaction or waiver of the Conditions Precedent
immediately prior to Closing, Acquirer shall, on the Closing Date, purchase from
the Sellers and the Sellers shall sell o Acquirer, as the legal and beneficial
owner, the Sale Shares free and clear from all Encumbrances and together with
all rights, title, interest and benefits appertaining thereto (the “Share
Purchase”), for the Purchase Price paid by the Acquirer to the Sellers in the
manner as provided in Schedule III.     2.2 The Sellers hereby agree and warrant
that pursuant to the receipt of the Purchase Price from Acquirer on the Closing
Date, the title of the Sale Shares, shall pass on to the Acquirer, free of all
Encumbrances whatsoever and together with all legal rights and advantages now
and hereafter attaching or accruing thereto, so that the Acquirer will upon the
Transfer of the Sale Shares in its name, receive full legal and beneficial
ownership thereof.

 

 8 

 

 

2.3 Execution Date Deliverables. Simultaneously with the execution of this
Agreement on the Effective Date:

 

  a. the Company shall deliver to the Acquirer a copy certified by a duly
authorized director of the Company, of the resolutions duly passed by the Board,
approving the execution by the Company of the Transaction Documents;         b.
Each of the Sellers shall have executed and delivered to the Acquirer and the
Company, a copy of a notarized power of attorney, authorizing to execute this
Agreement and any other agreements to be entered pursuant to Transaction
Documents, to which they are a party, on their behalf and binding all other
Sellers; and         c. the Acquirer shall deliver to the Company and Sellers
certified by a duly authorized director of the Company, of the resolutions duly
passed by the Board, approving the execution by the Company of the Transaction
Documents.

 

2.4 The Parties shall do or cause to be done all such further acts, deeds,
matters and things and execute such further documents and papers as may be
reasonably required to give effect to sale and Transfer of the Sale Shares under
the Agreement.

 

SECTION 3. CONDITIONS PRECEDENT

 

3.1 Sellers’ Conditions Precedent to Closing. The obligations of the Acquirer to
purchase and pay for the Sale Shares on Closing Date are subject to the
satisfaction, or waiver in writing by the Acquirer at or prior to the Closing,
of the following conditions.

 

  a. Compliance with obligations. The Company and the Sellers shall have
performed and complied in all respects with all agreements, obligations and
conditions contained in the Agreement that are required to be performed or
complied with on or before Closing and shall have obtained all approvals,
consents and qualifications necessary to complete the sale and purchase of the
Sale Shares;         b. Consents and Waivers. The Sellers or the Company (as the
case may be) will have obtained all necessary consents, waivers and
no-objections in writing from any Person as may be required under any applicable
Law or contract or otherwise for the execution, delivery and performance of the
Transaction Documents, including without limitation, Consents, waivers and
no-objections;         c. No Proceedings. No administrative, investigatory,
judicial, quasi-judicial or arbitration proceedings shall have been brought by
any Person seeking to enjoin, or seek Damages from any party in connection with
the sale and purchase of the Sale Shares, and no order, injunction, or other
action shall have been issued, pending or threatened, which involves a challenge
or seeks to or which prohibits, prevents, restrains, restricts, delays, makes
illegal or otherwise interferes with the consummation of any of the transactions
contemplated under the Agreement and the Transaction Documents;         d.
Capital Structure and Shareholding. No change in the capital structure of the
Company or shareholding of the Sellers or rights attached to the Equity Shares
shall have occurred other than pursuant to the Transaction Documents.         e.
Absence of Material Adverse Effect. There shall not have been, on or prior to
the Execution Date or as of the Closing Date, any event, condition or
circumstance of any character that, individually or in the aggregate,
constitute(s) or is reasonably expected to have a Material Adverse Effect.

 

 9 

 

 

  f. Corporate Actions. The Board shall have approved the execution of the
Transaction Documents by the Company;         g. Execution of Transaction
Documents. All Transaction Documents, other than this Agreement, shall have been
duly executed, stamped and delivered by the parties thereto.         h. Accuracy
of Warranties. A certificate, dated as of Closing Date, executed by the Sellers,
certifying that the warranties set out in Section 5 are true and correct; and

 

3.2 Acquirer’s Conditions Precedent to Closing. The obligations of the Sellers
and Company to sell the Sale Shares on Closing Date are subject to the
satisfaction, or waiver at or prior to the Closing, of the following conditions.

 

  a. Compliance with obligations. The Acquirer shall have performed and complied
in all respects with all agreements, obligations and conditions contained in the
Agreement that are required to be performed or complied with on or before
Closing and shall have obtained all approvals, consents and qualifications
necessary to complete the sale and purchase of the Sale Shares;         b.
Consents and Waivers. The Acquirer will have obtained all necessary consents,
waivers and no-objections in writing from any Person as may be required under
any applicable Law or contract or otherwise for the execution, delivery and
performance of the Transaction Documents, including without limitation,
Consents, waivers and no-objections;         c. Execution of Transaction
Documents. All Transaction Documents, other than this Agreement, shall have been
duly executed, stamped and delivered by the parties thereto.

 

3.3 Each of the Parties shall take all steps necessary to fulfil the Conditions
Precedent promptly and expeditiously and in any event prior to the Long Stop
Date. If any of the Conditions Precedent is not fulfilled, or is not waived, by
the Long Stop Date, the non-defaulting Party shall have the right, but not the
obligation, to terminate this Agreement by written notice to the Company and
upon issuance of such written notice, this Agreement shall ipso facto terminate,
save for any terms of this Agreement which are expressly stated to survive the
termination of this Agreement.     3.4 Immediately upon fulfilment (or waiver on
a case to case basis, as applicable) of all the Conditions Precedent, (i) the
Sellers and the Company shall provide written confirmation of the same (“CP
Confirmation Certificate I”) to the Acquirer and (ii) the Acquirer shall provide
written confirmation (“CP Confirmation Certificate II”) to the Sellers and the
Company.     3.5 Co-operation. The Parties shall co-operate with each other in
good faith and provide all requisite assistance for the satisfaction of any of
the Conditions Precedent upon being reasonably requested to do so by the other
Party. If any Party becomes aware of anything which will or may prevent any of
the Conditions Precedent from being satisfied before the Long Stop Date, the
relevant Party shall notify the other Party in writing as soon as practicable.

 

 10 

 

 

SECTION 4. pre closing actions

 

4.1 Between the Effective Date and the Closing (the “Interim Period”), except as
expressly permitted or required by this Agreement or with the prior written
consent of the Acquirer, the Company and the Sellers shall:

 

  a. not directly or indirectly initiate or engage in discussions or
negotiations with any other Person for the purpose of any transactions in
respect of any Equity Shares or Assets of the Company, including creation of any
interest, direct, indirect, current, future or contingent, in the Equity Shares
or Assets of the Company;         b. not carry out any action or omission which
may affect the proposed transaction under this Agreement or which may reduce or
dilute the effective shareholding of the Acquirer upon Closing or which may
change the shareholding of the Sellers;         c. not pass any resolution of
the Shareholders or Board, which is inconsistent with any provision of, or
transactions contemplated under, the Transaction Documents;         d. carry-on
the Business only in the ordinary course of business;         e. comply with all
applicable Laws relating to the Business;         f. not make any amendments to
the Memorandum or Articles of the Company except as contemplated in this
Agreement; and         g. not agree or otherwise commit to take any of the
actions described in the foregoing sub sections (a) through (f).

 

4.2 Reporting requirements. During the Interim Period, the Company and the
Sellers shall promptly advise the Acquirer in writing of any event, occurrence,
fact, condition, change, development or effect that, individually or in the
aggregate, has had or may reasonably be expected to have a Material Adverse
Effect.     4.3 Access to Board Meetings, Properties, Etc. The Sellers and
Company shall allow the Acquirer and its representatives to have reasonable
access until the Closing Date, during normal business hours and upon reasonable
notice, to the Company’s properties, Books and Records, and other relevant
documents.     4.4 No Actions to Cause Representations and Warranties to be
Untrue. During the Interim Period, except as otherwise expressly contemplated in
the Transaction Documents or agreed in writing by the Acquirer, the Sellers and
Company shall not take, or agree or otherwise commit to take, any of the
foregoing actions or any other action that if taken would reasonably be expected
to cause any of the representations or warranties set out in Section 6 to be
untrue.

 

SECTION 5. CLOSING, DELIVERY AND PAYMENT

 

5.1 Closing. Subject to the satisfaction or waiver of the Conditions Precedent
to Closing, their continued satisfaction or waiver immediately prior to Closing
and the receipt of CP Confirmation Certificate I by the Acquirer from the
Sellers, the Sellers shall Transfer and deliver to the Acquirer, and the
Acquirer shall, upon reliance on, amongst other things, the representations,
warranties and undertakings contained in this Agreement, receive and take
delivery from the Sellers, all of the right, title and interest of the Sellers
in the Sale Shares free and clear from all Encumbrances, together with the share
certificates and duly stamped and executed share transfer forms in relation to
the Sale Shares. The Transfer or procurement of the Transfer of the Sale Shares
by the Sellers to the Acquirer shall constitute the closing of the Share
Purchase (“Closing”). The Closing shall occur on or before the Closing Date, but
not later than the Long Stop Date, unless extended by the written agreement of
the Parties.

 

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5.2 Closing Payment and Actions. At Closing, in exchange for the Sale Shares and
the delivery or performance by Sellers of all those documents, items and actions
as may be required to enable the Acquirer to be the legal and registered owner
of the Sale Shares, the Acquirer shall pay to the Sellers, the Purchase Price by
way of pay order or banker’s draft drawn or by way of telegraphic transfer to
such account(s) as may be notified to the Acquirer in writing at least five (5)
Business Days prior to the Closing. At Closing the following events shall take
place:

 

  a. The Sellers shall deliver to the Acquirer the share certificate(s)
representing the Sale Shares sold by such Seller, accompanied by duly stamped
and executed share transfer form (Form SH-7) as prescribed under the Companies
Act.         b. the Company shall and the Sellers shall cause the Company to
convene a meeting of the Board for:

 

  i. taking on record the duly executed and stamped share transfer forms in
respect of the Sale Shares; and         ii. approving the Share Purchase of Sale
Shares from the Sellers to the Acquirer;

 

  c. the Company shall make the necessary filings under applicable Law and
execute all other documents as may be necessary for the conclusive Transfer of
the Sale Shares in the name of the Acquirer;         d. the Company shall make
the necessary entries in its register of members and register of share transfer
to record the Transfer of the Sale Shares from the Sellers to the Acquirer.    
    e. the Board shall pass the necessary resolutions towards changing the name
of the Officers as an authorised signatory to the Company’s bank accounts to the
nominee(s) appointed by the Acquirer and intimate the Company’s bankers in
relation thereto;         f. the Company shall adopt the Amended and Restated
Articles of the Company, in form and manner satisfactory to the Acquirer in a
meeting of the shareholders of the Company;         g. the Company shall file
with the jurisdictional Registrar of Companies Form No. MGT-14, in respect of
adoption of Amended and Restated Articles pursuant to Sections 94 (1) and 117
(1) of the Companies Act and provide a certified copy thereof with the filing
fee receipt to the Acquirer.

 

5.3 Deliverables at Closing. At the Closing the Company shall deliver to the
Acquirer the following documents:

 

  a. Certified extract of the resolutions passed by the Board approving the
transfer of the Sale Shares from the Sellers to the Acquirer.         b.
Certified extract of the register of members and the share transfer register of
the Company evidencing the entries relating to the transfer of the Sale Shares
from the Sellers to the Acquirer.         c. Certificate, dated as of the
Closing Date, executed by Company and the Sellers, certifying that the
representation and warranties made by the Sellers and the Company as set out in
this Agreement are true and correct as of the Closing.

 

 12 

 

 

  d. A certificate, dated as of the Closing executed by Company and the Sellers,
certifying to the fulfilment of the Execution Date Deliverables set forth in
this Agreement.         e. Share certificate(s) with respect to the Sale Shares
with endorsement of name of the Acquirer on the same.         f. Any other
document as may be reasonably required by the Acquirer pursuant to Closing under
this Agreement.

 

5.4 Upon Closing, the Acquirer shall hold 99% (Ninety Nine percent) Equity
Shares of the Company pursuant to Share Purchase, constituting 100% of the Fully
Diluted Share Capital of the Company.     5.5 The obligations of each of the
Parties in this Section are interdependent on each other. Closing shall not
occur unless all of the obligations specified in this Section are complied with
and are fully effective. Notwithstanding anything to the contrary, all
transactions contemplated by this Agreement to be consummated at the Closing
shall be deemed to occur simultaneously and no such transaction shall be deemed
to be consummated unless all such transactions are consummated.

 

SECTION 6. REPRESENTATIONS AND WARRANTIES

 

6.1 Representation and Warranties of the Sellers. The Sellers and Company
represents and warrants to the Acquirer that each of the statements set out
below (Warranties of the Seller) is now and will be true and accurate as of the
Effective Date (which representations and warranties shall be deemed to be
repeated as of the Closing Date by reference to the facts and circumstances then
existing as if references in such representations and warranties to the
Effective Date were references to the Closing Date).     6.2 Authorisation by
Sellers. This Agreement has been duly authorised, executed and delivered by the
Sellers and the Company and creates legal, valid and binding obligations of the
Sellers, enforceable in accordance with its terms. No consent, approval or
authorisation of any Person or entity is required in connection with the
Sellers’ execution or delivery of this Agreement or the consummation by the
Sellers of the transactions contemplated by this Agreement, except for the
approval of the Board to the transfer of the Sale Shares from the Sellers to the
Acquirer.     6.3 Organisation. The Company is a limited liability partnership
duly organised and validly existing under the Laws of India, has full corporate
power and authority to carry on its business as it is currently being conducted
and to own, operate and hold its Assets and properties as, and in the places
where, such Assets and properties are currently owned, operated or held.     6.4
Share Ownership Etc.

 

  a. The Sellers are the owner of the Sale Shares. The Sellers have the sole
voting power, sole power of disposition and the sole power to agree to all of
the matters set forth in this Agreement, in each case with respect to all of the
Sale Shares proposed to be transferred by the Sellers hereunder, with no
limitations, qualifications or restrictions on such rights.         b. All of
the Sale Shares held by the Sellers are fully paid and beneficially owned by the
Sellers free and clear from all Encumbrances, and the Sellers have full right,
power and authority to sell, Transfer, convey and deliver to the Acquirer good,
valid and marketable title to the Sale Shares held by the Sellers in accordance
with the terms of this Agreement.

 

 13 

 

 

  c. The Sale Shares held by the Sellers are not the subject matter of any
claim, action, suit, investigation or other proceeding or Judgment or subject to
any prohibition, injunction or restriction on sale under any decree or order of
any Governmental Authority.         d. The Sale Shares held by the Sellers were
legally acquired, and validly owned and held by the Sellers. The Sellers
represents that the Sale Shares held by them were acquired and are held in
compliance with the applicable Laws and subject to appropriate approvals by any
Government Authority. The Sale Shares sold by the Sellers represent that
percentage of the Share Capital of the Company on a Fully Diluted Basis as set
forth on Schedule I PART A hereto.         e. There are no outstanding or
authorised obligations, rights including allotment, pre-emptive rights, rights
of first refusal pursuant to any existing agreement warrants, options, or other
agreements including voting agreements, contracts, arrangements entered into by
the Sellers and binding upon the Company, of any kind that gives any Person the
right to purchase or otherwise receive the Sale Shares (or any interest
therein).         f. There are no options, agreements or understandings
(exercisable now or in the future and contingent or otherwise) which entitle or
may entitle any Person to create or require to be created any right or
Encumbrance over the Sale Shares being transferred by it.         g. The Sellers
confirms that they have not directly or indirectly entered into any arrangement
or agreement with any Person to sell, dispose-off or otherwise deal with the
Sale Shares held by the Sellers.         h. The Sellers have clear and
marketable title to the Sale Shares held by the Sellers and are entitled to
sell, transfer and convey to the Acquirer all of the legal and beneficial
interest in such Sale Shares on the terms of this Agreement.         i. The
Sellers have not, nor has anyone authorised on his behalf, done, committed or
omitted any act, deed, matter or thing whereby any of the Sale Shares owned by
the Sellers are or may be forfeited or extinguished.         j. the Acquirer
will acquire a valid and marketable title to the Sale Shares and the said shares
to be delivered by the Sellers to the Acquirer pursuant to this Agreement will
be, when delivered, duly authorized, validly issued, fully paid-up and will be
free and clear of all Encumbrances and Third Party rights and interests;        
k. No Taxes are required to be deducted at source or withheld by the Acquirer
under Law from payments to be made to the Sellers for the Sale Shares;        
l. Upon the completion of the transactions contemplated under this Agreement,
the Acquirer shall as of the Closing Date hold 99% of the issued and paid up
share capital of the Company on a Fully Diluted Basis.

 

6.5 No Conflicts. The execution, delivery and performance of and compliance with
this Agreement and the consummation of the transactions contemplated by this
Agreement do not and will not:

 

  a. violate, conflict with, result in or constitute a default under, result in
the termination, cancellation or modification of, accelerate the performance
required by, result in a right of termination under, or result in any loss of
benefit under: (i) any material contract to which the Sellers or the Company is
a party; (ii) a material permit/license; (iii) any agreements relating to the
Indebtedness of the Company, or the Sellers (v) any agreements entered into
between any or the Sellers or the Company or any of their respective Affiliates;

 

 14 

 

 

  b. violate or conflict with any Law to which Company, , the Sellers or any of
their respective property is subject;

 

  i. violate the provisions of the charter documents of the Company; or        
ii. impose any Encumbrances on the Sale Shares or the Company’s Assets.

 

6.6 No Proceedings. There are no legal or governmental proceedings pending to
which either of the Sellers or Company is a party or to which any of the
property of either of the Sellers or Company or Sale Shares is subject, and
which in either case could reasonably be expected to have an adverse effect on
the power or ability of either of the Sellers or Company to perform its
obligations under this Agreement.     6.7 Other Warranties. The Sellers
additionally represents and warrants as provided in Schedule IV. The
representations and warranties shall be subject to qualified by the Disclosure
Letter submitted by the Company and Sellers in the form as under Schedule V (if
any).     6.8 The Sellers hereby represent, warrant and undertake to the
Acquirer that the warranties set forth in this Agreement (including under
Section 6.7) are true, correct, complete and accurate as on the Closing Date and
further acknowledges that the Acquirer is entering into this Agreement relying
on the said warranties.     6.9 Acquirers Warranties. the Acquirer hereby
represents and warrants to the Sellers and the Company as follows:

 

  a. It has all requisite power and authority to enter into this Agreement, to
perform its obligations there under and to consummate the transaction
contemplated hereby. The execution and delivery of this Agreement by the
Acquirer and the performance by the Acquirer of its obligations hereunder and
the consummation by the Acquirer of the transactions contemplated hereby, have
been duly authorized by all necessary actions.         b. This Agreement
constitutes valid, legally binding and enforceable obligations of the Acquirer.
        c. It has financial resources to undertake its obligations and payment
of Purchase Price under the Agreement.

 

6.10 Each of the Parties shall give the other Parties prompt notice in writing
of any event, condition or circumstance (whether existing on or before the
Execution Date or arising thereafter) that would cause any of their respective
warranties to become untrue or incorrect or incomplete or inaccurate or
misleading in any respect, that would constitute a violation or breach of any of
the warranties as of any date from the Execution Date or that would constitute a
violation or breach of any terms and conditions contained in this Agreement.
This requirement shall not prejudice the right of the Parties to terminate this
Agreement pursuant to a breach of the terms or to seek indemnity for any breach
of the warranties. Each Party undertakes to notify the other Parties promptly
after becoming aware of such event, in any event no later than 10 (ten) days
after becoming aware of such event.     6.11 Each of the warranties shall be
construed as a separate representation, warranty, covenant or undertaking, as
the case may be, and shall not be limited by inference from the terms of any
other representation or warranty or by any other term of this Agreement.

 

 15 

 

 

6.12 Except as expressly stated, no representation made by the Parties shall be
deemed to qualify any other representation made by them.

 

SECTION 7. INDEMNIFICATION AND DAMAGES

 

7.1 In consideration of the purchase of the Sale Shares by the Acquirer from the
Sellers hereunder, each defaulting Party (“Indemnifying Party”) agrees to
indemnify, defend and hold harmless, the other non-defaulting Party , its
Affiliates and each of their respective partners, officers, employees,
shareholders, partners, agents, as the case maybe (each, an “Indemnified Party”
and collectively the “Indemnified Parties”) from and against, any and all,
damages, Losses, Liabilities, obligations, fines, penalties, levies, action,
investigations, inquisitions, notices, suits, judgments, claims of any kind
including third party claims, interest, governmental and statutory action,
costs, litigation and arbitral costs, taxes or expenses (including without
limitation, reasonable attorney’s fees and expenses) (collectively referred to
as “Loss”) suffered or incurred, directly or indirectly by any Indemnified Party
as a result of:

 

  a. any misrepresentation or inaccuracy in any Warranty made by such defaulting
Party, or any failure by such Sellers to perform or comply with any agreement,
obligation, liability, representation, warranty, term, covenant or undertaking
contained in this Agreement;         b. any Loss incurred by the Indemnified;  
      c. any fraud committed by the defaulting Party, at any time;         d.
Taxes, costs, and expenses (including reasonable fees and disbursements) arising
in respect thereof, arising out of or in connection with any demand by a
Governmental Authority against the Indemnified Party in connection with
performance of any obligation under this Agreement.

 

7.2 In the event the Company or the Sellers make any payment pursuant to this
Section 7 (Indemnification), the same shall be grossed up to take into account
any Taxes, payable by the Indemnified Parties, or deductible by the Company or
the Promoters, on such payment.     7.3 The indemnification rights of the
Indemnified Parties under this Agreement are independent of, and in addition to,
such other rights and remedies as Indemnified Parties may have at Law or in
equity or otherwise, including the right to seek specific performance or other
injunctive relief, none of which rights or remedies shall be affected or
diminished thereby.     7.4 The Indemnifying Parties acknowledge and agree that
any payments to be made pursuant to this Section 7 are not in the nature of a
penalty but merely reasonable compensation for the loss that would be suffered,
and therefore, each Indemnifying Party waives all rights to raise any claim or
defense that such payments are in the nature of a penalty and undertakes that it
shall not raise any such claim or defense.     7.5 The above indemnity shall
take effect upon Closing but shall be applicable for any cause originating prior
to the Closing and having cause d any Loss to the Indemnified Parties.

 

 16 

 

 

SECTION 8. TERMINATION

 

8.1 This Agreement may be terminated prior to the Closing only by (i) mutual
written consent of the Parties or (ii) by the Parties as follows:

 

  a. if the Closing shall not have occurred before July 31, 2019.         b.
upon the issuance of any Court Order that is final and not appealable and would
prevent the consummation of the transactions contemplated hereby;         c.
either of the Parties breaches in any material respect any provision of this
Agreement and that breach is not remedied within fifteen (15) Business Days of
receiving a written notice to remedy such breach from the non defaulting Party;
        d. a judgment has been entered against a Party or any of their
respective Affiliates restraining, prohibiting or declaring illegal the
consummation of this Agreement or the transactions contemplated by this
Agreement;

 

8.2 Any termination of this Agreement shall be without prejudice to any rights
and obligations of the Parties accrued or incurred prior to the date of such
termination, which shall survive the termination of this Agreement.

 

SECTION 9. MISCELLANEOUS.

 

9.1 Confidentiality:

 

  a. Each Party shall keep all information relating to each other Party,
information relating to the transactions herein and this Agreement (collectively
referred to as the “Information”) confidential. None of the Parties shall issue
any public release or public announcement or otherwise make any disclosure
concerning the Information without the prior approval of the other Party;
provided however, that nothing in this Agreement shall restrict any of the
Parties from disclosing any information as may be required under applicable Law
subject to providing a prior written notice of 10 (Ten) Business Days to the
other Parties (except in case of regulatory inquiry or examination, and
otherwise to the extent practical and permitted by Law) . Subject to applicable
Law, such prior notice shall also include (a) details of the Information
intended to be disclosed along with the text of the disclosure language, if
applicable; and (b) the disclosing Party shall also cooperate with the other
Parties to the extent that such other Party may seek to limit such disclosure
including taking all reasonable steps to resist or avoid the applicable
requirement, at the request of the other Parties.         b. Nothing in this
Section 9.1 shall restrict any Party from disclosing Information for the
following purposes:

 

  i. To the extent that such Information is in the public domain other than by
breach of this Agreement;         ii. To the extent that such Information is
required to be disclosed by any applicable Law or stated policies or standard
practice of the Parties or required to be disclosed to any Governmental
Authority to whose jurisdiction such Party is subject or with whose instructions
it is customary to comply;         iii. To the extent that any such Information
is later acquired by such Party from a source not obligated to any other Party
hereto, or its Affiliates, to keep such Information confidential;

 

 17 

 

 

  iv. Insofar as such disclosure is reasonably necessary to such Party’s
employees, directors or professional advisers, provided that such Party shall
procure that such employees, directors or professional advisors treat such
Information as confidential. For the avoidance of doubt it is clarified that
disclosure of information to such employees, directors or professional advisors
shall be permitted on a strictly “need-to-know basis”;         v. To the extent
that any of such Information was previously known or already in the lawful
possession of such Party, prior to disclosure by any other Party hereto; and    
    vi. To the extent that any information, materially similar to the
Information, shall have been independently developed by such Party without
reference to any Information furnished by any other Party hereto.         vii.
Where other Parties have given their prior approval to the disclosure.

 

  c. Any public release or public announcement (including any press release,
conference, advertisement, announcement, professional or trade publication, mass
marketing materials or otherwise to the general public) containing references
the investment made by the Acquirer in the Company, shall require the prior
written consent of the Acquirer.

 

9.2 Survival. The representations and warranties and the Indemnity provisions
shall survive the Closing. Any other provision which by virtue of its nature is
intended to survive shall survive the termination of this Agreement.     9.3
Successors and Assigns. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the Parties. Nothing expressed or
referred to herein will be construed to give any person other than the Parties
to this Agreement any legal or equitable right, remedy or claim under or with
respect to this Agreement or any provision of this Agreement.     9.4
Assignment. The Parties hereby agree that no assignment of this Agreement will
be permitted without the prior written consent of other Parties.     9.5
Counterparts. This Agreement may be executed in any number of originals or
counterparts, each in the like form and all of which when taken together shall
constitute one and the same document, and any Party may execute this Agreement
by signing any one or more of such originals or counterparts.     9.6 Notices.
Notices, demands or other communication required or permitted to be given or
made under this Agreement shall be in writing and delivered personally or sent
by prepaid post with recorded delivery, or email addressed to the intended
recipient at its address set forth below, or to such other address or email
number as a Party may from time to time duly notify to the others:

 

  a. If to the Company:

 

  (i) Name : Alpha Predictions LLP   (ii) Address : 411, Crossroads, NH-48,
Wakad, Pune - 41105   (iii) Attention : Snehalkumar Santosh Kadam   (iv) Email :
snehalkumar.kadam211@gmail.com,         snehalkumar.kadam@alphapredictions.co.in

 

  b. If to Acquirer

 

  (i) Name : mPhase Technologies, Inc.   (ii) Address : 9841 Washingtonian Blvd,
Suite 390 Gaithersburg MD 20878 USA   (iii) Attention : Mr. Anshu Bhatnagar  
(iv) Email : ab@mPhaseTech.com

 

 18 

 

 

  c. If to Sellers:

 

  (i) Name : Snehal / Smita / Anuj / Dhananjay Rajendra Adik   (ii) Address
:411, Crossroads, NH-48, Wakad, Pune - 41105   (iii) Email :
snehalkumar.kadam211@gmail.com,         snehalkumar.kadam@alphapredictions.co.in

 

9.7 Amendments. No amendment or variation of this Agreement shall be binding on
any Party unless such variation is in writing and duly signed by all the
Parties.     9.8 Waiver. No waiver of any breach of any provision of this
Agreement shall constitute a waiver of any prior, concurrent or subsequent
breach of the same or any other provisions hereof, and no waiver shall be
effective unless made in writing and signed by an authorised representative of
the waiving Party.     9.9 Severability. Each and every obligation under this
Agreement shall be treated as a separate obligation and shall be severally
enforceable as such in the event of any obligation or obligations being or
becoming unenforceable in whole or in part. To the extent that any provision or
provisions of this Agreement are unenforceable they shall be deemed to be
deleted from this Agreement and any such deletion shall not affect the
enforceability of the remainder of this Agreement not so deleted provided the
fundamental terms of this Agreement are not altered.     9.10 Entire Agreement.
This Agreement constitutes the whole agreement between the Parties relating to
the subject matter hereof and supersedes any prior arrangements whether oral or
written, relating to such subject matter. No Party has relied upon any
representation or warranty in entering this Agreement other than those expressly
contained herein.     9.11 Relationship. No Party, acting solely in its capacity
as a Shareholder, shall act as an agent of the Company or have any authority to
act for or to bind the Company.     9.12 Independent Rights. Each of the rights
of the Parties under this Agreement are independent, cumulative and without
prejudice to all other rights available to them, and the exercise or
non-exercise of any such rights shall not prejudice or constitute a waiver of
any other right of a Party, whether under this Agreement or otherwise.     9.13
Any date or period as set out in any Section of this Agreement may be extended
with the written consent of the Parties failing which time shall be of the
essence.     9.14 Governing Law: This Agreement and the relationship between the
Parties shall be governed by, and interpreted in accordance with, the Laws of
India. Subject to Section 8.16, the courts in Bangalore, India shall have the
jurisdiction over all matters arising pursuant to this Agreement.     9.15
Dispute Resolution

 

  a. If any dispute or difference arises between any of the Parties hereto
during the subsistence of this Agreement or thereafter, in connection with the
validity, interpretation, implementation or alleged material breach of any
provision of this Agreement or regarding any question, including the question as
to whether the termination of this Agreement by any Party hereto has been
legitimate, the Parties hereto shall endeavor to settle such dispute amicably.
The attempt to bring about an amicable settlement is considered to have failed
as soon as one of the Parties hereto, after reasonable attempts which attempt
shall continue for not less than 30 (Thirty) days, gives 30 (Thirty) days’
notice thereof to the other Party in writing.

 

 19 

 

 

  b. All disputes, differences or Claims arising out of or in connection with
this Agreement including, any question regarding its existence, validity,
construction, performance, termination or alleged violation which is not
resolved under Section 19.16(a) shall be finally resolved by arbitration
conducted in accordance with Indian Arbitration and Reconciliation Act of 1996
along with the rules framed there under. The Parties to the dispute shall share
the costs equally or in the proportion as decided by the arbitrator/arbitral
tribunal.         c. The seat or legal place for such arbitration shall be in
[Mumbai] and all proceedings shall be conducted in the English language. The
Parties agree that the existence of any arbitral proceedings, the claims,
applications and documents filed/ processed in relation to the same, hearings,
and awards made, shall be subject to the obligations of confidentiality set out
in this Section.         d. The dispute shall be settled by a sole arbitrator to
be appointed by the parties to the dispute. If the parties to the dispute are
unable to appoint a sole arbitrator by way of mutual consent, the Promoters and
the Company shall together appoint 1 (one) arbitrator, the Acquirer shall
together appoint 1 (one) arbitrator and the 2 (two) arbitrators so appointed
shall be entitled to appoint the third arbitrator who will act as umpire of the
arbitral tribunal. Any arbitration award by the arbitral tribunal shall be final
and binding upon the Parties, shall not be subject to appeal, and shall be
enforced by judgment of a court of competent jurisdiction.         e. All claims
and counterclaims (including non-monetary and declaratory claims) shall, to the
extent such claims or counterclaims are known at the time any arbitration is
commenced, be consolidated and determined in the same arbitration proceeding.
The arbitrator shall, inter alia, have the authority to award declaratory relief
and consider and award specific enforcement of this Agreement.         f.
Deposits to cover the costs of arbitration shall be shared equally by the
parties thereto. The award rendered by the arbitrator shall, in addition to
dealing with the merits of the case, fix the costs of the arbitration and decide
which of the Parties thereto shall bear such costs or in what proportions such
costs shall be borne by such Parties.         g. The award rendered by the
arbitrator shall be final and conclusive on all Parties to this Agreement,
whether or not, despite notice, such Parties have taken part in the arbitration,
and shall be subject to forced execution in any court of competent jurisdiction.
        h. Each Party shall co-operate in good faith to expedite (to the maximum
extent practicable) the conduct of any arbitral proceedings commenced under this
Agreement.         i. Nothing shall preclude either Party from seeking interim
or permanent equitable or injunctive relief, or both, from the competent courts,
having jurisdiction to grant relief on any disputes or differences arising from
this Agreement. The pursuit of equitable or injunctive relief shall not be a
waiver of the duty of the Parties to pursue any remedy (including for monetary
Damages) through the arbitration described in this Section.         j. Any
arbitration proceeding hereunder shall be conducted on a confidential basis.

 

9.16 Costs. Each party shall bear its own expenses incurred in preparing this
Agreement. The stamp duty and other costs payable on this Agreement, and the
share transfer deed in relation to the Sale Shares shall be borne by the
Sellers.     9.17 The provisions of this Agreement and the charter documents
shall (as far as possible) be interpreted in such a manner as to give effect to
all such documents; provided however, that in the event of an inconsistency
between this Agreement and the charter documents, to the extent permitted by
applicable Law, provisions of this Agreement shall prevail as between the
Parties and shall govern their contractual relationship and the Parties shall
cause the necessary amendments to the charter documents.

 

FOLLOWING THIS PAGE IS THE EXECUTION PAGE

 

 20 

 

 

IN WITNESS, the Parties have executed this Share Purchase Agreement as of the
date first written above.

 

ACQUIRER:   COMPANY:       mPhase Technologies, Inc.   Alpha Predictions LLP    
      By:     By:   Name:     Name: Snehalkumar Santosh Kadam Title:     Title:
MD Address:           Address:  411, Crossroads, NH-48, Wakad, Pune -41105
Authorised Signatory   Authorised Signatory

 

SELLERS:         By:     Name: Mr. Snehalkumar Santosh Kadam         Power of
Attorney holder on behalf of all the Promoters.  

 

 21 

 

 

Schedule I – part a

 

promoters/ sellers

 

Sr. No. Name Residential Address Shareholding         1.  Snehalkumar Santosh
Kadam

529/1, Shahunagar, Jaysingpur, Dist

Kolhapur-416101

40 2.  Smita Dinakar Shinde

529/1, Shahunagar, Jaysingpur, Dist

Kolhapur

30 3.  Anuj Kumar Saxena 41, Raghvanpalya, Avalahalli, JP Nagar 9th Phase, 7th
Block, Bangalore- 560108 20 4.  Dhananjay Rajendra Adik June Gavathan, Khanapur,
Shrirampur, Vadala Mahadeo, Ahmendnagar- 413739 10

 

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Schedule I – part B

 

SALE SHARES

 

Sr. No. Seller

Total

Shareholding (in number)

Number of

Sale Shares

Percentage of

Sale Shares in

total Share

Capital

Sale Shares Certificates Number 1.            2.            3.            4.   
        5.           

 

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Schedule II

 

shareholding on effective date

 

Name of the

shareholder

Number of equity

shares

%holding                               TOTAL   100%

 

shareholding on Closing Date:

 

Name of the

shareholder

Number of equity

shares

%holding                               Acquirer     TOTAL   100%

 

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Schedule IIi

 

PURCHASE PRICE

 

Sr. No. Seller Number of Sale Shares

Price per Sale

Share

Purchase Price 1.          2.          3.          4.          5.         

 

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SCHEDULE- IV:

 

REPRESENTATIONS AND WARRANTIES

 

The Company and Sellers (“Warrantors”) hereby jointly and severally represent,
warrant and undertake to the Acquirer that as of the Effective Date, the
following Warranties are true and correct in all respects:

 

For the purposes of this Schedule the following terms shall have the meaning set
out below attributed to them:

 

“Tax Claim” shall mean any notice of any claim by the Company pursuant to any
assessment, administrative or appellate or court proceedings or proposed change
or adjustment by any taxing authority concerning, for or in respect of any and
all Taxes with respect to any taxable period ending on or before the Effective
Date or beginning before and ending on or after the Effective Date (but only in
relation to the portion thereof applicable to the period prior to the Effective
Date); and

 

“Tax Demand” shall mean any Tax Claim under which demand for payment of Tax is
made on or adjustment of any Tax refunds claimed by a Person and outstanding as
on date of such Tax Claim is demanded from, a Person by any taxing authority (or
any combination of the foregoing).

 

1. AUTHORITY AND CAPACITY     1.1. The Company is duly incorporated under the
Companies Act, 2013 and validly existing under the Laws of India. The Warrantors
have the legal right, power and authority, including corporate authority, as
applicable, to enter into, deliver and perform this Agreement and any other
documents executed by it pursuant to or in connection with the transaction
contemplated under the Transaction Documents. Subject to applicable Laws, this
Agreement and Transaction Documents when executed, will constitute legal, valid
and binding obligations of each of the Warrantors and shall be enforceable
against each of the Warrantors in accordance with its terms.     1.2. All
actions on the part of the Company (including corporate action and Governmental
Approvals, as applicable), necessary for the authorization, execution and
delivery of, and the performance of all obligations of the Company, under this
Agreement and/or the Transaction Documents and/or any of the other documents or
instruments to be executed under or pursuant to this Agreement, have been duly
taken and obtained and the same are valid and in full force and effect. Further,
no consents, Governmental Approvals, registrations, authorisations or permits
are required to be obtained by the Company and/or the Promoters in connection
with the execution and performance of this Agreement and/or any of the
Transaction Documents.

 

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1.3. The execution, delivery and the performance (or any of the foregoing), by
the Warrantors of this Agreement and the respective obligations in relation to
the transactions contemplated herein will not (as applicable):

 

  (a) Conflict with, violate, result in or constitute a breach of or constitute
a default under the charter documents of the Company and any applicable Laws by
which the Warrantors or any of the Assets are bound or affected;         (b)
conflict with or result in any breach or violation of any of the terms and
conditions of, or constitute (or with notice or lapse of time or both
constitute) a default under, any instrument, Contract or other agreement or
arrangement (oral or written) to which such Party is a party or by which such
Party is bound or affected;         (c) result in the creation or imposition of
any Encumbrance of any nature over the Equity Shares, or any of the Company Real
Property or Assets;         (d) relieve any Third Party to a Contract executed
by the Company of its obligations or give any Third Party a right to terminate
or modify, or result in the creation of any Encumbrance under, any agreement,
licence or other instrument (oral or written) to which such Party is a party or
by which such Party is bound;         (e) give the holder of any note, debenture
or other evidence of any Indebtedness of the Company (or any person acting on
the Company’s behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such Indebtedness by the Company;         (f)
cause the Company to lose the benefit of any right, credit or privilege it
presently enjoys, or, cause any Person who normally does business with the
Company not to continue to do so on the same basis;         (g) constitute an
act of bankruptcy, preference, insolvency or fraudulent conveyance under any
bankruptcy act or other applicable Law for the protection of debtors or
creditors; and         (h) violate any order, decree or judgement against, or
binding upon, such Warrantor or upon its respective securities, properties or
businesses.

 

1.4. No Authorisation of, or registration, qualification, designation,
declaration or filing with, any Person is required in connection with the
execution, delivery and performance by the Company and the Promoters of this
Agreement and any other documents executed in the course of or pursuant hereto,
other than as specifically stated in this Agreement and any other documents
executed in the course of or pursuant hereto. The issue and allotment of the
Equity Shares are each in accordance with applicable Laws.     1.5. No event has
occurred and no matter, condition or state of fact or thing exists, that would
or is expected to materially and/or adversely affect the ability of the Company
to carry on the Business as currently being carried on and as currently proposed
to be carried on.     1.6. There is no outstanding Action which is likely to
result in the suspension, cancellation, refusal, modification or revocation of
any of the Governmental Approvals or consents held by the Company and/or no
notice has been received of any suspension, cancellation, refusal, modification,
revocation or non-renewal of any of the Governmental Approvals or consents held
by the Company.     1.7. The Warrantors have not, nor has anyone on their
behalf, done, committed or omitted any act, deed, matter or thing whereby the
Equity Shares can be forfeited, extinguished or rendered void or voidable.

 

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1.8. The issued and paid-up share capital of the Company as well as the current
shareholding pattern of the Company as on the Effective Date is as specified in
Part A of Schedule II and upon Series A Closing, will be as specified in Part B
of Schedule II.     2. CORPORATE MATTERS     2.1. The Company is a private
limited company.     2.2. The copies of the charter documents of the Company
delivered to Acquirer are true, correct and complete copies, and have annexed to
or incorporated in them, copies of all resolutions or agreements required by
applicable Law to be so annexed or incorporated. Other than this Agreement and
the Shareholders’ Agreement, no arrangement and, in particular, no Contract
explicitly or by inference or implication modifies the rules set forth in the
Articles of Association of the Company, whether or not such arrangement is
enforceable vis à vis third parties and the Company has complied with all the
provisions of its charter documents and, in particular, has not entered into any
ultra vires transaction.     2.3. The Company has, at all times, maintained and
continues to maintain in accordance with applicable Law, all statutory books,
records and registers (including without limitation accounting records, share
registers and minute books) required to be kept or maintained by the Company
under applicable Law, and all such statutory books, records and registers are
and have at all times been properly kept, written up to date and are complete,
and all matters have been truthfully, accurately, and fully recorded in such
books, records and registers. No notice or allegation that any of the statutory
books, records or registers of the Company is incorrect or should be rectified
has been received. All such books, records and registers are in the possession
and under the direct control of the Company.     2.4. All forms, returns,
reports, filings, particulars, registrations, resolutions and other documents
and intimations that the Company is required, by applicable Law, to file with,
make or deliver to any governmental, administrative or regulatory body have been
correctly made, duly filed and/or delivered and there is no outstanding notice
from any governmental, administrative or regulatory body received by the Company
as to its non-compliance with its obligations as to filings, returns,
particulars, resolutions and/or other documents.     2.5. The Company has the
corporate power and authority to own and operate its Assets and properties to
carry on its businesses as currently conducted.     2.6. The Company has not
bought back, repaid or redeemed or agreed to buy back, repay or redeem any of
its Equity Shares or other securities or otherwise reduced or agreed to reduce
its share capital or purchased any of its own shares or carried out any
transaction having the effect of a share buy-back or reduction of capital.

 

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2.7. Save and except as specified in this Agreement and the Transaction
Documents, there are no Encumbrances, outstanding options, warrants, rights
(including conversion or pre-emption rights) or agreements or understanding
(whether or not such agreements or understanding is absolute, revocable,
contingent, conditional, oral, written, binding or otherwise) for the
subscription or purchase from the Company of any shares in the capital stock of
the Company or any securities convertible into or ultimately exchangeable or
exercisable for any capital stock of the Company including voting agreements.
Further, the Company has (i) not agreed to acquire, whether legally or
beneficially, jointly or alone, and directly or indirectly, any share capital or
securities convertible into share capital or any other interest whatsoever in
any entity; and (ii) does not Control, whether jointly or alone and directly or
indirectly, any entity; and (iii) has not at any time, held any share capital or
securities convertible into share capital or other interest whatsoever in, or
Controlled, any entity.     2.8. The Company has no Subsidiaries or joint
ventures and has not formed an association of persons for Tax purposes, nor does
it own any direct or indirect equity, voting or ownership interest in any
Person, including Persons that carry on any business that competes with the
Business as presently conducted or as contemplated to be conducted.     2.9. The
Board is duly elected and validly appointed as per the provisions of the
Companies Act and the charter documents and none of the directors are
disqualified to continue as directors under any provisions of the Companies Act
and/or any other statutory legislation, as may be applicable.     2.10. The
Company has complied with all requirements of the Companies Act and its charter
documents for validly conducting the meetings of their respective boards and
members and have duly reflected the proceedings of the meetings in the
respective minutes.     2.11. None of the Directors have any direct or indirect
ownership (i) in any business entity with which the Company is affiliated; or
(ii) in any business entity that competes with the Company.     2.12. There are
no outstanding powers of attorney given by the Company and/or the Promoters to
any Person, in relation to the Company.     3. SHARES AND OTHER SECURITIES    
3.1. The Equity Shares, when issued and paid for as provided in this Agreement,
will be duly authorized, validly issued and fully paid-up. The Equity Shares
will at all times be free from Encumbrances.     3.2. Except for the approval of
the Board and the Shareholders of the Company, authorizing the issue and
allotment of the Equity Shares to the Acquirer in accordance with the terms of
this Agreement, no other approvals, for the issue and allotment of the Equity
Shares to the Acquirer, are required to be made or obtained by the Company and
in connection with the execution and delivery of this Agreement and the
Transaction Documents.     3.3. As on the date of this Agreement and the Closing
Date, all of the Equity Securities of the Company have been duly authorised and
validly issued in compliance with the requirements of the Act and all other
provisions of applicable Law, and are fully paid-up.     3.4. The Company does
not have any obligation(s) (contingent or otherwise) to purchase, redeem or
otherwise acquire any of its Equity Securities or any interest therein or to pay
any dividends or make any other distribution in respect thereof.

 

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3.5. Other than under this Agreement and the Transaction Documents there are no
voting trusts or agreements, shareholders’ agreements, pledge agreements,
buy-sell agreements, rights of first refusal, rights of first offer, pre-emptive
rights or proxies relating to any Equity Securities of the Company.     3.6. The
Company has not issued any debentures, warrants, bonds or any other debt
instruments and there are no outstanding Securities, warrants, options,
agreements, share purchase plans, instruments or other rights of any nature
whatsoever that may result in the sale or issuance by the Company of any Equity
Securities of the Company.     3.7. Other than under this Agreement or other
Transaction Documents a there are no Contracts, of any nature whatsoever,
entered into by or binding upon the Company or the Promoters that can, either
now or at any future date and whether contingently or not, be converted into or
exchanged for Equity Securities of the Company or which entitle or may entitle
any Person to subscribe to or receive any Equity Securities of the Company at
present or at a later date or which require or may require the Company to issue
any Equity Securities or rights convertible into or exchangeable for Equity
Securities of the Company or warrants or rights to purchase or acquire any
Equity Securities of the Company, and no Person has claimed to be entitled to
any of the foregoing.     4. COMPLIANCE     4.1. The Company is conducting and
has conducted its Business and its operations in accordance and in compliance
with all applicable Laws. None of the Company or any of its Directors, officers,
agents or employees and the Promoters during the course of their duties for or
on behalf of the Company, has done or omitted to do anything which is a
contravention of any applicable Law, giving rise to any fine, penalty and/or any
other liability on the part of the Company and the Promoters, and no notice or
complaints have been received by the Company and/or the Promoters in respect of
any such contravention or alleged contravention.     4.2. Since incorporation,
none of the Company, the Promoters or any of its Directors, officers, agents,
employees, Affiliates or other Persons associated with them, acting for or on
its behalf, directly or indirectly;

 

  (i) has made, offered, promised or authorised the making of any contribution,
gift, bribe, payoff, influence payment, kickback, or any other fraudulent
payment in any form, whether in money, assets, properties or services, or
anything of value to a Person, private or public official or otherwise in order,
in relation to the business of the Company: (a) to obtain favourable treatment
in securing or retaining business or directing business to the Company, (b) to
pay for such favourable treatment for business secured, (c) to obtain special
concessions or for special concessions already obtained, (d) to influence any
official act or decision, or (e) in violation of any material applicable Law.
The Company has maintained, and has caused each of its Affiliates (in relation
to the Business) to maintain, systems of internal controls (including, but not
limited to, accounting systems, purchasing systems and billing systems) to
ensure compliance with all applicable anti-bribery or anti-corruption law.

 

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  (ii) has established or maintained any fund, assets or properties in which the
Company has proprietary rights that have not been recorded in the books and
records of the Company.         (iii) have been a party to, (A) the use of any
of the Assets for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity; or (B) the making of any direct or
indirect unlawful payment to government officials or employees from any of the
Assets; or (C) the establishment or maintenance of any unlawful or unrecorded
fund of monies or other assets; or (D) the making of any false or fictitious
entries in the books or records of the Company; or (E) the making of any
unlawful or undisclosed payment.

 

4.3. The Company makes and keeps accurate books and records and maintains
internal accounting controls which provide reasonable assurance that (i)
transactions are executed pursuant to and in accordance with management’s due
authorization and (ii) transactions are recorded as necessary to permit
preparation of the financial statements of the Company and to maintain
accountability for the Assets and (iii) access to the Assets is permitted only
pursuant to and in accordance with management’s authorization     5.
GOVERNMENTAL APPROVALS     5.1. The Company has obtained and the Promoters have
caused the Company to obtain in its own name all Governmental Approvals
necessary or required under applicable Law and all necessary corporate power and
authority to, (i) use, occupy and/or hold its Assets and properties, (ii) carry
on and conduct the Business and its activities as now conducted and as presently
proposed to be conducted, each of which is valid, subsisting and in full force
and effect, and has complied with all terms and conditions of those Governmental
Approvals, and nothing has been done or has been omitted to be done, and no
event has occurred or condition or state of fact exists which (A) constitutes
(whether with notice, lapse of time and/or otherwise) a breach of or default
under any of those Governmental Approvals, or (B) (based on current applicable
Law and fact) might prejudice or prevent the grant, continuation or renewal of
any of those Governmental Approvals, or (C) would result in or permit any of
those Governmental Approvals to be modified, terminated, suspended or revoked,
or (D) might adversely affect the rights of the Company under any of those
Governmental Approvals.     6.  FINANCIAL MATTERS     6.1. The Promoters and the
Company Warrant that:

 

  (a) the Company has not declared, authorised, made or paid any dividend (in
cash or in specie) or other distribution of a similar nature upon or with
respect to any class or series of its Equity Securities;         (b) the
Company, or the Promoters on behalf of the Company, have not cancelled,
forgiven, waived or released any debt owed to the Company or any claim or right
of the Company;         (c) the Company or the Promoters have not sold or
otherwise disposed of any asset of the Company and have not Encumbered any of
the Assets;

 

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  (d) the Company has not changed any of its accounting policies, methods,
procedures or practices, or any policies or rates of depreciation or
amortization;         (e) the Business and operations of the Company has been
conducted and managed in the usual and ordinary course, consistent with past
practices, and there has not been any change in or re-organisation or
discontinuance of, any part of the Business or operations of the Company;      
  (f) the Company has not entered into, terminated, rescinded, invalidated or
accelerated any Contract except in accordance with the terms of the Contract, in
the ordinary course of its Business or as is consistent with past practice;    
    (g) the Company has not settled any existing Action;           no event has
occurred which gives rise to Taxation to the Company on deemed (as opposed to
actual) income, profits or gains or which results in the Company becoming liable
to pay or bear a Tax liability directly or primarily chargeable against or
attributable to another Person         (h) the Company has not made or granted
any loan or advance to, or made any payment or incurred any liability for the
benefit of any Person;         (i) no event or circumstance has occurred or is
continuing that would lead to or constitute a Material Adverse Effect; and      
  (j) neither the Company nor the Promoters have entered into any Contract to do
or in connection with, any of the foregoing.

 

6.2. The Company has not and is not engaged in financing of a type which is not
required to be shown or reflected in the audited accounts.     6.3. There is no
set off arrangement between the Company and any other Person.     6.4. The
accounting books, ledgers and other financial records of the activities of the
Company have been fairly and properly maintained and are in accordance with
applicable Law and Indian GAAP. and all other applicable statutes and
regulations and consistently applied accounting principles and are up-to-date
and contain all material matters required by Law to be entered in them.     6.5.
The financial statements shall contain (as appropriate under Indian GAAP
specific provisions or accruals adequate to cover, or full particulars in notes,
of all Taxation (including deferred taxation) and other Liabilities (whether
quantified, contingent or otherwise) of the Company as at the date of the
financial statements;     6.6. The business and the financial condition
(including the Assets, Liabilities and state of affairs) of the Company is truly
and fairly provided in the last financial statements dated March 31, 2019, and
there has been no change thereto, other than in the ordinary course of business,
and there has been no material change thereto, in any event.     6.7. The
auditors, who have audited the financial statements of the Company, and the
notes thereto, have delivered an unqualified audit report thereon and are
independent accountants with respect to the Company, as described in the audit
report.

 

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6.8. The financial statements are not adversely affected by any unusual or
non-recurring items;     6.9. The financial statements prepared since
incorporation were prepared under the historical convention, complied with the
requirements of the applicable Law then in force and with all statements of
standard accounting practice (or financial reporting standards) and accounting
standards prescribed by the ICAI then in force;     6.10. The financial
statements have been duly and timely approved by the general meeting of
shareholders and filed in accordance with the applicable Law;     6.11. The
financial statements provide in full for all Tax liable to be assessed on the
Company, or for which it is or may become accountable, in respect of any period
for which the financial statements are prepared and whether or not the Company
has or to the best of the knowledge of the Warrantor may have any right of
reimbursement against any other person, and the financial statements provide or
note in full for any contingent or deferred liability to Tax for any such
period.     6.12. The debts included in the financial statements have realised
or will realise, in the ordinary course of collection, their nominal amounts
plus any costs of collection and any accrued interest less any provisions for
bad and doubtful debts included in the financial statements.     6.13. The debt
owing to the Company (other than the debts included in the financial statements)
shall not in the ordinary course of collection realise its nominal amount plus
any costs of collection and any accrued interest.     6.14. The Company does not
have Liabilities or Indebtedness of any nature whatsoever, whether accrued,
absolute, contingent or otherwise (including Liabilities as guarantor or
otherwise with respect to obligations of others, or Liabilities (whether actual,
off-balance sheet, contingent or disputed and including financial lease
commitments and pension liabilities) for Taxes due or then accrued or to become
due), or outstanding borrowing or Indebtedness in the nature of borrowing, in
any form whatsoever, or any Claims outstanding against it.     6.15. The Company
does not own the benefit of any debt (whether present or future).     6.16. The
Company is not subject to any arrangement for receipt or repayment of any grant,
subsidy or financial assistance from any governmental, administrative or
regulatory body.     7. TAXATION MATTERS     7.1. The Company has complied with
all the requirements as specified under the respective Tax Laws as applicable to
it in relation to returns, computations, notices, deductions, withholdings and
information which are or are required to be made or given by the Company to any
Tax authority for all Tax periods for taxation and for any other Tax or duty
purposes, have been made on a proper and timely basis and are correct and none
of them is the subject of any dispute with the Indian taxation authorities and
all applicable Taxes have been deducted, collected, withheld, deposited and paid
and filings with respect to the same have been done and completed in accordance
with Law and no Tax Demand has been received or, to the best of the knowledge of
the Warrantors, threatened in respect thereof.

 

 33 

 

 

7.2. The Company has discharged all due and payable sums towards payment of
Taxes of any other Persons that they are required to discharge under any
applicable contracts and, there are no facts or circumstances that may give rise
as on the date of the financial statements to any material Tax or Tax liability
in addition to Tax already paid or provisioned in the financial statements.    
7.3. The Company is not subject to Tax in any jurisdiction other than India.    
7.4. The Company has no Tax liability arising out of any matter up to the
Closing except as adequately reserved for on its balance sheet, nor there are
any circumstances by reason of which the Company is likely to become liable to
pay, any interest, penalty, surcharge or fine relating to any Tax.     7.5. With
respect to any period for which Tax returns are not yet due and thus have not
been filed, or for which Taxes are not yet due or owing, the Company has made
due and sufficient accruals for such Taxes in its books and records and in
accordance with Indian GAAP and applicable Laws, including the financial
statements.     7.6. The Company has not paid or become liable to pay any
interest, penalty, surcharge or fine relating to any applicable Taxes. The
Company has not been since incorporation been subject to and the Company is not
currently subject to any investigation, audit, visit or search and/or seizure by
any revenue authority and no notice or communication of any such investigation,
audit or proposed visit by any taxation authority has been received by the
Company.     7.7. All claims or other requests for any particular treatment
relating to taxation that have been taken into account in computing any amount
in the financial statements, have been duly made and are, in the reasonable
opinion of the Company and the Promoters are not likely to be disputed by any
taxation authority.     7.8. The amount of taxation chargeable on the Company
during any assessment period has not been affected to any extent by any
concession, arrangement, agreement or other formal or informal arrangement with
any taxation authority (not being a concession, agreement or arrangement
available to companies generally).     7.9. The Company has granted, delivered
or issued or provided all certificates, forms and other documents to other
Persons required under the applicable Law relating to the Taxes, save in
relation to matters which are in progress in the ordinary course of business.  
  7.10. Any right to a repayment or relief of taxation to or in respect of the
Company to the extent that such right was taken into account in the financial
statements is available and is not lost, reduced or cancelled.     7.11. No
relief (whether by way of deduction, reduction, set-off, exemption,
postponement, roll-over, hold-over, repayment or allowance or otherwise) from,
against or in respect of any taxation has been claimed and/or given to the
Company which could or might be effectively withdrawn, postponed, restricted,
clawed back or otherwise lost as a result of the transaction contemplated under
this Agreement and/or as a result of any act, omission, event or circumstance
arising or occurring at or at any time before completion of the transaction
contemplated under this Agreement.

 

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7.12. No audit, investigation or other proceeding by a Governmental Authority is
pending or being conducted with respect to (i) any Taxes due from or with
respect to Company or in relation to the filing of any Tax returns or failure to
do so or (ii) any of the Company in respect of any pending proceedings under any
Tax Laws that have any adverse impact on the Company’s ability to consummate the
transactions contemplated herein or that has the effect of creating any charge
or lien on the Equity Shares or any Assets of Company in favour of a
Governmental Authority.     8. CONTRACTS     8.1. The Company is not a party to,
and the Assets and the Business are not bound or affected by, any Contract:

 

  (i) to which any Related Party is a party; or         (ii) that involves the
granting of any Encumbrance in, to or upon any Assets; or         (iii) that
involves the granting of any financing or financial assistance to the Company or
otherwise relates to the borrowing or lending of money; or         (iv) that
either (a) cannot be terminated by the Company in accordance with applicable
Laws or the terms of the Contract concerned or on less than 3 (three) months’
notice, or (b) cannot be terminated without the Company incurring any penalty or
other liability; or         (v) that is not in the ordinary course of its
business or is of an onerous nature or not on arm’s length basis or not on
normal commercial terms or cannot be fulfilled or performed by the Company or on
time with or without undue or unusual expenditure of money and effort; or      
  (vi) under which, by virtue or as a consequence of the execution, delivery
and/or performance of this Agreement and/or any of the Definitive Documents, (a)
any counterparty is likely to be relieved of any obligation or become entitled
to exercise any right (including without limitation any right of termination,
variation, pre-emption right or other option), or (b) the Company is or is
likely to be in breach or default or lose any benefit, right or interest which
it currently enjoys or (a) a liability or obligation of the Company is likely to
be created or increased, or (b) an increased benefit or payment or acceleration
of vesting of rights is or is likely to accrue to any counterparty; or        
(vii) that involves indemnification by the Company with respect to infringements
of intellectual property rights developed by the Company; or         (viii) that
involves any joint venture, consortium arrangement, partnership or similar
agreements; or         (ix) that imposes any non-compete, non solicit, or
exclusivity obligations on the Company.

 

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8.2. The Company and/or the Promoters (as the case may be) have fully complied
with its/their obligations under each Contract entered into by it/them, each
counterparty to a Contract has complied with all of its material obligations
under that Contract. The Company and the Promoters (as the case may be) and any
counterparty to a Contract is not in default of the performance, observance or
fulfilment of any of its respective obligations, covenants or conditions
contained in any Contracts, nor has it received notice of default or requiring
cure of any breach or termination from any counterparty under a Contract. None
of the counterparties to any of the Contracts are in default of the performance,
observance or fulfilment of any of their respective obligations, covenants or
conditions contained in Contracts. No event has occurred or is continuing and no
matter, condition or state of fact of thing exists, that would or, is reasonably
expected to be likely to cause, permit or allow (whether with notice, lapse of
time or otherwise), (a) a termination, rescission, modification, invalidation or
acceleration, of or under any Contract or (b) the imposition of any liability
(including any increase in the quantum of existing liability) on the Company
(whether by way of penalty, liquidated damages, or otherwise), under any
Contract, or (c) a termination, extinguishment, cancellation, rescission or
invalidation of any entitlement or other right of the Company under any
Contract. No counterparty has indicated any intention to terminate any such
contract prior to the expiration of its term.     8.3. All Contracts entered
into by the Company and the Promoters are legal, valid, subsisting, binding and
enforceable under and complies with, all applicable Law and have been duly
authorised, executed, duly stamped , if required to be stamped under applicable
Law, and, wherever required to be registered under applicable Law, has been
registered and delivered by the Company and constitutes a valid and binding
obligation of each party thereto, enforceable against each party thereto in
accordance with its terms and does not conflict with any other Contract entered
into by the Company.     8.4. No offer, tender or other invitation to enter into
any Contract with the Company which is capable of being converted into an
obligation of the Company by an acceptance or other act of some other Person is
outstanding.     8.5. None of the Contracts entered into by the Company and the
Promoters (A) affects or limits the right or ability of the Company to carry on
its Business (or any other line of business or activity) or compete, for any
period of time or in any geographical area(s), or (B) otherwise affects or
limits the Business, management and/or operations of the Company or restricts
the Company’s freedom to carry on the Business in any part of the world in such
manner as it thinks fit or to engage in any other line of business.     8.6. The
Company and the Promoters has no obligation or liability (actual or contingent)
in relation to the Business of the Company:

 

  (i) under any guarantee or indemnity or letter of credit or comfort letter
(whether or not reflected in the financial statements for the period ending as
on the Effective Date and the Closing Date);         (ii) under any leasing,
hiring, hire purchase, credit sale or conditional sale agreement in respect of
goods, other than in the ordinary course of its business.

 

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8.7. Other than (a) the current Articles; and (b) this Agreement, there are no
agreements or understandings to which the Company is a party or by which it is
bound which (i) grants direct or indirect management, operational or voting
rights or economic interest in the Company to any third Person including any
power of attorney with respect to the foregoing; ; (ii) is a non-competition
contract restricting in any way the business activities of the Company; (iii)
was entered into outside of the ordinary course of business of the Company; (iv)
provides for the sharing of the revenue of the Company with any Party or third
party; or (v) is adverse to the Business or financial condition of the Company.
    8.8. Other than employment or consultancy agreements and/or arrangements
between the Company and the employees or consultants specifically relating to
such employment or consultancy (if any), the Company is not a party to any
contract with any current or former employee, current or former director or any
current or former consultant of the Company or in which any such Person as
aforesaid is interested (whether directly or indirectly) nor are any such
contracts, arrangements or understanding outstanding or in force.     8.9. The
Company is not a party to any contract, arrangement or practice which in whole
or in part contravenes or is invalidated by any restrictive trade practices,
fair trade, consumer protection or similar Law or regulations in any
jurisdiction or in respect of which any filing, registration or notification is
required pursuant to such Laws or regulations (whether or not the same has in
fact been made).     8.10. There are no known or potential Liabilities on
account of liquidated Damages payable by the Company.     8.11. Other than in
ordinary course of business, there are no year-end commissions, incentives,
discounts payable by the Company.     9. RELATED PARTY ARRANGEMENTS     9.1.
Other than as disclosed in the financial statements, the Company has not entered
into any contract, arrangements, agreements or transactions with any of the
related parties and neither the Company nor the Assets are bound or affected by
any such contract, arrangements, agreements or transactions not so disclosed.  
  9.2. All arrangements with Related Parties of the Company were duly authorised
by all corporate action on the part of the parties thereto, were entered into on
arm’s length basis and under terms and conditions that are similar to comparable
agreements entered into with unrelated third parties (if any) and were otherwise
made in compliance with all applicable Law.     9.3. The Business does not
depend upon the use of any asset owned by, or facilities or services provided
by, any Related Party of the Company.     9.4. None of the Related Parties of
the Company, is either directly or indirectly concerned or interested,

 

  (i) in any business that is competitive or likely to be competitive with any
part of the Business;         (ii) in any contract entered into by the Company
or any other contract for the provision of finance, goods, services or other
facilities to or by the Company, or in any way relating to the Company or any of
the activities or Business.

 

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9.5. There is no Indebtedness, whether by way of borrowings, outstanding
Liabilities (whether contingent or otherwise), trade debts or howsoever
otherwise owed or payable by the Company to any Related Party, or by any Related
Party to the Company.     9.6. There are no subsisting contracts or arrangements
entered into by the Company which contravene Sections 295 or 297 of the
Companies Act, 1956 (or corresponding provision of the Companies Act, 2013).    
9.7. The Company does not own, nor has agreed to acquire or dispose, any Asset,
nor are receiving or have agreed to receive or provide any services or
facilities (including, without limitation, the benefit of any license or
agreements), the consideration for the acquisition or provision of which was or
will be in excess of its market value, or otherwise than on an arm’s length
basis.     9.8. No corporate guarantees have been issued by the Company for the
benefit of any of its Related Parties and there are no reimbursement
arrangements/agreements between the Company and any of the Related Parties in
relation to corporate guarantees issued by such related parties for the benefit
of the Company or otherwise.     10. EMPLOYEES     10.1. In this paragraph 10,
“employee” includes without limitation, a Person whose services are provided
under a consultancy or service Contract or any officer or employee of the
Company whether or not he has entered into (or, where the employment has ceased,
worked under) a Contract of employment with the Company.     10.2. Except as per
the requirements of Law, there are no other benefits that are being provided to
the employees and/or the workers including deferred compensation agreement,
incentive plan, profit sharing plan, retirement agreement or other similar
employee compensation agreements. The Company does not have any employee stock
option plans or schemes for its employees.     10.3. The Company has entered
into employment agreements with the Promoters and all employees.     10.4. All
employee costs are reflected in the audited financial statements and no employee
receives or is entitled to receive any compensation, salary, benefits,
(employment-related) performance incentive from anyone other than the Company.  
  10.5. Other than such payments made by the Company in relation to its
employees as per applicable law, the Company has not entered into any agreement
or arrangement for the payment towards any pensions, allowances or other sums or
benefits on retirement, death, work incapacity, illness or disablement for the
benefit of the Promoters or the present or former Directors or Shareholders of
the Company or any of their Relatives, save and except as contained in the
relevant employment agreements.

 

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10.6. The Company has not engaged in any unfair labour practices and the Company
and/or the Promoters have not received any notice from any member of key
management who (i) has intimated their intention to terminate his or her
employment or arrangement with the Company, or (ii) subsequent to the date of
the financial statements, has already terminated his or her employment or
arrangement with the Company     10.7. All subsisting Contracts of employment to
which the Company is a party, and all subsisting Contracts for the provision of
any personnel or consultancy services to the Company, are terminable by the
Company, in case of employees on probation on 1 (one) months’ notice or less
without compensation or severance pay and, in case of permanent employees on 1
(one) month’ notice without compensation or severance pay.     10.8. No
proposal, assurance or commitment has been communicated since the date of
incorporation of the Company regarding any change to the terms of employment or
working conditions or regarding the continuance, introduction, increase or
improvement of any benefit, custom or any discretionary arrangement or practice
in relation to terms of employment.     10.9. No loans and advances, guaranteed
and financial assistance has been made by the Company to its respective
employees or to the employees of its related parties.     10.10. There is no
existing trade union in the Company. The Company has no collective bargaining
agreements, arrangements and other similar understanding with any staff
association or other body representing the employees or workmen of the Company
and no labour union has requested or sought to represent any employees, workmen,
representatives or agents of the Company. There have neither been any strikes or
other labour disputes involving the Company nor are such strikes or similar
actions pending or threatened by or against the Company.     10.11. None of the
Company’s employees or workers are obligated under any contract, or subject to
any Law, judgment, decree or order of any Governmental Authority, that would
interfere with the use of his or her best efforts to promote the interests of
the Company or that would conflict with the Business.     10.12. Except as per
the requirement of applicable Law there are no bonus, retirement, death,
disability, profit sharing, incentive compensation, pension, gratuity,
superannuation, employees provident fund, employees deposit linked insurance, or
other employee benefit plans or arrangements (the “Benefit Plans”) of any nature
whatsoever offered or given by the Company to any of its present or past
employees.     10.13. The Company and the contractors appointed by it are in
compliance with all applicable Laws relating to engagement of contract
labourers.     10.14. The Company is not under any obligation, statutory or
otherwise, to employ, hire contract labourers or contract workmen for conducting
its Business.     10.15. The Company has not made any commitment to any public
agency, labour organization or any other party relating to the number of the
employees or to future (collective or individual) dismissals.

 

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10.16. Disputes

 

  (a) The Company and the Promoters have in all respects complied with their
obligations (including under applicable Law and the Benefit Plans) to their
employees and former employees and no claim in relation to employees of the
Company or former employees has been made against the Company, or against any
Person whom the Company is liable to indemnify.         (b) No employee of the
Company has been involved in any criminal Action relating to the Business or
activities of the Company.         (c) Neither the Company nor any Person for
whom it may be vicariously liable, is or has been engaged (in relation to, or on
behalf of the Company) in any prosecution, litigation, arbitration proceedings
or administrative or governmental investigation or challenge as plaintiff,
defendant, third-party or in any other capacity. There are no such matters
pending or, threatened in respect of which verbal or written communication has
been given or received by or against the Company. There are no facts or disputes
which may or might give rise to any such matters         (d) There is no
allegation or complaint or report that the Business has been conducted otherwise
than in accordance with applicable Law.         (e)  The Company is not subject
to any order, waiver, declaration, exemption or notice granted or issued by any
governmental, administrative or regulatory body in relation to the Company
labour and employment practices.

 

10.17. Directors

 

  (a) Except as provided in this Agreement, all the Directors may be removed
from office upon notice and without the payment of any indemnity or other
compensation whatsoever by the Company.         (b) All the Directors (past and
present) have been legally and validly appointed and all requisite filings in
this regard have been made with the relevant governmental, administrative or
regulatory body.         (c) None of the Directors (past or present) are or have
been interested in any Contract entered into by the Company.         (d) The
Board is presently constituted of [insert details].         (e) No Director has
furnished any personal guarantee or indemnification for or on behalf of the
Company and vice versa.         (f) Other than the Promoters, no other Person
has any right to appoint or nominate any Director.

 

10.18. None of the Directors are directors on the board of any other company or
have any management responsibilities in any other company.

 

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10.19. The Company has, in relation to each of its employees/workers and (so far
as relevant) to each of its former employees/workers:

 

  (a) complied in all respects with its obligations under relevant employment
Laws, employment practices, codes of conduct, orders and all other statutes and
regulations relevant to its relations with each employee/workers or the
conditions of service of the employee/worker and has maintained adequate and
suitable records regarding the service of the employee/worker;         (b)
discharged or adequately provided for in all respects its applicable obligations
to pay all outstanding salaries, wages, commissions, gratuity payments,
provident fund payments, bonuses, overtime pay, holiday pay, sick pay, leave
encashments and other benefits of or connected with employment up to the date of
this Agreement; and         (c) complied in all respects with all its
obligations concerning the health and safety at work of each of the
employees/worker and has not incurred any liability to any employee/worker in
respect of any accident or injury, which is not fully covered by insurance.

 

11. LEGAL MATTERS     11.1. Neither the Company nor the Promoters have,
committed nor there is a legal or factual basis for:

 

  (a) any criminal or unlawful act involving dishonesty; or         (b) any
breach of trust; or         (c) any breach of contract or statutory duty.

 

11.2. No Claim for Damages or compensation has been made by any Person against
the Company or the Promoters, which will adversely affect the transactions
contemplated by the Agreement.     11.3. The Company is not a party to (or
involved in) any agreement or course of conduct that infringes the Competition
Act, 2002, which may give rise to a claim by a third party (including the
Promoters).     11.4. All the Promoters and directors of the Company are Indian
residents only.     11.5. Neither the Promoters nor any of the Company’s
Directors is (i) an employee of any Indian government body or (ii) an official
of any Indian political party or a candidate for political office in India.    
11.6. No Indian government authority has any ownership or other financial
interest in the Company, directly or indirectly.     11.7. Other than the
applicable fees, none of the Promoters, and none of the Company’s Directors or,
employees (i) has made any payment (or given anything of value) to any official
or employee of any Indian governmental, administrative or regulatory body, or
any candidate for political office in India, in order to obtain, retain, or
direct business to the Company or to gain the approval of any governmental,
administrative or regulatory body for the business of the Company or (ii)
reimbursed, directly or indirectly, any third party for any such payment , or
(iii) faced any other allegation involving bribery for the business of the
Company.

 

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11.8. None of the Promoters of the Company or Directors has been prosecuted, or
has been convicted in any part of the world of any criminal offence (other than
a minor traffic offence) or have any unsatisfied order or judgment against them,
or have been adjudged bankrupt, in relation to the Company.     11.9. None of
the Promoters or any person Controlled by the Promoters or Directors has any
financial interest in any other company or business that is in competition with
the Company.     12. LITIGATION     12.1. There are no actions, suits, claims,
notices (including in relation to any investigation or inquiry by any
governmental, administrative or regulatory body) proceedings or investigations
pending or threatened against or by the Warrantors at Law alleging breach or
non-compliance of any applicable Law by the Company and the Promoters, in equity
or otherwise, and whether civil or criminal in nature in, before, or by, any
court, commission, arbitrator or Governmental Authority, and there are no
pending, outstanding or threatened judgments, decrees or orders of any such
court, commission, arbitrator or Governmental Authority:

 

  (i) by, or against the Company, or         (ii) in respect of which the
Company is liable to indemnify or compensate any Person; or         (iii) by,
against or affecting any past or present officer, Director or employee of the
Company or to which any past or present officer, Director or employee of the
Company is a party, in connection with such officer’s, Director’s or employee’s
relationship with, or actions taken or omitted to be taken on behalf of the
Company; or         (iv) for the amalgamation, or reconstruction of the Company,
or for any arrangement or composition with or assignment for the benefit of, all
or any class of creditors of the Company.

 

12.2. No distress, restraint, charging order, garnishee order, execution or
other process which a court or a similar body may use to enforce payment of a
debt has been levied or applied for in respect of the whole or any part of the
Assets.     12.3. No order has been made, petition presented, resolution passed
or meeting convened for the Winding Up (or other process whereby the Business is
terminated or the Assets of the Company are distributed amongst their creditors
and/or shareholders or other contributories) of the Company, and/or for an
administration order against the Company and there are no cases or proceedings
under any applicable insolvency, reorganisation, or similar Laws concerning the
Company. The Company is not insolvent or bankrupt, or unable to pay its debts as
they fall due. No receiver, liquidator, trustee, administrator, custodian or
similar official has been appointed in respect of the whole or any part of the
Business or Assets of the Company no step has been taken for, or with a view to
the appointment of such a Person.     12.4. The Company is not involved whether
as plaintiff or defendant or other party in any demand, claim, legal action,
proceeding, suit, litigation, prosecution, investigation, enquiry or arbitration
and no such demand, claim, legal action, proceeding, suit, litigation,
prosecution, investigation, enquiry or arbitration is pending or, threatened by
or against the Company (or any Person for whose acts or defaults the Company may
be vicariously liable).

 

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12.5. There is no governmental action, court order or proceeding or, any Action
pending proposed to be initiated which prohibits the consummation of the
transactions contemplated by this Agreement or adversely affects in any respect
Acquirer’s rights to exercise full rights of ownership of Securities currently
held or to be held immediately after Closing or Acquirer’s rights under this
Agreement.     13. INSOLVENCY     13.1. Neither the Company nor any of the
Assets is involved in or subject to any insolvency proceedings. There are no
circumstances which require or would enable any insolvency proceedings to be
commenced or initiated against the Company or any of the Assets. No act of
insolvency has occurred in relation to the Promoters or the Company.     13.2.
Neither the Promoters nor any of their assets or properties is involved in or
subject to any insolvency proceedings, and there are no circumstances which
require or would enable any insolvency proceedings to be commenced or initiated
against the Promoters or their assets or properties.     13.3. There are no
transactions (including those contemplated by this Agreement) capable of being
set aside, stayed, reversed, avoided or affected in whole or in part by any
insolvency proceedings (whether or not such insolvency proceedings have
commenced) in relation to the Company or any of its Assets, the Promoters and/or
any of their assets or properties, whether as transactions at undervalue, in
fraud of or against the interests of creditors, preferences or similar concepts
or legal principles.     14. INSURANCE     14.1. The Company has insured its
Assets and the Business in accordance with prudent business practices against
comprehensive liability, fire, earthquake and other appropriate insurance
coverage.     14.2. In respect of all insurances relating to the Company or its
Assets (i) all premiums have been duly paid to date; (ii) all the policies are
in full force and effect and no act, omission, misrepresentation or
non-disclosure by or on behalf of the Company has occurred which makes any of
these policies voidable, nor, has there been any breach of the terms, conditions
and warranties of any of the policies that would entitle insurers to decline to
pay all or any part of any Claim made under the policies; and (iii) no Claim is
outstanding and no circumstances exist which are likely to give rise to any
Claim.     15. ASSETS AND PROPERTIES     15.1. The Company does not own any
immovable property.     15.2. The Company Real Property is exclusively occupied
and used by the Company in the carrying on of the Business and in accordance
with applicable Law and the terms and conditions of each Company Real Property
Contract, as the case may be.

 

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15.3. The Company is fully and solely entitled to the Company Real Property and
such right, title and interest is evidenced by a duly executed written Contract
or instrument (a “Company Real Property Contract”) that complies with all
applicable Laws and has been duly stamped and registered in accordance with
applicable Law. Each aforesaid Contract is valid, binding, subsisting and in
full force and effect, and each Contract has not expired and/or been terminated
by the Company and the Company has not breached or is not liable to pay any
penalties or liquidated damages in accordance with the provisions of each
Company Real Property Contract.     15.4. All significant records and
information belonging to the Company or relating to its Business (whether or not
held in written form) are in the possession and under the control of the Company
and subject to unrestricted access by it.     15.5. All Assets of the Company
including all debts due to the Company which are included in the audited
financial accounts of the Company or have otherwise been represented as being
the property of or due to the Company and/or being used by the Company for the
purposes of their business are the absolute property of the Company, and/or is
being leased or licensed to the Company.     15.6. All payments required to be
made by the Company with respect to the Company Real Property have been duly
made by or on behalf of the Company, and there are no arrears or outstanding
Liabilities of the Company in respect of any of the Company Real Property, other
than as set out in the relevant Company Real Property Contract.     15.7.
Movable Assets.

 

  (a) None of the movable Assets are used or held by the Company under any
agreement for lease, hire, hire purchase, retention of title or sale on
conditional or deferred terms. Each of the movable Assets are held by the
Company under a valid, binding and subsisting Contract or instrument and free
and clear of any Encumbrance, and the Company enjoys peaceful and undisturbed
possession of each of such movable Assets.         (b) The movable Assets
disclosed in the financial statements comprise all the movable assets of the
Company.         (c) The Company has not granted to any Person, the right to
acquire, use or occupy any movable Assets or entered into any Contract to sell,
transfer, Encumber, or otherwise dispose of or impair the whole or any part of
its right or interest in or to any of the movable Assets.

 

15.8. Computer Systems, Data and Records

 

  (a) All the records and systems (including but not limited to computer
systems) and all data and information of the Company is recorded, stored,
maintained and/or operated or otherwise held exclusively by the Company and is
not wholly or partly dependent on any facilities or means (including any
electronic, mechanical or photographic process, computerised or otherwise) which
are not under the exclusive ownership and control of the Company or licensed to
the Company.         (b) The computer and telecommunication facilities, the
software and databases used by the Company is adequate for the operational and
business requirements of the Company and adequate back-up procedures and data
protection procedures have been implemented and are currently complied with.

 

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16. INTELLECTUAL PROPERTY     16.1. The Company is the sole and absolute owner
or registered owner, valid licensee, or authorized user (as the case may be) of
its trademarks, trade names, logos, trade secrets, proprietary information and
knowledge, technology, databases, copyrights (if any), licenses and, franchisees
and formulas, formulations or rights with respect thereto necessary for its
Business as is now being operated (“Intellectual Properties”).     16.2. The
Company does not carry on Business under any name other than its corporate name.
    16.3. The past or present use of the Intellectual Properties currently owned
or used as is being used by the Company or its licensee, or as contemplated by
the Business Plan does not infringe the intellectual property rights of any
other. There are no outstanding claims against the company or any licensee of
the Company against such infringement.     16.4. All rights in all Intellectual
Properties, confidential business information and trademarks owned or otherwise
required for the Business as currently conducted (including applications for
registration of rights over such intellectual property) are in the name of,
vested in or validly granted to the Company and no other person, including the
Promoters, have any right over such intellectual property and all renewal fees
and all renewal fees and steps required for their maintenance or protection have
been paid and taken.     16.5. The Company has not transferred, sold, licensed
or otherwise alienated or disposed of any of its Intellectual Property Rights or
permitted any Intellectual Property Rights to expire. All the intellectual
property which is owned by the Company is free and clear of any lien,
encumbrance or claim of any third party. The Company has not deposited any of
its intellectual property in an escrow nor has it entered into any contract or
arrangement with any Person under which it may be required to deliver any
proprietary intellectual property to any Person.     16.6. The Company is not in
breach of any licence or any other agreements relating to any intellectual
property that the Company owns or uses as part of its Business, to which
agreement the Company is a party (whether as a licensee or a licensor) and which
affects the Business and, no counter party to such agreement is in breach of any
such agreement.     16.7. To the extent any of the intellectual property
developed and designed by the Company is a modification of, is derived from, or
depends on, third-party owned software or general public licence or other open
source code, the Company has fully complied with the terms and conditions of all
terms and licenses that govern the use of such third-party owned software or
general public licence or other open source code and no disclosure of the
proprietary intellectual property, including the source code of the proprietary
software, is required, or has been disclosed as a result of using third-party
owned software or general public licence or other open source software. The open
source software, as used by the Company, is not modified or distributed by the
Company in any manner whatsoever. No disclosures or additional requirements are
required to be fulfilled by the Company as a result of the transactions
contemplated under this Agreement.

 

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16.8. The Company complies with all applicable data protection laws.     16.9.
The Company has not permitted or granted any rights to any third party or
Related Party to use the Company’s intellectual property, outside the ordinary
course of business and subject to standard license arrangements.     16.10.
There is no unauthorized use or infringement by (a) any employee of the Company;
or (b) any Person, of any of the Intellectual Property Rights owned or used by
the Company.     16.11. The Company has not committed any act or failed to
commit any act which would jeopardize the validity or subsistence of any
Intellectual Property Rights licensed to the Company. None of such licenses is
subject to or contains any restriction which adversely affects the Company’s
ability to use the intellectual property for the purpose of its Business and the
Company’s ability to use any of such intellectual property will not be affected
by the consummation of the transactions contemplated under this Agreement    
16.12. Secret or confidential information or property

 

  (a) The Company and the Promoters have not at any time (except (A) in the
ordinary and proper course of the Business and subject to a written obligation
of confidentiality, or (B) to professional advisers, Directors, employees,
officers or agents of the Company and subject to a written obligation of
confidentiality on such professional advisors, Directors, employees, officers or
agents or (C) as required by applicable Law) breached any of its confidentiality
obligations under a Contract or otherwise or disclosed to any Person:

 

  (i) any secret, proprietary or confidential information or property of the
Company or relating to the customers, officers, Directors, employees or agents
of the Company; or         (ii) any other information relating to the Business
or affairs of the Company, the disclosure of which would or is likely to, cause
a Material Adverse Effect.

 

  (b) The Company is not a party to any Contract as to confidentiality of
information which is void or unenforceable (whether in whole or in part).      
  (c) The Company and the Promoters are not aware of any breach of such
confidentiality obligations by any third party.

 

16.13. There are no legal proceedings including any litigation, arbitration,
infringement and/or passing off actions filed against the Company and no
litigation, arbitration, infringement and/or passing off actions is proposed
and/or threatened to be filed against the Company by any Person and the Company
has not received any cease and desist notice so far and is not aware of any
circumstance under which such a notice may be issued. The Company has not
received any notice of infringement of or conflict with, asserted rights of
others nor is any royalty payable by the Company with respect to its
Intellectual Property Rights.     17. GENERAL: All the information set out in
this Schedule to this Agreement is true, accurate and correct in all respects
and no facts or information have been omitted there from that would make such
information untrue, inaccurate or misleading. There are no facts or
circumstances in relation to the Business, the Company and the Promoters or the
transactions contemplated in this Agreement which have not been fully and fairly
disclosed in writing and which if disclosed might reasonably have been expected
to affect the decision of Acquirer (in consultation with their respective
professional advisors) to enter into this Agreement or the Transaction
Documents.

 

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SCHEDULE V: FORM OF DISCLOSURE SCHEDULE

 

Date: 30 June 2019

 

To,

 

mPhase Technologies, Inc.

9841 Washingtonian Blvd, Suite 390

Gaithersburg MD 20878 USA

 

Kind attention: Mr. Anshu Bhatnagar, CEO

 

Dear Sirs,

 

Sub: Disclosure Schedule

 

I refer to the Share Purchase Agreement dated 30 June, 2019, in relation to sale
and purchase of the Equity Shares to mPhase Technologies, Inc. (hereinafter the
“Agreement”).

 

Capitalised terms used herein and not otherwise defined shall have the
respective meanings ascribed to such terms in the Agreement, unless the context
other requires.

 

The following are the exceptions and disclosures to the warranties as referred
to in Agreement. The Clause numbers in this Disclosure Schedule correspond to
the relevant Clause numbers of the warranties mentioned in the Agreement.

 

Clause No. Heading Disclosure                  

 

Yours sincerely,

 

Signed and delivered for and on behalf of Signed and delivered for and on behalf
of Alpha Prediction LLP [Promoters/Sellers]           By:     By:
                       Name:     Name: [●] Title: Director   Title: [●]        
        Power of Attorney dated [●] holder on behalf of the [Promoters/Sellers].

 

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