Exhibit 10.2

SHARE PURCHASE AGREEMENT

BETWEEN

THE PERSONS LISTED IN SCHEDULE 1

IP HOLDING ASIA SINGAPORE PTE. LTD.

AND

INTERNATIONAL PAPER COMPANY

 

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SHARE PURCHASE AGREEMENT

This Share Purchase Agreement (“Agreement”) is made and entered into on this
24th day of March, 2011 at Mumbai.

BETWEEN

THE PERSONS LISTED IN COLUMN 2 OF SCHEDULE 1 (hereinafter referred to,
collectively as the “Sellers”, and individually, as a “Seller”, which expression
shall, unless repugnant to the context or meaning thereof, mean and include
their respective successors and permitted assigns);

IP HOLDING ASIA SINGAPORE PTE. LTD., a company incorporated under the laws of
Singapore and having its registered office at 1 Robinson road, #17-00, AIA
Tower, Singapore (048542) (hereinafter referred to as the “Purchaser”, which
expression shall, unless repugnant to the context or meaning thereof, mean and
include its successors and permitted assigns);

 

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LOGO [g169797ex10_2-65a.jpg] (Nature of Document)   

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(Registration Details)

if Registrable Name of S.R.O.

   Registrable / Non Registrable LOGO [g169797ex10_2-65c.jpg] (Franking Unique
No.)    -

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(Company Description in Brief)

   LOGO [g169797ex10_2-65e.jpg] (Consideration Amount)   

LOGO [g169797ex10_2-65f.jpg] (Stamp

Purchasers Name)

  

LOGO [g169797ex10_2-65g.jpg] (Name of the

other Party)

  

LOGO [g169797ex10_2-65h.jpg] (If Through Name

& Address)

  

LOGO [g169797ex10_2-65i.jpg] (Stamp Duty Amt.)

LOGO [g169797ex10_2-65j.jpg] (in words)

  

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(Authorised Person’s Full Signature &

Seal)

   THE KAPOL CO-OP. BANK LTD. FORT BRANCH    (AUTHORISED SIGNATORY)

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AND

INTERNATIONAL PAPER COMPANY, a company incorporated under the laws of United
States of America and having its principal executive office at 6400 Poplar
Avenue, Memphis, TN 38197, U.S.A. (hereinafter referred to as the “Purchaser
Guarantor”, which expression shall, unless repugnant to the context or meaning
thereof, mean and include its successors and permitted assigns).

The Purchaser, the Sellers and the Purchaser Guarantor shall hereinafter
collectively be referred to as the “Parties” and individually referred to as a
“Party”.

WHEREAS

 

A. The Andhra Pradesh Paper Mills Limited is a public listed company
incorporated under the Companies Act, 1956 and having its registered office at
Rajahmundry, 533105, East Godavari District, Andhra Pradesh, India (the
“Company”). The Company is primarily engaged in the business of the manufacture,
sale and trading of pulp and paper in India (the “Business”).

 

B. The paid up share capital of the Company is INR 397,700,390 divided into
39,770,039 Equity Shares of INR 10 each. The Equity Shares of the Company are
listed on the National Stock Exchange and the Bombay Stock Exchange.

 

C. Each Seller is the legal and beneficial owner of such number of Sale Shares
(as defined below) of the Company as indicated against its name in column 8 of
Schedule 1. The Sellers collectively hold 21,260,008 (Twenty One million two
hundred sixty thousand and eight) Sale Shares representing 53.46% (Fifty three
point four six percent) of the issued and subscribed share capital of the
Company of which 1,499,330 (One million four hundred ninety nine thousand three
hundred and thirty) shares are Pledged Shares.

 

D. The Sellers are desirous of selling, and the Purchaser is desirous of
acquiring the Sale Shares (as defined below) on the terms and conditions set out
hereunder.

 

E. As a condition and inducement to the Purchaser entering into this Agreement
and incurring the obligations set forth herein, the Sellers have executed, on
the date hereof, the Non-Compete Agreement (as defined below) in which they have
furnished certain non-competition undertakings to the Purchaser and the
Purchaser Guarantor.

 

F. The Sellers, the Purchaser, the Purchaser Guarantor and the Escrow Agent have
executed, on the date hereof, the Cash and Securities Escrow Agreement and the
Indemnity Escrow Agreement which sets out the manner in which the Escrow
Arrangement (all terms defined below) shall be operated.

 

G. The Parties hereto are desirous of entering into this Agreement to record
their mutual rights and obligations in relation to the purchase of the Sale
Shares by the Purchaser.

NOW THEREFORE, in consideration of the foregoing and the respective covenants,
agreements, representations and warranties set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, THE PARTIES HERETO AGREE AS FOLLOWS:

 

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I. DEFINITIONS AND INTERPRETATION

 

1.1 Definitions

Unless the context otherwise requires, the following capitalized terms shall
have meanings as defined herein:

“Act” means the Companies Act, 1956 and any amendments thereto or any other
succeeding enactment for the time being in force.

“Affiliate”, in relation to any Party,

 

  (a) being a corporate entity, shall mean any entity, which controls, is
controlled by, or is under the common control of that Party. The term ‘control’
shall mean the beneficial ownership directly or indirectly of more than 50% of
the voting securities of such entity or control of the majority of the
composition of the board of directors or power to direct the management or
policies of such entity by contract or otherwise. The Company shall not be
deemed to be an affiliate of the Sellers;

 

  (b) being an individual, means the parents, spouse or children or any entity
which is controlled by such individual or by such individual’s parents, spouse
or children. The term ‘control’ shall have the meaning as stated in sub-clause
(a) above.

“Agreed Claim” has the meaning ascribed to it in Clause 10.6.

“Articles” means articles of association of the Company.

“Applicable Law” means any applicable national, foreign, provincial, local or
other law, regulations, administrative orders, ordinance, constitution, decree,
principles of common law, governmental policies, statute or treaty, and shall
include notifications, regulations, policies, guidelines, circulars, directions,
directives and orders of any Governmental Authority, statutory authority, court,
tribunal having jurisdiction over the Parties or recognized stock exchange.

“Board” means the board of directors of the Company.

“Business” means the business of the Company as described in Recital A.

“Business Day” means a day, not being a Saturday, Sunday or a public holiday, on
which banks are open for business in Singapore, Mumbai and Kolkata, India and,
in the context of any payments being made to or from a bank in a place other
than India, in such other place.

“CCI” has the meaning ascribed to it in Clause 4.1(c).

“Cash and Securities Escrow Agreement” means the agreement entered into between
the Parties hereto and the Escrow Agent on the date hereof in relation to the
Pre-Closing Escrow Arrangement.

“Certificate” has the meaning ascribed to it in Clause 10.4.

 

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“Claim” means a claim for indemnification by the Indemnified Party against the
Indemnifying Parties pursuant to Clause 10.1.

“Closing” means the completion of the events specified in Clause 7 below.

“Closing Date” means the sixth Business Day after the date on which the Merchant
Banker shall have issued a certificate, as described in Regulation 23 (6) of the
Takeover Code, confirming that all obligations of the Purchaser under the
Takeover Code arising as a result of the execution of this Agreement have been
fulfilled, or any other Business Day agreed by the Parties in writing for the
Closing to occur.

“Company” has the meaning ascribed to it in Recital A;

“Conditions Precedent” has the meaning ascribed to it in Clause 4.1.

“Consideration” means the sum of the Purchase Price and the Non-Compete Fee.

“Consideration Escrow Account” means the bank account to be opened by the Escrow
Agent at its Mumbai branch in India to be operated in accordance with this
Agreement and the Cash and Securities Escrow Agreement.

“Consideration Escrow Transfer Instructions” means the irrevocable,
unconditional standing instructions from the Sellers to the Sellers' Bank in
respect of the Sellers’ Designated Bank Account, in a form reasonably acceptable
to the Purchaser, to effectuate the transfer of the Consideration to the
Consideration Escrow Account in accordance with Clause 2.2.2(iii)(B)(b).

“DEG” means Deutsche Investitions-und Entwicklungsgesellschaft Gmbh.

“Delivery Instruction Slip” means a signed, irrevocable and unconditional
delivery instruction slip (effective upon Closing) to be furnished to the
Relevant Seller DP by each Seller to transfer the Sale Shares in dematerialised
form held by such Seller to the Purchaser’s account maintained with the
Purchaser DP (details of such account maintained with the Purchaser DP have been
provided by the Purchaser to the Sellers) by debiting such Sale Shares from the
account of that Seller maintained with the Relevant Seller DP and crediting the
same to the account of the Purchaser maintained with the Purchaser DP.

“Disclosure Schedule” means the schedule attached hereto and marked as Schedule
6, which are exceptions to the Representations and Warranties of the Sellers set
out in Schedule 5 prepared and signed by the Sellers and delivered to Purchaser
simultaneously with the execution hereof.

“Encumbrances” means;

 

  (a) any and all mortgage, charge (whether fixed or floating), pledge, lien,
hypothecation, assignment, deed of trust, title retention, security interest or
other encumbrance of any kind securing, or conferring any priority of payment in
respect of, any obligation of any Person, including 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,

 

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  (b) any proxy, power of attorney, voting trust agreement, interest, option,
right of first offer, refusal or transfer restriction in favour of any Person,
and

 

  (c) any adverse claim as to title, possession or use.

“Environmental Claim” means (a) a Claim pursuant to Clause 10.1.5 or (b) a Claim
pursuant to Clause 10.1.1 in respect of a breach of the Representations and
Warranties made by the Sellers in terms of paragraph 2.12 of Schedule 5.

“Equity Share” means the equity shares of the Company, each having a par value
of INR 10 each.

“Escrow Agent” means Citibank N.A., Mumbai.

“Escrow Arrangement” has the meaning ascribed to it in Clause 2.2.1.

“Escrow Documents” means

 

  (i) the Delivery Instruction Slip,

 

  (ii) a validly stamped and executed irrevocable power-of-attorney in the form
set out in Annexure 1 hereto from each of the Sellers in favour of and
authorising the Purchaser and/or the Purchaser’s nominee, to:

 

  (a) transfer the Sale Shares to the Purchaser and carry out other matters
necessary and incidental thereto; and

 

  (b) execute and/or revalidate share transfer forms in respect of the Sale
Shares in physical form on behalf of the Sellers that hold these Sale Shares,
and

 

  (c) to fill in details and duly complete the standing instructions relating to
the Sellers’ Designated Bank Account and authorise the instructions to be used
to transfer:

 

  (i) the Consideration into Consideration Escrow Account in accordance with the
provisions of Clause 2.2.2(iii)(B)(b); and

 

  (ii) the Security Deposit into the Indemnity Escrow Account or Security
Deposit Account, as the case may be, at Closing in accordance with the
provisions of this Agreement,

 

  (iii) signed and valid share transfer forms, endorsed by the Registrar of
Companies in relation to these Sale Shares in physical form,

 

  (iv) Form FC-TRS, duly signed by an authorised signatory of the Sellers, and
relevant and available supporting documents, including the Sellers’ duly signed
consent letters (all in quadruplicate),

 

  (v)

standing instructions from the Sellers to the Escrow Agent in respect of the
Sellers’ Designated Bank Account, in a form reasonably acceptable to the
Purchaser, to effectuate

 

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the transfer of the amount as described in Clause 2.2.2(iii)(B)(b), Clause
2.2.4(a) and Clause 2.2.4(b)(V) at Closing, and

 

  (vi) undated letters of resignation from Mr L N Bangur, Mrs Alka Bangur and Ms
Sheetal Bangur as directors of the Company effective as on the Closing.

“Financial Year” means the period between 1 April of any year till 31 March of
the succeeding year.

“Governmental Authority” means any governmental or statutory authority,
government department, agency, commission, board, tribunal or court or other
entity authorized to make or interpret or adjudicate upon laws, rules or
regulations or pass directions having or purporting to have jurisdiction or any
state, municipality, district or other subdivision thereof.

“IFC” means the International Finance Corporation.

“Indemnity Escrow Arrangement” means the escrow arrangement described in Clause
2.2.3.

“Indemnity Escrow Account” means the bank account to be opened by the Escrow
Agent at its Mumbai branch in India, to be operated in accordance with the terms
of the Indemnity Escrow Agreement for the benefit of the Purchaser.

“Indemnity Escrow Agreement” means the agreement to be entered into between the
Sellers, the Escrow Agent and the Purchaser in relation to the Indemnity Escrow
Account;

“Indemnity Escrow Transfer Instructions” means the irrevocable, unconditional
standing instructions from the Sellers to the Sellers’ Bank in respect of the
Sellers’ Designated Bank Account, in a form reasonably acceptable to the
Purchaser, to effectuate the transfer of the Security Deposit forthwith upon
receipt of the Consideration in the Sellers’ Designated Bank Account, to the
Indemnity Escrow Account or the Security Deposit Account as contemplated under
Clause 2.2.4(a) and Clause 2.2.4(b)(V).

“Indemnified Party” and “Indemnified Parties” have the meaning ascribed to it in
Clause 10.1.

“Indemnifying Party” and “Indemnifying Parties” have the meaning ascribed to
them in Clause 10.1.

“Insider Trading Regulations” means the SEBI (Prohibition of Insider Trading)
Regulations, 1992 and any amendment thereto or any other succeeding enactment
for the time being in force.

“INR” means Indian Rupees.

“Key Employees” means all directors, managers and such other employees who
occupy the Key Positions in the Company.

“Key Positions” means the key executive positions in the Company, including the
following:

 

  (a) Managing Director & Chief Executive Officer;

 

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  (b) Director (Operations);

 

  (c) All Senior Vice Presidents;

 

  (d) All Vice Presidents;

 

  (e) All Associate Vice Presidents;

 

  (f) All General Managers; and

 

  (g) Any other position reasonably considered material to the Business.

“Lenders” means the banks/financial institutions set out in Schedule 4, who have
provided loans/credit facilities to the Company.

“Long Stop Date” means 1 December, 2011 or such other extended date as the
Sellers may notify in writing not beyond 1 April 2012.

“Losses” means actual and direct losses, claims, costs, liabilities damages and
expenses including, reasonable attorney’s fees and expenses.

“Material Adverse Effect” means any adverse effect, other than in the ordinary
course of business, on the Business, of the Company, provided that no material
adverse effect shall arise unless it results in a decline in the net assets of
the Company as at 31 March 2011 by over 35% or a reduction in the market
capitalization of the Company which results in the market capitalization of the
Company being less than 50% of the market capitalization of the Company
calculated based on the 26 (Twenty six) week average share price of the Company
prior to the date of this Agreement and it is not caused by:

 

  (i) changes in interest rates, exchange rates or securities or commodity
prices or in economic, financial or market conditions generally;

 

  (ii) changes in conditions generally affecting the industry in which the
Company operates;

 

  (iii) changes in accounting practices;

 

  (iv) any transaction contemplated by any of the Transaction Documents or any
change in control resulting from any such transaction or any enforcement action
under the Financing Documents or repayment of any indebtedness under the
Financing Documents;

 

  (v) any act or omission of any Purchaser Group Member;

 

  (vi) any act or omission of the Company or at the request or with the consent
of the Purchaser or as required to be done under the terms of any of the
Transaction Documents;

 

  (vii) any failure by the Company to achieve any earnings, other financial
projections or forecasts; or

 

  (viii) any matter set forth in the Disclosure Schedule.

“Merchant Banker” means Lazard India Private Limited.

“Memorandum” means memorandum of association of the Company.

“Net Debt” means the sum of secured loans and unsecured loans, reduced by cash
and bank balances, as reported in the audited financial statements of the
Company for the Financial Year

 

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ending 31 March, 2011 according to the general accepted accounting principles
provided that, for the purposes of this definition, the term ‘cash and bank
balances’ shall include all fixed deposits and liquid investments with a
maturity of 3 months or less.

“Non-Compete Agreement” means the Non-Compete Agreement and Business Waiver
Agreement to be entered into on or about the date hereof between the Sellers,
the Purchaser and the Purchaser Guarantor.

“Non-Compete Fee” has the meaning ascribed to it in Clause 3.2.

“Person” shall include an individual, an association, a corporation, a
partnership, a joint venture, a trust, an unincorporated organisation, a joint
stock company or any other entity or organisation, including a government or
political subdivision, or an agency or instrumentality thereof and/or any other
legal entity.

“Pledged Shares” means the 1,499,330 (One million four hundred ninety nine
thousand three hundred and thirty) Equity Shares pledged by Digvijay Investments
Limited, as set forth in Schedule 3, as security for the loans granted by IFC
and DEG to the Company pursuant to the Share Pledge Agreement.

“Pre-Closing Escrow Arrangement” means the escrow arrangement described in
Clause 2.2.2.

“Purchase Price” has the meaning ascribed to it in Clause 3.1.

“Purchaser Group” means the Purchaser and the Purchaser Guarantor, collectively,
each being a “Purchaser Group Member”.

“Purchaser DP” means Citibank, N.A. at Mumbai, having its registered office at
Trent House, 3rd Floor, G Block, Plot No. 60, Bandra-Kurla Complex, Bandra
(East), Mumbai - 400 051, or such other institution indicated in writing by the
Purchaser.

“Relative” has the meaning ascribed to it under Section 6 of the Act.

“Relevant Seller DP” means, with respect to a Seller, common depository
participant of the Sellers, notified by the Sellers in writing to the Purchaser;

“Representations and Warranties” means the representations and warranties made
by the Sellers in this Agreement, and in particular, Clause 9 of this Agreement
and Schedule 5 of this Agreement.

“Sale Shares” means the 21,260,008 (Twenty One million two hundred sixty
thousand and eight) Equity Shares held by the Sellers, particulars of which are
set out in Schedule 1.

“SEBI” means the Securities and Exchange Board of India.

“Security Deposit” means the amount of INR 700,000,000 to be deposited by the
Sellers (out of the Purchase Price) in the Indemnity Escrow Account or Security
Deposit Account in accordance with the provisions of Clause 7.3.4.

 

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“Security Deposit Account” means the bank accounts) to be opened by the Sellers
in the name of the Sellers with the Sellers' Bank pursuant to Clause 2,2.3;

“Sellers’ Bank” means Citibank, N.A. Mumbai or such other common bank as may be
reasonably acceptable to the Purchaser.

“Sellers’ Designated Bank Account” means the bank accounts of the Sellers, each
established with the Sellers’ Bank, details of which are to be provided by the
Sellers as soon as reasonably possible following the date of this Agreement.

“Share Pledge Agreement” means the share pledge agreement dated 20 November,
2008 entered into between Digvijay Investments Limited, the Company and IDBI
Trusteeship Services Limited in relation to the pledge of Equity Shares of the
Company by Digvijay Investments Limited in favour of IDBI Trusteeship Services
Limited beneficially for IFC and DEG.

“Shares Escrow Account” means the accounts in the names of the Sellers to be
opened in accordance with Clause 2.2.2(iii)(A) with the Escrow Agent for the
purpose of depositing the Sale Shares until Closing.

“Target Net Debt” means INR 4,500,000,000.

“Tax” or “Taxation” means all forms of current and deferred taxation, duties,
levies, imposts and social security charges, including without limitation
corporate income tax, wage withholding tax, provident fund, employee state
insurance and gratuity contributions, value added tax, customs and excise
duties, capital tax and other legal transaction taxes, dividend withholding tax,
real estate taxes, other municipal taxes and duties, environmental taxes and
duties and any other type of taxes or duties in any relevant jurisdiction,
together with any interest, penalties, surcharges or fines relating thereto,
due, payable, levied, imposed upon or claimed to be owed in any relevant
jurisdiction by any Tax Authority.

“Tax Authority” means any Governmental Authority or any other authority
whatsoever competent to impose any Tax in India.

“Tax Claim” means (a) a Claim pursuant to Clause 10.1.4 or (b) a Claim pursuant
to Clause 10.1.2 in respect of a breach of the Representations and Warranties
made by the Sellers in terms of paragraphs 2.23 to 2.27 of Schedule 5.

“Takeover Code” means the SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 1997 and any amendment thereto or any other succeeding enactment
for the time being in force.

“Transaction Documents” means this Agreement, the Cash and Securities Escrow
Agreement and the Indemnity Escrow Agreement, the Non-Compete Agreement, and all
other agreements, documents, letters, resolutions, undertakings, confirmations
and written instructions which are ancillary and necessary to effectuate the
transactions contemplated in this Agreement.

 

1.2 Interpretation

Save where the context otherwise requires in this Agreement:

 

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  (a) Words importing persons or parties shall include firms and corporations
and any organization having legal capacity;

 

  (b) Words importing the singular shall include the plural and vice versa;

 

  (c) All references in this Agreement to statutory provisions shall be
construed as meaning and including references to:

 

  (i) Any statutory modification, consolidation or re-enactment (whether before
or after the date of this Agreement) for the time being in force; and

 

  (ii) All statutory instruments or orders made pursuant to a statutory
provision.

 

  (d) Reference to any gender includes a reference to all other genders;

 

  (e) References to the words “include” or “including” shall be construed
without limitation;

 

  (f) The headings and titles in this Agreement are indicative and shall not be
deemed part thereof or be taken into consideration in the interpretation or
construction of the Agreement;

 

  (g) The Schedules and Annexures form part of this Agreement and shall have the
same force and effect as if expressly set out in the body of this Agreement, and
any reference to this Agreement shall include any Schedules attached to it. Any
references to clauses and schedules are to Clauses of and Schedules to this
Agreement;

 

  (h) Any references to a ‘company’ shall include a body corporate;

 

  (i) In addition to the terms defined in Clause 1.1, certain other terms are
defined elsewhere in this Agreement and whenever such terms are used in this
Agreement they shall have their respective defined meanings, unless the context
expressly or by necessary implication otherwise requires;

 

  (j) References to knowledge, information, belief or awareness of any Person
shall be deemed to mean, in each case, the actual knowledge, information, belief
or awareness, as the case may be, of such Person after reasonable enquiry.

 

  (k) Unless expressly provided otherwise, the provisions of this Agreement
which relate to the Sellers (including the Representations and Warranties) are
given and entered into by them jointly and severally. If any liability of a
Seller is, or becomes, illegal, invalid or unenforceable in any respect, this
shall not affect or impair the liability of the other Sellers under this
Agreement.

 

  (1) The obligation of any Party to remit, deposit or pay any amount under this
Agreement shall mean the obligation to ensure the credit of such amount in the
recipient's account in immediately available funds without any deductions or
withholdings unless required by Applicable Law.

 

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2. PURCHASE OF SALE SHARES

 

2.1 Subject to the terms and conditions of this Agreement and fulfilment or
waiver of the Conditions Precedent set out in Clause 4.1 below, the Sellers
shall sell, transfer, convey, assign and deliver to the Purchaser and the
Purchaser shall purchase, acquire and accept from the Sellers, relying on the
several Representations and Warranties, covenants and undertakings of the
Sellers, contained in this Agreement, the Sale Shares, free of all Encumbrances,
and with all rights, title and interest in and to the Sale Shares without any
restrictions whatsoever, at the price equal to the Purchase Price.

 

2.2 Escrow Arrangement

 

  2.2.1 The Parties have agreed that the Pre-Closing Escrow Arrangement and the
Indemnity Escrow Arrangement (collectively referred to as the Escrow
Arrangement”) will be established with the Escrow Agent. The terms of the
Pre-Closing Escrow Arrangement shall be governed by the terms set forth in the
Cash and Securities Escrow Agreement as well as the relevant provisions of this
Agreement and the terms of the Indemnity Escrow Arrangement shall be governed by
terms set forth in the Indemnity Escrow Agreement as well as the relevant
provisions of this Agreement. Each Party shall bear their respective costs in
relation to the Escrow Arrangement and the Escrow Agent’s fee shall be shared
equally, one half by the Purchaser and one half by the Sellers.

 

  2.2.2 Establishment of the Pre-Closing Escrow Arrangement

 

  (i) RBI Application: The Sellers shall, immediately following the execution of
this Agreement, make an application (the “Pre-Closing Escrow RBI Application”)
to the Reserve Bank of India in a form and substance reasonably satisfactory to
the Purchaser seeking approval for the establishment and operation of the
Pre-Closing Escrow Arrangement in accordance with the provisions of the Cash and
Securities Escrow Agreement, including:

 

  (I) the deposit of an amount equivalent to the Consideration received by the
Sellers from the Purchaser into the Consideration Escrow Account pursuant to the
receipt of the amount of Consideration remitted by the Purchaser into the
Sellers’ Designated Bank Account; and

 

  (II) the Sellers depositing the Escrow Documents and the Sale Shares with the
Escrow Agent in accordance with the Cash and Securities Escrow Agreement.

Each Party shall use all reasonable endeavours to make and diligently pursue the
Pre-Closing Escrow RBI Application. The Sellers shall keep the Purchaser fully
informed of the status of the Pre-Closing Escrow RBI Application and immediately
provide the Purchaser with copies of communications or approvals from the
Reserve Bank of India.

 

  (ii)

RBI Approval: If, prior to Closing, the Reserve Bank of India approves the Pre-
Closing Escrow RBI Application then the Purchaser and the Sellers shall take all
necessary steps to implement, or cause the Escrow Agent to implement, the
Pre-Closing

 

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Escrow Arrangement in accordance with the provisions of the Cash and Securities
Escrow Agreement and Clause 2.2.2 (iii) of this Agreement.

Rejection of RBI Application: If the Reserve Bank of India rejects the
Pre-Closing Escrow RBI Application, the Pre-Closing Escrow Arrangement shall not
be implemented, without prejudice to any other provisions of this Agreement.

 

  (iii) Creation of Escrow Accounts: Immediately following the receipt of all
necessary approvals from the Reserve Bank of India for the Pre-Closing Escrow
RBI Application:

 

  A Shares Escrow: The Parties shall cause the opening of the Shares Escrow
Account and each Seller shall deposit the Sale Shares and Escrow Documents held
by such Seller into the Shares Escrow Account in the following manner:

 

  (aa) Depositing with the Escrow Agent the share certificates for the Sale
Shares that arc held by such Seller in physical form;

 

  (bb) Procuring that the Sale Shares that are held in dematerialised form by
such Seller are placed in escrow with the Escrow Agent in accordance with the
provisions of the Cash and Securities Escrow Agreement; and

 

  (cc) Placing in escrow the Escrow Documents with the Escrow Agent.

Provided that such deposit of the Sale Shares or the Escrow Documents with the
Escrow Agent shall not be treated as transfer of any beneficial interest and
until Closing, the Sellers shall retain all rights, title and interests therein;
and

Provided further that in the event that the pledge on the Pledged Shares has not
been released prior to the opening of the Shares Escrow Account, then, subject
to such pledge having been released not later than 3 (Three) days prior to
Closing, the Pledged Shares shall be deposited in escrow in accordance with this
Clause 2.2.2(iii) immediately after such pledge has been released;

 

  B Consideration Escrow:

 

  (a) The Parties shall cause the opening of the Consideration Escrow Account
and the Purchaser shall, subject to

 

  (1) the Sellers having issued to the Sellers’ Bank the Consideration Escrow
Transfer Instructions and a copy of such instructions having been received by
the Purchaser;

 

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  (2) the Sellers having provided the Purchaser with a written confirmation that
it has issued the Consideration Escrow Transfer Instructions and that Sellers’
Bank will, on the basis of these Consideration Escrow Transfer Instructions,
transfer of the amount of the Consideration from the Seller’s Designated Account
to the Consideration Escrow Account, and

 

  (3) the Sellers having deposited the Sale Shares and the Escrow Documents with
the Escrow Agent in accordance with Clause 2.2.2(iii),

remit the amount of Consideration into the Sellers’ Designated Bank Account.

 

  (c) The Sellers shall immediately upon the receipt of the amount of the
Consideration, remit the amount of the Consideration from the Sellers’
Designated Bank Account into the Consideration Escrow Account in accordance with
provisions of the Cash and Securities Escrow Agreement and the Consideration
Escrow Transfer Instructions.

It is hereby agreed that the activities in Clause 2.2.2(iii)(A) and Clause
2.2.2(iii)(B) shall take place simultaneously and each Party acknowledges that
time for performance of such Party’s obligation is of essence. The Escrow
Arrangements shall be effective only after both Parties complete the performance
of their respective obligations. In the event either Party fails to perform its
obligations, the other Party shall be entitled to terminate the Escrow
Arrangements by giving a prior written notice of 7 (Seven) Business Days to the
other parties to the Escrow Arrangement and shall be entitled to require the
Escrow Agent to immediately refund the property (i.e., the Sale Shares in the
case of Sellers or the amount of Consideration in the case of Purchaser) to the
Party depositing the same.

 

  2.2.3 Establishment of the Indemnity Escrow Arrangement

 

  (i) RBI Application: The Sellers shall, within 15 (Fifteen) days of receipt of
the reply from the Reserve Bank of India in relation to the Pre-Closing Escrow
RBI Application, either approving or rejecting the Pre-Closing Escrow RBI
Application, make an application (the “Indemnity Escrow RBI Application”) to the
Reserve Bank of India in a form and substance reasonably satisfactory to the
Purchaser seeking approval for the establishment and operation of the Indemnity
Escrow Account for the benefit of the Purchaser in accordance with the
provisions of the Indemnity Escrow Agreement.

Each Party shall use all reasonable endeavours to make and diligently pursue the
Indemnity Escrow RBI Application, The Sellers shall keep the Purchaser fully
informed of the status of the Indemnity Escrow RBI Application and

 

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immediately provide the Purchaser with copies of communications or approvals
from the Reserve Bank of India.

 

  (ii) RBI Approval: If, prior to Closing, the Reserve Bank of India approves
the Indemnity Escrow RBI Application then the Purchaser and the Sellers shall
take all necessary steps to establish the Indemnity Escrow Account with effect
from Closing in accordance with the provisions of the Indemnity Escrow Agreement
and Clause 2.2.4 of this Agreement.

 

  (iii) Rejection of RBI Application: If the Reserve Bank of India rejects the
Indemnity Escrow RBI Application, the Sellers shall take steps to open the
Security Deposit Account. Without prejudice to the foregoing, in the event the
Indemnity Escrow RBI Application has been rejected by the Reserve Bank of India,
the Parties may agree to any other arrangement to ensure the implementation of
the Indemnity Escrow Arrangement in a manner that, as closely as possible (and
subject to Applicable Law), approximates the benefits for the Purchaser of the
Indemnity Escrow Arrangement as contemplated in this Agreement and the Indemnity
Escrow Agreement.

 

  (iv) Operation of Security Deposit Account: In relation to the Security
Deposit Account, the Parties agree that:

 

  (a) The Security Deposit Account shall be an interest bearing account and
subject to Clause 2.2.3(iv)(c) below, the Sellers shall be entitled to receive
the interest accruing in the Security Deposit Account and cause such amount to
be distributed to the Sellers proportionately;

 

  (b) The Sellers shall send reports to the Purchaser providing full details of
the transactions, if any, pertaining to the Security Deposit Account, the
balance lying to the credit of the Security Deposit Account and any interest or
other income accrued to the Security Deposit Account on a quarterly basis
commencing from the date of opening of the Security Deposit Account or otherwise
when reasonably requested by the Purchaser;

 

  (c) The Sellers hereby undertake and agree to maintain a minimum balance of a
amount equivalent to the Security Deposit in the Security Deposit Account save
and except for payments made in respect of the satisfaction of any Agreed Claims
and distributions permitted in accordance with the terms of this Agreement;

 

  (d) The Parties agree that the Security Deposit Account shall be operated in a
manner as closely as possible, approximates the benefits for the Purchaser of
the Indemnity Escrow Arrangement as contemplated in this Agreement and the
Indemnity Escrow Agreement and accordingly, for the purposes of Clauses 2.2.5 to
2.2.7, reference to the Indemnity Escrow Account shall be construed as reference
to the Security Deposit Account and references to the Escrow Agent shall be
construed as reference to the Sellers;

 

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  (e) The Security Deposit Account shall be maintained until the date on which
all Claims on or before the date that is 18 months from the Closing Date have
become Agreed Claims.

 

  2.2.4 Escrow Arrangements at Closing

 

  (a) Pre-Closing Escrow Arrangement Implemented: In the event the Parties have
implemented the Pre-Closing Escrow Arrangement, the Escrow Agent shall,:

 

  (i) not later than 3 (Three) Business Days prior to the Closing Date, release
to the Sellers’ Bank, the Indemnity Escrow Transfer instructions, with a copy of
these instructions to the Purchaser;

 

  (ii) at Closing, release and pay the entire amount standing to the credit of
the Consideration Escrow Account to the Sellers’ Designated Bank Accounts (which
shall constitute a discharge of the Purchaser’s obligations towards payment of
the Consideration); and

 

  (iii) at Closing, release the Sale Shares (including the share certificates
for the Sale Shares that are in physical form) and the Escrow Documents to the
Purchaser; and

the Sellers shall, upon the receipt of the Consideration in the Sellers’
Designated Bank Account, cause the Sellers’ Bank to transfer the Security
Deposit to (a) the Indemnity Escrow Account, in the event the Indemnity Escrow
Account has been opened or (b) the Security Deposit Account, in the event the
Indemnity Escrow Account has not been opened.

 

  (b) Pre-Closing Escrow Arrangement Not Implemented:

In the event the Pre-Closing Escrow Arrangement has not been implemented:

 

  (I) Except as set forth in Clause 2.2.10(i), each Seller shall, not later than
one week prior to Closing: (a) open a separate depository participant account
with a common depository participant and intimate the details thereof to the
Purchaser in writing, (b) ensure that the Sale Shares held by such Seller are
credited to such newly opened depository participant account, and (c) provide
details of (a) and (b) above in this regard to the Purchaser.

 

  (II) At Closing, the Sellers shall deliver the Sale Shares (including the
share certificates for the Sale Shares that are in physical form) and the Escrow
Documents to the Purchaser.

 

  (III) The Sellers shall, not later than 3 (Three) Business Days prior to the
Closing Date, issue to the Sellers’ Bank, the Indemnity Escrow Transfer
Instructions and deliver a copy of these instructions to the Purchaser.

 

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  (IV) The Purchaser shall at Closing, remit the amount of Consideration into
the Sellers’ Designated Bank Account.

 

  (V) At Closing, immediately after the payment of the Consideration by the
Purchaser to the Sellers pursuant to Clause 2.2.4(b) above, the Sellers
undertake and shall cause the Sellers’ Bank to deposit the Security Deposit into
the Indemnity Escrow Account or the Security Deposit Account, as the case maybe,
in accordance with the Indemnity Escrow Transfer Instructions. The Parties agree
that the provisions of Clause 2.2.3(iv) shall apply in relation to the Security
Deposit Account.

 

  2.2.5 No Closing

In the event that Closing does not take place or this Agreement is terminated in
accordance with Clauses 4.2, 4.3, 5.4 or 11 then if the Pre-Closing Escrow
Arrangement has been implemented, the Escrow Agent shall release to the
Purchaser the amount of the Consideration in the Consideration Escrow Account
and the Escrow Agent shall release the Sale Shares and the Escrow Documents to
the Sellers, in accordance with the terms of the Cash and Securities Escrow
Agreement.

 

  2.2.5A Post Closing Escrow Arrangements

In the event that, after Closing, the Escrow Agent receives evidence of an
Agreed Claim in accordance with Clause 10.6 and an instruction to release funds,
the Escrow Agent shall, and the Sellers shall cause the Escrow Agent to, release
to the Purchaser:

 

  (a) a portion of the monies then lying in the Indemnity Escrow Account, equal
to the amount of the Agreed Claim, or

 

  (b) if the amount of the Agreed Claim is greater than the amount of monies
then lying in the Indemnity Escrow Account, then all such monies lying in the
Indemnity Escrow Account.

 

  2.2.6 Interim Release of Unclaimed Escrow Amount

Following the first anniversary of the Closing Date, the Escrow Agent shall, and
the Purchaser shall cause (directly or indirectly) the Escrow Agent to, effect
the transfer of a pro rata share of either:

 

  (i) 50% of the Unclaimed Escrow Amount as on the first anniversary of the
Closing Date;

 

  (ii) or, if the amount described in Clause 2.2.6(a)(i) is more than INR
225,000,000, then INR 225,000,000,

to the respective bank account of each of the Sellers as detailed in Schedule 8
or such other bank account which the Sellers may intimate in writing to the
Purchaser and provide a written notice to the Purchaser, in accordance with the
Indemnity Escrow

 

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Agreement, that such monies have been transferred to the Sellers’ Designated
Bank Accounts of each of the Seller.

For the purposes of this clause, the term “Unclaimed Escrow Amount” means the
amount of monies remaining in the Indemnity Escrow Account minus the amount of
all Claims that have been made on or prior to the first anniversary of the
Closing Date that, as on such date, are subsisting and have not been paid.

 

  2.2.7 Final Release of the Security Deposit

After the later of:

 

  (i) the date that is 18 (Eighteen) months from the Closing Date; and

 

  (ii) the date on which all Claims made on or before the date that is 18
(Eighteen) months from the Closing Date shall have become Agreed Claims and the
Purchaser shall have received payment out of the Indemnity Escrow Account in
respect of such Agreed Claims, the Escrow Agent shall, and the Purchaser shall
cause the Escrow Agent to, effect the transfer of a pro rata share of such
monies then remaining in the Indemnity Escrow Account to the respective bank
account of each Seller as detailed in Schedule 8 or such other bank account
which the Sellers may intimate in writing to the Purchaser and provide a written
notice to the Purchaser in accordance with the Indemnity Escrow Agreement, that
such monies have been transferred to the designated accounts of each Seller.

 

  2.2.8 Co-operation

The Parties shall co-operate with each other to use all reasonable endeavours to
ensure that any and all government or regulatory approvals as may be necessary
to comply with and give effect to the provisions of this Clause 2.2 and the
Escrow Arrangement are obtained as soon as possible.

 

  2.2.9 Escrow Arrangements Indemnity

Subject to Closing, in the event that, as a result of the Sellers receiving or
becoming entitled to receive any interest in terms of the Consideration Escrow
Account, the SEBI directs the Purchaser to increase the total offer price
indicated in the public announcement required to be made by the Purchaser under
the provisions of the Takeover Code on account of the transaction contemplated
under this Agreement, the Sellers shall, jointly and severally, indemnify and
compensate the Purchaser to the extent to which the total offer price is
required to be increased, provided however, that the liability of the Sellers
pursuant to this Clause 2.2.9 shall not exceed the amount of interest, if any,
earned in the Consideration Escrow Account, net of any Taxes.

 

  2.2.10 Pledged Shares

In the event the Pledged Shares have not been deposited with the Escrow Agent,
as contemplated under the proviso under Clause 2.2.2(iii)(A), 15 (Fifteen)
Business Days prior to the Closing Date, the Sellers shall:

 

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  (i) ensure that the depository participant account of Digvijay Investments
Limited (“DIL”) as specified in Schedule 1, with the Stock Holding Corporation
of India Limited (“SHCIL”), will contain exclusively the Pledged Shares held by
Digvijay Investments Limited in the Company, and that all other shares or other
securities of any other entity, if any, held in the said account will be moved
into a different account; and

 

  (ii) on and from Closing, carry out all reasonable instructions of the
Purchaser and take all such steps and execute all necessary deeds, forms,
documents, agreements, letters, proxies, irrevocable and registered power of
attorney, etc., including an irrevocable power of attorney in the form
acceptable to the Purchaser authorising the Purchaser to instruct the depository
participant of DIL to deal with the Pledged Shares, to ensure that all rights,
title and interest (including all economic and beneficial interest therein) in
the Pledged Shares is transferred to the Purchaser on and from the Closing Date.
Without prejudice to the generality of the foregoing the Sellers shall ensure
that on and from the Closing Date, the Purchaser has unconditional power and
authority:

 

  a. to seek the registration of the transfer of the Pledged Shares with the
Company without any hindrance, protest and demur from the Sellers;

 

  b. to receive dividends declared and earned on the Pledged Shares;

 

  c. to attend all meetings of shareholders of the Company and exercise all
voting rights in relation to the Pledged Shares and shall also be entitled to
receive any dividend, rights shares, bonus shares, consideration on buy-back of
shares by the Company;

 

  d. to enter into, make, sign, seal, execute, extend and deliver documents,
agreements, share transfer forms, delivery instruction slips and other papers
for effectual transfer of the Pledged Shares and to revalidate, extend for such
period the share transfer forms with respect to the Pledged Shares;

 

  e. at any time, in respect of the issue of further capital, rights shares or
bonus shares or offers of new shares of the Company to the Sellers which arise
out of the Pledged Shares and in the name of the Sellers to execute all forms,
documents and papers which may in the opinion of the Purchaser be necessary or
requisite to enable the Purchaser to acquire such new shares;

 

  f. to represent before the Company and attend any general meetings, vote and
appoint any proxy(ies) thereat in respect of the Pledged Shares pending transfer
as stipulated in the Agreement.

 

  g. at any time, to make such declaration in respect of the Pledged Shares as
may be required or necessary in law to transfer the Pledged Shares to the
Purchaser;

 

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  h. at any time, to appoint and remove at Purchaser’s sole and absolute
pleasure and discretion any substitute for Purchaser or agents or to delegate
any or all of its functions envisaged hereunder to any person as it may deem
fit;

 

  i. to enter into discussions with IFC and DEG for the release of the Pledged
Shares; and

 

  j. to instruct SHCIL to transfer the Pledged Shares to the Purchaser upon the
release of the pledge on such shares.

Provided, however, it is clarified that the Pledged Shares shall be deemed to
have been sold and transferred by the Sellers to the Purchaser and all the right
title and interest therein shall pass to the Purchaser as on the Closing.

 

3. PURCHASE PRICE AND NON-COMPETE FEE

 

3.1 The purchase price for the Sale Shares (the “Purchase Price”) shall be
calculated on the basis of a price of INR 523 (Rupees Five hundred twenty three)
per Sale Share and in aggregate shall be INR 11,118,984,184 (Rupees Eleven
billion one hundred eighteen million nine hundred eighty four thousand one
hundred eighty four) (including the Pledged Shares) payable to each Seller in
the proportion set out in Schedule 2.

 

3.2 In consideration for the non-compete undertakings of the Sellers set out in
Clause 6 as well as in the Non-Compete Agreement, the Purchaser shall pay the
Sellers a non-compete fee of an amount of INR 2,779,530,000 (Rupees Two billion
seven hundred seventy nine million five hundred thirty thousand) (the
“Non-Compete Fee”), payable to each Seller in the proportion set out in Schedule
2.

 

3.3 Unless otherwise expressly stated (or as otherwise agreed in the case of a
given payment), the payment to be made to the Sellers under this Agreement shall
be made in INR.

 

4. CONDITIONS PRECEDENT

 

4.1 The obligation of the Purchaser to purchase the Sale Shares from the Sellers
and the Sellers to sell the Sale Shares is subject to the fulfilment of the
following conditions precedent (“Conditions Precedent”), before the Closing
Date, unless the Purchaser specifically waives the fulfillment of any of the
Conditions Precedent in writing (as are capable of being waived by the Purchaser
under Applicable Law):

 

  (a) The Purchaser shall have obtained the prior approval of the Reserve Bank
of India for the proposed purchase of the Sale Shares and the open offer process
to be concluded as per the Takeover Code.

 

  (b) The Merchant Banker shall have issued a certificate, as described in
Regulation 23(6) of the Takeover Code, confirming the fulfillment of all
obligations of the Purchaser under the Takeover Code arising as a result of the
execution of this Agreement.

 

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  (c) If notification of the transaction contemplated under this Agreement is
mandatory under Section 6 of the Competition Act 2002 (“CA02”) with the
Competition Commission of India (the “CCI”) then:

 

  (i) The CCI having passed an order in terms Section 31(1) of the CA02
unconditionally approving the transaction contemplated under this Agreement, or

 

  (ii) the transaction contemplated under this Agreement having been deemed
approved in accordance with Section 31(11) of the CA02.

 

  (d) Other than as contemplated in Clauses 4.1(a) to (c), no statute, rule or
regulation shall have been enacted, entered, promulgated or enforced by any
competent court or any Governmental Authority having jurisdiction over the
Parties that prohibits the acquisition of the Sale Shares by the Purchaser in
accordance with the terms of this Agreement; and

 

  (e) There shall not be in effect any judgment, order, injunction or decree of
any court or statutory authority of competent jurisdiction which is brought
about that prohibits acquisition of the Sale Shares by the Purchaser in
accordance with the terms of this Agreement other than as a result of any gross
negligence or willful default of the Purchaser.

 

4.2 If any of the Conditions Precedent mentioned in Clause 4.1 are not satisfied
anytime on or before the 10 (Ten) Business Days prior to the Long Stop Date, the
Purchaser and the Sellers shall have the right either to jointly waive such
Conditions Precedent as are capable of being waived by the Parties under
Applicable Law in writing and complete the sale and purchase of the Sale Shares
contemplated herein on the Closing Date or, to the extent that it is possible to
do so in accordance with the provisions thereof, the Purchaser shall be entitled
to terminate this Agreement in accordance with Clause 5.4.

 

4.3 If Closing has not occurred on or before the Long Stop Date, this Agreement
shall automatically terminate upon the expiry of the Long Stop Date. In the
event of such termination, neither Party shall have any rights, obligations or
claims against the other, other than (i) as specifically provided under this
Agreement or (ii) under those provisions which by their nature survive
termination of this Agreement.

 

4.4 The Parties undertake to use all reasonable endeavours to ensure that the
Conditions Precedent are satisfied as soon as possible and no later than the
Long Stop Date.

 

5. COVENANTS OF THE PARTIES

 

5.1 Covenants of the Sellers

In addition to the other covenants of the Sellers under the Transaction
Documents, from the date of this Agreement and until the Closing Date, the
Sellers undertake (to the extent permissible under Applicable Law) to do the
following, and shall exercise their voting rights in relation to the Equity
Shares held by them in the Company in such manner so as to ensure that the
following obligations are fulfilled, and shall cause their nominee Directors on
the Board to cast their votes to give effect thereto:

 

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  5.1.1 Each of the Sellers shall have obtained, and shall continue to maintain
in place, all corporate, shareholder and other authorizations and approvals that
are required in order to perform their obligations under this Agreement. In no
event shall any Seller permit the revocation of such authorization by its board
of directors action or otherwise.

 

  5.1.2 The Sellers shall ensure that the Company promptly discloses all
unpublished price sensitive information in compliance with the listing
agreements and the Insider Trading Regulations.

 

  5.1.3 The Business of the Company shall be conducted in the ordinary course
and in the same manner that the Business has been carried on prior to the date
of this Agreement without any change in the nature, scope of conduct thereof and
so as to maintain the same as a going concern. The Sellers shall procure that
the Company shall not, except with the prior written consent of the Purchaser,
such consent (i) not to be unreasonably withheld and (ii) to have been deemed to
have been given unless the Purchaser communicates, in writing (within 3 (Three)
Business Days of the Sellers requesting, in writing, the Purchaser for such
consent) its refusal to provide such consent, do or cause any of the following:

 

  (i) cause any amendments to the Articles or Memorandum except necessary to
effectuate the transactions contemplated herein;

 

  (ii) declare, set aside or pay any dividends on or make any other distribution
(in cash or in kind) in respect of any securities of the Company, or split,
combine or reclassify any Equity Shares,

 

  (iii) allot or issue, or agree to allot or issue, any securities or grant or
agree to grant rights which confer on the holder any rights to acquire any
securities,

 

  (iv) repay or redeem or reduce any of its share capital;

 

  (v) enter into any contract or commitment having a value of more than INR
100,000,000 (Rupees One hundred million), or violate, amend, terminate or
otherwise modify or waive any of the material terms of any of such contract or
commitment;

 

  (vi) incur or repay any indebtedness, guarantee any such indebtedness, issue
or sell any debt securities or guarantee any debt securities of others except:

 

  (a) to incur or repay any indebtedness exceeding INR 2,500,000 (Rupees Two
million five hundred thousand);

 

  (b) pursuant to the proposed arrangements with ICICI Bank Limited for a sum of
INR 670,000,000 (Rupees Six hundred seventy million) provided that the
indebtedness of the Company shall not increase by more than INR 50,000,000
(Rupees Fifty million), 14 (Fourteen) days after the drawdown; or

 

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  (c) drawdowns within the existing sanctioned cash credit facilities of the
Company;

 

  (d) debts owed to a trade creditor exceeding a sum of INR 25,000,000 (Rupees
Twenty five million); and

 

  (e) increase in interest free sales tax deferral loan from the Government of
Andhra Pradesh;

 

  (vii) mortgage, pledge or encumber any assets other than for ICICI Bank loans
and additional working capital limit referred to in Clause 5.1.3(vi);

 

  (viii) terminate, amend or enter into any lease with respect to any immoveable
property for a lease period exceeding 3 (Three) months and for an annual rent
exceeding INR 2,400,000 (Rupees Two million four hundred thousand);

 

  (ix) make any capital expenditures, capital additions or capital improvements
except projects having a value less than 100,000,000 (Rupees One hundred
million) individually;

 

  (x) increase the compensation or salaries of any Key Employees or directors of
the Company or declare any special bonuses for such Key Employees or directors
except in accordance with any legal obligation except where such increase in the
compensation is generally applicable to all the employees of the Company or
substantially all the employees of the Company;

 

  (xi) initiate or settle any litigation without prior consultation with the
Purchaser involving a sum exceeding INR 7,500,000 (Rupees Seven million five
hundred thousand);

 

  (xii) make, revoke or change any election in respect of Taxes inconsistent
with the past practices in any material respects;

 

  (xiii) adopt or change any accounting method, principles, policies, procedures
or practices except as may be required by the generally accepted accounting
standard in India or Applicable Law;

 

  (xiv) sell, lease, license, or otherwise dispose of or encumber any of its
properties or assets, material, individually or in the aggregate, to the Company
except in the ordinary course of business or disposal of assets exceeding a sum
of INR 7,500,000 (Rupees Seven million five hundred thousand);

 

  (xv) commence or adopt complete or partial winding up, merger, amalgamation,
spinoff or reconstruction except as contemplated herein,

 

  (xvi) open, close or change any of the Company’s bank accounts or appoint or
change any signatory thereto (except to the extent required under the provisions
of any Transaction Document and disclosed to the Purchaser), or

 

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  (xvii) agree in writing or otherwise to take any of the actions described in
this paragraph.

 

  5.1.4 The Sellers shall use all reasonable endeavours to procure that,
immediately following the earlier of (a) the expiry of 45 (Forty five) days from
the date of this Agreement; and (b) the deposit of the Consideration into the
Consideration Escrow Account in accordance with Clause 2, Mr. Paul Brown shall
be appointed as a director of the Company, provided that the Purchaser has
deposited into an escrow account, in cash, the entire consideration payable to
the shareholders in the open offer in accordance with the Takeover Code.

 

  5.1.5 The Parties shall, and the Sellers shall use reasonable endeavours to
procure that the Company shall, as applicable, have obtained all waivers/no
objection letters/consents from the Lenders, in writing, in respect of certain
covenants of the Company and the Sellers under the loan agreements between the
Company and the Lenders (including security and ancillary agreements executed in
connection with such loans/facilities granted to the Company), as may be
required in order that the consummation of the transaction contemplated in this
Agreement does not trigger a breach of these loan agreements. Should any of
these waivers, no objection letters or consents not be capable of being
obtained, the Purchaser shall, use reasonable endeavours to assist the Company
to arrange refinancing of the relevant loans and/or replacement of the relevant
Lender following the Closing.

 

  5.1.6 Each of the Parties shall use reasonable endeavours to obtain from IFC
and DEG release of the pledge of the Pledged Shares and consent for the transfer
of these Pledged Shares to the Purchaser in accordance with the provisions of
this Agreement, such release to be on terms reasonably acceptable to the
Purchaser. Should it not be possible to obtain such a release either from IFC or
DEG, the Purchaser shall, use reasonable endeavours to assist the Company to
arrange refinancing of the relevant loans and/or replacement of IFC or DEG, as
the case may be, as a Lender following the Closing.

 

  5.1.7 The Company shall not be in breach of any of its covenants under any of
its loan agreements which would entitle any lender to call for the acceleration
of repayment of any indebtedness of the Company prior to the maturity date or
shall have obtained waivers, in writing and in a form acceptable to the
Purchaser, from the relevant lenders in respect of any such breach other than as
a result of the transactions contemplated in the Transaction Documents or any
matters fairly disclosed in the Disclosure Schedules.

 

  5.1.8 The Sellers shall provide all information, documentation (except for the
information which is subject to any confidentiality or secrecy obligations) and
assistance as the Purchaser may reasonably request from them for the purposes of
obtaining statutory approvals that are required pursuant to this Agreement. The
Purchaser shall consult with the Sellers prior to making any applications to any
Governmental Authorities and shall take into account the Sellers’ comments and
keep the Sellers informed of the status of such applications. The Purchaser
shall promptly provide copies of applications filed with the Governmental
Authorities.

 

  5.1.9 The Sellers shall, at the Purchaser’s costs and expense, use reasonable
efforts to procure that the Company shall, prior to Closing:

 

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  (a) co-operate with the Purchaser to review and prepare for adoption of the
Purchaser’s corporate policies and procedures by the Board promptly following
the Closing;

 

  (b) co-operate with the Purchaser to review the internal controls, financial
reporting procedures, internal and external audit procedures and information
technology operations of the Company to facilitate integration of the Company’s
financial reporting and information technology systems with the Purchaser; and

 

  (c) allow reasonable access during normal working hours with a prior written
notice to the statutory books for the purposes of integrating the Company into
the Purchaser.

 

  5.1.10 The Net Debt shall not exceed the Target Net Debt, provided that in the
event of such Net Debt exceeding the Target Net Debt, the Sellers undertake,
jointly and severally, subject to Closing having occurred to indemnify the
Purchaser to the extent of the difference between (a) the Target Net Debt, and
(b) the Net Debt multiplied by the fraction the numerator of which shall
comprise the number of Sale Shares and the denominator of which comprises the
aggregate number of Equity Shares in the share capital of the Company.

 

5.2 Covenants of the Purchaser Group

In addition to the other covenants of each Purchaser Group Member under the
Transaction Documents, from the date of this Agreement and until the Closing
Date, the Purchaser Group Members undertake that:

 

  5.2.1 The Purchaser:

 

  (a) shall from the date of this Agreement until the earlier of Closing or the
termination of this Agreement not enter into any transaction or agreement
(including acquisition of any entity outside India with significant operations
in India) that would reasonably be expected to make more difficult or delay the
time required to satisfy the conditions set out in clause 4.1(c);

 

  (b) shall give reasonable prior notice of, and permit attendance by an
authorised representative of the Sellers, at any meetings that may be held
between the Purchaser and the CCI, subject to the rules and permission of the
CCI and consider reasonable comments and suggestions of the Sellers in any
application made to the CCI in this respect;

 

  (c) shall keep the Sellers informed of any progress and developments in
relation to the CCI, provided that the Purchaser shall not be obliged to divulge
to the Seller any confidential or proprietary information of the Purchaser Group
Members or any of their Affiliates not previously covered by any confidentiality
undertaking of the Sellers to the Purchaser in relation to such information
unless such disclosures are in compliance with any legal obligation or are
available in public domain; and

 

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  (d) confirms that neither it nor its Affiliates has any material business or
operations in India which in its view may be reasonably expected to make more
difficult or delay the time required to satisfy the conditions set out in clause
4.1(c).

 

  5.2.2 The Parties agree and understand that Purchaser shall not be obliged to
accept any modifications proposed by the CCI that has or, in its opinion, is
likely to have, a material adverse effect for the operation of the business of
the Company and/or the Purchaser in the future.

 

  5.2.3 Each Purchaser Group Member shall have obtained, and shall continue to
maintain in place, all corporate, shareholder and other authorizations and
approvals that are required in order to perform its obligations under this
Agreement. In no event shall any Purchaser Group Member permit the revocation of
such authorization by its board of directors or shareholder action or otherwise.

 

5.3 Mutual Covenants of the Parties

In addition to their other respective covenants under the Transaction Documents,
the Parties undertake to make all reasonable endeavours (so far as it lies
within their respective powers to do so) to procure that, prior to the Closing
Date, the Escrow Agent shall have obtained the prior approval of the Reserve
Bank of India for establishment and operation of the Indemnity Escrow Account
and that the Indemnity Escrow Account shall have been established. The Parties
shall for this purpose co-operate fully with each other and the Escrow Agent.

 

5.4 Purchaser’s Right to Terminate

If:

 

  (a) there has been any breach of any of the Representations and Warranties
(other than those made by the Purchaser), resulting in a Material Adverse Effect
save and except for any event or circumstances disclosed to the Purchaser under
the Disclosure Schedule (as updated from time to time in accordance with this
Agreement);

 

  (b) The Reserve Bank of India, in writing, refuses to issue, or rejects the
application for, an approval as described in Clause 4.1(a);

 

  (c) The CCI, in writing, refuses to issue, or rejects the application for, an
approval as described in Clause 4.1(e);

 

  (d) The acquisition of the Sale Shares by the Purchaser is prohibited for a
reason described in Clause 4.1(d) or Clause 4.1(e); or

 

  (e) The Sellers fall to provide, on the Closing Date, a certificate in terms
of Clause 7.3.1,

the Purchaser shall be entitled to immediately terminate this Agreement by
issuing a notice in writing to this effect giving a euro period of not less than
10 Business Days. In the event of such termination, neither Party shall have any
rights, obligations or claims against the other.

 

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6. NON-COMPETE

 

6.1 The Sellers acknowledge and agree that due to the nature of their
association with the Company they have confidential and proprietary information
related to the Business and operations of the Company. The Sellers acknowledge
that such information is of material to the Business, and will continue to be so
after the consummation of the transactions contemplated herein, and that
disclosure of such confidential information to others, especially the Company’s
existing and/or potential competitors, or the unauthorized use of such
information by others would cause substantial loss and harm to the Company. In
addition, the Sellers acknowledge that they are capable of offering competition
to the Business and the Company and, if the Sellers were to become substantially
involved in any of the activities detailed in the Non-Compete Agreement, such
involvement would present a substantial risk of using the Company’s trade
secrets and confidential information and would have a detrimental effect on, and
cause irreparable harm to, the Business.

 

6.2 The Sellers undertake, jointly and severally, that from the date of this
Agreement and for a period of 3 (Three) years following the Closing Date, none
of them shall compete with the Business or any of the Purchaser Group Members or
their Affiliates carrying on the same business in any manner as more
particularly set out in the Non-Compete Agreement.

 

6.3 Each of the Sellers hereby agrees and undertakes that on and from the
Closing Date and during the period of 3 years from Closing Date, he/she/it shall
not, directly or indirectly, by itself or in association with or through any
Person, either individually or in partnership with, as part of a joint venture
with, or otherwise in conjunction in any other manner with any other Person in
any manner whatsoever:

 

  (a) induce or attempt to induce any Person to leave the employment of the
Company, or employ or attempt to employ any Person, who is or has been a Key
Employee of the Company since the date of execution of this Agreement; or

 

  (b) induce or attempt to induce any Person, who is or has been at any time
since the date of execution of this Agreement a supplier of goods or services to
the Company, to cease to supply, or to restrict or vary the terms of supply, to
the Company; or

 

  (c) canvass or solicit, or attempt to canvass or solicit, orders from any
Person who is or has been at any time since the date of execution of this
Agreement, a customer of the Company for any of the products supplied by the
Company as part of its Business, or persuade such customer to cease doing
business or to reduce the amount of business which any such customer has been
doing or might propose to do with the Company.

 

  (d) solicit, or attempt to solicit in any manner, any Person to invest in the
Company or any client/customer of the Company, or in business of the type of or
similar to the Business of the Company.

 

6.4 The Sellers acknowledge and agree that the restrictions in Clause 6.1, 6.2
and 6.3 and the Non-Compete Agreement are no more extensive than what is
reasonable to protect the Purchaser as the purchaser of the Sale Shares, the
Purchaser Group Members and their Affiliates, the Company and the continuing
shareholders, the Business and goodwill of the Company being acquired by the
Purchaser as a consequence of the purchase of the Sale Shares.

 

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7. CLOSING

 

7.1 Closing shall take place on the Closing Date at 11 am (India time):

 

  7.1.1 at the offices of Citibank N.A., Mumbai or such other place as may be
mutually agreed between the Parties; or

 

  7.1.2 at any other place or time as agreed in writing by the Sellers and the
Purchaser.

 

7.2 All transactions contemplated by this Agreement to be consummated on Closing
shall be deemed to occur simultaneously and no such transaction shall be
consummated unless all such transactions are consummated.

 

7.3 The following actions shall take place at Closing:

 

  7.3.1 The Sellers shall deliver to the Purchaser:

 

  (a) a certificate, in the form set out in Schedule 9, signed by each Seller to
the effect that:

 

  (i) no event has occurred materially affecting the Sellers’ ability to perform
their obligations under this Agreement since the date of this Agreement until
the Closing Date; and

 

  (ii) each of the Representations and Warranties is, save and except as
disclosed in the Disclosure Schedule as updated from time to time in accordance
with the Agreement, as of the Closing Date, true and correct in all material
respects, and not misleading in any material respects;

 

  (iii) the Sellers have performed and complied with all covenants, obligations
and conditions of this Agreement in all material respects required to be
performed and complied with by them as of the Closing Date;

 

  (iv) each Seller is the sole legal and beneficial owner of, and has good and
marketable title to, the Sale Shares indicated against its name in column 3 of
Schedule 1, other than any Pledged Shares, and all Sale Shares have been
acquired by the Sellers in compliance with Applicable Laws,

provided that, for the avoidance of doubt, the certificate referred to in this
Clause 7.3.1 shall not (subject to such certificate not having been issued
fraudulently, dishonestly or grossly negligently) increase or extend the
liabilities or obligations of the Sellers otherwise arising under or pursuant to
this Agreement including under Clause 5.1, Clause 9.1 and Clause 10.1.

 

  (b) a certified copy of the resolution adopted by the board of directors of
each Seller that is a company, authorising the execution and performance of this
Agreement by such Seller and other Transaction Documents required to be executed
and performed by such Seller;

 

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  (c) an opinion of the legal counsel of each Seller that is a company
confirming that such Seller is validly incorporated under the laws of India, has
the capacity to enter into this Agreement;

 

  (d) a confirmation from the Sellers (duly verified and confirmed by the bank
with which the Sellers’ Designated Bank Account has been opened) that no
standing instructions other than those deposited with the Escrow Agent have been
issued by the Sellers in respect of the account.

 

  7.3.2 The Sellers shall, as applicable, deliver or cause the Escrow Agent to
deliver to the Purchaser the Escrow Documents and the Sale Shares in accordance
with the provisions of Clause 2.2.4.

 

  7.3.3 The Purchaser shall, as applicable, transfer or the Parties shall cause
the Escrow Agent to transfer to the Sellers’ Designated Bank Account the
Purchase Price and the Non-Compete Fee in accordance with the provisions of
Clause 2.2.4(a) or Clause 2.2.4(b)(ii) (as the case may be). For the avoidance
of doubt, the Purchaser may at its sole discretion, waive (in writing) the
requirement for the Sellers to provide all or any of the documents listed in
Clause 7.3.1.

 

  7.3.4 Immediately following the payment of the Purchase Price and the
Non-Compete Fee by the Purchaser to the Sellers in accordance with Clause 7.3.3,
the Sellers shall, release from the Sellers’ Designated Account, the Security
Deposit into the Indemnity Escrow Account or the Security Deposit Account, as
the case maybe, in accordance with the provisions of Clause 2.2.4 and the
Indemnity Escrow Transfer Instructions..

 

  7.3.5 The Parties confirm that the receipt of the Purchase Price in the
Sellers’ Designated Bank Account shall constitute payment to the Sellers of the
entire consideration for the sale of the Sale Shares.

 

7.4 Upon receipt of the Purchase Price by the Sellers as detailed in Clause 7.3,
each of the Parties shall ensure that the duly filled Form FC-TRS (in
quadruplicate) is filed with the concerned authorised dealer in respect of the
Sale Shares and procure due endorsement of the certificate in form FC-TRS from
the authorised dealer, The Sellers shall provide to the Purchaser, the relevant
supporting documents required in connection with the filing of form FC-TRS
including (i) shareholding pattern of the Company immediately upon Closing; and
(i) certificate from a chartered accountant indicating the fair value of the
Sale Shares. The Sellers shall provide all such assistance as may be reasonably
required by the Purchaser to ensure that the certificate in form FC-TRS is
endorsed by the authorised dealer of the Purchaser on the Closing Date.

 

7.5 The Sellers shall procure the convening of a meeting of the Board
immediately following Closing at which meeting the Board shall (i) pass
necessary resolutions to take on record and approve the transfer and sale of the
Sale Shares, including such Sale Shares as are in physical form, from the
Sellers to the Purchaser, (ii) appoint nominees of the Purchaser as directors in
the Company, and accept the resignations of Mr L N Bangur, Mrs Alka Bangur and
Ms Sheetal Bangur as directors of the Company, and (iii) pass necessary
resolutions to change the authorised signatories of all of the Company’s bank
accounts in accordance with the instructions given by the Purchaser.

 

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8. PURCHASER PARENT’S GUARANTEE

The Purchaser Guarantor hereby guarantees to the Sellers that the Purchaser will
comply properly and punctually with its obligations under this Agreement.

 

9. REPRESENTATIONS AND WARRANTIES

 

9.1 The Sellers jointly and severally represent and warrant to the Purchaser
that except as disclosed in the Disclosure Schedule, each of the statements made
by them as set out in Schedule 5 is true and correct in all material respects,
and not misleading in any material respects and acknowledge that the Purchaser
has agreed to purchase the Sale Shares, inter alia, relying upon the
Representations and Warranties. The liability of the Sellers in relation to any
claim for breach of the Representations and Warranties shall be subject to the
matters and limitations set out in Clause 10.2 and Schedule 7, provided that the
provisions of Clause 10.3 shall apply mutatis mutandis in respect of any such
claim.

 

9.2 Each of the Representations and Warranties set out in Schedule 5 is separate
and independent and is not limited by reference to any other Representations and
Warranties. The Purchaser has no actual knowledge of any facts, matters, events
or circumstances (other than as set out in the Disclosure Schedule) which it
believes would render any of the Representations and Warranties untrue or
inaccurate.

 

9.3 The Sellers shall promptly disclose to the Purchaser in writing any facts,
matters, events or circumstances which arises or which is known to any of them
which results in a breach of or is inconsistent with or may render inaccurate or
misleading any of the Representations and Warranties in any material respects if
they were to be repeated at Closing. The Sellers shall have the right to seek an
amendment and updation of the Disclosure Schedule to the extent of any facts
and/or circumstances that have occurred or are likely to occur after the date of
execution of this Agreement and prior to the Closing Date, provided such
occurrences are not (a) caused, either in part or in full, for any reason prior
to the date of execution of this Agreement which was not previously disclosed in
the Disclosure Schedule or (b) relate to any Encumbrance over, or any title
defect in respect of, any Sale Shares (with the sole exception of the pledge
created in favour of IFC and DEG in respect of the Pledged Shares pursuant to
the Share Pledge Agreement).

 

9.4 The Representations and Warranties made herein shall be deemed to have been
made and repeated immediately before Closing by reference to the then existing
facts and circumstances of the Closing Date.

 

9.5 The Sellers irrevocably waive all rights and claims which they may have
against the Company or any of its officers or employees in respect of any
misrepresentation, inaccuracy, or omission in or from any information or advice
given by the Company or any of its officers or employees to the Sellers to
enable them to give any of the Representations and Warranties or to prepare the
Disclosure Schedule or to assume any of the obligations assumed or to be assumed
by the Sellers under or pursuant to this Agreement.

 

9.6 The Purchaser Group Members jointly and severally represent and warrant to
the Sellers in terms hereinafter stated and acknowledge that the Sellers are
entering into this Agreement in reliance on the representations and warranties
of the Purchasers as provided in this Agreement:

 

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  (a) each Purchaser Group Member has the power and authority to execute and
deliver this Agreement. The execution and delivery of this Agreement has been
duly authorised and approved and does not require any further authorisation or
consent of any third party;

 

  (b) upon execution, this Agreement will be a legal, valid and binding
obligation of the Purchaser Group Members enforceable in accordance with its
terms;

 

  (c) the execution and delivery of this Agreement by the Purchaser Group
Members, and the promises, agreements or undertakings of the Purchaser Group
Members under this Agreement do not or shall not violate any law, rule,
regulation or order applicable to the Purchaser Group Members or violate or
contravene the provisions of or constitute a default under any documents,
contracts, agreements or any other instruments to which a Purchaser Group Member
is a party or which are applicable to a Purchaser Group Member; and

 

  (d) The Purchaser believes that it does not directly or indirectly possess any
unpublished price sensitive information in relation to the Company.

The total liability of the Purchaser Group Members in respect of all claims
under this Agreement, when taken together, shall not exceed the Purchase Price.

 

10. INDEMNIFICATION

 

10.1 Subject to the other provisions in this Clause 10, the Sellers (the
“Indemnifying Party” and collectively “Indemnifying Parties”) shall, jointly and
severally, indemnify and compensate and keep the Company and the Purchaser and
their officers, directors and employees acting in the course of their
employment, agents and authorised representatives (the “Indemnified Party” and
collectively “Indemnified Parties”) indemnified and hold the indemnified Parties
free and harmless from Losses (incurred or suffered arising out of or in
connection with:

 

  10.1.1 any breach of any Representation and Warranty made by the Sellers to be
true and correct in all material respects;

 

  10.1.2 any certificate delivered pursuant to this Agreement not being true and
correct as of the date of this Agreement and as of the Closing Date;

 

  10.1.3 any failure of the Sellers to perform, satisfy or discharge any of
their respective covenants, undertakings or obligations under the Transaction
Documents;

 

  10.1.4 (i) any Taxes relating to the period ending on or before the Accounts
Date which are not paid or provided for as of the Accounts Date and (ii) any
matters referred to in Annexure 2.13(a)-II to the Disclosure Schedule, with the
exception of items A3, A4, A5 and B1 therein (it being clarified that,
notwithstanding any other provisions of this Agreement, the ability of an
Indemnified Party to make a claim in respect of any of these matters shall not
be limited on account of these matters having been disclosed to the Purchaser);
and

 

  10.1.5

any reasonable costs incurred by the Company or Purchaser post Closing in excess
of INR 25,000,000 (Rupees Twenty five million) for the purposes of undertaking
remedial

 

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action in respect of any properties presently or formerly held by the Company in
order to ensure compliance with Applicable Law in India, including the
requirements of any environmental licenses or consents.

For the avoidance of doubt, any payment made, or required to be made, by a Party
pursuant to the provisions of this Clause 10.1 or in respect of any other claim
under this Agreement shall include any amount necessary to ensure that, after
Taxation of the payment, the other Party is left with the same amount it would
have had if the payment was not subject to Taxation.

 

10.2 The liability of the Sellers in relation to any Claim shall be subject to
the matters set out in Schedule 7 and the Disclosure Schedules and shall, in
addition, be limited as follows:

 

  10.2.1 The liability of the Sellers for all Agreed Claims when taken together
shall not exceed INR 1,250,000,000 (Rupees One billion two hundred fifty
million).

 

  10.2.2 The Sellers shall not be liable to indemnify the Indemnified Parties in
respect of a Claim unless:

 

  (a) the amount of the Claim, or of a series of connected Claims of which that
Claim is one, exceeds INR 7,500,000 (Rupees Seven million five hundred thousand)
(A Claim is connected with another Claim or Agreed Claim if they all arise out
of the occurrence of the same event and relate to the same subject matter);

 

  (b) the amount of all Claims (and not only the amount of all Agreed Claims)
that are not excluded under Clause 10.2.2(a), when taken together, exceeds INR
250,000,000, in which case only the amount exceeding INR 250,000,000 (Rupees Two
hundred fifty million) is recoverable by the Indemnified Party; and

 

  (c) the Indemnified Party has given the Sellers a Certificate notifying it of
the Claim in accordance with Clause 10.4 within 18 (Eighteen) months from the
Closing Date.

 

10.3 Nothing in Clause 10.2 shall apply to (i) a Claim that arises out of, in
connection with, or is delayed as a result of any dishonesty, fraud or willful
misconduct by any of the Sellers, their agents or advisers, (ii) a Claim that
arises out of or in connection with any title defect of the Sale Shares (except
for a pledge of the Pledged Shares in favour of IFC and DEG pursuant to the
Share Pledge Agreement) or (iii) any claims for indemnification pursuant to
Clause 2.2.9 or Clause 5.1.10.

 

10.4 Within 30 (Thirty) Business Days of the Purchaser having obtained specific
information of the incurrence of any Losses, for which the Indemnified Party is
entitled to indemnification pursuant to the provisions of this Clause 10,
including, any third party claim which might give rise to indemnification
hereunder (“Third Party Claim”), the Indemnified Party shall deliver to the
Sellers a certificate (“Certificate”), with a copy to the Escrow Agent, which:

 

  10.4.1 states that the Indemnified Party has properly accrued Losses for which
such Indemnified Party is entitled to indemnification pursuant to this
Agreement;

 

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  10.4.2 specifies in reasonable detail the basis for any anticipated Losses and
the nature of the misrepresentation, breach of warranty, breach of covenant or
claim to which each such item is related and the computation of the amount to
which such Indemnified Party claims to be entitled hereunder so as to enable the
Sellers to make an assessment of the relevant Claim and in respect thereof the
Indemnified Party shall promptly provide such information as it has or may
procure to enable the Sellers to assess and evaluate the Claim; and

 

  10.4.3 states the details of the bank account in which amounts equal to Agreed
Claims (as defined herein below) shall be transferred.

 

10.5 In the event that the Indemnifying Party objects to the indemnification of
an Indemnified Party in respect of any claimed Losses in any Certificate, the
Indemnifying Party shall, within 30 (Thirty) Business Days after receipt by the
Indemnifying Party of such Certificate, deliver to the Indemnified Party a
notice to such effect and the Indemnifying Party and the Indemnified Party
shall, within 30 (Thirty) Business Days beginning on the date of receipt by the
Indemnified Party of such objection, attempt in good faith to agree upon the
rights of the respective Parties with respect to each of such claims to which
the Indemnifying Party shall have so objected. If the Parties succeed in
reaching an agreement on their respective rights with respect to any of such
claims, the Parties shall promptly prepare and sign a memorandum setting forth
such agreement. Should the Parties be unable to agree as to any particular item
or items or amount or amounts, the dispute shall be settled in accordance with
the procedure set out in Clause 12 below.

 

10.6 Claims for Losses specified in any Certificate:

 

  (a) to which the Indemnifying Party has not objected in writing (with a copy
to the Escrow Agent) within 21 (Twenty one) Business Days of receipt of such
Certificate; or

 

  (b) which have been settled with the consent, in writing, of the Indemnifying
Party, as described in Clause 10.5; or

 

  (c) in respect of which, following the referral of such dispute to arbitration
pursuant to Clause 10.5 and Clause 11, an arbitral tribunal has made a final
award in respect of such Claim,

are hereinafter referred to, collectively, as “Agreed Claims”.

Upon any amounts being deemed or determined as Agreed Claims, the Indemnified
Party may deliver to the Escrow Agent either:

 

  (i) the relevant Certificate, where the Indemnifying Party has not objected to
such Certificate in writing within 21 (Twenty one) Business Days of receipt,

 

  (ii) documentation evidencing the consent of the Seller to such Agreed Claim,
or

 

  (iii) evidence of the final determination of such Agreed Claim by an arbitral
tribunal in accordance with the provisions of Clause 11 below,

 

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and instruct the Escrow Agent to make payment of the amount of such Agreed Claim
by wire transfer of immediately available funds from the Indemnity Escrow
Account. For the avoidance of doubt, any indemnification received by the
Indemnified Party pursuant to this Clause 10 is without prejudice to any other
remedies that the Indemnified Party may seek against the Indemnifying Party in
respect of such Claims.

 

10.7 The Indemnified Party shall not settle or admit liability in respect of, or
compromise or settle any Third Party Claim without prior consultation with the
Indemnifying Party; the Indemnified Party shall consider, but shall not be bound
to accept the advice and views expressed by the Indemnifying Party in this
regard. The Indemnified Party shall keep the Indemnifying Party fully and
promptly informed of the status of such Third Party Claim at all times.

 

10.8 Where any Indemnified Party has settled a Claim against the Sellers for or
in respect of the subject matter of which such Indemnified Party also has a
claim against a third party, the Indemnified Party, at no cost to the Sellers in
accordance with Applicable Law, shall assign and subrogate to the Sellers all
rights and interests in or to such claim against the third party, to the extent
of the value of the settled Claim.

 

11. TERMINATION

 

11.1 Termination

Without prejudice to Clause 4.3 and Clause 5.4, at any time prior to the
Closing, this Agreement may be terminated by the mutual written consent of the
Purchaser and the Sellers.

 

11.2 Effect of Termination

In the event of the termination of this Agreement in accordance with the
provisions hereof, this Agreement shall forthwith become void, and except as
provided in Clause 14.12 or as otherwise specifically provided in this
Agreement, there shall be no liability or obligation on the part of the
Purchaser, the Sellers or any of their respective subsidiaries, officers,
directors, interest holders or Affiliates, except to the extent of any breach by
a party hereto of any of its obligations prior to the time of termination.

 

12. ARBITRATION

 

12.1 If any dispute arises between the Parties hereto during the subsistence of
this Agreement or thereafter, in connection with or arising out of the validity,
interpretation, implementation or alleged breach of any provision of this
Agreement or regarding a question, including the question as to whether the
termination of this Agreement has been legitimate, the Parties hereto shall
endeavour to settle such dispute amicably.

 

12.2

In case the Parties fail to settle any such dispute, as contemplated in Clause
12.1, amicably within thirty 30 (Thirty) days from when it arose (or such other
time period as the representatives of the Purchaser and the Sellers may mutually
agree), the dispute shall be referred to final and binding arbitration by three
arbitrators, with the Purchaser nominating one arbitrator and the Sellers
appointing the second arbitrator. The third arbitrator shall be appointed by the
two arbitrators so appointed. The arbitration proceedings shall be governed by
the rules of arbitration of the International Chamber of Commerce. It is
expressly agreed by and between the Parties that Part I

 

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of the Indian Arbitration and Conciliation Act, 1996 (the “Arbitration Act”)
shall not apply (except for the provisions of Section 9 thereof) in case of any
arbitration held in accordance with the terms of this Clause 12.

 

12.3 The place of the arbitration shall be Singapore.

 

12.4 The proceedings of arbitration shall be in the English language. The
substantive law governing the dispute shall be the laws of India.

 

12.5 The arbitrators shall have the authority to assess the costs and the
expenses of the arbitration proceeding (including reasonable attorneys fees)
against the non-prevailing party.

 

12.6 The arbitrator’s award shall be final and binding on the Parties subject to
Applicable Law in force and the award shall be enforceable in any competent
court of law.

 

13. NOTICES

 

13.1 Any notice and other communications provided for in this Agreement shall be
in writing and shall be first transmitted by facsimile transmission, and then
confirmed by postage, prepaid registered airmail or by internationally
recognised courier service, in the manner as elected by the Party giving such
notice to the following addresses:

 

  (a) In the case of notices to the Sellers

 

Address   :    7 Munshi Premchand Sarani, Hastings, Kolkata -700022 Fax   :   
+91 33 22231569 Attn   :    Mr Lakshmi Niwas Bangur

 

  (b) In the case of notices to the Purchaser:

 

Address   :    1 Robinson road, #17-00, A1A Tower, Singapore (048542) Fax   :   
+65 6535 8577 Attn   :    Company Secretary With a copy to: Address   :    43rd
floor, K Wah Center, 1010 Huai Hai Zhong Road, Shanghai, China Fax   :    +86 21
6113 3201 Attn   :    General Counsel

 

  (c) In the case of notices to the Purchaser Guarantor:

 

Address   :    6400 Poplar Avenue, Memphis, TN 38197, U.S.A. Fax   :    +1
(901) 214-0647 Attn   :    General Counsel

 

13.2 All notices shall be deemed to have been validly given on (i) the Business
Day immediately after the date of transmission with confirmed answer back, if
transmitted by facsimile transmission, or (ii) the Business Day of receipt, if
transmitted by courier or registered airmail.

 

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13.3 Any Party may, from time to time, change its address or representative for
receipt of notices provided for in this Agreement by giving to the other Parties
not less than 10 (Ten) day’s prior written notice.

 

13.4 The provisions of this Clause 13 shall survive termination of the
Agreement.

 

13.5 So far as it is legally and within his powers to do so, Seller No. 1 is
hereby irrevocably appointed as agent and attorney-in-fact for each Seller and,
for and on behalf of each Seller, is hereby authorised to agree and execute any
amendments to the provisions of this Agreement, give and receive notices and
communications, notify consents, agree to negotiate, enter into settlements and
compromises, and demand arbitration and comply with orders of courts and awards
of arbitrators with respect to this Agreement and take all actions necessary,
expedient or appropriate in the judgment of Seller No. 1 to achieve the
foregoing provided that in no event shall Seller No. 1’s liability under this
Agreement to any Party be increased or extended (in amount or in time) only as a
result of his appointment hereunder.

 

14. MISCELLANEOUS

 

14.1 Waivers

No forbearance, indulgence or relaxation or inaction by any Party at any time,
to require performance of any of the provisions of this Agreement shall, in any
way, affect, diminish or prejudice the right of such Party to require
performance of that provision and any waiver or acquiescence by any Party of any
breach of any of the provisions of this Agreement shall not be construed as a
waiver or acquiescence of any continuing or succeeding breach of such provisions
or a waiver of any right under or arising out of this Agreement, or acquiescence
to or recognition of rights and/or position other than as expressly stipulated
in this Agreement.

 

14.2 Cumulative Rights

All remedies of either Party under this Agreement, whether provided herein or
conferred by statute, civil law, common law, custom, trade, or usage, are
cumulative and not alternative and may be enforced successively or concurrently.

 

14.3 Entire Agreement, Non-assignability, Parties in Interest

The Transaction Documents, including the Exhibits, Schedules, Annexes:

 

  (a) constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof,

 

  (b) except as specifically stated in a particular section of the Transaction
Documents referred to above, shall not create or to be deemed to create any
third party beneficiary rights in any person or entity not a party to this
Agreement,

 

  (c) except by operation of the transaction contemplated herein, shall not be
assigned by operation of law or otherwise except as otherwise specifically
provided, and

 

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  (d) shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.

 

14.4 Relationship

None of the provisions of this Agreement shall be deemed to constitute a
partnership between the Parties hereto and no Party shall have any authority to
bind the other Party otherwise than under this Agreement, or shall be deemed to
be the agent of the other in any way.

 

14.5 Severability

If any provision of this Agreement or the application thereof to any person or
circumstance shall be invalid or unenforceable to any extent, the remainder of
this Agreement and the application of such provision to persons or circumstances
other than those as to which it is held invalid or unenforceable shall not be
affected thereby, and each provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law. Any invalid or unenforceable
provision of this Agreement shall be replaced with a provision, which is valid
and enforceable and most nearly reflects the original intent of the
unenforceable provision.

 

14.6 Announcements

No announcement whatsoever relating to the contemplated acquisition of the Sale
Shares by the Purchaser shall be made by any of the Parties without prior
consultation with each other, save as required by Applicable Law. The Parties
undertake to keep confidential all information with respect to the intended
acquisition of the Sale Shares by the Purchaser including any negotiations,
arrangements or agreements (including the contents of this Agreement), save for
the disclosures required by Applicable Law. Provided that prior to any
disclosure of any information related to the acquisition of Sale Shares if
required by law or regulation, the Party disclosing the information must first
notify the other Parties, who shall then have the opportunity to respond to
and/or dispute such intended disclosure. Nothing stated in this Clause shall
affect the rights of the Parties to consult each other and make such
announcements to the press and media as is agreed between them at such time.

 

14.7 Confidentiality

The Parties shall maintain and cause to be maintained strict confidentiality of
all confidential information, data and materials relating to the business and
affair of the Parties and shall not disclose to anyone, such confidential
information, data and materials without prior written permission of the
concerned Party. All such confidential information, data and materials relating
to business and affairs of the concerned Party shall be given to the other Party
or its nominee, or destroyed as the concerned Party may advise and the other
Party shall deliver a certificate to the concerned Party certifying as to such
return or destruction except where such information is required to be kept with
the other Party under Applicable Law or under an order or judgement of a court
or required to be maintained with the other Party under any of its agreements.

The obligations of confidentiality shall not apply to any information that:

 

  (a) has become generally available to the public;

 

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  (b) may be required in any report, statement or testimony submitted to any
competent authority;

 

  (c) may be required in response to any summons or subpoena or in connection
with any litigation; or

 

  (d) may be required to comply with any law, order, judgement, regulation or
ruling applicable to the Party hereto.

The provisions of this Clause 14.7 shall survive the termination of this
Agreement.

 

14.8 Specific Performance

The Parties hereto agree that if any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached, irreparable damage would occur, no adequate remedy at law would exist
and damages would be difficult to determine and that parties shall be entitled
to seek and enforce specific performance of this Agreement, in addition to any
other legal rights and remedies, without the necessity of demonstrating the
inadequacy of monetary damages.

 

14.9 Costs

Unless otherwise provided, each Party shall bear its own costs in connection
with the negotiation, preparation, and performance of this Agreement and other
Transaction Documents. The stamp duty applicable on the Transaction Documents,
if any, shall be borne solely by the Purchaser.

 

14.10 Further Assurance

The Parties hereby agree and undertake to render all necessary cooperation and
assistance to each other and to execute, sign, and deliver all other documents,
deeds and writings that may be required by the Purchaser to give full force and
effect to terms and conditions under this Agreement.

 

14.11 Counterparts

This Agreement may be executed in counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same instrument.
Delivery of executed signature pages by facsimile transmission and/or PDF
attachment to email will constitute effective and binding execution and delivery
of this Agreement.

 

14.12 Survival

Clauses 1, 2.2, 6, 8, 10.2, 11.2, 12, 13, 14 and 15 shall survive the
termination of this Agreement.

 

14.13 Time is of the essence

The Parties agree that time is of the essence with respect to the performance of
their obligations under this Agreement.

 

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15. GOVERNING LAW AND JURISDICTION

This Agreement is made under, and shall be governed, enforced and construed in
accordance with the laws of India. Subject to Clause 12, the courts in Mumbai,
India shall have exclusive jurisdiction in respect of any dispute between the
Parties.

 

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IN WITNESS WHEREOF THE PARTIES HAVE PUT THEIR HANDS THE DAY AND YEAR FIRST
HEREINABOVE WRITTEN:

 

Signed and Agreed as to the date above written     Sellers    

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Surabhi Gaulande

One Indiabulls Centre

841 Senabati Bapat Marg

Mumbai 400013

By:  

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  Witness:  

 

Name:

 

 

Lakshmi Niwas Bangur

   

 

Title:

 

 

Sellers’ Representative

    Signed and Agreed as to the date above written     Purchaser    

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R. Sampati Kumar

933/1, The Residence,

7th Floor,

c/o Trilegal

Residency Road

Bangalore

 

By:  

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  Witness  

 

Name:

 

 

Paul Brown

   

 

Title:

 

 

IP Asia President

   

 

Signed and Agreed as to the date above written

   

 

Purchaser Guarantor

    By:  

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    Name:   Thomas Kadien     Title:   Senior Vice President, Consumer Packaging
& IP Asia    

 

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Schedule 5

REPRESENTATIONS AND WARRANTIES

 

1. Definitions

In addition to the terms defined in this Agreement the following capitalised
words shall have the following meanings, unless repugnant to the context or
meaning thereof:

“Accounts” means the audited financial statements of the Company for the
Financial Year ending on the Accounts Date and for the preceding two Financial
Years in each case including, as appropriate, the balance sheet, profit and loss
account together with the notes on them, the cash flow statement and the
auditor’s and Directors’ reports;

“Accounts Date” means 31 March, 2010;

“Financial Year” means the financial year of the Company, which shall be a
period commencing from 1 April and ending on 31 March of the following calendar
year;

“Insolvency Proceedings” means any proceedings for the winding-up, dissolution,
bankruptcy, liquidation, receivership, compromise, or administration of any
entity or any other insolvency proceedings or any scheme for the benefit of
creditors generally;

“Intellectual Property Rights” means trademarks, service marks, trade and
business names, rights in designs, patents, copyrights, database rights, moral
rights and rights in know-how and other intellectual property rights in each
case whether registered or unregistered and including applications for the grant
of any of the foregoing and all rights or forms of protection having equivalent
or similar effect to any of the foregoing which may subsist anywhere in the
world;

“Interim Accounts” means:

 

  (i) the reviewed unaudited financial statements of the Company for the six
months ending 30 September 2010; and

 

  (ii) the unaudited financial statements of the Company for the quarter ending
31 December, 2010;

“Lease” means a lease of land (including a leave, license or right of occupation
or use of land); and “Lessor” or “Lessee” shall be construed accordingly;

“License” means any authorisation, license (including statutory license),
approval, registration, recognition, notification, membership, clearance,
consent, permits, permissions, grant, certificate, exemption, order,
declaration, report or notice (including those received from any Governmental
Authority) necessary to establish, own and/or operate the assets of the Company
or to carry on the Business or any part thereof or any activity ancillary or
incidental to the conduct of the Business by the Company (except in relation to
any Intellectual Property Rights);

 

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“Marketing Information” means all information relating to the marketing of any
products or services, including customer names and lists, sales targets, sales
statistics, market share statistics, marketing surveys and reports, marketing
research and any advertising or other promotional material;

“Property” means any land and premises of which the Company is the Lessee or
licensee or a legal and/or beneficial owner;

“Regulatory Authority” means any regulatory, supervisory, administrative or
governmental body or agency, authority or self regulatory organisation, stock
exchange, clearing house, market or association of dealers or traders; and

“VAT” means value added tax.

 

2. Representations and Warranties

The Sellers, jointly and severally, hereby represent and warrant to the
Purchaser that:

 

2.1 Ownership of Shares

 

  (a) As on the date of this Agreement, the Sellers hold 21,260,008 (Twenty One
two hundred million sixty thousand and eight) Equity Shares or 53.46% (Fifty
three point four percent) of the issued and paid up equity share capital and
shareholder voting rights of the Company and each Seller holds such number of
Equity Shares as indicated against its name in column 3 of Schedule 1.

 

  (b) There is no action, suit, proceeding, investigation or arbitration
proceeding pending, or threatened against the Sellers or the Company and neither
the Company nor the Sellers has received any notice in relation to any
outstanding orders, decrees, or stipulations of any Governmental Authority in
relation to any of the Equity Shares or their assets which adversely affect the
transactions contemplated hereunder.

 

  (c) The Equity Shares held by the Sellers are fully paid-up and each Seller is
the sole legal and beneficial owner of, and has good and marketable title to,
the Sale Shares indicated against its name in column 3 of Schedule 1. All Sale
Shares held by the Sellers have been acquired in compliance with all Applicable
Laws. There is no option, right to acquire or Encumbrance on, over or affecting
any of the Equity Shares or any agreement or commitment to give or create any of
the foregoing in respect thereof, and the Sellers have not received notice of
any claim by any Person to be entitled to any of the foregoing in respect
thereof.

 

  (d) No Person has any right, contingent or otherwise, to subscribe for any
Equity Shares or other securities of the Company. Other than this Agreement,
neither the Sellers nor the Company has received notice from any third party
claiming that there exists any agreement, or obligation requiring the creation,
allotment, issue, transfer, redemption or repayment of, or the grant to a Person
of the right (conditional or not) to require the allotment, issue, transfer,
redemption or repayment of, a share in the capital of the Company (including an
option or right of pre-emption or conversion).

 

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2.2 The Sellers have not, entered into or agreed to enter into any agreement,
arrangement, undertaking, commitment or transaction on behalf of the Company or
incurred any liabilities (actual or contingent) on behalf of the Company or
otherwise bound the Company in any way whatsoever except in the ordinary course
of the Business and within the scope of the authority conferred by the Company.

 

2.3 Authority and Capacity of the Sellers

 

  (a) Each Seller has taken all necessary action and has all requisite power,
authority and capacity to enter into this Agreement and the Transaction
Documents to which such Seller is a party and to consummate the transactions
contemplated hereby and thereby. Each Seller that is a body corporate has duly
authorized by all necessary corporate action on its part the execution, delivery
and performance of this Agreement and the Transaction Documents to which such
Seller is a party and the consummation of the transactions contemplated hereby
and thereby and no other corporate action on the part of any Seller who a body
corporate is necessary to authorize the execution and delivery by any such
Seller of the Agreement and the Transaction Documents to which it is a party and
the consummation of the transactions contemplated hereby and thereby.

 

  (b) This Agreement and each Transaction Document to which the Sellers are or
will be a party have been or, if to be executed and delivered by the Sellers
after the date hereof and at or prior to the closing, will be duly executed and
delivered by the Sellers and constitute or will then constitute the valid and
binding obligations of the Sellers enforceable against the Sellers in accordance
with their terms.

 

2.4 The execution of and compliance with the terms of this Agreement and the
Transaction Documents does not and will not:

 

  (a) Conflict with or constitute a breach of or default under any provision of:

 

  (A) The constitutional documents of any Seller who is a body corporate;

 

  (B) Any agreement or instrument to which any Seller is a party or by which it
is bound which adversely affects the ability of the Sellers to consummate the
transactions contemplated under the Transaction Documents; or

 

  (C) Any lien, lease, order, judgment, award, injunction, decree, ordinance or
regulation or any other restriction of any kind or character by which any of the
Sellers are bound which adversely affects the ability of the Sellers to
consummate the transactions contemplated under the Transaction Documents;

 

  (b) Relieve any other party to a contract with the Company of its obligations
or enable that party to vary or terminate its rights or obligations under that
contract which materially and adversely affects the business of the Company;

 

  (c) Result in the creation or imposition of any Encumbrance of any nature on
any of the property or assets of the Company or the Sellers; or

 

  (d) Result in:

 

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  (i) the termination of or effect on any financial agreement to which the
Company is a party or subject; or

 

  (ii) any indebtedness of the Company becoming due, or capable of being
declared due and payable, prior to its stated maturity.

 

2.5 The state of the Company

The Company is a company duly incorporated, and validly existing under the laws
of India, is in good standing in each of the jurisdictions in which it conducts
business and has requisite power and authority to own its Property and assets
and to conduct its Business as presently conducted.

 

2.6 Information Provided

The information provided in relation to the Company by the Sellers to the
Purchaser and/or its representatives is true and accurate and nothing material
has been withheld.

 

2.7 Constitutional and corporate documents

 

  (a) The copies of the Certificate of Incorporation of the Company and the
Memorandum and Articles provided to the Purchaser and/or its representatives are
true, accurate and complete in all respects.

 

  (b) All statutory books and registers of the Company under the Act (including
the register of deposits required to be maintained by the Company in accordance
with the Companies (Acceptance of Deposits) Rules, 1975) and other Applicable
Law have been maintained and updated in accordance therewith and no notice or
allegation that any of them is incorrect or should be rectified has been
received.

 

  (c) During the past three years all returns and particulars, resolutions and
other documents which the Company is required by Applicable Law to file with or
deliver to a Person, body or court charged with maintaining a registry have been
correctly made up, duly filed and/or delivered.

 

2.8 Subsidiaries, associations and branches

The Company;

 

  (a) does not hold or beneficially own nor has it agreed, within the past three
years, to acquire any interest in or merge or consolidate with any body
corporate or any other entity;

 

  (b) within the past three years, has not nor has agreed to become a member of
any partnership or other unincorporated association, joint venture or
consortium;

 

  (c) does not have outside India any branch or any permanent establishment; or

 

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  (d) has not issued any profit sharing bonds or otherwise granted rights to any
Person to share in future income or profits, reserves or liquidation surpluses
(other than the holders of its Equity Shares) which bonds or rights, as the case
may be, are presently outstanding.

 

2.9 Ownership of assets

 

  (a) The Company is the legal and beneficial owner of and has good title to all
the assets included in the Accounts, and any assets acquired since 31 December,
2010 except for those disposed of since 31 December, 2010 in the normal course
of business.

 

  (b) None of the property, assets, undertaking, of the Company is subject to
any Encumbrance or any agreement or commitment to give or create any
Encumbrance, and no Person has claimed (in writing to the Sellers or the
Company) to be entitled to any of the foregoing.

 

  (c) The assets of the Company comprise all the assets necessary for the
Business as carried on by the Company as of 31 December, 2010 and date of this
Agreement.

 

  (d) The Company has not been a party to a transaction:

 

  (i) Which is liable to be set aside or otherwise avoided by reason of any
Applicable Law; or

 

  (ii) Pursuant to or as a result of which an asset owned, purportedly owned or
otherwise held by the Company is liable to be transferred or re-transferred to
another Person; or

 

  (iii) Which gives or may give rise to a right of compensation or payment in
favour of another Person under any Applicable Law.

  (e) The Company possesses all necessary Licenses under Applicable Law for the
use of the assets of the Company for the purpose for which they are currently
used for the conduct of the Business and the Company has not defaulted in
complying with the terms and conditions, if any, applicable or imposed on any
such License in any material respect.

 

  (f) All fixed assets of the Company have been duly capitalized as per the
Companies Act, 1956 and the standards prescribed by the Institute of Chartered
Accountants of India from time to time.

 

2.10 Compliance with laws

 

  (a) Neither the Company nor any of its officers, agents or employees (during
the course of their duties) has done or omitted to do anything which is a
contravention or violation of any Applicable Law or legal obligation of the
Company and the Company has complied with all Applicable Law, including
provisions of applicable labour, health and safety and environmental laws,
Insider Trading Regulations, SEBI (Depositories and Participants) Regulations,
1996, Takeover Code, and no complaints, proceedings and/or litigation involving
the Company is pending in respect of such matters.

 

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  (b) The Company has framed and adopted (i) a code of internal procedures and
conduct for prevention of trading in accordance with the provisions of the
insider Trading Regulations and (ii) a code of business conduct and ethics as
required by Clause 49 of the Listing Agreement.

 

  (c) The Company has complied with all the provisions of the Act, Companies
(Acceptance of Deposits) Rules, 1975 and other Applicable Law pertaining to
acceptance of public deposits, including maintaining a register of deposits, and
has not committed any breach or defaulted on its obligations in relation to the
deposits availed by it from the public and no proceedings have been filed
against, or received by, the Company or any of its officers or directors in this
regard.

 

2.11 Licenses, Permits and Consents

Paragraph 2.11 of the Disclosure Schedule lists all Licenses that the Company
possesses in connection with its Business and operations, all such Licenses are
either valid and effective or, if expired, are (so far as the Sellers are aware)
capable of renewal and the Company has not breached in any material respect any
of the terms and conditions applicable in relation to such Licenses and the
Sellers are not aware of anything which might prejudice the continuation or
renewal of any of those Licenses or result in any of those Licenses being
modified, cancelled, revoked or suspended. Other than the Licenses listed in
Paragraph 2.11 of the Disclosure Schedule, there are no other material Licences
that the Company requires in connection with its Business and operations. The
Disclosure Schedules contains details of all material Licences that have expired
and, in respect of each such Licence, an application for renewal of such Licence
has been made by the Company and the expiry of such Licence does not and will
not, unless the application for renewal is rejected by the relevant Governmental
Authority, adversely affect the ability of the Company to undertake its Business
and operations until renewal,

 

2.12 Environmental matters

 

  (a) The Company has obtained all requisite environmental Licenses (including
under the Air (Prevention and Control of Pollution) Act, 1981 and the Water
(Prevention and Control of Pollution) Act, 1974), all of which are valid and
subsisting, and complies with all applicable environmental law and with the
terms and conditions of all environmental Licenses and, so far as the Sellers
are aware, there are no circumstances likely to give rise to any modification,
suspension or revocation of an environmental License or a breach of applicable
environmental law. The Company has not received any notice or other
communication that it is or may be in violation of any environmental law or
environmental License.

 

  (b) No environmental Licence may be terminated, revoked, modified or suspended
as a result of the acquisition by the Purchaser of the Sale Shares. So far as
the Sellers are aware, no circumstances exist which may result in any
environmental Licence not being extended, renewed or, where necessary,
transferred.

 

  (c) So far as the Sellers are aware, no works or expenditure are required in
order to secure compliance with, or maintain, any environmental Licence of the
Company or in order for the Company to comply with all applicable environmental
laws.

 

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  (d) Requisite particulars of or, in the case of a document, a copy of all
Tradable Environmental Instruments held by the Company and any contract,
agreement, pledge or trust pursuant to which it has sold, mortgaged or in any
way disposed of any interest in any such Tradable Environmental Instrument are
set out in the Disclosure Letter.

For purposes hereof, the term ‘environmental law’ shall mean any central, state
or local law, statute, rule or regulation relating to the environment or health
and safety, including without limitation, any statute, regulation,
administrative decision or order or License pertaining to (i) treatment,
storage, disposal, generation and transportation of toxic or hazardous materials
or substances or solid or hazardous waste; (ii) air, water and noise pollution;
(iii) groundwater and soil contamination; (iv) the release or threatened release
into the environment of toxic or hazardous materials or substances, or solid or
hazardous waste, including without limitation emissions, discharges, injections,
spills, escapes or dumping; (v) storage tanks, vessels, containers, abandoned or
discarded barrels, and other closed receptacles used for toxic or hazardous
materials or substances of solid or hazardous waste; (vi) occupational health
and safety, or (vii) public health and safety.

“Tradable Environmental Instrument” shall mean any credit, allowance,
certificate or right relating to the use or exploitation of any environmental
resource.

 

2.13 Litigation

 

  (a) There are no material litigation or arbitration proceedings, or so far as
the Sellers are aware any inquiries, investigations or other proceedings pending
or threatened by or against the Company or any employee, officer or director of
the Company (in the course of the exercise of its duties). No notices of such
pending or threatened proceedings have been received by the Company or any of
the Sellers.

 

  (b) There are no existing or pending judgments, order, decree, arbitral award
or decision of a court, tribunal, arbitrator or governmental agency adversely
affecting the Company, its cash flows and financial condition or the Business of
the Company, or against a Person whose acts or defaults the Company may be
vicariously liable for.

 

2.14 Insolvency

 

  (a) Neither the Company nor any part of the assets or undertaking of the
Company, is part of any Insolvency Proceedings and there are no circumstances
likely to give rise to any successful Insolvency Proceedings in relation to the
Company or any of its assets or undertaking.

 

  (b) The Company is not a party to any material transactions capable of being
set aside, stayed, reversed, avoided or affected in whole or in part by any
Insolvency Proceedings whether as transactions at undervalue, in fraud of or
against the interests of creditors, or preferences.

 

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2.15 Distributions

All dividends or other distributions of profits declared, made or paid since the
date of incorporation of the Company have been declared, made and paid in
accordance with Applicable Law and its Memorandum and Articles.

 

2.16 Accounts and Financials

 

  (a) Accounts and debtors

 

  (i) The Accounts of the Company have been prepared in accordance with
generally accepted accounting principles and practices in India and the
Applicable Law and reflect a true and fair view of the state of affairs and the
profits or losses of the Company as on the Accounts Date and, without limitation
to the aforesaid:

 

  (A) Fairly and truly state the assets and liabilities of the Company;

 

  (B) Have been audited by a certified auditor;

 

  (C) Contain particulars in notes to the Accounts of Taxes (including deferred
Taxes) and other liabilities (whether quantified, contingent or otherwise) of
the Company as at the corresponding Accounts Date;

 

  (D) Are not affected by any unusual or non-recurring items (including without
limitation any transactions which rendered the profits and/or losses of the
Company unusually high or low); and

 

  (E) Have been duly filed in accordance with Applicable Law.

 

  (ii) The Accounts have been prepared on a basis consistent with the basis
employed for each of the three preceding Financial Years without any change in
the accounting policies used.

 

  (iii) The Company has disclosed all transactions with related parties in
accordance with generally accepted accounting principles and practices in India
and Applicable Law. All related party transactions are in the ordinary course of
business and the terms thereof are at arm’s length.

 

  (iv) Except as and to the extent of the amounts specifically accrued or
disclosed in the Accounts, the Company does not have any liabilities except for
liabilities incurred in the ordinary course of business.

 

  (b) Financial Debt, loans, bank accounts, etc.

 

  (i) Except as disclosed in the Accounts, the Company does not have any
outstanding loan capital or any money borrowed or raised including money raised
by promissory note or debt factoring or any liability (whether present or
future) in respect of any guarantee, indemnity, letter of credit, surety or any
other form of debt instrument, or any comfort letter.

 

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  (ii) The Company has not lent any money which has not been repaid to it nor
does it own the benefit of any debt (whether present or future) other than debts
accrued to it in the ordinary course of its business and no such debt has been
outstanding or released,

 

  (iii) The Company is not subject to any arrangement for receipt or repayment
of any grant, subsidy or financial assistance from any government department or
other body.

 

  (iv) The Company has paid its existing lenders within the times agreed with
them and, so far as the Sellers are aware, no event has occurred which would
entitle any lender (with or without the giving of notice) to call for the
acceleration of repayment of any indebtedness of the Company prior to the
maturity date.

 

  (v) In relation to any material legally enforceable agreement or instrument to
which the Company is a party:

 

  (A) There has not been any contravention of or non-compliance with any of its
terms which can or may result in termination or suspension of the agreement,
instrument or arrangement or the devolvement of any liability;

 

  (B) No steps for the enforcement of any Encumbrance (under such agreement or,
instrument) have been taken or threatened against the Sellers or the Company;

 

  (C) There has not been any alteration in the terms and conditions of any
agreement which may prejudice the Company;

 

  (D) Neither the Sellers nor the Company has done anything which prejudices its
continuation; and

 

  (E) It is not dependent on the guarantee of, or on any security provided by, a
third party,

 

  (vi) All deposits obtained by the Company from the public (including the
directors and employees of the Company) that have become due and payable have
been repaid by the Company in accordance with Applicable Laws including the
Companies (Acceptance of Deposits) Rules, 1975 and there are no amounts
outstanding in this regard.

 

  (vii) The Company’s bank accounts details (including the name of the bank,
branch, account number, account balance as of the date of this Agreement,
authorised signatories, signing/sign rule for the account) have been truly and
correctly disclosed in the Disclosure Schedule.

 

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  (c) Interim Accounts.

 

  (i) The Interim Accounts of the Company reflect a true and fair view of the
state of affairs, the profits or losses, and the assets and liabilities of the
Company to the extent of the basis of their respective preparations.

 

  (ii) The Interim Accounts of the Company have been prepared on a basis
consistent, to the extent of their respective preparations, with the preparation
of the Accounts.

 

2.17 Financial and other records

 

  (a) All statutory books of accounts and other financial records of the
Company:

 

  (i) have been prepared and maintained as required by Applicable Law;

 

  (ii) record all matters that ought to appear in them as required by Applicable
Law;

 

  (iii) do not contain any inaccuracies or discrepancies; and

 

  (iv) are in the possession or under the control of the Company.

 

  (b) So far as the Sellers are aware, no notice has been received or allegation
has been made by any Government Authority that any of those records are
incorrect or should be rectified.

 

  (c) All statutory records, including the accounting records, required to be
kept or filed by the Company have been properly kept or filed as required by the
Applicable Law.

 

  (d) All deeds and documents belonging to the Company that are required for its
operations or by Applicable Law are in its possession or under its control.

 

2.18 Changes since Accounts Date

Since the Accounts Date:

 

  (a) the Company has conducted its Business in the normal and ordinary course
and as a going concern;

 

  (b) no dividend or other distribution of profits or assets has been, or agreed
to be, declared, made or paid by the Company;

 

  (c) the Company has not borrowed or raised any money or taken any form of
financial security other than in the normal and ordinary course of business;

 

  (d)

no capital expenditure has been incurred on any individual item by the Company
in excess of INR 20,000,000 (Rupees Twenty million) and the Company has not
acquired, invested or disposed of (or agreed to acquire, invest or dispose of)
any individual item

 

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having a value in excess of INR 20,000,000 (Rupees Twenty million) other than in
the ordinary course of business;

 

  (e) there has been no abnormal increase or reduction of stock in trade as
compared to the relevant period during the previous Financial Year;

 

  (f) none of the stock in trade reflected in the Accounts has realised an
amount less than the value placed in it in the Accounts (except in accordance
with any provision made in the Accounts for this purpose); and

 

  (g) the Company has not entered into any transaction with a related party that
are undisclosed.

 

2.19 Commercial

 

  (a) Contracts

The Company has complied with all its obligations under each, and is not in
breach of any, material contract or obligation and, so far as the Sellers are
aware, each other party to such contract has complied with its obligations under
each contract. Each such material contract or obligation is in full force and
effect and binding on the parties in accordance with its terms and neither the
Company nor any of the Sellers has received any notice or has any knowledge that
the other party or parties to each such contract has argued or concluded that
such contract is invalid, non-binding or unenforceable or that a breach or
default thereunder has occurred.

 

  (b) Management contracts

The Company is not a party to any contractor obligation which is for the
provision of management services to the Company and which is not terminable by
it on less than six months’ notice without compensation.

 

  (c) Agencies, etc.

The Company is not a party to any agreement which restricts its freedom to carry
on the whole or any part of its Business in any part of the world in such manner
as it thinks fit.

 

  (d) Transactions with Sellers

Except as set forth in the Disclosure Schedule, no Seller or any Affiliate of a
Seller, is (i) a party to any transaction with the Company (including, but not
limited to, any Contract providing for the employment of, furnishing of goods or
services by, rental of real or personal property from, borrowing money from or
lending money to, or otherwise requiring payments to, any such Person, but
excluding payments for normal salary and bonuses and reimbursement of expenses),
or (ii) the direct or indirect owner of an interest in any Person which is a
present or potential competitor, supplier or customer of the Company, nor does
any such Person receive income from any source other than the Company which
relates to the business of, or should properly accrue to, the Company.

 

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  (e) Anti-competitive arrangements

 

  (i) The Company is and has always been in compliance with the provisions of
the Competition Act, 2002 or any other anti-trust or similar legislation in any
jurisdiction in which the Company carries on Business or has assets or sales.

 

  (ii) The Company has not given any undertaking and neither the Company nor any
of the Sellers has received any notice or has any knowledge that an order has
been made against it or that any investigation, request for information, or
statement of objections or similar matter has been carried out or, as the case
may be, received pursuant to any anti-trust or similar legislation in any
jurisdiction in which it carries on business or has assets or sales.

 

  (iii) The Company is not a ‘dominant undertaking’ for the purposes of
Section 108A read with Section 108G of the Act.

 

  (f) Intellectual Property Rights

 

  (i) No activities of the Company infringe on any Intellectual Property Rights
of any third party and, so far as the Sellers are aware, no claim has been made
against the Company in respect of such infringement. The Company has not entered
into any agreement for the license of any Intellectual Property Rights in
relation to its Business and operations and Company is not liable to pay any
material royalty or license fee to any person in this regard. The Company has
not licensed any of its Intellectual Property Rights to any third party.

 

  (ii) All Intellectual Property Rights used by the Company in its Business are
either owned by the Company or used with the consent of the owner of such
Intellectual Property Rights or pursuant to a license or other agreement.

 

  (iii) The Disclosure Schedule sets out all the registered and unregistered
trademarks, service marks, trade and business names owned or used by the Company
(“Company Trademarks”). The Company is the sole legal and exclusive owner, free
of any Encumbrance, of the Company Trademarks, the registration of all Company
Trademarks are currently valid and where the registration of any of the Company
Trademarks (including domain names) has expired, the Company has made the
necessary applications for the renewal of the same in accordance with Applicable
Law.

 

  (iv) As regards the Intellectual Property Rights (other than the Company
Trademarks) owned by the Company, the Company is the sole legal and beneficial
owner of or applicant for such Intellectual Property Rights and all such
Intellectual Property Rights are owned solely by the Company free of any
Encumbrance and the Company may freely use and dispose such Intellectual
Property Rights.

 

  (v) The Company is not aware of any unauthorised use by the Company of any
third party Intellectual Property Rights.

 

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  (vi) So far as the Sellers are aware, nothing has been done or omitted to be
done by the Company which would jeopardise the validity or subsistence of any of
the Intellectual Property Rights of the Company.

 

  (vii) The Company is not aware of any unauthorised use by any Person of any
Intellectual Property Rights or confidential information of the Company.

 

  (viii) No name or mark identical or deceptively similar to the Company
Trademarks has been registered in India or is, so far as the Sellers are aware,
being used by any Person in the same or similar business as the Business in
India.

 

  (ix) The Company has taken reasonable measures to protect its Intellectual
Property Rights, whether registered or unregistered.

 

  (x) The Company does not carry on Business under names other than the Company
Trademarks or its own registered corporate names.

 

  (g) Plant and Equipment

The machinery, plant and equipment of the Company and all equipment (including
without limitation office equipment) owned or used by it are in a condition to
perform their functions as now carried on.

 

  (h) Inventory/Stock in Trade

The stock-in-trade (including work-in-progress) of the Company:

 

  (i) is in good condition and is capable of being sold by the Company in the
ordinary course of its business.

 

  (ii) is not excessive and is adequate in relation to the current trading
requirements of the Company and none of the stock is obsolete, slow moving,
unusable or unmarketable other than in the normal course of business.

 

  (i) Insurance

 

  (i) Paragraph 2.19(i) of the Disclosure Schedule lists details of all
insurance policies that the Company has subscribed to in connection with its
Business, operations and assets (including but not limited to the policy type,
policy period, subject/scope of the insurance, premium, policy limit/amount
insured and the name of the insurer). All insurance policies are currently in
full force and effect and, so far as the Sellers are aware, nothing has been
done or omitted to be done by the Company or its officers which could make any
policy of insurance void or voidable. There is no claim outstanding under any
such policy. The Company has not received any notice or other communication to
pay any additional premiums other than those set out in the policies.

 

  (ii)

All the assets and undertakings of the Company of an insurable nature are
insured in adequate amounts against fire and other risks normally insured
against

 

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by persons carrying on the same business as those carried on by the Company and
are covered against accident, damage, injury, third party loss, loss of profits
and other risks normally covered by insurance.

 

  (iii) The Company is in compliance with all contracts that require it to
insure any of the assets or properties owned or occupied by the Company.

 

  (j) Computer Systems, data, records etc.

All the records and systems (including but not limited to computer systems) and
all data and information of the Company are recorded, stored, maintained or
operated in accordance with Applicable Law exclusively by or on behalf of the
Company and are not disclosed to any third party except in the ordinary course
of Business (and/or under Applicable Law), or wholly or partly dependent on any
facilities or means which are not under the ownership or control of the Company
and such records, control and other systems, data, telecommunication facilities
are adequate for the current operational and business requirements of the
Company (including the maintenance of back-up or procedures).

 

  (k) Export Obligations

The Company is not subject to any export obligations.

 

2.20 No powers of attorney

Except as contemplated under this Agreement, the Company has not granted any
power of attorney or other authority by which a Person may enter into any
agreement or arrangement, or undertake any obligation, for or on the Company’s
behalf.

 

2.21 Secret or confidential information or property

 

  (a) Neither the Company nor any of the Sellers have at any time (save in the
ordinary course of the Company’s Business or subject to an obligation of
confidentiality or to the Company’s professional advisors) disclosed to any
Person:

 

  (i) Any of the secret or confidential information of the Company, including
(without limitation) technical information, manufacturing and product
specifications, plans, statistics, client lists and marketing information; or

 

  (ii) Any other information relating to the Business or affairs the disclosure
of which might or could cause loss or damage to or adversely affect the Company;
or

 

  (iii) Any secret or confidential information relating to the Company’s
customers, clients, employees and agents.

 

  (b) The Company has not been a party to any agreement, arrangement or policy
regarding confidentiality of information which is void or unenforceable (whether
in whole or in part).

 

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2.22 Marketing Information

 

  (a) All Marketing Information used by the Company is owned by or is the
subject of a valid grant of rights to the Company and is not subject to any
restriction which materially and adversely affects the Company’s ability to use
it for the purposes of its Business.

 

  (b) The Company has not, except in the normal and proper course of the
Business, disclosed or is obliged to disclose any Marketing Information of a
confidential nature to any Person other than its employees, agents, consultants
or advisers.

 

  (c) The Company is not in material breach of any agreement under which any
Marketing Information was or is to be made available to it.

 

2.23 Taxation

 

  (a) Taxation liabilities

All Taxation of any nature whatsoever for which the Company is liable or for
which the Company is liable to account and which has fallen due for payment has
been duly paid (insofar as such Taxes ought to have been paid) within the
statutory period or any approved extension.

 

  (b) Taxation returns

 

  (i) All notices, computations and returns which ought to have been given or
made, have been properly and duly submitted by the Company to the relevant
Taxation or excise authorities within the statutory period or any approved
extension and all information, notices, computations and returns submitted to
such authorities are true, accurate and complete and are not the subject of any
dispute nor are likely to become, so far as the Sellers are aware, the subject
of any dispute with such authorities.

 

  (ii) All records that the Company is required to keep for Taxation purposes or
which would be needed to substantiate any claim made or position taken in
relation to Taxation by the Company, have been duly kept and are available for
inspection.

 

  (c) Extensions of time for filing

The Company has not asked for any extensions of time for the filing of any
Taxation returns or other documents relating to Taxation for the past three
financial years.

 

  (d) Concessions and arrangements

The amount of Taxes chargeable on the Company during any accounting period
ending on or within three years before the Accounts Date has not been affected
to any extent by any concession, arrangements, agreement or other arrangement
with any Taxation authority (not being a concession, agreement or arrangement
available to companies generally) and the Company is not subject to a special
regime in respect of Taxation.

 

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  (e) Penalties and interest

The Company is not, liable to pay any interest, penalty, surcharge or fine
relating to Taxation.

 

  (f) Investigations

The Company has not been subject to or is currently subject to any
investigation, show cause notice, audit, demand or search and/or seizure by any
Taxation or excise authority.

 

  (g) Payments

So far as the Sellers are aware, all rents, interest and other amounts paid or
payable by the Company are wholly allowable as deductions or charges in
computing the Company’s income for Taxation purposes.

 

  (h) Deductions and withholdings

 

  (i) The Company has made all deductions and withholdings in respect, or on
account of any Taxes from any payments made by it which it is obliged or
entitled to make and has accounted to the appropriate authority for all amounts
so deducted within the statutory period or any approved extension.

 

  (ii) The Company is entitled to deductions in respect of all expenses claimed
in relation to any carried forward losses and no such losses have been
disallowed.

 

  (iii) The Company has not received any notice or notices from any Taxation
authority which now requires it to withhold Taxes in excess of INR 7,500,000 in
the aggregate for all notices from any payment made or to be made since the
Accounts Date.

 

  (i) Depreciation and Tax bases

No material claim has been made for the depreciation of any asset of the Company
for Taxation purposes in circumstances in which claim is likely to be
disallowed.

 

  (j) Capital gains

The Company has not, in the last six months, disposed of or acquired any
material assets in circumstances such that the disposal price or acquisition
cost of the asset would be treated for Taxation purposes as being different from
the consideration given or received.

 

  (k) No charge to Taxation will arise in respect of the Company by virtue
(whether alone or in conjunction with any other facts or circumstances), of the
terms and conditions of this Agreement (other than the applicable stamp duty and
filing and registration charges).

 

  (l) Tax Residence

 

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The Company is not currently treated for any Taxation purpose as resident in a
country other than India and the Company does not have or has had within the
past three years, a branch, agency or permanent establishment in a country other
than India.

 

  (m) Transfer pricing

No transactions or arrangements involving the Company and its associated
undertakings (as defined under the Income Tax Act, 1961) have taken place since
the Accounts Date except in respect of and to the extent of income and profits
actually received or otherwise on arm’s length terms and no arrangements exist
which might give rise to such a liability, as a consequence of any provision
relating to transfer pricing.

 

  (n) No Taxation on deemed income, etc.

No event has occurred, since the Accounts Date, which gives rise to Taxation of
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 Taxation liability
directly or primarily chargeable against or attributable to another Person.

 

2.24 Value Added Tax

The Company is duly registered for the purposes of VAT and has complied in all
material respects with all Applicable Law in relation to VAT and is entitled to
credit for all VAT chargeable on supplies received and imports and acquisitions
made by it.

 

2.25 Stamp Duty

Neither the Sellers nor the Company has received any notice or order in relation
to non payment of any stamp duty for all instruments, and all similar taxes or
duties have been duly paid in respect of all transactions carried out by the
Company.

 

2.26 Reorganisations and mergers

The Company has not entered into or undergone any merger or claimed or has been
granted exemptions from Taxation in connection with any mergers.

 

2.27 Excise and Sales Tax

The Company has paid all excise duties and sales Taxes and is registered for
this purpose at every location where the Company is required to be so registered
under Applicable Law and is otherwise in compliance in all material respects
with all Applicable Law in this regard.

 

2.28 Properties

 

  (a) General

The Disclosure Schedule contains a true, accurate and complete list of all the
material real Property owned or leased by the Company.

 

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  (b) Title

 

  (i) The Company has good title to and is the sole legal and beneficial owner
of those of the Properties owned by it, particulars of which are set out in the
Disclosure Schedule, and is in exclusive occupation of, each of these material
Properties.

 

  (ii) The Company is fully and solely entitled to the Leases listed in the
Disclosure Schedule, is in exclusive occupation of the material Properties
forming the subject matter of such Leases and has a good right to each of such
leases.

 

  (iii) No Property or Lease is subject to any Encumbrance.

 

  (c) Leases

Each Lease complies with all Applicable Laws. Each Lease, whenever capable of
registration, has been registered, is in full force and effect and the Company
has complied with all its obligations under it. There are no disputes in
relation to any Lease, nor have any notices in this regard been received by the
Company.

 

  (d) Covenants

 

  (i) There is no covenant, restriction, burden or stipulation affecting any
material Property or the land which is the subject of any Lease which is of an
onerous or unusual nature or which conflicts with its present use or affects its
value.

 

  (ii) So far as the Seller is aware, no breach of any covenant affecting the
title to any Property, or which is contained in any Lease, is outstanding nor
have any notices in this respect been received.

 

  (e) Disputes

There are no notified disputes connected to or relating to the material
Properties or their use.

 

  (f) Planning and zoning

 

  (i) The present use of each material Property and of the land held under each
Lease is authorised under applicable planning and zoning Applicable Law and
regulations and the permits authorising that use are unconditional and permanent
and, so far as the Sellers are aware, no breach has been committed in respect of
these planning and zoning Applicable Law.

 

  (ii) Neither any of the Sellers nor the Company nor any Person on behalf of
any of them has made any application or an appeal from an order relating to any
permit in respect of any material Property or in respect of any land held under
any Lease which has yet to be determined by the relevant authority.

 

  (g) Notices, orders and proposals

 

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Neither any of the Sellers nor the Company has received any notice or order
affecting any material Property or any land held under any Lease from any
Governmental Authority, or any third party and neither any of the Sellers nor
the Company has received any notice or order in relation to any proposals on the
part of any Governmental Authority or any authority which would adversely affect
any Property or any land held under any Lease, including, without limitation,
those relating to compulsory purchase or expropriation or highways works.

 

  (h) Repair

 

  (i) All buildings or other erections on each Property and on the land held
under each Lease are in such state of repair and condition as to be
substantially fit for the purpose for which they are at present used and do not
contain any substance or material which is a risk to health or safety.

 

  (ii) The Company is not under any obligation to carry out material
improvements or repairs to the whole or any part of any material Property or
land held under any Lease, nor has the Company received any order or instruction
with respect to any such material improvements or repairs.

 

  (i) Outgoings

No outgoings are payable in respect of any Property except in the ordinary
course of business or applicable property taxes, charges for the supply of water
and electricity and the provision of sewerage services and rent and service
charge, in the case of any Lease.

 

2.29 Employee and Employee Benefits

 

  (a) Particulars disclosed

There are, in relation to the Company:

 

  (i) No works council or body of employee representatives or recognised trade
unions;

 

  (ii) No collective or workforce agreement, dismissal procedures agreement or
trade union membership agreement.

 

  (b) Employees and terms and conditions of employment

 

  (i) The Disclosure Schedule sets out all the Key Employees of the Company. The
Company has entered into valid employment contracts with all its Key Employees
and all such contracts are subsisting in accordance with the terms thereof.

 

  (ii) No Key Employee has given, or has been given, notice of termination of
his employment.

 

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  (iii) All subsisting contracts of employment with the Key Employees and any
agreements with the Key Employees to which the Company is a party are terminable
by it on notice of no longer than six months or salary in lieu of such notice.

 

  (iv) The Company does not have any outstanding liability to pay compensation
for loss of office or employment or a redundancy payment to, and neither the
Company nor any of the Sellers has received any notice from, any present or
former Key Employee to make any payment for breach of any agreement and neither
the Company nor any of the Sellers has received any notice for payment of such
sums nor such sums have been paid (whether pursuant to a legal obligation or ex
gratia).

 

  (v) There is no term of employment for any Key Employee which provides that a
change of control of the Company shall entitle the employee to treat the change
of control as amounting to a breach of the contract or entitling him to any
payment or benefit whatsoever or entitling him to treat himself as redundant or
otherwise dismissed or released from any obligation.

 

  (vi) The Company has not made any loan or advance, or provided any financial
assistance to any Key Employee.

 

  (vii) All the Key Employees are bound by valid non-competition agreements and
cannot carry on any activity which competes with or is same as or similar to the
Business during the term of their employment and for at least one year
thereafter, and neither the Company nor any of the Sellers owe, or expect to
owe, additional compensation to employers to secure enforceability of such
agreements, nor have received any notice from the Key Employees objecting to or
challenging to continue to be bound by the terms of such non-compete agreements
and no provision of such non-compete agreements shall be varied or amended or
the enforcement thereof waived by the Company.

 

  (viii) The Company has complied with all labour Applicable Law and collective
bargaining agreements (including trade union settlements) and with all its
obligations towards its employees past and present and, in particular, has
complied, in all material respects, with all instructions and obligations
imposed by the competent local authorities in relation to labour, health and
safety Applicable Law and all other laws and regulations applicable to
employment and employment benefits and provisions and, neither the Company nor
any of the Sellers has received any notice that any action has been commenced in
relation thereto and, so far as the Sellers are aware, there are no
circumstances likely to give rise to any such action being initiated.

 

  (ix)

The Company has not adopted, sponsored, formulated or maintained any stock
option plan, share purchase scheme or any other plan or agreement providing for
equity compensation to any person, employee or management personnel. The Company
has not granted any share/ equity based or linked compensation, remuneration,
incentive or emoluments or entered into any contract or agreement with or made
any commitments or promises, whether express or implied, to any

 

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person, employee or management personnel in respect of any share/ equity based
or linked compensation, remuneration, incentive or emoluments.

 

  (c) Disputes

 

  (i) The Company has, in all material respects, complied with its obligations
towards its employees and any relevant trade union and employee representatives.

 

  (ii) No material claim in relation to the Company’s employees or former
employees has been made against the Company or against any Person whom the
Company is liable to indemnify.

 

  (iii) There is not, and during the three years preceding the date of this
agreement, been any collective labour dispute or industrial action, affecting
the Company.

 

  (iv) So far as the Sellers and the Company are aware, no employee of the
Company has within a period of three years before the date of this Agreement
been involved in any criminal proceedings relating to the Business.

 

  (d) Pensions, Gratuity and Provident Fund

The Company is in compliance with Applicable Law in relation to employment and
employment practices, terms and conditions of employment and wages and hours
including but not limited to Payment of Gratuity Act, 1972, the Employees’
Provident Fund and the Miscellaneous Provisions Act, 1952, Employees State
Insurance Act, 1948, the Payment of Bonus Act, 1965 and the Minimum Wages Act,
1948. The Company has never engaged in any unfair labour practice nor has it
ever violated any child-labour law. There is no unfair labour practice complaint
pending or to the Seller’s knowledge threatened against the Company.

 

2.30 Anti-Corruption

So far as the Seller is aware, neither the Company nor any of its directors,
officers or employees nor any agents or other persons acting on behalf of any of
the foregoing, directly or indirectly, has: (a) violated or is in violation of
any applicable anti-corruption law; (b) made, offered to make, promised to make
or authorized the payment or giving of, directly or indirectly, any bribe,
rebate, payoff, influence payment, kickback or other payment or gift of money or
anything of value (including meals or entertainment) to any officer, employee or
ceremonial office holder of any government or instrumentality thereof, any
political party or supra-national organization (such as the United Nations), any
political candidate, any royal family member or any other person who is
connected or associated personally with any of the foregoing that is prohibited
under any applicable law or regulation or otherwise for the purpose of
influencing any act or decision of such payee in his official capacity, inducing
such payee to do or omit to do any act in violation of his lawful duty, securing
any improper advantage or inducing such payee to use his influence with a
government or instrumentality thereof to affect or influence any act or decision
of such government or instrumentality (“Prohibited Payments”); or (c) been
subject to any investigation by any governmental entity with regard to any
actual or alleged Prohibited Payment.

 

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2.31 Anti-Money Laundering

So far as the Seller is aware, the operations of the Company are and have been
conducted at all times in compliance with all anti-money laundering laws and all
applicable financial recordkeeping and reporting regulations applicable to the
Company (collectively, “Money Laundering Laws”) and no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Company with respect to Money Laundering Laws is
pending and no such actions, suits or proceedings are threatened or
contemplated.

 

2.32 Finder’s Fees

No person is entitled to receive a finder’s fee, brokerage or commission from
the Company in connection with this Agreement.

 

2.33 Miscellaneous

 

  (a) Listing

 

  (i) The Company is in compliance with the terms of the listing agreements
entered into by it with the Bombay Stock Exchange and the National Stock
Exchange and has not defaulted in complying with any of the said terms,
including, in the payment of the listing fee to the Bombay Stock Exchange and
the National Stock Exchange and all other payments as may be required to be paid
by the Company as per Applicable Law or the terms and conditions of the listing
agreements.

 

  (ii) So far as the Seller is aware, no investigations, proceedings, or
inquiries are pending against the Company by the SEBI, any recognised stock
exchange, or any other regulatory authority, in relation to the securities of
the Company or trading therein or otherwise.

 

  (iii) So far as the Seller is aware, the Company has disclosed all price
sensitive information to the public on a continuous and immediate basis in
compliance with the listing agreements and the Insider Trading Regulations and
neither the Company nor the Sellers have communicated to the Purchaser any
unpublished price sensitive information in relation to the Company in a manner
contrary to Applicable Law.

 

  (b) None of the disclosures in the Disclosure Schedule constitute unpublished
price sensitive information liable to be disclosed under the Insider Trading
Regulations.

 

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Schedule 7

LIMITATION OF LIABILITY OF THE SELLERS

 

1. The Parties agree that the matters set out in the Disclosure Schedule are
exceptions to the Representations and Warranties of the Sellers.

 

2. The Sellers shall not be liable in respect of each matter the subject of the
Certificate under Clause 10.4 which is not either accepted by the Sellers or
which is not referred to arbitration under Clause 12 within six (6) months after
service of such Certificate by the Indemnified Party.

 

3. The Sellers shall have no liability for any Claim to the extent that the same
would not have occurred but for the occurrence of any event after Closing
including without limitation the enactment of or any change in Applicable Law,
or change in interpretation of Applicable Law, by a Governmental Authority,
after the execution of this Agreement, which Applicable Law retrospectively
applies for the period prior to the date of this Agreement including, without
limitation, any increase in Tax rates or imposition of new Tax or any withdrawal
of relief from Tax not actually (or prospectively) in effect as at the date of
this Agreement.

 

4. The Sellers shall not be liable for any remote, special, indirect or
consequential loss or damage including without limitation any loss of
production, loss of profit, loss of revenue, loss of contract, loss of goodwill
or loss of claim.

 

5. The Sellers shall not be liable in respect of any Claim to the extent that
any Loss arising from such Claim is the subject of indemnity under a policy of
insurance in force on the date of this Agreement and to the extent payment is
made by the insurer and received by the relevant insured party.

 

6. If the Sellers pays to the Indemnified Party an amount in discharge of a
Claim and the Indemnified Party subsequently recovers (whether by payment,
discount, credit, relief or otherwise) from a third party a sum which is
referable to the subject matter of that Claim, the Indemnified Party shall (or,
as appropriate, shall procure that the Company shall) pay to the Sellers an
amount equal to the lesser of:

 

  (a) the sum recovered from the third party less any reasonable out-of-pocket
costs and expenses incurred by the Indemnified Party in recovering the same; and

 

  (b) the amount previously paid by the Sellers to the Indemnified Party,

so as to leave the Indemnified Party (after taking into account the amounts
received from the third party and from the Sellers and those payable to the
Sellers under this Clause) in no better or worse position than it would have
been in.

 

7. The Sellers shall not be responsible for any liability which is contingent
unless and until such contingent liability becomes an actual liability and is
due and payable.

 

8. The Indemnified Party must take ail reasonable steps to avoid or mitigate
Loss which the Indemnified Party may suffer or incur arising from any Claim.

 

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9. The Representations and Warranties solely for the benefit of the Purchaser
and are not assignable, provided that the Purchaser may assign any
Representations or Warranties to the Company or to an Affiliate of the
Purchaser.

 

10. If any amount is payable or paid by the Sellers to an Indemnified Party in
respect of a Claim under or in connection with this Agreement, such amount will
be deemed to be a reduction in the Purchaser Price.

 

11. The Sellers are not liable to any Indemnified Party in respect of anything
done or not done by the Sellers solely on account of any written request or
instruction of any Indemnified Party (and not pursuant to any obligation of any
Seller under any Transaction Document or under Applicable Law).

 

12. Subject to any confidentiality or secrecy obligations, the Indemnified Party
shall allow the Sellers and their authorized representatives including their
accountants and professional advisers access to the personnel of the Company,
and to any relevant premises, accounts, documents and records and to take copies
or photocopies thereof within their respective power, and to verify the matter
or circumstance alleged to give rise to a Claim and whether and to what extent
any amount is payable in respect of such Claim and for such purpose the
Indemnified Party shall give all reasonable information and alt reasonable
assistance at the cost and expense of the Sellers.

 

13. The Indemnified Party shall not be entitled to bring any Claim, other than a
Tax Claim or an Environmental Claim or a Claim in respect of the Sellers’ title
to the Sale Shares, in relation to any facts, matters or circumstances arising 3
(three) years prior to the date of this Agreement.

 

14. The Indemnified Party shall not be entitled to make any Claims for breach of
the Representations and Warranties unless Closing has occurred. The Sellers
shall not be liable in respect of any Claims or liability arising or being
increased or extended as a result of the gross negligence, wilful default or
breach of the terms hereof by the Indemnified Party or its Affiliates after
Closing.

 

16. The Indemnified Party shall not be entitled to recover more than once in
respect of the same matter on which any Claim is based.

 

17. The aggregate amount recoverable by an Indemnified Party in respect of any
Claim shall not exceed 75% of the value of such Claim.

 

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Pursuant to Reg. S-K Item 601(b)(2), the following schedules have been omitted
and will be furnished supplementally to the Securities and Exchange Commission
upon request:

Schedule 1 – Sellers and Their Shareholding

Schedule 2 – Purchase Price and Non-Compete Fee to Each Seller

Schedule 3 – Details of Shares Pledged by Seller No. 9

Schedule 4 – List of Lenders

Schedule 6 – Disclosure Schedule

Schedule 8 – Details of Sellers’ Bank Account for Clause 2.2.6

Schedule 9 – Certificate as per Clause 7.3.1

Annexure 1 – Form of Power of Attorney