** Portions of this exhibit have been omitted pursuant to Syntel’s request to
the Secretary of the Securities and Exchange Commission for confidential
treatment pursuant to Rule 24b-2 under the Securities and Exchange Act of 1934,
as amended.

EXHIBIT 10.1

EXECUTION VERSION

STATE STREET INTERNATIONAL HOLDINGS

and

SYNTEL DELAWARE, LLC,

and

SYNTEL SOLUTIONS (MAURITIUS) LIMITED

 

 

SHAREHOLDERS AGREEMENT

relating to

SYNTEL SOLUTIONS (MAURITIUS) LIMITED

 

 

1 February 2005

 

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EXECUTION VERSION

 

SHAREHOLDERS AGREEMENT

This Shareholders Agreement (this “Agreement”) is dated as of February 1, 2005
and made by and among:

 

(1) STATE STREET INTERNATIONAL HOLDINGS, a company organized under the authority
of Chapter 167F, Section 2(6) of the Massachusetts General Laws and Section 25A
of the Federal Reserve Act, as amended with its principal office at 225 Franklin
Street, Boston, Massachusetts 02110, USA (“State Street”);

 

(2) SYNTEL DELAWARE, LLC, a company incorporated under the laws of the State of
Delaware, and having its registered office at 1209 Orange Street, Wilmington,
Delaware 19801, USA (“Syntel”); and

 

(3) SYNTEL SOLUTIONS (MAURITIUS) LIMITED, a company incorporated in Mauritius,
and having its registered office at 608 St. James Court, St. Denis Street, Port
Louis, Republic of Mauritius (the “Company”).

WHEREAS

 

A. State Street and Syntel together currently own 100% of the issued and
outstanding Shares (as defined herein below) of the Company;

 

B. The Company owns 100% (except as set forth in the Subscription Agreement, as
defined below) of the issued and outstanding equity voting share capital of
Syntel Sourcing Private Limited, an Indian company incorporated under the
(Indian) Companies Act, 1956, as amended (“Companies Act”), with its registered
office at B/101-104, Delphi, “B” wing, Hiranandani Business Park, Powai, Mumbai
400 076, India (“SSI”); and

 

C. This is the Shareholders Agreement contemplated in the Subscription
Agreement.

IT IS AGREED as follows:

 

1. INTERPRETATION

In this Agreement, unless the context otherwise requires, the following words
and expressions shall have the following meanings:

 

  1.1 Definitions

“Affiliate” means, in relation to a body corporate, a company or entity that
directly or indirectly holds more than 25% of the voting rights of that body
corporate and/or a company or entity in which that body corporate holds directly
or indirectly more than 25% of the voting rights;

 

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EXECUTION VERSION

 

“Agreement” has the meaning given to such term in the introduction to this
Agreement;

“Auditors” means Ernst and Young or such other auditors as the Company may
appoint from time to time;

“Board” means the Board of Directors of the Company from time to time;

“Business” has the meaning set out in Section 2;

“Business Day” means any day on which the New York Stock Exchange is open for
ordinary business;

“Call Notice” has the meaning given to such term in Section 11.7;

“Call Offer Period” has the meaning given to such term in Section 11.7;

“Call Offer Price” means the price equivalent to **

“Call Offer to Purchase” has the meaning given to such term in Section 11.7;

“Chairman” means the chairman from time to time of the Board;

“Class A Common Shares” shall mean the shares of Class A Common Shares, without
par value, of the Company;

“Class B Common Shares” shall mean the shares of Class B Common Shares, without
par value, of the Company;

“Class A Directors” shall mean the directors nominated by the holder of shares
of Class A Common Shares, as described in the Constitution;

“Class B Directors” shall mean the directors nominated by the holder of shares
of Class B Common Shares, as described in the Constitution;

“Class A Shareholder” shall mean the holder of shares of Class A Common Shares;

“Class B Shareholder” shall mean the holder of shares of Class B Common Shares;

“Companies Act” has the meaning given to such term in the recitals to this
Agreement;

“Company” has the meaning given to such term in the introduction to this
Agreement;

 

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EXECUTION VERSION

 

“Control” or “control”, with respect to any person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management, business or policies of such person, whether through the ownership
of voting securities, by contract or otherwise, or the power to elect or appoint
at least 50% of the directors, managers, partners or other individuals
exercising similar authority with respect to such person;

“Constitution” means the constitution of the Company to be adopted by the
Company in the form set out in Exhibit A of the Subscription Agreement;

“Contractual Documents” has the meaning given to such term in Section 16.1;

“Damages” means all or any damages, claims, penalties, fines, costs, amounts
paid in settlement, liabilities, obligations, Encumbrances, losses, reasonable
expenses, fees and any Taxes and/or interest, charges, penalties or other
amounts imposed with respect to any Tax by any Governmental Authority,
including, without limitation, court costs, reasonable attorney’s fees,
disbursements and expenses (to the extent permitted by applicable law).

“Deed of Adherence” means a deed of adherence in the form set out in Schedule 1;

“Director” means any Class A Director or Class B Director appointed to the Board
from time to time;

“Effective Date” means the Closing Date under the Subscription Agreement;

“Employees” means all persons employed or retained by the Company and/or SSI,
including, without limitation, those employees on long term disability leave or
other absence;

“Encumbrance” means any interest or equity of any person (including, without
limitation, any right to acquire, option or right of pre-emption) and any
charge, mortgage, security interest, pledge, lien (including retention of title
claims), assignment, power of sale or hypothecation and any rental, hire
purchase, creditor, conditional sale or other agreement for payment on deferred
terms or any other third party right, restriction or encumbrance of any nature
whatsoever (whether or not perfected) and the term Encumber shall be construed
accordingly;

“FTE” means full-time equivalent Employee;

“Governmental Authority” means any government, any state or other political
subdivision thereof, any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, or any
other government authority, agency, department, board, commission or
instrumentality of United States of America or any political subdivision
thereof, and any court, tribunal or arbitrator(s) of competent jurisdiction,
and, any governmental or non-governmental self-regulatory organization, agency
or authority;

“Group Company” means the Company and its Subsidiaries from time to time;

 

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EXECUTION VERSION

 

“Material Event” means that State Street has received an opinion of counsel to
the effect that pursuant to legal or regulatory requirements, State Street is
prohibited from continuing in a joint venture relationship with the Class B
Shareholder;

“MSA” means that certain Master Services Agreement between SSI and State Street
Bank and Trust Company;

“Notice” has the meaning given to such term in Section 23.1;

“Permitted Transferee” has the meaning given to such term in Section 11.2;

“Preferred Shares” means the Preferred Shares, without par value, of the
Company, the holders of which shall have no rights other than the right to
receive dividends in accordance with the terms set forth in the Company’s
Constitution;

“Put Notice” has the meaning given to such term in Section 11.6;

“Put Offer to Sell” has the meaning given to such term in Section 11.6;

“Put Offer Period” has the meaning given to such term in Section 11.6;

“Share” means shares of Class A Common Shares, Class B Common Shares and the
Preferred Shares;

“Shareholder” means a holder of Shares;

“Shareholder Support” means any undertaking, covenant, guarantee of, performance
bond from, pledge of Shares held by, or any other recourse to, the Shareholders,
and provided by the Shareholders to, or in favour of, any third person pursuant
to any financing arrangement of the Company or any other Group Company from time
to time;

“SSI” has the meaning given to such term in the recitals to this Agreement;

“SSI Board” means the board of directors of SSI from time to time;

“SSI Chairman” means the chairman from time to time of the SSI Board;

“Standard of Conduct” has the meaning given to such term in Section 5;

“State Street” has the meaning given to such term in the introduction to this
Agreement;

“Subscription Agreement” means the agreement dated as of February 1, 2005 among
State Street, Syntel and the Company for the subscription of 51 shares of
Class A Common Shares of the Company;

“Syntel” has the meaning given to such term in the introduction to this
Agreement;

 

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EXECUTION VERSION

 

“Tax” means all taxes imposed by any Governmental Authority, including, (i) any
tax based upon or measured by income, gross receipts, sales use or value added;
(ii) any taxes denominated as ad valorem, transfer, franchise, capital shares,
payroll, employment excise, occupation, property, windfall profits,
environmental, customers, or withholding taxes; and (iii) any interest,
penalties, or other amounts imposed with respect to any tax;

“Transfer Value” means the price per Share calculated in accordance with the
provisions of Schedule 2;

“United States Dollars”, “USD” and “US$” means the lawful currency of the United
States of America.

 

  1.2 Construction of certain references

In this Agreement unless otherwise specified:

 

  1.2.1 the index and headings are for ease of reference only and shall not be
taken into account in construing this Agreement;

 

  1.2.2 references to this Agreement or any other document shall be construed as
references to this Agreement or that other document as amended, varied, novated,
supplemented or replaced from time to time;

 

  1.2.3 references to any recital, Section, clause, paragraph, Schedule or
Appendix are to those contained in this Agreement, and references to a part of a
Schedule are to the part of the Schedule in which the reference appears and all
Schedules and Appendices to this Agreement are an integral part of this
Agreement;

 

  1.2.4 the expression “this Section” shall, unless followed by reference to a
specific provision, be deemed to refer to the whole Section (not merely the
clause, sub-clause, paragraph or other provision of such Section) in which the
expression occurs;

 

  1.2.5 references to a party mean a party to this Agreement including that
party’s successors in title and assigns or transferees permitted in accordance
with the terms of this Agreement provided that the relevant property, right or
liability has been properly assigned or transferred to such person;

 

  1.2.6 references to a Director shall, where the context allows, include
reference to the alternate of such Director;

 

  1.2.7 references to any gender shall include the other gender; and words in
the singular include the plural and vice versa;

 

  1.2.8

law includes any legislation, any common or customary law, constitution, decree,
judgment, order, ordinance, treaty or other legislative measure in

 

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EXECUTION VERSION

 

 

any jurisdiction and any present or future directive, notification, circular,
request, requirement or guideline (in each case, whether or not having the force
of law but, if not having the force of law, compliance with which is in
accordance with the general practice of persons to whom the directive,
notification, circular, request, requirement or guideline is addressed);

 

  1.2.9 references to legislation include any statute, by-law, regulation, rule,
notification, circular, subordinate or delegated legislation or order; and
reference to any legislation is to such legislation or order as amended,
modified or consolidated from time to time and to any legislation replacing it
or made under it;

 

  1.2.10 reference to a person (or to a word importing a person) shall be
construed so as to include:

 

  (a) individual, firm, partnership, trust, joint venture, company, corporation,
body corporate, unincorporated body, association, organization, any government,
or state or any agency of a government or state, or any local or municipal
authority or other governmental body (whether or not in each case having
separate legal personality);

 

  (b) that person’s successors in title and assigns or transferees permitted in
accordance with the terms of this Agreement; and

 

  (c) references to a person’s representatives shall be to its officers,
employees, legal or other professional advisers, sub-contractors, agents,
attorneys and other duly authorized representatives;

 

  1.2.11 in writing includes any communication made by letter or fax but does
not include e-mail or other forms of electronic communication.

 

2. BUSINESS AND NAME OF COMPANY

The business of the Company (the “Business”) shall be to act as an investment
holding company and acquire and manage directly or indirectly equity controlling
interests in SSI, an Indian incorporated limited company offering back- and
middle-office services for institutional investors.

Both parties acknowledge and agree that the relationship between State Street
and Syntel is not exclusive, and each party may enter into joint ventures with
other third parties for similar services anywhere in the world, subject to any
restrictions set forth in this Agreement and the MSA. Both parties agree to
provide reasonable cooperation, at the requesting party’s expense, in
furtherance of the foregoing sentence and in response to requests or
requirements by Governmental Authorities.

If, at any time, State Street ceases to own the Class A Common Shares of the
Company, the Shareholders and the Company agree to take all such steps as are
necessary to change

 

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EXECUTION VERSION

 

the name of the Company and SSI to a name that does not in any manner whatsoever
include any tradename or trademark of State Street, or any words similar thereto
in any language. Any such name change shall also be made on all letterhead,
signs, logos, literature and any other items of the Company and SSI that
identify the Company or the Business or SSI or the business of SSI.

 

3. EFFECTIVE DATE

This Agreement shall come into force and effect from the Effective Date.

 

4. PROVISION OF FINANCE

 

  4.1 Financing the Company

 

  4.1.1  **

 

  4.1.2  **

 

5. EMPLOYEES

As soon as practicable and in any event within thirty (30) days following the
earlier of (i) the Effective Date or (ii) the hiring of an Employee of the
respective company, the Shareholders shall cause their respective Directors to
cause each of the Company and SSI to take all steps as are necessary to have in
place a set of rules (collectively, the “Standard of Conduct”) in the form set
out in Schedule 3 which will be required to be complied by any and all
Employees. Each Employee shall provide an undertaking to the Company pursuant to
which the Employee undertakes (i) to perform his duties, responsibilities and
functions to the Company to the best of his abilities in a diligent,
trustworthy, professional and efficient manner, and (ii) to comply with the
Company’s policies and procedures, including, without limitation, the Standard
of Conduct.

 

6 THE BOARD AND MANAGEMENT **

 

 

 

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EXECUTION VERSION

 

 

  6.2 Directors

The Board shall consist of ** Directors, ** of whom (including one Mauritian
resident Director) shall be nominated and elected by the Class A Shareholder and
considered Class A Directors and ** of whom (including one Mauritian resident
Director) shall be nominated and elected by the Class B Shareholder and
considered Class B Directors. Once nominated, the Shareholders agree to take all
action necessary or desirable so as to cause the number of directors and the
members of the Board to be as set forth herein and in the constituent documents
of the Company. Any person nominated as a Director by a Shareholder shall be
appointed and may be removed from such office only by the relevant nominating
Shareholder, by a memorandum signed in writing by such Shareholder, which shall
take effect from the date stated in such memorandum or, if no such date shall be
stated, from the date when such memorandum is lodged at the registered office of
the Company. For the avoidance of doubt, a Director shall be removed from office
without notice if he is guilty of any gross default or misconduct in connection
with or affecting the Business, or is guilty of fraud, dishonesty or any
criminal offence (save for minor road traffic offences).

 

  6.3 Alternate Directors

Subject to Section 6.2, any Director appointed to the Board shall be entitled to
nominate an alternate to attend and vote at Board meetings in his absence. Such
alternate shall be approved in writing by the Shareholder who appointed such
nominating Director.

 

  6.4 Chairman and Officers

**

 

  6.5 Board Meetings

Board meetings shall be held at the registered office of the Company at
intervals of not more than three months. Except as otherwise agreed by all the
Directors:

 

  6.5.1 Board meetings shall be convened by any Director or the company
secretary by not less than 5 Business Days’ notice, or where the particular
circumstances require a shorter period, such shorter period as the circumstances
reasonably require, sent to each Director;

 

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EXECUTION VERSION

 

  6.5.2 notice shall be sent to each Director to the address, fax number and/or
e-mail address notified to the Company for these purposes, provided if notice is
sent by fax or e-mail a copy of such notice shall also be sent by post;

 

  6.5.3 each notice of a Board meeting shall be accompanied by a full agenda and
all supporting papers;

 

  6.5.4 each Board meeting shall deal with the business set out in the agenda
which accompanied the notice convening that Board meeting and, in the event any
other business is raised at such meeting, it shall only be considered to the
extent it is so approved by at least one Class A Director and one Class B
Director (who are not also Mauritian resident Directors);

 

  6.5.5 minutes of each meeting of the Board shall be taken and kept by the
company secretary in the books of the Company. Copies of the minutes of each
such meeting shall be delivered to each member of the Board as soon as
practicable. If a member has not been present at the meeting, copies of all
papers considered by the Board at the meeting shall be sent to him with the
minutes;

 

  6.5.6 any Director may participate in a Board meeting by means of a telephone
or video conference, and the Chairman may appoint a Mauritian Director to chair
any such meeting; and

 

  6.5.7 notwithstanding any other provisions of this Section 6, a resolution in
writing signed by all Directors (which resolution may consist of several
counterparts) shall be as valid and effective as if it had been adopted by a
duly convened meeting of the Board.

 

  6.6 Quorum

The quorum for a Board meeting shall be one Class A Director and one Class B
Director (who are not also Mauritian resident Directors) present in person or by
their alternates and one Mauritian resident Director. If within 30 minutes. of
the time appointed for a Board meeting there is no quorum, the Director(s)
present shall adjourn the meeting to the same place and time on the third
Business Day following the adjourned meeting provided that at such adjourned
meeting the requirement that such Directors shall be present shall not apply and
any two Directors (including at least one Mauritian resident Director) present
may conduct the business of the meeting.

 

  6.7 Board Committees

Subject to the Constitution and Schedule 4, the Board may function through one
or more committees.

 

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  6.8 Shareholders to Procure Director’s Resignation

Unless agreed to otherwise, if there is a reduction in the percentage of Shares
held by a Shareholder at any time which affects a Shareholder’s right to appoint
a Director pursuant to Section 6.2 the relevant Shareholder shall procure the
resignation of the relevant number of Directors (which shall not include a
Mauritian resident Director) appointed by it and shall procure that such
directors resign without cost to the Company and such Shareholder shall
indemnify the Company and the other Shareholder(s) from and against all claims,
demands and rights which any such director may have against the Company in
respect of dismissal, redundancy or otherwise.

 

  6.9 Directors may pass information to their Appointer

A Director may from time to time disclose to the Shareholder who appointed him
and its representatives such information as he has regarding the Business as
shall reasonably be requested by the Shareholder appointing him.

 

  6.10 Directors’ Expenses

The Company shall reimburse each Director for all reasonable travel, hotel and
other expenses incurred by that Director in attending Board and committee
meetings or otherwise in working for the Company.

 

  6.11 Auditors

The Class A Directors shall be entitled to recommend the Auditors to be
appointed for the Company and SSI from time to time, and the other Shareholders
agree that they will use their best efforts to cause the Directors nominated by
them to vote in favor of the Auditors so recommended so long as such Auditors
have expertise in international tax and accounting matters.

 

  6.12 Allocation of Profits and Losses

The Board will adopt a policy to establish the Company’s policy with respect to
the allocation of profits and losses of the Company. **

 

7 SHAREHOLDER MEETINGS

 

  7.1 Notice of Shareholder Meetings

Each Shareholder shall be entitled to have notice of any Shareholders’ meeting
of the Company given to it at its address set out in Section 23.1. Notices shall

 

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EXECUTION VERSION

 

be sent by mail and to such fax number or e-mail address (if any) as the
Shareholder shall have provided to the company secretary.

 

  7.2 Quorum for Shareholder Meetings

The quorum for a Shareholders’ meeting of the Company shall be an authorized
representative or authorized representatives together representing Shareholders
holding more than 51% of the Company’s issued share capital from time to time.
If within 30 minutes of the time appointed for a Shareholders’ meeting of the
Company there is no quorum, the chairman of the meeting shall adjourn the
meeting to a place and time not less than three Business Days later provided
that at such adjourned meeting the quorum shall be an authorized representative
or authorized representatives together representing a Shareholder or
Shareholders holding not less than 52% of the Company’s issued share capital
from time to time.

 

  7.3 Chairman of Shareholder Meetings

The chairman of any Shareholders’ meeting of the Company shall be the Chairman
of the Board and shall not be entitled to a second or casting vote. In the event
the Chairman is absent from any Shareholders meeting, the Shareholders present
may appoint the chairman of the meeting.

 

  7.4 Resolution in Writing

Notwithstanding any other provisions of this Section 7, a resolution in writing
signed by all Shareholders (which resolution may consist of several
counterparts) shall be as valid and effective as if it had been passed at a duly
convened Shareholders’ meeting.

 

8. INDEMNIFICATION

 

  8.1 Indemnification by State Street

State Street shall, subject to the further provisions of this Section 8,
indemnify, defend and hold Syntel, its Affiliates and its respective directors,
officers, representatives, employees and agents, and Syntel’s successors and
permitted assigns harmless from and against any and all Damages incurred by any
of them as a result of, arising from, or in connection with, or relating to
(a) any breach of the representations and warranties made by State Street in
this Agreement; or (b) the non-performance (in whole or in part) by State Street
of any of its covenants, obligations or agreements contained in this Agreement,
except for non-performance resulting from a breach of this Agreement by the
Company or Syntel.

 

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  8.2 Indemnification by Syntel.

Syntel shall, subject to the further provisions of this Section 8, indemnify,
defend and hold State Street, its Affiliates and their respective directors,
officers, representatives, employees and agents, and State Street’s successors
and permitted assigns (including, without limitation, the Company), harmless
from and against any and all Damages incurred by any of them as a result of,
arising from, or in connection with, or relating to (a) any breach of the
representations and warranties made by the Company or Syntel in this Agreement;
or (b) the non-performance (in whole or in part) by the Company or Syntel of any
of its covenants, obligations or agreements contained in this Agreement, except
for non-performance resulting from a breach of this Agreement by State Street.

**

 

  8.3 Notice of Claim; Right to Participate in and Defend Third Party Claim;
Non-Third Party Claims

 

  (a)

Notice of Claim. If any indemnified party receives notice of any Action in
respect of which indemnification may be sought under this Agreement (a “Third
Party Claim”), and the indemnified party intends to seek indemnification under
this Agreement, then the indemnified party (the “Beneficiary”) promptly shall
provide the indemnifying party with written notice of the Third Party Claim and
the relevant facts and circumstances to the extent known; provided, however,
that if such claim is under Section 8.1 or 8.2, notice of the Third Party Claim
must be delivered prior to the expiration of the pertinent representation or
warranty as described in Section 8.4 of this Agreement. The failure by the
Beneficiary to notify an indemnifying party of a Third Party Claim shall not
relieve the indemnifying party of any indemnification responsibility under this
Section 8.3, unless such failure materially prejudices the ability of the
indemnifying Party to defend such Third Party Claim. The indemnifying party
shall have the right, at its option and expense, to participate in the defense
of such Third Party Claim, but not to control the defense,

 

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negotiation or settlement thereof, (which control shall at all times rest with
the Beneficiary) unless (i) such Third Party Claim involves only money damages
and not an injunction or other equitable relief, or (ii) if the indemnifying
party has a defense or counterclaim in relation to such Third Party Claim which
the Beneficiary is not entitled to assert (to the extent necessary to assert and
maintain such defense or counterclaim), and the indemnifying Party furnishes
satisfactory evidence of its financial ability to indemnify the Beneficiary, in
which case the indemnifying party may assume such control through counsel of its
choice (which counsel shall be satisfactory to the Beneficiary) at its own
expense; provided that the Beneficiary shall continue to have the right to be
represented, at its own expense, by counsel of its choice in connection with the
defense, negotiation or settlement of such Third Party Claim. If the
indemnifying Party does not assume control of the defense of such Third Party
Claim, the entire defense, negotiation or settlement of such Third Party Claim
by the Beneficiary shall be deemed to have been consented to by, and shall be
binding upon, the indemnifying party as fully as though the indemnifying party
alone had assumed the defense thereof and a judgment had been entered in such
Third Party Claim in respect of such settlement or judgment. If the indemnifying
party does assume control of the defense of such Third Party Claim, it shall
not, without the prior written consent of the Beneficiary, settle such Third
Party Claim or consent to entry of any judgment relating thereto which does not
include as an unconditional term the giving by the claimant to the Beneficiary a
release from all liability in respect of such Third Party Claim. The parties to
this Agreement agree to cooperate fully with each other in connection with the
defense, negotiation or settlement of any such Third Party Claim.

 

  (b) Non-Third Party Claims. Any indemnifiable claim under this Agreement that
is not a Third Party Claim must, in order to be valid and effective hereunder,
be asserted by the indemnified party by prompt delivery of written notice
thereof to the indemnifying party, provided that if such claim is under
Section 8.1 or 8.2, it must be delivered prior to the expiration of the
pertinent representation or warranty as described in Section 8.4 of this
Agreement.

 

  8.4 Survival of Representations and Warranties

All the representations and warranties contained in this Agreement shall survive
until the second year anniversary of the Closing Date.

 

  8.5 Limitation on Liability

Neither party shall have any liability or obligation to the other party with
respect to any claim arising out of this Agreement until the total of all
Damages with respect to such matters exceed ** (the “Threshold”), and
thereafter, liability shall be only for those Damages in excess of the
Threshold. The

 

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determination of the amount of any Damages arising out of the breach of more
than one representation, warranty, covenant or agreement shall be determined
without duplication or double counting of the same Damages. Any amounts payable
by either party pursuant to this Section 8 shall be reduced by any related
insurance recoveries net of cost incurred for such recovery. Each of the
indemnifying party and the indemnified party shall take action to mitigate any
Damages as a result of, arising from, or in connection with, or relating to
(i) any matter inconsistent with, or any breach of, the representations and
warranties contained in this Agreement and (ii) the non-performance (in whole or
in part) of any covenants or agreements contained in this Agreement, including,
without limitation, if required by Applicable Law, causing the Company to take
such action with respect to mitigation of Damages. Notwithstanding anything
herein to the contrary, Damages shall not include special, indirect,
consequential or punitive damages.

 

  8.6 Right to Indemnification Not Affected by Knowledge

The right to indemnification, payment of Damages or other remedy based on the
representations, warranties, covenants, obligations and agreements contained in
this Agreement shall not be affected by any investigation conducted with respect
to, or any knowledge acquired (or capable of being acquired) at any time,
whether before or after the Closing Date, with respect to the accuracy or
inaccuracy of or compliance or non-compliance with, any such representation,
warranty, covenant, obligation or agreement.

 

9. INFORMATION

 

  9.1 Information

The Company shall provide to each Shareholder and the Directors and, where
requested, to their representatives copies of all financial statements, business
plans, audit reports and other information which the Company shall receive from
SSI and, without prejudice to the foregoing, the Company shall keep the
Shareholders fully and promptly informed of all material developments regarding
the financial and business affairs and all significant events (including any
material litigation or arbitration) which will or may materially and adversely
affect any party.

 

10. VETO MATTERS

 

  10.1 List of Veto Matters

The Company agrees, so far as it lawfully may, and the Shareholders agree to
procure, so far as is within their powers as Shareholders or under this
Agreement, that the matters listed in Schedule 4 shall require and shall only be
implemented if the Company shall have received the prior written consent of all
Shareholders (provided that if such prior written consent is not refused within
5

 

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Business Days of it being requested by the Company it shall be deemed to have
been given).

 

11. TRANSFER OF SHARES

 

  11.1 Restrictions on Transfer

No Shareholder shall assign, transfer, exchange, Encumber or otherwise dispose
of any of the Shares held by it or any interest in them except in accordance
with the provisions of this Section 11.

 

  11.2 Permitted Transfers

Notwithstanding the provisions of Section 11.1, a Shareholder may transfer all
or part of its Shares to any of its Affiliates (a “Permitted Transferee”)
subject to the transferring Shareholder guaranteeing, to the satisfaction of the
remaining Shareholders, all of the Permitted Transferee’s obligations under this
Agreement and Shareholder Support obligations and subject to the Permitted
Transferee agreeing immediately to transfer all of its Shares to the transferor
Shareholder or to another Permitted Transferee of the transferor Shareholder
immediately upon the Permitted Transferee ceasing to be an Affiliate of the
transferor Shareholder.

 

  11.3 Transfers Conditional on Transferee’s Agreement

It shall be a condition of any allotment or transfer of Shares to any person
(including a Permitted Transferee not being an existing shareholder of the
Company) that the allottee or transferee shall enter into a deed substantially
in the form of Schedule 1 agreeing to become party to and to be bound by the
terms of this Agreement and thereafter any reference to a party or Shareholder
herein shall be deemed to include a reference to such transferee as if named
herein as a party.

 

  11.4 Directors’ Right to Verify Transfers

In order to verify that a transfer of Shares is to a Permitted Transferee, a
Permitted Transferee shall give the Company such information and evidence as the
Board may require and the Board shall refuse to register a relevant transfer
until the information is provided in a form reasonably satisfactory to the
Board.

 

  11.5 General Consent under the Constitution

Each of the parties expressly understands and agrees to give effect to each
transfer made in accordance with this Section 11 and agrees to cause the Board
to register each such transfer pursuant to the terms of this Agreement.

 

  11.6 Syntel’s Option to Buy State Street Shares

During the term of this Agreement, State Street shall have the right to give one
or more notices (each, a “Put Notice”) at any time to Syntel, containing an
offer by

 

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State Street, to sell all or any of the Shares of the Company owned by State
Street at that time (the “Put Offer to Sell”) at the Transfer Value of such
Shares. Within 15 Business Days of any Put Notice being given (the “Put Offer
Period”), Syntel shall have the option to accept the Put Offer to Sell by giving
notice of such acceptance to State Street. If Syntel elects to exercise its
right to accept the Put Offer to Sell, Syntel shall purchase, and State Street
shall sell, the number of Shares of the Company owned by State Street as
specified in the Put Notice at the Transfer Value of such Shares and the
transaction of purchase and sale shall be completed within 30 Business Days of
the expiry of the Put Offer Period, subject to receipt of requisite governmental
or regulatory approvals.

 

  11.7 State Street’s Right to Call

Notwithstanding Section 11.1 of this Agreement, State Street shall, effective
from the date following the 5th (Fifth) anniversary of the execution of this
Agreement and at any time (and from time to time) thereafter, have the right to
give notice (such notice being referred to in this section as the “Call Notice”)
to Syntel, containing an offer by State Street to purchase all, but not less
than all, of the Shares of the Company owned by Syntel at that time (the “Call
Offer to Purchase”) at the Call Offer Price. Within 15 Business Days of the Call
Notice being given (the “Call Offer Period”), Syntel shall accept the Call Offer
to Purchase by giving notice of such acceptance to State Street and Syntel shall
sell and State Street shall purchase all the Shares of the Company beneficially
owned by Syntel at such time at the Call Offer Price and the transaction of
purchase and sale shall be completed within 30 Business Days of the expiry of
the Call Offer Period, subject to the receipt of applicable regulatory,
governmental or corporate approvals.

 

  11.8 Material Event

If a Material Event outside the reasonable control of State Street occurs at any
time after the execution of this Agreement and State Street is required by
applicable law or regulatory guidance to promptly terminate the joint venture
relationship with the Class B Shareholder, State Street shall have the option to
give a Call Notice at any time to Syntel, containing a Call Offer to Purchase
the Shares of the Company owned by Syntel at that time at the Transfer Value.
Within the Call Offer Period, Syntel shall accept the Call Offer to Purchase by
giving notice of such acceptance to State Street and Syntel shall sell and State
Street shall purchase all the Shares of the Company beneficially owned by Syntel
at such time at the Transfer Value and the transaction of purchase and sale
shall be completed within 30 Business Days of the expiry of the Call Offer
Period, subject to the receipt of applicable regulatory, governmental or
corporate approvals.

 

  11.9 Dissolution and Liquidation; Redemption

 

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  (a) The Company shall be liquidated in accordance with Section 11.9(b) at any
time upon the unanimous consent of the Shareholders, which consent shall not be
unreasonably withheld.

 

  (b) In the event of any winding-up and liquidation of the Company pursuant to
Section 11.9(a), the Shareholders shall take all such action as may be necessary
to terminate this Agreement and, subject to the provisions of this Section 11.9,
the Company shall be dissolved, wound up and liquidated in accordance with
applicable law. In any dissolution, winding-up or liquidation of the Company,
any tangible or intangible properties or assets of the Company which may be
distributable under applicable law shall, upon such dissolution, winding-up and
liquidation of the Company, be divided and distributed among the Shareholders in
proportion to their respective share ownership in the Company at the time of
such distribution; provided, however, that the rights to all Employees of the
Company and physical assets (e.g., equipment) of the Company shall be
distributed to the Class B Shareholder. Upon any such dissolution, winding-up
and liquidation, the Shareholders shall cause the Auditors engaged by the
Company (whose determination shall be final, conclusive and binding on the
Shareholders) to prepare and deliver to the Shareholders a final accounting
statement as soon as reasonably practicable after all of the activities of the
Company have been concluded, all monies payable to the Company have been
received and all expenses and obligations of the Company have been paid,
satisfied or otherwise provided for, and upon delivery of such accounting
statement, this Agreement shall forthwith terminate and be of no further force
and effect (except to the extent of any liability or obligation of a Shareholder
which accrued prior to any such termination or any provisions herein which are
expressly provided to survive any termination hereof). Any costs, fees and other
expenses of any kind (including reasonable attorneys’ fees) associated in
connection with the dissolution and liquidation of the Company shall be borne by
the parties in equal proportion.

 

  (c) The Class A Shareholder may at any time request the Company to redeem, and
the Company shall redeem, the Class A Common Shares held by the Class A
Shareholder for an aggregate purchase price of **.

 

12. REPRESENTATIONS AND WARRANTIES

 

  12.1 Warranties by Syntel

Syntel represents and warrants to State Street and to the Company as follows:

 

  12.1.1 Syntel is a limited liability company organized and validly existing
under the laws of the State of Delaware, USA;

 

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  12.1.2 the signature, execution and performance of this Agreement and all
ancillary documents by Syntel have been duly authorized and are within the
corporate power of Syntel, constitute binding obligations on Syntel in
accordance with their terms and will not give rise to any breach of any
instrument, agreement, law, order, judgment or decree by which Syntel is bound;
and

 

  12.1.3 all consents, licences or approvals required by law or regulation in
order for Syntel to enter into and perform its obligations pursuant to this
Agreement have been obtained without conditions or limitations which would limit
Syntel’s performance of this Agreement.

 

  12.2 Warranties by State Street

State Street represents and warrants to Syntel and to the Company as follows:

 

  12.2.1 State Street is a company organized and validly existing under the
authority of the Commonwealth of Massachusetts and the Board of Governors of the
Federal Reserve System of the United States of America;

 

  12.2.2 the signature, execution and performance of this Agreement and all
ancillary documents by State Street have been duly authorized and are within the
corporate power of State Street, constitute binding obligations on State Street
in accordance with their terms and will not give rise to any breach of any
instrument, agreement, law, order, judgment or decree by which State Street is
bound; and

 

  12.2.3 all consents, licences or approvals required by law or regulation in
order for State Street to enter into and perform its obligations pursuant to
this Agreement have been obtained without conditions or limitations which would
limit State Street’s performance of this Agreement.

 

13. SYNTEL SOURCING PRIVATE LIMITED

 

  13.1 General Meetings

The Company shall as soon as practicable after the Company receives notice of
any general meeting of shareholders of SSI, convene a Board meeting in
accordance with the provisions of Section 6.5.1 and pass to the Shareholders
copies of such notice and any circulars or other correspondence from SSI to its
shareholders in respect of such general meeting. Subject to the provisions of
Schedule 4, the Board shall resolve how the shares in SSI held directly or
indirectly by the Company shall be voted at the relevant general meeting.

 

14. CONFIDENTIALITY

Each party agrees that it will, and cause its Affiliates and representatives to,
treat in confidence all documents, materials and other information which it
shall have obtained

 

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EXECUTION VERSION

 

regarding the other party, the Company, Syntel Sourcing, and their respective
customers during the term of this Agreement. Upon termination of this Agreement,
each party will return to the other party all copies of nonpublic documents and
materials which have been furnished in connection therewith. The obligation of
each party to treat such documents, materials and other information in
confidence shall not apply to any information which (i) is or becomes available
to such party from a source not under an obligation to maintain the
confidentiality of such documents, materials and other information, (ii) is or
becomes available to the public other than as a result of disclosure by such
party or its agents, or (iii) is required to be disclosed under applicable law
or judicial process, but only to the extent it must be disclosed. The parties
agree that a breach of the covenants in this Section 14 will cause irreparable
harm. Therefore, the parties agree that, in addition to any other remedies
available, the injured party shall be entitled to preliminary and permanent
injunctive relief against any breach or threatened breach by a party of the
covenants in this Section 14.

 

15. RELATIONSHIP BETWEEN SHAREHOLDERS AND THE COMPANY

 

  15.1 Shareholders’ Procurement Obligation

Each of the Shareholders agrees it shall exercise its rights hereunder and as a
Shareholder in the Company in such manner as could reasonably be expected to
prevent, and shall not exercise those rights in any manner which could
reasonably be expected to result in, a breach by the Company of any of its
obligations under this Agreement or any restrictions imposed upon it under its
Constitution (whether or not enforceable against the Company itself).

 

  15.2 No Partnership

Nothing in this Agreement, and no action taken under this Agreement, shall
create a partnership or establish a relationship of principal and agent between
any of the parties or (save as otherwise stated herein) otherwise authorize any
party to bind any other party for any purpose.

 

16. ENTIRE AGREEMENT AND SEVERANCE

 

  16.1 Entire Agreement

This Agreement together with any other documents in the agreed form referred to
in this Agreement (together the “Contractual Documents”) contains the whole
agreement between the parties relating to the subject matter of this Agreement
at the date of this Agreement to the exclusion of any terms implied by law which
may be excluded by contract and except to the extent repeated in this Agreement
or any Contractual Document, supersedes any previous written or oral agreement
between the parties in relation to the matters dealt with in this Agreement.

 

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EXECUTION VERSION

 

  16.2 Acknowledgment by Parties

Each party acknowledges that:

 

  16.2.1 in entering into this Agreement, it does not rely on, and shall have no
remedy in respect of, any representation (whether negligent or otherwise),
warranty or undertaking made to it by any person (whether a party to this
Agreement or not) which is not expressly set out or referred to in this
Agreement; and

 

  16.2.2 it has received independent legal advice relating to all the matters
provided for in this Agreement, including the provisions of this Section, and
agrees, having considered the terms of this Section 16.2 and the Agreement as a
whole, that the provisions of this Section are fair and reasonable.

 

  16.3 Conflict with the Constitution

The parties intend that the provisions of this Agreement shall prevail over the
Constitution in the event of conflict and, accordingly, the Shareholders shall,
if necessary, exercise all voting and other rights and powers available to them
as Shareholders or under this Agreement, and shall cause their nominees on the
Board, to procure any amendment to the Constitution and the Memorandum of
Association and the Articles of Association of SSI required to give effect to
the provisions of this Agreement.

 

  16.4 Invalidity

If at any time any provision in this Agreement is or becomes illegal, invalid or
unenforceable, in whole or in part, under any enactment or rule of law, such
provision or part shall to that extent be deemed not to form part of this
Agreement but the legality, validity or enforceability of the remainder of this
Agreement shall not be affected. The parties shall negotiate in good faith to
replace such illegal, invalid or unenforceable provision with a valid provision
which, as far as possible, has the same legal and commercial effect as that
which it replaces.

 

17. AMENDMENTS

This Agreement may not be changed, altered or waived unless in writing and
signed by or on behalf of each of the parties to this Agreement.

 

18. NO ASSIGNMENT

Except as results from a transfer of Shares as permitted under this Agreement,
no party may assign or transfer its rights or obligations under this Agreement
without the prior written consent of the other parties to this Agreement.

 

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19. REMEDIES AND WAIVERS

 

  19.1 No Waiver or Discharge

No default by any party in the performance of or compliance with any provision
of this Agreement shall be waived or discharged except with the express written
consent of all other parties.

 

  19.2 Saving for Future Waivers

No waiver by any party of any default by another party in the performance of or
compliance with any of the provisions of this Agreement shall operate or be
construed as a waiver of any other or further default whether of a like or
different character.

 

  19.3 Failure to Exercise etc. not a Waiver

No failure to exercise, nor delay or omission by any party in exercising, any
right, power or remedy conferred on it under this Agreement or provided by law
shall:

 

  19.3.1 affect that right, power or remedy; or

 

  19.3.2 operate as a waiver of it.

No single or partial exercise by any party of any right, power or remedy shall
prevent any further exercise of that right, power or remedy or the exercise of
any other right, power or remedy.

 

  19.4 Rights and Remedies Cumulative

The rights, powers and remedies conferred on the parties by this Agreement are
cumulative and not exclusive of any rights, powers and remedies provided by law
or otherwise.

 

20. THIRD PARTY RIGHTS

The parties do not intend that any term of this Agreement shall be enforceable
by any person who is not a party to this Agreement and accordingly no person who
is not a party to this Agreement shall be deemed a beneficiary of or shall have
any rights or entitlements under this Agreement. The parties may rescind, vary,
waive, release, assign, novate or otherwise dispose of all or any of their
respective rights or obligations under this Agreement without the consent of any
person who is not a party to this Agreement.

 

21. COSTS

Each party shall bear the legal costs and expenses incurred by it in connection
with the preparation, negotiation and implementation of this Agreement.

 

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EXECUTION VERSION

 

22. DURATION

The rights and obligations of each Shareholder shall continue and be enforceable
by or against it only while it is a Shareholder of the Company save for:

 

  (a) rights and obligations in respect of Sections 8, 22, 23 and 24 which shall
continue to have effect notwithstanding a party ceasing to be a Shareholder or
termination of this Agreement; and

 

  (b) rights and obligations in respect of antecedent breaches of this Agreement
or the Constitution.

 

23. NOTICES

 

  23.1 Service

Any notice, claim or demand in connection with this Agreement shall be in
writing in English (a “Notice”) and shall be sufficiently given or served if
delivered or sent in accordance with Section 11.6 of the Subscription Agreement.

 

24. GOVERNING LAW

This Agreement shall be governed by, and construed in accordance, with the laws
of the State of Delaware without regard to conflicts of law principles, and the
Parties agree to submit to jurisdiction of any court of law sitting in the State
of Delaware.

 

25. COUNTERPARTS

This Agreement may be entered into in any number of counterparts, all of which
taken together shall constitute one and the same instrument. Delivery of
counterparts may be by facsimile transmission. Any party may enter into this
Agreement by signing any such counterpart but the Agreement shall not be
effective until each party has executed at least one counterpart.

 

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EXECUTION VERSION

 

IN WITNESS WHEREOF, this Agreement has been duly executed under seal on the date
first above written.

 

STATE STREET INTERNATIONAL HOLDINGS By:  

**

Name:   ** Title:   ** SYNTEL DELAWARE, LLC By:  

 

Name:   Title:   SYNTEL SOLUTIONS (MAURITIUS) LIMITED By:  

 

Name:   Title:  

 

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EXECUTION VERSION

 

SCHEDULE 1

**

 

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EXECUTION VERSION

 

SCHEDULE 2

Transfer Value

The aggregate Transfer Value for all of the Class A Common Shares held by State
Street shall be **.

The aggregate Transfer Value for all of the Class B Common Shares and Preferred
Shares held by Syntel shall be the price equivalent to **

 

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EXECUTION VERSION

 

SCHEDULE 3

Standard of Conduct

 

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EXECUTION VERSION

 

SCHEDULE 4

Veto Matters

The following decisions, actions and resolutions of the Board shall require the
vote of all of the Directors:

(a) any sale by the Company of all or substantially all of its assets or stock,
or any reorganization, consolidation or merger (or similar transaction or series
of transactions) of the Company with another entity;

(b) any acquisition of all or substantially all of the assets or stock of
another entity;

(c) any liquidation, dissolution or winding up of the Company;

(d) the authorization or creation of any equity security of the Company;

(e) repurchase or redemption of any equity security of the Company;

(f) any amendment to the Memorandum of Association or these Articles;

(g) any increase or decrease in the number of directors that shall constitute
the Board;

(h) any material change in the nature of the business of the Company;

(i) any change in the name of the Company or any assumed name of the Company;

(j) any incurrence of indebtedness in excess of **;

(k) any capital expenditures in any calendar year in excess of **;

(l) any material change in the manner that the Company maintains its books and
records of account;

(m) any change in the make-up or powers of the Operating Committee

(n) the creation of any committee of the Board; or

(o) the declaration or payment of any dividend or distribution.

 

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