Execution version

 

JOINT VENTURE AGREEMENT
OF

WINDSTREAM TECHNOLOGIES, INC.

 

This Joint Venture Agreement (this “Agreement”) is made and entered into on 16th
day of October, 2014 (the “Effective Date”), by and among:

 

Windstream Energy Technologies India Private Limited, with registered address
located Janapriya Constructions, Flat No. 312 & 313, Kubera Towers, Narayanguda,
Hyderabad, Andhra Pradesh, India 500029 (“Company” which expression shall unless
it be repugnant to the context or meaning thereof, be deemed to mean and include
its successors and permitted assigns),

 

Windstream Technologies, Inc., with registered address located at 819 Buckeye
Street, North Vernon, Indiana 47265, United States of America (“U.S.”),
organized as a corporation under the laws of the state of Wyoming, U.S. (“WS”
which expression shall unless it be repugnant to the context or meaning thereof,
be deemed to mean and include its successors and permitted assigns),

 

West Coast Ventures Private Limited, a Company incorporated under the laws of
India having its registered office at No.4, Haudin Road, Near Ulsoor Lake,
Bangalore-560 042, India through any entity nominated by West Coast Ventures
Private Limited (hereinafter referred to as the “Investor” which expression
shall unless it be repugnant to the context or meaning thereof, be deemed to
mean and include its successors and permitted assigns).

 

RECITALS

 

A. Company was incorporated on October 26, 2013 and its sole shareholder is WS,
formed when Windaus Global Energy, Inc. merged into WS. WS designs, prototypes
and manufactures affordable and scalable renewable energy technologies for use
globally.     B. The Investor is a company engaged in the business of, amongst
others, promoting new / renewable energy and has decided to set up a special
purpose vehicle by name Deepan Energy Ventures LLP comprising of itself and
Kiran Saraf and associates.     C. The Investor has agreed to invest in the
Company and along with WS, become shareholders of the Company (collectively
Investor and WS are referred to as the “Shareholders” and each individually, a
“Shareholder”) for the purposes set forth below in accordance with the laws of
India including, but not limited to, the Companies Act, 2013.     D. The
Company, Investor and WS shall collectively be referred to as the “Parties” and
individually as “Party”, wherever the context so permits.

 

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AGREEMENT

 

NOW THEREFORE, in consideration of the mutual promises set forth in this
Agreement, and subject to the terms and conditions herein, Company and the
Shareholders agree as follows:

 

Article 1 Name of the Company.

 

The name of the Company is Windstream Energy Technologies India Private Limited.
The Company is a private limited company incorporated in India under the
Companies Act, 1956.

 

Article 2 Corporate Purpose.

 

The Company has been set up and is primarily engaged in manufacture of SolarMill
(defined below) for the territories identified under Schedule II of this
Agreement (“Territories”) and the Company shall engage in manufacture, selling,
distributing and retailing SolarMill in the territory of India (“Corporate
Purpose”).

 

WS has designed and developed a hybrid device of a wind turbine with solar
panels “SolarMill” and has entered into this Agreement and the License Agreement
(defined below) to fulfill the Corporate Purpose.

 

Article 3 Term of the Company.

 

The Company is formed for a period starting from October 26, 2013, the date of
its registration in the Registrar of Companies of the Ministry of Corporate
Affairs of India, and shall continue perpetually unless otherwise dissolved in
accordance with the terms of this Agreement or applicable law.

 

Article 4 Share Capital; Allocation of Profits and Losses.

 

4.1 Share Capital. The authorized, issued and paid up share capital of the
Company is fixed at [One Hundred Sixty Thousand] Indian Rupees (INR [160,000]),
the value of each share being Ten Indian Rupees (INR 10) (each, a “Share”). The
Shares shall be allotted among the Shareholders as follows:

 

Shareholder  No. of Shares   Share Value   Ownership Percentage  WS   [10,000]  
 INR 100,000     55% Investor   8184    INR 81840    45% Total   [18,184]    INR
181,840    100%

 

4.2 Initial Capital Contributions; Issuance of Shares.

 

The Company shall, as of the Effective Date, issue the Shares to the Investor
and WS shall hold the Shares as set forth in Article 4.1 above. The Investor,
subject to the terms and conditions of this Agreement, and relying upon the
representations and warranties of the Company under Article 18 of this Agreement
has agreed to invest in and subscribe to the Shares. Upon remittance of the
subscription amount by the Investor to the Company as set out in this Article
4.2, the Company shall take such actions as set out in Article 4.5 resulting in
issue and allotment of the Shares by the Company to the Investor, free and clear
of all encumbrances in accordance with this Agreement (“Closing”) on the Closing
Date, or on such date as may be mutually agreed by the Parties.

 

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Each of the Shareholders shall pay or shall have paid the following
consideration: (i) As of the Effective Date, WS has paid the share capital for
its 10,000 Shares prior to the Effective Date. WS shall in addition contribute
to the Company the right to the use of the Licensed Technology through a License
Agreement; (ii) As of the Closing Date, INVESTOR will pay the share capital for
its 8,184 Shares in full, plus such share premium which in aggregate with the
face value for the Shares issued shall be USD 2,000,000. The Shareholders
further agree that their capital contributions will be deposited in the
Company’s bank account.

 

4.3 Conditions Precedent to Closing. The obligation of the Investor to subscribe
to the Shares and remit the subscription amount towards capital contribution to
the Company is subject to fulfilment of the following Conditions Precedent to
the satisfaction of the Investor:

 

  a) The Company shall provide the Investor with a valuation certificate
prepared by an independent and duly qualified chartered accountant in accordance
with the applicable law.         b) Execution of the License Agreement in the
form and substance acceptable to the Investor.         c) Company shall have
provided its statement of accounts, including P&L accounts and balance sheet of
the Company duly certified by a director of the Company for the period up to
September 30, 2014, to the Investor.         d) Company shall have procured
approval from the Board as may be necessary for the execution of the Transaction
Documents and for the transactions contemplated under this Agreement.         e)
There shall not have been, on or prior to the Closing Date, any event(s) or
condition(s) of any character that constitutes a Material Adverse Effect. For
the purposes of this Agreement, “Material Adverse Effect” means any event,
occurrence, fact, condition, change, development or effect that, individually or
in the aggregate, has had or may reasonably be expected to have any material
adverse effect on (a) the ability of the Company to consummate the transactions
contemplated herein or to perform its obligations hereunder or pursuant to this
Agreement, or (b) the Company’s financial or otherwise, operations, results of
operations, prospects, assets, liabilities or the business as now conducted, or
(c) the validity or enforceability of this Agreement and the License Agreement,
the validity or enforceability of any of the transactions contemplated
hereunder, or of the rights or remedies of the Investor under this Agreement, or
(d) any material consents or approvals required for the Company to carry on the
business.

 

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  f) The Company shall have issued the private placement offer letter to the
Investor in Form PAS-4 as prescribed under the Companies Act, 2013 to subscribe
to the Investor Shares, on a private placement basis, together with an
application form specifically addressed to the Investor.         g) The Company
shall have obtained approval of the Investor or its representatives to the form
of Board and Shareholders’ resolutions, draft form of restated Articles of
Association (“Articles”) and other documents necessary for the giving effect to
the provisions of this Agreement.         h) The Company shall have duly
increased its authorized Share capital to such amount as may be necessary to
accommodate the issuance of Investor Shares under this Agreement and the Company
shall have amended the Share capital clause of the Memorandum of Association
accordingly and shall have undertaken all requisite corporate actions to give
effect to the above (including passing of necessary resolutions at meetings of
the Board and shareholders and making requisite statutory filings with the
Governmental Authorities.         i) An Advance Reporting Form, Form FC-GPR and
all other documents required to be filed under the Foreign Exchange Management
(Transfer or Issue of Security by a Person Resident Outside India Regulations,
2000), together with all necessary annexures are executed and filed with the
authorized dealer.

 

4.4 Waiver of Conditions. Notwithstanding anything contained elsewhere in the
Agreement, the Investor shall have the right at its discretion to waive any of
the Conditions Precedent by Notification to the Company. The Investor may also
in lieu of performance of any of the Conditions Precedent prior to the Closing
require that such of the Conditions Precedent be treated as conditions
subsequent and are performed within such period after Closing as the Investor
may direct.

 

4.5 Closing. Upon the fulfilment of the Conditions Precedent to Closing, the
Company shall notify the Investor that all the Conditions Precedent to Closing
have been duly satisfied (“CP Confirmation Letter”). The Company shall also
deliver to the Investor a certificate signed by the Company certifying that the
Conditions Precedent has been satisfied. Upon the Investor receiving the CP
Confirmation Letter and having verified the fulfilment of the Conditions
Precedent to its satisfaction, the Investor shall within 10 (ten) business days
of receipt of CP Confirmation Letter, remit the subscription amount for the
Shares and the Company shall undertake such Closing actions as specified under
Article 4.6 and Article 4.7 below (“Closing Date”).

 

4.6 Closing Board Actions. On the Closing Date, simultaneously upon receipt of
the subscription amount by the Investor into the designated bank account of the
Company, the Company shall, in a meeting of the Board:

 

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  a) effect the issue and allotment of the Investor Shares;         b) register
the Investor as member of the Company and make necessary entries in the
Company’s register of members in respect of the Investor Shares and deliver to
the Investor true extract, duly certified by a Director, of the updated register
of members reflecting the issue and allotment of the Investor Shares;         c)
approve the appointment of Mr. Amogh Dalvi, Mr. M.G. Banga and Mr. Kiran Saraf
as nominee of the Investor to the Board (“Investor Directors”) as additional
Directors of the Company;         d) authorize necessary entries in the
Company’s register of Directors in respect of appointment of the Investor
Directors and deliver to the Investor, true extract, duly certified by a
Director, of the updated register of Directors reflecting the appointment of the
Investor Directors;         e) adopt the restated Articles (in a form which
shall be to the satisfaction of the Investor), subject to approval of the
Shareholders in a Shareholders’ meeting;         f) issue the duly executed,
adequately stamped and certified original certificates in respect of the
Investor Shares to the Investor; and         g) issue a Notice to convene, at
shorter Notice, an extraordinary general meeting of the Shareholders of the
Company on the Closing Date.

 

4.7 Closing Shareholders’ Actions. On the Closing Date, the Company shall, in a
meeting of its Shareholders that is convened at a shorter Notice approve and
adopt the restated Articles.

 

4.8 Post-Closing Actions. The Company shall complete the following to the
satisfaction of the Investor within the timelines specified for each of the
following or such extended period as the Investor may agree:

 

  a) complete all statutory filings required pursuant to the Closing, including
filings with Governmental Authority (if any) and provide certified copies of all
such filings relating to the Investor Shares to the Investor within 15 (Fifteen)
days of the Closing Date;         b) take necessary actions and make all filings
for appointment of Investor Directors as Directors of the Company in accordance
with procedure laid down in section 160 of the Companies Act, 2013 prior to the
annual general meeting of the Company within 15 (Fifteen) days of the Closing
Date;         c) Appointment of the chief executive officer, who shall be
appointed by WS and approved by the Investor and execution by the chief
executive officer of employment agreement in the form and substance acceptable
to the Investor within such time as may be determined by the Parties.         d)
Appointment of the chief financial officer, who shall be appointed by the
Investor and approved by WS and execution by the chief financial officer of
employment agreement in the form and substance acceptable to the Investor within
such time as may be determined by the Parties; and         e) provide on the
Closing Date true extracts, duly certified by a Director, of the updated
register of members and register of Directors and, within 15 (Fifteen) days of
the Closing Date, the certified true copies of the Company’s restated Articles,
and all resolutions passed and other documents provided in accordance with
Article 4.6 and Article 4.7 above to the Investor.

 

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4.9 Limitation on Liability. The liability of each of the Shareholders shall be
limited to the aggregate amount of the share capital held by such Shareholder in
the Company (each contribution, a “Capital Contribution”).

 

Article 5 Further Issue of Capital.

 

5.1 Additional Capital Contributions.

 

  a) Subject to the Article 9.5 (Reserved Matters), the Company shall propose to
raise further capital and the Shareholders may make additional capital
contributions to the Company to fund operating deficits and capital deficits of
the Company.         b) The additional capital contributions required to be made
pursuant to Article 5.1(a) shall be made from time to time upon receipt by each
Shareholder of a written capital call signed by all of the members of the Board
of Directors, which sets forth the amount of the capital call and the reasons
for the capital call, including reference to Article 5.1(a) above (a “Capital
Call”). Within thirty (30) calendar days after receipt of a Capital Call, each
Shareholder shall make an additional capital contribution to the Company in an
amount equal to the Shareholder’s Ownership Percentage multiplied by the amount
of the Capital Call. Without prejudice to the rights of any Party under any
other provisions of this Agreement, the Company shall not, without the prior
written consent of the both the Shareholders issue any new Shares or securities
optionally or compulsorily convertible into Shares, until both the Shareholders
have exercised their rights under Article 9.5 (Reserved Matters).

 

5.2 Enforcement of Commitments.

 

  a) In the event any Shareholder fails to contribute capital pursuant to a
Capital Call (a “Delinquent Shareholder”), the remaining Shareholder which is
not a Delinquent Shareholder may provide the Delinquent Shareholder notice of
the failure to meet the Capital Call (the “Notice”). If the Delinquent
Shareholder fails to contribute capital pursuant to the Capital Call within
thirty (30) calendar days of the giving of Notice, the remaining Shareholder
shall have the right, but not the obligation to contribute to the Company and
subscribe to all of the portion of the Capital Call.

 

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  b) If the failure by a Delinquent Shareholder to make any additional capital
contribution required by a Capital Call continues until that date which is
thirty (30) calendar days following the due date thereof (the “Dilution Date”),
then the Ownership Percentage of the Delinquent Shareholder shall be diluted by
the capital contributed to the Company under the Capital Call so that the
Delinquent Shareholder’s Shareholder Interest shall be calculated by multiplying
its total initial capital contribution plus additional capital contributions by
a fraction, the numerator of which shall be the Delinquent Shareholder’s capital
contribution through Dilution Date and the denominator of which shall be the
Company’s contributed capital after the additional Capital Call.         c) The
provisions of this Article 5.2 are not intended to be a forfeiture or penalty
(and no Delinquent Shareholder shall plead or claim that these provisions
constitute a forfeiture or penalty) and have been fully negotiated and discussed
and each Shareholder completely understands and comprehends the intent, effect
and potential ramifications hereof.

 

5.3 Loans of Shareholders and Third Parties.

 

  a) The funds needed beyond the existing share capital may be financed, subject
to Article 9.5 (Reserved Matter) by loans from the Shareholders or from
financial institutions acceptable to the Board of Directors of the Company. Each
such loan shall, upon acceptance by the Board of Directors of the Company, be an
obligation of the Company. The assets of the Company may be pledged as
collateral to secure loans as determined by the Board of Directors of the
Company, to the extent permitted by and in accordance with the relevant laws and
regulations of India. The Company may enter into a loan agreement with a
Shareholder for any loan made to the Company under this Article 5.3 except for
the purpose of fulfilling the obligations of the Investor under Article 5.3 (b),
granting the Shareholder the right to convert all or a portion of the loan to
equity of the Company according to an agreed upon valuation formulation and be
issued additional Shares of the Company, subject to Article 9.5 (Reserved
Matter) and approval by the relevant governmental authorities.         b) Due to
Company’s short credit history, the Investor agrees that they shall use their
credibility to assist the Company with obtaining financing from financial
institutions in India or any other source, up to Three Million U.S. Dollars (USD
$3,000,000) to satisfy working capital requirements for increasing the sales
beyond the currently estimated levels of Company’s operations. Such assistance
by the Investor for the initial loan amount will include signing a loan
agreement by all Parties as co-obligors of the Company or guaranteeing the
Company’s financial obligations. This loan shall be obtained by the Company in
its name and the Investor shall only assist the Company directly or indirectly.
Such initial loan amount shall be facilitated by the Investor in the form of
debt, market credit, investment by channel partners or through a facilitation
partner or through any other source as may be feasible to the Investor. It is
clarified that all costs associated with such fund arrangements shall be borne
by the Company.         c) It is clarified that for any loan required for
financing the operations beyond Three Million U.S. Dollars (USD $ 3,000,000),
the same shall be raised with the joint effort of all the Parties and all the
Parties shall co-operate for procuring the loan and shall sign any loan
agreement as co-obligors of the Company or guaranteeing the Company’s financial
obligations.

 

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Article 6 Restrictions on Transfer.

 

6.1 Lock-in of Shares.

 

WS undertakes that it shall not:

 

  a) without the consent of the Investor and subject to Article 6.4 below, sell
or otherwise Transfer or part with any portion of their Shareholder Interest in
the Company, in whatever form (“WS Lock-In”), until the expiry of 3 (three)
years from the Closing Date (“Restriction Period”). Provided that, this
restriction shall not apply to Transfer of Shares by WS after expiry of 3(three)
years from the Closing Date provided that such Shares are first offered to the
Investor in accordance with Article 6.4 below.         b) without the prior
written consent of the Investor, encumber their Shareholder Interest (either
directly or indirectly), or do any other act which has the effect of undermining
the underlying beneficial, fiduciary or legal rights and obligations of WS.    
    c) The Company undertakes not to register any Transfer or Encumbrance in
respect of the Shareholder Interest of WS in violation of the aforesaid
undertaking.

 

The Investor undertakes that it shall not:

 

  a) without the consent of WS and subject to Article 6.4 below, sell or
otherwise Transfer or part with any portion of their Shareholder Interest in the
Company, in whatever form, until the expiry of the Restriction Period (“Investor
Lock-In”). Provided that, this restriction shall not apply to Transfer of Shares
by the Investor after expiry of 3(three) years from the Closing Date provided
that such Shares are first offered to WS in accordance with Article 6.4 below.  
      b) without the prior written consent of WS, encumber their Shareholder
Interest (either directly or indirectly), or do any other act which has the
effect of undermining the underlying beneficial, fiduciary or legal rights and
obligations of the Investor.         c) The Company undertakes not to register
any Transfer or encumbrance in respect of the Shareholder Interest of the
Investor in violation of the aforesaid undertaking.

 

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6.2 Restrictions on Transfer. No Shareholder may make a transfer, sale, gift,
assignment, pledge, granting of a security interest or other disposition,
including any disposition by operation of law (“Transfer”), directly or
indirectly by Transfer of any ownership or equity interest in the Company, all
or any part of its Shareholder Interest without the prior written approval of
the other Shareholder, and only in accordance with this Article 6.2. Any
purported Transfer that is not in compliance with this Article 6.2 shall be null
and void.

 

For purposes of this Agreement, the term “Shareholder Interest” means the entire
interest of a Shareholder in the Company, including, without limitation, its
right to vote as a Shareholder (if any), its Shares, its right to receive
dividend, distributions or any other economic benefits from the Company, and all
rights and obligations of the Shareholder under the Articles and this Agreement.
The provisions of this Article 6 shall be interpreted and applied in accordance
with the Companies Act, 2013.

 

6.3 Permitted Transfers. Notwithstanding Article 6.1, the following direct or
indirect Transfers of Shareholder Interest shall be permitted by any Shareholder
without the consent of the other Shareholders for the following: (i) Transfers
among the Shareholders; (ii) Transfer by WS with the consent of the Investor or
Transfer by the Investor with the consent of WS, as the case may be, prior to
the expiry of the Restriction Period; and (iii) Transfer by a Shareholder to an
Affiliate (as defined below); provided, that contemporaneously with the Transfer
the transferee agrees in writing to accept all obligations of and restrictions
upon the transferring Shareholder under the Articles and this Agreement and
execute a deed of adherence to this Agreement as annexed in Schedule 1. It is
clarified that in the event such transferee ceases to be an Affiliate of the
Shareholder, such transferee immediately on ceasing to be an Affiliate, shall
Transfer back to the relevant Shareholder all the Shares Transferred pursuant to
this Article 6.3.

 

For purposes of this Agreement, the term “Affiliate” means any entity in which a
Shareholder owns 51% or more of the shares or equity interests or which owns 51%
or more of the shares of the Shareholder.

 

6.4 Right of First Refusal. As permitted by applicable law, any Shareholder or
its assignee which desires to sell all (but not less than all) of their
Shareholder Interest (“Sale Shares”) to any party subject to Article 6.3 above,
must first offer to sell such Sale Shares to the other Shareholder, as set forth
below, and the other Shareholder may purchase all but not less than all of the
Sale Shares intended to be transferred in accordance with the Companies Act,
2013 and the following provisions:

 

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  a) If the transferring Shareholder has received from a third party a bona fide
written offer to purchase the Sale Shares, the transferring Shareholder shall
give written notice and a copy of the third party offer to the Company and to
the remaining Shareholder of its intention to sell the Sale Shares. Such offer
shall state the name of the proposed purchaser, the number of Sale Shares
proposed to be sold, the terms and conditions, including payment terms, upon
which the purchase is to be made and the consideration offered therefor (the
“Third Party Offer”).         b) Within fifteen (15) days after receipt of the
Third Party Offer, the remaining Shareholder, shall have the right and option to
purchase all but not less than all of the Sale Shares proposed to be sold at the
same purchase price and upon the same terms and conditions stated in the Third
Party Offer, by giving notice to the transferring Person of their intention to
do so (the “Shareholder’s Exercise Period”).         c) If any Shareholder
exercises its right to purchase all of the Sale Shares described in the Third
Party Offer, the purchasing Shareholders shall have the right to designate a
time, date and place of closing, provided that the date of closing shall be
within thirty (30) days after the expiration of the Shareholder’s Exercise
Period. At such closing, each Shareholder who is purchasing Sale Shares shall
transmit via wire transfer to the transferring Shareholder funds in the amount
of the purchase price therefor and shall receive the Sale Shares so purchased,
free and clear of any and all claims, charges, security interests or other
encumbrances of any nature whatsoever.         d) If, at the expiration of
Shareholder’s Exercise Period, the other Shareholder has not subscribed in full
to the Sale Shares described in the Third Party Offer, the transferring
Shareholder shall be entitled to consummate the proposed Transfer of its Sale
Shares to the third party offeror, subject to Articles 6.5 and 6.7 hereof and
provided that such sale is (i) on substantially the same terms and conditions
stated in the Third Party Offer and (ii) consummated within forty five (45) days
of the expiration of the Shareholder’s Exercise Period referred to in
subsections (b) and (c) above. If for any reason third party offeror and
transferring Shareholder do not consummate the proposed Transfer of Sale Shares
within the period of forty five (45) days after expiration of Shareholder’s
Exercise Period, the transferring Shareholder shall promptly reimburse the
remaining Shareholder for any and all expenses relating to the consideration of
the Third Party Offer, whether incurred for expenses of third party consultants
or for internal expenses of the remaining Shareholder.

 

6.5 Tag-Along Rights.

 

  a) In the event of a Permitted Transfer by WS and/ or the Investor under
Article 6.3 (ii) or any Transfer of its Shareholder Interest post the
Restriction Period by WS and/ or the Investor (“Selling Shareholder”), each of
which is a “Tag Sale”, the remaining Shareholder (‘Non-Selling Shareholder”)
shall have the right, exercisable as set forth below, to participate in the Tag
Sale on the same terms and conditions received by the Selling Shareholders and,
if the Tag Sale is structured as a sale of Shares, in the same proportion of
Shares as the proportion of the Shares being Transferred by the Selling
Shareholders in the Tag Sale (“Tag-Along Right”).

 

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  b) The Company or the Selling Shareholders shall notify the Non-Selling
Shareholders in writing not less than thirty (30) days prior to the proposed
consummation of a Tag Sale, which notice shall describe in reasonable detail all
of the material terms of the Tag Sale, including, without limitation, the name
and address of the prospective purchaser(s), the purchase price and other terms
and conditions of the Tag Sale and the date on or about which the Tag Sale is to
be made. Within twenty-one (21) days after delivery of such notice, the
Non-Selling Shareholder desiring to exercise its Tag-Along Right shall provide
written notice to the Company and the Selling Shareholders of such Non-Selling
Shareholder’s intentions to participate in the Tag Sale.         c) Each
Non-Selling Shareholder exercising a Tag-Along right shall promptly take all
actions reasonably necessary or reasonably desirable (in the judgment of the
Selling Shareholders) to facilitate the consummation of any Tag Sale (whether in
such Non-Selling Shareholder’s capacity as a Shareholder, Director, officer of
the Company or otherwise). Without limiting the foregoing, if the Tag Sale is
structured as a sale or exchange of Shareholder Interest, each such Non-Selling
Shareholder shall sell or exchange the Shareholder Interest held by such
Non-Selling Shareholder on the terms and conditions approved by the Selling
Shareholder.

 

6.6 Call Option on Material Breach.

 

  a) Upon the occurrence of any one of the following, each a “Material Breach”
in relation to a Shareholder (“Defaulting Shareholder”), the procedure provided
under this Article 6.6 shall be adopted:

 

  (i) taking any action with respect to the Reserved Matter in the absence of an
affirmative vote of the each of the Shareholders where such vote is mandated by
the provisions of Article 9.5 (Reserved Matters);         (ii) breach by WS or
the Investor or any of their appointed directors or officers of the Company, of
any material representation, warranty or covenant contained in this Agreement,
including but not limited to anti-corruption compliance as described
specifically in Articles 16.1, 16.2 and 16.3 hereof.         (iii) breach by WS
of any of its obligations under the License Agreement.

 

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  b) WS or the Investor, as the case may be, (the “Non-Defaulting Shareholder”)
shall exercise its call right under this Article 6.6 by delivering written
notice thereof to the Defaulting Shareholder, as applicable (a “Call Notice”).  
      c) If the Non-Defaulting Shareholder opts to exercise its call option
pursuant to the occurrence of Material Breach identified in Article 6.6 (a), the
purchase price for Defaulting Shareholder Interests, shall be at a price which
is less than 25% (twenty five percent) of the Fair Market Value. For the
purposes of this Agreement, “Fair Market Value” shall mean the fair market value
of all Shares of the Company multiplied by the percentage of Shares held by the
selling Shareholder as determined by the Company’s outside auditor. Within
thirty (30) days from receipt of the Call Notice from the Non-Defaulting
Shareholder, the Company’s outside auditor shall prepare the statement of Fair
Market Value (“Statement of Fair Market Value”), and deliver the Statement of
Fair Market Value to the Company and all Shareholders. In preparing the
Statement of Fair Market Value, the Fair Market Value of the Company shall be
determined by the outside auditor as of the last day of the calendar quarter
prior to the Call Notice.

 

6.7 Other Requirements for Effectiveness of Transfer. As a condition to
recognizing the effectiveness of any proposed or purported Transfer of
Shareholder Interests, the remaining Shareholders may require the transferring
Shareholder and/or the proposed transferee to execute such instruments of
transfer, assignment and assumption and such other documents, and to perform all
such other acts which the remaining Shareholder may deem necessary or desirable
to:

 

  a) Constitute such transferee as a substitute Shareholder;         b) Confirm
that the third party desiring to acquire Shareholder Interests, or to be
admitted as a Shareholder, has accepted, assumed and agreed to be subject and
bound by all of the terms, obligations and conditions of the Articles and this
Agreement, as the same may have been further amended;         c) Preserve, after
the Transfer, the Company’s status under the laws of each jurisdiction in which
the Company is qualified, organized or does business;         d) Assure
compliance with any applicable laws of India or any applicable foreign laws,
including securities laws and regulations, including but not limited to those
laws, regulations and directives referenced in Article 16 of this Agreement.

 

Article 7 Share Register

 

The Company shall prepare a Register of Shareholders and a Register of Share
Transfers in which it shall enter the names of the Shareholders, the number of
Shares owned by each and all the transactions affecting such Shares. No transfer
of Shares shall be effective, vis-à-vis the Company or third parties, unless the
reason for such transfer is duly entered in the said registers. The registers
must contain details including but not limited to the following:

 

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a) The name of each Shareholder, its nationality, and commercial registry
number;     b) Number of Shares owned by the Shareholder in the Company’s share
capital as well as their value;     c) Number and value of Shares which have
been disposed of along with the type of such disposal, whether by sale,
inheritance, gift or otherwise;     d) Name of the transferor and transferee;  
  e) Date of the disposal of Shares; and     f) Total number of Shares owned by
the Shareholder after such transfer and their value.     g) The said registers
shall be paginated in a serial manner and no page of such registers shall be
removed therefrom, nor shall any change or tampering be made in the details
recorded therein.

 

Article 8 Management of the Company

 

8.1 Board of Directors; Appointment; Term. The Company shall be managed by a
Board of Directors composed of seven (7) Directors. Three (3) Directors shall be
appointed by INVESTOR (the “INVESTOR Directors”) and four (4) Directors shall be
appointed by WS (the “WS Directors”). Each Director shall serve an indefinite
term on the Board of Directors until his or her earlier death, resignation, or
removal. A Director need not be a citizen or resident of India nor a Shareholder
or employee of the Company. Any vacancy of a WS Director position for any reason
including but not limited to the reasons of removal or resignation shall be
filled by WS. Any vacancy of an INVESTOR Director position for any reason
including but not limited to the reasons of removal or resignation shall be
filled by the Investor. A Shareholder shall be entitled by notice in writing to
the Board of Directors, to nominate any person to act as an Alternate Director
in place of any Director appointed by that Shareholder during such appointee’s
absence for a period of not less than three months for any reason. Upon
appointment of WS Directors and the Investor Directors, each of the Shareholders
shall cause their respective Directors and senior management personnel to enter
into adequate non-compete and non-disclosure agreements with the Company.

 

8.2 Removal of Directors. Each Director may be removed only by the Shareholder
that appointed him or her, except that a Director shall be removed automatically
and without any action by the Shareholders if the Director (i) has become the
subject of a decree or order for relief under any bankruptcy, insolvency or
similar law affecting creditors’ rights now existing or hereafter in effect;
(ii) has initiated, either in an original proceeding or by way of answer in any
state insolvency or receivership proceeding, an action for liquidation,
arrangement, composition, readjustment, dissolution or similar relief; (iii)
ceases to be an employee of the Shareholder that appointed such Director or of
any of its Affiliates, (iv) fails to comply with laws or directives as set forth
in Article 16; or (v) dies.

 

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8.3 Resignation of Directors. A Director may resign at any time by giving
written notice to the Board of Directors at least thirty (30) days prior to the
date that such resignation is to take effect. If such written notice does not
contain an effective date for the resignation, such resignation shall be
effective thirty (30) days after receipt of the notice by the Board of
Directors. Unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective. The Board of Directors
shall promptly notify the Shareholders of any notice of resignation received
from a Director.

 

8.4 Power of the Board of Directors. Subject to Article 9.5 (Reserved Matters),
the Board of Directors shall have all the powers to carry on the business of the
Company except those actions which require prior approval of the Shareholders
under the Companies Act, 2013.

 

8.5 Meetings of the Board of Directors.

 

  a) Statutory Meetings. The Board of Directors shall have a meeting at least
once in every three (3) months and at least four (4) such meetings shall be held
every year. The meetings of the Board of Directors shall be held at such times
and places within or outside India as may be fixed by the Board of Directors.
The company secretary of the Company will issue a notice convening a meeting
specifying the date, time and agenda for such meeting. The Company shall ensure
that sufficient information is included with such notice to enable each Director
to form a view on the issues at question at such meeting. Not less than seven
(7) days’ notice shall be given to all Directors, provided however, that such
notice period may be reduced with the written consent of all of the Directors.  
      b) Special Meetings. Special meetings of the Board of Directors may be
called by any Director. Notice of the time and place of a special meeting of the
Board of Directors, which may be within or outside India, shall be effective if
delivered to each Director by hand, electronic transmission, telecopy, mail or
overnight delivery at least twenty-four hours prior to the time of such special
meeting. Notices of special meetings of the Board of Directors shall identify
the purpose of the special meeting and the business to be transacted at the
special meeting.         c) Video and Teleconferences. A Director may
participate in a meeting of the Board of Directors by means of video or
telephone conference or any other means of communication by which all persons
participating in the meeting can hear and speak to each other, and such
participation in a meeting shall constitute presence in person at the meeting,
provided however that every Director shall physically attend at least one (1)
meeting of the Board of Directors in each financial year.         d) Quorum;
Vote Required. Except as otherwise expressly required by this Agreement: (i) at
least three Directors, two WS Directors and one Investor Director, shall be
necessary to constitute a quorum for the transaction of any business to come
before the Board of Directors, and (ii) on each matter to come before the Board
of Directors at which a quorum is present, the affirmative vote of at least
three Directors shall be required in order for the matter to be approved by and
constitute the act of the Board of Directors provided that: (a) the provisions
of Article 9.5 (Reserved Matters) shall be complied with, if a Reserved Matter
is taken up for discussion at such convened meeting and (b) provisions of
Article 20.3 (Alteration of Articles) is complied with if an alteration to the
Articles is taken up for discussion at such convened meeting. At any Board
meeting, each Director may exercise one (1) vote.

 

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  e) Written Actions. Subject to Article 9.5 (Reserved Matters) and Article 20.3
(Alteration of Articles), a written resolution circulated to all the Directors,
whether in India or overseas and consented/signed by a majority of them as
approved, shall (subject to compliance with the relevant requirements of the
Companies Act, 2013) be as valid and effective as a resolution duly passed at a
meeting of the Board of Directors called and held in accordance with this
Agreement and the Articles (provided it has been circulated in draft form,
together with the relevant papers, if any, to all the Directors) and such
consent(s) are filed with the minutes of the proceedings and meetings of the
Board of Directors. Action taken under this paragraph (e) is effective when the
last Director signs the consent, unless the consent specifies a different prior
or subsequent effective date, in which cases the action is effective on or as of
the specified date. The Company shall maintain a register to record therein the
minutes and resolutions passed at meetings of the Board of Directors.

 

8.6 Officers; Managing Director. Subject to Article 9.5 (Reserved Matters), the
chief executive officer shall be appointed by WS and approved by the Investor
and the chief financial officer shall be appointed by the Investor and approved
by WS. Subject to Article 9.5 (Reserved Matters), the Board of Directors may
appoint the Managing Director and may delegate certain responsibilities for the
operation of the Company to the Managing Director or to any other officers as
they may from time to time determine by creating the office and defining the
duties thereof. Each officer shall hold office for such terms as may be
prescribed by the Board of Directors and until such person’s successor shall
have been elected or until such person’s earlier death, resignation or removal.
Neither the Managing Director nor any other officer is required to be a citizen
of India. The Managing Director shall be responsible for the day-to-day matters
of the Company and implementing the policies and programs laid down by the Board
of Directors. Subject to Article 9.5 (Reserved Matters), the Managing Director
and any other officers may be removed, either with or without cause, at any time
by resolution of the Board of Directors in accordance with the terms of the
individual employment contract, if any. Any officer may resign at any time by
giving written notice thereof to the Board of Directors. Any such resignation
shall take effect on the date of receipt of such notice or on such later date
specified therein, and unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective. A vacancy in any
office because of death, resignation, removal or any other cause may be filled
by the Board of Directors. One person may hold offices and perform the duties of
any two or more offices; provided, however, that no officer shall execute,
acknowledge or verify any instrument in more than one capacity if such
instrument is required by law, the Articles, or this Agreement to be executed,
acknowledged or verified by two or more officers. Any officer may, but is not
required to be, at the same time a member of the Board of Directors.

 

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8.7 Compensation of Board of Directors and Officers. Subject to Article 9.5
(Reserved Matters), a Director shall not receive any compensation for his or her
services as Director. The Board of Directors shall fix from time to time the
salaries of the officers. No officer shall be prevented from receiving a salary
by reason of the fact that he or she is also a Shareholder or Director of the
Company. The Company shall reimburse the Directors for any and all costs of air
travel, meals, accommodation, and other expenses (including costs of
international air travel) incurred by the Directors for the purpose of
attendance at meetings of the Board of Directors provided such costs are limited
to a threshold as may be mutually agreed by the Parties and provided further
that all such expenses are appropriately documented. The Company shall pay all
such costs in the local currency as the expense in question.

 

8.8 Indemnification. Notwithstanding anything to the contrary in this Agreement,
the Company agrees to indemnify and hold the WS Directors, the Investor
Directors and/or the alternate Directors to WS Directors or the Investor
Directors and officers of the Company harmless from all claims and liabilities
to the maximum extent permitted under applicable laws. Termination of this
Agreement, for any reason whatsoever, shall not affect the indemnification
obligations of the Company under this Article 8.8 for any events that have
occurred prior to such termination.

 

Article 9 General Meetings of Shareholders.

 

9.1 Annual and Special General Meetings. An annual General Meeting shall be
called within six (6) months following the end of each fiscal year to consider
the Director’s report concerning the Company’s activities and its financial
position, the auditor’s report, to review and approve the Company’s balance
sheet and final accounts, determine the distribution of profits and appoint
another auditor or reappoint the same auditor and determine his fees. The annual
General Meeting must be held at the registered office of the Company or at a
place within the city or town in which the registered office of the Company is
situated. Special General Meetings of the Shareholders for any purpose shall be
called upon a request from the Board of Directors of the Company or the
Company’s auditors. All General Meetings shall be held in accordance with the
Companies Act, 2013 the Articles and this Agreement.

 

9.2 Chairman. WS shall have a right to nominate the Chairman of General
Meetings.

 

9.3 Notice; Place of Meetings; Video and Teleconferences. Subject to Applicable
Law, a minimum of twenty-one (21) days prior written notice shall be given to
all the Shareholders of any General Meeting, accompanied by the agenda for such
General Meeting. A General Meeting may be convened by the Chairman on less than
twenty-one (21) days notice with the prior written consent of the Shareholders.
No business shall be transacted at a General Meeting duly convened and held
other than the business specified in such notice, without the prior unanimous
consent of the Shareholders. The Board of Directors may designate any place,
either within or outside India, as the place of meeting for any meeting of the
Shareholders (other than the annual General Meeting). If no designation is made,
the place of meeting shall be the registered office of the Company. Shareholders
may participate in any annual or special meeting through the use of video or
telephone conference or any other means of communication by which all
Shareholders participating in the meeting can hear and speak to each other,
provided however that the Shareholders necessary to constitute quorum and the
Chairman of the General Meeting must be physically present at the place of the
meeting.

 

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9.4 Quorum; Voting; Proxies. Shareholders holding Shares of the Company equal to
two-thirds (2/3) of the total issued and outstanding Shares of the Company
represented in person or by proxy shall constitute a quorum at any meeting of
the Shareholders. If a quorum is present, an ordinary resolution of the
Shareholders shall be the act of the Shareholders, unless the vote of a greater
or lesser proportion or number is otherwise required by the Articles or
applicable law or under Article 9.5 (Reserved Matters). Each Shareholder shall
be entitled to cast one vote for each Share that such Shareholder owns. Unless
otherwise expressly provided herein or required under applicable law,
Shareholders who have an interest (economic or otherwise) in the outcome of any
particular matter upon which the Shareholders vote or consent may vote upon any
such matter and their votes shall be counted in the determination of whether the
requisite matter was approved by the Shareholders; provided that such
Shareholder discloses any such interest to all of the other Shareholders and the
Company in writing in advance of the meeting during which such vote is held or
written action is taken. Each Shareholder is entitled to delegate a person whom
he elects to represent him in attending the Shareholders’ meetings and vote on
his behalf by virtue of a written proxy. The Company shall maintain a register
to record therein the minutes and resolutions of the General Meetings of
Shareholders. The Chairman of the General Meetings shall sign such minutes and
adopted resolutions. Provided that no business concerning any of the Reserved
Matters shall be approved except as specified in Article 9.5 (Reserved Matters)
of this Agreement.

 

9.5 Reserved Matters. Notwithstanding anything contained in this Agreement, in
the event any reserved matter contained in Schedule III of this Agreement (each
a “Reserved Matter”) is proposed to be discussed at a Board or Shareholder
meeting, any decision of the Company, any resolution of the Board or a committee
thereof and any resolution of the Shareholders relating to a Reserved Matter,
shall require the prior approval of WS and the Investor, i.e. both the
Shareholders of the Company. In the event any decision and/or resolution is
effected without complying with the provisions of this Article, (a) such
decision or resolution shall not be valid or binding on any Person including the
Company; and (b) the Company shall not take any action pursuant to such decision
or resolution unless the prior approval of each of the Shareholder is obtained
for the same. The Company shall provide all necessary information and material
to each of the Shareholder to enable it to make a decision relating to the
Reserved Matters.

 

Article 10 Finances; Auditing; Taxes.

 

10.1 Accounting. The accounting system of the Company shall be formulated in
accordance with the relevant financial management rules and regulations of India
(the “Accounting Regulations”). If the Accounting Regulations do not cover a
particular aspect of the accounting system, the Company shall adhere to
generally accepted international accounting principles. The accounting system
shall be formulated by the Managing Director of the Company and shall be
approved by the Board of Directors. The financial books and records and other
important documents shall be kept English. All important financial and
accounting documents, records and statements shall require the approval of the
Board of Directors.

 

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10.2 Currency. Indian Rupees shall be the standard monetary currency for
accounting of the Company. The account books of the Company shall be kept in
Indian Rupees (INR) and United States Dollars (USD). Cash, deposits, accounts
payable and receivables, income and expenses shall also be set out in the
currency in which they are paid or received. The monthly and annual financial
statements of the Company shall be presented in Indian Rupees and United States
Dollars.

 

10.3 Fiscal Year. The initial fiscal year of the Company shall commence on the
Effective Date and shall end on December 31, 2014 and each fiscal year
thereafter shall be a calendar year of twelve (12) months, ending on December
31.

 

10.4 Financial Reports. The Managing Director shall prepare monthly financial
statements in English and other information (including information regarding the
Company’s tax liabilities and copies of tax returns) in accordance with the
generally accepted international accounting principles. The statements shall
sufficiently allow the Shareholders to determine their respective tax
liabilities relating to any dividend payments received from the Company or for
any other purposes required by applicable government regulations. The Managing
Director shall prepare within two (2) months following the end of the fiscal
year of the Company, the balance sheet, profit and loss account and a report
regarding the activities of the Company, its financial position and their
proposals on the distribution of the profits. These financial statements shall
set out all the details required by the Accounting Regulations, and such
additional information as would be required to produce annual financial
statements conforming to generally accepted accounting practices in India. The
Board of Directors shall authorize the submission of copies of these documents,
including the auditor’s report, to the Registrar of the Companies, Ministry of
Corporate Affairs within two (2) months from the approval of the aforesaid
documents by the Shareholders at the annual General Meeting of the Company.

 

10.5 Audits; Auditors. The Company shall have an independent auditor to be
selected annually by the Shareholders; provided that such auditor shall be from
among the auditors of international standing licensed to practice auditing in
India in accordance with applicable law. The auditor shall comply with the
Company’s Articles and the Companies Act, 2013. The auditor shall audit the
inventory lists, if applicable, annual final accounts, inspect balance sheet and
present his written audit report regarding the foregoing at the annual General
Meeting of the Shareholders. In performing the above duties, the auditor shall
have the right to review all the books of the Company, its documents and
contracts concluded with third parties. The auditor is also entitled to require
the clarifications and data he deems necessary to be obtained. The Shareholders
shall, by resolution, fix the auditor’s annual fees.

 

10.6 Audits by Shareholders. Each of the Shareholders shall have the right to
audit the books, records and accounts of the Company within twelve (12) months
after the end of each fiscal year, such audit to be at the expense of the
auditing Shareholder. At the completion of such a Shareholder audit, an audit
report shall be submitted to the Board of Directors of the Company. The Board of
Directors shall reply in writing within thirty (30) days after receipt of the
report. When requesting an audit under this Article 10.6, a Shareholder shall
have the right to appoint an auditor of its own choice. The auditor can be a
registered accountant in India or an accountant not registered in India but who
possesses knowledge of and experience in internationally accepted accounting
principles and practices. The auditing expenses incurred from an audit requested
by a Shareholder will be paid by the Shareholder making the request.

 

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10.7 Taxes. The Company shall timely pay taxes in accordance with the
requirements of pertinent laws and regulations of India. The Company shall
timely provide any Company information reasonably necessary to any Shareholder
or affiliate necessary for such party to prepare and timely file its taxes to
the extent such reporting or tax computations relate to the Company.

 

Article 11 License Agreement

 

11.1 WS shall grant an exclusive, irrevocable license to the Company for a term
of 25 (twenty five) years (“License Term”) to any and all rights related to the
use of Licensed Technology in the Territories identified under Schedule II of
this Agreement, to the exclusion of all other parties including WS or any
successor or assignee thereof, as required to perform the Corporate Purpose of
the Company and in accordance with the terms and conditions of a License
Agreement to be entered into between WS and the Company, in the form attached
hereto as Attachment A. Prior to the expiry of the License Term, the License
Agreement shall be renewable for a further period at no additional cost at the
option of the Investor acting through the Company.

 

11.2 Licensed Technology means any and all discoveries, inventions, processes,
methods, techniques, know-how, and intellectual property and proprietary rights,
expressed in whatever form including technical information, processes,
procedures, methods, formulae, protocols, software, specifications,
instructions, data, documents and materials that are owned by WS in relation to
the design, development and manufacture of the Product.

 

11.3 WS further agrees that any and all modifications, variations, updates,
enhancements and improvements carried on the Licensed Technology, shall be
automatically licensed to the Company at no additional consideration and without
requiring execution of any further documents in this regard. However, all rights
pertaining to ownership of the intellectual property in such modifications,
variations, updates, enhancements and improvements shall vest with WS.

 

11.4 WS further agrees and acknowledges that:

 

  a) The technical know-how fees/ royalty payable under the License Agreement
shall be such amount to meet the transfer pricing requirements of applicable tax
authorities.         b) Such License is exclusively provided to the Company to
meet the requirements and to carry out the business of the Company.         c)
Such License and all rights thereunder shall not terminate and shall continue to
operate in full force and effect for a term of 25 (twenty five) years or such
further extended period that the Company shall opt for notwithstanding
termination of this Agreement.

 

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11.5 WS further shall not assign or purport to assign or otherwise deal with any
of its rights affecting the Licensed Technology, except with the express prior
written consent of the Investor for the Territories under Schedule II. Upon
execution of the License Agreement between WS and the Company, the Company shall
have the right to assign, license, sub-license, grant the use of Licensed
Technology to any other person for the purposes of the Territories identified
under Schedule II.

 

Article 12 Insurance

 

Insurance policies of the Company on various kinds of risks shall be
underwritten with one or more insurance companies in India. The Board of
Directors shall determine the type, value, and duration of insurance policies to
be obtained by the Company.

 

Article 13 Dissolution and Liquidation

 

13.1 Events of Dissolution. Subject to Article 9.5 (Reserved Matters), the
Company shall be dissolved for one of the dissolution reasons provided for in
the Companies Act, 2013, and in addition, upon the occurrence of any of the
following, as determined by the Shareholders:

 

  a) If the Shareholders of the Company pass a resolution to voluntarily wind up
the Company upon expiration of the Term, as specified in its Articles;        
b) The Company is unable to pay its debts as they become due in the ordinary
course of business;         c) The Company is unable to operate its business due
to appropriation or condemnation of its business, facilities or rights in any
real property by governmental action;         d) The Company is unable to
operate its business consistent with its business scope due to events outside
its control, including, but not limited to, wars, terrorist acts, riots,
embargoes, natural disasters and governmental actions;         e) By loss of all
or substantially all of the Company’s assets, such that any remainder cannot be
effectively utilized; and         f) Merger of the Company into another entity.

 

13.2 Liquidation. The Company shall, upon dissolution, enter into liquidation in
accordance with the Companies Act, 2013, and, in case of voluntary liquidation,
the following actions shall be taken by the Board of Directors, who shall be
deemed liquidators until a liquidator is appointed, and thereafter, by the
liquidator appointed in accordance with the Companies Act, 2013:

 

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Preparation of a report regarding the Company’s financial position on the date
of issuing the Shareholder’s dissolution and liquidation resolution. Such report
should be certified by an accountant of international standing licensed to
practice in India, confirming that the Company is capable to fulfill all its
liabilities towards third parties.

 

Payment of all creditors’ debts or conclusion of a conciliation settlement with
them. If both of these actions cannot be performed, the Company shall not be
liquidated except after issuance of a decision declaring the bankruptcy of the
Company by the applicable Court in India upon the request of the creditors or
the Company in accordance with the Companies Act, 2013.

 

13.3 Distributions on Dissolution. On dissolution of the Company and after
settlement of all obligations of the creditors of the Company, any remaining
assets of the Company, including any reserves, shall be distributed among the
Shareholders in proportion to their Ownership Percentages.

 

Article 14 Prohibition of Competition.

 

14.1 At any time during the duration of the Company and for a period of 2 (two)
years after Dissociation or Transfer of the Shares of any Shareholder, none of
the Shareholders, shall establish, directly or indirectly, a business or
enterprise that: (A) provides or sells Competing Products/Services (as defined
below); and (B) is competitive with the Company or any of its Affiliates engaged
in the business with respect to Competing Products/Services (a “Competitive
Business”) or engages in any other activity with respect to Competing
Products/Services, except that any of the foregoing may own shares of stock
representing less than two percent (2%) of the outstanding shares of any
Competitive Business. For purposes of this Article 14, the term “Competing
Products/Services” means any technology product/service that is a hybrid between
solar and wind energy and is used for power generation, and is similar to and
competitive with the Product and/or services offered or provided by the Company.

 

14.2 Right of First Refusal on New Technology

 

In case WS, whether directly or indirectly, has made progress and developed any
new process, solution or technology that utilizes renewable energy for power
generation in the Territory identified under Schedule II (“New Technology”), the
following procedure shall be followed:

 

  (a) WS, prior to granting any license in relation to the manufacture and/or
distribution of New Technology to any person other than the Company, shall first
give a written notice (“ROFR Notice”) to the Company.         (b) The Company
shall be entitled to respond to the ROFR Notice by serving a written notice to
WS (“ROFR Response Notice”) prior to the expiry of 60 (sixty) days after the
date of receipt of the ROFR Notice (“Offer Period”) of the proposed terms of
license for the New Technology (“ROFR Terms”) to the Company.

 

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  (c) On receipt of the ROFR Response Notice, WS shall within 15 (Fifteen) days
from the Offer Period (i) License the New Technology to the Company subject to
receipt of the ROFR Terms; or (ii) be free to license to any third party (A) on
terms and conditions better than those offered by the Company.         (d) In
the event the Company does not deliver a ROFR Response Notice to WS prior to the
expiry of the Offer Period, then, upon the expiry of the Offer Period, WS shall
be entitled to license the New Technology to any third party.

 

Article 15 Notices.

 

All notices given or made pursuant to this Agreement shall be in writing and
shall be deemed to have been duly given on the date delivered, if delivered
personally, on the fifth (5th) business day after being mailed by registered or
certified mail (postage prepaid, return receipt requested), in each case, to the
parties at the following addresses, or on the date sent and confirmed by
electronic transmission to the telecopier number specified below (or at such
other address or telecopier number for a party as shall be specified by notice
given in accordance with this Article 21): (i) if to the Company, to the
attention of the Managing Director at the Company’s principal place of business,
(ii) if to any Director, to such Director’s last address set forth in the
records of the Company, and (iii) if to the Shareholders, to their addresses
stated in the Company’s Register of Shareholders provided for in Article 7 of
this Agreement.

 

Article 16 Compliance with Laws and Directives.

 

16.1 Foreign Corrupt Practices Act and Prevention of Corruption Act. All
activities and obligations performed, directly or indirectly, pursuant to, or in
connection with, this Agreement, or in furtherance of its objectives, shall be
carried out in form and substance in accordance with all applicable laws,
regulations, executive orders, procedures and policies of India, and to the
extent applicable, of the United States of America (U.S.). The Company is
subject to and shall comply with the U.S. Foreign Corrupt Practices Act (the
“FCPA”) and with the Indian Prevention of Corruption Act, 1988 (“POCA”).
Accordingly, no Shareholder, Director, officer or employee shall provide or
authorize payments, loans, gifts, or anything of value, or make promises or
offers of any payments, loans, gifts or anything of value, directly or
indirectly, (i) to or for the benefit of any official or employee of any
government or governmental agency or instrumentality, (ii) to any political
party, political party official, or candidate for political office, (iii) to any
officer or employee of any public international organization, or (iv) to any
other person if the party knows or has reason to know that any part of such
payment, loan, gift or thing of value will be directly or indirectly given or
paid to any person referred to in (i), (ii) or (iii) above, or (v) to any person
or entity, the payment of which would violate the FCPA or the POCA, as
applicable.

 

16.2 U.S. Export Administration Act. The Company shall comply with the U.S.
Export Administration Act of 1979, 50 U.S.C. App. Sections 2401 – 2420,
including the EAR, the Arms Export Control Act, 22 U.S.C. Section 2751 et seq.,
including the ITAR, the Trading with the Enemy Act, 50 U.S.C. App. 1 et seq.;
and the International Emergency Economic Powers Act, 50 U.S.C. Sections 1701 –
1707; and any regulations, executive orders, procedures and policies issued in
relation thereto (“U.S. Export Controls”).

 

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16.3 U.S. Anti-Boycott Laws. The Company shall comply with the U.S. anti-boycott
laws found in Section 8 of the U.S. Export Administration Act and implemented in
15 C.F.R. Part 760 (administered by the U.S. Department of Commerce, Bureau of
Industry and Security) and Section 999 of the U.S. Internal Revenue Code
(administered by the Department of the Treasury, Internal Revenue Service)
(“U.S. Anti-boycott Laws”).

 

16.4 Board Obligations. In the event the Board of Directors determines in good
faith that the Managing Director, any officer or any member of the Board of
Directors has (i) violated the FCPA, U.S. Export Controls or U.S. Anti-boycott
Laws; (ii) applicable foreign anti-corruption laws, regulations or orders; or
(iii) committed a serious breach of this Agreement or neglect of duty, the Board
shall have the power to dismiss him or her at any time. The Managing Director
shall have the authority to dismiss any officer or employee who has (i) violated
the FCPA, U.S. Export Controls or U.S. Anti-boycott Laws; (ii) applicable Indian
anti-corruption laws or (iii) neglected his or her duty. This Article 18.4 does
not restrict the right of the Board or the right of the Managing Director to
dismiss an officer or employee for any other reason permitted by law

 

Article 17 Dissociation of a Shareholder.

 

17.1 Dissociation. A Shareholder shall cease to be a Shareholder of the Company
upon the happening of any of the following events:

 

  a) Where the Shareholder has (i) become the subject of a decree or order for
relief under any bankruptcy, insolvency or similar U.S. or foreign law,
affecting creditors’ rights now existing or hereafter in effect; (ii) initiated,
either in an original proceeding or by way of answer in any state insolvency or
receivership proceeding, an action for liquidation, arrangement, composition,
readjustment, dissolution, or similar relief; (iii) consented to any order for
relief entered with respect to the Shareholder under the Federal Bankruptcy Code
or under the bankruptcy or insolvency laws of a foreign country.         b) Upon
the Shareholder’s dissolution and commencement of winding up, or upon the
revocation of its corporate charter.         c) Upon the Shareholder’s material
breach of any representation, covenant, warranty or obligation set forth in this
Agreement.         d) Upon the Shareholder’s violation of any of the laws or
regulations set forth in Article 16 hereof.

 

17.2 Rights of Dissociating Shareholder. In the event any Shareholder
dissociates prior to the dissolution and winding up of the Company if the
dissociation causes a dissolution and winding up of the Company under Article 13
hereof, the Shareholder shall be entitled to participate in the winding up of
the Company to the same extent as any other Shareholder except that any
distributions to which the Shareholder would have been entitled shall be reduced
by the damages sustained by the Company as a result of the dissolution and
winding up

 

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Article 18 Representations, Warranties and Indemnities

 

18.1 Warranties of Company. As a material inducement to the Investor to invest
into the Company, the Company warrants to the Investor that the Warranties in
this Article and under Schedule IV are all true and correct in every material
respect as of the Effective Date, and further represent that they shall be true
and correct on and as of the Closing Date.

 

18.2 The Parties agree and acknowledge that each of the Warranties shall be
separate and independent. The Parties further agree that the Investor shall have
the right to make a claim for breach of any Warranty whether or not the
Investor, prior to execution, has or could have discovered (whether by any
investigation made by it or on its behalf into the affairs of the Company or
otherwise) that any Warranty has not been complied with or carried out, or is
otherwise untrue or misleading.

 

18.3 Notwithstanding anything to the contrary contained in this Agreement, the
Parties agree that for the purposes of this Agreement and the transactions
contemplated in this Agreement, there shall be no presumption of knowledge
imputed to the Investor and the Investor shall be entitled to completely rely on
the Warranties.

 

18.4 Warranties of the Investor. The Investor represents and warrants to the
Company that:

 

  a) it has the power and authority to execute and deliver this Agreement, to
consummate the transactions contemplated hereby and thereby and to perform its
obligations under this Agreement, and any other agreements contemplated hereby
and thereby;         b) the execution, delivery and performance by it of this
Agreement and the consummation by it of the transactions contemplated hereby
have been duly authorized by all necessary corporate action by it and shall
constitute a valid and legally binding obligation, enforceable against it in
accordance with the terms hereof.         c) There are no pending actions, suits
or proceedings against it or affecting any of its assets and there has been no
event or occurrence which in each case, might reasonably be expected to give
rise to a Material Adverse Effect.         d) The execution, delivery and
performance of its obligations under this Agreement does not and will not

 

24

 

 

  (i) contravene any Law, regulation or order of any Governmental or other
official body or agency or any judgment or decree of any court having
jurisdiction over it; or         (ii) conflict with or result in any breach or
default under any agreement, instrument, regulation, license or authorization
binding upon it or any of its assets;

 

18.5 Indemnity by Company.

 

  a) The Company (an “Indemnifying Party”) agrees to indemnify, defend and hold
harmless, the Investor, its Affiliates and all their directors, officers,
employees and advisors (who are in any manner associated with the transactions
contemplated herein) (each, an “Indemnified Party”) to the fullest extent
permitted by applicable law from and against any and all Damages actually
suffered or incurred in connection thereto incurred by the Indemnified Party
directly in connection with or arising out of (i) material breach of any
Warranty, representation, covenant or agreement by the Company as contained in
Schedule IV of this Agreement, or (ii) any and all actions, causes of action and
suits arising out of, relating to or in connection with the operation of the
Company prior to the Closing Date, pursuant to which the Indemnified Party is
named a party, or (iii) for any fraud, material default or misconduct of the
Indemnifying Party prior to the Closing Date, or (iv) failure on behalf of the
Company to obtain necessary registrations for the purpose of conduct of business
of the Company or its Affiliates (each of the abovementioned an “Indemnity
Event”). The Parties acknowledge that (a) any Damages whatsoever, incurred or
suffered by the Company on account of an Indemnity Event or (b) any reduction in
the value of the Company on account of an Indemnity Event shall be deemed to be
the Damages incurred or suffered by the Investor in proportion to its
shareholding at the relevant time for the purpose of this Article.

 

18.6 The rights accorded to an Indemnified Party under this Agreement shall be
in addition to any rights that any Indemnified Party may have at common law, in
equity or otherwise; provided, however, that the Indemnified Party shall not
make a Claim for Damages under this Article 18.5 for any claim for which it has
already been expressly and fully compensated by the Indemnifying Parties in
pursuance of this Article 18.5 or in common law, equity or otherwise.

 

18.7 The Indemnifying Parties shall do all such acts and deeds as may be
necessary to give effect to the provisions of Article 18.5, including obtaining
in a timely manner all applicable consents and governmental approvals.

 

18.8 Limitation to Indemnification: The Indemnifying Party shall be liable to
indemnify the Indemnified Party under Article 18.5: (a) if a claim in relation
to an Indemnity Event has arisen before the expiry of the periods mentioned
herein below or (b) if a notice with respect to an claim in relation to an
Indemnity Event has been given before the expiry of the periods mentioned herein
below:

 

25

 

 

  a) 7 (Seven) years from the Closing Date in respect of claims relating to a
breach of Warranties pertaining to Taxation;         b) 3 (Three) years from the
Closing Date in respect of claims in relation to a breach of all other
Warranties, not specified above, or a period of 1 (one) year from the date the
Indemnified Party has knowledge of a breach of Warranties, not specified above.

 

18.9 The Indemnified Party shall be entitled to make a claim in relation to an
Indemnity Event for Damages at any time within the periods specified in this
Agreement, but shall be paid only once the aggregate of the Damages claimed by
the Indemnified Party under this Agreement are equal to or in excess of Indian
Rupees Five Lakhs (INR 5,00,000 only).

 

18.10 For the purposes of this Article, the term “Damages” means any and all
monetary damages, fines, costs, fees, penalties, losses, liabilities (including
any liability imposed under any award, writ, order, judgment, decree or
direction passed or made by any governmental authority or arbitration tribunal
(including a sole arbitrator)), actual out-of-pocket expenses including fees and
expenses of legal counsel, court fees, costs, accountants, and other experts,
and other expenses in relation to any litigation.

 

Article 19 Covenants of the Parties.

 

19.1 WS shall be responsible for overall management of the business of the
Company, including management of manufacturing plant, setting up of all the
system and processes, distribution network including coordination with the
Investor in this regard, setting up research and development system in place for
indignation of the Product, collection of demand from the Territories identified
under Schedule II and setting up manufacturing facilities in India.

 

19.2 The Investor shall provide the Company a shed for the purposes of setting
up of its manufacturing facilities of 25,000 square feet which shall be extended
to an area of 50,000 square feet at the sole discretion of the Investor and on
terms and conditions acceptable to the Investor.

 

Article 20 Miscellaneous.

 

20.1 No Partnership. The Shareholders expressly do not intend hereby to form a
partnership, either general or limited, under any jurisdiction’s partnership
law. The Shareholders do not intend to be partners to one another, or partners
as to any third party, or create any fiduciary relationship among themselves,
solely by virtue of their status as Shareholders of the Company. No Shareholder
is authorized to commit or purport to commit any other Shareholder to any
obligation of any kind whatsoever. No Shareholder is authorized to sign any
contract or make any commitment for or on behalf of the Company to any
obligation whatsoever unless specifically authorized to do so herein or by
proper authorization of the Company’s Board of Directors.

 

26

 

 

20.2 No Agency. No Shareholder, acting solely in its capacity as a Shareholder,
shall act as an agent of the Company or have any authority to act for or to bind
the Company, except as authorized by the Board of Directors in accordance with
the terms and conditions of this Agreement.

 

20.3 Alteration of Articles. Any amendment to the Memorandum or Articles of
Association of the Company will require prior written consent of both the
Shareholders. For the purposes of these Articles, the term “Shareholder” means
West Coast Ventures Private Limited and Windstream Technologies Inc. or their
nominated entity or any of their Affiliates pursuant to rights assigned to such
Affiliate and includes any Person: (a) who holds Shares and is a member of the
Company; and prior written consent of who/ which is required for carrying out
any amendments to the Memorandum or Articles of Association pursuant to a
written agreement among such Person, the Company, WS and the Investor.

 

20.4 Applicable Law. The Company shall be subject to all the laws and
regulations in force in India. For any matter not provided for in this Agreement
or the Articles, the Companies Act, 2013 shall apply.

 

20.5 Amendment. This Agreement may not be amended, modified or supplemented
except by a written instrument executed by all of the Shareholders.

 

20.6 Waiver. No waiver of any provision of this Agreement shall be effective
unless set forth in written instrument signed by the Shareholder waiving such
provision. No failure or delay by a Shareholder in exercising any right, power
or remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of the same preclude any further exercise thereof or
the exercise of any other right, power, or remedy. Without limiting the
foregoing, no waiver by a Shareholder of any breach by any other Shareholder of
any provision hereof shall be deemed to be a waiver of any prior, concurrent or
subsequent breach of that or any other provision hereof.

 

20.7 Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon the
successors, permitted assigns, heirs, executors and administrators of WS and the
Investor. The Agreement and the rights and/or obligations herein may be assigned
and novated by the WS and/ or the Investor, as the case may be, to the Person to
whom the Shareholder Interest is sold in terms of the this Agreement. The
Agreement and the rights and obligations herein may not be assigned by the
Company or WS without the prior written consent of the Investor. Provided
however all the costs which may arise as a result of such assignment shall be
the sole liability of the assigning party.

 

20.8 Entire Agreement. This constitutes the whole agreement between the
Shareholders relating to the subject matter hereof and supersedes any prior
agreements or understandings relating to such subject matter.

 

20.9 Severability. Each and every obligation under this Agreement shall be
treated as a separate obligation and shall be severally enforceable as such and
in the event of any obligation or obligations being or becoming unenforceable in
whole or in part. To the extent that any provision or provisions of this
Agreement are unenforceable, they shall be deemed to be deleted from this
Agreement, and any such deletion shall not affect the enforceability of the
remainder of this Agreement not so deleted, provided the fundamental terms of
the Agreement are not altered.

 

27

 

 

20.10 Representations. Each of the parties represents and warrants that (i) it
has been duly organized and is validly existing and in good standing in the
state or country of its organization; (ii) it has all necessary authority to
enter into this Agreement and the transactions contemplated herein, and that it
shall be bound by such Agreement; and (iii) the individual signing on behalf of
such entity has been duly appointed and authorized to execute this Agreement and
has the authority to bind his or her respective organization.

 

20.11 Dispute Resolution. Any dispute arising out of or in connection with this
Agreement, including any question regarding its existence, validity or
termination, shall be referred to and finally resolved by arbitration under the
London Court of International Arbitration (“LCIA”) Rules, which Rules are deemed
to be incorporated by reference into this clause. The number of arbitrators
shall be one, and the sole arbitrator shall be named by the LCIA Court. The
seat, or legal place, of arbitration shall be London, England. The language to
be used in the arbitral proceedings shall be English. The parties acknowledge
that the United Nations Convention on the Recognition and Enforcement of Foreign
Arbitral Awards (1958) applies to this Agreement.

 

20.12 Copies. This Agreement is made in two (2) copies of which each party
received a copy thereof to act accordingly.

 

20.13 Language. This Agreement shall be written in English.

 

20.14 Termination by Mutual Consent. The Agreement shall continue in full force
and effect until terminated in writing by the Shareholders by mutual consent.

 

20.15 Survival. The provisions of Article 8.8 (Indemnification), Article 180
(Representations, Warranties and Indemnities), Article 11 (License Agreement),
Article 13 (Dissolution and Liquidation) and Article 191 (Miscellaneous) and
such other provision as recorded in this Agreement shall survive the termination
of this Agreement subject to Applicable Law.

 

20.16 Validity of License. Notwithstanding anything contained in this Agreement,
in the event WS exits the Company, for any reason whatsoever, the License
granted by WS to Company under Article 11 shall not automatically terminate.

 

[REMAINDER OF PAGE INTENTIONALLY BLANK]

 

28

 

 

COMPANY:

 

Windstream ENERGY Technologies INDIA PRIVATE LIMITED

 

By:       President and CEO  

 

WS:

 

Windstream Technologies, Inc.

 

By:       Daniel Bates     President and CEO  

 

INVESTOR:

 

By:     Name:     Title:    

 

Signature Page to the Joint Venture Agreement between Windstream Energy
Technologies India Private Limited, Windstream Technologies Inc. and West Coast
Ventures Private Limited

 

29

 

 

SCHEDULE I

 

DEED OF ADHERENCE

 

This agreement is made on [●] between:

 

[●] (the Company);

 

[●] of [●] (the New Shareholder);

 

[●] (the Shareholder[s]);.

 

WHEREAS:

 

(A) The Shareholder[s] are parties to a joint venture agreement dated [●] (the
“Original Agreement”).     (B) The New Shareholder proposes to purchase [●]
Shares of [●] each in the capital of the Company from the Shareholder in terms
of a [share purchase] agreement dated on or about [●] executed between them.    
(C) This Agreement is executed by the New Shareholder in compliance with the
Original Agreement. Capitalised terms used but not defined in this Agreement
will have the respective meanings given to them in the Original Agreement.

 

THIS DEED WITNESSES AS FOLLOWS:

 

1. The New Shareholder confirms that it has been supplied with a copy of the
Original Agreement and has fully understood the terms thereof.     2. The New
Shareholder agrees to hold the Shares referred to in Recital B above subject to
the Original Agreement and the Memorandum and Articles of Association of the
Company.     3. The New Shareholder undertakes to the Shareholders and the
Company to be bound by the Original Agreement in all respects as if the New
Shareholder was a party to the Original Agreement and named in it as a
Shareholder and to observe and perform all the provisions and obligations of the
Original Agreement applicable to or binding on it under the Original Agreement
insofar as they fall to be observed or performed on or after the date of this
Agreement.     4. The Shareholder[s] undertake to the New Shareholder to observe
and perform all the provisions and obligations of the Original Agreement
applicable to or binding on them under the Original Agreement and acknowledge
that the New Shareholder shall be entitled to the rights and benefits of the
Original Agreement in accordance with the terms of the Original Agreement,
unless specified otherwise in the [share purchase] agreement.

 

30

 

 

5. This Agreement is made for the benefit of (a) the parties to the Original
Agreement, and (b) every other person who after the date of the Original
Agreement (and whether before or after the execution of this Agreement) assumes
any rights or obligations under the Original Agreement or adheres to it.     6.
The address and facsimile number of the New Shareholder for the purposes of
Clause [●] of the Original Agreement is as follows:       [●]     7. This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same deed and any party may enter into
this Agreement by executing a counterpart.     8. This Agreement is governed by
and shall be construed in accordance with Indian law.

 

In witness of which this Agreement has been executed and has been delivered on
the date which appears first on page 1 hereof.

 

Signed and delivered by [●]

 

31

 

 

SCHEDULE II

 

TERRITORIES

 

1. Territory of South Asia including but not limited to:

 

a) India,

 

b) Pakistan,

 

c) Bhutan,

 

d) Bangladesh

 

e) Sri Lanka and

 

f) Nepal

 

2. Territory of South East Asia including, but not limited to:

 

a) Myanmar

 

b) Thailand

 

c) Malaysia

 

d) Cambodia

 

e) Indonesia

 

f) Singapore

 

g) Philippines

 

h) Taiwan

 

i) Hong Kong

 

j) Vietnam and

 

k) Lao People’s Democratic Republic.

 

3. Any other territories as may be added by the Parties.

 

32

 

 

SCHEDULE III

 

RESERVED MATTERS

 

The following actions of the Company shall not be undertaken unless they receive
the prior approval of at least 1 (one) Investor Director and atleast 1 (one) WS
Director at a meeting of the Board and/or the affirmative vote of each of the
Shareholders at a meeting of the shareholders called by the Company:

 

1. Any change in the authorized, subscribed, issued or paid up capital including
issuing of new Shares, alteration of rights attached to any shares, creation of
new classes of shares or reclassification of shares and redemption or repurchase
of any shares.

 

2. Any amendments to the Company’s memorandum including change of company’s name
and main objects.

 

3. Commencement of any new business and cessation or closing down any existing
business.

 

4. Entering into or amending the terms of any related party transactions
including transactions with the Shareholders, directors and their respective
Affiliates.

 

5. Entering into any joint ventures, strategic partnerships, profit sharing
arrangements or any transaction granting exclusive rights of any nature to any
Person.

 

6. Creating or dissolving any subsidiaries.

 

7. Appointment and removal of employees who satisfy any of the following
criteria: (a) whose cost to Company is above INR 18,00,000 (Indian Rupees
Eighteen Lakhs only); (b) who directly reports to the Board or to the Company’s
chief executive officer / managing director other than secretarial staff; (c)
key managerial personnel (as defined under the Companies Act, 2013); (d) head of
any division or vertical;

 

8. Any acquisition of or lien, charge, pledge, right to acquire, lease,
sub-lease, license on assets, indebtedness other than in the ordinary course of
business; a Transfer of (a) all or substantially all of the assets; (b) sale or
modification of any of the proprietary rights; and (c) sale of assets or
liabilities of the value greater than INR 5,00,000 (Indian Rupees Five Lakhs
only);

 

9. Winding up or a merger, restructurings, arrangements, amalgamations,
consolidations and divestments of or by the Company;

 

10. Acquisition of an entity or business

 

11. Adoption and deviations to the Company’s business plans and annual budgets
(other than variations to the extent of 50% (Fifty percent) provided such
variations do not negatively impact the Company);

 

33

 

 

12. Adoption of, amendments to and deviating from or grant or issue of share
vesting plan, any stock option plan, stock appreciation plan, phantom plan or
other similar plan by whatever name called or any issuance or grant of any
phantom stock options;

 

13. Modification of terms of the License Agreement and all other material
contracts of the Company.

 

14. Appointment and removal of statutory and internal auditors and changes in
the Financial Year and accounting policies (other than as necessitated by law);

 

15. Any amendments, termination, novation or assignment of License Agreement or
any other contract executed by the Company and the Investor to give effect to
the terms of this Agreement.

 

34

 

 

SCHEDULE IV

 

WARRANTIES

 

The Company hereby represent and warrant to the Investor as of the Execution
Date and as of the Closing Date that the following statements are all true,
correct and complete.

 

Each of the Warranties shall be construed as a separate Warranty and (save as
expressly provided to the contrary herein) shall not be limited or restricted by
inference from the terms of any other Warranties or any other terms of this
Agreement.

 

1. Accuracy of Information

 

1.1. All the information contained in the Agreement is true, complete and
accurate and does not omit to state a material fact required to be stated
herein. All the information which has been given by or on behalf of the Company
to the Investor (or to any director, representative, agent or adviser of the
Investor) with respect to the Company is true and accurate in all respects are
not aware of any circumstances which could adversely affect what is set forth
herein. Where any Warranty or representation is qualified by the words “to the
best knowledge of” or similar expressions, including references to “awareness”,
the same shall be deemed to be qualified by the words, “after due and careful
inquiry made”.

 

2. Corporate Status and Authority

 

2.1. The Company is a body corporate duly incorporated and organized under the
laws of India, having the full corporate power and authority under applicable
law to enter into, execute and perform its obligation under this Agreement and
all other documents and instruments required to be executed pursuant thereto or
in connection therewith, to own its assets and carry on the business as it is
now being conducted, and is duly registered and authorized to do business in
every jurisdiction which, by the nature of its business and assets, makes
registration or authorisation necessary.     2.2. Execution of this Agreement
and all other documents and instruments required to be executed pursuant thereto
or in connection therewith, and such documents, will constitute valid and
binding obligations and be enforceable against the Company in accordance with
their respective terms.     2.3. The business and affairs of the Company have
been conducted in accordance with its certificate of incorporation, Memorandum
and Articles and true, complete and duly amended copies of the same have been
provided to the Investor. Further, the Company does not carry on any business
that will render the issue of Investor’s Shares to the Investor to be in
violation of any applicable law.     2.4. The Company has not had, and does not
have any subsidiary.

 

35

 

 

2.5. Authorised Representative: This Agreement, having been duly executed by
each of the authorised representative, constitute a legal, valid, and binding
obligation on each of them and are enforceable against each of them in
accordance with their terms. Each authorised representative has the power and
authority to execute this Agreement and perform and observe all their terms. No
authorised representatives is bound by any contract, which may restrict his
right or ability to enter into or perform this Agreement, or which would be
breached as a result of execution and performance of this Agreement.

 

3. Authorisations

 

3.1. Company is in compliance with all foreign exchange regulations and has made
relevant filings/ declarations and has obtained requisite consents/ approvals
under the said regulations with respect to its business.     3.2. The execution,
delivery and performance by the Company of this Agreement and their compliance
with the terms and provisions thereof:

 

  3.2.1. does not violate the certificate of incorporation, Memorandum and the
Articles;         3.2.2. does not contravene any provision of any applicable
law, or any order, writ, injunction or decree of any court or tribunal or
governmental authority to which they are subject;         3.2.3. does not result
in the creation of any encumbrance upon the assets, properties and Shares of the
Company, or prejudice any authorization, consent, license or registration that
is required for business of the Company;         3.2.4. does not conflict with,
result in any breach of, or constitute a default under, or give rise to a right
to terminate, amend, modify, abandon or accelerate, any agreement, contract or
permit which is applicable to the Company, or by which any of the assets of the
Company may be bound; or         3.2.5. does not constitute an act of
bankruptcy, preference, insolvency or fraudulent conveyance under any bankruptcy
act or other applicable law enacted for the protection of debtors or creditors.

 

4. Share Capital and Shareholding

 

4.1. As on the Effective Date, the authorized share capital of the Company is
INR 1,00,000 (Indian Rupees One Lakh only) divided into 10,000 equity shares of
INR 10 (Indian Rupees Ten) each and subscribed and paid-up Shares is INR
1,00,000 (Indian Rupees One Lakh only) divided into 10,000 equity shares of INR
10 (Indian Rupees Ten) each.     4.2. All of the issued and outstanding Shares
are, and the Investor Shares shall be, when issued and delivered in accordance
with the terms of the Agreement, duly authorized, validly issued, fully paid and
non-assessable and free of pre-emptive rights and other Encumbrances. Upon issue
and allotment of the Shares to the Investor, the Investor shall have the
marketable title to and shall be the sole legal and beneficial owner of such
Shares free from any encumbrance or claim or demand of any description
whatsoever.

 

36

 

 

4.3. The Company has not, nor has anyone on its behalf, done, committed or
omitted any act, deed, matter or thing whereby the Shares of the Investor can be
forfeited, extinguished or rendered void or voidable. Neither the Company nor
anyone acting on behalf of the Company has entered into or arrived at any
agreement or arrangement, written or oral, with any Person, which will render
the issue and allotment of any of the Shares held by the Investor in violation
of such agreements.     4.4. Except as contemplated under this Agreement, there
are no outstanding rights, plans, options, warrants, calls, conversion rights,
re-purchase rights, redemption rights or any contracts, arrangements,
requirements or commitments of any character (either oral or written, firm or
conditional) obligating the Company to issue, deliver, sell, purchase,
re-purchase or otherwise acquire, or cause to be issued, delivered, sold,
purchased, re-purchased or otherwise acquired, any equity Shares or any
securities exchangeable for or convertible into the foregoing or obligating the
Company to grant, extend or enter into any such contract, arrangement,
requirement or commitment, nor are there any rights to receive dividends or
other distributions in respect of any such securities.     4.5. There are no
outstanding options, rights of pre-emption, rights of first refusal, redemption
rights, conversion rights or stock option, stock purchase, stock appreciation
right, phantom stock option scheme or stock incentive schemes in favour of the
Directors or employees of the Company.     4.6. There are no agreements voting
trusts, understandings or commitments to which the Company is a party in respect
of any of the Shares of the Company or to create, issue or Transfer Shares for
the conversions of any loan or borrowing into Equity Shares.

 

5. Structure

 

5.1. The Company is not the holder or beneficial owner of any shares or other
capital in any body corporate (wherever incorporated or not) and does not
otherwise Control any Person, whether directly or indirectly, whether through
the ownership of securities or through control over composition of Board or by
contract or proxy, or whether alone or in concert with others.     5.2. The
Company is not a member of any partnership, joint venture, consortium, or other
unincorporated association, body or undertaking in which it participates or is
required to participate with any other Person in any business or investment.

 

6. Solvency

 

6.1. None of the following has occurred and is subsisting, or threatened, in
relation to the Company:

 

  6.1.1. appointment of an administrator.         6.1.2. an application or an
order made, proceedings commenced, a resolution passed or proposed in a Notice
of meeting or other steps taken for:

 

  (a) the winding up, dissolution or administration of the Company; or        
(b) the Company entering into an arrangement, compromise or composition with or
assignment of the benefit of its creditors or a class of them.

 

  6.1.3. The Company:

 

  (a) being (or taken to be under applicable legislation) unable to pay its
debts, other than as the result of a failure to pay a debt or claim which is the
subject of a good faith dispute with regards to the business of the Company; or
        (b) stopping or suspending, or threatening to stop or suspend, payment
of all or a class of its debts;

 

  6.1.4. appointment of a receiver, receiver and manager, administrator and
receiver or similar officer to any of the assets and undertakings of the
Company;         6.1.5. the Company becoming bankrupt or insolvent or making an
arrangement with its creditors generally or taking advantage of any statute for
the relief of insolvent debtors.

 

7. Financial Arrangements

 

7.1. There is no encumbrance affecting any securities, and/or assets, including
but not limited to tangible, intangible, movable or immovable assets, of the
Company.     7.2. The Company is not potentially liable for the obligations of
any Person.     7.3. The Company has not made any representation or given any
undertaking to any Person in respect of the obligations or solvency of any other
Person or in support of or as an inducement to or otherwise in connection with
the provision of financial accommodation, whether or not considered by them to
be legally binding.     7.4. There is no other claim, liability or indebtedness
of the Company, whether direct, indirect, contingent, absolute, accrued or
otherwise, nor is the Company aware of any condition, fact or circumstance that
will create such claim, obligation, liability or indebtedness.     7.5. The
Company has not provided or agreed to provide, any loan, credit, or financial
assistance to any Person.     7.6. None of the amounts invested by the Company
are the proceeds of illegal activities obtained by the Company in violation of
any applicable anti-money laundering statute, and the rules and regulations
thereunder.

 

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8. Compliance with Legislation and Absence of Litigation

 

8.1. The Company does not have any claims or liabilities arising or any actions,
investigations, orders from any governmental authority with respect to any
research, test or business activity undertaken by the Company.     8.2. The
Company, is not aware of, nor has it received any Notice of any action or
investigation or other proceedings of any nature whatsoever, by any governmental
authority or any other Person which would restrain, prohibit or otherwise
challenge or impede the transactions contemplated by the this Agreement or would
be likely to have a Material Adverse Effect on the Company or the business or is
with respect to an alleged or actual violation and/or failure to comply with any
applicable law, or constitutional document, or require the Company to take or
omit any action.     8.3. There is no allegation or complaint or report that the
business has been conducted otherwise than in accordance with Applicable Law.  
  8.4. There are no investigations pending or to the best of Company’s knowledge
threatened in respect of the Company by any governmental authority.     8.5. The
Company is not subject to any order, waiver, declaration, exemption or Notice
granted or issued by any governmental, administrative or regulatory body.    
8.6. The Company is not involved in any dispute, whether as claimant or
defendant, involving more than INR 1,00,000 (Indian Rupees One Lac only)
individually, or which has or is likely to have a Material Adverse Effect on the
Business and/or its Assets.     8.7. There is no litigation, arbitration,
administrative or criminal proceedings, pending, threatened or expected,
involving the Company or any past or present directors, officers or employees of
the Company where the amount claimed by or against the Company is, or is likely
to be, more than INR 1,00,000 (Indian Rupees One Lac only) individually, or the
proceedings have had or are likely to have a Material Adverse Effect on the
business of the Company.     8.8. There is no order or direction of any court,
tribunal, governmental or statutory authority made and currently in force
against the Company.     8.9. No court, tribunal, governmental or statutory
authority has issued any judgment, order, injunction, or decree, which has or is
likely to have a Material Adverse Effect on the business and/or Company’s
assets.     8.10. There is no undertaking in existence given by the Company to
any court or governmental agency or other authority.

 

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9. Proprietary Rights

 

9.1. The Company owns all Proprietary Rights with respect to trademarks, patent,
copyright, trade secret, confidential information without any Claims or
Encumbrances of any manner. All Proprietary Rights are validly assigned or
registered in the name of the Company.     9.2. The Company to its best
knowledge does not infringe nor is it alleged that the Company infringes or
wrongfully uses any confidential information or Proprietary Rights.     9.3. For
the purposes of this Agreement, “Proprietary Rights” means and include
collectively or individually, the following worldwide rights relating to
intangible property, whether or not filed, perfected, registered or recorded and
whether now or hereafter existing, filed, issued or acquired: (a) patents,
patent applications, patent disclosures, patent rights, including any and all
continuations, continuations-in-part, divisions, re-issues, re-examinations,
utility, model and design patents or any extensions thereof; (b) rights
associated with works of authorship, including without limitation, copyrights,
copyright applications, copyright registrations; (c) rights in trademarks,
trademark registrations, and applications therefor, trade names, service marks,
service names, logos, or trade dress; (d) rights relating to the protection of
trade secrets and confidential information; and (e) internet domain names,
Internet and World Wide Web (WWW) URLs or addresses; (f) mask work rights, mask
work registrations and applications therefor; and (g) all other intellectual,
information or proprietary rights anywhere in the world including rights of
privacy and publicity, rights to publish information and content in any media.

 

10. Records and Corporate Matters

 

10.1.  All accounts, books, ledgers, and financial and all other records of the
Company:

 

  10.1.1. have been fully and properly maintained and contain complete and
accurate records in all material respects of all the matters required to be
entered in them by Applicable Law;         10.1.2. do not contain or reflect any
material inaccuracies or discrepancies;         10.1.3. give a true and fair
view in all material respects of the trading transactions, state of affairs,
results, financial and contractual position and assets and liabilities of the
Company;         10.1.4. have been prepared in accordance with applicable
accounting standards in the place of incorporation of the Company; and        
10.1.5. are in the possession (either by itself or through its registered agent)
and unqualified Control of the Company.

 

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10.2. Accurate and up to date copies of the Memorandum and Articles or other
constituent documents of the Company are in the possession of the Company
(either by itself or through its registered agent), and have been provided to
the Investor, or its advisers or other representatives.     10.3. Meetings of
Board and Shareholders. The Company has complied with and are complying with all
requirements of the Act and the relevant charter documents for validly
conducting the meetings of the Board and its members, and have duly reflected
the proceedings of the meetings in the respective minutes.

 

11. Taxation

 

11.1. The accounts contain provisions adequate to cover Taxes for or in respect
of the Company for all periods up to the date of execution of the Agreement. No
additional or other Taxes are or will be payable (whether on, before or after
Closing) by the Company in respect of periods prior to Closing Date.     11.2.
The Company is not subject to any audit by any Governmental Authority or Tax
Claims or liabilities. The Company has no Notice of any Tax disputes or other
liabilities of Taxes in respect of which a claim has been made or Notice has
been issued against the Company.

 

12. Related Party Transactions

 

12.1. The Company, or Persons acting on behalf of the Company with respect to
the Company, have no transactions with any Related Party and all transactions
entered into by the Company with Related Parties, if any are in compliance with
Applicable Laws (including the Companies Act, 2013).

 

13. Property

 

13.1. The properties comprises the freehold and leasehold premises, used and/or
occupied by the Company as on date (“Property”). Other than the Property, the
Company does not own or lease any immovable property.     13.2. The Company has
a valid freehold or leasehold interest, as the case may be, in the Property. The
Property is fully maintained in good repair and is currently used by the Company
and no part of any Property is leased, sub-leased or licensed, as the case may
be, to a third party. There are no circumstances which could adversely affect
the present use of the Property by the Company.

 

14. Independent Warranties

 

14.1. For avoidance of doubt, the foregoing Warranties shall be separate and
independent, and save as expressly provided shall not be limited by reference to
any other section, clause or anything in this Agreement or its Annexures or
Schedules.

 

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Attachment A

 

License Agreement

 

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