SHARE PURCHASE [AND SUBSCRIPTION] AGREEMENT
by and among
SPE MAURITIUS HOLDINGS LIMITED
SPE MAURITIUS INVESTMENTS LIMITED
THE SHAREHOLDERS LISTED ON SCHEDULE I
and
MAA TELEVISION NETWORK LIMITED
dated
______2012
9308-12
Doc#: Europe1:63804v9
TABLE OF CONTENTS
Page
ArticleI DEFINITIONS; USAGE 2
Section1.1 Definitions 2
Section1.2 Table of Defined Terms 10
Section1.3 Usage 11
ArticleII SALE OF SHARES 12
Section2.1 Purchase and Sale of Purchased Shares 12
Section2.2 [Subscription for Shares] 12
Section2.3 Repayment of Closing Indebtedness 13
Section2.4 Closing of Purchase and Subscription 13
Section2.5 Determination of the Company’s EBITDA 13
Section2.6 Withholding 14
Section2.7 Sellers’ Representative 15
Section2.8 Transactions to be effected at the Closing 15
ArticleIII WARRANTIES OF THE SELLERS 18
Section3.1 Existence and Power 18
Section3.2 Authorisation; No Contravention 18
Section3.3 Title to Purchased Shares 18
Section3.4 Governmental Authorisation; Third Party Consents 19
Section3.5 Binding Effect 19
Section3.6 Litigation; Orders 19
Section3.7 No Government Officials 19
Section3.8 Compliance with Law; Anti-Bribery Laws 19
Section3.9 Shares Buyout. 21
Section3.10 Broker’s, Finder’s or Similar Fees 21
Section3.11 Insolvency 21
Section3.12 Taxation 21
ArticleIV WARRANTIES AS TO THE COMPANY 21
Section4.1 Corporate Existence and Power 21
Section4.2 Authorisation; No Contravention[; Title to Subscribed Shares]. 22
Section4.3 Governmental Authorisation; Third Party Consents and Notices 22
Section4.4 Binding Effect 22
Section4.5 Litigation; Orders 22
Section4.6 Compliance with Law; Anti-Bribery Laws 22
Section4.7 Statutory Records 23
Section4.8 Capitalisation 23
Section4.9 Financial Statements 24
Section4.10 Contracts 24
Section4.11 Assets 27
Section4.12 Taxes 28
Section4.13 No Material Change 29
Section4.14 Employees; Labour Matters 29
Section4.15 Privacy of Customer Information 31
Section4.16 Intellectual Property 31
Section4.17 Real Estate 32
Section4.18 Insurance 32
Section4.19 Affiliates; Affiliate Transactions 33
Section4.20 Accounting Controls 33
Section4.21 Sufficiency of Assets 34
Section4.22 Broker’s, Finder’s or Similar Fees 34
Section4.23 Disclosure 34
Section4.24 Stamp duty 34
Section4.25 Encumbrances and Loans 34
Section4.26 Insolvency 34
ArticleV WARRANTIES OF THE PURCHASER 35
Section5.1 Existence and Power 35
Section5.2 Authorisation; No Contravention 35
Section5.3 Binding Effect 35
Section5.4 Litigation; Orders 35
Section5.5 Insolvency 35
ArticleVI COVENANTS AND UNDERTAKINGS 36
Section6.1 Conduct of Business 36
Section6.2 Confidentiality 38
Section6.3 Access to Information 39
Section6.4 Filings and Required Consents; Further Assurances 39
Section6.5 Expenses 41
Section6.6 Publicity 41
Section6.7 Transfer of Shares 41
Section6.8 Exclusivity 41
Section6.9 Dematerialization of the Purchased Shares 42
Section6.10 Termination of Existing Shareholders Agreement 42
Section6.11 Release 42
Section6.12 Certain Post-Closing Filings 42
ArticleVII RESTRICTIVE COVENANTS 42
Section7.1 Non-Compete; Non-Solicitation 42
Section7.2 No Use of Names and Marks 43
Section7.3 Treatment of Restrictive Covenants 43
ArticleVIII CONDITIONS TO CLOSING 43
Section8.1 Conditions Precedent to the Closing 43
ArticleIX INDEMNIFICATION 45
Section9.1 Survival of Warranties 45
Section9.2 Indemnification of the Purchasers and the Sellers 46
Section9.3 Tax Indemnification 46
Section9.4 Limitation of Liability 46
Section9.5 Third Party Claims 47
Section9.6 Effect of Knowledge or Waiver of Condition 48
ArticleX TERMINATION 48
Section10.1 Termination 48
Section10.2 Survival After Termination 49
ArticleXI MISCELLANEOUS 49
Section11.1 Governing Law 49
Section11.2 Resolution of Disputes 49
Section11.3 Notices 51
Section11.4 Waiver; Amendments; Assignment 52
Section11.5 Specific Performance 52
Section11.6 No Third Party Beneficiaries 52
Section11.7 Disclosure Letters 52
Section11.8 Miscellaneous 53
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Doc#: Europe1:63804v9
SHARE PURCHASE [AND SUBSCRIPTION] AGREEMENT
SHARE PURCHASE [AND SUBSCRIPTION] AGREEMENT, dated ______2012 (this “Agreement”), by and among;
1. SPE Mauritius Holdings Limited, a Mauritius company with its principal address at 6th Floor, Tower A, 1 CyberCity, Ebène, Mauritius (“SPEMH”);
2. SPE Mauritius Investments Limited, a Mauritius company with its principal address at 6th Floor, Tower A, 1 CyberCity, Ebène, Mauritius (collectively with SPEMH, the “Purchasers”);
3. The shareholders of the Company listed on ScheduleI hereto (the “Sellers”); and
4. MAA Television Network Limited, a company incorporated and existing in accordance with the Law of India bearing registration number U64204AP2001PLC036950 , with its registered office at Aishwarya House, Plot # 770/C, Road # 44, Jubilee Hills, Hyderabad- 500 033, India (the “Company”).
RECITALS
A. Upon the terms and subject to the conditions set forth in this Agreement, the Sellers wish to sell to the Purchasers, and the Purchasers wish to purchase from the Sellers, at Closing, in the aggregate, [29,418,290] Shares owned by the Sellers (the “Purchased Shares”);
B. The Sellers will immediately prior to the Closing Date legally and beneficially own, in the aggregate, 100% of the Purchased Shares;
C. [Upon the terms and subject to the conditions set forth in this Agreement, the Purchasers wish to subscribe for, and the Company agrees to issue and allot to each Purchasers, at the same Per Share Price as will be paid for the Purchased Shares, at Closing, [•] Shares(the “Subscribed Shares”);] and
D. Upon the Closing Date, after giving effect to the Contemplated Transactions, the number of issued and paid-up Shares held by the Purchasers will represent 51% of all Shares issued and paid-up on a Fully Diluted Basis. The shareholding pattern of the Company immediately prior and immediately after the Closing is as set out in Exhibit A.
NOW, THEREFORE, in consideration of the foregoing and the respective warranties, covenants and other agreements set forth in this Agreement and other consideration, the sufficiency and adequacy of which is hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:
ArticleIDEFINITIONS; USAGE
Section1.1 Definitions
.
(a) Capitalised terms used and not otherwise defined in this Agreement shall have the meanings ascribed to them in this Section1.1.
“Accountant” means the statutory auditor of the Company.
“Act” means the Companies Act, 1956 and any amendment thereto or any other succeeding enactment for the time being in force.
“Action” means any action, audit, suit, proceeding, mediation, arbitration, civil investigative demand, or governmental investigation.
“Affiliate” means any Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Person specified. Solely for purposes of the definition of Affiliate, the terms “control”, “controlling” or “controlled” as to any Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, the right to appoint directors, by contract or otherwise. For purposes of this definition, the ownership of more than 50% (fifty percent) of the voting securities of a Person or the ability to elect a majority of its board of directors (or equivalent governing body) shall be deemed to confer control on the possessor thereof.
“Anti-Bribery Laws” means the Indian Prevention of Corruption Act, 1988, the Indian Prevention of Money Laundering Act, 2002, and all other Laws relating to bribery and/or corruption that are applicable to the Company or the Shareholders or their Affiliates.
“Arbitration Act” means the (Indian) Arbitration & Conciliation Act, 1996, as may be amended from time to time.
“Assets” means any assets or properties of every kind, nature, character and description (whether immovable, movable, tangible, intangible, absolute, accrued, fixed or otherwise) as now operated, hired, rented, owned or leased by a Person, including securities, accounts and notes receivable, real estate, plant and machinery, equipment, raw materials, inventory, furniture, fixtures, Contract rights and rights under insurance policies.
“Audited Financial Statements” means in respect of any Financial Year, the balance sheet as at the end of such Financial Year and the related statements of income and cash flow for the Financial Year then ended of the Company, prepared in accordance with Indian GAAP and audited by the Accountant.
“Benefit Plan” means any pension, profit-sharing, savings, retirement, employment, collective bargaining, consulting, severance, termination, executive compensation, incentive compensation, deferred compensation, bonus, share purchase, share option, phantom share or other equity-based compensation, change-in-control, retention, salary continuation, vacation, sick leave, disability, death benefit, group insurance, hospitalization, medical, dental, life (including all individual life insurance policies as to which the Company is the owner, the beneficiary or both), employee loan, educational assistance or fringe benefit plan, program, policy, practice, agreement or arrangement, whether written or oral, formal or informal.
“Big Four Accounting Firms” means KPMG, Ernst & Young, PricewaterhouseCoopers or Deloitte Touche Tohmatsu or any Indian affiliate of any of the aforesaid.
“Board” means the board of directors of the Company.
“Books and Records” means all accounting, financial reporting, Tax, business, marketing and corporate files, documents, instruments, papers, books, registers and records (statutory or otherwise) of a Person, including technical records, financial statements, journals, deeds, manuals, minute books, share certificates and books, share transfer ledgers, common seals, customer and client lists, registered representative lists, reports, files, documents and operating data, including any such records stored or maintained in electronic format or medium.
“Business Day” means any day other than a Saturday, Sunday or any other day on which commercial banks in Los Angeles, California, USA, Ebène, Mauritius or Mumbai, India are authorized or required by Law, or necessitated by any Force Majeure Event, to close.
“Closing Indebtedness” means the aggregate amount of outstanding Indebtedness under [describe credit facilities from Axis Bank, Kotak Bank and State Bank of India etc.], including all principal and accrued interest and any fees, premiums and penalties payable thereunder as of the [Closing Date].
“Company Fundamental Warranties” means the warranties set forth in Section4.1 (Corporate Existence and Power), Section4.2 (Authorisation; No Contravention), Section 4.3 (Governmental Authorisation; Third Party Consents and Notices) and Section4.8 (Capitalisation).
“Company Plan” means any Benefit Plan: (i)under which any current or former director, officer, employee, consultant or independent contractor of the Company has any present or future right to benefits and that is maintained, sponsored or contributed to by the Company; or (ii)with respect to which the Company has any Liability.
“Company’s EBITDA” means an amount in Rs. equal to net income of the Company (as determined under Indian GAAP) for such Financial Year, plus (i)without duplication and to the extent deducted in determining net income for such period, the sum of (A)Interest Expense for such period net of interest income, (B)income Tax expense for such period net of Tax refunds, (C)all amounts attributable to depreciation and amortization expense for such period, other than any amounts attributable to amortization in respect of programming and/or content used in the MAA Business, all as derived from the statement of income for the most recent Financial Year completed prior to the Closing Date, included in the applicable Audited Financial Statements. The Parties agree that Company’s EBITDA for the Financial Year ended 31 March 2012 was [Rs. 476,858,565][1].
“Condition of the Company” means the Assets, business, results of operations and/or financial condition of the Company.
“Confidential Information” means (i)in relation to the Sellers, all confidential operating, business, commercial, technical, scientific or engineering information or data which is proprietary or related to the Company, the Sellers or their respective Affiliates, or this Agreement, and (ii)in relation to the Purchasers, all confidential operating, business, commercial, technical, scientific or engineering information or data which is proprietary or related to the Purchasers or their respective Affiliates, or this Agreement.
“Consent” means any consent, approval, authorisation, waiver, grant, agreement or exemption of any Person that is required in connection with (i)the execution and delivery by any Party of this Agreement or (ii)the consummation by the Sellers, the Company or the Purchasers of Contemplated Transactions, it being understood that the term “Consent” may mean either negative or affirmative consent.
“Contemplated Transactions” means the transactions contemplated by the Transaction Documents.
“Contract” means any contract, agreement, lease, license, instrument, note, evidence of indebtedness or other legally binding commitment or undertaking, including all film and non-film assignment agreements for procurement of content in relation to MAA Business.
“Directors” means the directors on the Board.
“Disclosure Letter” means the disclosure letter, dated as of the date hereof, from the Sellers to the Purchasers and accompanying this Agreement.
“Encumbrance/s” means any mortgage, pledge, equitable interest, assignment by way of security, conditional sales contract, hypothecation, right of other Persons, claim, security interest, collateral assignment, encumbrance, defect in title, title retention agreement, voting trust agreement, interest, option, lien, charge, commitment, restriction or limitation of any nature whatsoever, including restriction on use, voting rights, transfer, receipt of income or exercise of any other attribute of ownership, right of set-off, any arrangement (for the purpose of, or which has the effect of, granting security), or any other security interest of any kind whatsoever, or any agreement, whether conditional or otherwise, to create any of the same.
“Environmental Law” means any Law, Order or any Contract with any Governmental Authority, relating to (a)the environment, (b)pollution or (c)the protection of human health and safety.
“FEMA” means the Foreign Exchange Management Act, 1999 of India, and the rules and regulations promulgated thereunder.
“FIPB” means the Foreign Investment Promotion Board of India.
“Filings” means any form, declaration, return, certificate, notice, statement or other information required to be filed by any Person with any Governmental Authority.
“Financial Year” means the 12 month period beginning on 1 Aprilof a calendar year and ending on 31 Marchof the following calendar year.
“Force Majeure Event” means an event beyond the reasonable control of the applicable Party, including but not limited to an act of God, war, epidemic, flood, cyclone, earthquake, tornado or other extremely adverse weather conditions,, volcanic eruption, fire or explosion, chemical, biological or radioactive, contamination, continuous power or computer systems failure, strikes, boycotts or lock-outs, civil disturbances, robbery, or the occurrence of any event analogous to the foregoing, in each case only if beyond the reasonable control of such Party.
“Form FC-TRS” means the filings required to be made to the Reserve Bank of India regarding the sale of the Purchased Shares under the Agreement.
“Fully Diluted Basis” means the total of all classes and series of Share Capital and the effect of any anti-dilution protection regarding previous financings, all on an “as if converted” basis. For the purpose of this definition, “as if converted” basis means as if any such Share Capital that is exercisable, convertible or exchanged into Shares had been converted into Shares.