Option Agreement - ICICI Ltd. and Wipro Ltd.
[GRAPHIC OF TWENTY RUPEES CURRENCY OMITTED]
22 OCT 1999
ICICI LIMITED
ICICI TOWERS
Bandra-Kurla Complex
Mumbai-400 051 (India)
OPTION AGREEMENT
THIS OPTION AGREEMENT (this "Agreement") entered into this 28th day of December,
1999, between:
(1) ICICI LIMITED, a public limited company incorporated under the Indian
Companies Act, 1913 and having its registered office at ICICI Towers,
Bandra Kurla Complex, Bandra (East), Mumbai 400 051 (hereinafter referred
to as 'ICICI', which expression shall, unless the context otherwise
requires, be deemed to include its successors and permitted assigns);
(2) WIPRO LIMITED, a public limited company incorporated under the Companies
Act, 1956 and having its registered office at 10th Floor, Du Parc Trinity,
17, M.G. Road, Bangalore 560 001 (hereinafter referred to as "the
Company", which expression shall, unless repugnant to the context, be
deemed to include its successors and permitted assigns).
ICICI and the Company are hereinafter collectively referred to as the
"PARTIES" and individually as a "PARTY")
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WHEREAS:
(A) ICICI and the Company have entered into a Share Purchase Agreement dated
December 28, 1999, whereby ICICI has agreed to purchase and the Company
has agreed to sell to ICICI 1,791,385 equity shares of Wipro Net at Rs.
555.0 per share.
(B) One of the terms and conditions of the Share Purchase Agreement is that
the Company will provide to ICICI a put option whereby ICICI may sell
to the Company or its nominee up to 1,791,385 shares of Wipro Net at the
Put Option Strike Price during the Put Option Period (the "Put
Option"). ICICI will provide to the Company or its nominee a call
option whereby the Company or its nominee may buy from ICICI 1,791,385
Shares of Wipro Net at the Call Option Strike Price during the Call
Option Period (the "Call Option").
NOW THEREFORE, the Parties hereto hereby agree as follows:
1. DEFINITIONS
1.1 Capitalised terms used in this Agreement shall have the meanings set forth
below:
"WIPRO NET" means WIPRO NET LIMITED, a company incorporated under the
Companies Act, 1956, having its registered office at 10th Floor, Du Parc
Trinity, 17, M.G. Road, Bangalore 560 001;
"SHARE PURCHASE AGREEMENT" means the share purchase agreement dated
December 28th, 1999, entered into between ICICI and the Company;
"PROMOTER" means any person who currently holds either directly or through
investment companies controlled by him, the majority in the paid up equity
share capital of the SELLER.
"CALL NOTICE" means the notice given by the Company under Section 4.5
hereof.
"CALL OPTION PERIOD" means the period between 13 months and 18 months from
the execution of the Share Purchase Agreement, unless otherwise agreed to
by ICICI subject to the terms of Clause 3.1.
"CALL OPTION STRIKE PRICE" means the price per share so as to yield a
return to ICICI of 15.0% per annum compounded quarterly on the purchase
price of Rs. 555.0 per share;
"PLEDGE AGREEMENT" means the Share Pledge Agreement dated December
__, 1999, between the Promoters and ICICI;
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"PUT NOTICE" means the notice given by ICICI under Section 2.4 hereof;
"PUT OBLIGATION" shall mean all the obligations and liabilities of the
Company under this Agreement;
"PUT OPTION EVENT" means the Event of Default as defined in the Share
Purchase Agreement and includes:
(i) material breach of any of the representations and/or obligations
under this Agreement;
(ii) failure of the Company to honour any of the obligations under this
Agreement;
"PUT OPTION PERIOD" means the period between 13 months and 18 months from
the date of execution of the Share Purchase Agreement;
"PUT OPTION STRIKE PRICE" means price per share so as to yield a return to
ICICI of 13.75% per annum compounded quarterly on the purchase price of
Rs. 555.0 per share;
"CONSIDERATION" means the total consideration of Rs. 99,42,18,675 paid
by ICICI to the Company for the purchase of the Shares;
"SHARES" means the equity shares of Wipro Net purchased by ICICI under the
Share Purchase Agreement;
"SETTLEMENT DATE" means:
(i) in relation to the Put Option, the date specified in the Put
Notice for making payment for the Put Obligation;
(ii) in relation to the Call Option the date specified in the Call
Notice for making delivery of the Call Option Shares;
"TRANSACTION DOCUMENTS" mean the Share Purchase Agreement, the Pledge
Agreement and this Agreement, and any of the security documents or other
documents and undertakings executed pursuant to the aforesaid documents.
1.2 Capitalised expressions used but not defined herein shall have the same
meanings assigned to them in the Transaction Documents.
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2. PUT OPTION
2.1 At any time during the Put Option Period or upon the occurrence of a Put
Option Event in the opinion of ICICI, ICICI shall be entitled to deliver
the Put Notice to the Company, to require the Company to purchase, or to
cause the purchase of all or any of the Shares (the "PUT OPTION SHARES")
at the Put Option Strike Price.
2.2 The delivery of the Put Notice shall constitute a binding agreement and
obligation of the Company, notwithstanding any nomination, to purchase the
Put Option Shares at the Put Option Strike Price as of the Settlement
Date. The settlement in respect of the purchase and sale of the Put Option
Shares shall occur on the relevant Settlement Date.
2.3 On the Settlement Date, the Company shall pay, or cause to be paid, in
full without set-off, condition or counterclaim and free and clear of and
without deduction of any taxes, duties, fees and other liabilities (save
and except for taxes, if any, deductible at source obligated to be made
under law) required to be paid or discharged by reason of transfer of the
Put Option Shares, the Option Price in Rupees in the manner specified in
the Put Notice, against the delivery of the Put Option Shares.
2.4 The Put Notice shall specify:
(i) the estimate of the Put Option Strike Price (but without prejudice
to the actual Put Option Strike Price payable on the Settlement
Date);
(ii) the Settlement date which date shall not be less than 7 days from
the date of the Put Notice;
(iii) the basis on, or the reasons for, which the Put Option has been
exercised;
(iv) the mode of payment of the Put Option Strike Price; and
(v) location for the settlement in Bangalore.
2.5 In the event that the Put Option cannot be exercised due to any regulation
or the lack of any approval whatsoever, the Company shall deposit an
amount equivalent to the Put Option Strike Price on the Settlement Date
with ICICI as an advance against the purchase of the Shares. No interest
is payable on such deposit made by the Company. The Company hereby agrees
and covenants to identify an alternative purchaser to complete the
transaction within 30 days of exercising the Put Option by ICICI failing
which ICICI shall be entitled to forfeit the advance towards the Put
Obligation.
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3. CALL OPTION
3.1 At any time during the Call Option Period, the Company shall be entitled
to deliver the Call Notice, to require ICICI to sell to the Company all of
the Shares (the "CALL OPTION SHARES") at the Call Option Strike Price, on
the Settlement Date. Provided that in the event the Company intends to
exercise the Call Option within 13 months from the execution of the Share
Purchase Agreement, the call option strike price would be calculated by
discounting the Call Option Strike Price, as applicable at the end of 13
months from the date of the execution of the Share Purchase Agreement, by
the applicable ICICI cost of funds.
3.2 The delivery of the Call Notice shall constitute a binding agreement and
obligation of ICICI, to sell the Call Option Shares specified in the Call
Notice at the Call Option Strike Price as of the Settlement Date. The
settlement in respect of the purchase and sale of the Call Option Shares
shall occur on the relevant Settlement Date.
3.3 On the Settlement Date, the Company shall pay, or cause to be paid,
notwithstanding any nomination, in full without set-off, condition or
counterclaim and free and clear of and without deduction of any taxes,
duties, fees and other liabilities save and except for taxes, if any,
deductible at source obligated to be made under law) required to be paid
or discharged by reason of transfer of the Call Option Shares, the Call
Option Strike Price in Rupees in the manner specified in the Call Notice,
against the delivery of the Call Option Shares.
3.4 The Call Notice shall specify:
(i) the Company's estimate of the Call Option Strike Price (but
without prejudice to the actual Call Option Strike Price payable
on the Settlement Date),
(ii) the Settlement date which date shall not be less than 7 days from
the date of the Call Notice;
(iii) the mode of payment of the Call Option Strike Price; and
(iv) location for the settlement in Bangalore.
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4. REPRESENTATIONS AND WARRANTIES
4.1 The Company hereby represents and warrants that:
(a) that the Company has the full power and authority to execute and
deliver this Agreement and to incur its obligations and perform and
observe its obligation under this Agreement;
(b) this Agreement constitutes the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with
terms hereof;
(c) the execution delivery and performance of this Agreement have been
duly authorized by all necessary action, including corporate
approvals and Board resolutions on the part of the Company;
(d) all authorizations, consents, approvals and licenses required for the
execution, delivery and performance of this Agreement have been duly
obtained or granted and are in full force and effect.
(e) the Put Obligation shall be secured by the pledge of the Pledged
Shares.
4.2 ICICI hereby represents and warrants that:
(a) ICICI has the full power and authority to execute and deliver this
Agreement and to incur its obligations and perform and observe its
obligation under this Agreement;
(b) this Agreement constitutes the legal, valid and binding obligations
of ICICI, enforceable against ICICI in accordance with terms hereof;
(c) the execution delivery and performance of this Agreement have been
duly authorized by all necessary action, including corporate
approvals and Board resolutions on the part of the Company;
(d) all authorizations, consents and approvals required for the
execution, delivery and performance of this Agreement have been duly
obtained or granted and are in full force and effect.
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5. REMEDIES UPON EXERCISE OF PUT OPTION
5.1 In the event that the Company fails to perform its obligations to make
payment to ICICI within the period stipulated in the Put Option Notice,
ICICI shall have the right to enforce the Security as provided in Section
2 of the Pledge Agreement without prejudice to any other rights and
remedies available to ICICI under the Transaction Documents or under the
law.
6. INDEMNITY
In the event of any breach by the Company of any representation, warranty,
covenants or agreement made or given by the Company in this Agreement, the
Company undertakes to indemnify and hold harmless ICICI to the extent of
any and all damages (including all losses, costs, damages, fines, fees,
penalties, out-of-pocket expenses under the applicable law, fees and
expenses of attorney's, accountants and other expenses) suffered or
incurred by ICICI, resulting from or consequent upon or relating to such
breach of representation or warranty, covenant of agreement by the
Company.
7. MISCELLANEOUS
7.1 Costs and Charges
The Company shall pay all taxes, stamp duties and other charges payable in
or in connection with the execution of this Agreement.
7.2 Notices.
Any notice or other communication given pursuant to this Agreement must be
in writing and (a) delivered personally, (b) sent by facsimile
transmission (c) or sent by registered mail, postage prepaid, as follows:
If to ICICI:
ICICI Limited
2nd Floor, East Wing
Reheja Towers
26-27, M.G. Road
Bangalore 560 001
Fax No: (91-80-5588556)
Attn: Zonal Manager
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If to the Company:
Wipro Limited
10th Floor, Du Parc Trinity
17, M.G. Road
Bangalore 560 001
Fax: (91-80-5596752)
Attn: Corporate Executive Vice President - Finance
All the notices and other communications required or permitted under this
Agreement that are addressed as provided in this Section 8.2 will (a) if
delivered personally or by courier, be deemed given upon delivery; (b) if
delivered by facsimile transmission, be deemed given when electronically
confirmed; and (c) if sent by registered mail, be deemed given when
received. Any Party from time to time may change its address for the
purpose of notices to that Party by giving a similar notice specifying a
new address, but no such notice will be deemed to have been given until it
is actually received by the Party sought to be charged with the contents
thereof.
7.3 Entire Agreement.
This Agreement supersedes all prior discussions and agreements (whether
oral or written, including all correspondence) among all of the Parties or
some of the parties with respect to the subject matter of this Agreement,
and this Agreement contains sole and entire Agreement between the Parties
hereto with respect to the subject matter hereof.
7.4 Waiver.
Any term or condition of this Agreement may be waived at any time by the
party that is entitled to the benefit thereof. Such waiver must be in
writing and must be executed by an authorised office of such party. A
waiver on one occasion will not be deemed to be a waiver of the same or
either under breach or non-fulfillment on a future occasion. All remedies,
either under this agreement, or by law or otherwise afforded, will be
cumulative and not alternative.
7.5 Amendment
This Agreement may be modified or amended only by writing duly executed by
or on behalf of each of the parties.
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7.6 Severability
If any provision of this Agreement is held be illegal, invalid, or
unenforceable under any present or future law, and if the rights or
obligations under this Agreement of the parties will not be materially and
adversely affected thereby (a) such provision will be fully severable; (b)
this agreement will be construed and enforced as if such illegal, invalid,
or unenforceable provision had never comprised a part hereof; and (c) the
remaining provisions of the agreement will remain in full force and effect
and will not be affected by the illegal, invalid or unenforceable
provision or by its severance here from.
8. ARBITRATION
Any and all differences, disputes or questions arising out of or under or
incidental to this agreement shall be resolved by recourses to arbitration to be
conducted by a panel of three arbitrators, one of whom would be appointed by
ICICI, one by Wipro and the third by the two arbitrators so appointed and shall
be conducted in accordance with the Arbitration Act, 1966. The venue of
arbitration shall be Bangalore and the Arbitration Award shall be final and
binding on the parties.
IN WITNESS WHEREOF, the Parties have entered into this Agreement the day and
year first above written.
ICICI LIMITED
By:
Name:
Title:
WIPRO LIMITED [WIPRO LIMITED SEAL]
By: /s/
Name: S.C. Senapaty
Title: Corporate Executive Vice President - Finance