SHARE PURCHASE 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
Section1.1...... Definitions
Section1.2...... Table of Defined Terms
Section1.3...... Usage
ArticleII SALE OF SHARES
Section2.1...... Purchase and Sale of Purchased Shares
Section2.2...... Closing of Purchase
Section2.3...... Withholding
Section2.4...... Sellers’ Representative
Section2.5...... Transactions to be effected at the Closing
ArticleIII WARRANTIES OF THE SELLERS
Section3.1...... Existence and Power
Section3.2...... Authorisation; No Contravention
Section3.3...... Title to Purchased Shares
Section3.4...... Governmental Authorisation; Third Party Consents
Section3.5...... Binding Effect
Section3.6...... Litigation; Orders
Section3.7...... No Government Officials
Section3.8...... Compliance with Law; Anti-Bribery Laws
Section3.9...... Share Buyout.
Section3.10...... Broker’s, Finder’s or Similar Fees
Section3.11...... Insolvency
Section3.12...... Taxation
ArticleIV WARRANTIES AS TO THE COMPANY
Section4.1...... Corporate Existence and Power
Section4.2...... Authorisation; No Contravention.
Section4.3...Governmental Authorisation; Third Party Consents and Notices
Section4.4...... Binding Effect
Section4.5...... Litigation; Orders
Section4.6...... Compliance with Law; Anti-Bribery Laws
Section4.7...... Statutory Records
Section4.8...... Capitalisation
Section4.9...... Financial Statements
Section4.10...... Contracts
Section4.11...... Assets
Section4.12...... Taxes
Section4.13...... No Material Change
Section4.14...... Employees; Labour Matters
Section4.15...... Privacy of Customer Information
Section4.16...... Intellectual Property
Section4.17...... Real Estate
Section4.18...... Insurance
Section4.19...... Affiliates; Affiliate Transactions
Section4.20...... Accounting Controls
Section4.21...... Sufficiency of Assets
Section4.22...... Broker’s, Finder’s or Similar Fees
Section4.23...... Disclosure
Section4.24...... Stamp duty
Section4.25...... Encumbrances and Loans
Section4.26...... Insolvency
ArticleV WARRANTIES OF THE PURCHASER
Section5.1...... Existence and Power
Section5.2...... Authorisation; No Contravention
Section5.3...... Binding Effect
Section5.4...... Litigation; Orders
Section5.5...... Insolvency
ArticleVI COVENANTS AND UNDERTAKINGS
Section6.1...... Conduct of Business
Section6.2...... Confidentiality
Section6.3...... Access to Information
Section6.4...... Filings and Required Consents; Further Assurances
Section6.5...... Expenses
Section6.6...... Publicity
Section6.7...... Transfer of Shares
Section6.8...... Exclusivity
Section6.9...... Dematerialization of the Purchased Shares
Section6.10...... Termination of Existing Shareholders Agreement
Section6.11...... Release
Section6.12...... Certain Post-Closing Filings
ArticleVII RESTRICTIVE COVENANTS
Section7.1...... Non-Compete; Non-Solicitation
Section7.2...... No Use of Names and Marks
Section7.3...... Treatment of Restrictive Covenants
ArticleVIII CONDITIONS TO CLOSING
Section8.1...... Conditions Precedent to the Closing
ArticleIX INDEMNIFICATION
Section9.1...... Survival of Warranties
Section9.2...... Indemnification of the Purchasers and the Sellers
Section9.3...... Tax Indemnification
Section9.4...... Limitation of Liability
Section9.5...... Third Party Claims
Section9.6...... Effect of Knowledge or Waiver of Condition
ArticleX TERMINATION
Section10.1...... Termination
Section10.2...... Survival After Termination
ArticleXI MISCELLANEOUS
Section11.1...... Governing Law
Section11.2...... Resolution of Disputes
Section11.3...... Notices
Section11.4...... Waiver; Amendments; Assignment
Section11.5...... Specific Performance
Section11.6...... No Third Party Beneficiaries
Section11.7...... Disclosure Letters
Section11.8...... Miscellaneous
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Doc#: Europe1:63804v9
SHARE PURCHASE AGREEMENT
SHARE PURCHASE 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
- 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, [30,888,290] Shares owned by the Sellers (the “Purchased Shares”);
- The Sellers will immediately prior to the Closing Date legally and beneficially own, in the aggregate, 100% of the Purchased Shares;and
- 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
Section1.1Definitions
.
(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.
“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.
“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) ), Section 4.4 (Binding Effect), Section 4.5 (Litigation; Orders), Section 4.6 (Compliance with Laws; Anti-Bribery Laws)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.
“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.
“Employee Holders” means those employees of the Company listed on Schedule II hereto who hold Shares or options to acquire Shares.
“Employee Sellers” means those Employee Holders selling Shares to the Purchasers concurrent with the Closing pursuant to the Employee SPA.
“Employee SPA” means that certain Share Purchase Agreement of even date herewith among the Purchasers and the Employee Sellers.
“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, orthe 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.
“Fundamental Warranties” means the Sellers Fundamental Warranties, the Company Fundamental Warranties and the Purchasers Fundamental Warranties.
“Governmental Authority” means: (i)any international, national, state, city or local governmental authority; (ii)any commission, organization, agency, department, board, bureau or instrumentality of any of the foregoing governmental authorities (and “instrumentality of government of any of the foregoing governmental authorities” includes any entity owned or controlled by such governmental authorities); (iii)any stock exchange or similar self-regulatory or quasi-governmental agency; and (iv)any court, arbitrator, arbitral body or other tribunal having jurisdiction.
“Government Official” means (i)any officer, director, employee, appointee or official representative of a Governmental Authority or of a public international organization; (ii)any political party or party official; (iii)any candidate for political or judicial office.
“ICC” means International Chamber of Commerce.
“Indebtedness” means (i) any indebtedness or other obligation of the Company for borrowed money, whether current, short-term or long-term and whether secured or unsecured; (ii)any indebtedness of the Company evidenced by any note, bond, debenture or other security or similar instrument; (iii) any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof that are required to be classified and accounted for under Indian GAAP as capital leases; (iv)any performance bond or letter of credit or any bank overdrafts and similar charges; (v)any accrued interest, premiums, pre-payment penalties, redemption fees, “breakage costs” and other obligations relating to the foregoing; and (vi)any indebtedness referred to in clauses (i)through (v)above of any Person that is either guaranteed (including under any “keep well” or similar arrangement) by, or secured (including under any letter of credit, banker’s acceptance or similar credit transaction) by any Encumbrance upon any Asset owned by, the Company.
“IndianGAAP” means generally accepted accounting principles applicable in India, as promulgated (i)by the Indian Institute of Chartered Accountants, and (ii)under the (Indian) Companies Act, 1956.
“Indian Tax Department” means the Income Tax Department, Department of Revenue, Ministry of Finance, Government of India.
“Intellectual Property” means any of the following, as they exist anywhere in the world, whether registered or unregistered: (a)patents, patentable inventions and other patent rights (including any divisions, continuations, continuations-in-part, reissues, reexaminations and interferences thereof); (b)trademarks, service marks, trade dress, trade names, taglines, brand names, logos and corporate names and all goodwill related thereto; (c)copyrights, mask works and designs; (d)trade secrets, know-how, inventions, processes, procedures, databases, confidential business information and other proprietary information and rights; (e) computer software programs, including all source code, object code, specifications, designs and documentation related thereto; and (f) domain names, internet addresses and other computer identifiers.
“Knowledge” means, (i)when used in reference to the Sellers, the knowledge of each Seller (if an individual) and each officer or director or person performing a similar function of a Seller (if an entity), in each case after due inquiry; (ii)when used in reference to the Company, the knowledge of the directors and officers of the Company, in each case after due inquiry; and (iii)when used in reference to the Purchasers, the knowledge of and , in each case after due inquiry.
“Law” means any law, statute, ordinance, rule, regulation, guideline, policy or other pronouncement having the effect of law of any Governmental Authority or any interpretation or adjudication having the force of law of any of the foregoing, by any concerned authority having jurisdiction over the matter in question.
“Liabilities” means any Indebtedness, liability for Taxes, contractual obligation or other liability of a Person (whether absolute, accrued or contingent).
“Loan” means all loans, advances and other extensions of credit, including loans which have been partially or fully charged off, interests in loan participations and assignments, customer Liabilities on bankers acceptances and overdrafts, as well as legally binding commitments and obligations to extend credit (including any unfunded or partially funded revolving loans, lines of credit or similar arrangements), and all rights and obligations relating thereto or arising under any related Loan Documentation.
“Loan Documentation” means all loan and credit agreements, promissory notes, debentures, mortgages or deeds of trust, security agreements, and other documentation evidencing or representing any Loans and any Encumbrances securing the same.
“Losses” means losses, Liabilities, fines, penalties, diminution of value (including diminution in the value of the Purchased Shares) and damages, whether or not involving a third party claim, including reasonable attorneys’ fees, court costs and other out-of-pocket expenses.
“MAA Business” means the business of the Company as it is conducted as of the applicable date. As of the date hereof, the MAA Business consists of ownership and operation of Telegu-language general entertainment television channels presently consisting of the MAA Channels.
“MAA Channels” means MAA, MAA Movies, MAA Music and MAA Gold (formerly known as MAA Junior).
“Material Adverse Effect”means any change, effect, event, occurrence or state of facts that individually or in the aggregate has or have had or is, or could reasonably be expected to be, materially adverse to the Condition of the Company, except that any adverse change, effect, occurrence, state of facts or development to the extent attributable to conditions affecting the Indian economy as a whole that does not disproportionately affect the Condition of the Company, relative to other companies in India, shall not by itself constitute a Material Adverse Effect, and any changes or effects that arise out of the performance of this Agreement shall not by themselves constitute a Material Adverse Effect.