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SHARE PURCHASE AGREEMENT

Purchase and Sale Agreement

SHARE PURCHASE AGREEMENT | Document Parties: CLENERGEN CORP | Enkem Engineers Private Limited | United Bio Fuels Private Limited You are currently viewing:
This Purchase and Sale Agreement involves

CLENERGEN CORP | Enkem Engineers Private Limited | United Bio Fuels Private Limited

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Title: SHARE PURCHASE AGREEMENT
Date: 2/14/2011
Industry: Electric Utilities     Sector: Utilities

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SHARE PURCHASE AGREEMENT

 

BETWEEN

 

Clenergen India

 

And

 

Enkem Engineers Private Limited

 

 

i


 

 


 

SHARE PURCHASE AGREEMENT

 

THIS AGREEMENT is executed on this 12 th day of December 2009 by and between:

 

1.

[ Clenergen India Private Limite , a company incorporated under the provisions of the Companies Act, with its registered office at   36 A, Cathedral Garden Road, Chennai 600 034 (" Clenergen ") (hereinafter referred to as the " Purchaser ", which expression shall unless repugnant to the context thereof be deemed to mean and include its successors in business and assigns, respectively);

 

2.

Enkem Engineers Private Limited , a company incorporated under the provisions of the Companies Act with its registered office at   _No. 824, Poonnamalleee_High Road, Chennai 600 010_ (" Enkem ") and , ( hereinafter  referred to as the " Seller ", which expression shall unless repugnant to the context thereof be deemed to mean and include their successors in business and assigns, respectively);

 

3.

United Bio Fuels Private Limited a company incorporated under the provisions of the Companies Act, with its registered office at 824, Poonnamallee High Road, Chennai 600 010 (hereinafter referred to as the " Company " which expression shall unless repugnant to the context thereof be deemed to mean and include its successors in business and permitted assigns) as the confirming party to this Agreement.

 

The Seller and the Purchaser are individually referred to as a " Party "

WHEREAS:

 

A.

The Company is engaged in the business of [ power generation through biodegradable resources such as poultry litter .]

 

B.

The Company has at the date hereof, an authorised share capital of  9000000  equity shares  of Rs. 10 each aggregating to Rs. 90 Milllions   and that the Seller own33.5%of the fully paid up subscribed share capital of the Company on a Fully Diluted Basis aggregating to 7320564 equity shares of Rs. 10 each (collectively the " Shares ").

 

C.

It is the intention of the Parties that upon the consummation of the sale and purchase of the shares pursuant to this Agreement, the Purchaser shall own the entire issued and subscribed share capital of the Company, together with all the rights, economic value and benefits pertaining thereto.

 

D.

The Seller has agreed to sell to the Purchaser, and the Purchaser has agreed to purchase from the Seller the shareholding in the Company, for the Purchase Consideration (as defined hereunder) in accordance with the terms and conditions set forth in this Agreement (" Share Purchase ")

   

NOW THEREFORE IN CONSIDERATION OF THE MUTUAL PROMISES SET OUT BELOW, THE PARTIES AGREE AS FOLLOWS:

 

1


 


 

1. 

DEFINITIONS AND INTERPRETATION

 

1.1 

Definitions

 

The following words and expressions shall, unless the context otherwise requires, have the meanings set out below:

 

" Accounts " means the audited financial statements of the Company comprising the balance sheet of the Company, the consolidated balance sheet, profit and loss account and cash flow statement, together with the notes thereon, directors' report and auditors' certificate, as at and for the financial period ended on the Accounts Date;

 

" Accounts Date " means 31 March, 2009

 

" Affiliate " means any entity that controls or is controlled by, directly or indirectly, or is under common control of a Party, where "control" and "controlled by" means the possession of the power to influence the management and policies of such entity, whether through the ownership of voting stock of such entity, by contract or otherwise;

 

" Agreement " means this share purchase agreement including all Schedules;

 

" Articles " means the articles of association of the Company;

 

" Assets " means the assets/properties of the Company or any part(s) thereof and "Asset" means any one of them

 

" Board of Directors " shall mean the board of directors of the Company;

 

 

" Closing " means the  of the Share Purchase in accordance with Clause 6 and the recording of the Purchasers as the registered holders of the Shares in the register of members of the Company;

 

" Closing Date " means the date on which Closing takes place which shall be on the _14 th December 2009 Business Day following the date on which the Seller notify the Purchaser of the fulfilment by the Seller of its obligations in accordance with Clause 4 or such other date as may be notified to the Purchaser by the Seller;

 

" Company " shall have the meaning ascribed to it in the preamble of this Agreement;

 

" Companies Act " means the Companies Act, 1956;

 

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" Conditions Precedent " shall have the meaning ascribed to it in Clause 4.1;

 

" Disclosure Schedule " shall have the meaning ascribed to it in Clause 7.7;

 

" Encumbrance " means any mortgage, charge (whether fixed or floating), pledge, lien, security interest or other third party right or interest (legal or equitable) over or in respect of the relevant Asset, security or right including the Shares;

 

" Financials " means:

 

(i)

the audited  balance sheet as of March 31, 2009 , and the related  statements of income, cash flow and other information that are more particularly set out in Schedule III ;

 

" Government Entity " means and includes central/federal, state and local authorities to which the Parties are subject;

 

" Interim Period " means the period between the date of this Agreement and the earlier of the date of termination of this Agreement and the Closing Date;

 

" Long Stop Date " means December 14 th 2009 or such other date decided exclusively by the Purchasers;

 

" Material Adverse Effect " means any change, event or effect other than in the ordinary course of business and consistent with past practice, that is, likely to be materially adverse to the business, assets (including intangible assets), liabilities, financial condition, property prospects or results of operation of the Company taken as a whole.

 

" Memorandum " means the memorandum of association of the Company;

 

 

" Purchase Consideration " shall have the meaning ascribed to it in Clause 3.1;

 

" RBI " means the Reserve Bank of India;

 

" Rs. " or " Rupees " means the lawful currency of India;

 

" Share Purchase " shall have the meaning ascribed to it in Recital D;

 

" Shares "   means 909,250 unpledged equity shares of Rs.   10 each of the Company, issued and held by the Seller, constituting the shareholding of the Seller in the  Company, including all legal and beneficial interest in the Shares and equity shares held by the financial investors who have confirmed the terms  laid down in the Offer Letter issued by Clenergen to the Company which would  along with pledged shares together with the Seller’s Shareholding encompass 100% of the issued and paid up capital of the Company

 

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" Tax " shall means (a) any and all taxes, assessments and other charges, duties, impositions and similar liabilities imposed by any Government Entity, including taxes based upon or measured by gross receipts, income, profits, sales and value added, withholding, payroll, excise and property taxes, together with all interest, penalties and additions imposed with respect to such amounts; (b) any liability for the payment of any amounts by the Company as a result of being a member of an affiliated, consolidated, combined or unitary group for any period; and (c) any liability for the payment of any amounts by the Company as a result of any express obligation to indemnify any other Person or as a result of any obligation under any agreement or arrangement with any other Person with respect to such amounts and including any liability for Taxes of a predecessor entity; and

 

" Warranties " means the representations, warranties, covenants and undertakings set out in this Agreement and particularly in Clause 7 and Schedule IV .

 

1.2 

Interpretation

 

 

In this Agreement unless the context otherwise requires:

 

 

(a)

references to any statute or statutory provision or order or regulation made there under shall include that statute, provision, order or regulation as amended, modified, re-enacted or replaced from time to time whether before or after the date hereof;

 

 

(b)

headings to Clauses are for information only and shall not form part of the operative provisions of this Agreement and shall not be taken into consideration in its interpretation or construction;

 

 

(c)

references to Recitals, Clauses or Schedules are, unless the context otherwise requires, to recitals to, clauses of or schedules to this Agreement;

 

 

(d)

unless the context otherwise requires, reference to one gender includes a reference to the other, words importing the singular include the plural and vice versa;

 

 

(e)

references to the words "include" or "including" shall be construed as being suffixed by the words "without limitation";

 

 

(f)

a reference to a day, month or year is relevant to a day, month or year in accordance with the Gregorian calendar; unless otherwise specified in this Agreement;

 

 

(g)

a reference to an agreement, deed, instrument or other document include the same as amended, novated, supplemented, varied or replaced from time to time;

 

 

(h)

the expression "writing" or "written"   shall include communications by notice, telex, telegram, facsimile (fax) and letter; and

 

 

(i)

Unless the context otherwise requires, reference to one gender includes a reference to the other, words importing the singular include the plural and vice versa

 

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(J)

The obligations and liabilities of the Sellers under this Agreement shall be joint and several.

 

2. 

SHARE PURCHASE

 

2.1

In accordance with and subject to the terms of this Agreement, the Seller shall sell, transfer, convey and the Purchasers shall purchase the Shares from the Seller, on and with effect from the Closing Date, free from all Encumbrances except those ____ of Equity Shares which are pledged with IREDA and together with all accrued benefits and attached rights and all dividends declared after the Accounts Date in respect of the Shares. The Seller shall ensure and take all necessary steps to have the pledged shares transferred to the Sellers herein upon closure of the loan outstanding to IREDA for a consideration of Re. 1/-

 

2.2

The shareholding of the Company after successful consummation of the Closing,and considering the pledged shares are subsequently transferred after closing date by IREDA shall be held by the Purchaser herein.

 

3. 

PURCHASE CONSIDERATION

 

3.1

In consideration for the sale and transfer of the Shares by the Seller as set out in Clause 2, the Purchasers shall pay a total consideration of Rs. 7.5 Millions (" Purchase Consideration ") to the Seller and to the other financial shareholders, details of which are set out in Schedule II (The amounts are already placed  with ABN Amro Bank N.V., Harrington Road, Chennai 600031.  The Purchasers hereby agree to  pay a sum not exceeding Rs. 70 Millions towards the outstanding loans including interest and other charges in respect of the sums due to IREDA  On closing date. The Purchasers shall also make a payment of Rs. 5 Millions to the Seller herein who undertakes to pay off all the current and other liabilities of the Company besides the sums due to IREDA.  Any further liability till the date of execution of this agreement shall be to the account of the Seller.

 

3.2

The Purchasers shall be deemed to have fulfilled their obligations under this Clause 3 once the Purchase Consideration has been transferred or remitted to the respective accounts of the Seller in accordance with Clause 6.

 

 

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4.

CONDITIONS PRECEDENT TO CLOSING

 

4.1

The Purchasers obligation to purchase the Shares and remit the Purchase Consideration in accordance with Clause 6 is subject to the fulfilment on or prior to the Long Stop Date, of each of the following conditions any one or part of which may be waived in writing exclusively by the Purchasers, and the Sellers shall, and where applicable, shall cause the Company to satisfy the following conditions (" Conditions "):

 

 

­(a)

The Sellers and the Purchasers shall have obtained all approvals as stipulated in Schedule I--which are required in connection with the execution and delivery of the Agreement and consummation of the transactions contemplated by this Agreement and the certified copies of the same shall have been delivered to each of the Purchaser.

 

 

(b)

All loan balances outstanding to IREDA including overdue balances and interest/ overdue interest have been settled or approvals from IREDA shall have been obtained by the Seller and as part of the overall consideration for acquisition of the Company, the Purchases shall provide a sum not exceeding Rs. 70Millions towards the One Time Settlement relating to the loan from IREDA.

 

 

(c)

The Seller shall have obtained written resignation letters from   P..Subramani & Peter Stepany , as directors of the Company effective as at the end of the Closing Date.

 

 

 

(f)

The Company providing the Purchasers with certified true copies of the extract of the resolutions passed in a meeting of its board of directors on closing date:

 

 

(i)

agreeing to effect the transfer of the Shares upon the duly executed and stamped share transfer forms along with the original share certificates being delivered to it; and

 

 

(ii)

approving the Company's execution of this Agreement and conferring authority on MrP.Subramani  the Managing Director of the Company, to sign and duly execute this Agreement.

 

The Company shall undertake and provide an undertaking in the format mutually agreed by all the parties to the effect that all legal requirements in respect of its allotment of shares to the shareholders is in order and further as a token of the undertaking, authorizes the purchasers to withhold a sum of Rs. 0.5 Millions out of the 5 Millions payable to the Company/ Enkem for a period of 120 days from the date of execution of this agreement .  Upon the completion of 120 days as aforementioned, the said sum net of any outflow in respect of matters relating to allotment of shares shall be released by the purchaser to the seller herein.

 

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(g)

Copy of a certificate to be signed on the Closing Date by Seller, to the effect that as of the Closing Date the Company and the Sellers have performed and complied in all material respects with all covenants and obligations under this Agreement as necessarily required and agreed to be performed and complied with by such Party as of the Closing Date; and

 

 

(h)

The Sellers shall procure that the Company performs the following corporate, regulatory and other actions till the Closing Date:

 

 

(i)

Maintenance and updation of all statutory registers required to be maintained under the Companies Act;

 

 

(ii)

Undertaking all statutory filings as may be required under the Companies Act.

 

4.2

Other than such Conditions as are waived by the Purchasers, the Sellers shall, by the Long Stop Date notify the Purchaser, that all the Conditions under Clause 4.2, and 4.3 have been satisfied.

 

4.3

If all the Conditions have been satisfactorily fulfilled or waived by the Long Stop Date, the Closing shall take place on the Closing Date in accordance with Clause 6.

 

4.4

If all the Conditions have not been satisfactorily fulfilled or waived by the Long Stop Date, the respective obligations of the Parties shall cease and the Purchasers may in their sole discretion terminate this Agreement and except in relation to any breach of any provision of this Agreement prior thereto no Party shall have any claim against any other Party.

 

5. 

PERIOD UNTIL CLOSING

 

5.1 

Conduct of Business of the Company

 

During the Interim Period, the Sellers agree to conduct the business of the Company in a diligent manner and in accordance with sound and prudent business practices. During the Interim Period, the Sellers shall, within 3 Business Days promptly notify each of the Purchasers of: (a) any event,   occurrence or emergency not in the ordinary course of business of the Company; or (b) any event which could have a materially negative effect on the financial condition or the operations of the Company; or (c) any matter or thing which may or has come to the knowledge of the Sellers and which is inconsistent with any of the representations and warranties made by the Sellers under this Agreement or is likely to affect the judgement of each of the Purchaser.  Except as expressly contemplated by this Agreement, the Sellers shall ensure that the Company shall not, without the prior written consent of the Purchaser during the offer validity period :

 

 

(a)

Undertake any transaction except in the ordinary course of business as conducted on that date and consistent with past practices;

 

 

(b)

Make any modifications, amendments or changes to its articles and memorandum of association;

 

 

(c)

Undertake any expenditure, transaction or commitment

 

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(d)

Adopt or make changes in any accounting method in respect of taxes, agreement or settlement of any claim or assessment in respect of taxes;

 

 

(e)

Issue or authorize issuance of any other securities in respect of, in lieu of or in substitution for shares in the Company;

 

 

(f)

sell, lease, license or otherwise  dispose of any of the Assets of the Company, including the sale of any accounts receivable of the Company or its Subsidiary, or any creation of any security interest in such assets or properties, in excess of monetary limits which are equivalent to the amount in Clause 5.1(c);

 

 

(g)

Make any loan to any person, or purchase any debt securities of any person in excess of the monetary limits which are equivalent to the amount in Clause 5.1(c);

 

 

(h)

waive or release any right or claim for an amount equivalent to the amount in Clause 5.1(c), including any waiver, release or other compromise of any account receivable of the Company;

 

(i) 

Commence or settle any lawsuit;

 

 

(j)

Sell, lease, license or transfer to any person any intellectual property rights of the Company or enter into any transaction relating to such rights in excess of monetary limits which are equivalent to the amount in Clause 5.1(c);

 

(k) 

Grant any sublease of any leased property of the Company;

 

 

(l)

agree to acquire by merging or consolidating with, or by purchasing Assets or equity securities of, any business or corporation, partnership, association or other business organization or division thereof, or other acquisition or agree to acquire any assets or any equity securities that are material, individually or in the aggregate, to the business of the Company;

 

 

(m)

adopt or amend any Company employee plan, execute or amend any employee agreement, or pay or agree to pay any bonus or special remuneration to any director or employee, or increase or modify the salaries, wage rates or other compensation (including any equity based compensation) of any employee;

 

 

(n)

increase the salaries of employees nor provide any extraordinary employment benefits to the employees of the Company without prior written consent of the Purchaser

 

 

(o)

promote or effect similar change to the employment status or title of any employee;

 

 

(p)

alter any interest in a subsidiary or any corporation, association, joint venture, partnership or business entity in which the Company directly or through each other holds any interest which may amount to a Material Adverse Effect; or

 

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(q)

agree to do any of the things described in the preceding sub-clauses of this Clause 5.1

    

5.2

Access to Information

 

The Sellers shall, during the Interim Period, afford the Purchaser and its representatives, as notified, access to all of the properties, books, contracts and records of the Company, all other information concerning the Company as the Purchaser may  request, and information relating to all employees of the Company.  All information disclosed by the Company to the Purchasers and/or their representatives, pursuant to this Clause 5.2 shall be provided on a strictly confidential basis and shall be held in trust by the Purchasers and/or their representatives and shall be kept confidential by the Purchasers and/or their representatives except the following information which:

 

 

(a)

is required to be disclosed by, under or pursuant to any law in force or pursuant to any order, decree, judgment, award, etc., of any competent court, tribunal, board, government or statutory authority, etc.;

 

 

(b)

is public knowledge or which subsequently becomes public knowledge, other than by way of a breach of the terms of this Agreement;

 

 

(c)

is available to the Purchaser and/or its representatives prior to its disclosure by the Company under the terms of this Agreement or which becomes known to the Purchaser and/or its representatives prior to or subsequent to such disclosure without similar restrictions from a source other than the Company, as evidenced by records;

 

(d)

The Company agrees in writing may be disclosed; or

 

 

(e)

is or becomes available in writing to the Purchaser from sources which to the Purchaser's knowledge are under no obligation of confidentiality to the Company.

 

6. 

CLOSING

 

6.1 

Closing Actions

 

Subject to the terms of this Agreement, Closing shall take place at a mutually agreed location in Chennai   on the Closing Date and the following transactions shall deemed to be consummated simultaneously:

 

 

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6.1.1 

Certificates

 

The Sellers, shall hand over the originals of the documents mentioned in Clause 4.1 (g), (h) and (i) to the  Purchaser; and

 

6.1.2 

Execution of share transfer documents

 

Enkem shall execute and deliver to [ the relevant Purchaser ] necessary forms and documents including Form FC-TRS, consent letters, undertakings, etc., in accordance with Foreign Exchange Management ACT

 

The Purchaser shall file the duly completed Form FC-TRS together with all relevant documents after closing date.

6.1.3

Share transfer forms

 

The Seller shall execute and deliver to the Purchasers duly executed and valid share transfer forms and original share certificates in respect of the Shares free and clear of all Encumbrances.

 

 

6.1.4

Purchase Consideration

 

 

Purchaser shall cause the remittance of their respective share of the Purchase Consideration to the bank accounts of the Seller  in such proportions and in accordance with the bank account details stated in the Schedule V .on  closing date

 

 

6.1.5

Meeting of the Board of Directors

 

The Seller shall cause the Company to convene a meeting of the Board of Directors on  the date of payment of the purchase consideration  to:

 

 

(a)

approve the transfer of the Shares in favour of the Purchaser and to duly endorse and deliver original share certificates for the Shares evidencing the Purchasers as the lawful and beneficial owners of the Shares;

 

 

(b)

enter the name of the Purchasers\as members in the register of members maintained by the Company in accordance with the requirements of the Act;

 

 

(c)

approve the appointment of Mark Quinn and Abhilash Kamti nominees of Purchaser as additional directors of the Company effective as of the Closing Date;

 

 

(d)

accept the resignations of all the directors and additional directors (except the nominees of the Purchasers appointed in accordance with 6.1.5 (c) above), of the Company with effect from the end of the Closing Date;

 

10


 


 

 

(e)

revoke all mandates to bankers existing as on the Closing Date, and granting authority in favour of such persons as the Purchasers may nominate to operate the bank accounts thereof;

 

 

(f)

revoke all power of attorneys issued by the Company and existing as on the Closing Date; and

 

7. 

WARRANTIES 

 

7.1

The Seller are the holders of 33.5% the issued share capital of the Company, and are therefore competent to give Warranties on their own behalf as well as in respect of the Company as set out in Schedule IV .

 

7.2

The Seller hereby represent, warrant, covenant and undertake to the Purchasers on their behalf and on behalf of the Company (so as to bind the Seller and their respective legal representatives, and assigns) as follows:

 

 

(a)

All of the Shares are fully paid, or properly credited as fully paid, and have been validly issued to the all the existing shareholders of the company, whose details are set forth in Schedule  II to this Agreement.

 

 

(b)

The Seller is the absolute legal and beneficial owners of the shares and has full legal right, power and authority to enter into, execute and deliver this Agreement and to perform the obligations, undertakings and transactions set forth herein, and this Agreement has been duly and validly executed and delivered by the Seller and constitutes a legal, valid and binding obligation, enforceable against them in accordance with its terms;

 

 

(c)

The Shares owned by the Seller are free and clear of all Encumbrances (excluding those pledged to IREDA. )

 

 

(d)

Except for the transaction contemplated by this Agreement there is no subscription, option, warrant, call-right, agreement or commitment outstanding in relation to the sale or transfer of the Shares;

 

 

(e)

The Seller has not entered into any contracts, arrangements or engagements with any third party(ie) or done any acts on behalf of the Company which may at a later stage lead to any material liabilities for the Company other than the acts done by it in the usual and ordinary course of business;

 

 

(f)

The transfer of the unpledged  Shares to  the  Purchaser hereunder will convey to the  Purchaser good and marketable title to the Shares, free and clear of all pledges, security interests, options, equities, liens, charges, Encumbrances, claims or other third party rights (including rights of pre emption) whatsoever;

 

 

(g)

All claims/ penalties if any, claimed by creditors including related parties of the Company have been settled as at the Closing Date and the relevant no due certificates have been obtained; The Seller shall provide an undertaking to the effect that on the payment of Rs. 5 Millions, all liabilities of the Company besides the sums due to IREDA shall stand extinguished and the seller indemnifies the Purchasers and the Company from any statutory or non statutory liability or financial obligation pertaining to the period upto the date of transfer of shares to the purchasers.

 

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(h)

There is no funding commitment to AHIMSA Biofuels except  a sum of  Rs. 4,500,000 paid in 2006-07;

 

 

(i)

The amounts disclosed as unabsorbed depreciation available for carry forward are complete and accurate;

 

Neither the execution and delivery of this Agreement by the Seller nor the consummation by the Seller of the transactions contemplated hereby will violate, conflict with or result in the breach of any of the terms, conditions or provisions of the memorandum and articles of association of the Company or any agreement to which the Company or the Seller is a party or any law, regulation, order, ruling, decree, judgment, arbitration award or stipulation to which the Company or the Sellers are subject, or constitute a default there under which would result in the creation or imposition of any lien, charge, Encumbrance or other third party interest there under upon the Shares.

 

 

(n)

The Financials are true and fair and in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India and have been prepared on a consistent basis throughout the periods indicated and consistent with each other. The Financials present fairly the Company's consolidated financial condition, operating results and cash flows as of the dates and during the periods indicated therein.

 

7.4

Without restricting the rights of the Purchaser or the ability of the Purchaser to claim damages on any basis available to it in the event that any of the Warranties prove to be untrue or misleading or are breached (as the case may be) the Seller shall pay to the Purchaser on demand the amount as set out under Clause 8 of this Agreement together with all costs and expenses incurred by the Purchaser as a result of such breach.

 

7.5

Each of the Warranties shall be construed as a separate representation, warranty, covenant or undertaking (as the case may be) and (save as expressly provided to the contrary) shall not be limited by the terms of any of the other Warranties or by any other term of this Agreement.

 

7.6

The Warranties are only qualified by the facts and circumstances fairly, specifically and accurately disclosed in the disclosure schedule delivered by the Company and the Sellers to the Purchasers concurrently with the execution of this Agreement, attached as Schedule VI. ("Disclosure   Schedule")

 

7.7

Unless any information or fact is disclosed in the Disclosure Schedule, the Seller shall not invoke any Purchaser's knowledge (actual, constructive or imputed) of such fact or information, which might make the Warranties untrue, inaccurate or misleading.

 

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7.8

The Seller acknowledge and confirm that the Purchaser has entered into this Agreement based on the Warranties, and the correctness of all the information provided by the Sellers to the Purchasers.

 

7.9

The Seller shall give to the Purchasers and its representatives both before and after Closing all such information and documentation relating to the Company as the Purchaser shall reasonably require enabling it to satisfy itself as to the accuracy and observance of the Warranties.

 

7.10

The Seller  agree and undertake not to do or cause to be done any act or thing between the date of this Agreement and the Closing Date which would result the Warranties being rendered completely or partially untrue or incorrect.

 

8. 

INDEMNIFICATION

 

8.1 

Right of Indemnification

 

The Seller ("Indemnifying Party") shall indemnify, defend and hold harmless the Purchasers, their Affiliates, shareholders, directors, officers, employees, representatives, agents, contractors or licensees (each an "Indemnified Party" and together the "Indemnified Parties"), from and against any and all suits, sanctions, legal proceedings, claims, assessments, judgments, damages, penalties, fines, liabilities, demands, reasonable out-of-pocket expenses of whatever kind and losses incurred or sustained by the Indemnified Parties as a result of, arising from, or in connection with,  or relating to, directly or indirectly: (a) a breach of representations and warranties made by the Indemnifying Party under this Agreement; and/or (b) the non-performance (in whole or in part) by the Indemnifying Party of any of its covenants, obligations or undertakings contained in this Agreement.

 

Provided however that, neither Party shall be liable to the other for any indirect and/or consequential damages as well as loss of production, loss of overheads or profits in any manner or form arising from this Agreement.

 

8.2 

Indemnification Procedure

 

8.2.1

If any Indemnified Party is entitled to indemnification hereunder, such Indemnified Party shall as soon as reasonably practicable give notice to the Indemnifying Party against whom the indemnity is claimed of the losses suffered by the Indemnified Party as provided in Clause 8.1 above and/or any claim or of the commencement of any proceeding against the Company or the Indemnified Party, brought by any third party with respect


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