Shriram City Union Finance Limited - Karvy

(c) Term and termination: Either party has the right to terminate this Agreement any time before the date onwhich closing shall have taken place due to a breach of the covenants by the opposite party of thisInvestment Agreement.(d) Governing Law: Indian Law(g) Dispute Resolution: Arbitration will be in accordance with the Arbitration and Conciliation Act, 1996, andthe place of arbitration is Mumbai. All proceedings will be conducted in English Language.4. Investment agreement dated December 26, 2006 between Van Gogh Limited, (“Investor”) andShriram City Union Finance Limited, (“Company”), (“Investment Agreement”) as amended by theSubscription and Amendment Agreement dated May 12, 2008 between the Investor and ourCompany, (“Amendment Agreement”)Pursuant to the Investment Agreement, our Company has issued and allotted 40,00,000 equity shares, to theInvestor in one or more tranches aggregating to 10.23% of the equity share capital of our Company, postthe preferential allotment of equity shares to the Investor and other financial investors investing in theequity shares of our Company (“Other New Investors-I”)pursuant to the resolution passed under the extraordinarygeneral meeting dated December 18, 2006, of our Company (“Post Preferential Issue EquityShare Capital-I”).Pursuant to the Amendment Agreement our Company has further issued and allotted to the Investor,6,62,500 equity shares constituting 1.5% of the equity share capital of our Company post the preferentialallotment of equity shares to the Investor, Other New Investors-I and other financial investors investing inthe equity shares of our Company (“Other New Investors – II”) pursuant to the preferential allotmentunder the extra-ordinary general meeting resolution dated May 3, 2008. Further, pursuant to theAmendment Agreement, our Company has issued and allotted 6,62,500 warrants to the Investor whichrepresent a right to apply for an aggregate of 6,62,500 equity shares of our Company(adjusted for anybonus issues, share splits, share consolidation or reduction of capital of our Company).The salient features of the Investment Agreement and the Amendment Agreement are as follows:(a) Indemnities: Our Company will indemnify (i) the Investor and its affiliates (entities which are eithercontrolled, in control of or in common control with the Investor) and employees and (ii) the Investor Group(as described in the Investment Agreement), against any losses arising out of misrepresentations or breachof any warranty, costs and expenses incurred by the Investors in respect of any claim.(b) Board of Directors: Our Company, the Investor and Other New Investors – I will jointly agree on a panelof six independent directors out of which three will be appointed by our Company for a period of five yearsand will not be eligible to retire by rotation. The Investor also has a right to appoint an observer who isentitled to attend any and all Board meetings.(c) Reserved matters: Our Company is required to seek consent from the Investor before passing anyresolution or taking any decisions with respect to a reserved matter. Reserved matters include approval ofan annual business plan/operating budget; any material deviations from the approved business plan;entering into or modifying transactions with connected persons/concerns; making investments or acquiringshares exceeding ` 5 crore; transfer or disposal of any material part of our Company’s business; changes inthe memorandum or articles of association of our Company; issue of new shares or convertible instruments(except in a case where the Investor has not exercised the pre-emptive rights offered to the Investor); anychange in the class rights, preferences and privileges of shareholders (including common equity, preferenceshares and other convertible instruments); voluntary delisting of the shares; any material change in thenature of business of our Company or commencement of a new line of business or entering into any joint103