ARTICLE-2

PURCHASE OF SHARES BY BSES AND COMPLETION
 
2.1

Within 30 days from the date of this Agreement BSES shall a per Clause 2.6 pay to holding Company the total consideration of Rs. 234,60,00,000 (Two hundred thirty four crores and sixty lacs only) as per the Bid (as amended and finally accepted by GNCTD). Holding Company shall sell and transfer to BSES and BSES shall purchase from Holding Company the Purchased Shares against the receipt of the consideration in the manner and upon the terms and subject to conditions specified in this Agreement, Bid Documents. In the event the sale and purchase of shares is not completed for reasons attributable to GNCTD or the Holding Company and if there are no contributory default or failure on the part of BSES, the conduct of business of the COMPANY from the said 30 days to the Completion Date shall be to the account of GNCTD and/or the Holding Company.

2.2

The Purchased shares shall be delivered by Holding Company to BSES against the payment of the entire consideration amount by BSES to Holding Company. Holding Company shall deliver to BSES the duly executed transfer deeds to enable BSES to lodge the Purchase Shares with COMPANY for registration in the name of BSES.

2.3

BSES shall place before the Board of COMPANY the Purchased shares and the transfer deeds pertaining pertaining to the Purchase Shares for registration of the transfer at the time of completion of the transactions as provided hereunder.

2.4

The completion of such transaction shall take place within the time specified in clause 2.1 above the following manner:

 

A meeting of the Board of Directors of COMPANY shall be held to undertaken the following manner:

 

(a)

REGISTRATION OF PURCHASED SHARES TRANSFERRED in FAVOUR OF BSES : The board of Directors of COMPANY shall pass a resolution approving the transfer of the purchased Shares from Holding Company to BSES and registration in the books of COMPANY of the transfers in favour of BSES.
 

(b)

RECONSTITUTION OF THE BOARD OF DIRECTORS: The Board of Directors of COMPANY shall be registration-constituted with the co-option of three nominee directors of BSES and two directors to be nominated by .Holding company. All directors other than the five directors mentioned above shall resign from the Board of Directors of COMPANY and their resignation will be noted and accepted by the Board. The resigning directors will confirm that they will have no claim against the COMPANY by reason of their appointment continuation or resignation as directors if the COMPANY.
 

(c)

APPOINTMENT OF MANAGING DIRECTOR/MANAGER AND AUTHORISATION TO BE GIVEN : One of the nominee directors of BSES to be designated by BSES shall be appointed as the Managing Director or a Whole time Director or at the option of BSES in place of Managing Director or Whole time a Chief Executive to be appointed by BSES shall be designated as the Manager of COMPANY as envisaged in section 269 of the Companies Act, 1956 and he shall be given the powers of management of COMPANY subject to the supervision and control of the Board of Directors.
 

(d)

CHAIRMAN : The chairman of the COMPANY shall be chosen at the Board Meeting of the COMPANY and the director so chosen shall act as the Chairman. The Chairman shall exercise such powers (provided such power shall not be inconsistent with the terms of the Shareholders Agreement) as the Board may decide.
 

(e)

AUTHORISATION FOR SIGNING OF THE SHAREHOLDERS AGREEMENT: The Board of Directors shall authorize the signing of the Shareholders Agreement; Holding Company, BSES and COMPANY shall sign the Shareholders Agreement.
 

(f)

AMENDMENT OF ARTICLES OF ASSOCIATION: The Board of Directors shall recommend to the shareholders the passing of the following as special resolutions.
 

"IT WAS RESOLVED that the Articles of Association of the Company be and are hereby amended as under.
   

(i)

The reference to the Company being a Government Company in the heading and all other references to the Governor at all other references to the Governor at all other places be deleted.

(ii)

The following be added as Article 142.

"The provisions of the Shareholders Agreement dated [-------------, 2002" made between the principal shareholders of the Company, a copy of which is attached to this resolution and marked Appendix 'A', shall be read as part of these Articles and in case of any conflict or inconsistency between the provisions of that Agreement shall prevail."
 

(g)

CALLING OF AN EXTRA ORDINARY GENERAL MEETING: The Board of Directors shall call an Extra Ordinary General Meeting of the Company to be held on a date to be mutually agreed to between BSES and Holding Company to transact the following:
   

•

Passing of the resolution for amendment of the Articles of Association as proposed in Clause (f) above;

•

Appointment of the director s of the reconstituted Board of the COMPANY as provided in clause (b) above as regular directors; and

•

Confirmation of other actions taken by the Board as per clause (a) to (e) above.

2.5

The COMPANY shall take necessary steps for increasing its authorized share capital as per the provisions of the Transfer Scheme and transfer shares from GNCTD to the Holding Company.

2.6

Payment by BSES of consideration for the purchased shares shall be made at the closing simultaneously with making the Transfer Scheme effective as envisaged in Recital E; and execution of the Shareholders Agreement.