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Exhibit 10.12
ADVISORY AGREEMENT
THIS AGREEMENT dated this 20th day of January, 1995 between Pioneering
Management (Jersey) Limited, a corporation organized under the laws of Jersey,
Channel Islands (the "Manager"), and Pioneer Investment Poland Sp. z o. o., a
company organized under the laws of Poland (the "Advisor").
W I T N E S S E T H
WHEREAS, Pioneer Poland U.S., L.P., a limited partnership organized under
the laws of Delaware, the United States, and Pioneer Poland U.K., L.P., a
limited partnership organized under the laws of England (individually, a
"Partnership," and collectively, the "Partnerships") have been organized for the
purpose of co-investing, on a pro rata basis, in equity and equity related
securities issued by companies operating primarily in the Republic of Poland,
and otherwise in accordance with the Confidential Private Placement Memorandum
of Pioneer Poland Fund dated March 21, 1994, as it may be amended or
supplemented from time to time (as so amended or supplemented, the
"Memorandum");
WHEREAS, pursuant to authority granted the Manager by the Partnerships and
pursuant to the provisions of the Joint Management Agreement of even date
herewith among the Manager and the Partnerships (the "Management Agreement"),
the Manager has selected the Advisor to act as a sub-investment advisor of the
Partnerships and to provide certain other services, as more fully set forth
below, and to perform such services under the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the mutual covenants and benefits set
forth herein, the Manager and the Advisor do hereby agree as follows:
1. Activities of the Advisor. The Advisor will regularly provide the
Manager with investment research, advice and supervision and will continuously
develop and recommend an investment program for the Partnerships. The Advisor
will recommend to the Manager from time to time what activities shall be
undertaken by the Partnerships, what securities shall be held or sold by the
Partnerships and what portion of the Partnerships' assets shall be held
uninvested as cash, subject always to the investment objectives, policies and
restrictions of the Partnerships, as each of the same shall be from time to time
in effect, and as otherwise set forth herein. Without limiting the foregoing,
the Advisor shall be responsible for identifying potential investments for the
Partnerships, negotiating the terms of the investments, monitoring such
investments and recommending actions to be taken by the Partnerships in their
capacity as investors in portfolio companies and, if appropriate, providing
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designees to serve as the representative of the Partnerships on the boards of
directors or comparable governing boards of the portfolio companies.
Notwithstanding the foregoing, the Advisor shall not provide any advisory
services for which the permits of any governmental authority are required,
unless and until such permits shall have been obtained.
2. Expenses of the Partnerships. Except as is provided in paragraph 2(b)
of the Management Agreement, the Advisor shall be responsible for all of its
office overhead expenses and shall pay the fees, salaries and related office
overhead expenses of any investment advisers and/or investment managers
appointed by the Advisor.
3. Fees. The Manager shall pay to the Advisor such fees as the Manager
shall receive from the Partnerships under the Management Agreement, as and when
so received, reduced by such fees as the Manager shall pay to the Administrator
of the Partnerships pursuant to such fee schedule as may be in effect from time
to time.
4. Investment Review Committee. The Advisor shall designate an Investment
Review Committee, constituting at least four members (selected from time to time
by the Advisor in its sole discretion). All investment recommendations of the
Advisor with respect to the Partnerships shall be presented to the Investment
Review Committee, which shall have the power to veto such recommendations before
they are implemented. The Advisor shall deliver to (i) the European Bank for
Reconstruction and Development ("EBRD"), for such time as EBRD is a limited
partner of a Partnership, and (ii) to DEG - Deutsche Investitions- und
Entwicklungsgesellschaft mbH ("DEG"), for such time as DEG continues to be
entitled to exercise the approval rights granted to it by Sections 1(c)(1),
1(c)(3), 1(c)(5), 5(c) and 7(b) of the Management Agreement, all investment and
investment disposal proposals contemporaneously with the submission of such
proposals to members of the Investment Review Committee (provided that each such
limited partner shall enter into a confidentiality agreement satisfactory to the
Advisor with respect to such information (the execution by the Advisor of such
agreement being evidence that it is satisfactory)). Each such limited partner
shall be given reasonable opportunity to comment on such proposals prior to any
decision being taken by the Investment Review Committee. No attendance fee shall
be paid by the Partnerships to members of the Investment Review Committee.
5. Termination of Advisor.
(a) This Agreement shall continue in effect until each of the
Partnerships shall have been terminated and the business of the Partnerships
wound up, except as set forth in paragraphs (b) and (c) below.
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(b) Except as hereinafter provided, the Advisor shall be entitled to
resign its appointment hereunder by giving not less than six months' notice in
writing to the Manager; provided, however, that the resignation of the Advisor
shall not take effect unless and until a new Advisor shall have been appointed
by the Manager as provided in the Management Agreement.
(c) (i) Subject to paragraph (ii) below, the Manager shall, if the
partners holding a majority of the aggregate number of Interests in both
Partnerships (voting together as a single class) so vote pursuant to the terms
of their respective Partnership Agreements, terminate the appointment of the
Advisor following 30 days' written notice to the Advisor in any of the following
events:
(1) if the Advisor goes into liquidation (except a voluntary
liquidation contemplated by this Agreement or for the
purpose of reconstruction or amalgamation upon terms
previously approved in writing by the Oversight Board)
or becomes bankrupt as defined in the Ordinance of the
President of the Republic of Poland dated October 24,
1934 on the Bankruptcy Law (Journal of Laws of the
Republic of Poland 1991, No. 118, item 512 and 1994, No.
1, item 1) or any other governing insolvency law or if a
receiver is appointed for any of the assets of the
Advisor; or
(2) if the Advisor shall commit any material breach of its
obligations under this Agreement and (if such breach
shall be capable of remedy) shall fail to cure such
breach within thirty days of receipt of notice in
writing served by the Oversight Board (as defined in the
Management Agreement) requiring it to do so.
(ii) Notwithstanding the provisions of paragraph (i) above, the
Manager shall not terminate the appointment of the Advisor without the prior
written consent of (x) EBRD at any time during which EBRD holds at least ten
percent (10%) of the aggregate number of Interests in the Partnerships, (y) DEG
at any time during which DEG is entitled to exercise the approval rights granted
to it by Sections 1(c)(1), 1(c)(3), l(c)(5), 5(c) and 7(b) of the Management
Agreement and (z) the Pittsburgh Representative (as defined in the Management
Agreement) at any time during which the Pittsburgh Representative is entitled to
exercise the approval rights granted to him by Sections 1(c)(1), 1(c)(3),
1(c)(5), 5(c) and 7(b) of the Management Agreement.
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6. Rights and Obligations under the Management Agreement. The Advisor is
hereby entitled to all of the rights and subject to all of the obligations of
subadvisors under the Management Agreement, including without limitation,
Sections 6 and 9 thereof.
7. No Right to Conclude Contracts. Notwithstanding anything herein to the
contrary, the Advisor shall have no right to enter into contracts on behalf of
the Partnerships.
8. Miscellaneous.
(a) The Advisor is an independent contractor and not a partner of
the Manager for any purpose.
(b) This Agreement states the entire agreement of the parties hereto
with respect to the subject matter hereof, and is intended to be the complete
and exclusive statement of the terms hereof.
(c) This Agreement and all performance hereunder shall be governed
by and construed in accordance with the substantive laws of Jersey, Channel
Islands.
(d) Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
(e) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(f) This Agreement shall inure to the benefit of, and be binding
upon, the Manager, the Advisor, and their respective successors.
(g) This Agreement may only be amended with the consent of each of
the parties hereto.
(h) Any dispute, controversy or claim arising out of or relating to
this Agreement, or the breach, termination or invalidity hereof, shall be
referred to and finally resolved by arbitration administered by the London Court
of International Arbitration in accordance with the UNCITRAL Arbitration Rules
as in force and effect on the date of this Agreement. Any dispute shall be
submitted to an arbitral tribunal of one arbitrator appointed by the London
Court of International Arbitration which shall, regardless of the number of
parties to such dispute, be
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empowered to act as the appointing authority for such purposes. The place of
arbitration shall be London, England, and the English language shall be used
throughout the arbitral proceedings.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and their seal to be hereto affixed
as of the day and year first above written.
ATTEST: PIONEERING MANAGEMENT (JERSEY)
LIMITED
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ A. N. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ A. N. ▇▇▇▇▇▇, Director
ATTEST: PIONEER INVESTMENT
POLAND Sp. z o. o.
/s/ M.D. Caro By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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M.D. CARO
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AMENDMENT TO ADVISORY AGREEMENT
This amendment (the "Amendment") to the Advisory Agreement, dated as of
January 20, 1995, between Pioneering Management (Jersey) Limited and Pioneer
Investment Poland Sp. z o. o. (the "Agreement") is made, pursuant to Section
8(g) of the Agreement.
The Agreement is hereby amended:
1. By deleting Section 3 in its entirety and replacing it with the
following new Section 3:
3. Fees. The Manager shall pay to the Advisor a portion of the
fees that the Manager receives from the Partnerships under the
Management Agreement, as the Manager and the Advisor shall further
agree.
2. By (A) redesignating "(x)", "(y)" and "(z)" contained in 5(c)(ii) as
"(v)", "(w)" and "(x)", (B) deleting the word "and" from the eighth
line of such Section and replacing it with "," and (C) inserting the
following words immediately after the words "and 7(b) of the
Management Agreement" contained in the twelfth line of Section
5(c)(ii):
, (y) Commerzbank AG at any time during which Commerzbank AG holds
at least 20.618 Interests in the Partnerships, and (z) State of
Wisconsin Investment Board ("SWIB") at any time during which SWIB
holds at least 20.618 Interests in the Partnerships.
This amendment shall become effective as of the 15th day of September,
1995 upon its executive by the undersigned.
PIONEERING MANAGEMENT (JERSEY) LIMITED
By: /s/ ▇.▇. ▇▇▇▇▇▇
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, Director
PIONEER INVESTMENT POLAND Sp. z o. o.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Executive Vice President