EXHIBIT 2.1
OWNERSHIP INTEREST PURCHASE AGREEMENT
by and among
SFMT-CIS, INC.,
OOO TELEROSS
and
OAO ROSTELECOM
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Dated as of March 13, 2002
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS...................................................................................7
ARTICLE II PURCHASE AND SALE OF THE INTEREST...........................................................11
Section 2.1 Purchase and Sale of the Interest...........................................11
Section 2.2 The Purchase Price..........................................................11
Section 2.3 Failure to Close the Transaction............................................13
ARTICLE III CLOSING....................................................................................13
Section 3.1 Closing Date................................................................13
Section 3.2 Closing Deliveries..........................................................14
Section 3.3 Transfer Taxes..............................................................16
ARTICLE IV CERTAIN CONDITIONS..........................................................................16
Section 4.1 Conditions Precedent to the Closing.........................................16
Section 4.2 Registration of the Amendments..............................................19
Section 4.3 Release of Escrow in Favor of Seller........................................20
Section 4.4 No Liens....................................................................20
Section 4.5 Transfer of the Purchase Price..............................................21
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER.....................................................21
Section 5.1 Organization and Authority..................................................21
Section 5.2 Due Authorization; Binding Obligation.......................................21
Section 5.3 Non-Contravention...........................................................22
Section 5.4 Regulatory Approvals........................................................22
Section 5.5 Title to the Interest.......................................................22
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Section 5.6 Organization of the Company.................................................22
Section 5.7 Legal Proceedings...........................................................22
Section 5.8 Contracts...................................................................23
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYERS....................................................23
Section 6.1 Organization and Authority..................................................23
Section 6.2 Due Authorization; Binding Obligation.......................................23
Section 6.3 Non-Contravention...........................................................24
Section 6.4 Regulatory Approvals........................................................24
Section 6.5 GTI Stock...................................................................24
ARTICLE VII FURTHER AGREEMENTS AND ASSURANCES..........................................................25
Section 7.1 Government Filings and Approvals............................................25
Section 7.2 Cooperation in Defense of Action............................................25
Section 7.3 Confidentiality.............................................................26
Section 7.4 Best Efforts; Execution of Additional Documents.............................26
Section 7.5 Foreign Corrupt Practices Act...............................................27
ARTICLE VIII CONDITIONS TO BUYERS' OBLIGATIONS.........................................................27
Section 8.1 Accuracy of Representations and Warranties..................................28
Section 8.2 Performance of Covenants....................................................28
Section 8.3 Government Approvals........................................................28
Section 8.4 No Legal Proceedings........................................................28
Section 8.5 Contracts...................................................................28
ARTICLE IX CONDITIONS TO SELLER'S OBLIGATIONS..........................................................28
Section 9.1 Accuracy of Representations and Warranties..................................29
Section 9.2 Performance of Covenants....................................................29
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Section 9.3 Government Approvals........................................................29
Section 9.4 No Legal Proceedings........................................................29
ARTICLE X INDEMNIFICATION..............................................................................29
Section 10.1 Indemnification by Seller...................................................29
Section 10.2 Indemnification by Buyers...................................................30
Section 10.3 Third-Party Claims..........................................................30
ARTICLE XI CHANGE IN LAW...............................................................................31
Section 11.1 Change in Law Preventing Performance........................................31
ARTICLE XII TERMINATION PRIOR TO CLOSING DATE..........................................................31
Section 12.1 Noncompliance or Nonperformance Prior to Closing Date.......................31
Section 12.2 Effect of Termination.......................................................32
ARTICLE XIII MISCELLANEOUS.............................................................................32
Section 13.1 Effectiveness of the Agreement..............................................32
Section 13.2 Relations between Seller and the Company....................................32
Section 13.3 Severability................................................................33
Section 13.4 Integration; Independent Obligations........................................33
Section 13.5 Assignment..................................................................33
Section 13.6 Survival....................................................................33
Section 13.7 Counterparts................................................................34
Section 13.8 Headings....................................................................34
Section 13.9 Waiver; Requirement of Writing..............................................34
Section 13.10 Finder's Fees; Brokers......................................................34
Section 13.11 Expenses....................................................................34
Section 13.12 Exclusivity.................................................................34
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Section 13.13 Notices.35
Section 13.14 Applicable Law..............................................................36
Section 13.15 Dispute Resolution..........................................................36
Section 13.16 No ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇..........................................................36
Section 13.17 Public Announcements........................................................37
Section 13.18 No Third-Party Beneficiaries................................................37
Exhibits
Exhibit A List of Contracts
Exhibit B Form of GTI Guarantee
Exhibit C Form of Registration Rights Agreement
Exhibit D Form of Subscription Agreement
Exhibit E Form of TeleRoss Promissory Note
Exhibit F Form of Seller's Transfer Notice
Exhibit G Form of Proxy
Exhibit H Form of Buyers' Transfer Notice
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OWNERSHIP INTEREST PURCHASE AGREEMENT
THIS OWNERSHIP INTEREST PURCHASE AGREEMENT, dated as of March 13, 2002
(the "Execution Date"), is made by and among OAO ROSTELECOM, an open joint stock
company duly registered and validly existing under the laws of the Russian
Federation ("Seller"), SFMT-CIS, INC., a corporation duly organized and validly
existing under the laws of the State of Delaware in the United States ("SFMT"),
and OOO TELEROSS, a limited liability company duly registered and validly
existing under the laws of the Russian Federation ("TeleRoss"). (Seller together
with SFMT and TeleRoss, the "Parties" and each individually a "Party"; and SFMT
together with TeleRoss, the "Buyers").
W I T N E S S E T H :
- - - - - - - - - - -
WHEREAS:
(A) Seller is the legal, record and beneficial owner of a 50% (fifty
percent) ownership interest (the "Interest") in OOO EDN Sovintel, a
limited liability company duly registered and validly existing under
the laws of the Russian Federation (the "Company"), and the Interest
represents 50% (fifty percent) of the issued, outstanding and
authorized charter capital of the Company;
(B) The Company is a provider of various telecommunications services
and owner of telecommunications networks primarily in Moscow and Saint
Petersburg, and each of the Buyers desires to obtain the benefit of
this business by acquiring the Interest;
(C) Each of the Buyers desires to purchase from Seller, and Seller
desires to sell to the Buyers, all of the Interest upon the terms and
subject to the conditions set forth herein;
(D) The Seller desires to become a shareholder in Golden Telecom, Inc.,
a corporation duly organized and validly existing under the laws of the
State of Delaware in the United States ("GTI") and the parent company
of the Buyers;
(E) The Co-Owner is the second participant in the Company and holds the
remaining 50% (fifty percent) of the issued, outstanding and authorized
charter capital of the Company; and
(F) The Company was established by Seller and Co-Owner, and since its
establishment has been under joint control of the Seller and Co-Owner
through the board of directors of the Company.
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NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements hereinafter contained, the
Parties agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and the plural forms of the terms defined):
"Act" has the meaning set forth in Section 7.5(a).
"Action" means any legal, administrative, governmental or regulatory
proceeding or other action, suit, proceeding, claim, arbitration, mediation,
alternative dispute resolution procedure, inquiry or investigation by or before
any arbitrator, mediator, court or other Governmental Entity.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person. For purposes of the immediately preceding sentence, the term
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect 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, by contract or otherwise.
"Agreement" means this Ownership Interest Purchase Agreement, as the
same may be duly amended, modified or supplemented from time to time.
"Amendments" means all amendments to the Charter and Foundation
Agreement of the Company as may be necessary or advisable to reflect the changes
in the ownership structure of the Company as a result of the purchase by each of
the Buyers of the Interest under this Agreement.
"Antimonopoly Ministry" means the Ministry for Antimonopoly Policy and
Support of Entrepreneurship of the Russian Federation, or any successor entity
thereto.
"Authorization" means any consent, permission, waiver, allowance,
novation, authorization, declaration, filing, registration, notification,
application, license, permit, certificate, variance, exemption, franchise or
other approval issued, granted, given, required or otherwise made available by
any Governmental Entity material to the business of a Person.
"Business Day" means a day upon which banks are open for business in
each of the Russian Federation and the United States of America.
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"Business Property" means the tangible and intangible assets of the
Company as of the Execution Date and on the Closing Date together with all
intellectual property owned or used by the Company as of either such dates free
from any Liens.
"Buyers" has the meaning set forth in the Preamble to this Agreement.
"Buyers' Affiliates" has the meaning set forth in Section 10.1.
"Cash Consideration" has the meaning set forth in Section 2.2(a)(i).
"CBR" means the Central Bank of the Russian Federation, or any
successor entity thereto.
"CBR License" means the Authorization issued by the CBR, together with
any prior Authorization from the Ministry for Economic Development and Trade of
the Russian Federation as may be required, that constitutes necessary and
sufficient authorization for the Seller to acquire and hold the Stock
Consideration in accordance with all applicable Laws and subject to the terms
and conditions of the Subscription Agreement, the Standstill Agreement, the
Registration Rights Agreement and the New Shareholders Agreement.
"Charter" means the charter of the Company registered by the Moscow
Registration Chamber on March 30, 2000 and entered into the State Register of
Commercial Organizations of the State Registration Chamber on April 10, 2000, as
may be amended thereafter.
"Closing" has the meaning set forth in Section 3.1(a).
"Closing Date" has the meaning set forth in Section 3.1(a).
"Company" has the meaning set forth in the Preamble to this Agreement.
"Contracts" means all agreements, contracts, leases or liabilities
listed in Exhibit A.
"Co-Owner" means Sovinet, Inc., an indirectly wholly-owned Affiliate of
GTI.
"Cut Off Date" has the meaning set forth in Section 2.3.
"Escrow Agent" means a duly authorized commercial bank in Russia as
shall be agreed upon by the Parties.
"Escrow Agreement" means an agreement to be entered into prior to the
Closing Date by and among the Escrow Agent, each of the Buyers and the Seller,
setting forth the terms and conditions on which the Escrow Agent will receive
and release the Purchase Price to the Seller, or such other arrangement for this
purpose as agreed to by the Parties.
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"Escrow Account" means the account opened by the Escrow Agent (or any
other custodial arrangement or mechanism agreed to by the Parties), subject to
the terms and conditions of the Escrow Agreement.
"Escrow Release" has the meaning set forth in Section 4.3(a).
"Escrow Release Date" has the meaning set forth in Section 4.3(b).
"Execution Date" has the meaning set forth in the Preamble hereto.
"Foundation Agreement" means the foundation agreement of the Company
registered by the Moscow Registration Chamber on December 17, 1998 and entered
into the State Register of Commercial Organizations of the State Registration
Chamber on December 28, 1998, as may be amended thereafter.
"Governmental Entity" means, in any applicable jurisdiction or
international forum, any (a) federal, state, territorial, oblast, okrug,
municipal, local or foreign government, (b) court, arbitral or other tribunal,
(c) governmental or quasi-governmental authority of any nature (including any
political subdivision, instrumentality, branch, department, official or entity),
and including but not limited to international organizations having jurisdiction
over matters concerning intellectual property or (d) agency, commission,
authority or body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory or taxing authority or
power of any nature.
"GTI" has the meaning set forth in Recital D to this Agreement.
"GTI Guarantee" means the guarantee to be issued by GTI on the Closing
Date for the benefit of Seller relating to, among other things, the guarantee by
GTI of the payment obligation of TeleRoss in respect of the TeleRoss Promissory
Note, substantially in the form of Exhibit B.
"GTI Stock" means duly authorized, validly issued, fully paid and
nonassessable shares of common stock of GTI, par value US $0.01 per share.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the applicable rules and regulations promulgated
thereunder.
"Interest" has the meaning set forth in Recital A to this Agreement.
"Interest Transfer Transaction" has the meaning set forth in Section
2.1.
"Laws" means all laws, statutes, constitutions, treaties, rules,
regulations, policies, standards, directives, ordinances, codes, judgments,
rulings, orders, writs, decrees, stipulations, normative acts, instructions,
information letters, injunctions and determinations of any Governmental Entity.
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"Lien" means any charge or claim, community property interest,
condition, equitable interest, lien (statutory or otherwise), encumbrance,
option, proxy, pledge, security interest, mortgage, right of first refusal,
right of first offer, retention of title agreement, defect of title or
restriction of any kind or nature, including any restriction on use, voting,
transfer, receipt of income or exercise of any other attribute of ownership.
"Material Adverse Effect" means any circumstance, condition, change,
effect or development that, individually or in the aggregate, is, or is
reasonably likely to be, materially adverse to the business, condition
(financial or otherwise), operations, results of operations, assets or
liabilities of the Company.
"Notice on Conditions Precedent" has the meaning set forth in Section
3.1(b).
"New Shareholders Agreement" means the Shareholders Agreement by and
among GTI, certain current shareholders of GTI and Seller to be entered into on
or before the Closing Date.
"Person" means any individual, firm, partnership, joint venture, trust,
corporation, limited liability entity, unincorporated organization, estate or
other entity (including a Governmental Entity).
"Purchase Price" has the meaning set forth in Section 2.2(a).
"Registration Rights Agreement" means the Registration Rights Agreement
by and between Seller and GTI to be entered into on or before the Closing Date,
substantially in the form of Exhibit C.
"SEC" means the United States Securities and Exchange Commission, or
any successor thereto.
"Seller" has the meaning set forth in the Preamble to this Agreement.
"Seller's Affiliates" has the meaning set forth in Section 10.2.
"SFMT" has the meaning set forth in the Preamble to this Agreement.
"SFMT Interest" has the meaning set forth in Section 2.1.
"Standstill Agreement" means the Standstill Agreement among the Seller,
GTI, and certain current GTI shareholders to be entered into on or before the
Closing Date.
"Stock Certificate" has the meaning set forth in Section 2.2.(a)(iii).
"Stock Consideration" has the meaning set forth in Section
2.2.(a)(iii).
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"Subscription Agreement" means the Subscription Agreement by and
between Seller and GTI to be entered into on or before the Closing Date,
substantially in the form of Exhibit D.
"Taxes" means any present or future taxes, withholding obligations,
duties and other charges of whatever nature levied by any Governmental Entity.
"TeleRoss" has the meaning set forth in the Preamble to this Agreement.
"TeleRoss Interest" has the meaning set forth in Section 2.1.
"TeleRoss Promissory Note" has the meaning set forth in Section
2.2(a)(ii), substantially in the form of Exhibit E.
"Transfer Notice" means the notice of transfer from Seller and each of
the Buyers to the Company, which shall be countersigned by an authorized
representative of the Company, to be delivered at the Closing, substantially in
the form of Exhibit F.
ARTICLE II
PURCHASE AND SALE OF THE INTEREST
Section 2.1 Purchase and Sale of the Interest.
Subject to all of the terms and conditions of this Agreement and in
reliance on the covenants, representations and warranties contained herein,
Seller shall sell, convey, transfer, assign and deliver to each of the Buyers,
and each of the Buyers shall purchase and acquire from Seller, all of Seller's
ownership rights and interest in and to the Interest, free and clear of all
Liens (the "Interest Transfer Transaction"). The Interest shall be transferred
by the Seller into the ownership of each of the Buyers as follows: (i) 25%
(twenty-five percent) of the outstanding participatory interests in the Company
shall be transferred to TeleRoss (the "TeleRoss Interest"), and (ii) 25%
(twenty-five percent) of the outstanding participatory interests in the Company
shall be transferred to SFMT (the "SFMT Interest") on the Closing Date, subject
to adjustment as provided for in Section 2.2 (d) (if applicable).
Section 2.2 The Purchase Price.
(a) Purchase Price for the Interest. Subject to all of the terms and
conditions of this Agreement, Seller shall, in reliance on the covenants,
representations and warranties of each of the Buyers contained herein, sell,
convey, transfer, assign and deliver to each of TeleRoss and SFMT their
respective portions of the Interest as provided for in Section 2.1, and each of
TeleRoss and SFMT shall, in reliance on the covenants, representations and
warranties of Seller contained herein, purchase and acquire from Seller all of
Seller's ownership rights and interest in and to the Interest for the following
aggregate consideration:
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(i) the Russian ▇▇▇▇▇ equivalent of US $10,000,000 (ten
million US dollars), calculated at the CBR US Dollar to Russian ▇▇▇▇▇
exchange rate in effect on the Escrow Release Date (the "Cash
Consideration") payable in accordance with the terms and conditions of
Section 2.2(c);
(ii) a promissory note, guaranteed by GTI, to pay the amount
of the Russian ▇▇▇▇▇ equivalent of US $46,000,000 (forty-six million US
dollars) calculated at the CBR US Dollar to Russian ▇▇▇▇▇ exchange rate
in effect on the date of its payment, issued by TeleRoss in favor of
the Seller with a maturity date of ninety days after the date of
deposit thereof with the Escrow Agent (the "TeleRoss Promissory Note"),
and which shall be substantially in the form of Exhibit E; and
(iii) 15% of the issued and outstanding shares of GTI Stock as
of the Closing Date (the "Stock Consideration") represented by a stock
certificate issued in the name of the Seller with duly executed stock
powers attached (the "Stock Certificate"), as subscribed by the Seller
pursuant to, and subject to the terms and conditions of, the
Subscription Agreement.
The consideration set forth in paragraphs (i), (ii) and (iii) above
shall be hereinafter collectively referred to as the "Purchase Price". The
obligations of the Buyers in respect of payment of the Purchase Price shall be
borne by each of the Buyers equally (subject to Section 2.2(d) below).
(b) Adjustment of the Stock Consideration. If at any time after the
Closing Date and on or before the Escrow Release Date, GTI issues to any Person
any warrants, options or convertible securities or other rights to acquire
shares of GTI Stock (the "Derivative Rights"), the Seller shall have the right,
but not an obligation, to maintain its percentage ownership of GTI Stock
received on the Closing Date by acquiring Derivative Rights from GTI, so as to
ensure that assuming full exercise of all Derivative Rights available to any
Person prior to the Escrow Release Date, the Seller shall maintain the
percentage ownership of GTI Stock acquired on the Closing Date. The Parties
acknowledge and agree that the Seller shall have the right to acquire any
additional Derivative Rights pursuant to this Section 2.2(b) on the same terms
and conditions (including price and payment terms), and subject to all
restrictions, as those available to or imposed upon any Person acquiring such
Derivative Rights. The Buyers undertake to cause GTI to notify the Seller of any
Derivative Rights granted with respect to GTI Stock during the above period and
offer to the Seller to acquire such additional Derivative Rights as may be
necessary to maintain the percentage ownership of GTI Stock acquired by the
Seller on the Closing Date. Within ten (10) days of such notification the Seller
shall have the right to accept the offer to acquire such additional Derivative
Rights on the terms stated therein, provided that no such Derivative Rights may
be acquired or exercised by the Seller in the event the Seller fails to obtain
any required Authorization (including, without limitation, the relevant
Authorization from the CBR).
(c) Payment of the Purchase Price. Subject to Section 4.1 and Article
VIII, on the Closing Date, (i) TeleRoss and SFMT (or either of them) shall pay
or cause to be paid
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the Cash Consideration initially in US Dollars into the Escrow Account, which
amount shall then be payable to the Seller by the Escrow Agent in Rubles
calculated at the CBR Dollar to ▇▇▇▇▇ exchange rate in effect on the Escrow
Release Date subject to the terms of this Agreement and the Escrow Agreement,
provided that each of the Buyers shall pay such amount of the Cash Consideration
so as to ensure that the aggregate value of consideration paid or provided by
each Buyer or caused to be paid or provided by each Buyer hereunder shall be
equal, subject to the terms of Section 2.2(d) below; (ii) TeleRoss shall cause
the TeleRoss Promissory Note to be issued and deposited into the Escrow Account;
and (iii) SFMT shall cause the Stock Certificate to be deposited into the Escrow
Account, together with a duly authorized and executed stock power, with
guaranteed signatures, in proper form for transfer of the Stock Consideration to
GTI. It is understood and agreed that the Purchase Price shall be deemed paid as
provided in the final paragraph of Section 2.2.(a).
(d) Adjustment. Notwithstanding anything in this Section 2.2 to the
contrary, in the event that SFMT is unable, for any reason whatsoever, to pay or
cause to be paid its respective portion of the Cash Consideration to the Escrow
Account, the relative proportions of the Interest to be transferred to TeleRoss
and SFMT as set forth in Section 2.1 shall be adjusted to correspond to the
contribution to the Purchase Price to be made by each of the Buyers, provided
that the aggregate Purchase Price shall remain unchanged, and provided further
that Buyers will acquire title to the entire Interest (which is not subject to
any adjustments whatsoever). If the Buyers shall elect to so adjust their
respective proportions in the Interest, then Buyers shall notify Seller of such
adjustment no later than five (5) days prior to the Closing Date.
Section 2.3 Failure to Close the Transaction.
Notwithstanding anything herein to the contrary, if the Closing Date
shall not have occurred on or before the date that is six months after the
Execution Date (the "Cut Off Date"), then, as of the Cut Off Date, unless the
Parties agree otherwise, this Agreement shall terminate and be of no further
force and effect and the Parties shall cease to have any obligations hereunder.
ARTICLE III
CLOSING
Section 3.1 Closing Date.
(a) The closing of the Interest Transfer Transaction (the "Closing")
shall take place on the next Business Day following the delivery by either of
the Buyers to Seller of the Notice on Conditions Precedent in accordance with
Section 3.1(b) or at such other date and time as the Parties may agree. The date
and time at which the Closing actually occurs is referred to herein as the
"Closing Date".
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(b) Within five (5) Business Days after the occurrence or performance
to the Buyers' satisfaction (or waiver thereof in its sole discretion as
applicable) of each of the conditions precedent set forth in Section 4.1 and
each of the Conditions Precedent to Buyers' Obligations set forth in Article
VIII, the Buyers or either of them shall deliver a written notice to the Seller
that said conditions have occurred, been performed or been waived, as applicable
(the "Notice on Conditions Precedent"). Neither of the Buyers shall unreasonably
delay the issue of such Notice on Conditions Precedent. In respect of any
conditions precedent for which the Seller is responsible, the Seller shall
immediately provide the Buyers (or either of them) with a written notice upon
satisfaction of such conditions precedent.
(c) On the Closing Date, the following shall occur and shall be a
condition for signing of the Transfer Notice by Seller:
(i) Seller and GTI shall enter into the Registration Rights
Agreement, which will become effective upon release of the Stock
Certificate by the Escrow Agent to the Seller as provided for herein
and in the Escrow Agreement;
(ii) Seller, GTI and certain shareholders of GTI shall enter
into the New Shareholders Agreement and the Standstill Agreement each
of which will become effective upon release of the Stock Certificate by
the Escrow Agent to the Seller as provided for herein and in the Escrow
Agreement; and
(iii) Seller and GTI shall enter into the Subscription
Agreement which will become effective as of the Closing Date.
Section 3.2 Closing Deliveries.
(a) On or before the Closing Date, Seller covenants and agrees to
deliver to the Buyers (or either of them) the following:
(i) written notice from Seller that all conditions precedent
for which Seller is responsible have been satisfied;
(ii) a notarized copy of the CBR License;
(iii) a copy of the duly executed Transfer Notice from Seller
and each of the Buyers to the Company, stating that, in accordance with
the terms and conditions of this Agreement, Seller has transferred full
ownership rights to the Interest to TeleRoss and to SFMT, and TeleRoss
and SFMT have accepted such ownership rights, which Transfer Notice
shall have been countersigned by an authorized representative of the
Company; provided, however, that the Transfer Notice shall be executed
by the Seller only after the occurrence of the actions set out in
Section 3.1(c);
(iv) an original of the Amendments stamped with the Company's
seal, as well as originals of any other documents that are necessary in
accordance with
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the Laws of the Russian Federation to transfer to TeleRoss and SFMT,
respectively, all ownership rights in and to the Interest and to
register the Amendments with all relevant Governmental Entities,
including, without limitation, minutes of the general meeting of
participants of the Company approving the Amendments, all dated (or
sealed) not more than five (5) Business Days prior to the Closing Date;
(v) an original or notarized copy of the resolution adopted by
Seller, its board of directors and/or other governing body, as
appropriate, evidencing the due authorization of Seller to enter into
and perform all of its obligations under this Agreement, including, but
not limited to, taking such actions as are required of it on the
Closing Date, and the execution, delivery and performance of all other
agreements, instruments or other documents contemplated hereby;
(vi) an irrevocable proxy in favor of SFMT permitting SFMT to
vote the Stock Consideration in its sole discretion, to the extent
possible under applicable Laws, and until such time as the Amendments
have been registered in accordance with, and subject to the terms and
conditions of, Section 4.2 and the Escrow Release has occurred, to be
substantially in the form of Exhibit G;
(vii) a stock power for the Stock Consideration in favor of
GTI as provided for in Section 2.2(c);
(viii) all other instruments, agreements, certificates,
opinions and documents required to be delivered by Seller or the
Company on or prior to the Closing Date pursuant to this Agreement; and
(ix) an opinion of counsel to Seller, reasonably satisfactory
to the Buyers.
(b) On or before the Closing Date, and subject to occurrence or
performance of each of the conditions precedent set forth in Section 4.1 and
each of the Conditions Precedent to Buyers' Obligations set forth in Article
VIII, each of the Buyers, or either of them as required, covenants and agrees to
deliver to the Seller the following:
(i) the Notice on Conditions Precedent;
(ii) instructions for deposit of the Cash Consideration into
the Escrow Account (as provided in Section 2.2(c)) in the form of a
facsimile payment instruction issued to the bank responsible for
transfer of the Cash Consideration, with an acknowledgement from such
bank and confirmation from the Escrow Agent;
(iii) a letter from a reputable bank selected by TeleRoss to
the effect that such bank has agreed to assist TeleRoss in meeting its
payment obligations under this Agreement;
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(iv) an acknowledgment of receipt of the TeleRoss Promissory
Note and the GTI Guarantee, issued by the Escrow Agent, pursuant to the
terms and conditions of the Escrow Agreement;
(v) an acknowledgment of receipt by the Escrow Agent of the
Stock Certificate and the stock power in favor of GTI (as provided in
Section 2.2(c));
(vi) an acknowledgment of receipt issued by the Escrow Agent
of a notice of transfer, undated and signed by each of the Buyers, in
substantially the form attached hereto as Exhibit H;
(vii) original or notarized copies of the resolutions adopted
by each Buyer, its board of directors and/or other governing body, as
appropriate, evidencing the due authorization of each Buyer to enter
into and perform its obligations under this Agreement;
(viii) all other instruments, agreements, certificates,
opinions and documents required to be delivered by either Buyer on or
prior to the Closing Date pursuant to this Agreement; and
(ix) an opinion of counsel to each of the Buyers reasonably
satisfactory to the Seller.
Section 3.3 Transfer Taxes.
All applicable sales, withholding, and transfer Taxes (including any
stock transfer Taxes due as a result of the purchase and sale of the Interest
and Taxes, if any, imposed upon the transfer of real and personal property) and
filing, recording, registration, stamp, documentary and other Taxes and fees
payable in connection with any of the transactions contemplated hereby will be
the responsibility of, and be paid by, the appropriate Party in accordance with
applicable Law. All payments to be made by either of the Buyers in connection
with this Agreement are inclusive of any value added or similar Taxes, which may
be imposed from time to time.
ARTICLE IV
CERTAIN CONDITIONS
Section 4.1 Conditions Precedent to the Closing.
(a) The performance or occurrence of the following conditions to the
satisfaction of each of the Buyers (or waiver thereof as applicable), shall be
conditions precedent to the Closing as provided in Section 3.1 above:
(i) As promptly as practicable, but in no event later than
twenty-one (21) calendar days following the Execution Date, the Buyers
shall have conducted
16
legal, financial and other due diligence on the Company without
impediment and with the full cooperation of Seller and the Company, and
the results thereof shall have been found to be in all material
respects satisfactory to the Buyers acting reasonably;
(ii) The board of directors or shareholders of SFMT as may be
required by applicable Law and SFMT's constitutive documents shall have
approved the purchase by SFMT of the SFMT Interest and the execution,
delivery and performance of this Agreement, and the execution, delivery
and performance of all other agreements, instruments or other documents
contemplated hereby, including the Escrow Agreement (as appropriate);
(iii) The board of directors or shareholders of GTI as may be
required by applicable Law and GTI's constitutive documents shall have
approved the execution, delivery and performance of this Agreement, the
transfer of the Stock Consideration and the execution, delivery and
performance of all other agreements, instruments or other documents
contemplated hereby, including the GTI Guarantee, the Subscription
Agreement, the Registration Rights Agreement, the New Shareholders
Agreement and the Standstill Agreement (as appropriate) and, if
necessary, all transactions of SFMT and TeleRoss as GTI's Affiliates
contemplated hereunder;
(iv) The board of directors or participants of TeleRoss as may
be required by applicable Law and TeleRoss' constitutive documents
shall have approved the purchase by TeleRoss of the TeleRoss Interest
and the execution, delivery and performance of this Agreement, and the
execution, delivery and performance of all other agreements,
instruments or documents contemplated hereby, including the Escrow
Agreement (as appropriate);
(v) The board of directors and/or other governing body of
Seller as may be required by applicable Law and the Seller's
constitutive documents shall have approved the sale of the Interest and
the execution, delivery and performance of this Agreement and the
transactions contemplated hereby, and the execution, delivery and
performance of all other agreements, instruments or other documents
contemplated hereby, including the Escrow Agreement, the Subscription
Agreement, the Registration Rights Agreement, the New Shareholders
Agreement and the Standstill Agreement (as appropriate), and receipt of
the Cash Consideration, the TeleRoss Promissory Note, and the Stock
Consideration, all subject to the terms and conditions of this
Agreement, the Subscription Agreement, the New Shareholders Agreement,
the Standstill Agreement, the Registration Rights Agreement and any
other agreements, instruments or documents which may be required in
connection herewith or therewith;
(vi) Seller shall have obtained the CBR License permitting
Seller to receive and hold the Stock Consideration as envisaged by this
Agreement;
17
(vii) The Amendments and all other necessary or appropriate
documents shall have been duly approved by the general meeting of
participants of the Company in accordance with applicable Law and the
Charter; provided, that the Buyers (or either of them) shall use their
reasonable best efforts to cause the Co-Owner (A) to provide to the
Seller assistance with respect to the convocation and holding of such
general meeting of participants of the Company and (B) to vote in favor
of the issues on the agenda of such general meeting of participants of
the Company as may be necessary to carry out the transactions
contemplated hereby;
(viii) As promptly as practicable, but in no event later than
fourteen (14) calendar days following the Execution Date, the Seller
shall have given written notice to the Co-Owner, and the Company
itself, of its intention to sell the Interest to TeleRoss and SFMT;
(ix) TeleRoss and SFMT each shall have received the
appropriate Authorization from the Antimonopoly Ministry allowing them
to acquire their respective Interests;
(x) Any waiting period applicable to the transfer of the Stock
Consideration under the HSR Act shall have expired;
(xi) Seller and GTI shall have entered into the Subscription
Agreement and the Registration Rights Agreement;
(xii) Seller, GTI and certain shareholders of GTI shall have
entered into the Standstill Agreement;
(xiii) Seller, GTI and certain shareholders of GTI shall have
entered into the New Shareholders Agreement; and
(xiv) GTI shall have issued the GTI Guarantee.
(b) The performance or occurrence of the following conditions to the
satisfaction of the Seller (or waiver thereof as applicable), shall be
conditions precedent to the Closing as provided in Section 3.1 above:
(i) As promptly as practicable, but in no event later than 5
Business Days following the delivery of notice specified in Section
4.1.(a)(viii), the Buyers (or either of them) shall provide to the
Seller, or shall ensure that the Seller is provided with, duly executed
waivers from GTI's Affiliate holding the other 50% (fifty percent) of
the issued, outstanding and authorized charter capital of the Company,
and the Company itself, of their respective pre-emptive rights to
purchase the Interest (such waivers shall be in form and substance
reasonably satisfactory to the Seller);
(ii) The board of directors and/or other governing body of
each of the Buyers (as appropriate) shall have approved the purchase of
the Interest and the
18
execution, delivery and performance of this Agreement and the
transactions contemplated hereby, and the execution, delivery and
performance of all other agreements, instruments or other documents
contemplated hereby, and payment or issue of the Cash Consideration and
the TeleRoss Promissory Note, all subject to the terms and conditions
of this Agreement, the Escrow Agreement, the Subscription Agreement,
the New Shareholders Agreement, the Standstill Agreement and the
Registration Rights Agreement (as appropriate) and any other
agreements, instruments or documents which may be required in
connection therewith;
(iii) The board of directors or shareholders of GTI as may be
required by applicable Law and GTI's constitutive documents shall have
approved the execution, delivery and performance of this Agreement, the
transfer of the Stock Consideration and the execution, delivery and
performance of all other agreements, instruments or other documents
contemplated hereby, including the GTI Guarantee, the Subscription
Agreement, the Registration Rights Agreement, the New Shareholders
Agreement and the Standstill Agreement (as appropriate) and, if
necessary, all transactions of SFMT and TeleRoss as GTI's Affiliates
contemplated hereunder; and (iv) As promptly as practicable, but in no
event later than twenty-one (21) calendar days following the Execution
Date, Seller shall have conducted legal, financial and other due
diligence of GTI without impediment and with the full cooperation of
each of the Buyers, and the results thereof shall have been found to be
in all material respects satisfactory to Seller acting reasonably.
Section 4.2 Registration of the Amendments
(a) No later than five (5) days following Closing Date, the Seller and
each of the Buyers shall cause the Company to file the Amendments and all other
required documents necessary in connection with the registration of the
Amendments with all relevant Governmental Entities, which registration shall be
completed to the satisfaction of the Buyers no later than 60 (sixty) days after
the Closing Date.
(b) In the event that the registration of the Amendments is not
performed or does not occur as provided above, the Buyers shall promptly notify
Seller of such non-performance or non-occurrence and, within 30 (thirty)
calendar days of receipt of such notification, Seller shall cause the
performance or occurrence of the registration of the Amendments as provided for
in Section 4.2(a). In the event that Seller is unwilling or unable to cause such
performance or occurrence of these conditions within 30 (thirty) calendar days
after receipt of such notice, the Buyers may pursue any remedy available to the
Buyers, including the right to terminate this Agreement unilaterally. In such
event, either Buyer shall have the right to present a notice to the Escrow Agent
(with a copy to the Seller) in response to which the Cash Consideration (in the
form as initially deposited with the Escrow Agent), the TeleRoss Promissory
Note, the GTI Guarantee and the Stock Consideration (together with the stock
power in favor of GTI as provided for in Section 2.2.(c)) shall be
unconditionally
19
released from the Escrow Account in favor of the Buyers in accordance with the
terms of the Escrow Agreement and the title to the Interest shall be
unconditionally transferred to Seller (and the Buyers shall execute such
documents as may be required to ensure that title to the Interest is so
transferred to Seller).
Section 4.3 Release of Escrow in Favor of Seller.
(a) After the Closing and subject to the terms and conditions of the
Escrow Agreement, the Purchase Price shall be released to the Seller upon
satisfaction of each of the following conditions (the "Escrow Release"):
(i) the Buyers shall have presented to the Escrow Agent an
original copy of the Amendments as duly registered with all relevant
Governmental Entities in accordance with applicable Laws, including,
without limitation, the Moscow Registration Chamber and the State
Registration Chamber under the Ministry of Justice of the Russian
Federation, and in all respects, (1) TeleRoss shall be deemed, under
applicable Law, to be the exclusive owner of the TeleRoss Interest,
free and clear of any Liens, and (2) SFMT shall be deemed, under
applicable Law, to be the exclusive owner of the SFMT Interest, free
and clear of any Liens; and
(ii) the Seller shall have presented a certificate signed by
the General Director of the Seller and dated as of the Escrow Release
Date, to the effect that the CBR License has not been revoked,
cancelled or annulled and shall be in full force and effect.
(b) In accordance with the terms of the Escrow Agreement, the Purchase
Price shall be released by the Escrow Agent in its entirety on the next Business
Day immediately following the first day on which each of the conditions set
forth in Section 4.3(a) shall have been fulfilled to the satisfaction of the
Buyers (the "Escrow Release Date").
(c) As of the Escrow Release Date, the Registration Rights Agreement,
the Standstill Agreement and the New Shareholders Agreement shall become
effective, subject to satisfactory fulfillment of all other conditions to their
respective effectiveness as provided for therein.
Section 4.4 No Liens.
(a) Notwithstanding anything to the contrary herein, on the Closing
Date, the Buyers shall obtain the Interest free and clear of any Liens,
including, for the avoidance of doubt, any Liens arising by operation of law or
otherwise, in favor of any Person, including the Seller.
(b) Notwithstanding anything to the contrary herein, on the Closing
Date, the Seller shall obtain the Stock Consideration free and clear of any
Liens, other than any Lien arising under this Agreement or any other agreement
to be executed in connection herewith or in connection with the transactions
contemplated hereby, including, for the avoidance of
20
doubt, any Liens arising by operation of law or otherwise, in favor of any
Person, including either of the Buyers or GTI.
Section 4.5 Transfer of the Purchase Price.
The Purchase Price shall be transferred to the Seller on the Escrow
Release Date. Seller agrees and covenants that until the Escrow Release Date or
the Cut Off Date, whichever shall occur earlier, it shall not assign, sell,
transfer or permit to exist any Lien with respect to either of the TeleRoss
Promissory Note or the Stock Consideration, other than in favor of SFMT or its
Affiliates. Each of the Buyers agrees and covenants that until the Escrow
Release Date or the Cut Off Date, whichever shall occur earlier, it shall not
assign, sell or transfer in any manner whatsoever, whether in whole or in part,
or permit to exist any Lien with respect to the Interest, or any portion
thereof, or allow the Interest to be diluted, whether by virtue of a charter
capital increase of the Company or exercise of any rights of any Persons or
otherwise, or dispose in any manner whatsoever of any assets or properties of
the Company without the prior written consent of the Seller, the disposal of
which would result in a Material Adverse Effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to each of the Buyers as of the
date hereof, the Closing Date, and the Escrow Release Date (unless otherwise
indicated), as follows:
Section 5.1 Organization and Authority.
Seller is an open joint stock company duly organized and validly
existing under the Laws of the Russian Federation, with full corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby.
Section 5.2 Due Authorization; Binding Obligation.
The execution, delivery and performance by Seller of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Seller. This
Agreement has been duly and validly executed and delivered by Seller. This
Agreement constitutes the valid and binding obligations of Seller, enforceable
in accordance with its terms, subject to the qualification, however, that the
enforcement of the rights and remedies created hereby is subject to bankruptcy
and other similar laws of general application relating to or affecting the
rights and remedies of creditors and that the availability of the remedy of
specific enforcement or of injunctive relief is subject to the discretion of the
court before which any proceeding therefor
21
may be brought. For the avoidance of doubt, the Parties acknowledge that the
Closing hereunder is subject to the satisfaction of certain conditions precedent
as provided herein.
Section 5.3 Non-Contravention.
The execution, delivery and performance of this Agreement by Seller and
the consummation of the transactions contemplated hereby do not and will not,
with or without the giving of notice or the lapse of time, or both, violate,
conflict with, result in the breach of or constitute a default under, or give
rise to any right of termination, cancellation or acceleration of any
Authorization and Contract or obligation of Seller to any Person or result in
the creation of any Lien upon any property or assets of the Seller under any of
the terms, conditions or provisions of (1) the charter documents or by-laws or
other constitutive documents of Seller, or (2) any covenant or agreement to
which Seller, or any Contract to which the Seller, is a party or by which the
Seller's property or assets are bound, or (3) any Law in respect of which Seller
is subject, other than, in the case of clauses (2) and (3) above, any such items
that, individually or in the aggregate, would not result in a Material Adverse
Effect or adversely affect the ability of the Seller to consummate the
transactions contemplated hereby.
Section 5.4 Regulatory Approvals.
Except for the CBR License and satisfaction of any requirements under
the HSR Act, the Seller is not required to obtain any Authorization, in
connection with the execution, delivery and performance of this Agreement by
Seller, or the consummation of the transactions contemplated hereby.
Section 5.5 Title to the Interest.
As of the Execution Date and up through the Closing Date, Seller is the
legal, beneficial and record owner of the Interest and such ownership is free
and clear of any Liens. The Interest constitutes 50% (fifty percent) of the
participatory interests (ownership) of the Company. On the Closing Date, Seller
will convey to the Buyers sole and exclusive ownership of the Interest, free and
clear of any Liens.
Section 5.6 Organization of the Company.
As of the Execution Date and up through the Closing Date, the Company
is a limited liability company duly organized, validly existing and in good
standing under the laws of the Russian Federation, with full power and authority
to carry on its business as currently conducted by it and to own, lease and
operate the Business Property.
Section 5.7 Legal Proceedings.
(a) To the best knowledge of the Seller, there are no Actions material
to the business or condition of the Company pending or threatened against,
relating to or affecting the Company or any of its assets and properties which
(i) could reasonably be
22
expected to result in the issuance of an order restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement or otherwise result in a material
diminution of the benefits contemplated by this Agreement to the Buyers, or (ii)
if determined adversely to the Company, could reasonably be expected to result
in (x) any injunction or other equitable relief against the Company that would
interfere in any material respect with its business or operations or (y) losses
by the Company, individually or in the aggregate with losses in respect of other
such actions or proceedings, exceeding $100,000 or its equivalent in any other
currency; and
(b) there are no facts or circumstances known to Seller that could
reasonably be expected to give rise to any action or proceeding that would be
required to be disclosed pursuant to paragraph (a) above.
Section 5.8 Contracts.
All Contracts are in full force and effect and are legally binding and
enforceable by and against the parties thereto.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYERS
Each of the Buyers hereby represents and warrants to the Seller as to
itself as of the date hereof, the Closing Date and the Escrow Release Date, as
follows:
Section 6.1 Organization and Authority.
(a) SFMT is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware, with full corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby.
(b) TeleRoss is a limited liability company duly organized and validly
existing under the Laws of the Russian Federation, with full corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby.
(c) Both SFMT and TeleRoss shall remain Affiliates of GTI until the
Escrow Release Date or the Cut Off Date (whichever shall occur earlier)
inclusive.
Section 6.2 Due Authorization; Binding Obligation.
The execution, delivery and performance by each of the Buyers of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of each Buyer.
This Agreement has
23
been duly and validly executed and delivered by each Buyer. This Agreement
constitutes the valid and binding obligations of each Buyer, enforceable in
accordance with its terms, subject to the qualification, however, that the
enforcement of the rights and remedies created hereby is subject to bankruptcy
and other similar laws of general application relating to or affecting the
rights and remedies of creditors and that the availability of the remedy of
specific enforcement or of injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought. For the avoidance of
doubt, the Parties acknowledge that the Closing hereunder is subject to the
satisfaction of certain conditions precedent as provided herein.
Section 6.3 Non-Contravention.
The execution, delivery and performance of this Agreement by each Buyer
and the consummation of the transactions contemplated hereby do not and will
not, with or without the giving of notice or the lapse of time, or both,
violate, conflict with, result in the breach of or constitute a default under,
or give rise to any right of termination, cancellation or acceleration of
Authorization or obligation of either Buyer to any Person, or result in the
creation of any Lien upon the property or assets of either Buyer under, any of
the terms, conditions or provisions of (1) the charter documents, certificate of
incorporation or by-laws or other constitutive documents of either Buyer, or (2)
any covenant or agreement to which either Buyer is a party or by which the
property or the assets of each Buyer are bound, or (3) any Law in respect of
which either Buyer is subject, other than, in the case of clauses (2) and (3)
above, any such items that, individually or in the aggregate, would not have a
Material Adverse Effect or adversely affect the ability of either Buyer to
consummate the transactions contemplated hereby.
Section 6.4 Regulatory Approvals.
Subject to each Buyer obtaining such Authorization as may be required
from the Antimonopoly Ministry to acquire the Interest and satisfaction of any
requirements under the HSR Act, as applicable, neither Buyer is required to
file, seek or obtain any Authorization, in connection with the execution,
delivery and performance of this Agreement by either Buyer, or the consummation
of the transactions contemplated hereby.
Section 6.5 GTI Stock
The shares of GTI Stock to be issued to Seller pursuant to this
Agreement as the Stock Consideration will be duly authorized, validly issued and
non-assessable.
24
ARTICLE VII
FURTHER AGREEMENTS AND ASSURANCES
Section 7.1 Government Filings and Approvals.
(a) Each of Seller, TeleRoss and SFMT agrees to use its best efforts to
comply promptly with all requests or requirements which applicable Law or any
Governmental Entity may impose on them with respect to the transactions which
are the subject of this Agreement. The best efforts of Seller, TeleRoss and SFMT
shall include, but shall not be limited to, a good faith response, in
cooperation with one another, to all requests for information, documentary or
otherwise, by any Governmental Entity; provided, however, that neither of the
Buyers nor any of their Affiliates shall be required to divest any operations,
assets or business.
(b) In addition to the obligations under subsection (a) immediately
above, as promptly as practicable, but in no event later than 21 days following
the Execution Date, Seller shall, and SFMT shall cause GTI to, complete the
filings required pursuant to the HSR Act (if applicable). Seller and SFMT shall
diligently undertake, and fully cooperate with each other and GTI in the taking
of, all actions and provide any and all additional information required or
reasonably requested in order to comply with the requirements of the HSR Act.
Seller shall pay any fee related to the filings required under the HSR Act.
Seller and SFMT shall use their respective best efforts to ensure that any
applicable waiting periods under the HSR Act expire as promptly as practicable
and that any objections to the transfer of the Stock Consideration hereunder are
promptly withdrawn. Nothing under this Section 7.1(b) shall obligate any Party
to sell or otherwise dispose of any assets pursuant to any requirement imposed
as a condition to clearance of the transfer of the Stock Consideration by any
Governmental Entity.
(c) In addition to the obligations under subsection (a) immediately
above, as promptly as practicable, but in no event later than 30 days following
the Execution Date, Seller shall complete the filings required in order to
obtain the CBR License.
(d) As promptly as practicable, but in no event later than 30 days
following the Execution Date, the Buyers (or either of them) shall cause GTI to
deliver to the Seller true and complete copies of the financial statements of
GTI for the last three years of its activity.
Section 7.2 Cooperation in Defense of Action.
In the event that on or before the Escrow Release Date either of the
Buyers or the Seller shall become aware that the Company is threatened by,
subject to or is liable to be subject to an Action, the Buyers and Seller agree
to promptly notify each other to such effect and to cooperate fully and in good
faith in defending against or bringing a counterclaim in respect of such Action.
The Parties further agree to take (and to cause the Company to take, as
required) all necessary steps, including without limitation executing any
required legal
25
instruments, in furtherance of defending the Company or bringing a counterclaim
in respect of such Action.
Section 7.3 Confidentiality.
(a) Seller shall, and shall cause each of its Affiliates and each of
the representatives of Seller and its Affiliates to (i) maintain in confidence
any and all information concerning this Agreement, the transactions contemplated
hereby and the Company and each of TeleRoss and SFMT and (ii) refrain from using
any and all such information for their own benefit or in competition with or
otherwise to the detriment of TeleRoss, SFMT or their Affiliates, or the
Company. It is understood that Seller shall have no liability hereunder for
disclosure or use of any such information which (1) is in or, through no fault
of Seller, its Affiliates, the representatives of Seller or its Affiliates,
comes into the public domain, or (2) was acquired by Seller from other sources
after the Closing Date, provided such sources are not, to Seller's knowledge,
bound by any confidentiality agreement with TeleRoss, SFMT, any Affiliate of
TeleRoss or SFMT or the Company or (3) which Seller is legally required to
disclose pursuant to a request of, or obligation to, any Governmental Entity or
in accordance with any applicable Law, SEC or NASDAQ regulation or as otherwise
advised by legal counsel.
(b) Each of TeleRoss and SFMT shall, and shall cause each of their
Affiliates and each of the representatives of each of TeleRoss and SFMT and
their Affiliates to (i) maintain in confidence any and all information
concerning this Agreement, the transactions contemplated hereby and Seller and
(ii) refrain from using any and all such information for their own benefit or in
competition with or otherwise to the detriment of the Seller. It is understood
that each of TeleRoss and SFMT shall have no liability hereunder for disclosure
or use of any such information which (1) is in or, through no fault of TeleRoss
or SFMT, either of their Affiliates, the representatives of TeleRoss or SFMT or
their Affiliates, comes into the public domain, or (2) was acquired by TeleRoss
or SFMT from other sources after the Closing Date, provided such sources are
not, to TeleRoss or SFMT's knowledge, bound by any confidentiality agreement
with Seller, any Affiliate of Seller or the Company or (3) which TeleRoss or
SFMT is legally required to disclose pursuant to a request of, or obligation to,
any Governmental Entity or in accordance with any applicable Law, SEC or NASDAQ
regulation or as otherwise advised by legal counsel.
Section 7.4 Best Efforts; Execution of Additional Documents.
(a) Subject to the terms and conditions of this Agreement, each Party
shall use its reasonable best efforts to cause the Closing and the Escrow
Release, to occur.
(b) Without further consideration, within a reasonable period of time
after the Closing, as and when requested by any Party, each Party shall execute
and deliver, or cause to be executed and delivered, to the other Party or
Parties all such documents and instruments, and shall take, or cause to be
taken, all such other actions, as the first Party may reasonably
26
deem necessary or desirable to evidence the consummation of the transactions
contemplated by this Agreement and carry out any post-closing matters provided
for hereunder.
Section 7.5 Foreign Corrupt Practices Act.
(a) The Parties represent and acknowledge that certain applicable Laws
of both the Russian Federation and of the United States of America shall apply
to the transactions contemplated by this Agreement. The Parties represent that
each is familiar with the United States Foreign Corrupt Practices Act of 1977,
as amended (the "Act"), and, in particular, with the provisions of the Act which
prohibit the payment or giving anything of value either directly or indirectly
by a representative of a company formed in a jurisdiction of the United States
of America to an official of a foreign government (including political party
officials and candidates for public office) for the purpose of influencing an
act or decision in his or her official capacity, or inducing him or her to use
his or her influence with the foreign government or any Governmental Entity
thereof, to assist a company in obtaining or retaining business for or with, or
directing business, to any Person.
(b) Seller represents and warrants that no part of the consideration to
be provided hereunder will be accepted or used by Seller, nor will the Seller,
take any action that would constitute a violation of the Act.
(c) Each Buyer represents and warrants that such Buyer will not take
any action that would constitute a violation of the Act.
(d) If either Buyer determines that the Seller has taken any action, or
has requested or authorized any action, that could constitute a violation of the
Act, then such Buyer shall have all remedies available to it at law or in equity
against the Seller for breach thereof.
(e) If the Seller determines that either Buyer has taken any action, or
has requested or authorized any action, that could constitute a violation of the
Act, then the Seller shall have all remedies available to it at law or in equity
against the Buyers for breach thereof.
(f) All payments to Seller shall be solely by bank transfer, delivery
of a promissory note or transfer of securities pursuant to the Subscription
Agreement; no payment shall be in cash and no payment shall be made to any
Person other than Seller.
ARTICLE VIII
CONDITIONS TO BUYERS' OBLIGATIONS
In addition to the matters addressed in Article IV of this Agreement,
the obligations of the Buyers to proceed with the Closing, are subject to the
satisfaction, or waiver in writing by either of TeleRoss or SFMT on or prior to
the Closing Date, respectively, of the following conditions:
27
Section 8.1 Accuracy of Representations and Warranties.
The representations and warranties of Seller made in this Agreement
shall be true and correct in all material respects (and those qualified as to
materiality shall be true and correct in all respects) as of the Execution Date
and the Closing Date as though made as of such dates (unless specific dates are
otherwise indicated in the text of such representations and warranties) and
Seller shall have delivered to the relevant Buyer a certificate to that effect,
dated as of such dates, and signed by the duly elected and authorized general
director of Seller.
Section 8.2 Performance of Covenants.
Each and all of the covenants and agreements of Seller to be performed
or complied with prior to the Closing Date respectively shall have been duly
performed or complied with by Seller in all respects, and Seller shall have
delivered to the relevant Buyer a certificate to that effect, dated as of such
date, and signed by the duly elected and authorized general director of Seller.
Section 8.3 Government Approvals.
Any and all Authorizations or other administrative authority required
from any Governmental Entity to proceed with the transactions contemplated
hereby shall have been obtained by each of TeleRoss, SFMT, Seller or the
Company.
Section 8.4 No Legal Proceedings.
No injunction shall be in effect prohibiting or restraining the
transactions contemplated by this Agreement and no Action shall have been
commenced or threatened by any Governmental Entity to restrain or challenge the
transactions contemplated by this Agreement or seeking to obtain material
damages from either or both of the Buyers or their Affiliates or the Company if
such transactions are consummated.
Section 8.5 Contracts.
There shall be no threatened, pending or ongoing Action in respect of
any Contract. None of Seller, the Buyers or any of their Affiliates shall be
aware of any breach, default or other failure to abide by the terms of any
Contract.
ARTICLE IX
CONDITIONS TO SELLER'S OBLIGATIONS
In addition to the matters addressed in Article IV of this Agreement,
the obligations of the Seller to proceed with the Closing, are subject to the
satisfaction, or waiver in writing by Seller on or prior to the Closing Date of
the following conditions:
28
Section 9.1 Accuracy of Representations and Warranties.
The representations and warranties made by each of the Buyers in this
Agreement shall be true and correct in all material respects (and those
qualified as to materiality shall be true and correct in all respects) as of the
Execution Date and the Closing Date as though made as of such dates, and each of
the Buyers shall have delivered to Seller a certificate to that effect, dated on
such dates, and signed by a duly elected and authorized official of each of the
Buyers.
Section 9.2 Performance of Covenants.
Each and all of the covenants and agreements of each of the Buyers to
be performed or complied with prior to the Closing Date respectively shall have
been duly performed or complied with by each of the Buyers in all material
respects, and each of the Buyers shall have delivered to Seller a certificate to
that effect, dated as of such date, and signed by a duly elected and authorized
official of each of the Buyers.
Section 9.3 Government Approvals.
Any and all Authorizations or other administrative authority required
from any Governmental Entity to proceed with the transactions contemplated
hereby shall have been obtained by each of TeleRoss, SFMT, Seller or the
Company.
Section 9.4 No Legal Proceedings.
No injunction shall be in effect prohibiting or restraining the
transactions contemplated by this Agreement and no Action shall have been
commenced or threatened by any Governmental Entity to restrain or challenge the
transactions contemplated by this Agreement or seeking to obtain material
damages from either of the Buyers or their Affiliates or the Company if such
transactions are consummated.
ARTICLE X
INDEMNIFICATION
Section 10.1 Indemnification by Seller.
Seller will indemnify, defend, save and hold each of the Buyers and any
of their Affiliates (including the Company) and any of its and their respective
directors, officers, employees or agents ("Buyers' Affiliates") harmless from
and against any and all damage, liability, loss, penalty, expense, assessment,
judgment or deficiency of any nature whatsoever (including, without limitation,
reasonable attorneys' fees and expenses, consultants' and investigators' fees
and expenses and other costs and expenses incident to any suit, action or
proceeding) actually incurred or sustained by either Buyer or any of Buyers'
Affiliates which shall arise out of or result from (a) any breach of any
representation and warranty given or made by Seller in Article V herein or in
any certificate delivered with respect thereto, or (b)
29
the noncompliance with or nonperformance of any agreement, obligation or
covenant of Seller under this Agreement, provided that such breach,
noncompliance or nonperformance resulted in liabilities or losses for the Buyers
or Buyers' Affiliates or the Company, as appropriate, in an aggregate amount
equal to or exceeding US $250,000 (or the equivalent thereof in any other
currency).
Section 10.2 Indemnification by Buyers.
Each of the Buyers will indemnify, defend, save and hold Seller and any
of its Affiliates and any of its or their respective directors, officers,
employees or agents ("Seller's Affiliates") harmless from and against any and
all damage, liability, loss, penalty, expense, assessment, judgment or
deficiency of any nature whatsoever (including, without limitation, reasonable
attorneys' fees and expenses, consultants' and investigators' fees and expenses
and other costs and expenses incident to any suit, action or proceeding)
actually incurred or sustained by Seller or any of Seller's Affiliates which
shall arise out of or result from (a) any breach of any representation and
warranty given or made by either Buyer in Article VI herein or in any
certificate delivered with respect thereto, or (b) the noncompliance with or
nonperformance of any agreement, obligation or covenant of Buyer under this
Agreement, provided that such breach, noncompliance or nonperformance resulted
in liabilities or losses for the Seller or Seller's Affiliates, as appropriate,
in an aggregate amount equal to or exceeding US $250,000 (or the equivalent
thereof in any other currency).
Section 10.3 Third-Party Claims.
Reasonably promptly after service of notice of any claim or of process
by any third person in any matter in respect of which indemnity may be sought
from the other party pursuant to this Agreement, the party in receipt of the
claim (the "Indemnified Party") shall notify the other party (the "Indemnifying
Party") of the receipt thereof. Failure to give such notice reasonably promptly
shall not relieve the Indemnifying Party of its obligation hereunder; provided,
however, that if such failure to give notice reasonably promptly adversely
affects the ability of the Indemnifying Party to defend such claims or
materially increases the amount of indemnification which the Indemnifying Party
is obligated to pay hereunder, the amount of indemnification to which the
Indemnified Party will be entitled to receive shall be reduced to an amount
which the Indemnified Party would have been entitled to receive had such notice
been timely given. Unless the Indemnifying Party shall notify the Indemnified
Party that it elects to assume the defense of any such claim or process or
settlement thereof (such notice to be given as promptly as reasonably possible
in view of the necessity to arrange for such defense (and in no event later than
10 days following the aforesaid notice) and to be accompanied by an
acknowledgment of the Indemnifying Party's obligation to indemnify the
Indemnified Party in respect of such matter), the Indemnified Party shall assume
the defense of any such claim or process or settlement thereof. Such defense
shall be conducted expeditiously (but with due regard for obtaining the most
favorable outcome reasonably likely under the circumstances, taking into account
costs and expenditures) and the Indemnifying Party or Indemnified Party, as the
case may be, shall be advised promptly of all developments. If the Indemnifying
Party assumes the defense, the
30
Indemnified Party will have the right to participate fully in any such action or
proceeding and to retain its own counsel, but the fees and expenses of such
counsel will be at its own expense unless (i) the Indemnifying Party shall have
agreed to the retention of such counsel for both the Indemnifying and
Indemnified Parties or (ii) the named parties to any such suit, action or
proceeding (including any impleaded parties) include both the Indemnifying Party
and the Indemnified Party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. No settlement of a claim by either party shall be made without the prior
written consent of the other party, which consent shall not be unreasonably
withheld or delayed. Notwithstanding the foregoing, the Indemnifying Party shall
not be entitled to assume the defense of any such action or proceeding (and
shall be liable for the fees and expenses of counsel incurred by the Indemnified
Party in defending such matter) to the extent that the action or proceeding
seeks an order, injunction or other equitable relief or relief for other than
money damages against the Indemnified Party subject to the same requirements
referred to above for the Indemnifying Party when it is entitled to assume such
defense and the Indemnified Party shall have the right to settle such matter
without the prior written consent of the Indemnifying Party unless such
settlement involves the payment of money, in which event the required prior
written consent shall not be unreasonably withheld or delayed.
ARTICLE XI
CHANGE IN LAW
Section 11.1 Change in Law Preventing Performance.
Notwithstanding anything in this Agreement to the contrary, if any
Party is prevented from performing in full its obligations under this Agreement
as a result of a change in any applicable Law unforeseeable at the date of this
Agreement or on the Closing Date, then the affected Party shall notify the other
Party hereto of such change in Law within 14 days thereof. The notification
referencing the relevant change in Law must include the full name and official
details of the corresponding legal act of the appropriate Governmental Entity,
as well as the source of official publication of this act (to the extent such
act is published). If such change in Law prevents the performance in full of the
notifying Party's obligations for more than three (3) months, provided, that
such Party has duly notified the other Party hereto in accordance with this
Section 11.1, then either Party shall have the right to terminate this Agreement
by giving fifteen (15) days' written notice to the other Party.
ARTICLE XII
TERMINATION PRIOR TO CLOSING DATE
Section 12.1 Noncompliance or Nonperformance Prior to Closing Date.
In addition to Buyers' right to terminate under Section 4.2(b) and the
Parties' right to terminate under Section 11, if a Party materially breaches any
term or condition of
31
this Agreement to be complied with at or before the Closing Date or the
obligations of such Party become incapable of fulfillment prior to the Closing
Date (other than as provided for in Section 11), and such breach or
noncompliance shall not have been waived by the other Party or Parties hereto,
then this Agreement may be terminated, the Closing Date shall not occur and the
transactions contemplated hereby may be abandoned upon written notice by the
nonbreaching Party to the breaching Party, without prejudice to the terminating
Party's rights to claim damages or other relief, provided, that a breaching
Party shall be granted five (5) Business Days from the date of the notice of
termination to cure any breach or failure to comply.
Section 12.2 Effect of Termination.
If this Agreement is validly terminated pursuant to Section 12.1, this
Agreement will forthwith become null and void, and there will be no liability or
obligation on the part of either Party (or any of their respective officers,
directors, employees, agents or other representatives or Affiliates), without
prejudice to the terminating Party's rights provided for in Section 12.1 above
and except that the provisions with respect to expenses in Section 13.11, the
survival of representations and warranties in Section 13.6 and confidentiality
in Section 7.3 will continue to apply following any such termination. For the
avoidance of doubt, if the Amendments are not registered after the Closing Date
as provided herein, then the termination of this Agreement shall be governed by
Section 4.2.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Effectiveness of the Agreement.
This Agreement enters into full force and effect on the date first
written in the Preamble, provided that the obligations of the Parties are
contingent upon fulfillment of the conditions as provided for herein.
Section 13.2 Relations between Seller and the Company.
The Seller agrees to continue to carry out all of its obligations under
the Contracts all in accordance with their respective terms and conditions and
shall use its best efforts to maintain the Contracts in force and effect until
their respective dates of expiration, subject to their respective terms and
conditions and the governing law of such Contracts. Notwithstanding anything in
this Agreement to the contrary, the Parties agree that the Seller shall not be
under any obligation to enter into new contracts with the Company or to amend or
modify the Contracts in any manner unless otherwise specifically provided for in
the Contracts or unless such new contracts or amendments or modifications to the
Contracts are negotiated in good faith to the satisfaction of the respective
parties thereto.
32
Section 13.3 Severability.
It is expressly understood and agreed that any condition or provision
of this Agreement (including without limitation any condition precedent such as
obtaining the CBR License) that is invalid or unenforceable in any situation in
any jurisdiction shall not affect the enforceability of the remaining terms and
provisions hereof nor shall it affect the validity or enforceability of the
offending term or provision in any other situation or in any other jurisdiction.
Section 13.4 Integration; Independent Obligations.
(a) This Agreement (including the Exhibits attached hereto) constitutes
the entire agreement and understanding of the Parties relating to the subject
matter hereof and supersedes all prior agreements and understandings, whether
oral or written, relating to the subject matter hereof.
(b) Notwithstanding anything herein to the contrary, it is agreed that
any obligations hereunder expressly represented to be the responsibility of
either TeleRoss or SFMT, including, without limitation, the express obligations
set forth in Section 10.2, shall be an obligation of such Party only, and
neither the performance of any such obligation, nor any liability arising from
the failure to perform any such obligation, shall be allocated to the other
Party not expressly responsible for such obligation hereunder.
Section 13.5 Assignment.
This Agreement shall be binding upon, and inure to the benefit of, the
Parties hereto and their respective successors and permitted assigns. This
Agreement may not be assigned by Buyers without the prior written consent of
Seller or by Seller without the prior written consent of Buyers; provided,
however, that this Agreement may be assigned by Buyers to any corporate parent
or any directly or indirectly wholly-owned subsidiary of such corporate parent,
provided that Buyers shall continue to be bound by this Agreement after such
assignment.
Section 13.6 Survival.
The representations, warranties and covenants set forth in this
Agreement are deemed repeated on each of the Execution Date, the Closing Date
and the Escrow Release Date (unless specific dates are otherwise indicated in
the text of such provisions and taking into account all of the facts and
circumstances existing as of such dates). The liability for breach of the
representations and warranties (other than breach of the representations and
warranties in Sections 5.1, 5.2, 5.4, 5.6, 5.8, 6.1, 6.2, 6.4 and 6.5) shall
survive such dates for one year following the Escrow Release Date, and the
liability for breach of the representations and warranties in Sections 5.1, 5.2,
5.4, 5.6, 5.8, 6.1, 6.2, 6.4 and 6.5 shall survive until the expiration of the
applicable statutes of limitations provided for by the Laws governing this
Agreement.
33
Section 13.7 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument. This Agreement is executed in Russian
and in English, with 1 (one) copy in each language for each Party hereto, and 1
(one) copy in each language to GTI. In the event of any discrepancies between
the English and Russian versions, the English shall prevail.
Section 13.8 Headings.
The headings in this Agreement are included for convenience of
reference only and shall not in any way affect the meaning or interpretation of
this Agreement.
Section 13.9 Waiver; Requirement of Writing.
This Agreement cannot be changed or any performance, term or condition
waived in whole or in part except by a writing signed by the party against whom
enforcement of the change or waiver is sought. Other than with respect to
receipt of any Authorization required under applicable Law, any term or
condition of this Agreement may be waived at any time by the Party hereto
entitled to the benefit thereof. No delay or failure on the part of any Party in
exercising any rights hereunder, and no partial or single exercise thereof, will
constitute a waiver of such rights or of any other rights hereunder.
Section 13.10 Finder's Fees; Brokers.
Seller and each of the Buyers represent and warrant that there are no
claims (or any basis for any claims) for brokerage commissions, finder's fees or
like payments in connection with this Agreement or the transactions contemplated
hereby resulting from any action taken by it or on its behalf. Seller shall
indemnify and hold each Buyer harmless and Buyers shall indemnify and hold
Seller harmless with respect to their respective representations and warranties
set forth in this Section 13.10.
Section 13.11 Expenses.
Each of the Parties hereto shall pay, without right of reimbursement
from the another Party or from the Company, its own costs, Taxes as well as all
the costs incurred by it incident to the preparation, execution and delivery of
this Agreement and the performance of its obligations hereunder, whether or not
the transactions contemplated by this Agreement shall be consummated; provided,
however, that the Escrow Agent's fees shall be payable by the Buyers.
Section 13.12 Exclusivity.
The arrangements between the Parties set out herein shall be exclusive
and the Parties undertake not to enter into similar arrangements with another
party at any time with
34
any other party, until (i) the Cut Off Date (or such later date as may be agreed
between the Parties in writing) or (ii) this Agreement has been terminated as
provided herein.
Section 13.13 Notices.
Any notice, request, consent, waiver or other communication required or
permitted hereunder shall be effective only if it is in writing and personally
delivered or sent by facsimile or sent, postage prepaid, by registered or
certified mail, return receipt requested, or by recognized overnight courier
service, postage or other charges prepaid, and shall be deemed given when so
delivered by hand or facsimilied, or when received if sent by mail or by
courier, as follows:
If to Seller:
OAO Rostelecom
Russian Federation, 125047,
Moscow, ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Ivanovich
Fax: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
If to SFMT:
SFMT-CIS, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇, ▇▇▇
Attention: General Counsel
Fax: (▇-▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇-▇▇▇) ▇▇▇-▇▇▇▇
If to TeleRoss:
OOO TeleRoss
Russian Federation, 111250
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: General Director
Telephone: ▇-▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇-▇▇▇-▇▇▇-▇▇▇▇
35
with a copy to (in case of a notice to SFMT or TeleRoss)
Golden TeleServices Representation ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: General Director
Telephone: ▇-▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇-▇▇▇-▇▇▇-▇▇▇▇
or such other person or address as the addressee may have specified in a notice
duly given to the sender as provided herein.
Section 13.14 Applicable Law.
This Agreement will be construed and interpreted in accordance with and
governed by the laws of the State of New York, United States of America.
Section 13.15 Dispute Resolution.
Any dispute arising out of or in connection with this Agreement
(including a dispute regarding the existence, validity or termination of this
Agreement or the consequences of its nullity) shall be referred to and finally
resolved by arbitration under the Arbitration Rules (the "Rules") of the London
Court of International Arbitration (the "LCIA"). The arbitral tribunal shall
consist of one arbitrator and the appointing authority shall be the LCIA. The
seat of arbitration shall be London, England and the language of the arbitration
shall be English. Any arbitral award shall be final and may not be challenged in
any other arbitral tribunals located in any other jurisdictions. The successful
party shall have the right to enforce such arbitral award in any court of
competent jurisdiction. All expenses connected with the arbitration, including
legal fees and other fees, incurred by the parties when resolving disputes under
this Agreement shall be payable in accordance with the arbitral award of the
tribunal.
Section 13.16 No ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
If any Party obtains material, nonpublic information about another
Party or any of its Affiliates, businesses, subsidiaries or ventures in the
course of the transaction contemplated by this Agreement, the Party in receipt
of such information (the "Recipient") agrees that neither the Recipient nor its
representatives will trade, and that the Recipient will undertake reasonable
precautions to disallow its representatives from trading, in the other Party's
securities (or the securities of any Affiliate of another Party) during such
time as such information is material and nonpublic.
36
Section 13.17 Public Announcements.
None of the Parties shall make any press release or public announcement
with respect to the transactions contemplated hereby without (a) in the case of
either of the Buyers, obtaining the prior written approval of Seller and (b) in
the case of Seller, obtaining the prior written approval of each of the Buyers,
except in each case as may be required by law or regulations of securities
exchanges. Approvals under this Section 13.17 shall not be unreasonably withheld
or delayed.
Section 13.18 No Third-Party Beneficiaries.
Nothing in this Agreement will be construed as giving any person, firm,
corporation or other entity, other than the Parties hereto, their successors and
permitted assigns, any right, remedy or claim under or in respect of this
Agreement or any provision hereof.
[SIGNATURE PAGE FOLLOWS]
37
IN WITNESS WHEREOF, this Ownership Interest Purchase Agreement has been
validly executed and delivered by the duly authorized representatives of the
Parties hereto as of the Execution Date.
OOO TELEROSS SFMT-CIS, INC.
By: By:
----------------------------------- -----------------------------------
Name: ▇▇▇▇▇▇▇ Abbeloos Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: General Director Title: President and CEO
By:
-----------------------------------
Name:
Title: Chief Accountant
OAO ROSTELECOM
By:
-----------------------------------
Name: S.I. Kouznetsov
Title: General Director
By:
-----------------------------------
Name:
Title: Chief Accountant
38
EXHIBIT A
LIST OF CONTRACTS
Name Subject Matter No of Agreement Date of Agreement
---- -------------- --------------- -----------------
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom Moscow -▇▇▇▇▇▇ 10(27)-142A December 27, 1995
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom Moscow - Seoul NP3 27-350A January 30, 2001
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom Moscow - Kiev 30N07 15-11/030/242-1,8 April 28, 2000
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom Moscow - ▇▇▇▇ ▇▇▇▇ 10(27)-253A October 5, 1998
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom Moscow - St. Petersburg 30N24 15-11/036/601-1.8 October 16, 1998
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom Moscow - St. Petersburg 30N26 15-11/031/428-1.8 June 8, 1998
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom Moscow - St. Petersburg 30N27 15-11/032/430-1.8 June 8, 1998
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom Moscow - St. Petersburg 30N28 15-11/033/431-1.8 June 8, 1998
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom Joint provision of international
digital private lines 10/30.96 April 10, 1996
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom Interconnection 215-2.8 April 1, 2000
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom Intellectual network services under
"800" code IN/FP-002-01 February 23, 2001
------------------------------------------------------------------------------------------------------------------
Lease (one rack for placement of
OAO Rostelecom equipment) 2106/2001-122 February 1, 2001
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom (TCHMS - Monitoring of equipment in technical
21) premises 2110/98-5 March 25, 1998
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom (MMT) 1. Cooperation in connection with
provision of telecommunication
services;
2. Connection of Sovintel's
equipment into Rostelecom's (MMT)
equipment 3-IN August 17, 1999
------------------------------------------------------------------------------------------------------------------
39
Name Subject Matter No of Agreement Date of Agreement
---- -------------- --------------- -----------------
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom (GCHUMS) Connection with Sovintel's
telecommunication network in
vertical cable passes and MDF
facilities of OAO Rostelecom
(GCHUMS). Maintenance of vertical
cable passes and MDF facilities OC-22\10-17E December 21, 1998
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom (GCHUMS) Lease of premises (▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇) ON-22\46-35NI May 15, 2001
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom (GCHUMS) Provision of maintenance services of
Quadralink equipment ON-22\35-4YI January 1, 2002
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom (GCHUMS) Lease of digital channels 44O February 5, 2001
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom (MMTS-10) Lease of digital channels 441 January 1, 2000
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom Provision of "last mile" for
international digital channels ZZRTK September 21, 1999
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom Provision of telecommunication
services 450-28/00090 February 12, 2000
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom Provision of technical maintenance
of telecommunication equipment 776-2.8/90889 November 30, 1999
------------------------------------------------------------------------------------------------------------------
OAO Rostelecom Provision of technical maintenance
of telecommunication equipment 937-2.8 01154 November 14, 2000
------------------------------------------------------------------------------------------------------------------
40
OOO TELEROS SFMT-CIS, INC.
By: By:
----------------------------------- -----------------------------------
Name: ▇▇▇▇▇▇▇ Abbeloos Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: General Director Title: President and CEO
By:
-----------------------------------
Name:
Title: Chief Accountant
OAO ROSTELECOM
By:
-----------------------------------
Name: S.I. Kouznetsov
Title: General Director
By:
-----------------------------------
Name:
Title: Chief Accountant
41
EXHIBIT B
GUARANTEE
THIS GUARANTEE (this "GUARANTEE") dated as of [ ], 2002 by Golden Telecom, Inc.,
a corporation duly organized and validly existing under the laws of the State of
Delaware in the United States (the "GUARANTOR"), in favor of OAO ROSTELECOM, a
joint stock company duly organized and existing under the laws of the Russian
Federation (the "Seller").
WHEREAS, Seller, on the one hand, and SFMT-CIS, INC., a corporation duly
organized and validly existing under the laws of the State of Delaware in the
United States ("SFMT") and OOO TELEROSS, a limited liability company duly
registered and validly existing under the laws of the Russian Federation
("TELEROSS"), each an Affiliate of the Guarantor, on the other hand, have
entered into an Ownership Interest Purchase Agreement, dated as of March 13,
2002 (as the same may be amended, modified or supplemented from time to time,
the "Agreement"), providing for the sale by Seller to SFMT and TeleRoss of
Seller's 50% interest in OOO EDN Sovintel, a Russian limited liability company
(the "COMPANY");
WHEREAS, as a portion of the Purchase Price under the Agreement, TeleRoss has
agreed to issue in favor of the Seller the TeleRoss Promissory Note with a face
value equal to the ▇▇▇▇▇ equivalent of US $46,000,000;
WHEREAS, as an inducement to the Seller to enter into the Agreement, the
Guarantor has agreed to issue this Guarantee and the delivery of this Guarantee
to the Escrow Agent is a condition precedent to the Closing of the transactions
envisaged thereby; and
WHEREAS, the Guarantor will derive direct and indirect benefit from the sale by
the Seller to the Guarantor's Affiliates of the Seller's 50% interest in the
Company;
NOW, THEREFORE, in consideration of the foregoing premises and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Guarantor hereby agrees as follows:
1. Definitions
As used in this Guarantee, the terms defined in the preamble and
recitals hereto shall have the respective meanings specified therein. In
addition, capitalized terms defined in this Guarantee used and not otherwise
defined herein shall have the meanings set forth in the Agreement and the
following terms shall have the following meanings:
"Guaranteed Obligation" shall mean the obligation of TeleRoss under the TeleRoss
Promissory Note to pay an amount in Russian Rubles equal to US $46,000,000, at
the
exchange rate established by the CBR on the payment date specified in the
TeleRoss Promissory Note all in accordance with its terms and the terms of the
Agreement.
"Non-Payment Notice" has the meaning set forth in Section 2(b).
2. Guarantee.
(a) Subject to the terms and conditions set forth herein, the Guarantor
hereby unconditionally and irrevocably guarantees to the Seller the payment to
the Seller of the Guaranteed Obligation.
(b) If TeleRoss fails to pay under the TeleRoss Promissory Note when
due, the Seller shall provide a notice of non-payment to the Guarantor stating
that TeleRoss has failed to make payment in full under the TeleRoss Promissory
Note on the date due (the "Non-Payment Notice"), provided however, that any
failure of the Seller to provide such Non-Payment Notice shall not affect the
Guarantor's obligations under this Guarantee.
(c) In the event that any payment by TeleRoss under the TeleRoss
Promissory Note is rescinded or must otherwise be returned for any reason
whatsoever other than as provided for in Section 4(b)(iii), this Guarantee shall
continue to be effective, or shall be reinstated, as the case may be, and the
Guarantor shall remain liable hereunder in respect of such payment as if such
payment had not been made.
(d) Subject to Sections 3 and 4 hereof, if the Guaranteed Obligation
shall not have been discharged by TeleRoss or any other Person in full when due,
then the Guarantor shall pay to the Seller within 15 calendar days following
receipt of the Non-Payment Notice all of the outstanding amounts due from, and
payable by, TeleRoss under the TeleRoss Promissory Note.
(e) The Guarantor agrees to pay all reasonable fees and out-of-pocket
expenses (including reasonable attorneys' fees) incurred by the Seller and
directly relating to the enforcement by the Seller of this Guarantee in the
event of a failure to pay by the Guarantor in accordance with the terms hereof.
3. Guarantee is Limited.
(a) Notwithstanding anything herein to the contrary, under no
circumstances shall the aggregate liability or obligations of the Guarantor
arising under this Guarantee exceed the ▇▇▇▇▇ equivalent of US $ 46,000,000, at
the exchange rate established by the CBR on the date of payment under the
TeleRoss Promissory Note plus any amounts due pursuant to Section 2(e) above.
(b) The aggregate liability of the Guarantor arising under this
Guarantee shall be reduced to the extent of any amounts paid out by the
Guarantor to discharge any
2
Lien created by the Seller with respect to the Interest prior to delivery of the
Non-Payment Notice, provided that (i) such payment has been made by the
Guarantor in good faith after final adjudication or settlement and (ii) promptly
upon the Guarantor becoming aware of any Action initiated by a third party
claiming any Lien over the Interest created by the Seller, the Guarantor shall
provide the Seller with the opportunity to participate in any such Action.
4. Effective Date; Termination.
(a) This Guarantee and the obligations of the Guarantor hereunder shall
become effective on the Escrow Release Date. The Guarantor hereby undertakes to
provide the Seller on the Escrow Release Date with a written confirmation
stating that the Guarantee has become effective, provided however, that any
failure by the Guarantor to provide such written confirmation shall have no
effect on the effectiveness of this Guarantee.
(b) This Guarantee, and the Guarantor's obligations hereunder in
respect of payment of the Guaranteed Obligation or otherwise, shall terminate
(i) upon satisfaction in full of the Guaranteed Obligation hereunder, or (ii) if
this Guarantee is terminated by mutual agreement of the parties to the
Agreement, or (iii) if the Agreement, or any transaction contemplated thereby,
is challenged in an Action as null and void, and as a result thereof, the
Interest is ordered in a final adjudication to be returned by any competent
Governmental Entity and the Interest is returned to the Seller.
5. Guarantee is Absolute and Unconditional.
(a) The Guarantor hereby waives diligence, presentment, protest, demand
for payment and notice of default or nonpayment to or upon TeleRoss or the
Guarantor with respect to obligations of TeleRoss under the TeleRoss Promissory
Note or of the Guarantor under this Guaranty, as applicable.
(b) Subject to Section 4(b) above, this Guarantee shall be construed as
a continuing, absolute and unconditional guarantee of payment without regard to
(i) the validity or enforceability of the Agreement, the TeleRoss Promissory
Note or the Guaranteed Obligation, or right to set off with respect thereto,
(ii) any defense, setoff or counterclaim (other than a defense of payment or
performance) which may at any time be available to or asserted by TeleRoss
against the Seller, or (iii) any other circumstance whatsoever (with or without
notice to or knowledge of TeleRoss or the Guarantor) which constitutes, or might
be construed to constitute, an equitable or legal discharge of TeleRoss for its
obligations under the TeleRoss Promissory Note or of the Guarantor under the
Guarantee, in bankruptcy or in any other instance.
3
6. No Subrogation.
Upon final receipt by the Seller of all amounts due and owing under the
Teleross Promissory Note, the Guarantor shall be entitled to be subrogated to
any of the rights of the Seller.
7. Miscellaneous
Section 7.1 Amendment. This Guarantee may not be modified, amended,
terminated or revoked, in whole or in part, except by an agreement in writing
signed by Seller and the Guarantor.
Section 7.2 Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been
sufficiently given to any party hereto if personally delivered or if sent by
telegram, telecopy or telex, or by registered or certified mail, return receipt
requested, or by recognized courier service, postage or other charges prepaid,
addressed as follows:
(a) If to Seller:
OAO Rostelecom
Russian Federation, 125047,
Moscow, ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Ivanovich
Fax: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
Telephone:
(b) If to the Guarantor:
Golden Telecom, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇, ▇.▇.▇.
Telephone: ▇ (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: ▇ (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as may be specified from time to time by the Guarantor
or the Seller in a notice to the other party given as herein provided. Such
notice or communication will be deemed to have been given as of the date so
personally delivered, telegraphed, telecopied, telexed, mailed or sent by
courier.
Section 7.3 Assignment. This Guarantee is provided solely for the
benefit of the Seller and may not be assigned or otherwise transferred without
the explicit consent of the Guarantor.
4
Section 7.4 Section Headings. The section headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
Section
7.5 Governing Law. This Agreement shall be construed and interpreted in
accordance with and governed by the laws of the State of New York, United States
of America.
Section 7.6 Submission to Jurisdiction. The Guarantor hereby
unconditionally and irrevocably.
(a) submits to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof for the
purpose of any suit, action or other proceeding arising out of this Guarantee;
(b) consents that any such suit, action or proceeding may be brought in
such courts and waives any objection it may now or hereafter have to the venue
of any such suit, action or proceeding in any such court or that such suit,
action or proceeding was brought in an inconvenient forum and agrees not to
assert the same;
(c) agrees that service of process in any such suit, action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail, postage prepaid, to the Guarantor at its address set forth herein; and
(d) agrees that nothing herein shall effect the right to effect service
of process in any other manner permitted by law or shall limit the right to ▇▇▇
in any other jurisdiction.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be executed on
its behalf as of the date first written above.
Golden Telecom, Inc.,
-----------------------------
Name:
Title:
5
EXHIBIT C
Form of Registration Rights Agreement
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into
as of [ ], 2002, by and between Golden Telecom, Inc., a Delaware corporation
(the "Company"), and OAO ROSTELECOM, a Russian open joint stock company
("Investor").
RECITALS
(A) In connection with the transfer by Investor of [25%] ownership of OOO
EDN Sovintel, a limited liability company duly registered and existing
under the Laws of the Russian Federation, to SFMT-CIS, Inc., a
Delaware corporation, the Company desires to grant to Investor certain
registration rights with respect to an aggregate of [3,943,977] shares
of common stock of the Company.
(B) The parties hereto desire to set forth the terms and conditions of the
Company's covenants and agreements in respect of the registration of
such shares with the Securities and Exchange Commission and all
applicable state securities agencies.
(C) In consideration of the premises and the mutual agreements contained
herein, the parties hereby agree as follows:
AGREEMENT
1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
"Advice" has the meaning set forth in the last paragraph of Section 5
hereof.
"Agents" means any Person authorized to act and who acts on behalf of
Investor with respect to the transactions contemplated by this
Agreement.
"Common Stock" means shares of the Company's common stock, par value
$.01 per share, as the same may be constituted from time to time.
"Demand Registration" has the meaning set forth in Section 3(a) hereof.
"Effective Date" means the date on which the shares to be issued to the
Investor under the terms of the Subscription Agreement, are issued to
the Investor.
"Exchange Act" means The Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder as in effect from time to time.
"Person" means an individual, partnership, corporation trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
"Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement and all other
amendments and supplements to the Prospectus, including post-effective
amendments and all material incorporated by reference in such
Prospectus.
"Registrable Securities" means (i) the [3,943,977] shares of Common
Stock to be issued to the Investor under the terms of the Subscription
Agreement and (ii) any securities issued or issuable with respect to
such shares of Common Stock by way of a stock dividend or stock split or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization, until such shares of Common Stock
or other securities are not Restricted Securities as defined in Section
2, provided, however, that Registrable Securities shall not include any
such securities as may be transferred pursuant to an exemption from the
registration requirements of the Securities Act provided by Rule 144
under the Securities Act.
"Registration Expenses" has the meaning set forth in Section 6 hereof.
"Registration Statement" means any registration statement of the Company
which covers Registrable Securities pursuant to the provisions of this
Agreement, including (i) the Prospectus, (ii) amendments and supplements
to such Registration Statement, (iii) post-effective amendments, (iv)
all exhibits and all material incorporated by reference in such
Registration Statement and (v) any registration statement pursuant to a
Demand Registration.
"Restricted Securities" means the Registrable Securities upon original
issuance thereof, subject to the provisions of Section 2 hereof.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"SEC" means the Securities and Exchange Commission.
"Subscription Agreement" means the agreement to purchase [3,943,977]
shares of Common Stock of the Company entered into by the Investor and
the Company and dated [ ], 2002.
"Underwritten Offering" means the offering and sale of securities of the
Company covered by any Registration Statement pursuant to a firm
commitment underwriting to an underwriter at a fixed price for
reoffering or pursuant to agency or best efforts arrangements with an
underwriter.
2
Unless the context otherwise requires: (i) "or" is not exclusive; and
(ii) words in the singular include the plural and in the plural include
the singular.
2. SECURITIES SUBJECT TO THIS AGREEMENT
Registrable Securities. The securities entitled to the benefits of this
Agreement are the Registrable Securities but, with respect to any
particular Registrable Security, only so long as such security
continues to be a Restricted Security. A Registrable Security ceases to
be a Restricted Security when (i) it has been effectively registered
under the Securities Act and disposed of in accordance with the
Registration Statement covering it, (ii) it has been distributed
pursuant to Rules 144 or 144A under the Securities Act (or any similar
provision then in force), (iii) it has otherwise been transferred and a
new certificate or other evidence of ownership for it not bearing a
legend restricting transfer under the Securities Act and not subject to
any stop transfer order has been delivered by or on behalf of the
Company and no other restriction on transfer exists or (iv) such
security may be transferred pursuant to any other exemption from the
registration requirements of the Securities Act provided under the
Securities Act.
3. DEMAND REGISTRATION
(a) Requests for Registration. At any time six months after the
Effective Date (the "Six-Month Lock-Up"), Investor may make a
written request for registration with the SEC under and in
accordance with the provisions of the Securities Act of all or
part of its Registrable Securities (a "Demand Registration").
A request made pursuant to this Section 3(a) shall specify the
number of Registrable Securities to be registered and the
intended methods of disposition thereof. All such requests
shall be delivered to the Company in accordance with the
provisions of Section 9(d) of this Agreement.
(b) Number of, and Limitations on, Registrations. Investor will be
entitled to request 2 (two) Demand Registrations. The Company
will not be obligated to register any Registrable Securities
pursuant to such a Demand Registration unless there is
requested to be included in such registration at least
1,000,000 shares of Common Stock (subject to such adjustments
as may be necessary by reason of the occurrence of an event
contemplated by clause (ii) of the definition of Registrable
Securities) (unless, at the time of such request, Investor
holds less than 1,000,000 shares of Common Stock, in which
case such request must be for such entire lesser amount).
(c) Expenses. In any registration initiated as a Demand
Registration, the Company will pay all Registration Expenses,
whether or not the Registration Statement has become
effective.
3
(d) Selection of Underwriters. If any of the Registrable
Securities covered by a Demand Registration are to be sold in
an underwritten offering, or in a best efforts underwritten
offering, the investment banker or investment bankers and
manager or managers that will administer the offering will be
selected jointly by the Investor and the Company. If Investor
disapproves of the terms and conditions of the underwriting,
Investor may elect to withdraw all its Registrable Securities
by written notice to the Company and the managing underwriter,
but for the avoidance of doubt such demand for registration
and subsequent withdrawal shall count as one of the Investor's
Demand Registrations provided for under Section 3(b).
4. INCIDENTAL REGISTRATION
(a) Request for Registration. After the Six-Month Lock-Up, if the
Company at any time proposes to register any of its authorized
but unissued shares of Common Stock on its own behalf for the
purposes of raising capital (other than on Form S-4 or Form
S-8 or any successor or similar form to Form S-4 or Form S-8),
or any of its unregistered and issued shares of Common Stock
on behalf of other stockholders, under the Securities Act on a
form and in a manner that would permit registration of
Registrable Securities under the Securities Act for sale to
the public, it shall each such time give prompt notice in
accordance with the provisions of Section 9(d) of this
Agreement to Investor of its intention to do so, specifying
the form and manner and the other relevant facts involved in
such proposed registration (including, without limitation, the
identity of the managing underwriter, if any). Upon the
written request of Investor delivered to the Company within 30
days after such notice shall have been given to Investor
(which request shall specify the Registrable Securities
intended to be disposed of by such holder and the intended
method of disposition thereof), the Company will use its
reasonable best efforts to effect the registration under the
Securities Act, as expeditiously as is reasonable, of all the
Registrable Securities that the Company has been so requested
to register by Investor, to the extent requisite to permit the
sale of the Registrable Securities to be so registered;
provided, however, that:
(i) if, at any time after giving such written notice of
its intention to register any Common Stock proposed
to be registered by the Company and prior to the
effective date of the registration statement filed in
connection with such registration, the Company shall
determine for any reason not to register such Common
Stock, the Company shall, at its election, give
written notice of such determination to Investor, and
thereupon the Company shall be relieved of its
obligation to register any Registrable Securities in
connection with such registration (but not from its
obligation to pay the Registration Expenses in
connection therewith to the extent provided in
Section 4(b));
4
(ii) if the managing underwriter of such offering shall
advise the Company that, in its judgment, the number
of shares of Common Stock proposed to be included in
such offering should be limited because the inclusion
of Registrable Securities is likely to adversely
impact the purchase price obtained for the Common
Stock proposed to be included in such offering, then
the Company shall promptly advise Investor thereof
and may require, by written notice to Investor
accompanying such advice, that, to the extent
necessary to meet such limitation, all holders of
Registrable Securities and of other shares of Common
Stock proposing to sell Common Stock in such offering
shall share pro-rata in the number of Common Stock to
be excluded from such offering, such sharing to be
based on the respective numbers of Registrable
Securities and other shares of Common Stock as to
which registration has been requested by such
holders, and that the distribution of such
Registrable Securities and other shares of Common
Stock as are so excluded be deferred (in case of a
deferral as to a portion of such Registrable
Securities and other shares of Common Stock, such
portion to be allocated among such holders in
proportion to the respective numbers of Common Stock
so requested to be registered by such holders) until
the completion of the distribution of such Common
Stock and any other securities by such underwriters;
and
(b) Expenses. In any registration initiated pursuant to this
Section 4, the Company will pay all Registration Expenses,
whether or not the Registration Statement has become
effective.
5. REGISTRATION PROCEDURES
Whenever Investor has requested that any Registrable Securities be
registered pursuant to this Agreement, the Company shall promptly take
all such actions as may be necessary or desirable to permit the sale
of such Registrable Securities in accordance with the intended method
or methods of disposition thereof, and pursuant thereto the Company
shall as expeditiously as possible:
(a) with respect to a request to file a Registration Statement
covering Registrable Securities made pursuant to Section 3,
use its reasonable best efforts to prepare and file with the
SEC not later than 60 days after receipt of such request
(which 60-day period may be extended by the Company for up to
an additional 60 days if at the time of such request the
Company is engaged in negotiations in anticipation of its
participation in a material merger, acquisition or other form
of business combination or, if by reason of such transaction,
the Company is not in a position to timely prepare and file
the Registration Statement and the Company furnishes to
Investor a certificate signed by the president or a vice
president of the Company stating that in the good faith
opinion of the board of directors of the
5
Company such registration would interfere with such
transaction then being pursued by the Company) a Registration
Statement on a form for which the Company then qualifies which
is satisfactory to the Company and Investor (unless the
offering is made on an underwritten basis, including on a best
efforts underwriting basis, in which event the managing
underwriter or underwriters may determine the form to be used)
and which form shall be available for the sale of the
Registrable Securities in accordance with the intended method
or methods of distribution thereof, and use its reasonable
best efforts to cause such Registration Statement to become
effective; the Company shall not file any Registration
Statement pursuant to Section 3 or any amendment thereto or
any Prospectus or any supplement thereto (including such
documents incorporated by reference) to which Investor or the
underwriters, if any, shall reasonably object in light of the
requirements of the Securities Act or any other applicable
laws or regulations;
(b) before filing a Registration Statement or Prospectus or any
amendments or supplements thereto (excluding documents to be
incorporated by reference therein, except in the case of the
preparation of the initial Registration Statement), the
Company shall, at least five days before filing, furnish to
Investor and the underwriters, if any, copies of all such
documents in substantially the form proposed to be filed
(including documents incorporated therein by reference), to
enable Investor and the underwriters, if any, to review such
documents prior to the filing thereof, and the Company shall
make such reasonable changes thereto (including changes to, or
the filing of amendments reflecting such changes to, documents
incorporated by reference) as may be reasonably requested by
Investor and the managing underwriter or underwriters, if any;
(c) subject to paragraph (b) above, prepare and file with the SEC
such amendments and post-effective amendments to the
Registration Statement as may be necessary to keep the
Registration Statement continuously effective for a period of
not less than 150 days, or such shorter period which will
terminate when all Registrable Securities covered by such
Registration Statement have been sold or withdrawn or such
Registrable Securities cease to be Restricted Securities;
cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the Securities Act; and comply with
the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the
intended methods of disposition by Investor thereof set forth
in such Registration Statement or supplement to the
Prospectus;
(d) notify Investor and the managing underwriters, if any,
promptly, and (if requested by any such Person) confirm such
advice in writing, (1) when the Prospectus or any Prospectus
supplement or post-effective amendment has
6
been filed, and, with respect to the Registration Statement or
any post-effective amendment, when the same has become
effective, (2) of any request by the SEC for amendments or
supplements to the Registration Statement or the Prospectus or
for additional information, (3) of the issuance by the SEC of
any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings
for that purpose, (4) if at any time the representations and
warranties of the Company contemplated by paragraph (o) below
cease to be true and correct, (5) of the receipt by the
Company of any notification with respect to the suspension of
the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any
proceeding for such purpose, and (6) of the happening of any
event which makes any statement made in the Registration
Statement, the Prospectus or any document incorporated therein
by reference untrue or which requires the making of any
changes in the Registration Statement, the Prospectus or any
document incorporated therein by reference in order to make
the statements therein not misleading;
(e) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the Registration
Statement at the earliest possible moment;
(f) as promptly as practicable after filing with the SEC of any
document which is incorporated by reference into the
Registration Statement or the Prospectus (after initial filing
of the Registration Statement) provide copies of such document
to counsel to Investor and to the managing underwriters;
(g) provide to Investor and each managing underwriter, without
charge, at least one signed copy of the Registration Statement
and any post-effective amendment thereto, including financial
statements and schedules, all documents incorporated therein
by reference and all exhibits (including those incorporated by
reference) and a reasonable number of conformed copies of all
such documents;
(h) deliver to Investor and the underwriters, if any, as many
copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as such
Persons may reasonably request; the Company consents to the
use of the Prospectus or any amendment or supplement thereto
by Investor and the underwriters, if any, in connection with
the offering and sale of the Registrable Securities covered by
the Prospectus or any amendment or supplement thereto;
(i) prior to the date on which the Registration Statement is
declared effective, use its reasonable best efforts to
register or qualify, or cooperate with Investor and the
underwriters, if any, and their respective counsel in
connection with the registration or qualification of, such
Registrable Securities for offer and sale under the securities
or blue sky laws of such
7
jurisdictions as any seller or underwriter reasonably requests
in writing and do any and all other acts or things necessary
or advisable to enable the disposition in such jurisdictions
of the Registrable Securities covered by the Registration
Statement; provided that the Company will not be required to
qualify generally to do business in any jurisdiction where it
is not then so qualified or to take any action which would
subject it to general service of process or taxes in any such
jurisdiction where it is not then so subject; provided,
further, that the Company will not be required to qualify such
Registrable Securities in any jurisdiction in which the
securities regulatory authority requires that Investor submit
any shares of its Registrable Securities to the terms,
provisions and restrictions of any escrow, lock-up or similar
agreement(s) for consent to sell Registrable Securities in
such jurisdiction unless Investor agrees to do so;
(j) cooperate with Investor and the managing underwriters, if any,
to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold
and not bearing any restrictive legends; and enable such
Registrable Securities to be in such denominations and
registered in such names as the managing underwriters may
request at least two business days prior to any sale of
Registrable Securities to the underwriters;
(k) use its reasonable best efforts to cause the Registrable
Securities covered by the Registration Statement to be
registered with or approved by such other governmental
agencies or authorities within the United States as may be
necessary to enable the seller or sellers thereof or the
underwriters, if any, to consummate the disposition of such
Registrable Securities;
(l) upon the occurrence of any event contemplated by paragraph
(d)(6) above, prepare a supplement or post-effective Amendment
to the Registration Statement or the Prospectus or any
document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the
purchasers of the Registrable Securities, the Prospectus will
not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements
therein not misleading;
(m) use its reasonable best efforts to cause all Registrable
Securities covered by the Registration Statement to be listed
on each securities exchange or the Nasdaq National Market on
which similar securities issued by the Company are then listed
if requested by Investor or the managing underwriters, if any;
(n) provide a transfer agent and registrar for all Registrable
Securities;
(o) enter into such agreements (including an underwriting
agreement) and take all such other actions in connection
therewith as Investor or the managing underwriters, if any,
reasonably request in order to expedite or facilitate the
8
disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is
entered into and whether or not the registration is an
underwritten registration (1) make such representations and
warranties to Investor and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to
underwriters in primary underwritten offerings (including,
without limitation, an agreement to not sell equity securities
during a customary lock-up period) and confirm the accuracy of
the same if and when requested, and matters relating to the
compliance of the Registration Statement and the Prospectus
with the Securities Act; (2) obtain opinions of counsel to the
Company, and updates thereof (which counsel and opinions (in
form, scope and substance) shall be reasonably satisfactory to
the managing underwriters) addressed to Investor and the
underwriters, if any, covering the matters customary in
underwritten primary offerings and such other matters as may
be reasonably requested by Investor and underwriters, if any;
(3) obtain "comfort" letters and updates thereof from the
Company's independent certified public accountants addressed
to Investor and the underwriters, if any, such letters to be
in customary form and covering matters of the type customarily
covered in "comfort" letters by underwriters in connection
with primary underwritten offerings; (4) if an underwriting
agreement is entered into, the same shall set forth in full
the indemnification provisions and procedures of Section 7
hereof with respect to all parties to be indemnified pursuant
to said Section; and (5) the Company shall deliver such
documents and certificates as may be requested by Investor and
the managing underwriters, if any, to evidence compliance with
clause (1) above and with any customary conditions contained
in the underwriting agreement or other agreement entered into
by the Company. The above shall be done at each closing under
such underwriting or similar agreement or as and to the extent
required thereunder;
(p) make available for inspection during normal business hours by
Investor, any underwriter participating in any disposition
pursuant to such registration statement, and any attorney,
accountant or other agent retained by Investor or any such
underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all
information reasonably requested by Investor or any such
underwriter, attorney, accountant or agent in connection with
such registration statement; provided that any records,
information or documents that are designated by the Company in
writing as confidential shall be kept confidential by such
Persons;
(q) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC, and make
generally available to its security holders, earnings
statements satisfying the provisions of Section 11(a) of the
Securities Act, no later than 45 days after the end of any
12-month
9
period (1) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a
firm or best efforts underwriting offering, and (2) beginning
with the first month of the Company's first fiscal quarter
commencing after the effective date of the Registration
Statement, which statements shall cover said 12-month periods;
and
(r) take such other reasonable steps that are necessary or
advisable to permit the sale of such Registrable Securities.
The Company may require Investor to furnish to the Company such
information and documents regarding Investor and the distribution of the
Registrable Securities as the Company may from time to time reasonably
request in writing.
Investor agrees by acquisition of such Registrable Securities that, upon
receipt of any notice from the Company of the happening of any event of
the kind described in Section 5(d)(6) hereof, Investor will forthwith
discontinue disposition of Registrable Securities until Investor's
receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(l) hereof, or until it is advised in writing
(the "Advice") by the Company that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental
filings which are incorporated by reference in the Prospectus, and, if
so directed by the Company, Investor will, or will request the
underwriters to, deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in Investor's possession,
of the Prospectus covering such Registrable Securities current at the
time of receipt of such notice. If the Company shall give such notice,
the time periods mentioned in Section 5(c) hereof shall be extended by
the number of days during the period from and including the date of the
giving of such notice pursuant to Section 5(d)(6) to and including the
date when Investor shall have received the copies of the supplemented or
amended prospectus contemplated by Section 5(l) hereof or the Advice.
6. EXPENSES
Except as otherwise provided herein, all expenses incident to the
Company's performance of or compliance with this Agreement including
without limitation all registration and filing fees, including with
respect to filings required to be made with the National Association of
Securities Dealers, fees and expenses of compliance with securities or
blue sky laws (including reasonable fees and disbursements of counsel
for the underwriters in connection with blue sky qualifications of the
Registrable Securities and determination of their eligibility for
investment under the laws of such jurisdictions as the managing
underwriters or holders of a majority of the Registrable Securities
being sold may designate), printing expenses, messenger, telephone and
delivery expenses, and fees and disbursements of counsel for the
Company, and of all independent certified public accountants (including
the expenses of any special audit and "comfort" letters required by or
incident to such performance), the fees and expenses incurred in
10
connection with the listing of the securities to be registered on each
securities exchange on which similar securities issued by the Company
are then listed, rating agency fees, securities acts liability insurance
if Investor so requires, the reasonable fees and expenses of any special
experts retained by Investor or by the Company at the request of the
managing underwriters in connection with such registration and fees and
expenses of other Persons retained by Investor (all such expenses being
herein called "Registration Expenses") will be borne by the Company. The
Company shall, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties) and the expense of any
annual audit which are not "Registration Expenses" for purposes of this
Agreement. In no event shall the Company be liable for the payment of
any discounts, commissions or fees of underwriters, selling brokers,
dealer managers or similar industry professionals relating to the
distribution of the Registrable Securities. Investor shall be liable for
the cost and expense of the time spent by its officers, employees and
Agents, including Investor's counsel, incurred in connection with the
registration of Registrable Securities owned by it.
7. INDEMNIFICATION
(a) Indemnification by Company. The Company will indemnify and hold
harmless, to the full extent permitted by law, Investor, its officers
and directors, their Agents and each Person who controls Investor
(within the meaning of the Securities Act) against all losses, claims,
damages, liabilities (or actions in respect thereto) and expenses to
which any such Person may be subject, under the Securities Act or
otherwise, and reimburse all such Persons for any legal or other
expenses incurred with investigating or defending against any such
losses, claims, damages or liabilities, insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue or
alleged untrue statement of a material fact contained in a Registration
Statement, Prospectus or preliminary prospectus or any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
except insofar as the same arise out of or are based upon an untrue
statement of a material fact or omission of a material fact required to
be stated therein or necessary to make the statements therein not
misleading, which statement or omission is made therein in reliance upon
and in conformity with information furnished in writing to the Company
by Investor, expressly for use therein. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on
behalf of Investor, Investor's directors and officers, their Agents or a
controlling Person, and shall survive the transfer of such securities by
Investor. The Company will also indemnify underwriters, selling brokers,
dealer managers and similar securities industry professionals
participating in the distribution, their officers and directors and each
Person who controls such Persons (with the meaning of the Securities
Act) to the same extent as provided above with respect to the
indemnification of Investor of Registrable Securities.
11
(b) Indemnification by Investor. Investor will indemnify and hold harmless,
to the full extent permitted by law, the Company, its directors and
officers and each Person who controls the Company (within the meaning of
the Securities Act) against any losses, claims, damages, liabilities (or
actions in respect thereto) and expenses to which any such Person may be
subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities arise out of or are based upon any untrue
or alleged untrue statement of a material fact contained in a
Registration Statement or Prospectus or preliminary prospectus or any
omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, to
the extent, but only if and to the extent, that such untrue or alleged
untrue statement or omission or alleged omission is made therein in
reliance upon and in conformity with the information furnished in
writing by Investor specifically for inclusion therein. In no event
shall the liability of Investor hereunder be greater in amount than the
dollar amount of the proceeds received by Investor upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
The Company shall be entitled to receive indemnities from underwriters,
selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, to the same extent as
provided above with respect to information so furnished in writing by
such Persons.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder will (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks
indemnification and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest may exist between such indemnified and
indemnifying parties with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party and in that case the
indemnified party shall have the right to participate in the conduct of
such defense provided that it will pay for the fees of its own counsel.
Whether or not such defense is assumed by the indemnifying party, the
indemnifying party will not be subject to any liability for any
settlement made without its consent (but such consent will not be
unreasonably withheld). No indemnifying party will consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving of the claimant or plaintiff to
such indemnified party of a release from all liability in respect to
such claim or litigation. An indemnifying party who is not entitled to,
or elects not to, assume the defense of a claim will not be obligated to
pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of
such additional counsel or counsels. The failure to notify an
indemnifying party promptly of the commencement of any such action, if
and to the extent prejudicial to its ability to defend such action,
shall relieve such indemnifying party of any liability to the
indemnified party under this Section, but the omission so to notify
12
the indemnifying party will not relieve it of any liability that it may
have to any indemnified party otherwise than under this Section.
(d) Contribution. To the extent any indemnification by an indemnifying party
is prohibited or limited by law, the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect
the relative fault of the indemnifying party and indemnified party in
connection with the actions which resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged
untrue statement of material fact or omission or alleged omission to
state a material fact, has been made, or relates to information supplied
by, such indemnifying party or indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as
a result of the losses, claims, damages or liabilities referred to above
shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation
or proceeding. In no event the amount of contribution payable by the
Investor hereunder shall exceed the dollar amount of the proceeds
received by the Investor upon the sale of the Registrable Securities
giving rise to such contribution obligation.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
8. TRANSFER OF REGISTRATION RIGHTS
The registration rights of Investor under this Agreement with respect to
any Registrable Securities may be transferred to any transferee of such
Registrable Securities, including any affiliate of Investor; provided,
however, that (i) Investor shall give the Company written notice at or
prior to the time of such transfer stating the name and address of the
transferee and identifying the securities with respect to which the
rights under this Agreement are being transferred, (ii) such transferee
shall agree in writing, in form and substance reasonably satisfactory to
the Company, to be bound by the provisions of this Agreement and (iii)
the terms of such transfer make clear how the Investor and the
transferee shall utilize the two Demand Registrations provided to the
Investor hereunder.
13
9. MISCELLANEOUS
(a) Remedies. Investor shall be entitled to exercise all rights
provided herein or granted by law, including recovery of
damages, and each will be entitled to specific performance of
their rights under this Agreement. The Company agrees that
monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of
this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be
adequate.
(b) No Inconsistent Agreements. The Company will not on or after
the date of this Agreement enter into any agreement with
respect to its securities which is inconsistent with the
rights granted to Investor in this Agreement or otherwise
conflicts with the provisions hereof.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given unless
the Company has obtained the written consent of Investor.
(d) Notices. All notices, requests, demands and other
communications provided for by this Agreement shall be in
writing (including telecopier or similar writing) and shall be
deemed to have been given at the time when mailed in any
general or branch office of the postal service, enclosed in a
registered or certified postpaid envelope, or sent by Federal
Express or other similar overnight courier service, addressed
to the address of the parties stated below or to such changed
address as such party may have fixed by notice or, if given by
telecopier, when such telecopy is transmitted and the
appropriate answerback is received.
(i) If to Investor:
OAO Rostelecom
Russian Federation, 125047,
Moscow, ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, ▇▇
Telephone:
Facsimile: 7-095-787-2850
(ii) If to the Company:
Golden Telecom, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇, ▇.▇.▇.
14
Telephone: ▇ (▇▇▇) ▇▇▇ ▇▇▇▇
Facsimile: ▇ (▇▇▇) ▇▇▇ ▇▇▇▇
(e) Assignment. Neither party shall assign or transfer any of its
rights under this Agreement without the prior written consent
of the other party, except for a transfer in accordance with
section 8. If any transferee of a holder of Registrable
Securities shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such
Registrable Securities such transferee shall be conclusively
deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement and such transferee
shall be entitled to receive the benefits hereof.
(f) Governing Law. This Agreement shall be governed by the laws of
the State of New York. Each of the parties hereby consents to
the non-exclusive jurisdiction of the courts of the State of
New York, and to service of process by regular mail.
(g) Entire Agreement. This Agreement, together with any other
agreements between the parties, constitutes the entire
understanding between the parties and supersedes all
proposals, commitments, writings, negotiations and
understandings, oral and written, and all other communications
between the parties relating to the subject matter of this
Agreement.
(h) Counterparts and Effectiveness. This Agreement may be executed
in several counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same document, and shall become effective on the Effective
Date and shall have no force and effect prior thereto. This
Agreement is executed in Russian and in English, with 1 (one)
copy in each language for each party hereto. In the event of
any discrepancies between the English and Russian versions,
the English shall prevail.
(i) Severability. Should any part, term or condition hereof be
declared illegal or unenforceable or in conflict with any
other law, the validity of the remaining portions or
provisions of this Agreement shall not be affected thereby,
and the illegal or unenforceable portions of this Agreement
shall be and hereby are redrafted to conform with applicable
law, while leaving the remaining portions of this Agreement
intact.
(j) Force Majeure. No party shall be deemed to have breached this
Agreement or be held liable for any failure or delay in the
performance of all or any portion of its obligations under
this Agreement if prevented from doing so by a cause or causes
beyond its control. Without limiting the generality of the
foregoing, such causes include acts of God or the public
enemy, fires,
15
floods, storms, earthquakes, riots, strikes, lock-outs, wars
and war-operations, restraints of government power or
communication line failure or other circumstances beyond such
party's control, or by reason of the judgment, ruling or order
of any court or agency of competent jurisdiction or change of
law or regulation subsequent to the execution of this
Agreement.
(k) Successors and Assigns. Subject to the provisions of Section
9(e), this Agreement is solely for the benefit of the parties
and their respective successors and assigns. Nothing herein
shall be construed to provide any rights to any other entity
or individual.
(l) Headings. Section headings are for convenience only and do not
control or affect the meaning or interpretation of any terms
or provisions of this Agreement.
(m) Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any
provision hereof or thereof is validly asserted as a defense,
the successful party shall be entitled to recover reasonable
attorneys fees in addition to any other available remedy.
[Signature Page Follows]
16
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
OAO ROSTELECOM
By:
---------------------------
Name:
Title:
By:
---------------------------
Name:
Title:
GOLDEN TELECOM, INC.
By:
---------------------------
Name:
Title:
17
EXHIBIT D
DATED [ ], 2002
GOLDEN TELECOM, INC.
AND
OAO ROSTELECOM
FOR
[THREE MILLION NINE HUNDRED FORTY THREE THOUSAND NINE HUNDRED SEVENTY
SEVEN SHARES OF
COMMON STOCK, PAR VALUE $.01 EACH]
---------------------------------
SUBSCRIPTION AGREEMENT
---------------------------------
THIS SUBSCRIPTION AGREEMENT is made on [ ], 2002
BETWEEN:
(1) Golden Telecom, Inc., a Delaware corporation (the "COMPANY"); and
(2) OAO Rostelecom, a Russian open joint stock company ("INVESTOR").
WHEREAS:
(A) Investor owns a 50% ownership interest (the "Sovintel Interest") in OOO
EDN Sovintel, a limited liability company duly registered and existing
under the laws of the Russian Federation ("Sovintel");
(B) Investor, OOO TeleRoss, a limited liability company duly registered and
existing under the laws of the Russian Federation ("TeleRoss") and
SFMT-CIS, Inc., a Delaware corporation ("SFMT"), have entered into an
Ownership Interest Purchase Agreement dated as of March 13, 2002 (the
"Ownership Interest Purchase Agreement");
(C) In accordance with the terms of the Ownership Interest Purchase
Agreement, on the Closing Date, the Investor will transfer, in the
aggregate, [50%] of the Sovintel Interest to TeleRoss and [50%] of the
Sovintel Interest to SFMT in exchange for the ▇▇▇▇ Consideration, the
TeleRoss Promissory Note, and the Company Shares, as defined herein;
(D) TeleRoss and SFMT are Affiliates (as defined below) of the Company;
(E) As more fully set forth herein, at the Closing, Investor proposes to
acquire, and the Company proposes to issue to Investor, [three million
nine hundred forty three thousand nine hundred seventy seven
(3,943,977)] shares of Common Stock (the "Company Shares") as the Stock
Consideration, being a portion of the Purchase Price for the Sovintel
Interest due by the Buyers in accordance with the terms of the
Ownership Interest Purchase Agreement;
(F) Contemporaneously with the execution of this Subscription Agreement,
the Company and Investor have also executed and delivered the
Registration Rights Agreement and, with certain other shareholders of
the Company, the Standstill Agreement and the New Shareholders'
Agreement; and
(G) In accordance with the terms of the Ownership Interest Purchase
Agreement and the Escrow Agreement, the Company Shares will be held in
escrow upon subscription therefor until the Buyers are duly registered
as the owners of the SFMT Interest and the Teleross Interest,
respectively, in the Charter and Foundation Agreement of Sovintel, all
in accordance with the requirements under Russian law and the terms of
the Ownership Interest Purchase Agreement and the Escrow Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements hereinafter contained, the
Parties agree as follows:
1. INTERPRETATION
In this Agreement (including the Recitals):
"AFFILIATE" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
For purposes of the immediately preceding sentence, the term "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as used with respect 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, by contract or otherwise;
"AGREEMENT" means this Subscription Agreement, as the same may be amended,
modified or supplemented from time to time;
"CLOSING" means the transfer of the Company Shares by the Company to Investor
pursuant to the provisions of Section 3 of this Agreement;
"COMMON STOCK" means common stock of the Company having a par value of US$ 0.01
per share;
"COMPANY" has the meaning given to it in introductory clause (1) of this
Agreement;
"COMPANY SHARES" has the meaning given to it in Recital (E);
"ENCUMBRANCE" means any security interest, pledge, mortgage, lien (including,
without limitation, environmental and tax liens), charge, encumbrance, adverse
claim, preferential arrangement, or restriction of any kind, including, without
limitation, any arrangement, restriction on the use, voting, transfer, receipt
of income or other exercise of any attributes of ownership;
2
"INVESTOR" has the meaning given to it in introductory clause (2) of this
Agreement;
"NEW SHAREHOLDERS' AGREEMENT" means the Shareholders Agreement, dated as of the
date hereof, by and among the Company, certain shareholders of the Company and
Investor setting forth certain agreements of the parties thereto relating to the
Company Shares;
"OWNERSHIP INTEREST PURCHASE AGREEMENT" has the meaning given to it in
Recital (B);
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement, dated
as of the date hereof, by and between the Company and Investor relating to the
grant by the Company to Investor of certain registration rights in respect of
the Company Shares;
"REPORTS" has the meaning given to it in Section 6(2).
"SECURITIES ACT OF 1933" means the United States Securities Act of 1933 as
amended, and the rules and regulations thereunder as in effect from time to
time;
"SECURITIES EXCHANGE ACT OF 1934" means the United States Securities Exchange
Act of 1934 as amended, and the rules and regulations thereunder as in effect
from time to time;
"SOVINTEL INTEREST" has the meaning given to it in Recital (A); and
"STANDSTILL AGREEMENT" means the Standstill Agreement, dated as of the date
hereof, by and among the Company, certain shareholders of the Company and
Investor setting forth certain agreements of the parties thereto relating to the
Company Shares.
Terms not otherwise defined herein shall have the meanings set forth in the
Ownership Interest Purchase Agreement.
The headings in this Agreement do not affect its interpretation.
2. SUBSCRIPTION
(1) Subject to the terms and conditions of this Agreement, at the Closing,
the Company, in reliance on the covenants, representations and
warranties of Investor contained herein, shall issue the Company Shares
to the Investor at the Closing, and the Investor, in reliance on the
covenants, representations and warranties of the Company contained
herein, shall acquire the Company Shares from the Company at the
Closing. The Company Shares shall be issued to the Investor by the
Company in partial
3
consideration for the sale by the Investor of the Sovintel Interest to
Teleross and SFMT pursuant to the Ownership Interest Purchase
Agreement.
(2) For the purposes of this Agreement, the value of each of the Company
Shares shall be deemed equal to US$ 10.50 and the aggregate value of
the Company Shares shall be deemed equal to [US$ 41,411,758.50].
3. CLOSING
(1) At the Closing, which shall take place simultaneously with the closing
of the Interest Transfer Transaction under the Ownership Interest
Purchase Agreement, provided that the conditions precedent set forth in
Section 4 have been satisfied in full, the Company shall transfer the
Stock Certificate representing the Company Shares to the Escrow Agent
in definitive form and in such name(s) and in such denomination(s) as
Investor shall request in writing not later than five full Business
Days prior to the Closing.
4. CONDITIONS PRECEDENT TO CLOSING
(1) The Investor shall have delivered to SFMT and the Company a notarized
copy of the CBR License to acquire the Company Shares.
(2) Any waiting period applicable to the transfer of the Company Shares
under the HSR Act, as amended, and the rules and regulations
promulgated thereunder, shall have expired.
(3) Subject to the terms and conditions of the Ownership Interest Purchase
Agreement, the Buyers shall have delivered the Notice on Conditions
Precedent to the Investor (with a copy to the Company).
(4) The Buyers shall have received all other closing deliveries from the
Investor as specified in Section 3.2 of the Ownership Interest Purchase
Agreement.
5. REPRESENTATIONS AND WARRANTIES
(1) The Company represents, warrants and undertakes to Investor as follows:
(a) that the Recitals relating to the Company are in every material
respect true and accurate and not misleading;
(b) that the Company has been duly incorporated and is validly
existing as a
4
corporation in good standing under the laws of the State of
Delaware with full power and authority to own, lease and operate
its properties and assets and conduct its business;
(c) that the execution, delivery and performance of this Agreement,
the Registration Rights Agreement, the Standstill Agreement and
the New Shareholders' Agreement by the Company have been duly
authorized by the Company, and this Agreement, the Standstill
Agreement and the New Shareholders' Agreement and the Registration
Rights Agreement constitute legal, valid and binding obligations
of the Company;
(d) that the issuance of the Company Shares has been duly authorized
by the Company;
(e) that the Company Shares will, on issue and receipt of payment
therefor in accordance with the terms of this Agreement, be
validly issued in accordance with the law and regulations of the
State of Delaware, fully paid and non-assessable and free from all
Encumbrances and other third party rights other than those
Encumbrances and rights created under the Standstill Agreement,
the Registration Rights Agreement and the New Shareholders'
Agreement and any other Encumbrances or rights created or caused
by the Investor;
(f) the financial statements and Reports of the Company received by
the Investor as indicated in Section 6(2) hereof were prepared in
accordance with U.S. GAAP and fairly present in all material
respects the financial condition and results of operations of the
Company as of the respective dates thereof and for the respective
periods covered thereby, and such Reports accurately disclose all
material facts relating to the business and condition of the
Company;
(g) except as reflected or reserved against in the balance sheet
included in the latest available audited financial statements or
in the notes thereto, there are no liabilities against, relating
to or affecting the Company or any of the Company's assets and
properties, or any other Encumbrances in respect of such assets
and properties, other than liabilities or Encumbrances incurred or
arising in the ordinary course of business consistent with past
practice which in the aggregate are not material to the business
or condition of the Company;
5
(h) there are no actions or proceedings material to the business or
condition of the Company pending or threatened against, relating
to or affecting the Company or any of its assets and properties
which (i) could reasonably be expected to result in the issuance
of an order restraining, enjoining or otherwise prohibiting or
making illegal the consummation of any of the transactions
contemplated by this Agreement or the Ownership Interest Purchase
Agreement or otherwise result in a material diminution of the
benefits contemplated hereby or thereby, or (ii) if determined
adversely to the Company, could reasonably be expected to result
in (x) any injunction or other equitable relief against the
Company that would interfere in any material respect with its
business or operations or (y) losses by the Company, individually
or in the aggregate with losses in respect of other such actions
or proceedings, exceeding US$ 1,000,000 or its equivalent in any
other currency; and
(i) there are no facts or circumstances known to the Company that
could reasonably be expected to give rise to any action or
proceeding that would be required to be disclosed pursuant to
paragraph (h) above.
(2) Investor represents, warrants and undertakes to the Company as follows:
(a) that the Recitals relating to Investor and the representations and
warranties relating to the Investor in the Ownership Interest
Purchase Agreement are in every material respect true and accurate
and not misleading;
(b) that Investor has been duly organized and is validly existing and
in good standing under the laws of the Russian Federation with
full power and authority to subscribe for and purchase the Company
Shares as contemplated by this Agreement;
(c) that the execution, delivery and performance of this Agreement,
the Standstill Agreement, the New Shareholders' Agreement and the
Registration Rights Agreement by Investor have been duly
authorized by Investor, and this Agreement, the Standstill
Agreement, the New Shareholders' Agreement and the Registration
Rights Agreement constitute legal, valid and binding obligations
of Investor; and
(d) that the Investor is aware that it is acquiring the Company Shares
in a transaction exempt from the registration requirements of the
Securities Act of 1933 and is acquiring the Company Shares for its
own account and without a
6
view to the public distribution of the Company Shares or any
interest therein, and will only resell the Company Shares if they
are registered under the Securities Act of 1933 or pursuant to an
exemption from registration.
6. ACKNOWLEDGMENTS
The Investor acknowledges and agrees with the Company that:
(1) the Company Shares subscribed for hereunder have not been
registered under the Securities Act of 1933 or any other
applicable securities law and may not, and will not, be offered,
sold or otherwise transferred except pursuant to the registration
requirements of the Securities Act of 1933 or any other applicable
securities law, or pursuant to any other exemption therefrom, and
in each case in compliance with the conditions for transfer set
forth in Section 7 below. Hedging transactions involving the
Company Shares subscribed for hereunder may not, and will not, be
conducted unless such transactions are conducted in compliance
with the Securities Act of 1933.
(2) the Company or any person representing the Company has not made
any representation to it with respect to the Company or the
offering or sale of any Company Shares other than the
representations made in this Agreement and the Ownership Interest
Purchase Agreement. The Investor has received from the Company and
reviewed the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2000 ("Annual Report") and the Company's
Quarterly Report on Form 10-Q for the quarterly periods ended
March 31, 2001, June 30, 2001 and September 30, 2001, all filed
with the United States Securities and Exchange Commission pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934 and
a copy of a draft of the Company's earnings release for the year
ended December 31, 2001 (collectively, the "Reports"). The
Investor further acknowledges it has had access to such financial
and other information concerning the Company and the Company
Shares as it has deemed necessary in connection with its decision
to purchase any of the Company Shares, including an opportunity to
ask questions of and request information from the Company. The
Investor is aware that the trading price of the Company Shares is
highly volatile and that significant risks are associated with the
ownership of the Company Shares and with the operations conducted
by the Company, as indicated, in part, in the section of the
Annual Report entitled "Certain Considerations Applicable to Our
Operations."
7
(3) any offer or sale of the Company Shares by the Investor shall be
made in accordance with all applicable securities laws of the
United States, the states of the United States or any other
applicable jurisdiction.
(4) the Company Shares certificate to be issued to the Investor will
contain a legend substantially to the following effect:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
OR OTHER SECURITIES LAWS. NEITHER THESE SECURITIES NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. HEDGING
TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS
SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE SECURITIES ACT.
THESE SECURITIES ARE ALSO SUBJECT TO THE TERMS AND CONDITIONS OF A
SHAREHOLDERS' AGREEMENT AND A STANDSTILL AGREEMENT, EACH DATED
[_______], 2002.
(5) the Company is relying upon the truth and accuracy of the
foregoing acknowledgements, representations, warranties and
agreements and agrees that, if any of the acknowledgements,
representations, warranties and agreements made in connection with
the Investor's acquisition of Company Shares are no longer
accurate, it shall promptly notify the Company.
7. UNDERTAKINGS
For a period of six (6) months after the date on which the Closing
occurs, Investor will not offer, contract to sell, pledge or otherwise
dispose of, directly or indirectly, any of the Company Shares or
securities convertible into or exchangeable or exercisable for any of
the Company Shares, or publicly disclose the intention to make any such
offer, sale, pledge, disposition or filing, without the prior written
consent of the Company, provided that the Company may transfer the
Company Shares to an Affiliate where such transfer is permitted under
the Securities Act of 1933.
8
8. NOTICES
Any notice or notification in any form to be given under this Agreement
may be delivered in person or sent by telex, facsimile or telephone
(subject in the case of a communication by telephone to confirmation by
telex or facsimile) addressed to:
IN THE CASE OF THE COMPANY:
Golden Telecom, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
WITH A COPY TO:
Representative Office of Golden TeleServices, Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇
Telephone: ▇-▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 7-095-797-9332
Attention: General Counsel
IN THE CASE OF INVESTOR:
OAO Rostelecom
Russian Federation, 125047,
Moscow, ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, ▇▇
Telephone:
Facsimile: 7-095-787-2850
Attention: General Director
Any such notice shall take effect, in the case of delivery, at the time
of delivery and, in the case of telex or facsimile, at the time of
dispatch.
9
9. COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which, taken together, shall constitute one and the same agreement and
any party may enter into this Agreement by executing a counterpart.
This Agreement is executed in Russian and in English, with 1 (one) copy
in each language for each Party hereto. In the event of any
discrepancies between the English and Russian versions, the English
shall prevail.
10. TERMINATION
This Agreement shall automatically terminate without any further notice
and be of no further force and effect if the Escrow Release Date does
not occur, as provided in the Ownership Interest Purchase Agreement or
the Agreement is terminated by the Buyers pursuant to Section 4.2(b) of
the Agreement.
11. GOVERNING LAW
THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, USA.
12. DISPUTE RESOLUTION
Any dispute, controversy or claim arising out of or relating to this
Agreement, or the breach, termination or validity thereof, shall be
referred to and finally resolved by arbitration in accordance with the
Arbitration Rules of the American Arbitration Association as in force
and effect on the date of this Agreement which are deemed to be
incorporated by reference into this article. The appointing authority
shall be the American Arbitration Association. There shall be three (3)
arbitrators appointed in accordance with said Rules. Where the
Arbitration Rules of the American Arbitration Association do not
provide for a particular situation, the arbitrators shall determine
what course of action should be followed. The place of arbitration
shall be New York, New York and the English language shall be used
throughout the arbitral proceeding.
[Signature Page Follows]
10
IN WITNESS WHEREOF this Agreement has been executed on the date first
written above.
GOLDEN TELECOM, INC.
By:
--------------------------------
Name:
Title:
OAO ROSTELECOM
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title: Chief Accountant
11
EXHIBIT E
FORM OF TELEROSS PROMISSORY NOTE
English Translation
OOO "TeleRoss"
PROMISSORY NOTE No. (1) _____
Date of Issuance: "___" _________ 2002
Place of Issuance: city of Moscow
Limited Liability Company "TeleRoss" (tax identification No. [ ]), with
its registered office at, [ ] does hereby unconditionally promise to pay under
this promissory note Forty Six Million US Dollars ("Note Amount"), without
interest on the Note Amount, to open joint stock company "Rostelekom" (tax
identification No. [ ]), with its registered office at [ ] .
The payment of the Note Amount shall be made in Rubles at the exchange
rate established by the Central Bank of the Russian Federation on the date of
payment.
This promissory note shall be payable in 90 days after the date of its
issuance.
The city of Moscow shall be the place of payment.
General Director OOO TeleRoss _____________
[seal]
Chief Accountant III "TeleRoss " ______________
EXHIBIT F
FORM OF TRANSFER NOTICE
[on the letterhead of Seller]
[________], 2002
OOO EDN Sovintel
[ ]
Moscow, Russian Federation
Attn: General Director
Reference is made to the Ownership Interest Purchase Agreement,
dated as of March 13, 2002 (the "Interest Purchase Agreement"), among OAO
ROSTELECOM ("Seller"), an open joint stock company duly registered and validly
existing under the laws of the Russian Federation, SFMT-CIS, INC., a corporation
duly organized and validly existing under the laws of the State of Delaware in
the United States ("SFMT"), and OOO TELEROSS, a limited liability company duly
registered and validly existing under the laws of the Russian Federation
("TeleRoss"), a copy of which is attached hereto for your records.
Capitalized terms used herein, but not otherwise defined, shall
have the meaning ascribed to such terms in the Interest Purchase Agreement.
Pursuant to Article 2 of the Interest Purchase Agreement, the
Seller hereby confirms to OOO EDN Sovintel that the Seller has agreed to sell,
assign and transfer [one-half] of the Interest to TeleRoss and [one-half] of the
Interest to SFMT, subject to the terms and conditions set forth in the Interest
Purchase Agreement and certain other agreements entered into in connection
therewith.
In consequence thereof and in satisfaction of the notification
requirements under the Russian Federation Law "On Limited Liability Companies"
(as in effect on the date hereof), by this notice, the Seller hereby notifies,
declares and confirms that it has sold, assigned and transferred its entire
interest in the charter capital of OOO EDN Sovintel as follows: (i) [one-half]
of its Interest to TeleRoss; and (ii) [one-half] of its Interest to SFMT, such
that as a result of this transfer, TeleRoss shall become the owner of a [25%]
interest in the charter capital of OOO EDN Sovintel and SFMT shall become the
owner of a [25%] interest in the charter capital of OOO EDN Sovintel.
Seller requests that, in accordance with Section 4.2 of the
Interest Purchase Agreement, OOO EDN Sovintel take such actions as are necessary
to eliminate all remaining references to the Seller in the Charter and the
Foundation Agreement as a participant in OOO EDN Sovintel and register the
Amendments with all relevant Governmental Entities.
Please acknowledge your receipt of this letter by signing below.
Please deliver a copy with your original signature to the attention of [ ] of
Seller, SFMT and TeleRoss.
Very truly yours,
OAO "ROSTELECOM"
--------------------------------------
Name:
Title: General Director
--------------------------------------
Name:
Title: Chief Accountant
OOO TeleRoss hereby acknowledges and accepts full title to 25% interest in the
charter capital of OOO EDN Sovintel
--------------------------------------
Name:
Title: General Director
--------------------------------------
Name:
Title: Chief Accountant
SFMT-CIS Inc., hereby acknowledges and accepts full title to 25% interest in the
charter capital of OOO EDN Sovintel
--------------------------------------
Name:
Title: General Director
--------------------------------------
Name:
Title: Chief Accountant
Acknowledged and agreed in full this
____ day of [ ], 2002
OOO EDN SOVINTEL
-------------------------------------
Name:
Title:
EXHIBIT G
FORM OF IRREVOCABLE PROXY
Reference is made to the Ownership Interest Purchase Agreement, dated
as of March 13, 2002 (the "Purchase Agreement"), by and between SFMT-CIS, Inc.,
a Delaware corporation ("SFMT"), OOO Teleross, a Russian limited liability
company, and OAO Rostelecom, a Russian open joint stock company ("Rostelecom").
This proxy is granted pursuant to Section 3.2(a)(vi) of the Purchase Agreement.
Capitalized terms used herein but not otherwise defined shall have the meanings
ascribed to such terms in the Purchase Agreement.
1. In consideration of the transactions contemplated by the Purchase
Agreement, Rostelecom, being the owner and holder of [__________________(_____)]
common voting shares of Golden Telecom, Inc., a Delaware corporation (the
"Company") (together with any other shares of the Company issued in respect
thereof or otherwise acquired by Rostelecom, the "Shares"), does hereby
constitute and appoint [________________], representing SFMT, its true and
lawful attorney, substitute and proxy to vote the Shares at any meeting of
shareholders of the Company (whether annual or special and whether or not an
adjourned meeting), or to act in respect thereof by written consent in lieu of
any such meeting or otherwise in such manner as such attorney shall in his sole
discretion deem proper, hereby granting the attorney full power and authority to
act for Rostelecom and in its name at any such meeting or meetings and in the
transaction of any business as may properly come before the meeting, or execute
and deliver any written consent of shareholders, as fully as if Rostelecom were
present at and participated in any such meeting, with full power of substitution
and revocation, and hereby ratifying and confirming all that the above attorney
may do in our name, place and stead.
2. With respect to any of the Shares where the provisions of Section 1
are insufficient or unenforceable (or there is any doubt or uncertainty as to
their sufficiency or enforceability), by reason of the jurisdiction in which the
Company is incorporated or any change thereof, or any change in applicable law,
Rostelecom shall promptly execute and deliver to the attorney any further
documentation requested by the attorney reasonably necessary to effect the
intent of this Irrevocable Proxy.
3. Rostelecom hereby waives, releases and discharges the attorney and
SFMT from any and all claims that Rostelecom may have now or that may arise in
the future with respect to the voting or the failure to vote by the attorney of
the Shares and acknowledges that the attorney may vote or not vote such Shares
as the attorney may decide in his sole and absolute discretion, provided,
however, that such attorney and SFMT shall not take any action pursuant to this
proxy without giving at least seven business days prior notice thereof to
Rostelecom.
4. This Irrevocable Proxy is irrevocable, is deemed coupled with an
interest in the Shares and is granted pursuant to, and in furtherance of, the
Purchase Agreement.
5. This Irrevocable Proxy shall become effective as of the date set
forth below and shall expire upon the earlier to occur of (1) the registration
of the Amendments, or (2)
the termination of the Purchase Agreement, each as provided for in, and subject
to the terms of, the Purchase Agreement.
6. This Irrevocable Proxy shall be governed by, and construed in
accordance with, the laws of the State of Delaware, USA.
7. This Irrevocable Proxy shall be binding on the heirs,
representatives, successors and assigns of Rostelecom.
IN WITNESS WHEREOF, Rostelecom has hereunto set its hand and seal this
[___] day of [____________], 2002.
OAO Rostelecom
-------------------------------------
Authorized Representative
2
EXHIBIT H
FORM OF BUYERS' TRANSFER NOTICE
[________], 2002
OOO EDN Sovintel
[ ]
Moscow, Russian Federation
Attn: General Director
Reference is made to the Ownership Interest Purchase Agreement, dated
as of March 13, 2002 (the "Interest Purchase Agreement"), among OAO ROSTELECOM
("Seller"), an open joint stock company duly registered and validly existing
under the laws of the Russian Federation, SFMT-CIS, INC., a corporation duly
organized and validly existing under the laws of the State of Delaware in the
United States ("SFMT"), and OOO TELEROSS, a limited liability company duly
registered and validly existing under the laws of the Russian Federation
("TeleRoss"), a copy of which is attached hereto for your records.
Capitalized terms used herein, but not otherwise defined, shall have
the meaning ascribed to such terms in the Interest Purchase Agreement.
The Buyer has elected to terminate the Interest Purchase Agreement
pursuant to Section 4.2 of the Interest Purchase Agreement, as a result of which
the Interest sold and transferred by the Seller to the Buyers on the terms and
conditions set forth therein, shall be returned to Seller.
In consequence thereof and in satisfaction of the notification
requirements under the Russian Federation Law "On Limited Liability Companies"
(as in effect on the date hereof), by this notice, each Buyer hereby notifies,
declares and confirms that it has transferred its entire interest in the charter
capital of OOO EDN Sovintel to Seller, such that as a result of this transfer,
Seller shall become the owner of a 50% interest in the charter capital of OOO
EDN Sovintel.
This notice does not constitute and may not be construed as a waiver of
any right, power or remedy available to each Buyer under the Interest Purchase
Agreement.
Please acknowledge your receipt of this letter by signing below. Please
deliver a copy with your original signature to the attention of [ ] of Seller,
SFMT and TeleRoss.
Very truly yours,
OOO TeleRoss
-------------------------------------
Name:
Title: General Director
-------------------------------------
Name:
Title: Chief Accountant
SFMT-CIS, Inc.
-------------------------------------
Name:
Title: General Director
-------------------------------------
Name:
Title: Chief Accountant
Acknowledged and agreed in full this
____ day of [ ], 2002
OOO EDN SOVINTEL
-------------------------------------
Name:
Title: