EXHIBIT 10.4(d)
MEMORANDUM OF UNDERSTANDING
BETWEEN
OJSC
COMMERCIAL BANK
SOTSIALNY GORODSKOY BANK
AND
IPORUSSIA, INC.
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MEMORANDUM OF UNDERSTANDING
This Memorandum, effective this 22nd day of January, 2003, by and
between IPORUSSIA, INC. ("Advisor"), a Delaware USA Corporation, and Commercial
Bank SOTSIALNY GORODSKOY BANK Open Joint Stock Company ("Bank"), a Russian
registered bank. The Bank and Advisor are referred herein together as the
"Parties", and each separately as a "Party".
WHEREAS, the Bank is an Open Joint Stock Company and desires to have
its securities traded in the United States, or foreign Stock Market ("Stock
Market");
WHEREAS, Advisor represents that it will endeavor to assist and
introduce the Bank to one or more underwriting companies, stock brokerage
companies, a potential strategic alliance partner in the form of a foreign bank,
or bank group, and / or an investor(s) ("Investors") who may be interested in
engaging in a financing arrangement, or in a business combination with the Bank
for a substantial Private Placement investment, or an Initial Public Offering /
Underwriting (IPO) of its securities on a foreign Stock Market known as the
"Transaction". Such an agreement shall be stipulated in writing by a separate
Definitive Agreement between Bank and Investor(s); and
WHEREAS, the Bank desires to retain the services of Advisor to provide
business consulting, assistance, and guidance as well as introduction services
to such Investor(s) entities.
IT IS HEREBY MUTUALLY AGREED
THAT:
1. APPOINTMENT. The Bank retains Advisor to find Investor(s) groups interested
in effecting a strategic alliance / financing on terms acceptable to the Bank
and the Investors. Advisor will endeavor to introduce the Bank to such
Investor(s) entities. Advisor is an independent contractor and is not an agent
of the Bank and it shall have no authority to bind the Bank in any manner.
2. BUSINESS INFORMATION. The Bank will furnish Advisor from time to time with
current financial statements and business information, in the Russian Language
and appropriate sections translated into English if requested ("Business
Information"). Advisor is authorized to send copies of the Business Information
to potential Investors. The Bank hereby represents and warrants that all the
Business Information provided Advisor pertaining to the Bank shall be true and
correct. The volume of information
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furnished shall be reasonable and sufficient for the consummation of
Transaction. Advisor shall provide the Bank, from time to time, with a list of
Investors that have been contacted and introduced to Bank's Business
Information.
3. COMPENSATION.
(A) In the event of a consummated Transaction, the Bank shall pay a cash fee
("Fee") to Advisor upon closing ("Closing") of the Transaction at the amount of
5% of all considerations paid in such Transaction.
"consideration paid in such Transaction" for purposes of this Memorandum shall
mean the value of (1) all consideration, including proceeds from the sale of
securities of the Bank and its Stockholders in an Underwriting, Investments paid
to the Bank and the Stockholders of the Bank in connection with a Transaction,
including cash, securities or other consideration exchanged or paid at Closing;
assumption of debt; and any deferred payments including without limitation
notes, contingent payments and (2) the aggregate amount of any investment made
by the Investor in a joint venture with the Bank. Payment of the applicable Fee
set forth above will be made at the Closing of the related Transaction. The Fee
shall be payable in cash and any consideration other than cash which is paid in
the consummated Transaction shall be valued at its fair market value.
(B) The Fee to Advisor shall be considered separate and apart from any
underwriters compensation or brokerage fee or commission on a Transaction. The
Bank shall be responsible for all of their legal, accounting and other expenses
associated with a Transaction. The compensation Fee to Advisor shall include all
Advisor's expenses associated with Transaction, and/or with performance of
Advisor's obligations for the said Memorandum. Bank bears no responsibility for
Advisor's expenses associated with Transaction, and/or with performance of
Advisor's obligations for the said Memorandum.
(C) In the event Advisor shall find an Investor that provides for financing of
the costs associated with the Bank's Initial Public Offering (IPO) on terms
agreeable to the Bank, the per cent value stated in Paragraph 3(A) might be
increased. Upon coordinated resolution to increase Advisor's Fee, the Parties
shall conclude a separate Exhibit to the given Memorandum.
(D) Should impossibility of performance of the given Memorandum be a result of
circumstances that neither Party is responsible for, Bank shall not reimburse
Advisor for expenses incurred.
4. TERM. This Memorandum shall remain in full force and effect for a period of
twenty four (24) months from the above date hereof; provided, however, that
Advisor shall be entitled to receive the full Fee set forth in Paragraph 3
hereof in the event an introduction was made by Advisor to an Investor during
the term of this Memorandum and a Transaction or other business arrangement is
consummated with such Investor within two years from the expiration of this
Memorandum.
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5. EXPENSES. Neither Party shall incur any expenses on behalf of the other Party
without prior approval in writing. Advisor agrees to use its best efforts to
introduce the Bank to one or more possible Investors interested in financing the
costs associated with the support of and/or placement of Bank's securities in
the Stock Market on terms agreeable to the Bank.
6. ENTIRE MEMORANDUM. This Memorandum contains the entire understanding of the
Parties hereto with respect to the transactions contemplated and may only be
amended or modified if reduced to writing and signed by both Parties, and
supersedes all prior Memorandums between the Parties with respect to its subject
matter whether written or oral. Both Parties represent and warrant to each other
that the Parties signing this Memorandum are officers and have full power and
authority to enter into this Memorandum and carry out the terms and conditions
contemplated hereby.
7. CAPTIONS, HEADINGS, OR TITLES. All captions, headings or titles in the
sections of the Memorandum are inserted for convenience of reference only and
shall not constitute a part of this Memorandum or a limitation of scope of the
particular sections to which they apply.
8. COUNTERPARTS. This Memorandum may be signed in counterparts and shall become
effective as if executed in a single, complete document as of the date hereof
upon its execution by both parties.
9. GOVERNING LAW. This Memorandum and any modifications, amendments and
additions thereto shall be governed in accordance with the laws of the Russian
Federation.
10. CONFIDENTIALITY. The Parties agree that any information disclosed to each
other marked "Confidential" shall not be disclosed to any Investor or third
party unless prior written permission has been obtained.
11. DISPUTES AND ARBITRATION. Any controversy or claim arising out of or
relating to this Memorandum shall be settled by binding arbitration by the
International Court of Arbitration of the International Chamber of Commerce (the
"ICC") in accordance with the ICC Rules of Arbitration in effect at the time of
the arbitration. The arbitration proceedings shall be conducted in Geneva,
Switzerland and in the English language. There shall be three (3) arbitrators,
one of whom shall be selected by the Party seeking to initiate the arbitration,
one by the other Party and the third by the two arbitrators so selected. The
arbitration award shall be given in writing and shall be final and binding on
the Parties with respect to the subject matter in controversy. The Parties shall
keep confidential the arbitration proceedings and terms of any arbitration
award, except as may otherwise be required by law. Each Party shall bear its own
legal fees and other costs related to the arbitration, except that the
arbitrators shall determine who shall bear the costs of the arbitrators. The
arbitrators may determine arbitrability but may not award punitive damages or
limit, expand or otherwise modify the terms of this Memorandum.
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12. This Memorandum is made in English and Russian. The English and Russian
forms of this Memorandum shall be equally binding. Should any difficulties or
ambiguous interpretation of terms and conditions of this Memorandum arise, the
Parties shall first attempt to resolve this matter between them. If not
successful, the controversy shall be subject to Paragraph 11.
13. NOTICES. All notices, requests, consents and other communications hereunder
shall be in writing, shall be addressed to the receiving Party's address set
forth below or to such other address as a Party may designate by notice
hereunder, and shall be either (i) delivered by hand, (ii) made by telecopy or
facsimile transmission and e-mail, (iii) sent by recognized international
overnight courier service, or (iv) sent by registered mail, return receipt
requested, postage prepaid.
If to Bank:
Xx. Xxxxxxxxx X. Xxxxxxx
Chairman of the Board
OJSC Commercial Bank
SOTSIALNY GORODSKOY BANK
11-A Novomytishinsky Prospect
Mytishi, Moscow Oblast, 141002
Tel: (000) 000-0000
Fax: . (000) 000-0000
E-Mail: : xxx_xx@xxxxxxxxxx.xx
If to Advisor:
Xxxxxxxx Xxxxxxxxx
President
IPORUSSIA, INC.
00 Xxxxxxxx Xxx.
Xxxxxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx of America
Tel. (000) 000-0000
Fax: (000) 000-0000
E-Mail: xxxx@xxxxxxxxx.xxx
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IN WITNESS WHEREOF, Bank and the Advisor have duly signed and executed
this Memorandum effective as of the date first written above.
IPORUSSIA, INC. OJSC COMMERCIAL BANK
SOTSIALNY GORODSKOY BANK
By: /s/ Xxxxxxxx X. Xxxxxxxxx By: /s/ X.Xxxxxxx
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Xxxxxxxx X. Xxxxxxxxx Xxxxxxxxx X. Xxxxxxx
President & C.E.O. Chairman of the Board
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