Exhibit 10.4
FINANCIAL ADVISORY AGREEMENT
BETWEEN
JOINT STOCK BANK ELEKTRONIKA
AND
IPORUSSIA, INC.
FINANCIAL ADVISORY AGREEMENT
This Agreement, effective this 30 day of April, 2002, by and between
IPORUSSIA, INC. ("Advisor"), a Delaware Corporation, and Joint Stock Bank
Elektronika ("Bank"), located in the Russian Federation. The Bank and the
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 Stock Market ("Stock Market");
WHEREAS, Advisor represents that it will endeavor to introduce the Bank
to one or more underwriting companies, stock brokerage companies, and/or
investors ("Investors") who may be interested in engaging in a financing
arrangement or in a business combination with the Bank. Public Underwriting of
the securities of the Bank in the Stock Market shall be stipulated in writing by
a separate Agreement between Bank and Investors ("Transaction"); and
WHEREAS, the Bank desires to retain the services of Advisor to provide
an introduction to such Investors.
IT IS HEREBY MUTUALLY AGREED THAT:
1. Appointment. The Bank retains Advisor to find Investors interested in
effecting a Transaction on terms acceptable to the Bank and the Investors.
Advisor will endeavor to introduce the Bank to such Investors. 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 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 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 introduces to Bank's Business
Information.
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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 7% of all considerations paid in such Transaction.
"consideration paid in such Transaction" for purposes of this Agreement 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 Agreement. Bank bears no responsibility for
Advisor's expenses associated with Transaction, and/or with performance of
Advisor's obligations for the said Agreement.
(C) In the event when Advisor shall find 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 Agreement.
(D) Should impossibility of performance of the given Agreement be a
result of circumstances that neither Party is responsible for, Bank shall not
reimburse Advisor for expenses incurred.
4. Term. This Agreement shall remain in full force and effect for a period of
twenty four (24) months after the 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
Agreement and a Transaction or other business arrangement is consummated with
such Investor within two years from the expiration of this Agreement.
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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 Bank's securities in the
Stock Market on terms agreeable to the Bank.
6. Entire Agreement. This Agreement 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 agreements 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 Agreement are officers and have full power and
authority to enter into this Agreement and carry out the terms and conditions
contemplated hereby.
7. Captions, Headings, or Titles. All captions, headings or titles in the
sections of the Agreement are inserted for convenience of reference only and
shall not constitute a part of this Agreement or a limitation of scope of the
particular sections to which they apply.
8. Counterparts. This Agreement 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 Agreement 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 Agreement 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 Agreement.
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12. This Agreement is made in English and Russian. The English and Russian forms
of this Agreement shall be equally binding. Should any difficulties or ambiguous
interpretation of terms and conditions of this Agreement 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:
Xxxxxxxx Xxxxxxx
Chairman of the Board
Joint Stock Bank
Xxxxxxxxxxx
0, Xxxxxxxxx Xxxxxxxx,
Xxxxxx, 000000
Russian Federation
Tel: (000) 000-0000
Fax: (000) 000-0000
E-Mail: xxxx@xxxxxxxxxxx.xx
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If to Advisor:
Xxxxxxxx Xxxxxxxxx
President
IPORUSSIA, INC.
00 Xxxxxxxx Xxx.
Xxxxxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx of America
Tel/Fax: (000) 000-0000
E-Mail: xxxxxxxxx@xxxxx.xxx
In Witness Whereof, Bank and the Advisor have duly signed and executed
this Agreement effective as of the date first written above.
IPORUSSIA, INC. Commercial Joint Stock
Bank Elektronika
By: /s/ Xxxxxxxx Xxxxxxxxx By: /s/ Xxxxxxxx Xxxxxxx
------------------------ --------------------------
Xxxxxxxx Xxxxxxxxx Xxxxxxxx Xxxxxxx
President Chairman of the Board
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