Page 63 of 96 Pages
EXHIBIT F
STANDSTILL AGREEMENT
This STANDSTILL AGREEMENT, dated as of March 31, 2001 (this "Agreement"),
by and among Alfa Telecom Limited, a British Virgin Islands company ("Alfa"),
Global TeleSystems, Inc., (formerly known as Global TeleSystems Group, Inc.), a
Delaware corporation ("GTS"), Capital International Global Emerging Markets
Private Equity Fund, L.P., a Delaware limited partnership ("Capital"), Cavendish
Nominees Limited, a limited liablity company organized and registered under the
laws of Guernsey ("Cavendish"), First NIS Regional Fund SICAV, a private
institutional fund organized and registered under the laws of Luxembourg ("NIS,"
and together with Cavendish, "Barings"), and Golden Telecom, Inc., a Delaware
corporation (the "Company"). Alfa, GTS, Capital and Barings are collectively
referred to herein as the "Stockholders."
RECITALS:
WHEREAS, GTS owns beneficially and of record 15,056,328 shares of the
common stock, $.01 par value per share, of the Company (the "Common Stock");
WHEREAS, Alfa, Capital and Barings wish to acquire from GTS and GTS wishes
to sell to the Alfa, Capital and Barings an aggregate of 12,195,122 shares of
Common Stock pursuant to a Share Purchase Agreement (the "Share Purchase
Agreement") to be executed and delivered as of the 31st day of March 2001 by and
among GTS, Alfa, Capital and Barings (the "Proposed Transaction");
WHEREAS, Alfa wishes to acquire from GTS and GTS wishes to sell to Alfa
10,731,707 shares of Common Stock pursuant to the Share Purchase Agreement;
WHEREAS, Capital wishes to acquire from GTS and GTS wishes to sell to
Capital 487,805 shares of Common Stock pursuant to the Share Purchase Agreement;
WHEREAS, Barings wishes to acquire from GTS and GTS wishes to sell to
Barings 975,610 shares of Common Stock pursuant to the Share Purchase Agreement;
WHEREAS, in connection with the consummation of the Share Purchase
Agreement, the Stockholders and the Company are entering into a Shareholders
Agreement (the "Shareholders Agreement") pursuant to which the Stockholders and
the Company would agree to, among other things, certain procedures with respect
to the nomination, appointment and removal of certain directors of the Company;
WHEREAS, upon the execution of the Share Purchase Agreement, Alfa would own
in excess of 15% of the outstanding Common Stock thereby making it an Interested
Shareholder as defined in Section 2 of this Agreement and, pursuant to the
Shareholders Agreement, Capital and Barings would thereby also become Interested
Stockholders;
WHEREAS, Alfa, Capital and Barings have requested that the Board of
Directors of the Company (the "Board") approve, pursuant to Section 203(a)(1) of
the General Corporation Law of the State of Delaware (the "DGCL"), the Proposed
Transaction and Alfa, Capital and Barings becoming Interested Shareholders;
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WHEREAS, the Board established an independent special committee of the
Board pursuant to Section 141 of the DGCL (the "Independent Committee") to
evaluate and determine the propriety of approving the Proposed Transaction under
Section 203(a)(1) of the DGCL;
WHEREAS, the Independent Committee has approved the Proposed Transaction
for purposes of Section 203 of the DGCL and Alfa, Capital and Barings each
becoming an Interested Shareholder as a result of the Proposed Transaction on
the condition that Alfa, Capital and Barings agree to the terms and conditions
set forth in this Agreement (a copy of the resolutions of the Independent
Committee pertaining thereto is attached hereto as Exhibit A); and
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WHEREAS, GTS is not currently subject to the restrictions of Section 203 of
the DGCL, but in furtherance of the Proposed Transaction has agreed to be bound
by certain provisions hereof.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Stockholders and the Company agree as follows:
Section 1. Representations and Warranties. Each of the Stockholders and
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the Company represents to the other parties, as to itself, that all necessary
corporate action to authorize the execution and delivery of this Agreement has
been taken by it, that this Agreement has been duly executed and delivered by it
and that this Agreement constitutes a valid and legally binding obligation by it
and is enforceable in accordance with its terms.
Section 2. Certain Defined Terms. As used in this Agreement, the terms
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"Affiliate," "Business Combination," "Interested Stockholder," and "Voting
Stock" have the meanings ascribed to them in Section 203(c) of the DGCL in
effect on the date hereof. For the purposes of this Agreement, the Company is
not deemed to be an Affiliate of the Stockholders. A copy of Section 203 of the
DGCL as currently in effect is attached hereto as Exhibit B.
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The term "Disinterested Director" means any member of the Board who is
neither an officer, director nor a person who controls or is under common
control with the Stockholder, or any Affiliate of the Stockholder that at the
time proposes to engage in a Business Combination with the Company.
The term "fully diluted basis" means all outstanding Voting Stock or other
shares of capital stock of the Company taking into account any options,
warrants, convertible securities, or other rights to acquire Voting Stock.
Section 3. Business Combination. Subject to the requirements of Section
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4 of this Agreement, each of the Stockholders agrees that it will not engage and
shall not permit any of its Affiliates to engage, in any Business Combination
with the Company without the prior approval of the Board, which approval will be
effective only if it includes the affirmative vote of a majority of the
Disinterested Directors. If no Disinterested Directors are in office, then each
of the Stockholders agrees that it will not engage and will not permit any of
its Affiliates to engage, in any Business Combination with the Company or its
Affiliates unless such Business Combination is approved in accordance with
Section 203(a)(3) of the DGCL as in effect on the date hereof.
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Section 4. Board Composition and Board Nominees. The Stockholders and
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the Company agree that the Board shall consist of nine (9) members. Alfa shall
be entitled to designate not less than three (3) but no more than four (4)
directors to the Board. The Stockholders and the Company agree further that the
nomination and removal of directors to the Board shall be governed by Section 3
of the Shareholders Agreement. Any amendment to the terms set forth in this
Section 4 (including, but not limited to, any increase in the total number of
directors on the Board or any increase in the number of nominees designated to
the Board by Alfa, Barings or Capital, respectively) must be made in accordance
with Section 9 hereof.
Section 5. Standstill Agreement.
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(a) Each of the Stockholders agrees that, from and after the date
hereof, unless this Agreement is earlier terminated, it will not, nor will it
permit its respective Affiliates to, directly or indirectly, in any manner
acquire, or agree to acquire, any Voting Stock of the Company, to the extent
that the acquisition of such Voting Stock would increase the ownership of such
Stockholder and its Affiliates to more than (i) the percentage of the Voting
Stock then outstanding (calculated on a fully-diluted basis) as set forth
opposite each such Stockholder's name in the first column below, or (ii) the
percentage of the Voting Stock then outstanding (calculated on a non-fully
diluted basis) set forth opposite such Stockholder's name in the second column
below.
Alfa 43.00% 49.99%
GTS 43.00% 49.99%
Capital 17.20% 20.00%
Barings 17.20% 20.00%
(b) The limitations in Section 5(a) hereof shall not apply to the
following acquisitions or circumstances:
(i) Common Stock acquired from GTS or other stockholders of the
Company with a view toward distribution and which are in fact resold, placed or
otherwise distributed within six months of acquisition; provided, however, that
no Common Stock acquired in reliance on this Section 5(b)(i) shall be voted by a
Stockholder that holds Voting Stock in excess of the limitation in Section 5 (a)
above; and
(ii) In the event that that Board determines to conduct an
auction of the Company, then each of the Stockholders may participate in any
auction on the same terms as all other bidders, notwithstanding any provisions
in this Agreement to the contrary; and
(iii)In the event that any person other than Alfa, European Bank
of Reconstruction and Development, Capital or Barings or any of their respective
affiliates acquires, or proposes to acquire beneficial ownership of greater than
15% of the outstanding Voting Stock of the Company.
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(c) Each of the Stockholder agrees that, from and after the date
hereof, unless this Agreement is earlier terminated, it will not, nor will it
permit its respective Affiliates, to make or in any way participate in any
"solicitation" of "proxies" (as such terms are used in the proxy rules of the
United States Securities and Exchange Commission) to vote any Voting Stock of
the Company in connection with the election of the directors of the Company
(other than proxies to vote any Voting Stock beneficially owned by such
Stockholders and/or its respective Affiliates).
(d) Each of the Stockholders agrees that, from and after the date
hereof, unless this Agreement is earlier terminated, it will not, nor will it
permit its Affiliates to make or in any way participate in any "solicitation" of
"proxies" (as such terms are used in the proxy rules of the United States
Securities and Exchange Commission) to vote any Voting Stock, with respect to
any matter, other than the election of directors of the Company (which is
governed by Section 4 hereof) (a "Non-Election Issue"), which may be submitted
to a vote of the stockholders of the Company (other than proxies to vote any
Voting Stock beneficially owned by such Stockholders and/or its respective
Affiliates) with respect to any such Non-Election Issue.
(e) Each of the Stockholders agrees that from and after the date
hereof, it will not amend the voting provisions of the Shareholders Agreement or
enter into any other agreement, arrangement or understanding with respect to
voting its shares of Common Stock without the prior approval of the Board, which
approval will be effective only if it includes the affirmative vote of a
majority of the Disinterested Directors.
(f) Notwithstanding anything to the contrary contained in Section
5(a) through 5(d), nothing contained in this Agreement shall be construed to
prevent any of the Stockholders or any of their respective Affiliates from: (i)
making a tender offer for the Common Stock so long as such tender offer is made
on an any and all basis; or (ii) communicating with any other holder or holders
of the Company's outstanding securities, including, without limitation, the
expression of the opinion of the Stockholders with respect to any third-party
solicitation of proxies, provided that such Stockholder does not (A) provide to
any security holder of the Company a form of proxy or other authorization
permitting a stockholder (or its designee) to vote any equity security of the
Company on such security holder's behalf or (B) accept from any security holder
of the Company a proxy or other authorization permitting the Stockholders (or
its designee) to vote any equity security of the Company on such security
holder's behalf, provided that clauses (A) and (B) above shall not be deemed to
prevent the solicitation of proxies to vote Company securities beneficially
owned by such Stockholders, as contemplated by Sections 5(b) and 5(c) above.
Section 6. Purchase Rights of the Stockholders. Until the termination
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of this Agreement, the Company will give the Stockholders at least 30 days'
(and, when possible at least 90 days') prior written notice of the issuance by
the Company of any Voting Stock or any other shares of capital stock of the
Company and any options, warrants, convertible securities, or other rights to
acquire Voting Stock or other capital stock of the Company or securities
exercisable or convertible for Voting Stock or other capital stock of the
Company ("New Securities") as a result of which a Stockholder's beneficial
ownership of the Company would be reduced, either immediately upon issuance of
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such New Securities or upon the exercise or conversion thereof. Such notice must
set forth (a) the approximate number and type of New Securities proposed to be
issued and sold and the material terms of such New Securities, (b) the proposed
price or range of prices at which such New Securities are proposed to be sold
and the terms of payment, (c) the number of such New Securities to be offered
for sale and (d) any other material feature, term or condition relating to such
New Securities or the proposed sale thereof. Upon receipt of such notice from
the Company, each Stockholder will have the right, but not the obligation, to
elect to purchase up to its pro-rata share of such New Securities on a fully
diluted basis. Such pro-rata share, for purposes of this Section 6, for any a
Stockholder is the ratio of (x) the sum, without duplication, of the total
number of shares of Voting Stock or any other shares of capital stock of the
Company, held by such Stockholder prior to the issuance of New Securities
assuming the full exercise or conversion of any options, warrants, convertible
securities exercisable or convertible for Voting Stock or other capital stock of
the Company to (y) the sum, without duplication, of the total number of shares
of Voting Stock or any other shares of capital stock of the Company outstanding
immediately prior to the issuance of New Securities held by all stockholders of
the Company, assuming the full exercise or conversion of any options, warrants,
convertible securities exercisable or convertible for Voting Stock or other
capital stock of the Company. Each Stockholder's purchase must be on the same
terms and conditions as the balance of such issuance of New Securities;
provided, however, if the sale price at which the Company proposes to issue,
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deliver or sell any New Securities is to be paid with consideration other than
cash, then the purchase price at which Alfa, Capital or Barings may acquire its
portion of such New Securities will be equal in value (as determined in good
faith by the Board) but payable entirely in cash. The closing of each
Stockholder's purchase of its portion of such New Securities will occur
simultaneously with the closing of the balance of the issuance of such New
Securities; provided, however, if as of the date of said closing all necessary
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approvals of governmental authorities required in connection with the issuance
of such New Securities have not been obtained by the Company and/or a
Stockholder then (i) such Stockholder will not be required to effect purchase of
its portion of such New Securities until all necessary governmental authority
approvals are obtained and (ii) the Company may terminate such Stockholder's
right to purchase its portion of such New Securities if such Stockholder fails
to obtain any necessary approvals of governmental authority applicable only to
such Stockholder within 120 days of the closing of the balance of the issuance
of such New Securities. If at any time, the terms of a proposed issuance of New
Securities are materially changed, altered or modified from those stated in the
Company's notice to the Stockholders of the proposed issuance thereof, then such
proposed issuance will be treated as a new issuance, subject to the notice
obligation of the Company set forth above and any election of a Stockholder to
purchase its portion of such New Securities prior to such change, alteration or
modification may, in the sole discretion of such Stockholder be withdrawn.
Notwithstanding any provision herein to the contrary in no event shall a
Stockholder be permitted to exercise its rights under this Section 6, to the
extent such exercise would cause it to exceed the limitations set forth in
Section 5 hereof.
Section 7. Term. This Agreement will terminate and the provisions of
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this Agreement will be of no further force or effect upon the occurrence of any
of the following: (i) the mutual agreement of the parties in accordance with
Section 9 hereof, (ii) upon termination of the Share Purchase Agreement prior to
the consummation of the purchase of shares thereby, (iii) the voluntary or
involuntary filing of a petition in bankruptcy by or against the Company, an
event of insolvency affecting the Company, or the appointment of a receiver for
the Company or (iv) on the second anniversary of the date on which the Proposed
Transaction is consummated.
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Section 8. Remedies. The Stockholders, on the one hand, and the
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Company, on the other, acknowledge and agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties are entitled to an injunction or injunctions
to prevent or cure breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state thereof having jurisdiction, this being in addition to any other
remedy to which they may be entitled at law or equity.
Section 9. Amendments and Termination. This Agreement may not be
----------------------------
amended or terminated except pursuant to a writing signed by all parties hereto.
Notwithstanding anything to the contrary contained herein, the Stockholders are
not entitled to amend the provisions hereof or terminate this Agreement unless:
(i) the holders of a majority of the Voting Stock (calculated without reference
to any Voting Stock held by the Stockholders or their respective Affiliates)
approve a proposal submitted by the Board authorizing such amendment or (ii) a
majority of the Disinterested Directors shall approve a resolution authorizing
such amendment.
Section 10. Entire Understanding. This Agreement contains the entire
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understanding of the parties with respect to the matters covered hereby.
Section 11. Counterparts. This Agreement may be executed by the parties
------------
hereto in counterparts and each such executed counterpart shall be an original
instrument. This Agreement will be deemed to have been executed and delivered by
the parties so long as each of the Company and the Stockholders have duly
executed and delivered a counterpart of this Agreement even if no single
counterpart has been executed by both parties.
Section 12. Notices. All notices, consents, requests, instructions,
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approvals and other communications provided for herein and all legal process in
regard hereto will be deemed to be validly given, made or served, if in writing
and delivered personally by facsimile (except for legal process) or sent by
registered or certified mail, postage prepaid, if to:
The Company: Golden Telecom, Inc.
c/o Representation Office of Golden
TeleServices, Inc.
00 Xxxxxxxx Xx.
0xx Xxxxx
Xxxxxx 000000 Xxxxxx
Facsimile No.:
Attention: General Counsel
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Alfa: Alfa Telecom Limited
X.X. Xxx 0000
Xxxxxx Xxxxx
0xx Xxxxx
333 Waterfront Drive
Road Town
Tortola, British Virgin Islands
Facsimile No.:
Attention: Xxxxx Xxxxxxxx
GTS: Global TeleSystems, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX XX0X 0XX
Facsimile No.: x00 000 000 0000
Attention: General Counsel
Capital: c/o Capital International Global Emerging
Markets Private Equity Fund, L.P.
000 Xxxxx Xxxxx Xxxxxxx Xxxxxxxxx
Xxxx, XX 00000-0000
Facsimile No.: x0(000) 000-0000
Attention: Xxx Xxxxx
With a copy to:
Capital International Limited
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Facsimile No.: x00(00) 0000-0000
Attention: Xxx Xxxxxx
and to:
Capital Research International Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Facsimile No.: x00(00) 0000-0000
Attention: Xxxxxx Xxxxxxx
Barings: If to Cavendish Nominees Limited:
c/o International Private Equity Services
00-00 Xxxxxxxx Xxxx
X.X. Xxx 000
Xx. Xxxxx Xxxx
XX0 0XX, Xxxxxxxx
Facsimile No.: 44(0) 1481 715 219
Attention: Xxx. Xxxxxx Xxxxxx
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With a copy to:
Baring Vostock Capital Partners
10 Uspenski Xxxxxxxx
000000 Xxxxxx, Xxxxxx
Facsimile No.: 7095 967 1308
Attention: Xxxxxxx Xxxxxx
If to First NIS Regional Fund SICAV:
x/x Xxxx xx Xxxxxxx Xxxxxxxxxx
00 Xxx Xxxxxx
X-0000, Xxxxxxxxxx
Facsimile No.: 00(0)0 00 00 00 1
Attention: Xxxxxxxxx Tourney
With a copy to:
Baring Vostock Capital Partners
10 Uspenski Xxxxxxxx
000000 Xxxxxx, Xxxxxx
Facsimile No.: 7095 967 1308
Attention: Xxxxxxx Xxxxxx
or to such other address or facsimile number as any party may, from time to
time, designate in a written notice give a like manner.
Section 13. Consent to Personal Jurisdiction. Each of the parties hereto
--------------------------------
agrees that this Agreement involves at least $100,000.00 and that this Agreement
has been entered into in express reliance upon 6 Del. C. ss. 2708. Each of the
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parties hereto irrevocably and unconditionally agrees (i) to be subject to the
jurisdiction of the courts of the State of Delaware and of the federal courts
sitting in the State of Delaware, (ii) that, to the extent such party is not
otherwise subject to service of process in the State of Delaware, it will
appoint (and maintain an agreement with respect to) an agent in the State of
Delaware as such party's agent for acceptance of legal process, (iii) that
service of process may also be made on such party by prepaid certified mail with
a validated proof of mailing receipt constituting evidence of valid service, and
(iv) that service made pursuant to (ii) or (iii) above, will, to the fullest
extent permitted by applicable law, have the same legal force and effect as if
served upon such party personally within the State of Delaware. For purposes of
implementing the parties' agreement to appoint and maintain an agent for service
of process in the State of Delaware, each party that has not as of the date
hereof already duly appointed such an agent does hereby appoint Corporation
Service Company, 0000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx
00000, a such agent.
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Section 14. Governing Law. This Agreement shall be governed by,
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construed and enforced in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Stockholders and the Company have caused this
Agreement to be duly executed by their respective officers, each of whom is duly
authorized, all as of the day and year first above written.
ALFA TELECOM LIMITED
By
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Name:
Title
GLOBAL TELESYSTEMS, INC.
By
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Name:
Title:
CAPITAL INTERNATIONAL GLOBAL EMERGING MARKETS PRIVATE
EQUITY FUND, L.P.
By CAPITAL INTERNATIONAL INC.
By
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Name:
Title:
CAVENDISH NOMINEES LIMITED
By
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Name:
Title:
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FIRST NIS REGIONAL FUND SICAV
By
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Name:
Title:
By
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Name:
Title:
GOLDEN TELECOM, INC.
By
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Name:
Title:
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