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EXHIBIT 10.5
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered
into as of __________, 1999 by and between Global TeleSystems Group, Inc., a
Delaware corporation (together with its subsidiaries other than Golden Telecom,
Inc. and Golden Telecom, Inc.'s subsidiaries, hereinafter referred to as "GTS"),
and Golden Telecom, Inc., a Delaware corporation (together with its
subsidiaries, hereinafter referred to as the "Company").
RECITALS
A. The Company is a subsidiary of GTS. GTS and the Company desire to
enter into this Agreement to indemnify each other (and provide for contribution
to each other) against liabilities arising from the operation of the parties'
respective businesses.
B. In connection with the initial public offering of the Company, the
Company has prepared a Prospectus, dated __________, 1999 (the "Prospectus") and
has filed with the Securities and Exchange Commission a registration statement
(the "Registration Statement") of which the Prospectus forms a part.
C. In connection with the initial public offering of the Company, the
Company and GTS have agreed to a separation of assets, services and other
responsibilities (the "Separation").
AGREEMENT
The parties therefore agree as follows:
1. Indemnification. (a) The Company agrees to indemnify and hold
harmless GTS, its directors, officers, employees and agents against any and all
claims, losses, damages, liabilities, costs and expenses, joint or several
(including reasonable attorneys' fees and costs of investigation), to which GTS
may become subject insofar as such claims, losses, damages, liabilities, costs
and expenses (or actions in respect thereof) relate to, arise out of, or result
from (i) the Company's failure to pay, perform or otherwise promptly discharge
any of the liabilities arising out of the business, operations or assets of the
Company, on or after __________, 1999 (the "Closing Date"), whether or not
expressly assumed by the Company; (ii) any liabilities attributable to the
Company in connection with any United States federal or state tax audit of GTS;
(iii) any material breach by the Company of this Agreement, the Administrative
Services Agreement, the Trademark Transfer Agreement, the Employee Benefits
Agreement, the Shareholders' Agreement and the Registration Rights Agreement
(collectively, the "Separation Agreements"); and (iv) any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus (as
amended or supplemented if the
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Company shall have furnished any amendments or supplements thereto), or any
omission or alleged omission to state therein a material fact required to be
stated in the Prospectus or necessary to make the statements therein not
misleading, with respect to all information contained in the Prospectus or the
Registration Statement, as amended or supplemented of which it forms a part.
(b) GTS agrees to indemnify and hold harmless the Company, its
directors, officers, employees and agents against any and all claims, losses,
damages, liabilities, costs and expenses, joint or several (including reasonable
attorneys' fees and costs of investigation), to which the Company may become
subject insofar as such claims, losses, damages, liabilities, costs and expenses
(or actions in respect thereof) relate to, arise out of or result from any
material breach by GTS under any of the Separation Agreements.
(c) The Company further agrees to indemnify and hold harmless
GTS against any and all claims, losses, damages, liabilities, costs and
expenses, joint or several (including reasonable attorneys' fees and costs of
investigation), to which GTS may become subject insofar as such claims, losses,
damages, liabilities, costs and expenses (or actions in respect thereof) relate
to, arise out of or result from guarantees made by GTS with respect to the
obligations or liabilities of the Company, and the Company agrees to pay GTS for
its direct costs, if any, of maintaining such guarantees.
(d) Except as set forth in this Agreement, all liabilities
existing or arising on or before the Closing Date, are released and discharged
in their entirety.
2. No Representation or Warranty. Neither the Company nor GTS intends
to make any representation or warranty to one another or to any other person or
party as to (i) the assets, businesses or liabilities transferred or assumed as
part of the Separation, (ii) any consent or liability transferred or assumed as
part of the Separation, (iii) any consent or approval required in connection
therewith, (iv) the value or freedom from any security interests of any of the
assets transferred, (v) the absence of any defense or freedom from counterclaim
with respect to any claim or any part thereof, or (vi) the legal sufficiency of
any assignment, document or instrument delivered to convey title to any asset
transferred.
3. No Transfer of Marketable Title. The Company and GTS understand that
except as expressly set forth in any Separation Agreement, all assets are being
transferred to the Company on an "as is, where is" basis, and the Company and
GTS agree to bear the economic and legal risks that the conveyance is
insufficient to vest in the transferee good and marketable title, free and clear
of any encumbrances.
4. Dispute Resolution. (a) For the purposes of this section, the term
"dispute" shall include any difference, dispute, claim or controversy arising
out of or in connection with this
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Agreement or any other difference, dispute, claim or controversy arising between
GTS and the Company.
(b) In an effort to resolve informally and amicably any
dispute without resorting to litigation, each party shall first notify the other
of any dispute that requires resolution. Notification of a dispute shall be made
to a member of senior management (or other mutually agreed) representatives of
GTS or the Company, as the case may be. GTS and the Company shall each designate
an employee to investigate, discuss and seek to settle the matter between them.
(c) Any dispute which is not resolved by the two individuals
appointed under the preceding sub-section within thirty 30 days after the
notification of the dispute shall be finally settled under the Rules of
Arbitration of the International Chamber of Commerce by one or three arbitrators
appointed in accordance with the said Rules. The place of the Arbitration shall
be Paris and the language of the arbitral proceedings shall be English.
(d) The Arbitral Tribunal shall have the authority to give
orders requiring either party to produce documents relevant to the dispute or
disputes before the Arbitral Tribunal.
5. Assignment. Neither party shall assign or transfer any of its rights
under this Agreement without the prior written consent of the other party.
6. 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 United States 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.
If to GTS:
Global TeleSystems Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx, 00xx Xxxxx
XxXxxx, XX 00000
Attn: Chief Financial Officer
Copy to: General Counsel
If to the Company:
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Golden Telecom, Inc.
00 Xxxxxxxxxxxxxxxxxx Xxx., 0xx Xxxxx
00000 Xxxxxx, Xxxxxx
Attn: Chief Financial Officer
Copy to: General Counsel
7. Further Assurances. GTS and the Company shall execute, acknowledge
and deliver or cause to be executed, acknowledged and delivered such instruments
and take such other action as may be necessary or advisable to carry out their
obligations under this Agreement and under any exhibit, document or other
instruments delivered pursuant hereto.
8. Governing Law. This Agreement shall be governed by the laws of the
State of New York.
9. 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. This Agreement may not
be amended or otherwise modified except in writing duly executed by all of the
parties. A waiver by any party of any breach or violation of this Agreement
shall not be deemed or construed as a waiver of any subsequent breach or
violation thereof.
10. Counterparts. 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.
11. 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.
12. 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,
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.
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13. Successors and Assigns. Subject to the provisions of Section 5,
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.
14. 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.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
GLOBAL TELESYSTEMS GROUP, INC.
By:
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Name:
Title:
GOLDEN TELECOM, INC.
By:
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Name:
Title:
