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EXHIBIT 99.1
SHARE PURCHASE AGREEMENT
DATED
APRIL 2, 2001
BY AND AMONG
GLOBAL TELESYSTEMS, INC.,
AS SELLER,
AND
ALFA BANK HOLDINGS LIMITED,
CAPITAL INTERNATIONAL GLOBAL EMERGING MARKETS PRIVATE EQUITY FUND, L.P.,
CAVENDISH NOMINEES LIMITED
AND
FIRST NIS REGIONAL FUND SICAV,
AS PURCHASERS
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TABLE OF CONTENTS
1. Purchase and Sale of Purchase Shares; Closing and Manner of Payment.............................1
1.1 Agreement to Purchase and Seller Purchase Shares.......................................1
1.2 Purchase Price.........................................................................2
1.3 Manner of Payment of Purchase Price....................................................2
1.4 Manner of Delivery of Purchase Shares..................................................2
1.5 Time and Place of Closing..............................................................2
2. Representations and Warranties of Purchaser.....................................................2
2.1 General Statement......................................................................2
2.2 Representations and Warranties of Purchasers...........................................3
2.3 Representations and Warranties of Seller...............................................4
3. Covenants.......................................................................................8
3.1 Cooperation............................................................................8
3.2 Conduct of Business....................................................................8
3.3 Public Announcements...................................................................8
3.4 Access.................................................................................8
3.5 Certain Intercompany Agreements........................................................8
4. Closing Conditions..............................................................................9
4.1 Conditions Precedent to the Obligations of All Parties.................................9
4.2 Additional Conditions to the Obligations of Seller.....................................9
4.3 Additional Conditions to the Obligations of Purchasers................................10
5. Deliveries at Closing..........................................................................10
6. Survival of Representations and Warranties.....................................................12
7. Termination rights.............................................................................12
7.1 Termination...........................................................................13
7.2 Procedure and Effect of Termination...................................................13
7.3 Specific Performance..................................................................14
7.4 Default of Purchasers.................................................................14
8. Miscellaneous..................................................................................14
8.1 Amendment and Modification............................................................14
8.2 Benefit and Assignment................................................................14
8.3 No Third-Party Beneficiaries..........................................................15
8.4 Entire Agreement......................................................................15
8.5 Expenses..............................................................................15
8.6 Headings..............................................................................15
8.7 Choice of Law.........................................................................15
8.8 Notices...............................................................................15
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8.9 Counterparts..........................................................................18
8.10 Currency..............................................................................18
8.11 Waiver of Jury Trial..................................................................
8.12 Board Approvals.......................................................................
EXHIBITS
EXHIBIT A - Promissory Note
EXHIBIT B - Pledge Agreement
EXHIBIT C - Alfa Stock Option Agreement
EXHIBIT D - CIG Stock Option Agreement
EXHIBIT E - Barings Stock Option Agreement
EXHIBIT F - New Shareholders Agreement
EXHIBIT G - Assignment and Amendment Agreement
EXHIBIT H - Amendment to Shareholders and Registration Rights Agreement
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SHARE PURCHASE AGREEMENT
This SHARE PURCHASE AGREEMENT (the "AGREEMENT") is made, executed and
delivered as of April 2, 2001 by and between Global TeleSystems, Inc. (formerly
known as Global TeleSystems Group, Inc.), a Delaware corporation (Global
TeleSystems, Inc. and its permitted successors or assigns hereunder, the
"SELLER"), and Alfa Bank Holdings Limited, a company incorporated in the British
Virgin Islands ("ALFA"), Capital International Global Emerging Markets Private
Equity Fund, L.P., a Delaware limited partnership ("CIG"), and Cavendish
Nominees Limited, a limited liability company organized and registered under the
laws of Guernsey, and First NIS Regional Fund SICAV, a private institutional
fund organized and registered under the laws of Luxembourg (together with
Cavendish, "BARINGS"; Alfa, CIG and Barings collectively, "PURCHASERS").
WITNESSETH:
WHEREAS, Seller owns beneficially and of record 15,056,328 shares (the
"GTS SHARES") of the common stock, par value $0.01 per share (the "SHARES"), of
Golden Telecom, Inc., a Delaware corporation ("GTI" or the "COMPANY"),
constituting approximately sixty-one and five-tenths percent (61.5%) of the
issued and outstanding Shares;
WHEREAS, Purchasers, severally, desire to purchase 12,195,122 of the
GTS Shares in the aggregate (the "PURCHASE SHARES") from Seller in such amounts
as set forth opposite the name of each Purchaser on Schedule 1.1 hereto, and
Seller desires to sell such Purchase Shares, severally, to Purchasers, on the
terms and subject to the conditions herein contained;
WHEREAS, a special committee of the Board of Directors of the Company
has approved the purchase of the Purchase Shares by the Purchasers and
consummation of the other transactions contemplated hereby for purposes of
Section 203(a)(1) of the Delaware General Corporation Law, subject to the
condition that the Purchasers enter into a Standstill Agreement with the Company
setting forth certain restrictions on the ability of the Purchasers to acquire
additional Shares and to enter into "business combinations" with the Company;
and
WHEREAS, the Purchasers have entered into such a Standstill Agreement
on the date hereof.
AGREEMENTS:
Now, therefore, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and with the intent to be legally
bound, the parties agree as follows:
1. Purchase and Sale of Purchase Shares; Closing and Manner of Payment
1.1 Agreement to Purchase and Sell Purchase Shares. On the terms and
subject to the conditions contained in this Agreement, each Purchaser shall
purchase from Seller, and Seller shall sell to each Purchaser, the number of
Purchase Shares set forth opposite the name of such Purchaser on Schedule 1.1
hereto, which Purchase Shares shall upon such sale be fully paid and
non-assessable and free and clear of all liens, encumbrances, proxies, voting
trusts, voting agreements, adverse claims, contractual restrictions on transfer
or any other
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charges (collectively, the "CLAIMS"), except for the restrictions imposed by the
Shareholders Agreement, to be dated as of the Closing Date (as hereinafter
defined), among Purchasers, Seller, and the Company (the "NEW SHAREHOLDERS
AGREEMENT").
1.2 Purchase Price. The purchase price of the Purchase Shares (the
"PURCHASE PRICE") shall be $10.25 per Share.
1.3 Manner of Payment of Purchase Price. The Purchase Price shall be
paid or satisfied at the Closing (as herein after defined) by wire transfer of
immediately available funds to such bank account or accounts as Seller shall
designate by written notice delivered to Purchasers not later than two (2)
business days prior to the Closing; provided, however, that Alfa shall satisfy
its obligation to pay the portion of the Purchase Price payable by it by
delivery of 50% of such amount in cash and delivery of its promissory note in a
principal amount equal to 50% of such amount due May 31, 2001 in the form
attached hereto as Exhibit A, with blanks appropriately filled in (and with the
maker's name corrected if the Assignment (as such term is defined in Section
3.7) has not occurred) (the "NOTE"), which shall be secured by a pledge of
Alfa's Purchase Shares pursuant to a Pledge Agreement in the form attached
hereto as Exhibit B, with blanks appropriately filled in (and with the pledgor's
name corrected if such Assignment has not occurred) (the "PLEDGE AGREEMENT").
Notwithstanding the foregoing, Alfa shall have the right to pay the entire
portion of the Purchase Price payable by it in cash. The aggregate amount of the
Purchase Price due from each Purchaser on the Closing is set forth opposite the
name of such Purchaser on Schedule 1.1 hereto.
1.4 Manner of Delivery of Purchase Shares. At the Closing, the Seller
shall deliver to each Purchaser certificates evidencing the Purchase Shares in
such amounts as set forth on Schedule 1.1 hereto duly endorsed in blank, or
accompanied by valid stock powers duly executed in blank, in proper form for
transfer.
1.5 Time and Place of Closing. The transactions contemplated by this
Agreement, including, without limitation, the sale and purchase of the Purchase
Shares, shall be consummated (the "CLOSING") at 10:00 a.m. London time, at the
offices of Akin, Gump, Strauss, Xxxxx & Xxxx, One Xxxxx Xxxxx, Xxxxxx XX0X 0XX,
Xxxxxx Xxxxxxx, at the later to occur of: (i) April 20, 2001 and (ii) within two
(2) days after satisfaction of the conditions precedent set forth in Section 4
hereof, or on such other date, and at such time or place, as shall be mutually
agreed upon in writing by Seller and Purchasers. The date on which the Closing
occurs in accordance with this Agreement is referred to in this Agreement as the
"CLOSING DATE".
2. Representations and Warranties
2.1 General Statement. Except as expressly set forth in this Agreement,
the parties are only making the representations and warranties to each other
which are set forth in this Section 2 and no others with respect to the matters
contained herein. The representations and warranties made by each Purchaser
hereby are made solely as to itself and not jointly or jointly and severally.
All such representations and warranties are made as of the date hereof (or, in
the case of Alfa Telecom, on the date it accepts the Assignment, as such term is
defined in Section 3.7) and as of the date of Closing (the "CLOSING DATE"). All
representations and warranties of Seller are made subject to the exceptions in
the schedules attached hereto (the "SCHEDULES").
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2.2 Representations and Warranties of Purchasers. Each Purchaser,
severally, represents and warrants to Seller as to itself as follows:
(a) Such Purchaser is a corporation, partnership or other
organization, as the case may be, duly organized or formed,
validly existing and in good standing under the laws of the
state or other jurisdiction of its organization or formation
and has the power and authority to carry on its business as
presently conducted.
(b) Such Purchaser has full corporate, partnership or other
organizational power, as the case may be, and authority to
enter into and perform (i) this Agreement; (ii), as applicable
(1) the Stock Option Agreement, by and between Seller and
Alfa, to be dated as of the Closing Date, in the form attached
hereto as Exhibit C, with blanks appropriately filled in (and
with the Alfa party's name corrected if the Assignment (as
such term is defined in Section 3.7) has not occurred) (the
"ALFA STOCK OPTION AGREEMENT"); (2) the Stock Option
Agreement, by and between Seller and CIG, to be dated as of
the Closing Date, in the form attached hereto as Exhibit D,
with blanks appropriately filled in (the "CIG STOCK OPTION
AGREEMENT"); and (3) the Stock Option Agreement, by and
between Seller and Barings, to be dated as of the Closing
Date, in the form attached hereto as Exhibit E, with blanks
appropriately filled in (the "BARINGS STOCK OPTION
AGREEMENT"); (iii) the New Shareholders Agreement, to be dated
as of the Closing Date, in the form attached hereto as Exhibit
F, with blanks appropriately filled in; and (iv) with respect
to Alfa, each of the Note and the Pledge Agreement
(collectively, "PURCHASER'S ANCILLARY AGREEMENTS"). The
execution and delivery by such Purchaser of this Agreement and
such Purchaser's Ancillary Agreements and the performance by
such Purchaser of its obligations hereunder and thereunder
have been duly authorized and approved by all requisite
corporate, partnership or other organizational action, as the
case may be. This Agreement constitutes and such Purchaser's
Ancillary Agreements will constitute the valid and binding
obligation of such Purchaser, enforceable against such
Purchaser in accordance with its and their terms except as may
be limited by applicable laws relating to bankruptcy,
insolvency, reorganization, moratorium or similar creditors'
rights generally and by general principles of equity.
(c) Except for filings under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR ACT"), no
consent, authorization, order or approval of, or filing or
registration with, any governmental authority or other person
is required for the execution and delivery by such Purchaser
of this Agreement or such Purchaser's Ancillary Agreements and
the consummation by such Purchaser of the transactions
contemplated hereby and thereby.
(d) Neither the execution and delivery of this Agreement or
such Purchaser's Ancillary Agreements by such Purchaser, nor
the consummation by such Purchaser of the transactions
contemplated hereby or thereby, will (i) conflict with or
result in a material breach of any of the terms, conditions or
provisions (A) of any organizational documents of such
Purchaser, or (B) of any statute or administrative regulation
typically applicable to transactions of this type, or of any
order, writ, injunction, judgment or decree of any court or
governmental authority or of any arbitration award to which
such Purchaser is
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a party or by which Purchaser is bound; (ii) constitute a
material default under or give rise to a right of termination,
cancellation or acceleration of any right or obligation of
such Purchaser or to a loss of any material benefit to which
Purchaser is entitled under any provision of any unexpired,
undischarged or unsatisfied written or oral agreement,
contract, indenture, mortgage, debenture, note or other
instrument binding such Purchaser or any material license,
franchise, permit or other similar authorization held by such
Purchaser, except with respect to clauses (i)(B) and (ii) for
such conflicts, defaults, or other occurrences that would not
have a material adverse effect on such Purchaser's ability to
perform its obligations hereunder or thereunder.
(e) Except for arrangements by or on behalf of such Purchaser
previously disclosed to Seller, the fees with respect to which
shall be borne by such Purchaser, such Purchaser has not dealt
with any person or entity who is or may be entitled to a
broker's commission, finder's fee, investment banker's fee or
similar payment from Seller for arranging the transactions
contemplated hereby or introducing the parties to each other.
(f) There is no claim, litigation, proceeding or investigation
pending or, to the best of such Purchaser's knowledge,
threatened, which seeks to enjoin or prohibit, or otherwise
question the validity of, any action taken or to be taken by
such Purchaser in connection with this Agreement or
Purchaser's Ancillary Agreements or which would have an
adverse effect on such Purchaser's ability to perform its
obligations hereunder or thereunder.
(g) Such Purchaser has sufficient cash on hand or enforceable
financial commitments from credible sources to allow it to pay
the Purchase Price of its Purchase Shares, consummate the
transactions contemplated hereby, and pay all related fees and
expenses as set forth herein.
(h) Alfa Telecom Limited, a company incorporated in the
British Virgin Islands ("ALFA TELECOM") is an affiliate of
(being under common control with) Alfa.
(i) Alfa has delivered to Seller its unaudited financial
statements as of December 31, 2000, which financial statements
were prepared in conformity with International Accounting
Standards, and which fairly present, in all material respects
(subject to normal, recurring, year-end adjustments which are
not material, individually or in the aggregate) Alfa's
financial condition as of the dates thereof and Alfa's results
of operations for the periods presented.
(j) The organizational chart of each of Alfa and Alfa Telecom
delivered to Seller by Alfa is true and correct.
2.3 Representations and Warranties of Seller. Seller represents and
warrants to Purchasers that:
(a) Seller is a corporation validly existing and in good
standing under the laws of the State of Delaware and has the
power and authority to carry on its business as presently
conducted.
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(b) Except for filings under the HSR Act and consents,
authorizations, orders, approvals, filings and registrations
required to be made by any Purchaser, no consent,
authorization, order or approval of, or filing or registration
with, any governmental authority or other person (including
without limitation the stockholders of Seller) is required for
or in connection with the execution and delivery by Seller of
(i) this Agreement; (ii) the Alfa Stock Option Agreement;
(iii) the CIG Stock Option Agreement; (iv) the Barings Stock
Option Agreement; and (v) the New Shareholders Agreement;
(collectively, "SELLER'S ANCILLARY Agreements") and the
consummation by Seller of the transactions contemplated hereby
and thereby.
(c) Except as set forth on Schedule 2.3(c) hereof, neither the
execution and delivery of this Agreement or Seller's Ancillary
Agreements by Seller, nor the consummation by Seller of the
transactions contemplated hereby or thereby, will (i) conflict
with or result in a breach of any of the terms, conditions or
provisions of (A) any organizational documents of Seller, the
Company or any Subsidiary (as defined below) of the Company,
or (B) of any statute or administrative regulation typically
applicable to transactions of this type, or of any order,
writ, injunction, judgment or decree or any court or
governmental authority or of any arbitration award to which
Seller, the Company or any Subsidiary is a party or by which
Seller, the Company or any Subsidiary is bound; (ii)
constitute a default under or give rise to a right of
termination, cancellation or acceleration of any right or
obligation of the Company or any of its Subsidiaries or to a
loss of any benefit to which the Company or any of its
Subsidiaries is entitled under any provision of any unexpired,
undischarged or unsatisfied written or oral agreement,
contract, indenture, mortgage, debenture, note or other
instrument binding the Company or any of its Subsidiaries or
any license, franchise, permit or other similar authorization
held by the Company or any of its Subsidiaries, or (iii)
result in the creation or imposition of any lien or
encumbrance on any asset of the Company or any of its
Subsidiaries, except with respect to clauses (i)(B), (ii) and
(iii), for any conflicts, defaults or other occurrences which
would not have a Material Adverse Effect (as defined
hereinafter). For purposes of this Agreement, a "SUBSIDIARY"
shall mean any corporation, partnership or other entity that
is directly or indirectly wholly-owned by the Company.
(d) Seller has full corporate power and authority to enter
into and perform this Agreement and Seller's Ancillary
Agreements. The execution and delivery of this Agreement and
Seller's Ancillary Agreements and the performance by Seller of
its obligations hereunder and thereunder have been duly
authorized by all requisite corporate action. This Agreement
constitutes and Seller's Ancillary Agreements will constitute
the valid and binding obligation of Seller, enforceable
against Seller in accordance with its and their terms, except
as maybe limited by applicable laws relating to bankruptcy,
insolvency, reorganization, moratorium or similar rights of
creditors generally and by general principles of equity.
(e) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, United States, and has
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all requisite corporate power and authority to carry out its
business as now being conducted or proposed to be conducted by
it.
(f) Except for the restrictions imposed by the Shareholders
and Registration Rights Agreement, dated as of December 24,
1999 among the Company, the Seller, and CIG (the "CIG
SHAREHOLDERS AGREEMENT") and the Seller Shareholders
Agreement, Seller owns of record and beneficially all Purchase
Shares, free and clear of any Claims.
(g) The Company has filed all forms, reports and documents
("SEC DOCUMENTS") required to be filed by it with the SEC
since September 30, 1999. As of its filing date (and, with
respect to any registration statement, the date on which it or
any post-effective amendment was declared effective), each SEC
Document was in compliance, in all material respects, with the
applicable requirements of the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended,
contained no untrue statement of a material fact and did not
omit any statement of a material fact required to be stated
therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not
misleading. The financial statements of the Company included
in the SEC Documents were prepared in accordance with
generally accepted accounting principles applied on a
consistent basis during the periods involved (subject, in the
case of unaudited statements, to the omission of certain
footnotes and except as may be indicated in the notes thereto)
and fairly present, in all material respects (subject, in the
case of the unaudited statements, to normal, recurring
year-end audit adjustments which are not material,
individually or in the aggregate, to the financial position,
results of operations or cash flows of the Company) the
consolidated financial position of the Company as of the dates
thereof and the consolidated results of its operations for the
periods presented. Since December 31, 2000, there has not been
any change in the business, assets, financial condition or
results of operation of the Company or any of its
Subsidiaries, which in any case would have a material adverse
effect on or with respect to the business, assets, financial
condition or results of operation of the Company and its
Subsidiaries, taken as a whole, except for (i) changes that
are generally applicable to (A) the telecommunications
industry in Russia, (B) the Russian economy or (C) the United
States securities markets and (ii) any material adverse effect
to the extent directly attributable to the execution and
announcement of this Agreement or to the transactions
contemplated hereby ("MATERIAL ADVERSE EFFECT").
(h) Except as set forth in the SEC Documents, to the Seller's
knowledge (for purposes of this Agreement "Seller's knowledge"
and "knowledge of the Seller" shall mean the actual knowledge
after due inquiry of the executive officers of Seller and the
designees of Seller who sit on the Board of Directors of the
Company), the businesses of the Company and its Subsidiaries
have been conducted in compliance with all applicable laws,
ordinances and regulations of all governmental entities
(including, without limitation, those relating to licenses and
permits for the ownership, occupancy and operation of their
properties), except for violations that individually or in the
aggregate would not reasonably be expected to have a Material
Adverse Effect. Except for any investigation or review that
would not reasonably be expected to have a
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Material Adverse Effect, as of the date of this Agreement, to
the knowledge of the Seller no investigation or review by any
governmental entity (including without limitation any audit or
similar review by any U.S., Russian or Ukrainian federal,
state or local taxing authority) with respect to the Company
or any of its Subsidiaries or any of their respective
properties is pending or, to the knowledge of Seller,
threatened in writing.
(i) The Board of Directors of the Company has approved all
transactions contemplated hereby pursuant to Section 203 of
the Delaware General Corporation Law, and otherwise has taken
the necessary actions to make inapplicable any other
applicable anti-takeover statute or similar statute or
regulation to the transactions contemplated by this Agreement,
including the acquisition of the Purchase Shares.
(j) The authorized capital stock of the Company consists of
110,000,000 Shares and 10,000,000 shares of preferred stock,
par value $.01 per share ("PREFERRED STOCK"). As of March 26,
2001, (i) 24,479,997 Shares were issued and outstanding, (ii)
no Shares were held in the treasury of the Company, (iii) no
Shares were held by the Subsidiaries, and (iv) 4,320,000
Shares were reserved for future issuance pursuant to
outstanding employee stock options or stock incentive rights
granted pursuant to stock option plans of which 1,307,023
options had vested as of March 26, 2001. No shares of
Preferred Stock are outstanding. Except as set forth in this
Section or in Schedule 2.3(j), there are no options, warrants
or other rights, agreements, arrangements or commitments of
any character relating to the issued or unissued capital stock
of the Company or any Subsidiary obligating the Company or any
Subsidiary to issue or sell any shares of capital stock of, or
other equity interests in, the Company.
(k) Except as set forth on Schedule 2.3(k) hereof, to the
knowledge of Seller there are no liabilities of the Company
and its Subsidiaries of any kind whatsoever, whether or not
accrued and whether or not contingent or absolute, determined
or otherwise, other than (i) liabilities reflected on the
balance sheets contained in the SEC Documents or any schedule
to this Agreement, and (ii) liabilities that in the aggregate
would not reasonably be expected to have a Material Adverse
Effect.
(l) Except for a Deutsche Bank affiliate, whose fee shall be
exclusively borne by Seller, Seller has not employed nor is
subject to the valid claim of, any broker, finder or other
financial intermediary in connection with the transactions
contemplated by this Agreement or the transactions
contemplated hereby, who might be entitled to a fee or
commission in connection herewith or therewith.
(m) The Indemnification Agreement, dated October 5, 1999
between Seller and the Company, is in full force and effect
and constitutes the valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms,
except as may be limited by applicable laws relating to
bankruptcy, insolvency, reorganization, moratorium or similar
rights of creditors generally and by general principles of
equity. Neither Seller nor any of its affiliates (excluding
the Company) has any outstanding claims for indemnification
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under the Indemnification Agreement and Seller has not
received any written indemnification claims from the Company
thereunder.
3. Covenants
3.1 Cooperation. Upon the terms and subject to the conditions hereof,
each of the parties hereto shall (i) make promptly its respective filings, and
thereafter make any other reasonable submissions, under the HSR Act with respect
to the transactions contemplated by this Agreement; provided, however, the
parties shall have no obligation to make any filing under the HSR Act unless and
until the condition precedent to Purchasers' obligations hereunder set forth in
Section 4.3(e) shall have been satisfied; and provided, further, that the
parties shall make such filing within seven (7) business days after the
satisfaction of such condition precedent, and (ii) use its reasonable best
efforts to take, or cause to be taken, all appropriate action, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement and the Purchasers' Ancillary Agreements.
Concurrently with the filing of notifications under the HSR Act or as soon
thereafter as practicable, the parties shall each request early termination of
the HSR Act waiting period.
3.2 Conduct of Business. During the period from the date hereof to the
Closing Date, Seller covenants and agrees that it will use reasonable efforts to
cause the Company and its Subsidiaries to carry on their material businesses in
the ordinary course of business, in substantially the same manner as heretofore
conducted, and will use all reasonable efforts consistent with past practices
and policies to preserve intact the Companies and Subsidiaries' present
corporate formation, keep available the services of their respective officers
and key employees, and preserve their relationships with material customers and
suppliers and others having business dealings with them.
3.3 Public Announcements. The parties will consult with one another
before issuing any press release or otherwise making any public statement with
respect to this Agreement, and shall not issue any such press release or make
any such public statement absent mutual agreement thereon except, based on the
advice of counsel, as required by applicable law or exchange requirement.
3.4 Access. Seller agrees to provide and use all reasonable efforts to
cause the Company and Subsidiaries to provide reasonable access by each
Purchaser for its respective due diligence review of the books, records,
personnel and facilities of its material businesses during normal business
hours, subject at all times to the Confidentiality Agreement, dated as of March
17, 2001, between the Seller and Alfa Bank, Inc. (the "CONFIDENTIALITY
AGREEMENT"). Purchasers agree to cooperate with Seller and to conduct such due
diligence review in a manner to minimize any disruption to its material
businesses.
3.5 Trademark Transfer Agreement. Seller hereby waives any rights that
it may have under Section 4(i) of the Trademark Transfer Agreement, dated as of
October 5, 1999, by and between the Seller and the Company in the event of a
Change of Control (as defined in such Trademark Transfer Agreement).
3.6 CIG Shareholders Agreement. CIG, on behalf of itself, and each of
its affiliates, hereby irrevocably waives any rights, including any tag-along
right, arising under the CIG Shareholders Agreement that it may have with
respect to the transactions
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contemplated by this Agreement and the Alfa Stock Option Agreement, the CIG
Stock Option Agreement and the Barings Stock Option Agreement.
3.7 Mandatory Assignment and Guarantee. Alfa may assign its rights and
obligations under this Agreement to Alfa Telecom at any time prior to the
Closing Date but no such assignment shall relieve Alfa of any of its obligations
hereunder (the "ASSIGNMENT"). If the Assignment is made, then (i) at the Closing
Alfa, as the Guarantor, will execute and deliver the guaranty appended to the
form of the Note attached hereto as Exhibit A, with blanks appropriately filled
in and (ii) all references to "Alfa" in this Agreement and the Purchaser's
Ancillary Agreements will be deemed references to "Alfa Telecom".
4. Closing Conditions
4.1 Conditions Precedent to the Obligations of All Parties. The
respective obligations of each party shall be subject to the fulfillment or
written waiver at or prior to the Closing of each of the following conditions:
(a) Any waiting period (and any extension thereof) applicable
under the HSR Act shall have expired or been terminated.
(b) No preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction
or by an applicable governmental, regulatory or administrative
agency or commission nor any applicable statute, rule,
regulation or executive order promulgated or enacted by any
applicable governmental authority shall be in effect which
would prevent the consummation of the transactions provided
for in this Agreement.
4.2 Additional Conditions to the Obligations of Seller. The obligations
of Seller hereunder are also subject to the fulfillment or written waiver at or
prior to the Closing of the following additional conditions:
(a) Each Purchaser shall have performed in all material
respects each of its obligations under this Agreement,
including without limitation delivery of the items described
in Section 5(a) required to be delivered by such Purchaser.
(b) The representations and warranties of each Purchaser
contained in this Agreement shall be true and correct in all
material respects, in each case when made and, unless such
representation and warranty is made as of a specific date, at
and as of the Closing Date as if made at and as of such time.
(c) Seller shall have received a certificate, dated the
Closing Date, of the appropriate officer or partner of each of
the Purchasers, to the effect that the conditions specified in
paragraphs (a) and (b) of this Section 4.2 have been
fulfilled.
(d) Each Purchaser shall have duly executed and delivered the
New Shareholders Agreement (and with the Alfa party's name
corrected if the Assignment has not occurred).
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4.3 Additional Conditions to the Obligations of Purchasers. The
obligations of each of the Purchasers are also subject to the fulfillment or
written waiver at or prior to the Closing of all of the following additional
conditions:
(a) Seller shall have performed in all material respects each
of its obligations under this Agreement, including without
limitation delivery of the items described in Section 5(b)
required to be delivered by Seller.
(b) The representations and warranties of Seller contained in
this Agreement shall be true and correct when made and, unless
such representation or warranty is made as of a specified
date, at and as of the Closing Date as if made at and as of
such time, except for (i) changes contemplated by this
Agreement and (ii) any failure to be so true and correct
which, individually or with all such other failures, would not
have a Material Adverse Effect.
(c) The two separate promissory notes of the Company held by
Seller in the respective principal amounts of $4.8 million and
$1.5 million shall each have been amended to reflect that the
final maturity date shall be one year after the Closing Date
and that no payments shall be required under such notes until
such final maturity date.
(d) Purchasers shall have received a certificate dated the
Closing Date, of a duly qualified Officer of Seller, to the
effect that the conditions specified in paragraphs (a) and (b)
of this Section 4.3 have been fulfilled.
(e) Ernst & Young, the independent auditors of Seller, shall
have delivered their audit report and opinion on the financial
statements of Seller as of and for the year ended December 31,
2000, which opinion shall contain no "going concern" or other
qualification, and which opinion shall have been included in
Seller's Annual Report on Form 10-K for the year ended
December 31, 2000, and such financial statements shall have
been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis
and shall fairly present, in all material respects, the
consolidated financial position of Seller as of the dates
thereof and the consolidated results of its operations for the
periods presented.
(f) Each other Purchaser shall have duly executed and
delivered the New Shareholders Agreement.
5. Deliveries at Closing
(a) Documents to be Delivered by the Seller. At the Closing,
the Seller will deliver or cause to be delivered to each of the
Purchasers (or only to such specific Purchaser if so indicated):
(i) Certificates representing the Purchase Shares, duly
endorsed (or accompanied by duly executed stock
powers), shall be validly delivered and transferred
to each Purchaser, in the amounts set forth on
Schedule 1.1 hereto, free and clear of any and all
Claims, except for restrictions imposed by the New
Shareholders Agreement and, in the
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case of the Purchase Shares to be delivered to Alfa,
the Pledge Agreement;
(ii) Copies of the resolutions of the respective Board of
Directors of Seller and the Company authorizing and
approving this Agreement, the Seller's Ancillary
Agreements and the transactions and other agreements
contemplated hereby and thereby, certified by a duly
authorized officer of Seller and the Company, as
applicable, to be true, correct and in full force and
effect and unmodified as of the Closing Date;
(iii) Good standing certificate for each of Seller and the
Company from the Secretary of State of the State of
Delaware, dated not more than ten (10) days prior to
the Closing;
(iv) A certified copy of the Certificate of Incorporation
of Seller from the Secretary of State of the State of
Delaware, dated not more than ten (10) days prior to
the Closing;
(v) A certified copy of the Bylaws of Seller from the
Secretary of Seller, dated not more than ten (10)
days prior to the Closing;
(vi) Letters of resignation, effective as of the Closing
Date, of four of the five Seller nominees to the
Company's Board of Directors, which shall not include
one of the following Seller nominees: Xxxxxx X. Xxxxx
or Xxxxx X. Xxxxxx;
(vii) A certificate of a duly authorized officer of Seller
pursuant to Section 4.3(d) hereof;
(viii) Delivery to Alfa of the Alfa Stock Option Agreement
duly executed by Seller;
(ix) Delivery to CIG of the CIG Stock Option Agreement
duly executed by Seller;
(x) Delivery to Barings of the Baring Stock Option
Agreement duly executed by Seller;
(xi) The New Shareholders Agreement duly executed by
Seller and the Company;
(xii) Delivery to Baring Vostok Private Equity Fund LP
("BARING VOSTOK") and Barings of the Assignment and
Amendment Agreement by and among Baring Vostok, the
Company and others, dated the Closing Date, duly
executed by the Company, in the form attached hereto
as Exhibit G with blanks appropriately filled in; and
(xiii) Delivery to CIG of the Amendment to Shareholders and
Registration Rights Agreement by and between CIG and
the Company, dated the Closing Date, duly executed by
the Company, in the form attached hereto as Exhibit H
with blanks appropriately filled in.
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(b) Documents to be Delivered by Purchasers. At the Closing,
Purchasers (or such individual Purchaser as specified) will deliver to
the Seller:
(i) Their respective portion of the Purchase Price, in
accordance with Sections 1.2 and 1.3 hereof;
(ii) Alfa shall deliver to Seller a duly executed copy of
the Note;
(iii) Alfa shall deliver to Seller a duly executed copy of
the Pledge Agreement;
(iv) A copy of the resolutions of the Board of Directors
or similar governing body of Alfa authorizing and
approving this Agreement and all other transactions
and agreements contemplated hereby certified by a
duly authorized officer of Alfa to be true, correct
and in full force and effect and unmodified as of the
Closing Date;
(v) A certified copy of the Certificate of Incorporation
of Alfa from the Registrar of Companies of the
British Virgin Islands, dated not more than ten (10)
days prior to the Closing;
(vi) A certificated copy of the Memorandum of Association
of Alfa from the Registrar of Companies of the
British Virgin Islands, dated not more than ten (10)
days prior to the Closing;
(vii) A certificate of a duly authorized officer or other
signatory of each Purchaser pursuant to Section
4.2(c) hereof;
(viii) Alfa will deliver to Seller the Alfa Stock Option
Agreement duly executed by Alfa;
(ix) CIG will deliver to Seller the CIG Stock Option
Agreement duly executed by CIG;
(x) Barings will deliver to Seller the Barings Stock
Option Agreement duly executed by Barings; and
(xi) The New Shareholders Agreement duly executed by each
of the Purchasers.
6. Survival of Representations and Warranties. Except as set forth in the
following sentence, all of the representations and warranties contained
in this Agreement or any representations and warranties contained in
any certificate, document or instrument delivered pursuant to this
Agreement shall survive the Closing. The representations and warranties
contained in Sections 2.2(i), 2.3(b), (c), (g), (h), (i), (j) and (k)
of this Agreement shall survive for a period of one year from the
Closing Date.
7. Termination Rights
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7.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date:
(a) by mutual written consent of the parties;
(b) by any Purchaser (other than Alfa) as to itself only and
Alfa as to the entire Agreement, (i) if Seller shall have
materially breached any of its material covenants herein or if
Seller shall have made a material misrepresentation and not
cured such breach or misrepresentation within thirty (30) days
of notice of such breach or misrepresentation given by such
Purchaser; provided, however, that if an inaccuracy in any of
Seller's representations and warranties as of the date
subsequent to the date of this Agreement or a breach of a
covenant by Seller is curable and Seller is continuing to
exercise all reasonable efforts to cure such inaccuracy or
breach, then such Purchaser may not terminate this Agreement
under this Section 7.1(b) on account of such inaccuracy or
breach for a period ending 30 days after serving a notice of
such inaccuracy of breach on Seller, or (ii) if Ernst & Young
LLP shall have delivered their audit report and opinion on the
financial statements of Seller as of and for the year ended
December 31, 2000 and such opinion shall contain a "going
concern" or other qualification;
(c) by Seller, subject to Section 7.4 hereof, as to any
particular Purchaser and to the entire Agreement if Alfa is
the breaching Purchaser, if such Purchaser shall have
materially breached any of its covenants herein or if such
Purchaser shall have made a material misrepresentation herein
and not cured such breach or misrepresentation within thirty
(30) days of notice of such breach or misrepresentation given
by Seller; provided, however, that if any inaccuracy in any of
such Purchaser's representations and warranties as of a date
subsequent to the date of this Agreement or a breach of a
covenant by such Purchaser is curable by such Purchaser and
such Purchaser is continuing to exercise all reasonable
efforts to cure such inaccuracy or breach, then Seller may not
terminate this Agreement under this Section 7.1(c) as to such
Purchaser on account of such inaccuracy or breach for a period
ending 30 days after serving a notice of such inaccuracy of
breach on such Purchaser;
(d) by either Purchasers or Seller, if any court of competent
jurisdiction or other governmental agency of competent
jurisdiction shall have issued an order, decree or ruling or
taken any other action restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement
and such order, decree, ruling or other action shall have
become final and non-appealable;
(e) by either CIG or Barings, as to itself, pursuant to
Section 7.4 hereof; or
(f) by any Purchaser (other than Alfa) as to itself only and
Alfa as to the entire Agreement or Seller, if the Closing has
not occurred by July 31, 2001.
7.2 Procedure and Effect of Termination. In the event of termination
pursuant to Section 7.1 hereof, notice thereof shall forthwith be given to the
other parties hereto and this Agreement shall terminate without further action
by any of the parties hereto. If this Agreement is terminated as provided
herein, no party hereto shall have any liability or further
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obligation to any other party to this Agreement except pursuant to the
Confidentiality Agreement; provided, however, nothing herein will relieve any
party from liability for any breach of this Agreement, and the non-breaching
party or parties will have the right to enforce all available remedies, at law
or in equity, including without limitation as set forth in Section 7.3 below.
7.3 Specific Performance. The parties agree that the Purchasers would
be irreparably damaged if for any reason Seller failed to sell the Purchase
Shares to the Purchasers or to perform any of its other obligations under this
Agreement, and that the Purchasers would not have an adequate remedy at law for
money damages in such event. Accordingly, the Purchasers shall be entitled to
specific performance and injunctive and other equitable relief to enforce the
performance of this Agreement by Seller. Accordingly, if any Purchaser should
institute an action or proceeding seeking specific enforcement of the provision
hereof, Seller hereby waives the claim or defense that such Purchaser has an
adequate remedy at law and hereby agrees not to assert in any such action or
proceeding the claim or defense that such a remedy at law exists. Seller further
agrees to waive any requirements for the securing or posting of any bond in
connection with obtaining any such equitable relief. This provision is without
prejudice to any other rights that the Purchasers may have against Seller for
any failure to perform its obligations under this Agreement.
7.4 Default of Purchasers. If either or both of CIG or Barings defaults
in its obligations to purchase its respective portion of the Purchase Shares on
the Closing Date, then each of the non-defaulting Purchasers shall have the
option, in their sole discretion, to purchase the defaulting Purchaser's
Purchase Shares for cash, in proportion to the respective amounts of Purchase
Shares that they have agreed to purchase hereunder. If Alfa defaults in its
obligations to purchase its portion of the Purchase Shares on the Closing Date,
then each of CIG and Barings shall also have the option, in its sole discretion,
to terminate its respective obligations hereunder, without any liability on the
part of CIG or Barings. In the event that such defaulting party shall be CIG
and/or Barings, Alfa shall not have the right to terminate its obligation to
purchase its portion of the Purchase Shares hereunder. Nothing herein will
relieve the defaulting Purchaser from liability for its default.
8. Miscellaneous
8.1 Amendment and Modification. This Agreement may be amended, modified
or supplemented only by mutual written agreement of the parties hereto.
8.2 Benefit and Assignment. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
successors and assigns, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party to this
Agreement without the prior written consent of the other parties hereto;
provided, however, that (i) Global TeleSystems, Inc. may, with the prior written
consent of the other parties hereto (such consent not to be unreasonably
withheld or unreasonably delayed), assign its rights and obligations hereunder
but only to any direct or indirect subsidiary of Global TeleSystems, Inc. to
which Global TeleSystems, Inc. proposes to transfer the Purchase Shares, which
assignment shall not relieve Global TeleSystems, Inc. of its obligations
hereunder and (ii) the Assignment as permitted by Section 3.7 hereof shall not
require the consent of any other party hereto.
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8.3 No Third-Party Beneficiaries. Nothing in this Agreement shall
confer any rights upon any person or entity other than the parties hereto and
their respective heirs, successors and permitted assigns.
8.4 Entire Agreement. This Agreement, the Purchaser's Ancillary
Agreements, the Seller's Ancillary Agreements, the Confidentiality Agreement,
and the exhibits and schedules hereto and thereto, embody the entire agreement
and understanding of the parties hereto and supersede any and all prior
agreements, arrangements and understandings relating to the matters provided for
herein and therein. No amendment, waiver of compliance with any provision of
condition hereof or consent pursuant to this Agreement shall be effective unless
evidenced by an instrument in writing signed by the party against whom
enforcement of any amendment, waiver or consent is sought. Seller is not making
any representation or warranty whatsoever, express or implied, except the
representations and warranties of Seller contained in Section 2.3 of this
Agreement, and each Purchaser acknowledges and agrees that it has not relied on
or been induced to enter into this Agreement by any representation or warranty
other than those expressly set forth herein.
8.5 Expenses. The parties shall be responsible for the payment of their
respective expenses, including legal and accounting fees, in connection with the
preparation, negotiation and closing of this Agreement and the transactions
contemplated hereby. For the avoidance of doubt, none of Seller's or Purchasers'
expenses shall be allocated to or paid by the Company, directly or indirectly.
8.6 Headings. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.
8.7 Choice of Law; Arbitration. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
principles of conflicts of law. All claims or other disputes arising out of or
in connection with this Agreement will be referred to and finally settled by
arbitration under the Rules of Arbitration of the International Chamber of
Commerce (the "RULES") as follows: (i) the number of arbitrators shall be three
(to be appointed in accordance with the Rules); (ii) the place of arbitration
shall be London, England; (iii) the language of the arbitration shall be
English; and (iv) any award of the arbitrator shall be final and binding and the
parties hereby waive any right to refer any question of law and any right of
appeal on the law and/or merits to any court.
8.8 Notices. All notices, requests, demands, letters, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery, or (d) sent by fax, as follows:
(a) if to Alfa, at:
X.X. Xxx 0000
Xxxxxx Xxxxx
0xx Xxxxx
000 Xxxxxxxxxx Xxxxx
Xxxx Xxxx
Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx
Facsimile No.: (350) 52065
Attn: Xxxxx Xxxxxxxx
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with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx L.L.P.
Xxxxxx X. Xxxxxxx Building
0000 Xxx Xxxxxxxxx Xxxxxx X.X.
Xxxxxxxxxx, X.X. 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxxx Xxxxxxxx
(b) if to CIG, at:
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Facsimile No.: x00 (0)00 0000-0000
Attn.: Xxxxxx Xxxxxxx
--and--
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Facsimile No.: x00 (0)00 0000-0000
Attn.: Xxx Xxxxxx
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
00 Xxxx Xxxx
Xxxxxx XX0X 0XX
Facsimile No.: x00 (0)00 0000-0000
Attn.: Xxxxx X. Xxxxxxxxx
(c) If to Cavendish Nominees Limited:
c/o International Private Equity Services
00-00 Xxxxxxxx Xxxx XX Xxx 000
Xx. Xxxxx Xxxx
XX0 0XX, Guernsey
Facsimile No.: 44 (0) 1481 715 219
Attn.: Xxx. Xxxxxx Xxxxxx
with a copy to:
Baring Vostok Capital Partners
10 Uspenski Xxxxxxxx
000000 Xxxxxx, Xxxxxx
Facsimile No.: 7095 967 1308
Attn.: Xxxxxxx Xxxxxx
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and to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
00 Xxxx Xxxx
Xxxxxx
XX0X 0XX
Facsimile: x00 (00) 0000 0000
Attn.: Xxxxx Xxxxxxxxx
(d) 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
Attn.: Xxxxxxxxx Tourney
with a copy to:
Baring Vostok Capital Partners
10 Uspenski Xxxxxxxx
000000 Xxxxxx, Xxxxxx
Facsimile No.: 7095 967 1308
Attn.: Xxxxxxx Xxxxxx
and to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
00 Xxxx Xxxx
Xxxxxx
XX0X 0XX
Facsimile: x00 (00) 0000 0000
Attn.: Xxxxx Xxxxxxxxx
(e) if to Seller, at:
Global TeleSystems, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx XX0X 0XX
Facsimile No.: x00 (0)00 0000 0000
Attn: General Counsel
with a copy to:
Shearman & Sterling
0 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Facsimile No.: x00 (0)00 0000 0000
Attention: Xxxxxxx Xxxxxxxxx
00
00
or to such other person or entity or address as any party shall specify by
notice in writing to the party entitled to notice. All such notices, requests,
demands, letters, waivers and other communications shall be deemed to have been
received (w) if by personal delivery on the day after such delivery, (x) if by
certified or registered mail, on the fifth Business Day after the mailing
thereof, (y) if by next-day or overnight mail or delivery, on the day delivered
or (z) if by fax, on the next day following the day on which such fax was sent,
provided that a copy is also sent by certified or registered mail.
8.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument. This Agreement may be executed by
facsimile signatures and such signatures shall be deemed binding for all
purposes hereof, without delivery of an original signature being thereafter
required.
8.10 Currency. 8.15 Unless otherwise specified in this Agreement, all
references to currency, monetary values and dollars set forth herein shall mean
United States (U.S.) dollars and all payments hereunder shall be made in United
States dollars.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
SELLER:
Global TeleSystems, Inc.
By:
---------------------------------------
Its:
-------------------------------------
PURCHASERS:
Alfa Bank Holdings Limited
By:
---------------------------------------
Its:
-------------------------------------
Capital International Global Emerging
Markets Private Equity Fund, L.P.
By: Capital International, Inc.,
General Partner
By:
---------------------------------------
Its:
-------------------------------------
Cavendish Nominees Limited
By:
---------------------------------------
Its:
-------------------------------------
First NIS Regional Fund SICAV
By:
---------------------------------------
Its:
-------------------------------------
By:
---------------------------------------
Its:
-------------------------------------
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