Exhibit 10.23
---------------------------------------------------------------
STOCK PURCHASE AGREEMENT
By and Between
STORYFIRST COMMUNICATIONS, INC.,
and
ALFA CAPITAL HOLDINGS (CYPRUS) LIMITED
Dated July 29, 2003
------------------------------------------------------------
STOCK PURCHASE AGREEMENT
This Agreement (the "Agreement") is made and entered into this 29th day
of July, 2003 by and between:
(1) StoryFirst Communications, Inc., a Delaware corporation (the
"Company"); and
(2) Alfa Capital Holdings (Cyprus) Limited, a private limited liability
company incorporated under the laws of Cyprus (the "Purchaser").
The Company and the Purchaser are hereinafter sometimes referred to
individually as a "Party" and collectively as the "Parties".
PREAMBLE
WHEREAS, the Purchaser desires to own a 25% interest in the Company;
WHEREAS, the Purchaser currently owns, or will own prior to the closing
of the transactions contemplated hereby, 819,602 shares, having a nominal value
of Rubles 10 each (the "CTC Shares"), of ZAO "CTC", a closed joint stock company
organized and existing under the laws of the Russian Federation ("CTC"); and
WHEREAS, in exchange for, among other consideration, the CTC Shares and
subject to the terms and conditions set forth herein, the Company desires to
sell to the Purchaser a number of shares of the Company such that, together with
the Purchaser's other shares of the Company, the Purchaser owns a 25% interest
in the Company immediately following the Closing (as defined herein).
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Unless the context shall otherwise require, capitalized terms
used herein shall have the following meanings (such
definitions to be equally applicable to both the singular and
plural forms of the terms used):
1.1.1 "Applicable Law" means, with respect to any Party,
all laws, ordinances, regulations, judgments,
decrees, decisions, and rules of any Governmental
Authority or non-governmental regulatory body, and
any international treaties and agreements, in force
and governing such Party and/or its business
activities, or the Transactions contemplated
hereunder.
1.1.2 "Business Day" means any day on which banks are open
for business in Moscow, Russian Federation and San
Francisco, California, U.S.A.
-1-
1.1.3 "Cash Consideration" means the sum of (i) $15,648,229
less the amount of the Loan Balance and (ii) the
Top-Up Consideration, if any.
1.1.4 "Closing" shall have the meaning ascribed to such
term in Section 3.1 hereof.
1.1.5 "Closing Date" shall have the meaning ascribed to
such term in Section 3.1.
1.1.6 "Common Stock" means the common stock, par value
$0.01 per share, of the Company.
1.1.7 "Consideration" shall have the meaning ascribed to
such term in Section 2.2.
1.1.8 "Dollar" and "$" means the lawful currency of the
United States of America.
1.1.9 "Financial Statements" shall have the meaning
ascribed to such term in Section 4.2.7.
1.1.10 "Government Approvals" means authorizations,
licenses, permits and consents from or registrations
with or notifications of Governmental Authorities
that may be required, necessary or desirable in order
to give effect to this Agreement, the transactions
contemplated hereby and the making, assignment and
repayment of the Loan.
1.1.11 "Governmental Authority" means, with respect to the
Company, any national, regional, local or other
governmental authority or court of the U.S. or the
Russian Federation and, with respect to the
Purchaser, any national, regional, local or other
governmental authority or court of Cyprus or the
Russian Federation.
1.1.12 "Xxxx-Xxxxx-Xxxxxx Act" means the U.S.
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
1.1.13 "Initial Shares" means that number of shares of
Common Stock and/or Senior Stock (as determined in
accordance with Section 2.4 hereof) equal to 23.47%
of the issued and outstanding capital stock of the
Company, determined on an as-if-converted to Common
Stock basis immediately following the Closing before
taking into account any shares of capital stock of
the Company issued in connection with the exercise of
the Pre-Emptive Rights, if any.
1.1.14 "Loan" shall have the meaning ascribed to such term
in Section 5.2.7.
-2-
1.1.15 "Loan Assignment" means the assignment in
substantially the form initialled by the parties
hereto on the date hereof relating to the assignment
of the Loan from the Purchaser to the Company.
1.1.16 "Loan Balance" means the principal amount of the Loan
plus any accrued and unpaid interest thereon as of
the Closing Date.
1.1.17 "Loan Documents" shall have the meaning ascribed to
such term in Section 5.2.7.
1.1.18 "Option Agreement" means the option agreement between
the Company and the Purchaser substantially in the
form initialled by the parties hereto on the date
hereof.
1.1.19 "Person" means any individual, corporation, limited
or general partnership, limited liability company,
joint venture, association, trust, estate,
unincorporated organization, entity or any
Governmental Authority or political subdivision
thereof or any other entity or organization.
1.1.20 "Pre-Emptive Rights" shall have the meaning ascribed
to such term in Section 5.2.9.
1.1.21 "Register" means the official shareholders register
of CTC.
1.1.22 "Rubles" means the lawful currency of the Russian
Federation.
1.1.23 "Russian Competition Act" shall have the meaning
ascribed to such term in Section 5.2.8.
1.1.24 "Securities Act" means the U.S. Securities Act of
1933, as amended.
1.1.25 "Senior Stock" means the Company's Super Senior
Preferred Stock, $0.01 par value per share, with the
rights and preferences set forth in the Company's
Amended and Restated Certificate of Incorporation as
on file with the Secretary of State of the State of
Delaware on the date hereof.
1.1.26 "Shares" means collectively the Initial Shares and,
if any, the Top-Up Shares.
1.1.27 "Stockholders' Agreement" means the stockholders'
agreement among the Company, the Purchaser and
certain stockholders of the Company substantially in
the form initialled by the parties hereto on the date
hereof.
1.1.28 "Top-Up Consideration" means zero if there are no
Top-Up Shares to be purchased hereunder or, if
otherwise, the Dollar amount equal to the number of
Top-Up Shares (determined on an as-if-converted to
Common Stock basis) multiplied by the Top-Up Price.
1.1.29 "Top-Up Election" shall have the meaning ascribed to
such term in Section 2.3.
-3-
1.1.30 "Top-Up Notice" shall have the meaning ascribed to
such term in Section 2.3.
1.1.31 "Top-Up Price" means the price per share paid by the
holders of the Pre-Emptive Rights upon exercise of
such rights.
1.1.32 "Top-Up Shares" means, in the event of any exercise
of the Pre-Emptive Rights, a number of shares of
Common Stock and/or Senior Stock (as determined in
accordance with Section 2.4 hereof) set forth in the
Top-Up Election; provided, however, that such number
of shares shall not exceed X (rounded down to the
nearest whole share) where:
X = A/(1-B) - A
Where:
A = the number of shares of capital
stock of the Company (determined on
an as-if-converted to Common Stock
basis) purchased by the holders of
Pre-Emptive Rights in connection
with the exercise of the Pre-Emptive
Rights; and
B = the percentage of the issued and
outstanding capital stock of the
Company owned by the Purchaser
(including any shares of the
Company's capital stock purchased
from existing shareholders of the
Company) immediately following the
Closing (excluding any shares of
capital stock of the Company issued
in connection with the exercise of
the Pre-Emptive Rights and
determined on an as-if-converted to
Common Stock basis); provided,
however, that such percentage shall
not in any event exceed 25%.
1.1.33 "Transaction Documents" means this Agreement, the
Loan Assignment, the Stockholders' Agreement, the
Option Agreement and any other documents and
instruments referred to herein or therein.
1.1.34 "Transactions" means all of the transactions
contemplated by this Agreement, including, without
limitation, (a) the issuance of Shares by the Company
to the Purchaser in exchange for the Consideration
and (b) the execution, delivery and performance of
this Agreement and the other Transaction Documents.
1.1.35 "Transfer Notice" means the notice by the Purchaser
to CTC and the CTC shareholders regarding its
intention to consummate the sale of the CTC Shares
contemplated hereunder, such notice setting forth the
purchase price, payment terms and other material
terms of such transaction.
1.1.36 "U.S." and "U.S.A." means the United States of
America.
-4-
ARTICLE 2
AUTHORIZATION; SALE OF SHARES
2.1 Authorization. The Company has, or before the Closing will
have, duly authorized the sale and issuance, pursuant to the
terms of this Agreement, of the Shares.
2.2 Sale of Shares. Subject to the terms and conditions of this
Agreement, at the Closing, the Company will sell and issue to
the Purchaser, and the Purchaser will purchase, the Shares in
exchange for the following consideration (the
"Consideration"):
2.2.1. the sale, transfer and assignment of the CTC Shares
to the Company;
2.2.2. an assignment of all principal and accrued and unpaid
interest on the Loan in accordance with the Loan
Assignment; and
2.2.3. the Cash Consideration.
2.3 Top-Up Shares. If there is an exercise of any Pre-Emptive
Rights, the Purchaser shall have the right to purchase, and
the Company shall be obligated to issue to the Purchaser, the
Top-Up Shares at a price per share equal to the Top-Up Price.
Promptly following the lapse of the exercise periods for the
Pre-Emptive Rights, the Company shall provide written notice
(the "Top-Up Notice") to the Purchaser of the election by any
holder of Pre-Emptive Rights to exercise such rights,
including the number of shares to be so purchased, the price
per share to be paid and the maximum number of Top-Up Shares
purchasable hereunder by the Purchaser. If the Purchaser
desires to purchase any Top-Up Shares, the Purchaser shall
provide, no later than five (5) Business Days following the
deemed receipt of the Top-Up Notice, an irrevocable written
notice to the Purchaser (the "Top-Up Election") of its
election to purchase Top-Up Shares and the number of shares it
so elects to purchase.
2.4 Form of Shares. If, on the Closing Date, the Company has
issued and outstanding Senior Stock, the Company shall sell
and issue to the Purchaser the Shares in the form of a
combination of shares of Senior Stock and Common Stock, where,
with respect to the Initial Shares, the number of shares of
Senior Stock shall be 36,432 and the number of shares of
Common Stock shall be equal to the total number of Initial
Shares to be issued and sold hereunder less the number of
shares of Senior Stock so issued and where, with respect to
the Top-Up Shares, the ratio of shares of Senior Stock to
Common Stock shall be the same as with respect to the Initial
Shares. If on the Closing Date, the Company's issued and
outstanding capital stock comprises solely Common Stock, the
Company shall sell and issue to the Purchaser the Shares
solely in the form of Common Stock.
2.5 Taxes. The Parties acknowledge that as of the date of this
Agreement, delivery of the Consideration by the Purchaser in
the manner contemplated by this Agreement is not subject to
any withholding tax or duty under Applicable Law. The Parties
further acknowledge and agree that the Cash Consideration
shall be net of all taxes and duties that may be imposed under
Applicable Law.
-5-
ARTICLE 3
CLOSING ARRANGEMENTS
3.1 Closing. The closing of the sale and purchase of the Shares
(the "Closing") shall take place within 14 Business Days
following the satisfaction of the conditions precedent set
forth in Sections 5.1, 5.2 and 5.3 or their waiver by the
relevant Party, but in no event later than August 31, 2003 or
such other date as the Parties may agree in writing. Such date
is referred to herein as the "Closing Date". The Closing shall
take place at 10:00 a.m. on the Closing Date at the offices of
CTC, 12, 3rd Xxxxxxxxxxxxxx Xx., 000000 Xxxxxx, Xxxxxx or at
such other time on the Closing Date or such other place as may
be agreed by the Parties.
3.2 Actions at Closing. At the Closing, the Company and/or the
Purchaser shall take the following actions:
3.2.1. the Purchaser shall deliver to the Company a
certified extract from the Register evidencing the
Company as the owner of the CTC Shares;
3.2.2. the Purchaser shall pay the Cash Consideration by
wire transfer of immediately available funds in
Dollars to the account of the Company, as designated
by the Company in writing to the Purchaser; and
3.2.3. each of the Company and the Purchaser shall execute
and deliver (i) the Loan Assignment, (ii) the
Stockholders' Agreement and (iii) the Option
Agreement.
3.3 Delivery of Share Certificates. Upon receipt of the documents
set forth in Section 3.2.1 above and upon receipt of the Cash
Consideration the Company shall deliver to the Purchaser a
certificate(s) for the Shares, registered in the name of the
Purchaser.
3.4 Company Further Assurances. The Company, from time to time
after the Closing Date, at the Purchaser's request, shall take
such other actions and execute and deliver such other
documents, certificates, instruments of conveyance and further
assurances as the Purchaser may reasonably request in order to
vest more fully and effectively in the Purchaser all rights
and ownership in, and title to, and to put the Purchaser more
fully in possession of the Shares, or to carry out, evidence
or confirm the intended purposes of this Agreement.
3.5 Purchaser Further Assurances. The Purchaser, from time to time
after the Closing Date, at the Company's request, shall take
such other actions and execute and deliver such other
documents, certificates, instruments of conveyance and further
assurances as the Company may reasonably request in order to
vest more fully and effectively in the Company all rights and
ownership in, and title to, and to put the Company more fully
in possession of the CTC Shares and the Loan, or to carry out,
evidence or confirm the intended purposes of this Agreement.
If, notwithstanding the assignment of the Loan, the Purchaser
or any of its affiliates (other than the Company) receives
payment from CTC of any amount under or in respect of the
Loan, at any time after the Closing Date, the Purchaser will
promptly pay the amount so received to the Company.
-6-
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Purchaser. As a material
inducement to the Company's entry into this Agreement and the
performance of the transactions contemplated hereby and
acknowledging that the Company is entering into this Agreement
in reliance on the representations and warranties in this
Section 4.1, the Purchaser represents and warrants to the
Company that as of the date of this Agreement and the Closing
Date:
4.1.1 Due Registration and Corporate Power. The Purchaser
is duly organized and registered and validly existing
under the laws of Cyprus, has the full power and
authority to own and dispose of the assets it owns
and to perform its obligations under this Agreement
and the other Transaction Documents, and its
constituent documents are in full force and effect.
The Purchaser has not been organized, reorganized or
recapitalized specifically for the purpose of
investing in the Company.
4.1.2 Authorization. The execution, delivery and
performance of this Agreement and the other
Transaction Documents have been duly authorized by
all necessary action of its governing bodies.
4.1.3 Enforceability of Obligations. This Agreement has
been, and, upon the Closing, the other Transaction
Documents will be, duly executed and delivered by the
Purchaser and, assuming the due authorization,
execution and delivery of this Agreement by the
Company and of the other Transaction Documents by the
parties thereto other than the Purchaser, constitute
or will constitute its legal, valid and binding
obligations, enforceable against it in accordance
with their respective terms, except to the extent
that such enforcement may be subject to bankruptcy,
insolvency, reorganization or other similar laws now
or hereafter in effect relating to creditors' rights
and remedies generally.
4.1.4 Ownership of the CTC Shares. As of the Closing, the
Purchaser shall be the owner of the CTC Shares with
good and valid title thereto, free and clear of any
mortgages, liens, security interests, claims and
other encumbrances (other than its obligations
hereunder) and upon transfer to the Company hereunder
the CTC Shares will be validly issued and outstanding
in the name of the Company, fully paid and free and
clear of any mortgages, liens, security interests,
claims and other encumbrances.
-7-
4.1.5 Ownership of the Loan. As of the Closing, the
Purchaser shall be the owner of the Loan with good
and valid title thereto, free and clear of any
mortgages, liens, security interests, claims and
other encumbrances and upon assignment to the Company
hereunder the Loan will be free and clear of any
mortgages, liens, security interests, claims and
other encumbrances. The Loan will constitute a legal,
valid and binding obligation of CTC enforceable
against it in accordance with the terms thereof, and
all Government Approvals in connection with the
making, assignment and repayment of the Loan have
been, or by the Closing will be, obtained and in full
force and effect. The total outstanding principal
amount of the Loan is not less than $9,838,281.08. No
part of the Loan has been paid and the Purchaser has
received no notice and is not otherwise aware of any
defense to the Loan.
4.1.6 Noncontravention. Subject to compliance with the
applicable requirements of the Xxxx-Xxxxx-Xxxxxx Act
and the Russian Competition Act, neither the
execution and delivery by the Purchaser of this
Agreement or the other Transaction Documents, nor the
consummation by the Purchaser of the transactions
contemplated hereby or thereby, will (a) conflict
with or violate any provision of the constituent
documents of the Purchaser, (b) require on the part
of the Purchaser any notice to or filing with, or any
permit, authorization, consent or approval of, any
Governmental Authority, (c) conflict with, result in
a breach of, constitute (with or without due notice
or lapse of time or both) a default under, result in
the acceleration of obligations under, create in any
party the right to terminate, modify or cancel, or
require any notice, consent or waiver under, any
contract or instrument to which the Purchaser is a
party or by which the Purchaser is bound or to which
any of its assets is subject, (d) result in the
imposition of any security interest. lien, charge or
encumbrance upon any assets of the Purchaser or (e)
violate any order, writ, injunction, decree, statute,
rule or regulation applicable to the Purchaser or any
of its properties or assets.
4.1.7 Litigation. The Purchaser is not a party to any
action, suit, investigation or proceeding pending
(or, to the knowledge of the Purchaser, threatened)
against it or affecting its property before any
judicial, arbitral or administrative body that, if
determined adversely to its interests, would
materially and adversely affect the ability of the
Purchaser to perform its obligations under this
Agreement or any other Transaction Document.
-8-
4.1.8 No Claims. The Purchaser has no right to any claim or
compensation from the Company in connection with its
transfer of the CTC Shares or the Loan hereunder.
Other than the Loan, CTC has no outstanding
indebtedness to the Purchaser.
4.1.9 Investment. The Purchaser is acquiring the Shares,
and the shares of Common Stock into which the Shares
may be converted, for its own account for investment
and not with a view to, or for sale in connection
with, any distribution thereof, nor with any present
intention of distributing or selling the same; and
the Purchaser has no present or contemplated
agreement, undertaking, arrangement, obligation,
indebtedness or commitment providing for the
disposition thereof. The Purchaser is an "accredited
investor" as defined in Rule 501(a) under the
Securities Act.
4.1.10 Experience. The Purchaser has carefully reviewed the
representations concerning the Company contained in
this Agreement, and has made detailed inquiry
concerning the Company, its business and its
personnel; the officers of the Company have made
available to the Purchaser any and all written
information which it has requested and have answered
to the Purchaser's satisfaction all inquiries made by
the Purchaser; and the Purchaser has sufficient
knowledge and experience in finance and business that
it is capable of evaluating the risks and merits of
its investment in the Company and the Purchaser is
able financially to bear the risks thereof.
4.2 Representations and Warranties of the Company. As a material
inducement to the entry into this Agreement by the Purchaser
and the performance of the transactions contemplated hereby
and acknowledging that the Purchaser is entering into this
Agreement in reliance on the representations and warranties in
this Section 4.2, the Company represents and warrants to the
Purchaser that as of the date of this Agreement and the
Closing Date:
4.2.1 Company's Due Registration and Corporate Power. The
Company is duly organized and registered and validly
existing under the laws of the jurisdiction of its
creation, has the full power and authority to own and
dispose of the assets it owns and to perform its
obligations under this Agreement and the other
Transaction Documents to which it is a party.
4.2.2 Authorization by the Company. The execution, delivery
and performance of this Agreement and the other
Transaction Documents to which it is a party have
been duly authorized by all necessary action of the
governing bodies of the Company.
-9-
4.2.3 Enforceability of the Company's Obligations. This
Agreement has been, and, upon the Closing, the other
Transaction Documents to which it is a party will be,
duly executed and delivered by the Company and,
assuming the due authorization, execution and
delivery of this Agreement by the Purchaser and of
the other Transaction Documents by the parties
thereto other than the Company, constitutes or will
constitute its legal, valid and binding obligation,
enforceable against it in accordance with its terms,
except to the extent that such enforcement may be
subject to bankruptcy, insolvency, reorganization or
other similar laws now or hereafter in effect
relating to creditors' rights and remedies generally.
4.2.4 The Shares. The issuance, sale and delivery of the
Shares in accordance with this Agreement have been,
or will be on or prior to the Closing, duly
authorized by all necessary corporate action on the
part of the Company. The Shares when so issued, sold
and delivered against payment therefor in accordance
with the provisions of this Agreement will be duly
and validly issued, fully paid and nonassessable.
Immediately following the Closing but before taking
into account any shares of capital stock of the
Company issued in connection with the exercise of the
Pre-Emptive Rights, if any, the Initial Shares will
represent 23.47% of the issued and outstanding
capital stock of the Company, determined on an
as-if-converted to Common Stock basis. Except (i) as
set forth on Exhibit C to the Stockholders'
Agreement, (ii) for the rights of various
stockholders of the Company to maintain their
percentage ownership in the Company in connection
with the issuance of certain securities by the
Company and (iii) for the various classes and series
of preferred stock set forth in the Company's amended
and restated certificate of incorporation as on file
with the Secretary of State of the State of Delaware
as of the date hereof, there are no outstanding
options, warrants or other convertible securities or
other rights, agreements or arrangements under which
the Company is or may be obligated to issue equity
securities.
4.2.5 Noncontravention. Subject to compliance with the
applicable requirements of the Xxxx-Xxxxx-Xxxxxx Act
and the Russian Competition Act, neither the
execution and delivery by the Company of this
Agreement or the other Transaction Documents, nor the
consummation by the Company of the transactions
contemplated hereby or thereby, will (a) conflict
with or violate any provision of the constituent
documents of the Company, (b) require on the part of
the Company any notice to or filing with, or any
permit, authorization, consent or approval of, any
Governmental Authority, (c) conflict with, result in
a breach of, constitute (with or without due notice
or lapse of time or both) a default under, result in
the acceleration of obligations under, create in any
party the right to terminate, modify or cancel, or
require any notice, consent or waiver under, any
contract or instrument to which the Company is a
party or by which the Company is bound or to which
any of its assets is subject, (d) result in the
imposition of any security interest. lien, charge or
encumbrance upon any assets of the Company or (e)
violate any order, writ, injunction, decree, statute,
rule or regulation applicable to the Company or any
of its properties or assets.
-10-
4.2.6 Litigation. The Company is not a party to any action,
suit, investigation or proceeding pending (or, to the
knowledge of the Company, threatened) against it or
affecting its property before any judicial, arbitral
or administrative body that, if determined adversely
to its interests, would materially and adversely
affect the ability of the Company to perform its
obligations under this Agreement or any other
Transaction Document.
4.2.7 Financial Statements. The Company's consolidated
financial statements at and for the period ended
December 31, 2002 (the "Financial Statements"), a
copy of which has been provided to the Purchaser,
were prepared in accordance with generally accepted
accounting principles applied on a consistent basis
during the periods involved and fairly present in all
material respects the consolidated financial position
of the Company as of the dates thereof and the
consolidated results of its operations for the
periods presented except, in each case, for the fact
that the Financial Statements have been prepared on
the basis that the results of operations of the
Company's subsidiary, Radio Maximum, are not
consolidated into the Company's consolidated results
and the audit committee of the Company's Board of
Directors and the Company's auditors have not
formally decided if this approach is appropriate or
if in fact such results should be consolidated within
the Financial Statements, consistent with the
Company's prior treatment of such results of
operations. Since December 31, 2002, there has not
been any change in the business, assets, financial
condition or results of operations of the Company
which in any case would have a material adverse
effect on the business, assets, financial condition,
or results of operation of the Company and its
subsidiaries, taken as a whole, except for changes
applicable to the Russian economy and international
securities markets generally.
4.2.8 Compliance with Applicable Law. The Company's
business has been conducted in accordance with all
Applicable Law (including Applicable Law relating to
licenses, and permits for ownership, occupancy and
operation of the Company's properties), except to the
extent that the failure to so conduct the business
would not reasonably be expected to have a material
adverse effect on the business, assets, financial
condition or results of operations of the Company and
its subsidiaries taken as a whole. As of the date of
this Agreement, to the best of the Company's
knowledge, no investigation or review by a
Governmental Authority with respect to the Company,
its directors, officers or any of its respective
properties is pending or threatened in writing.
-11-
4.2.9 Liabilities. To the Company's knowledge there are no
liabilities of the Company of any kind whatsoever,
whether or not accrued or whether or not contingent
or absolute, determined or otherwise other than (i)
liabilities reflected on the balance sheets of the
Financial Statements and of the management accounts
of the Company for the quarter ended March 31, 2003
and (ii) liabilities that in aggregate would not
reasonably be expected to have a material adverse
effect on the business, assets, financial condition
or results of operation of the Company and its
subsidiaries taken as a whole.
4.2.10 Information for Valuation Reports. All historical
information regarding the Company and its
subsidiaries given by the Company to Deutsche Bank AG
to be used in connection with the preparation by
Deutsche Bank AG of its valuation report on the
Company dated September 4, 2002 and the update of
such valuation report dated March 2003 is true and
correct in all material respects and does not omit
material information necessary to make the
information provided, in light of the purpose for
which it was so provided, not misleading.
4.3 Survival of Representations and Warranties. The
representations and warranties of the Purchaser and the
Company contained in Sections 4.1 and 4.2, respectively, shall
survive the execution and delivery of this Agreement and the
issuance of the Shares contemplated hereby, and all statements
contained in any certificate or other instrument delivered by
one Party hereunder shall be deemed to constitute
representations and warranties made by such Party and no
investigation by the other Party shall detract from, or
diminish the scope of, any representation or warranty or such
Party's reliance thereon.
ARTICLE 5
CONDITIONS PRECEDENT
5.1. Conditions Precedent to Either Party's Obligations at Closing.
The obligations of the Company and the Purchaser to be
performed hereunder on the Closing Date shall be conditional
upon all applicable waiting periods (and any extensions
thereof) under the Xxxx-Xxxxx-Xxxxxx Act having expired or
having otherwise been terminated.
5.2. Conditions Precedent to the Company's Obligations at Closing.
Subject to the right of the Company to waive in writing any
such conditions to its performance, the obligations of the
Company to be performed hereunder on the Closing Date shall be
conditioned upon satisfaction of the following conditions
precedent:
-12-
5.2.1 Compliance. The Purchaser shall have performed and
complied with all terms and conditions of this
Agreement at or before the Closing and the Purchaser
shall have executed and delivered or caused to have
been executed and delivered to the Company at the
Closing all documents contemplated to be delivered at
or before the Closing in accordance with Sections
3.2.1 and 3.2.3 hereof.
5.2.2 Accuracy of Representations and Warranties. All
representations and warranties of the Purchaser
contained in this Agreement shall remain true and
correct in all material respects at and as of
Closing.
5.2.3 No Litigation. No action or proceedings shall have
been instituted or threatened before or by any
Governmental Authority for the purpose of
invalidating, nullifying, enjoining, preventing or
restraining the Transactions contemplated by this
Agreement.
5.2.4 Shareholder Approval. The Company shall have received
the approval of the issuance of the Shares to the
Purchaser in the manner contemplated by this
Agreement by a majority of the votes represented by
the outstanding shares of capital stock of the
Company entitled to vote thereon.
5.2.5 Transfer Notice. The Purchaser shall have delivered a
Transfer Notice to CTC with respect to the sale and
purchase of the CTC Shares hereunder.
5.2.6 Registration of Transfer of CTC Shares. Ownership of
the CTC Shares shall be registered in the Register in
the name of the Company and the Purchaser shall have
delivered to the Company a certified extract from the
Register to such effect.
5.2.7 Conditions to the Assignment of the Loan. The
Purchaser shall have extended an unsecured loan to
CTC in a principal amount of at least $9,838,281.08
at an interest rate of 15% per annum, having a term
of no less than two years from the date of issue (the
"Loan"). OAO Alfa Bank shall have provided written
confirmation of repayment by CTC of the following
credit facilities in full (including all accrued and
unpaid interest and penalties thereon:
------------------------- -------------------- ---------------------------
Number/Date Principal Amount Original Maturity Date
------------------------- -------------------- ---------------------------
------------------------- -------------------- ---------------------------
57419/January 30, 2001 $1,500,000 March 28, 2003
------------------------- -------------------- ---------------------------
------------------------- -------------------- ---------------------------
69615/December 25, 2001 $6,232,318.06 March 28, 2003
------------------------- -------------------- ---------------------------
------------------------- -------------------- ---------------------------
82551/September 30, 2002 $475,000 March 28, 2003
------------------------- -------------------- ---------------------------
-13-
Prior to the Closing, the Purchaser shall have
delivered to CTC written notice of the assignment of
the Loan to the Company. The Purchaser shall have
delivered to the Company true, correct, and complete
copies of all documents, instruments and other
writings evidencing the Loan, each as amended or
otherwise modified to date, and all waivers,
consents, releases, and correspondence related
thereto, which constitute all documents evidencing
the Loan and the Purchaser's ownership thereof (the
"Loan Documents"). As of the Closing Date, the Loan
Documents shall be in full force and effect and shall
not have been modified, amended, terminated,
rejected, disaffirmed, or repudiated by the Purchaser
or CTC. All Government Approvals with respect to the
making, assignment and repayment of the Loan shall
have been obtained, and shall be in full force and
effect as of the Closing Date.
5.2.8 Preliminary Consent of the Ministry of Antimonopoly
Policy. The Ministry of Antimonopoly Policy and
Support for Entrepreneurship of the Russian
Federation under Article 18 of Law No. 948-I of the
Russian Federative Soviet Socialist Republic "On
competition and limitation of monopolist activities
on commodities markets," dated March 22, 1991 (as
amended, the "Russian Competition Act") shall have
granted its preliminary written consent to the
acquisition by the Company of the CTC Shares
hereunder, and the terms and conditions of such
consent shall be reasonably satisfactory to the
Company.
5.2.9 No Exercise of Pre-Emptive Rights. The exercise
period afforded any stockholder of the Company that
has a right to maintain its percentage ownership in
the Company in connection with the Transactions (the
"Pre-Emptive Rights") shall have lapsed and no such
stockholder shall have exercised its Pre-Emptive
Rights.
5.2.10 Constituent Documents. The Purchaser shall have
delivered to the Company a certified copy of the
constituent documents of the Purchaser and
certificates of formation issued by the appropriate
Governmental Authorities.
5.2.11 Corporate Approvals. The Purchaser shall have
delivered to the Company a certified copy of the
decision of its authorized governing bodies
authorizing the execution, delivery and performance
of this Agreement and the other Transaction
Documents.
5.2.12 Other Company Shares. The Purchaser shall have
delivered to the Company a certificate, signed by an
authorized officer of the Purchaser, certifying that
the Purchaser together with all of its affiliates
(including, without limitation, OAO Alfa Bank and
Xxxxxx Ventures Limited) has, as of the Closing Date,
a beneficial interest in, and/or option or right to
purchase, no more than 2% of the issued and
outstanding capital stock of the Company after giving
effect to the Recapitalization or Modified
Recapitalization (each term as defined in the
Company's Information Statement dated as of April 25,
2003) but immediately prior to the Closing.
-14-
5.2.13 Lapse of Top-Up Election Period. If there has been an
exercise of any Pre-Emptive Rights, the period during
which the Purchaser shall be entitled to deliver a
Top-Up Election shall have lapsed.
5.3. Conditions Precedent to the Purchaser's Obligations at
Closing. Subject to the right of the Purchaser to waive in
writing any such conditions to its performance, the
obligations of the Purchaser to be performed hereunder on the
Closing Date shall be conditioned upon satisfaction of the
following conditions precedent:
5.3.1 Compliance. The Company shall have performed and
complied with all terms and conditions of this
Agreement at or before the Closing and the Company
shall have executed and delivered or caused to have
been executed and delivered to the Purchaser at the
Closing all documents contemplated to be delivered at
or before the Closing in accordance with Section
3.2.3 hereof.
5.3.2 Accuracy of Representations and Warranties. All
representations and warranties of the Company
contained in this Agreement shall remain true and
correct in all material respects at and as of
Closing.
5.3.3 No Litigation. No action or proceedings shall have
been instituted or threatened before or by any
Governmental Authority for the purpose of
invalidating, nullifying, enjoining, preventing or
restraining the Transactions contemplated by this
Agreement.
5.3.4 Corporate Approvals. The Company shall have delivered
to the Purchaser of a certified copy of the decision
of its Board of Directors authorizing the execution,
delivery and performance of this Agreement and the
other Transaction Documents.
5.3.5 Waiver of First Refusal Rights. CTC and OOO
CTC-Communications shall have waived their first
refusal rights with respect to each of the
acquisition of the CTC Shares by the Purchaser prior
to the Closing, and the transfer of the CTC Shares by
the Purchaser to the Company hereunder.
5.4 Company's Rights if Condition Precedent Not Fulfilled. If any
of the conditions precedent set forth in Section 5.1 or 5.2
have not been fulfilled on or before August 31, 2003, then the
Company may, without limiting any rights or remedies available
at law or equity:
5.4.1 defer the Closing by written notice to the Purchaser
for a reasonable period not to exceed thirty calendar
days unless otherwise agreed by the Parties to permit
the condition precedent to be fulfilled;
5.4.2 terminate this Agreement by written notice to the
Purchaser in accordance with Section 9.1.2 hereof, in
which event the Company and the Purchaser shall,
subject to Section 9.2, be released from all
obligations under this Agreement; or
-15-
5.4.3 waive compliance with any such condition by express
written notice to the Purchaser without prejudice to
its right of termination in the event of
non-fulfillment of any other condition.
5.5 Purchaser's Rights if Condition Precedent Not Fulfilled. If
any of the conditions precedent set forth in Section 5.1 or
5.3 have not been fulfilled on or before August 31, 2003, then
the Purchaser may, without limiting any rights or remedies
available at law or equity:
5.5.1 defer the Closing by written notice to the Company
for a reasonable period not to exceed thirty calendar
days unless otherwise agreed by the Parties to permit
the condition precedent to be fulfilled;
5.5.2 terminate this Agreement by written notice to the
Company in accordance with Section 9.1.3 hereof, in
which event the Company and the Purchaser shall,
subject to Section 9.2, be released from all
obligations under this Agreement; or
5.5.3 waive compliance with any such condition by express
written notice to the Company without prejudice to
its right of termination in the event of
non-fulfillment of any other condition.
ARTICLE 6
CONDUCT OF BUSINESS; EXCLUSIVE DEALING
6.1 Certain Conduct by the Purchaser. At all times from the date
of this Agreement to the Closing Date, the Purchaser shall
conduct its business in such a manner that on the Closing Date
the representations and warranties with respect to the
Purchaser, the CTC Shares and the Loan contained in this
Agreement shall be true, accurate and complete, as though such
representations and warranties were made on and as of such
date.
6.2 Certain Conduct by the Company. At all times from the date of
this Agreement to the Closing Date, the Company shall conduct
its business in such a manner that on the Closing Date the
representations and warranties with respect to the Company and
the Shares contained in this Agreement shall be true, accurate
and complete, as though such representations and warranties
were made on and as of such date.
6.3 Exclusive Dealing. During the period from the date of this
Agreement to the Closing Date, the Purchaser shall not take
any action to, directly or indirectly, encourage, initiate or
engage in discussions or negotiations with, or provide any
information to, any Person other than the Company or its
representatives or attorneys, concerning any purchase of the
CTC Shares or assignment of the Loan.
-16-
ARTICLE 7
ADDITIONAL COVENANTS
7.1 Approvals. Each of the Parties shall (i) use its best efforts
to obtain all corporate approvals, third party consents and
Government Approvals that are necessary or appropriate for
such Party's execution and delivery of this Agreement, or its
performance of the Transactions and (ii) keep the other Party
informed at reasonable intervals of all such approvals and
consents and of the stage of completion of receipt thereof.
Without limiting the generality of the foregoing, each of the
Parties shall promptly file any Notification and Report Forms
and related material that it may be required to file with the
Federal Trade Commission and the Antitrust Division of the
United States Department of Justice under the
Xxxx-Xxxxx-Xxxxxx Act, shall use its reasonable best efforts
to obtain an early termination of the applicable waiting
period, and shall make any further filings or information
submission pursuant thereto that may be necessary, proper or
advisable.
7.2 Waiver of First Refusal Rights. The Company shall cause CTC
and OOO CTC-Communications to waive its first refusal rights
with respect to the transfer of the CTC Shares from the
Purchaser to the Company and agrees to cause CTC and OOO
CTC-Communications to execute and deliver a written waiver to
such effect.
ARTICLE 8
INDEMNIFICATION
The Parties hereby agree that, in the event of breach by any Party of
any representation, warranty, obligation or covenant contained in this
Agreement, the breaching Party shall indemnify and hold harmless the
other Party and any of its shareholders, directors, officers,
employees, representatives, agents and advisors against any losses,
claims, actions, damages or liabilities (including, without limitation,
legal, accounting and other fees and expenses) directly or indirectly
arising or resulting from or in any way attributable to such breach by
the breaching Party.
ARTICLE 9
TERMINATION
9.1 Termination. This Agreement and the Transactions contemplated
hereby may be terminated at any time before the Closing Date:
9.1.1 by the mutual written consent of the Parties;
9.1.2 by the Company, by giving written notice to the
Purchaser, (i) if there has been a material
misrepresentation in this Agreement by the Purchaser,
or a material breach by the Purchaser of any of its
warranties or covenants set forth herein, or (ii) if
the Closing shall not have occurred on or before
August 31, 2003, or such other date as the Parties
may agree upon, by reason of the failure of any
condition precedent under Section 5.1 or 5.2 hereof;
or
-17-
9.1.3 by the Purchaser, by giving written notice to the
Company, (i) if there has been a material
misrepresentation in this Agreement by the Company,
or a material breach by the Company of any of the
warranties or covenants of the Company set forth
herein, which breach is not cured within 30 calendar
days following written notice to the Company or which
breach by its nature cannot be cured prior to the
Closing, or (ii) if the Closing shall not have
occurred on or before August 31, 2003 or such other
date as the Parties may agree upon, by reason of the
failure of any condition precedent under Section 5.1
or 5.3 hereof.
9.2 Effect of Termination. The termination of this Agreement shall
not in any way operate to impair or destroy any of the rights
or remedies of any Party that shall have accrued prior to the
effective date of termination. The obligations, agreements,
representations and warranties contained in Article 4
(Representations and Warranties), Article 8 (Indemnification),
Article 10 (Securities Law Compliance), Article 11 (Dispute
Resolution; Governing Law) and Section 13.2 (Publicity) shall
survive termination.
ARTICLE 10
SECURITIES LAW COMPLIANCE
10.1 Restricted Securities. The Shares have not been and will not
be registered under the Securities Act and will be issued to
the Purchaser in reliance upon an exemption from such
registration. The Purchaser hereby confirms that it has been
informed that the Shares are restricted securities under the
Securities Act and may not be resold or transferred unless the
Shares are first registered under the U.S. federal securities
laws or unless an exemption from such registration is
available.
10.2 Restrictions on Disposition of Shares. The Purchaser shall
make no disposition of the Shares unless either (i) they first
shall have been registered under the Securities Act, or (ii)
the Company first shall have been furnished with an opinion of
legal counsel, reasonably satisfactory to the Company, to the
effect that such sale or transfer is exempt from the
registration requirements of the Securities Act.
Notwithstanding the foregoing, no registration or opinion of
counsel shall be required for (i) a transfer by the Purchaser
to a wholly owned subsidiary of the Purchaser provided that
the transferee in each case agrees in writing to be subject to
the terms of this Article 10 to the same extent as if it were
the original Purchaser hereunder, or (ii) a transfer made in
accordance with Rule 144 under the Securities Act.
-18-
10.3 Restrictive Legends. The stock certificates for the Shares
shall be endorsed with one or more of the following
restrictive legends:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The
shares may not be sold or offered for sale or otherwise
transferred, pledged or hypothecated unless and until such
shares are registered under such act or an opinion of counsel
satisfactory to the company is obtained to the effect that
such negotiation is not required."
"The shares represented by this certificate are subject to an
option granted to StoryFirst Communications, Inc. ("SFC") and
accordingly may not be sold, assigned, transferred,
encumbered, or in any manner disposed of except in conformity
with the terms of the option agreement dated _________, 2003
between SFC and the registered holder of the shares (or the
predecessor in interest to the shares). A copy of such
agreement is maintained at SFC's principal corporate offices."
ARTICLE 11
DISPUTE RESOLUTION; GOVERNING LAW
11.1 Dispute Resolution. Any controversy between the Parties,
including the construction or application of any of the terms,
covenants or conditions of this Agreement shall on written
request of one Party served upon the other, be submitted to
arbitration and be governed by the rules of the American
Arbitration Association in effect on the date of referral to
arbitration, except that in the event of any conflict between
those rules and this Section 11.1, this Section 11.1 shall
govern. The arbitration shall take place in New York, New York
and shall be conducted in English. The arbitration shall be
conducted by a single neutral arbitrator selected in
accordance with the rules of the American Arbitration
Association. The arbitrator (i) shall not have any power or
authority to add to, alter, amend or modify the terms of this
Agreement and (ii) shall interpret and construe this Agreement
in accordance with the laws of the State of New York and the
United States of America. The cost of such arbitration,
including reasonable attorney's fees, shall be borne by the
losing Party or in such proportion as the arbitrator shall
decide.
11.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York
and the United States of America, without giving effect to the
conflict of laws rules thereof.
ARTICLE 12
NOTICE
12.1 Notice. Except as otherwise provided in this Agreement, any
and all notices, consents, waivers, instructions, requests,
votes, and other documents or communications shall be in
writing in English and signed by the person giving such notice
or other communication. Notice and other documents and
communications shall be deemed properly given only if they are
(i) delivered personally; or (ii) transmitted by fax or by
another instantaneous means of transmission (with confirmation
of receipt in the case of transmission by fax or other
instantaneous means of transmission) to the following
addresses:
-19-
(a) if to the Company, to:
StoryFirst Communications, Inc.
x/x Xxxxx Xxxxx
00 0xx Xxxxxxxxxxxxxx xx.
000000 Moscow
Russian Federation
Tel.: x0 (000) 000-0000
Fax: x0 (000) 000-0000
Attention: President
With a copy (which copy shall not be deemed notice
hereunder) to:
Xxxx and Xxxx
Xxxxx Castle
00 Xxxxx Xxxxxx
Xxxxxx
Xxxxxxx XX0X 0XX
Tel.: x00 (00) 0000-0000
Fax.: x00 (00) 0000-0000
Attention: Xxxxxx Xxxxxxx
(b) if to the Purchaser, to:
Alfa Capital Holdings (Cyprus) Limited
Presidium Xxxxxxxx
0xx Xxxxx
0 Xxxxxxxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxx
Tel.: x000 00 000 000
Fax.: x000 00 000 000
Attn: Xxxxxx X. Zyukin
or at such address that any Party, as the case may be, may
designate by official notice to the other Parties for the
receipt of such documents or communications.
12.2 Receipt. All such notices or other communications shall be
deemed to have been given or received: (i) upon receipt, if
personally delivered; and (ii) upon confirmation of receipt,
if notice is given by electronic facsimile.
-20-
ARTICLE 13
MISCELLANEOUS
13.1 Expenses. Each Party hereto shall be responsible for all costs
incurred by it relating to negotiation, execution and delivery
of this Agreement and the other Transaction Documents and
performance of the transactions contemplated hereby and
thereby. Without limiting the generality of foregoing, the
Purchaser shall pay the filing fee in accordance with the
Xxxx-Xxxxx-Xxxxxx Act.
13.2 Publicity. Except as otherwise required by Applicable Law, no
Party shall issue any press release or make any other public
statement, in each case relating to, connected with or arising
out of this Agreement or the matters contained herein, without
obtaining the prior written approval of the other Parties to
the contents and the manner of presentation and publication
thereof.
13.3 Survival. All covenants, agreements, representations and
warranties made herein shall survive the execution and
delivery of this Agreement and the issuance of the Shares
contemplated hereby.
13.4 Captions. The Article and Section captions used herein are for
reference purposes only, and shall not in any way affect the
meaning or interpretation of this Agreement.
13.5 No Assignment. No Party to this Agreement may assign or
otherwise transfer, in whole or in part, any of its rights or
obligations arising hereunder or under any other Transaction
Document to any third parties without the prior written
approval of the other Parties hereto; provided, however, that
the assignability of the rights and obligations under the
Stockholders' Agreement shall be governed by such agreement.
13.6 Entire Agreement. This Agreement, the other Transaction
Documents and the other agreements and instruments referred to
herein and therein, shall represent the entire agreement and
understanding of the Parties hereto on the subject matter
hereof and supersedes all previous negotiations, agreements or
understandings between or among some or all of them, whether
written or oral. In the event of a conflict between this
Agreement and any of the exhibits hereto and agreements and
instruments referred to herein or therein (other than the
Stockholders' Agreement), the terms of this Agreement shall
govern.
13.7 Amendments. No amendment or modification of this Agreement
will be effective unless it is in writing and duly executed by
each Party hereto.
13.8 No Action on Behalf of Other Party. Except as otherwise
provided in this Agreement, no Party shall, without the prior
written consent of the other Party, in any manner use the name
of, act or purport to act for or as a representative or agent
of, or enter into any obligations or responsibilities on
behalf of the other Party.
-21-
13.9 Severability. In case any provision in this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions hereof will not
in any way be affected or impaired thereby, and the Parties
shall negotiate in good faith concerning alternative means of
achieving the goals and objectives underlying the invalid or
unenforceable provision.
13.10 Third Party Beneficiaries. Each Party intends that this
Agreement shall not benefit or create any right or cause of
action in or on behalf of any Person other than the Parties
hereto.
13.11 No Presumption. This Agreement shall be construed without
regard to any presumption or other rule requiring construction
against the Party drafting or causing this Agreement to be
drafted. References to any document, instrument or agreement
shall (i) include all addenda, exhibits and other attachments
thereto; (ii) include all documents, instruments or agreements
issued or executed in replacement thereof; and (iii) mean such
document, instrument or agreement as amended, modified and
supplemented.
13.12 Counterparts. This Agreement may be executed in two or more
counterparts, and by the Parties hereto in separate
counterparts, each of which, when so executed and delivered,
shall be an original, but all of which together shall
constitute one and the same instrument.
-22-
IN WITNESS WHEREOF, each of the Parties hereto has duly executed this Agreement,
all as of the day and year first above written.
STORYFIRST COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
ALFA CAPITAL HOLDINGS (CYPRUS) LIMITED
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Director
-23-