Re: Agreement Regarding Investment in Convertible Promissory Notes
Exhibit 10.17
July 09,2014
Open Joint Stock Company "RUSNANO"
10A prospect 60-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Moscow 117036 Russia
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇:
This amended and restated letter agreement (this "Letter Agreement") will confirm our agreement that in connection with its investment in Quantenna Communications, Inc.'s (the "Company") Convertible Promissory Notes (the "Notes"), and for other good and valuable consideration, the receipt and sufficiency are hereby acknowledged, Open Joint Stock Company "RUSNANO" will be entitled to certain additional rights with respect to its shares of Series F-1 Preferred Stock (and Series F-2 Preferred Stock, as applicable) and the Notes, as described below.
WHEREAS, the Company and Rusnano are parties to that certain letter agreement dated as of April 16 , 2012 (the "Prior Agreement") and each of the Company and Rusnano wish to amend and restate the Prior Agreement.
NOW THEREFORE, in consideration of the mutual promises and covenants herein, the parties hereto agree to amend and restate the Prior Agreement as follows:
Section 1 Board Observer
1.1 Board Observer Right
(a) A representative or agent of RUSNANO (the "Board Observer") shall be entitled to attend and participate in all meetings of the Company' s Board of Directors (the "Board"). The Board Observer shall be entitled to ask questions of and have discussions with the Company's management and members of the Board for a reasonable period of time. The Company shall give the Board Observer copies of all notices, agendas, actions and other materials that the Company provides to the Board for the open session, at the same time such materials are provided to the Board. Notwithstanding the foregoing, the Company reserves the right to withhold any information and to exclude the Board Observer from any meeting or portion thereof if: (1) access to such information or attendance at such meeting would adversely affect the attorney-client privilege between the Company and its counsel (other than the presence of attorneys for minute taking and general purposes); or (2) access to such information or attendance at such meeting would result in a conflict of interest between RUSNANO or the Board Observer and the Company. Any decision to exclude the Board Observer from any Board meeting, or portion thereof, shall be made in good faith, and limited to the highest extent practicable, with a view towards providing RUSNANO with the maximum appropriate presence affordable at such meetings.
(b) Upon reasonable written notice to the Company, the Board Observer shall be entitled to visit the Company' s properties, examine its books and records, and discuss the Company's business and prospects with its officers and key employees; provided, however, that access to highly confidential proprietary information and facilities may be withheld at the Company's reasonable discretion.
(c) RUSNANO shall have the right to select its Board Observer, and such Board
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Observer may change from time to time upon prior written notice provided by RUSNANO to the Company.
1.2 Confidentiality. ▇▇▇▇▇▇▇ agrees, and any representative of RUSNANO that serves as the Board Observer will agree, to hold in confidence and trust and not to disclose any and all information provided to it or learned by it in connection with its rights under Section 1.1 of this letter, except to the extent otherwise required by law, any court of competent jurisdiction, any governmental official or regulatory body and any other regulatory process to which RUSNANO is subject or the rules or regulations of any applicable stock exchange. Notwithstanding the foregoing, the obligation of confidentiality shall not apply to Company confidential information that: (i) is publicly available at the time of its disclosure under Section 1.1; (ii) becomes publicly available following disclosure under Section 1.1 (other than as a result of disclosure by RUSNANO or the Board Observer); (iii) was lawfully in the possession of RUSNANO or the Board Observer prior to disclosure under Section 1.1 (as can be demonstrated by such person's written records or other reasonable evidence) from a source free of any restriction as to its use or disclosure prior to its being so disclosed; or (iv) following disclosure under Section 1.1, becomes available to RUSNANO or the Board Observer from a different source (as can be demonstrated by such person's written records or other reasonable evidence), which source is not bound by any obligation of confidentiality in relation to such information. Additionally, RUSNANO may disclose Company confidential information: (x) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company; or (y) to those personnel within RUSNANO who are engaged in RUSNANO's venture capital activities, provided in each case that RUSNANO informs such personnel that such information is confidential, and remains responsible to the Company for such personnel maintaining the confidentiality of such information. If the Board Observer is required to execute any written confidentiality agreement in connection with the exercise of the rights of the Board Observer described in this Section 1, the confidentiality terms of such agreement shall in no event be more restrictive than the terms of this Section 1.2.
1.3 Termination of Board Observer Right. The rights described in this Section 1 shall terminate and be of no further force or effect upon the earlier of the date of: (a) the closing of the sale of the Company securities pursuant to a registration statement filed by the Company under the Securities Act of 1933, as amended, in connection with the firm commitment underwritten offering of its securities to the general public, covering the offer and sale of the Company's Common Stock, provided that the aggregate gross proceeds to the Company are not less than $35,000,000 (an "IPO"); (b) when the Company first becomes subject to the periodic reporting requirement of Sections 12(g) or 15( d) of the Securities Exchange Act of 1934, as amended; (c) a decrease in RUSNANO's equity ownership of the Company's securities by seventy-five percent (75%) or more as determined as of the effective date of the Prior Agreement; or (d) a Liquidation Event (as such term is defined in the Company's Certificate of Incorporation, as may be amended from time to time), which ever event shall occur first. The confidentiality provision hereof will survive any such termination.
Section 2 Company Obligations Regarding the Russian Subsidiary
2.1 Creation and Funding of Russian Subsidiary. On August 29, 2012, the Company formed a Russian Subsidiary under the name Limited Liability Company "Quantenna Communications" ("RusCo") as a wholly owned subsidiary of the Company incorporated in the Russian Federation. The Company will use commercially reasonable efforts to operate RusCo in compliance with the provisions and requirements of RusCo's corporate structure as described on Exhibit A attached hereto. "Russian Funding" for purposes of this Letter Agreement shall include cash transfers from the Company to RusCo, plus unreimbursed expenses allocated to RusCo by the Company as described in Section 2.2. The Company agrees to allocate a budget to ▇▇▇▇▇ in an aggregate amount of $13 million, with the Russian
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Funding to be provided to RusCo and/or to be spent by the Company according to Section 2.2 as follows:
Fund Date: | Investment Amount |
December 31, 2014 ("Period 1") | $2,200,000.00 |
December 31, 2015 ("Period 2") | $1,700,000.00 |
December 31, 2016 ("Period 3") | $2,000,000.00 |
December 31,2017 ("Period 4") | $2,200,000.00 |
December 31, 2018 ("Period 5") | $2,400,000.00 |
December 31, 2019 ("Period 6") | $2,500,000.00 |
Total | $13,000,000.00 |
The Russian Funding shall be approved by the Board of Directors of the Company (the "Board"). The Company agrees to provide Russian Funding in the applicable Investment Amount on or before the applicable Fund Date for each Period as set forth above.
2.2 Provision of Russian Funding. All Company cash transfers for equity investments in RusCo and for funding RusCo operations in Russia, as well as certain Company expenditures related to RusCo (as provided by this clause), will be included in the Russian Funding. Company expenditures related to RusCo shall include expenditures related to the operation, oversight, and support of RusCo. Such expenditures incurred at the Company for RusCo shall not exceed 20% of the applicable Investment Amount, unless otherwise agreed to by vote of the RusCo Board, and may include employee compensation including benefits, taxes, other employee related matters, capital expenses, deposits, prepaids, other assets, software, hardware equipment, tapeouts, rent, office supplies, utilities, taxes, legal, accounting, and any and all other necessary related operational expenses, as determined by the Board. With respect to project expenses, such as tapeout costs, involving the collaboration of ▇▇▇▇▇ and the Company, a fraction of the expenditure in such projects shall count towards the Russian Funding equivalent to the fraction of all engineers involved in the project that are RusCo engineers (subject to total 20% limit provided above). All other expenditures by ▇▇▇▇▇ not otherwise described above shall be included in the Russian Funding. The RusCo Expenses shall be pre-approved by the Board.
2.3Reserved.
2.4Basic Financial Information and Inspection Rights. The Company shall record the allocation of the Russian Funding to RusCo separately on the Company's books and records (the "RusCo Financial Information"). RUSNANO shall be entitled to (a) review the RusCo Financial Information, as soon as practicable, but in any event within ninety (90) days, after the end of each fiscal year of the Company and (b) initiate an independent financial audit of the RusCo Financial Information for each fiscal year, with such independent financial audit to be conducted by independent public accountants of nationally recognized standing, to be mutually agreed upon by the Company and RUSNANO. Any costs incurred in connection with such independent financial audit shall be borne fifty percent (50%) by RUSNANO and fifty percent (50%) by the Company.
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2.5Liability in Connection with the Russian Funding
(a) Penalty for Failure to Fund. By March 31st of each year, the Company and Rusnano will calculate the amount of Russian Funding actually transferred by the Company to RusCo for such applicable Period (the "Actual Funding Amount"). In the event that the Company fails to meet its funding obligations to RusCo for such Period (as set forth in Section 2.1 above), the Company shall pay a one-time penalty fee to RUSNANO (the "Penalty"), calculated as follows :
Penalty = 10% x (0.8 x A - B)
Where:
A = The Investment Amount
B = The Actual Funding Amount
For the avoidance of doubt, a separate penalty shall be assessed for each fiscal year during which the Company fails to meet its funding obligations to RusCo as set forth in Section 2.1.
(b) Cure Period. No Penalty for any Period shall apply if the applicable Russian Funding shortfall is cured within one (1) calendar quarter after the applicable fiscal year (the "Cure Period"). If the Company and RUSNANO disagree as to whether there has been shortfall for the applicable fiscal year, after the respective Cure Period, either party may initiate an independent financial audit of the RusCo Financial Information, with such independent financial audit to be conducted by independent public accountants of nationally recognized standing, to be mutually agreed upon by the Company and RUSNANO. Any costs incurred in connection with such independent financial audit shall be borne equally by RUSNANO and the Company. Following the Cure Period and the audit, if applicable, the Company shall pay the applicable Penalty to RUSNANO within one calendar quarter thereafter. Funding shall include all expenses in accordance with U.S. GAAP, in addition to capital expenditures (versus depreciation/amortization), deposits, prepaids and other assets, certified by the Chief Executive Officer and the Chief Financial Officer of the Company.
(c) Notice. The Company shall provide written notice to RUSNANO of the amount of funding that it provided to RusCo within 60 days of each applicable Period as set forth in Section 2.1.
(d) The penalties described in Section 2.5(a) shall be RUSNANO's only recourse against Company, its affiliates, or assigns in the event Company does not meet its obligations under Section 2 "Company Obligations Regarding the Russian Subsidiary" of this Letter Agreement.
2.6RusCo Intellectual Property Rights. The Company shall ▇▇▇▇▇ ▇▇▇▇▇ the right to use intellectual property of the Company, as may be necessary to conduct ▇▇▇▇▇'▇ business. The Company may require any intellectual property created by ▇▇▇▇▇ to be assigned to the Company or a designee of the Company.
2.7Negative Covenants of the Company Regarding RusCo
(a) The Company agrees that it will not, without first obtaining the approval of ▇▇▇▇▇▇▇, take any of the actions described on Schedule 1 attached hereto.
(b) The Company agrees that it will not, without first obtaining the approval of at least one (1) of the RUSNANO appointees to the RusCo Board of Directors, take any of the actions described
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on Schedule 2 attached hereto .
(c)The covenants described in Section 2.7 shall terminate upon the earlier to occur of: (i) a decrease in RUSNANO's equity ownership of the Company's securities by fifty-one percent (51%) or more; (ii) the closing of a firm commitment underwritten initial public offering pursuant to an effective registration statement filed under the Securities Act of 1933, as amended, covering the offer and sale of the Company' s Common Stock, provided that the aggregate gross proceeds to the Company are not less than $35,000,000; (iii) a Liquidation Event (as such term is defined in the Company's Certificate of Incorporation, as may be amended from time to time); or (iv) the completion or termination of the Company's funding obligations in RusCo under this Letter Agreement, provided however that RUSNANO shall retain the right to nominate one member to the RusCo Board.
2.8.Affirmative Covenants of the Company Regarding RusCo
(a)The Company and RUSNANO agree the Russian Funding for Period 1 shall include up to $2,200,000 for services rendered prior to December 31, 2014 pursuant to that certain Services of Development, Adaptation, Modification of Computer Software Agreement entered into by and between the Company and Luxoft Professional LLC ("Luxoft") dated as of July 10, 2013 and that certain Dedicated Center Services of Development, Adaptation, Modification of Computer Software Agreement entered into by and between the Company and Luxoft dated as of July 10, 2013; provided, however, that the Company and RUSNANO hereby further agree that if the Company fails to comply with the covenant set forth in Subsection 2.8(b) below, then the Russian Funding for Period 1 shall not include any amounts paid to Luxoft for services, as contemplated by the initial clause of this Subsection 2.8(a).
(b)The Company agrees to transfer at least thirteen employees from Luxoft to RusCo on or before January 31, 2015 .
(c)The Company and RUSNANO agree that the expenses listed in Appendix B attached hereto shall be considered Russian Funding for Period 1.
2.9.Termination for Political Factors
If, due to political factors between the United States and the Russian Federation, such as sanctions, regulations, laws, or other political actions (the "Sanctions") taken by one country directly against the other, either:
(i) the Company will become prohibited to provide the Russian Funding, and performance of such obligation will be deemed as direct violation of mandatory provisions of the Sanctions;
(ii) the Company becomes prohibited from transferring assets, funds, or intellectual property to RusCo or RusCo becomes prohibited from accepting assets, funds, or intellectual property from the Company;
(iii) RusCo becomes prohibited from providing services for the Company or the Company becomes prohibited from accepting services from RusCo; or
(iv) Company employees become unable to obtain a visa or are otherwise prohibited from visiting the Russian Federation or RusCo employees become unable to obtain a visa or are otherwise prohibited from visiting the United Stated;
then the Company shall be free, upon prior reasonable (but in any case not less than 30 days,
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unless the Sanctions require earlier action) notice to RUSNANO, from the obligations according to Section 2 of this Letter Agreement with no further liability.
Given the provisions of applicable Sanctions, the Company and RUSNANO shall take all reasonable actions necessary to renegotiate certain provisions of this Letter Agreement affected by the Sanctions. The Company's obligations according to Section 2 of this Letter Agreement will be suspended for the period of the Sanctions and shall resume within a reasonable amount of time after the Sanctions have been cancelled, unless otherwise agreed by the Parties, provided that if the sanctions last longer than 9 months then the obligations under Section 2 shall terminate permenantly.
Section 3 Miscellaneous
3.1.Amendments and Waivers. The provisions of this Letter Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given without the prior written approval of each of the Company and RUSNANO.
3.2.Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by facsimile or electronic mail or otherwise delivered by hand or by messenger addressed:
(a)if to the Company, one copy should be sent to Quantenna Communications, Inc., ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Chief Executive Officer, or at such other address as the Company shall have furnished to RUSNANO, with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and
(b)if to RUSNANO, at RUSNANO's address, facsimile number or electronic mail address as shown in the Company's records.
Each such notice or other communication shall for all purposes of this Letter Agreement be treated as effective or having been given when delivered if delivered personally, or, if sent by mail, at the earlier of its receipt or 5 business days after the same has been deposited with Federal Express with delivery specified within 5 business days of deposit with Federal Express, addressed and mailed as aforesaid or, if sent by facsimile, upon confirmation of facsimile transfer or, if sent by electronic mail, upon confirmation of delivery when directed to the electronic mail address of RUSNANO or the Company.
3.3.Entire Agreement. This Letter Agreement, and the documents entered into in connection with the Note and dated as of the date hereof (including, without limitation, the I/V Agreement) constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof. No party hereto shall be liable or bound to any other party in any manner with regard to the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth herein.
3.4.Successors and Assigns. This Letter Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without limitation, and without the need for an express assignment.
3.5.Counterparts. This Letter Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
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3.6.Headings. The headings in this Letter Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
3.7.Governing Law. This Letter Agreement shall be governed in all respects by the internal laws of the State of California as applied to agreements entered into among California residents to be performed entirely within California, without regard to principles of conflicts of law.
3.8.Jurisdiction; Venue. With respect to any disputes arising out of or related to this Letter Agreement, the parties consent to the exclusive jurisdiction of, and venue in, the state courts in Santa ▇▇▇▇▇ County in the State of California (or in the event of exclusive federal jurisdiction, the courts of the Northern District of California).
3.9.Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.
3.10.Specific Performance for Section 2. 7. It is agreed and understood that monetary damages would not adequately compensate RUSNANO for the breach of the negative covenants of the Company referenced in Section 2.7(a) and (b) and set forth in Schedule I and Schedule II, respectively, of this Letter Agreement, that the negative covenants referenced in Section 2. 7( a) and (b) and set forth in Schedule I and Schedule II, respectively, shall be specifically enforceable, and that any breach of the negative covenants referenced in Section 2.7(a) and (b) and set forth in Schedule I and Schedule II, respectively, shall be the proper subject of a temporary or permanent injunction or restraining order. Further, each party hereto waives any claim or defense that there is an adequate remedy at law for such breach or threatened breach.
**********
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Very truly yours,
Quantenna Communications, Inc.
/s/ ▇▇▇ ▇▇▇▇▇▇▇_________________
▇▇▇ ▇▇▇▇▇▇▇
Chief Executive Officer
ACKNOWLEDGED AND ACCEPTED:
OPEN JOINT STOCK COMPANY "RUSNANO"
By: ___________________________
Name: _________________________
Title: __________________________
Very truly yours,
Quantenna Communications, Inc.
_______________________________
▇▇▇ ▇▇▇▇▇▇▇
Chief Executive Officer
ACKNOWLEDGED AND ACCEPTED:
OPEN JOINT STOCK COMPANY "RUSNANO"
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ | ||||
By: | ▇▇▇▇ ▇▇▇▇▇▇▇▇ |  | ||
Acting on the basis of the power of attorney #3-559 | ||||
dated February 12, 2014/ |  | |||
 | No3-559 or 12 |  | ||
RUSCO ISSUES
Below are the corporate governance guidelines with respect to Limited Liability Company "Quantenna Communications", a wholly owned subsidiary of Quantenna incorporated in the Russian Federation ("RusCo").
1. | General Shareholders Meeting Board of Directors General Director (Sole Executive Body). | ||
RusCo Governance | |||
2. | Five (5) members of the Board of Directors shall be elected by the General Shareholders Meeting for 1 (one) year; and Rusnano shall be entitled to nominate two (2) of such members of the Board of Directors. The Board Meetings shall be convened by the Chairman of the Board of Directors, a Rusnano director shall be the Chairman. The Chairman shall not have a casting vote at Board Meetings. The Board Meetings are eligible (have quorum) if four (4) Board Members are present at the meeting for the issues requiring qualified majority, if three (3) Board Members are present at the meeting for the issues requiring simple majority vote. During the voting, each Board Member has one vote. All decisions at the Board meetings shall be made by at least three (3) votes. | ||
Board of Directors | |||
3. | The General Director of RusCo shall be appointed by the RusCo Board of Directors for 1 (one) year. General Director shall perform operating management of RusCo business activity within operating activities in compliance with Business Plan and budget agreed by RusCo Board of Directors. In doing so, he/she shall perform any actions required for the execution of the above duty, except for addressing the issues within the responsibilities of other RusCo governance bodies. | ||
General Director | |||
4. | RusCo shall engage independent auditors from a "Big Four" accounting firm or such other internationally recognized independent auditor firm to be proposed by ▇▇▇▇▇▇▇ and subject to the reasonable approval of the Company. | ||
Independent Auditors | |||
5. | RusCo profits shall be reinvested in the business or distributed to the Company annually as per the decision of the RusCo Shareholder and recommendations of the RusCo Board of Directors. | ||
Distribution of Profits | |||
6. | In order to ensure ▇▇▇▇▇▇▇'s right to control the targeted use of the Rusnano's funds being invested in RusCo for the purposes of the Project, RusCo will undertake to be governed by the provisions of Monitoring Regulations which are to be adopted by ▇▇▇▇▇' s Board and pursuant to the terms of the RusCo Account Control Agreement to be entered by RusCo, and which shall be reasonably | ||
RusCo Investment Funds Control | |||
Terms | acceptable to Rusnano. The mechanism for controlling expenditures must provide that: Bank account agreements may only be entered into, amended or terminated with the prior consent of the RusCo Board and with Rusnano's consent; and Funds may only be debited from the account in accordance with the quarterly budget approved by the RusCo Board. | ||
SCHEDULE 1
COVENANTS IN FAVOR OF ▇▇▇▇▇▇▇
WITH RESPECT TO THE OPERATION OF RUSCO
Without the consent of Rusnano, RusCo shall not undertake any:
1. | Amendment of the RusCo charter, including additions thereto, and approval of new revisions of the Charter, including adjustments of the authorized capital of the RusCo; |
2. | Election and anticipatory termination of powers of the Board of Directors Members to be appointed by ▇▇▇▇▇▇▇ |
3. | Any increase or decrease in the authorized capital of the RusCo in any manner |
4. | Decisions on placement by the RusCo of bonds and other issued securities |
5. | Decisions on payment of remuneration and/or reimbursement of expenses related to performance of obligations by members of the Board of Directors of RusCo during the period of performance of obligations, as well as determination of the size of such remuneration and reimbursement |
6. | Determination to change the main line of business of RusCo |
7. | Decisions on approval by ▇▇▇▇▇ of interested party transactions in accordance with Article 45 of the Federal Law "On Limited Liability Companies", if the paid amount of the transaction exceeds 2% of the equity value, determined in the accounting report for the |
last accounting period | |
8. | Decisions on approval by RusCo of major transactions, related to acquisition, alienation or possibility of alienation of the property by ▇▇▇▇▇, directly or indirectly, if its value exceeds the aggregate of 50% of the book value of net assets of RusCo as determined basing on financial statements as of the last reporting date at the date of approval of such transaction |
9. | Decisions on delegation, termination or limitation of auxiliary rights and obligations to participant(s) of the RusCo, including of a particular participant of ▇▇▇▇▇ |
10. | Decisions on ▇▇▇▇▇'▇ approval of pledge of a share or a part of a share of a participant in the authorized capital of RusCo to a third party (third parties) |
11. | Decisions on ▇▇▇▇▇'▇ of the real value of the share or a part of the share by the remaining participants of the RusCo to the creditors of the participant, the share whereof is levied execution upon |
12. | Decisions on ▇▇▇▇▇'▇ payment of the real value of the share or a part of the share, which is levied execution upon, against debt of the participant of the RusCo |
13. | Decision on allocation of a share of the RusCo or a part thereof among all participants of the RusCo in proportion to their shares in the authorized capital of the RusCo |
14. | Decision on the offer to sell a share of the RusCo or a part thereof to all or certain participants of the RusCo (with no subsequent changes in the shares of the RusCo's participants or with subsequent changes in the shares of the RusCo 's participants) or to the third parties. Determination of the price of the share of the RusCo or a part of the share to be sold different from the price, at which the RusCo has acquired such a share |
15. | Decisions on making contributions to ▇▇▇▇▇ 's property |
[Schedule II]
The following matters shall be reserved to the decision of the RusCo Board of Directors to be taken by 4 votes of 5, and, without the consent of such Board, there shall be no undertaking by or on behalf of ▇▇▇▇▇ of any:
1. | Decisions on passing a proposal of voluntary liquidation of RusCo and appointment of |
liquidation commission | |
2. | Approval of and amendments to the quarterly budgets of RusCo |
3. | Approval of and amendments to ▇▇▇▇▇'▇ business plans and quarterly budgets, or other similar documents, based whereon RusCo business is finances, and reporting documents on cash spending |
4. | Identification of inappropriate use of the funds of RusCo, determination of the amount of such inappropriate use of the funds |
5. | Use of reserved and other funds of ▇▇▇▇▇. |
6. | Forming and liquidation of branches and representative offices of RusCo, approval of regulations on branches and representative offices, and making amendments and additions thereto |
7. | Preliminary approval of annual reports and annual accounting balance sheets of RusCo |
8. | Decisions on selection of the independent auditor of ▇▇▇▇▇'▇ financial and economic activity and assignment of the audit |
9. | Approval of the maximum authorized staff, maximum average wage of main RusCo's divisions, determined within the budget of RusCo |
10. | Approval of the annual payroll fund of RusCo and its bonus system |
11. | Approval and amendment of ▇▇▇▇▇'▇ Accounting policy, timely provision of the annual report and other accounting reports to the respective bodies and information on RusCo's activity to other interested parties |
12. | Approval of an independent appraiser (appraisers) to determine value of the share and assets of RusCo in cases stipulated by law and ▇▇▇▇▇'▇ charter and by some certain decision of the Board of Directors of RusCo |
13. | Approval of internal control procedures for financial and economic activity of RusCo |
14. | Approval of the regulation on internal economic control, in-house audit, and inspections |
15. | Initiating/settlement of any judicial disputes if the price exceeds the largest of: 500,000.00 Roubles (or an equivalent in other currency) or other judicial disputes material for RusCo's business, as well as decisions on referring such disputes to arbitration courts, execution of settlement agreement, acceptance of claims, denial of claims, as well as any other legal proceedings |
16. | Decisions on approval by ▇▇▇▇▇ of interested party transactions in accordance with Article 45 of the Federal Law "On Limited Liability Companies", if the payment thereunder does not exceed 2% of the property of RusCo based on the book value of net assets of RusCo as determined basing on financial statements as of the last reporting date |
17. | Decision on approval by RusCo of major transactions, save as major transactions, approval whereof remains within the competence of the General Meeting of Shareholders of RusCo |
18. | Approval of transactions related to acquisition, alienation and possibility to alienate by ▇▇▇▇▇ of immovable property the aggregate of 5,000,000 Roubles or an equivalent amount in any other currency at the date of execution, amendment or termination of the transaction |
19. | Approval of transactions related to acquisition, alienation and possibility to alienate, encumbrance and possibility to encumber by RusCo of exclusive and/or individualization means (save as acquisition of rights to use applications), except the transactions with the Company's Shareholder |
20. | Approval of transactions related to monetary disbursements and/or acquisition, alienation and possibility to alienate by RusCo of property, if its value exceeds within one transaction or a series of interrelated transactions the aggregate of 7,000,000 Roubles or an equivalent amount in any other currency at the date of execution, amendment or termination of the transaction |
21. | Approval of transactions related to extension or receipt by RusCo of loans, credits and sureties securing obligations of third parties if the paid amount exceeds 15,000,000 Roubles |
22. | Approval of a bill transaction, including issuance by ▇▇▇▇▇ of the bills, endorsements, bill sureties, and payments irrespective of amounts |
23. | Approval of transactions of rent or other term or indefinite use of RusCo's property of over 7,000,000 Roubles. |
24. | Decisions on transactions related to: (i) acquisition, alienation and possibility to alienate stock (shares, and instruments in the authorized or share capital) in other commercial organizations; (ii) termination of participation or decrease of shares in an authorized or share capital of the other company, alienation of shares and instruments in the authorized or share capital of other organizations; and also on disposition by any other means, including encumbrance, of stocks and shares of other organizations |
25. | Decisions on conclusion by ▇▇▇▇▇ of simple partnership agreements |
26. | Approval of the conclusion, amendment and termination of the bank account agreement, bank deposit agreement, settlement and cash services agreement and other agreements with credit organizations (banks), including approval of the terms of such agreements |
27. | Decision on issuing a power of attorney on behalf of ▇▇▇▇▇, if such power of attorney authorizes a person to close transactions, which should be approved by the General Meeting of the Shareholders or by the Board of Directors |
28. | Early termination of powers of the sole executive body of ▇▇▇▇▇ in case of inappropriate use of investments funds in the amount of 1,000,000.00 Roubles or non-performance of the quarterly budget, approved by the Board of Directors of RusCo, in the amount exceeding 10,000,000.00 Roubles during 2 quarters subsequently |
29. | Forming of the sole executive body of ▇▇▇▇▇ and early termination of the powers of the sole executive body |
30. | Decision on suspension of the powers of the management organization (manager) of ▇▇▇▇▇ |
31. | Approval of employment contract with the person acting as the sole executive body of ▇▇▇▇▇, including terms of remuneration and other payments and compensations, amendments and additions to the contract, as well as termination thereof including early termination |
32. | Decisions on monetary incentive for the general director, holding the director liable |
33. | Imposing employment functions of temporarily absent general director to one of the board members |
34. | Approval of the financial director, chief accountant; approval of the agreements with the above mentioned persons, including remuneration and other payments and compensations, making amendments and additions thereto |
35. | Preliminary approval of labor agreements of personnel of RusCo, providing annual income of an employee, exceeding 2,000,000 Roubles, including remuneration and other payments and compensations, making amendments and additions thereto |
36. | Decisions on forming of commercial organizations |
37. | Decisions on participation and termination of participation in non-commercial organizations |
38. | Decision on use of rights, attached to stocks and shares in the authorized or share capital of other legal entities, held by RusCo, including: • decisions on the agenda of general meetings of such commercial organizations; • appointment of persons, representing ▇▇▇▇▇'▇ interests at the general meetings of such commercial organizations, including voting instructions; • proposing candidates to the executive bodies and to managing other bodies of the commercial organizations where ▇▇▇▇▇ is a participant |
39. | Decisions on encumbrance of stock and shares in the authorized or share capital of other legal entities held by RusCo |
40. | Election of the board's chairman and early termination of the powers thereof |
41. | Approval of the corporate secretary of RusCo and/or secretary of the board of directors |
42. | Approval of employment contract with the corporate secretary and/or secretary of the board of directors of ▇▇▇▇▇, and passing amendments and additions thereto |
43. | Preliminary consent with ▇▇▇▇▇'▇ using its priority right to purchase a share or a part of the share in RusCo's authorized capital, or RusCo's refusal to exercise this right |
44. | Other questions of competence of the Board of Directors, according to the Charter and the Russian legislation |
On behalf of Rusnano | On behalf of the Company | ||||
/s/ ▇▇▇ ▇▇▇▇▇▇▇ | |||||
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇ | By: ▇▇▇ ▇▇▇▇▇▇▇ | ||||
Title: Chief Executive Officer | |||||
Date: | Date: July 09, 2014 | ||||
On behalf of Rusnano | On behalf of the Company | ||||
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ | |||||
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇ | By: ▇▇▇ ▇▇▇▇▇▇▇ | ||||
Title: Chief Executive Officer | |||||
Date: | Date: July 09, 2014 | ||||