EXHIBIT 99.1
DATED NOVEMBER 13, 1999
GOLDEN TELECOM, INC.
1,250,000 SHARES OF COMMON STOCK, PAR VALUE $.01 EACH
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SUBSCRIPTION AGREEMENT
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THIS AGREEMENT (the "Agreement") is made on November 13, 1999 BETWEEN:
(1) Golden Telecom, Inc., a Delaware corporation (the "COMPANY"); and
(2) Capital International Global Emerging Markets Private Equity Fund,
L.P., a Delaware limited partnership ("INVESTOR").
WHEREAS:
(A) In connection with this Agreement, Investor proposes to subscribe for,
and the Company proposes to issue to Investor, 1,250,000 shares (the
"Shares") of its common stock, par value $.01 per share (the "Common
Stock");
(B) Investor intends to pay $15,000,000 in cash for the Shares purchased
from the Company; and
(C) Investor (i) acknowledges that the Shares have not been registered
under the U.S. Securities Act of 1933, as amended (the "Securities
Act") and are being offered and sold in reliance on an exemption from
registration under the Securities Act and (ii) confirms that it has
received a copy of the private placement memorandum, dated November
13, 1999 (the "Private Placement Memorandum"), relating to the Company
and Investor's intention to subscribe for the Shares.
IT IS AGREED as follows:
1. INTERPRETATION
(1) In this Agreement (including the Recitals):
"CLOSING" means the sale of the Shares by the Company to Investor
pursuant to the provisions of Section 3 of this Agreement;
"CLOSING DATE" has the meaning given to it in Section 3 of this
Agreement;
"COMMON STOCK" has the meaning given to it in Recital (A);
"COMPANY" has the meaning given to it in introductory clause (1) of
this Agreement;
"ENCUMBRANCE" means any security interest, pledge, mortgage, lien
(including, without limitation, environmental and tax liens), charge,
encumbrance, adverse claim, preferential arrangement, or restriction
of any kind, including, without limitation, any arrangement,
restriction on the use, voting, transfer, receipt of income or other
exercise of any attributes of ownership;
"INVESTOR" has the meaning given to it in introductory clause (2) of
this Agreement;
"PERSON" shall have the meaning given to it in Section 5 of this
Agreement;
"PRIVATE PLACEMENT MEMORANDUM" has the meaning given to it in Recital
(C);
"PURCHASE PRICE" means $15,000,000 in cash;
"SHARES" has the meaning given to it in Recital (A); and
"SHAREHOLDERS AND REGISTRATION RIGHTS AGREEMENT" has the meaning given
to it in Section 4(2) of this Agreement.
(2) The headings in this Agreement do not affect its interpretation.
2. SUBSCRIPTION
(a) Subject to the terms and conditions of this Agreement and the
Private Placement Memorandum, Investor agrees to subscribe for
the Shares, and the Company agrees to issue and sell the Shares
to Investor.
(b) The Investor understands that the Shares are being offered in a
transaction not involving any public offering within the United
States within the meaning of the Securities Act of 1933 (the
"Securities Act") and that the Shares have not been and will not
be registered under the Securities Act, except if requested by
the Investor in accordance with the Shareholders and Registration
Rights Agreement described in Section 4(2) hereof among the
Investor, Global TeleSystems Group, Inc. ("GTS") and the Company,
and agrees that if in the future the Investor decides to resell,
pledge or otherwise transfer such Shares, such Shares may be
offered, resold, pledged or otherwise transferred only (i) in the
United States to a person who we reasonably believe is a
"qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) in a transaction meeting the requirements of
Rule 144A, (ii) outside the United States in a transaction in
accordance with Rule 904 under the Securities Act, (iii) pursuant
to an exemption from registration under the Securities Act (such
as that provided by Rule 144 thereunder, if available) or (iv)
pursuant to an effective registration statement under the
Securities Act, in each of cases (i) through (iv) in accordance
with any applicable securities laws of any State of the United
States or any other applicable jurisdiction. The Investor
understands that the registrar and transfer agent for the Shares
will not be required to accept for registration of transfer any
of the Investor's Shares, except upon presentation of evidence
satisfactory to the Company and the transfer agent, which may
include an opinion of counsel, that the foregoing restrictions on
transfer have been complied with. The Investor further
understands that any Shares acquired by it will be in the form of
definitive physical certificates and that such certificates will
bear a legend reflecting the substance of this paragraph.
3. CLOSING
(1) Subject to the satisfaction of all conditions set forth in
Section 4 below, at 9:00 A.M. (New York time) on December 31,
1999 or at such earlier time and/or date when such conditions
precedent have been satisfied (the "CLOSING DATE"):
(a) the Company shall issue the Shares and shall deliver a
certificate, in definitive form and registered in such
name(s) and in such denomination(s) as Investor shall
request in writing not later than two full business days
prior to the Closing, evidencing the Shares for the
account(s) of Investor, against payment of the Purchase
Price;
(b) Investor shall pay to the Company the Purchase Price in
respect of the Shares in Federal (same day) funds; and
(c) Subject to subclauses (a) and (b) of this Section (3)(1),
the Shares to be issued on such Closing date will be fully
paid, and Investor's commitment to subscribe for the Shares
will be fully satisfied to the extent that all the Shares
are so issued to Investor.
(2) A certificate or certificates for the Shares to be delivered to
Investor shall be in definitive form and delivered to Investor at
the offices of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, New
York, New York for the account of Investor on the date of the
Closing in accordance with the instructions delivered in
accordance with Section 3(1)(a) above.
(3) Each certificate representing Shares shall be stamped or
otherwise imprinted with a legend substantially in the following
form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED
OF UNLESS IT HAS BEEN REGISTERED UNDER THAT ACT OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE."
A certificate shall not bear such legend if in the opinion of
counsel satisfactory to the Company (it being agreed that
Shearman & Sterling and Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
shall be satisfactory) the securities being sold thereby may be
publicly sold without registration under the Securities Act.
4. CONDITIONS PRECEDENT TO THE CLOSING
(1) HSR Clearance. The Company and Investor shall have taken all
actions necessary to make the filings required of each of them
under the Xxxx-Xxxxx Xxxxxx Act (the "HSR Act") and clearance
from the Federal Trade Commission or the Antitrust Division of
the Department of Justice shall have been obtained.
(2) Execution of Shareholders and Registration Rights Agreement.
Before or as of the Closing Date, the Company, GTS and the
Investor shall have entered into a Shareholders and Registration
Rights Agreement substantially in the form of Exhibit A hereto
(the "SHAREHOLDERS AND REGISTRATION RIGHTS AGREEMENT").
(3) Representations and Warranties. Each of the representations and
warranties made by the Company and the Investor in this Agreement
(other than those made as of a specified date earlier than the
Closing Date) shall be true and correct in all material respects
on and as of the Closing Date as though such representation or
warranty was made on and as of the Closing Date, and any
representation or warranty made as of a specified date earlier
than the Closing Date shall have been true and correct in all
material respects on and as of such earlier date.
(4) Opinion of Counsel to the Company and GTS. The Investor shall
have received the opinion of Shearman & Sterling, counsel to the
Company and GTS, in form and substance reasonably satisfactory to
Investor.
(5) Waiver of Right of First Refusal by GTS. GTS shall have waived
the right of first refusal it holds pursuant to the Shareholders'
Agreement entered into as of October 5, 1999 by and between GTS
and the Company to purchase a pro rata portion of any issue of
new shares of Common Stock by the Company.
5. REPRESENTATIONS AND WARRANTIES
(1) The Company represents, warrants and undertakes to Investor as
follows:
(a) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Delaware with full power and authority to own,
lease and operate its properties and assets and conduct its
business materially as described in the Private Placement
Memorandum;
(b) the execution of this Agreement and the Shareholders and
Registration Rights Agreement by the Company has been duly
authorized by the Company, and this Agreement constitutes,
and the Shareholders and Registration Rights Agreement will
constitute, a legal, valid and binding obligation of the
Company, enforceable in accordance with their respective
terms;
(c) the authorized and issued capital stock of the Company
conforms as to legal matters to the description thereof
contained in the Private Placement Memorandum;
(d) the shares of Common Stock outstanding prior to the issuance
of the Shares have been duly authorized and are validly
issued, fully paid and non-assessable;
(e) the Shares have been duly authorized by the Company;
(f) the Shares will, on issue and receipt of payment therefor in
accordance with the terms of this Agreement, be validly
issued in accordance with the laws and regulations of the
State of Delaware, fully paid and non-assessable and free
from all Encumbrances and other third party rights;
(g) all consents, approvals, orders, registrations and filings
or other action required to be obtained by the Company for
the execution and delivery of this Agreement and the
offering and sale of the Shares as contemplated by the
Private Placement Memorandum and the performance of the
terms of this Agreement by the Company, have been obtained
or made and are in full force and effect; no filing with, or
authorization, approval, consent, license, order,
registration, qualification or decree of, any court or
governmental authority or agency (other than under the
securities or "blue sky" laws of the various states) is
necessary or required for the performance by the Company of
its obligations hereunder;
(h) the Shares conform in all material respects to the
statements relating thereto contained in the Private
Placement Memorandum;
(i) subject to the accuracy of the Investor's representations
and covenants contained herein, it is not necessary in
connection with the offer, sale and delivery of the Shares
in the manner contemplated in the Agreement and the Private
Placing Memorandum to register the Shares under the
Securities Act;
(j) as of its date and as of the Closing date, the Private
Placement Memorandum does not and will not include an untrue
statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading; and
(k) the audited financial statements appearing in the Private
Placement Memorandum were prepared in accordance with the
requirements of law and with generally accepted accounting
principles of the United States consistently applied and
they present fairly the financial condition of the Company
as at the dates at which they were prepared and the results
of operations of the Company in respect of the periods for
which they were prepared.
(l) The execution and delivery by the Company of this Agreement
and of the Shareholders and Registration Rights Agreement,
its consummation of the transactions contemplated thereby,
and its compliance with the provisions thereof, will not (i)
violate or conflict with the Company's Articles of
Incorporation or By-laws, (ii) violate, conflict with, or
give rise to any right of termination, cancellation, or
acceleration under any agreement, lease, security agreement,
licence, permit, or instrument to which the Company is a
party, or to which it or any of its assets is subject, (iii)
result in the imposition of any Encumbrance on any asset of
the Company, (iv) violate or conflict with any laws, or (v)
require any consent, approval or other action of, notice to,
or filing with any entity or person (governmental or
private) (collectively, "PERSON"), except for those that
have been obtained or made.
(2) Investor represents, warrants and undertakes to the Company as
follows:
(a) the Investor has been duly organized and is validly existing
as a Delaware limited partnership in good standing under the
laws of Delaware with full power and authority to subscribe
for the Shares as contemplated by this Agreement;
(b) the execution of this Agreement by Investor has been duly
authorized by Investor, and this Agreement constitutes a
legal, valid and binding obligation of Investor;
(c) the Investor is acquiring the Shares for its own account and
without a view to the public distribution of the Shares or
any interest therein;
(d) the Investor understands that no action has been or will be
taken in any jurisdiction by the Company that would permit a
public offering of the Shares, or possession or distribution
of the Private Placement Memorandum or any other offering or
publicity material relating to the Shares, in any country or
jurisdiction where action for that purpose is required,
other than as contemplated by the Shareholders and
Registration Rights Agreement;
(e) the Investor will comply with all applicable laws and
regulations in each jurisdiction in which it acquires Shares
or has in its possession the Private Placement Memorandum or
any such other material, in all cases at its own expense;
(f) in connection with the private placement of Shares
contemplated by this Agreement, the Investor has not
solicited offers for, or offered, the Shares by any form of
general solicitation or general advertising (as those terms
are defined in Regulation D under the Securities Act)
including, without limitation, by any form of electronic
media;
(g) the Investor has such knowledge and experience in financial
and business matters that it is capable of evaluating the
merits and risks of purchasing Shares; and
(h) the Investor has received a copy of the Private Placement
Memorandum relating to the offering of the Shares and
acknowledges that it has had access to such financial and
other information, and has been afforded the opportunity to
ask such questions of representatives of the Company and
receive answers thereto, as it deems necessary in connection
with its decision to purchase the Shares.
6. UNDERTAKINGS
(1) For a period of 180 days after the Closing Date, the Investor
will not offer, contract to sell, pledge or otherwise dispose of,
directly or indirectly, any Shares or publicly disclose the
intention to make any such offer, sale, pledge, disposition or
filing, without the prior written consent of the Deutsche Bank AG
London, which consent shall not be unreasonably withheld.
(2) Except as set forth herein, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such cost or expense,
except that the expenses incurred in connection with all actions
necessary to make the filings required of the Company and the
Investor under the Xxxx-Xxxxx Xxxxxx Act, as well as any filing
fee relating thereto, shall be paid by the Company.
7. REPRESENTATIONS TO SURVIVE DELIVERY
All representations, warranties and agreements contained in this
Agreement shall remain operative and in full force and effect for
one year after the date of this Agreement, regardless of any
investigation made by or on behalf of the Investor, and shall
survive delivery of the Shares for such period.
8. NOTICES
All notices, requests, demands and other communications provided
for by this Agreement shall be in writing (including telecopier
or similar writing) and shall be deemed to have been given at the
time when mailed in any general or branch office of the United
States Postal Service, enclosed in a registered or certified
postpaid envelope, or sent by Federal Express or other similar
overnight courier service, addressed to the address of the
parties stated below or to such changed address as such party may
have fixed by notice or, if given by telecopier, when such
telecopy is transmitted and the appropriate answerback is
received,
IN THE CASE OF THE COMPANY:
Golden Telecom, Inc.
00, Xxxxxxxxxxxxxxxxxx
Xxxxxx, Xxxxxx 000000
Facsimile: x0 (000) 000-0000
Attention: General Counsel
WITH A COPY TO:
Global TeleSystems Group, Inc.
0000 Xxxxxx Xxxxxxxxx
0xx Xxxxx
Xxxxxxxxx, XX 00000
Facsimile: x0 (000) 000-0000
Attention: General Counsel
IN THE CASE OF INVESTOR:
Capital International Global Emerging Markets Private Equity
Fund, LP
000 Xxxxx Xxxxx Xxxxxxx Xxxxxxxxx
Xxxx, XX 00000-0000
Facsmile: x0 (000) 000-0000
Attention: Xxx Xxxxx
WITH A COPY TO:
Capital International Limited
00 Xxxxxxx Xxxxxx
Xxxxxx
XX0X 0XX
Facsmile: x00 (000) 000-0000
Attention: Xxx Xxxxxx
and a copy to:
Capital Research International Limited
00 Xxxxxxx Xxxxxx
Xxxxxx
XX0X 0XX
Facsmile: x00 (000) 000-0000
Attention: Xxxxxx Xxxxxxx
Any such notice shall take effect, in the case of delivery, at
the time of delivery and, in the case of telex or facsimile, at
the time of despatch.
8. COUNTERPARTS
This Agreement may be executed in any number of counterparts, all
of which, taken together, shall constitute one and the same
agreement and any party may enter into this Agreement by
executing a counterpart.
9. GOVERNING LAW
THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE
JURISDICTION AND VENUE IN ANY ACTION BROUGHT BY ANY PARTY HERETO
PURSUANT TO THIS AGREEMENT SHALL LIE EXCLUSIVELY IN ANY FEDERAL
OR STATE COURT LOCATED IN THE CITY OF NEW YORK, NEW YORK. THE
PARTIES IRREVOCABLY AGREE THAT VENUE WOULD BE PROPER IN ANY SUCH
COURT, AND HEREBY WAIVE ANY OBJECTION THAT ANY SUCH COURT IS AN
IMPROPER OR INCONVENIENT FORUM FOR THE RESOLUTION OF SUCH ACTION.
THE PARTIES AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY APPLICABLE LAW.
IN WITNESS of which this Agreement has been executed on the date
written above.
GOLDEN TELECOM, INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Senior Vice President,
General Counsel &
Corporate Secretary
CAPITAL INTERNATIONAL GLOBAL EMERGING
MARKETS PRIVATE EQUITY FUND, L.P.
By: Capital International Inc.,
General Partner
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Title: Vice President
EXHIBIT A
FORM OF SHAREHOLDERS AND REGISTRATION
RIGHTS AGREEMENT
