FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report February 18, 2000
ANDERSEN GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-1460 06-0659863
(State or other jurisdiction Commission File Number IRS Employer
incorporation
Identification No.
515 Madison Avenue, New York, NY 10022
(Address of principal executive offices) (Zip code)
(212) 826-8942
(Registrants telephone number, including area code)
Item 5. Other Matters. Andersen Group, Inc. (the Company) is herein filing
with the Commission the General Agreement dated January 31, 2000 among
Moskovskaya Telecommunikatsionnaya Corporatsiya (COMCOR), a Moscow-based
telecommunications company, Treglos Investments Limited (Treglos) and ZAO
COMCOR-TV (COMCOR-TV), and the amendment to such agreement dated February 15,
2000, which establishes the first of three defined funding dates for COMCOR-TV
as March 14, 2000. The timing of this funding is consistent with Russian
administrative practices. The agreement forms the basis for the operations of
COMCOR-TV to provide a wide range of telecommunication services, including cable
television, high speed internet access and IP telephony to individual
subscribers and businesses throughout the Moscow region.
Forward-Looking Statements This report contains forward-looking statements
which reflect managements current expectations, assumptions and estimates of
future performance and economic conditions. Such statements are made in reliance
upon the safe harbor provisions of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. The Company cautions
investors that any forward-looking statements are subject to risks and
uncertainties which may cause actual results and future trends to differ
materially from those matters expressed in or implied by such forward-looking
statements. Such statements contain a number of risks and uncertainties,
including, but not limited to: (i) regulatory changes in the Russian Federation
that may affect the cable and telecommunications industries; (ii) changes in
economic and political conditions in Russia that could adversely affect the
level of demand for cable and telecommunications services; (iii) higher than
anticipated start-up costs associated with new business opportunities; (iv)
higher than anticipated employee levels, capital expenditures, and operating
expenses; (v) consumer acceptance of broadband services, including telephony and
data services; (vi) increases in fraudulent activity with respect to broadband
services; or (vii) delays in the development of anticipated technologies, or the
failure of such technologies to perform according to expectations.
Exhibits.
99.1 General Agreement, dated January 31, 2000
99.2 Amendment Regarding Closing Date, dated February 15, 2000
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ANDERSEN GROUP, INC.
Date February 18, 2000 /s/ Andrew M. O'Shea
Andrew M. O'Shea
Chief Financial Officer
Exhibit 1
_________________
GENERAL AGREEMENT
_________________
by and among
OAO MOSKOVSKAYA TELECOMMUNIKATSIONNAYA CORPORATSIYA,
ZAO COMCOR-TV
and
TREGLOS INVESTMENTS LIMITED
_________________
January 31, 2000
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TABLE OF CONTENTS
ARTICLE I: DEFINITIONS AND INTERPRETATION.........................................2
1.1
Definitions..............................................................................2
1.2
Interpretations.........................................................................13
ARTICLE II: SALE AND PURCHASE; EXCLUDED LIABILITIES; DEFERRED SHARE.................................13
2.1 Purchase and Sale of Common Stock.......................................................13
2.2 Payment for the Common Stock............................................................14
2.3 First Stage Closing.....................................................................16
2.4 Second Stage Closing....................................................................24
2.5 Third Stage Closing.....................................................................27
2.6 Excluded Liabilities....................................................................31
2.7 Deferred Share..........................................................................32
ARTICLE III: REPRESENTATIONS AND WARRANTIES OF THE PARENT AND COMCOR-TV..............................33
3.1 Organization; Charter and Board Rules; Resignation of Board Members.....................33
3.2 Authority; No Conflict..................................................................34
3.3 Charter Capital of COMCOR-TV; Authorized Share Capital..................................34
3.4 Financial Statements....................................................................35
3.5 Charter; Books and Records..............................................................36
3.6 Title to Property; Encumbrances.........................................................36
3.7 Condition and Sufficiency of the Transferred Assets and the Additional Transferred Assets36
3.8 Accounts Receivable.....................................................................37
3.9 No Undisclosed Liabilities..............................................................37
3.10 Taxes...................................................................................37
3.11 No Material Adverse Change..............................................................37
3.12 Governmental Approvals and Filings......................................................38
3.13 Litigation..............................................................................38
3.14 Contracts and Commitments...............................................................39
3.15 Insurance...............................................................................39
3.16 Licenses; MFON..........................................................................39
3.17 Environmental Matters...................................................................40
3.18 Employees and Agents; Labor Relations...................................................41
3.19 No Dividends, Sale of Assets, Etc.......................................................41
3.20 Transactions with Affiliates............................................................41
3.21Exclusivity.............................................................................41
3.22 Business and Purpose of COMCOR-TV.......................................................42
3.23 Banks...................................................................................42
3.24 Absence of Certain Commercial Practices.................................................42
3.25 Trademarks, Trade Names and Copyrights..................................................42
3.26 Year 2000 Compliance....................................................................42
3.27 Brokers and Finders.....................................................................43
3.28 Disclosure..............................................................................43
3.29 Plan....................................................................................44
ARTICLE IV: REPRESENTATIONS AND WARRANTIES OF PURCHASER.............................................44
4.1 Organization of the Purchaser...........................................................44
4.2 Authority: No Conflict..................................................................44
4.3 Governmental Approvals and Filings......................................................45
4.4 Legal Proceedings.......................................................................45
4.5 Suitability.............................................................................45
4.6 Brokers and Finders.....................................................................45
ARTICLE V: COVENANTS OF THE PARTIES................................................................45
5.1 Other Agreements........................................................................45
5.2 Nomination and Removal of Directors.....................................................45
5.3 Use of Proceeds.........................................................................46
5.4 Credit Agreement........................................................................46
5.5 Public Market...........................................................................46
5.6 Plan....................................................................................47
5.7 Chairman................................................................................47
5.8 General Director; First Deputy General Director.........................................48
5.9 Chief Financial Officer and Chief Accountant............................................49
5.10 Investment Manager; Investment Fees; Financing Fees.....................................50
5.11 Financial Reports.......................................................................50
5.12 Deposits; Withdrawals...................................................................51
5.13 Insurance...............................................................................51
5.14 Public Announcements....................................................................52
5.15 Furnishing Information..................................................................52
5.16 Best Efforts............................................................................52
5.17 Employees...............................................................................53
5.18 Government and Regulatory Authority Notices and Filings.................................53
5.19 First General Meeting of Shareholders and First Board Meeting...........................53
5.20 Subsequent Meetings of Shareholders.....................................................54
ARTICLE VI: CERTAIN RESTRICTIONS ON TRANSFER; PURCHASER'S RIGHTS; DEADLOCK;
BUY-SELL PROVISION; RIGHT OF FIRST REFUSAL; RELATED MATTERS; CHANGE IN
CONTROL......................................................55
6.1 Certain Restrictions on Transfer........................................................55
6.2 Restraining Order.......................................................................55
6.3 Agreement with Transferees..............................................................56
6.4 Right of First Refusal..................................................................56
6.5 Deadlock................................................................................58
6.6 Buy/Sell Procedure......................................................................58
6.7 Appraisal Procedure.....................................................................59
6.8 Change in Control.......................................................................60
6.9 Purchaser's Tag-Along Right.............................................................61
ARTICLE VII: TERMINATION.............................................................................62
7.1 Termination of Agreement................................................................62
7.2 Procedure Upon Termination..............................................................62
ARTICLE VIII: INDEMNIFICATION.........................................................................63
8.1 Indemnification by the Parent and COMCOR-TV.............................................63
8.2 Indemnification by the Purchaser........................................................63
8.3 Payment Adjustment......................................................................63
8.4 Procedures for Third Party Claims.......................................................64
ARTICLE IX: GOVERNING LAW AND DISPUTE RESOLUTION....................................................64
9.1 Governing Law and Language..............................................................64
9.2 Arbitration.............................................................................64
9.3 Agreement not to Assert Claims/Sovereign Immunity.......................................65
ARTICLE X: MISCELLANEOUS...........................................................................65
10.1 Survival of Representations, Warranties and Covenants...................................65
10.2 Further Assurances......................................................................65
10.3 Entire Agreement........................................................................65
10.4 Notices.................................................................................66
10.5 Confidentiality.........................................................................67
10.6 Severability............................................................................68
10.7 Waiver..................................................................................68
10.8 Assignment..............................................................................68
10.9 Counterparts............................................................................68
10.10 Remedies................................................................................68
10.11 Expenses................................................................................68
10.12 Amendment...............................................................................69
Exhibits
Exhibit A......... Form of Strategic Agreement
Exhibit B......... COMCOR-TV Financial Operating Plan
Exhibit C......... Board Rules
Exhibit D......... Form of Deferred Share Power of Attorney
Exhibit E......... Form of Deferred Share Purchase Agreement
Exhibit F......... Form of Deferred Share Transfer Acceptance Act
Exhibit G......... Form of Deferred Share Voting Power of Attorney
Exhibit H......... Form of Financing Agreement
Exhibit I......... Form of Lease Agreement
Exhibit J Parent Second Share Purchase Agreement
Exhibit K......... Parent Third Share Purchase Agreement
Exhibit L......... Purchaser First Share Purchase Agreement
Exhibit M......... Purchaser Second Share Purchase Agreement
Exhibit N......... Purchaser Third Share Purchase Agreement
Exhibit O......... Form of Opinion of Counsel to the Parent and COMCOR-TV
Exhibit P......... Terms to be set forth in amended Charter
Schedules
Schedule 1.1 Transferred Assets
Schedule 2.2(a) Additional Transferred Assets
Schedule 3.1(b) Revised COMCOR-TV Charter
Schedule 3.1(c) Revised COMCOR-TV Board Rules
Schedule 3.1(d) COMCOR-TV Board Members
Schedule 3.2(c) Third Party Consents
Schedule 3.9 Undisclosed Liabilities
Schedule 3.10 Taxes
Schedule 3.11 Material Adverse Effect
Schedule 3.12 Governmental Approvals and Filings
Schedule 3.13 Litigation
Schedule 3.14(a) Contracts
Schedule 3.14(c) Commitments
Schedule 3.16(a) Licenses
Schedule 3.16(c) License Restrictions
Schedule 3.16(d) MFON
Schedule 3.18(a) Employees
Schedule 3.18(b) Benefit Plans
Schedule 3.19 Dividends/Sale of Assets
Schedule 3.20 Transactions with Affiliates
Schedule 3.23 Banks
Schedule 3.25 Intellectual Property
Schedule 4.1 Corporate Documents of Purchaser
Schedule 4.2(c) Third Party Consents
Schedule 4.3 Governmental Approvals and Filings
Schedule 4.6 Brokers and Finders
Schedule 5.17(b) Organizational Chart
Schedule 6.4(c) Transfer Consent
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AGREEMENT
This GENERAL AGREEMENT is dated as of January 31, 2000, by and among OAO
Moskovskaya Telecommunikatsionnaya Corporatsiya (also known as COMCOR), an open
joint stock company organized under the laws of the Russian Federation (the
"Parent"), ZAO COMCOR-TV, a closed joint stock company organized under the laws
of the Russian Federation ("COMCOR-TV"), and Treglos Investments Limited, a
limited liability company organized under the laws of Cyprus (the "Purchaser").
Each of the Parent, COMCOR-TV and the Purchaser are referred to herein
individually as a "Party" and collectively as the "Parties".
WITNESSETH
WHEREAS, the Parent owns and operates and is responsible for the
development and wiring of the Moscow Fiber Optic Network (the "MFON");
WHEREAS, the Parent has provided certain exclusive access and use of the
MFON to COMCOR-TV as set forth in the Strategic Agreement, a copy of which is
attached hereto as Exhibit A;
WHEREAS, the Parent owns 20,000 shares of Common Stock representing 100% of
the issued and outstanding shares of Common Stock (as defined in Section 1.1) of
COMCOR-TV in partial consideration for which the Parent has transferred and
assigned to COMCOR-TV the Transferred Assets (as defined in Section 1.1);
WHEREAS, the Parent and Purchaser desire to cause COMCOR-TV to issue and
sell to the Parent, and the Parent desires to subscribe for and purchase the
Parent's Shares (as defined in Section 1.1) in two stages from COMCOR-TV in
exchange for which the Parent desires to make a capital contribution to
COMCOR-TV valued at US$20,000,000, subject to adjustment, in the form of the
Additional Transferred Assets (as defined in Section 1.1), on the terms set
forth in this Agreement;
WHEREAS, the Purchaser desires to obtain certain economic benefits of the
MFON through an ownership interest in COMCOR-TV;
WHEREAS, the Parent and Purchaser desire to cause COMCOR-TV to issue and
sell to the Purchaser and, in reliance on the representations, warranties and
covenants of the Parent and COMCOR-TV made herein, the Purchaser desires to
subscribe for and purchase the Purchaser's Shares (as defined in Section 1.1) in
three stages from COMCOR-TV in exchange for which the Purchaser desires to make
a capital contribution to COMCOR-TV valued at approximately US$30,000,000,
subject to adjustment, on the terms set forth in this Agreement;
WHEREAS, the Parent and Purchaser desire to each own 50% of the issued and
outstanding shares of Common Stock of COMCOR-TV in accordance with the
provisions of this Agreement;
WHEREAS, the Parent, COMCOR-TV and the Purchaser desire to enter into this
Agreement to, among other things, set forth their agreement in respect to
certain aspects of the governance of COMCOR-TV from and after the date first
written above;
WHEREAS, the Parent and Purchaser desire that COMCOR-TV conduct its
business in accordance with the COMCOR-TV Financial Operating Plan, a copy of
which is attached hereto as Exhibit B; and
WHEREAS, as set forth in the Strategic Agreement and the COMCOR-TV
Financial Operating Plan, the Parent has projected with reasonable satisfaction
that the "last mile" costs associated with COMCOR-TV's ability to provide
MFON-utilized services to up to 1.5 million subscribers in the operating area,
are approximately US$130 million and Andersen Group desires to manage the
financing of such costs by acting as the financial manager of COMCOR-TV.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
ARTICLE I: DEFINITIONS AND INTERPRETATION
1.1 Definitions
As used herein, the following terms shall have the following meanings:
"Actions or Proceedings" shall mean any action, suit, arbitration or other
proceeding commenced, brought, conducted or heard by or before any Governmental
or Regulatory Authority.
"Additional Transferred Assets" shall mean the Second Stage Transferred
Assets and the Third Stage Transferred Assets.
"Affiliate" shall mean, with respect to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person and, if such Person is an individual, any relative or
spouse of such individual, or any relative of such spouse, any one of whom has
the same home as such individual, and any trust or estate for which such
individual serves as a trustee or in a similar capacity or in which such
individual has a substantial beneficial interest and any Person who is
controlled by any such member or trust. As used in this definition, "control"
(including, with its correlative meanings, "controlled by" and "under common
control with") shall mean possession, directly or indirectly, of power to direct
or cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise) of any other Person, provided that, in any event, any Person which
owns, directly or indirectly, a majority of the securities having ordinary
voting power for the election of directors or other governing body of a
corporation or a majority of the partnership or other ownership interests of any
other Person (other than as a limited partner of such other Person) will be
deemed to control such corporation or other Person.
"Agreement" shall mean this Agreement and the Exhibits and the Schedules
hereto.
"Andersen Group" shall mean Andersen Group, Inc., a Delaware corporation,
which is contemplated to act as investment manager of COMCOR-TV, as set forth in
Section 5.10 hereof.
"Assets and Properties" shall mean, with respect to any Person, all assets
and properties of every kind, nature, character and description (whether real,
personal or mixed, whether tangible or intangible, whether absolute, accrued,
contingent, fixed or otherwise and wherever situated), including the goodwill
related thereto, used, operated, owned or leased by such Person, including,
without limitation, cash, cash equivalents, Investments, accounts and notes
receivable, chattel paper, documents, instruments, general intangibles, real
estate, equipment, inventory, goods and Intellectual Property.
"Auditors" shall have the meaning assigned thereto in the Charter.
"Benefit Plan" shall mean any plan, including loans to employees and
deposit schemes, established by COMCOR-TV, existing on the First Stage Closing
Date or prior thereto or subsequently adopted or amended from time to time by
Unanimous Approval, to which COMCOR-TV contributes or has contributed, or under
which any employee, former employee, director, consultant or independent
contractor of COMCOR-TV or any beneficiary thereof is covered, is eligible for
coverage or has benefit rights.
"Board" shall mean the Board of Directors of COMCOR-TV.
"Board Rules" shall mean the rules of the Board consistent with Exhibit C,
or as such Board Rules have been amended by Unanimous Approval.
"Business Day" shall mean a day other than a Saturday, a Sunday or any day
on which banks located in Moscow, Russia or New York, New York are authorized or
obliged to close.
"Business or Condition of COMCOR-TV" shall mean the business, condition
(financial or otherwise), results of operations and Assets and Properties of
COMCOR-TV taken as a whole.
"Business or Condition of the Parent" shall mean the business, condition
(financial or otherwise), results of operations and Assets and Properties of the
Parent taken as a whole.
"CBR" shall mean the Central Bank of Russia (Tsentralniy bank Rossii or TsB
Rossii), including any applicable territorial agent thereof, or any successor
thereto.
"Chairman" shall mean the Chairman of the Board.
"Charter" shall mean the most recent version of the charter (ustav) of
COMCOR-TV.
"Charter Capital" (ustavniy kapital) shall mean the aggregate value of the
ownership interests of a Person as stated in its charter, provided that, with
respect to a joint stock company, the Charter Capital shall mean the aggregate
nominal value of its issued shares.
"Chief Accountant" shall mean the Chief Accountant (glavniy bukhgalter) of
COMCOR-TV, subject to the provisions and requirements of Russian law currently
in effect and the corporate documents of COMCOR-TV.
"Chief Financial Officer" shall mean the Chief Financial Officer of
COMCOR-TV.
"Closing Dates" shall mean First Stage Closing Date, the Second Stage
Closing Date and the Third Stage Closing Date.
"Closings" shall mean the First Stage Closing, the Second Stage Closing and
the Third Stage Closing.
"COMCOR-TV Capital Account" shall mean a separate bank account maintained
by COMCOR-TV at Citibank T/O, Moscow into which all capital contributions in
cash (including, but not limited to, the cash portions of the Purchaser's
Purchase Price) shall be deposited.
"COMCOR-TV Equity Securities" shall mean, as of any time, the then issued
and outstanding Equity Securities of COMCOR-TV (including, without limitation,
the Common Stock).
"COMCOR-TV Shareholders" shall mean a collective reference to the holders
from time to time of the Common Stock (or such other COMCOR-TV Equity
Securities, if any), and "COMCOR-TV Shareholder" shall mean a reference to any
of them.
"Common Stock" shall mean the shares of common stock of COMCOR-TV, as
defined in Section 5 of the Charter.
"Contract" shall mean any agreement, letter of intent, lease, license,
evidence of Indebtedness, mortgage, indenture, security agreement or other
contract or understanding (whether written or oral), in each case, to the extent
legally binding.
"Defaulting Party" shall mean any Party on whose part an Event of Default
occurs.
"Deferred Share" shall mean one (1) share of Common Stock which as of the
First Stage Closing shall be reflected in the Register as being owned by the
Parent and which the Purchaser shall acquire after the First Stage Closing, in
the manner described in Section 2.8.
"Deferred Share Power of Attorney" shall mean the power of attorney
executed by the Parent as of the First Stage Closing Date in the form attached
hereto as Exhibit D.
"Deferred Share Purchase Agreement" shall mean the Deferred Share Purchase
Agreement executed by the Parent as of the First Stage Closing Date in the form
attached hereto as Exhibit E.
"Deferred Share Transfer Acceptance Act" shall mean the Deferred Share
Transfer Acceptance Act executed by the Parent as of the First Stage Closing
Date in the form attached hereto as Exhibit F.
"Deferred Share Voting Power of Attorney" shall mean the Deferred Share
Voting Power of Attorney executed by the Parent as of the First Stage Closing
Date in the form attached hereto as Exhibit G.
"Environmental Law" shall mean any Law or Order relating to the regulation
or protection of human health and safety, the environment or hazardous or toxic
substances, wastes, pollutants or contaminants.
"Equity Securities" shall mean, with respect to any Person, any stock or
similar security of such Person or any partnership share or other equity
ownership interest in such Person, including without limitation securities
containing equity features and securities containing profit participation
features, or any security convertible or exchangeable, with or without
consideration, into any stock or similar security, or any security carrying any
warrant or right to subscribe to or purchase any stock or similar security, or
any such warrant or right.
"Event of Default" shall mean the occurrence of any of the following events
on the part of any Party:
(i) any representation or warranty made by such Party in this Agreement was
false or misleading in any material respect as of the date of this Agreement or
as of such other date as of which such representation or warranty was made or
deemed to be repeated; or
(ii) such Party shall fail to perform or observe any covenant or agreement
contained in this Agreement, to be performed or observed by such Party, which
failure shall remain unremedied for ten (10) days after written notice thereof
shall have been given to such Party by the other Party, with the exception of
the failure of such Party to make a capital contribution to COMCOR-TV in
exchange for shares of Common Stock pursuant to the terms of this Agreement; or
(iii) the failure of such Party to make an additional capital contribution
to which it is obligated in accordance with the terms of this Agreement in
exchange for shares of Common Stock within two months after such capital
contribution is due under this Agreement, except that an Event of Default shall
not be deemed to have occurred if the Purchaser fails to make an additional
capital contribution in exchange for shares of Common Stock pursuant to this
Agreement, because of (A) the failure of the conditions set forth in Sections
2.5(a)(i), 2.5(b)(i), and 2.5(c)(i) to be satisfied, (B) the Parent's and/or
COMCOR-TV's failure to properly and timely approve or register the issuances of
shares of Common Stock to Purchaser or (C) any other failure of Parent or
COMCOR-TV to perform its obligations under this Agreement; or
(iv) the Transfer of COMCOR-TV Equity Securities by such Party in violation
of the restrictions on Transfer set forth in Article VI hereof, except for
Transfers by operation of Law; or
(v) such Party shall become insolvent, generally shall fail or be unable to
pay its debts as they mature, shall admit in writing its inability to pay its
debts as they mature, shall make a general assignment for the benefit of
creditors, shall enter into any composition or similar agreement with creditors,
or shall suspend the transaction of all or a substantial portion of its usual
business as a result of its insolvency or general failure or inability to pay
its debts as they mature (or shall take such action, or enter into a
transaction, analogous or similar to any of the foregoing); or
(vi) such Party shall file a petition or answer or consent seeking relief
under any Law Affecting Creditors Rights, or such Party shall consent to the
institution of proceedings thereunder or the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee, custodian,
sequestrator or similar official to take possession of any substantial part of
such Party's Assets and Properties (or shall take such action, or enter into a
transaction, analogous or similar to any of the foregoing); or
(vii) there shall be entered a decree or order or similar act by a court or
similar forum constituting an order for relief (or other similar order) in
respect of any Law Affecting Creditors Rights, or appointing a trustee,
custodian, sequestrator or similar official to take possession of any
substantial part of such Party's Assets and Properties, or ordering the
winding-up of or liquidation of the affairs of such Party (or other similar
act), and any such decree or order (or other similar act) shall continue
unstayed and in effect for a period of 30 consecutive days; or
(viii) the withdrawal from COMCOR-TV by such Party except as permitted
under the terms of this Agreement.
"Excluded Liabilities" shall mean any liability or obligation, direct or
indirect, absolute or contingent, of any nature whatsoever of or relating to
COMCOR-TV, any of COMCOR-TV's agents or employees (including, without
limitation, any of the Transferred Employees), or any of the Transferred Assets,
Additional Transferred Assets or Assets and Properties of COMCOR-TV which
liability or obligation arose, in whole or in part, directly or indirectly,
prior to the Closing Dates, or of the Parent or any other Person.
"FCSM" shall mean the Federal Commission for the Securities Market of the
Russian Federation (Federalnaya komissiya po rynku tsennikh bumag Rossiiskoi
Federatsii or "FKTsB"), or any successor thereto, including any applicable
territorial agent thereof.
"Financial Statements" shall mean the financial statements of COMCOR-TV,
delivered to the Purchaser pursuant to Sections 2.5 and 3.4 of this Agreement.
"Financing Agreement" shall mean the financing agreement, dated the First
Stage Closing Date, between COMCOR-TV and Andersen Group, in the form attached
hereto as Exhibit H.
"First Stage Closing" shall mean the consummation of the transactions
contemplated by Section 2.5(a) and the other transactions contemplated to be
consummated at that time pursuant to the terms of this Agreement.
"First Stage Closing Date" shall mean the date of the First Stage Closing,
which date shall be the date hereof unless the Parties shall agree in writing to
such other date.
"First Stage Purchase's Shares" shall mean the 19,998 shares of Common
Stock the Purchaser receives in exchange for the first portion of the
Purchaser's Purchase Price on the First Stage Closing Date pursuant to this
Agreement.
"General Director" shall mean the person holding the office of General
Director of COMCOR-TV in accordance with the Charter.
"Governmental or Regulatory Authority" shall mean any court, tribunal,
arbitrator, arbitral panel, legislature, government, ministry, committee,
inspectorate, authority, agency, commission, official or other competent
authority of the Russian Federation, any other country or any state, as well as
any county, city, municipality or other political subdivision of any of the
foregoing.
"IAS" shall mean the Institute of Automated Systems, an open joint stock
company organized and existing under the laws of the Russian Federation.
"Indebtedness" shall mean, with respect to any Person, all obligations of
such Person (a) for borrowed money or investment commitments, (b) evidenced by
notes, bonds, debentures or similar instruments, (c) for the deferred purchase
price of goods or services (other than trade payables or accruals incurred in
the ordinary course of business consistent with past practice), (d) under
capital leases or (e) in the nature of a guarantee of any obligation described
in clauses (a) through (d) above of any other Person.
"Intellectual Property" shall mean patents and patent rights, licenses,
inventions, copyrights and copyright rights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks and trademark rights, service
marks and service mark rights, trade names and trade name rights, service names
and service name rights, brand names, processes formulae, trade dress, business
and product names, logos, slogans, industrial models, processes, designs,
methodologies, software programs (including all source codes) and related
documentation, technical information, manufacturing, engineering and technical
drawings and all pending applications for and registrations of patents,
trademarks, service marks and copyrights.
"Investments" shall mean all investments (tangible or intangible),
including cash, equipment, debentures, notes and other evidences of
Indebtedness, stocks, securities (including warrants and other rights to
purchase securities and securities convertible into or exchangeable for other
securities), interests in joint ventures, general and limited partnerships, and
other Persons, mortgage and trade loans, and also other investment or portfolio
assets owned of record or beneficially by a Person (other than (a)any direct or
indirect Subsidiaries of COMCOR-TV or any ownership interests therein and
(b)any short-term trade receivables generated in the ordinary course of
business).
"Knowledge of COMCOR-TV" or "Known to COMCOR-TV" shall mean to the best of
the knowledge and belief of COMCOR-TV after having made reasonable inquiries.
"Knowledge of the Parent and COMCOR-TV" or "Known to the Parent and
COMCOR-TV" shall mean to the best of the knowledge and belief of the Parent or
COMCOR-TV after having made reasonable inquiries.
"Knowledge of the Purchaser" or "Known to the Purchaser" shall mean to the
best of the knowledge and belief of the Purchaser after having made reasonable
inquiries.
"Law Affecting Creditors' Rights" shall mean any bankruptcy, fraudulent
conveyance or transfer, insolvency, moratorium, reorganization, or other similar
law or laws affecting the enforcement of creditors' rights generally, and any
general principles of equity.
"Laws" shall mean (a) all laws, decrees, resolutions, instructions,
statutes, rules, regulations, acts, ordinances and other pronouncements having
the effect of law or regulation of the Russian Federation, the United States or
any other country or any state, as well as any county, city or other political
subdivision of any of the foregoing, and (b) all rules or regulations of any
securities exchange on which the securities of any of the Parties are now or
hereafter traded or listed.
"Lease Agreement" shall mean the Lease Agreement, dated as of the First
Stage Closing Date, between the Parent and COMCOR-TV, in the form attached
hereto as Exhibit I.
"Liabilities" shall mean all Indebtedness, obligations and other
liabilities of a Person (whether absolute, accrued, contingent, fixed or
otherwise, or whether due or to become due).
"Licenses" shall mean all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority or any other
Person, including, without limitation, all MFON Licenses.
"Lien" shall mean any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or
any conditional sale contract, title retention contract or other Contract to
give any of the foregoing.
"Loss" shall mean any and all damages, fines, fees, penalties,
deficiencies, losses and expenses (including, without limitation, interest,
court costs, fees of attorneys, accountants and other experts or other expenses
of litigation or other similar proceedings or of any claim, default or
assessment); provided, however, that all Losses shall be documented by
supporting materials.
"MAMP" shall mean the Ministry for Anti-Monopoly Policy and Support for
Entrepreneurship of the Russian Federation (Ministerstvo po Antimonopolnoy
politike i podderzhke predprinimatelstva Rossiiskoi Federatsii, or "GAK
Rossii"), or any successor thereto, including any applicable territorial agent
thereof.
"Material Adverse Effect" shall mean, with respect to any Person, a
material adverse effect on or with respect to the business, assets, financial
condition or results of operations of such Person and its Subsidiaries taken as
a whole, or upon such Person's ability to perform its obligations under this
Agreement and the other Principal Agreements, if any, to which it is a party.
"MFON" shall have the meaning specified in the preamble to this Agreement.
"MFON Licenses" shall mean all Licenses granted or issued by any authorized
Governmental or Regulatory Authority with respect to the use and operation of
the MFON.
"MRC" shall mean the Moscow Registration Chamber (Moskovskaya
registratsionnaya palata), or any successor thereto.
"Mr. Pripachkin" shall mean Yuri Pripachkin, a citizen of the Russian
Federation resident in Moscow, Russia.
"New Issuance" shall mean any issuance by COMCOR-TV of any of its Equity
Securities to any Person consummated after the date of this Agreement, other
than (a) any such issuance to the Purchaser or any Affiliate in connection with
any capital contribution made by the Purchaser or any Affiliate thereof to
COMCOR-TV, (b) any such issuance to the Parent in connection with this
Agreement, or (c) any such issuance pursuant to the Initial Public Offering (as
defined in Section 5.5).
"Nominee" shall mean, with respect to the Parent, an individual nominated
by the Parent for election to the Board and, with respect to the Purchaser, an
individual nominated by the Purchaser for election to the Board or Francis E.
Baker or Oliver R. Grace.
"Order" shall mean any writ, judgment, decree, injunction or similar order
of any Governmental or Regulatory Authority.
"Parent First Share Purchase Agreement" shall mean the share purchase
agreement, by and between the Parent and COMCOR-TV pursuant to which the Parent
acquired shares of Common Stock in exchange for the Transferred Assets.
"Parent Group" shall mean a collective reference to each of the Parent and
each of its officers, directors, shareholders, representatives and Affiliates.
"Parent Licenses" shall mean all Licenses necessary for the Parent to
lawfully (i) own and operate the MFON and its other Assets and Properties, and
(ii) enter into, and perform Parent's obligations under, the Principal
Agreements.
"Parent Second Share Purchase Agreement" shall mean the share purchase
agreement, by and between the Parent and COMCOR-TV, in the form of Exhibit J
hereto.
"Parent Share Purchase Agreements" shall mean collectively the Parent
Second Share Purchase Agreement and the Parent Third Share Purchase Agreement.
"Parent Third Share Purchase Agreement" shall mean the share purchase
agreement, by and between the Parent and COMCOR-TV, in the form of Exhibit K
hereto.
"Parent's Purchase Dates" shall mean the Parent's Second Stage Purchase
Date and the Parent's Third Stage Purchase Date.
"Parent's Purchase Price" shall mean the capital contribution of the Parent
to COMCOR-TV in exchange for the Parent's Shares pursuant to Section 2.2(a).
"Parent's Second Stage Purchase Date" shall mean the date on which the
Parent purchases the Second Stage Parent's Shares pursuant to either Section
2.4(a)(i) or Section 2.4(a)(ii), unless otherwise agreed to by the Parties.
"Parent's Shares" shall mean the Second Stage Parent's Shares and the Third
Stage Parent's Shares.
"Parent's Third Stage Purchase Date" shall mean the date on which the
Parent purchases the Third Stage Parent's Shares pursuant to either Section
2.4(b)(i) or Section 2.4(b)(ii); provided, however, that the Parent's Third
Stage Purchase Date may not take place on or before the Second Stage Closing
Date.
"Percentage Interest" shall mean, with respect to any Person, the
percentage interest of such Person in the equity capital of COMCOR-TV on a fully
diluted basis, expressed as a percentage, reflecting the ratio of (i) the number
of shares of equity capital stock of COMCOR-TV owned or controlled by such
Person to (ii) the aggregate number of issued and outstanding shares of equity
capital stock of COMCOR-TV.
"Permitted Lien" shall mean (a) any Lien for Taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with US GAAP, (b) any
statutory Lien arising in the ordinary course of business by operation of Law
with respect to a Liability that is not yet due or delinquent, and (c) any
mechanic's, materialman's or other similar Lien arising by operation of Law or
any minor imperfection of title or similar Lien, none of which individually or
in the aggregate with other such Liens materially impairs the value of the
property subject to such Lien or the use of such property in the conduct of the
business of the Parent.
"Person" shall mean any natural person, corporation, general partnership,
simple partnership, limited partnership, proprietorship, other business
organization, trust, union, association or Governmental or Regulatory Authority,
whether incorporated or unincorporated.
"Plan" shall mean the COMCOR-TV Financial Operating Plan, a copy of which
is attached hereto as Exhibit B, or as such COMCOR-TV Financial Operating Plan
has been amended by Unanimous Approval.
"Primary Shareholders" shall mean a collective reference to the Purchaser
and the Parent, and "Primary Shareholder" shall mean a reference to either of
them.
"Principal Agreements" shall mean this Agreement, the Financing Agreement,
the Deferred Share Power of Attorney, the Deferred Share Purchase Agreement, the
Deferred Share Transfer Acceptance Act, the Deferred Share Voting Power of
Attorney, the Lease Agreement, the Parent Share Purchase Agreements, the
Purchaser Share Purchase Agreements, the Strategic Agreement and any other
documents required under this Agreement.
"Purchaser First Share Purchase Agreement" shall mean the share purchase
agreement, dated as of the First Stage Closing Date, by and between the
Purchaser and COMCOR-TV, in the form of Exhibit L hereto.
"Purchaser Group" shall mean a collective reference to each of the
Purchaser and each of its officers, directors, shareholders, representatives and
Affiliates.
"Purchaser Second Share Purchase Agreement" shall mean the share purchase
agreement, dated as of the Second Stage Closing Date, by and between the
Purchaser and COMCOR-TV, in the form of Exhibit M hereto.
"Purchaser Share Purchase Agreements" shall mean collectively the Purchaser
First Share Purchase Agreement, Purchaser Second Share Purchase Agreement and
Purchaser Third Share Purchase Agreement.
"Purchaser Third Share Purchase Agreement" shall mean the share purchase
agreement, dated as of the Third Stage Closing Date, by and between the
Purchaser and COMCOR-TV, in the form of Exhibit N hereto. "Purchaser's Purchase
Price" shall mean the capital contribution of the Purchaser to COMCOR-TV in
exchange for the Purchaser's Shares pursuant to Section 2.2(b).
"Purchaser's Shares" shall mean the First Stage Purchaser's Shares, the
Second Stage Purchaser's Shares and the Third Stage Purchaser's Shares.
"Register" shall mean the share register of COMCOR-TV, which as of the
First Stage Closing Date shall be maintained by the Registrar.
"Registrar" shall mean the National Registry Company or such other
registrar which maintains COMCOR-TV's share register as chosen by Unanimous
Approval.
"ruble" shall mean the lawful currency for the time being of the Russian
Federation.
"ruble equivalent" shall mean the amount, in rubles, equivalent to an
amount expressed in another currency, based on the daily rate established by the
CBR.
"Second Stage Closing" shall mean, subject to the satisfaction of the
conditions set forth in Section 2.5(b)(i), the consummation of the transactions
contemplated by Section 2.5(b) and the other transactions contemplated to be
consummated at that time pursuant to the terms of this Agreement.
"Second Stage Closing Date" shall mean either the date which is nine months
after the First Closing Date if the Board has made a determination that
COMCOR-TV has been conducting its business according to the Plan and decisions
of the Board pursuant to Section 2.3(a)(i) or a date within 45 days after the
Parent's Second Stage Purchase Date if the Auditors have determined that
COMCOR-TV has been conducting its business according to the Plan and decisions
of the Board pursuant to Section 2.3(b)(i); provided, however, that the
conditions set forth in Section 2.5(b)(i) shall have been satisfied, unless
otherwise agreed to by the Parties.
"Second Stage Parent's Shares" shall mean the 39,998 shares of Common Stock
the Parent receives in exchange for the Second Stage Transferred Assets on the
Parent's Second Stage Purchase Date pursuant to this Agreement.
"Second Stage Purchaser's Shares" shall mean the 39,998 shares of Common
Stock the Purchaser receives in exchange for US$10,000,000 on the Second Stage
Closing Date pursuant to this Agreement.
"Second Stage Transferred Assets" shall mean those certain Assets and
Properties as specified in Schedule 2.2(a) to be transferred by the Parent to
COMCOR-TV on the Parent's Second Stage Purchase Date.
"Securities Act" shall mean the U.S. Securities Act of 1933, as amended.
"SRC" shall mean the State Registration Chamber under the Ministry of
Justice of the Russian Federation (Gosudarstvennaya registratsionnaya palata pri
Ministerstve iustitsii Rossiiskoi Federatsii), or any successor thereto.
"Strategic Agreement" shall mean the Strategic Agreement, dated the First
Stage Closing Date, by and between the Parent and COMCOR-TV, in the form of
Exhibit A hereto.
"Subsidiary" of a Person shall mean any Person at least a majority of the
voting shares or voting Equity Securities of which is, directly or indirectly,
owned or controlled collectively by such Person.
"Tax Document" shall mean any return, declaration, report, claim for
refund, assessment, demand, act, or information return, statement or other
document relating to Taxes, including any Schedule or attachment thereto, and
including any amendment thereof, whether prepared by the taxpayer, a tax
preparer or a Governmental or Regulatory Authority.
"Taxes" shall mean any national, federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added alternative or add-on minimum, estimated, or
other tax, duty, governmental fee or charge of any kind whatsoever, including
any interest, penalty, or addition thereto.
"Third Stage Closing" shall mean the consummation of the transactions
contemplated by Section 2.5(c) and the other transactions contemplated to be
consummated at that time pursuant to the terms of this Agreement.
"Third Stage Closing Date" shall mean either the date which is fifteen
months after the First Closing Date if the Board has made a determination that
COMCOR-TV has been conducting its business according to the Plan and decisions
of the Board pursuant to Section 2.3(a)(ii) or the date within 45 days after the
Parent's Third Stage Purchase Date if the Auditors have determined that
COMCOR-TV has been conducting its business according to the Plan and decisions
of the Board pursuant to Section 2.3(b)(ii); provided, however, that the
conditions set forth in Section 2.5(c)(i) shall have been satisfied, unless
otherwise agreed to by the Parties.
"Third Stage Parent's Shares" shall mean the 119,994 shares of Common Stock
the Parent receives in exchange for the Third Stage Transferred Assets on the
Parent's Third Stage Purchase Date pursuant to this Agreement.
"Third Stage Purchaser's Shares" shall mean the 119,994 shares of Common
Stock the Purchaser receives in exchange for US$10,000,000 on the Third Stage
Closing Date pursuant to this Agreement.
"Third Stage Transferred Assets" shall mean those certain Assets and
Properties as specified in Schedule 2.2(a) to be transferred by the Parent to
COMCOR-TV on the Parent's Third Stage Purchase Date.
"Transferred Assets" shall mean those certain Assets and Properties
(including property and the rights associated with tangible and intangible
property) heretofore transferred by the Parent to COMCOR-TV, as listed on
Schedule 1.1.
"Unanimous Approval" shall mean, with regard to a meeting or vote of the
Board, the unanimous approval of all members of the Board present and voting at
such meeting or vote; provided, however, that the presence (or, with respect to
any meeting by ballot, the vote) of at least one duly elected Board member, who
is a Nominee of the Purchaser, and at least one duly elected Board member, who
is a Nominee of the Parent, shall be necessary to constitute a quorum at such
meeting (or to make effective the vote by ballot).
"U.S. dollar", "dollar", and the signs "$" and "US$" shall mean a reference
to the lawful currency for the time being of the United States of America.
"US GAAP" shall mean United States Generally Accepted Accounting
Principles.
1.2 Interpretations
Unless the context of this Agreement otherwise requires, the following
rules of interpretation shall apply to this Agreement:
(a) the singular shall include the plural, and the plural shall include the
singular;
(b) words of any gender shall include each other gender;
(c) the words "hereof", "herein", "hereby", "hereto" and similar words
refer to this entire Agreement and not to any particular Section or any other
subdivision of this Agreement;
(d) a reference to any Article, Section, Schedule or Exhibit is a reference
to a specific Article or Section of, or Schedule or Exhibit to, this Agreement;
and
(e) the headings contained in this Agreement are for convenience of
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
ARTICLE II: SALE AND PURCHASE; EXCLUDED LIABILITIES; DEFERRED SHARE
2.1 Purchase and Sale of Common Stock
(a) Parent's Shares.
(i) In accordance with the procedures set forth in the Parent Share
Purchase Agreements, and on the Parent's Purchase Dates, COMCOR-TV shall issue,
sell, assign, convey and transfer to the Parent, and the Parent shall subscribe
for and purchase from COMCOR-TV, the Parent's Shares, free and clear of all
Liens.
(ii) Subject to the terms and conditions hereof and in consideration for
the issuance, sale, assignment, conveyance and transfer to the Parent by
COMCOR-TV of the Parent's Shares, the Parent shall on the Parent's Purchase
Dates transfer to COMCOR-TV ownership of the relevant grouping of the Additional
Transferred Assets in accordance with Section 2.4.
(iii) The transfer of the Additional Transferred Assets by the Parent in
exchange for the Parent's Shares on the Parent's Purchase Dates constitutes a
valid and binding obligation of the Parent and is subject only to (A) in
connection with the transfer Second Stage Transferred Assets, satisfaction of
the condition set forth in either Section 2.4(a)(i) or Section 2.4(a)(ii), and
(B) in connection with the transfer of the Third Stage Transferred Assets,
satisfaction of the condition set forth in either Section 2.4(b)(i) or Section
2.4(b)(ii).
(iv) The execution of this Agreement shall not constitute placement
(razmescheniye) of the Parent's Shares. The placement shall occur on the dates
on which the Parent's Shares are disposed of (otchuzhdeniye) by COMCOR-TV in
favor of the Parent by transferring the title to the Parent's Shares to the
Parent pursuant to the terms of the Parent Share Purchase Agreements. In no
event shall the disposition (otchuzhdeniye) of the Parent's Shares or any part
thereof take place prior to the registration of the issuance of the Parent's
Shares with the FCSM. The transfer of the Additional Transferred Assets to
COMCOR-TV shall be allocable entirely to, and deemed to be in consideration of,
all of the Parent's Shares being purchased hereunder and under the Parent Share
Purchase Agreements.
(b) Purchaser's Shares.
(i) In accordance with the procedures set forth in the Purchaser Share
Purchase Agreements and on the basis of the representations, warranties and
covenants made by the Parent and COMCOR-TV herein, on each of the Closing Dates,
COMCOR-TV shall issue, sell, assign, convey and transfer to the Purchaser, and
the Purchaser shall subscribe for and purchase from COMCOR-TV, the Purchaser's
Shares, free and clear of all Liens.
(ii) Subject to the terms and conditions hereof and in consideration for
the issuance, sale, assignment, conveyance and transfer to the Purchaser by
COMCOR-TV of the Purchaser's Shares, the Purchaser shall on each of the Closing
Dates pay COMCOR-TV the relevant portion of the Purchaser's Purchase Price in
accordance with Section 2.2(b).
(iii) Purchaser's obligation to purchase the Purchaser's Shares on the
First Stage Closing Date, the Second Stage Closing Date and the Third Stage
Closing Date is subject to satisfaction of the conditions set forth in Sections
2.5(a)(i), 2.5(b)(i), and 2.5(c)(i) respectively; provided, however, that the
Purchaser may in its sole discretion purchase the Purchaser's Shares on the
First Stage Closing Date, the Second Stage Closing Date and the Third Stage
Closing Date, notwithstanding the fact that the conditions set forth in Sections
2.5(a)(i), 2.5(b)(i), and 2.5(c)(i) respectively have not been satisfied.
(iv) The execution of this Agreement shall not constitute placement
(razmescheniye) of the Purchaser's Shares. The placement shall occur on the
dates on which the Purchaser's Shares are disposed of (otchuzhdeniye) by
COMCOR-TV in favor of the Purchaser by transferring the title to the Purchaser's
Shares to the Purchaser pursuant to the terms of the Purchaser Share Purchase
Agreements. In no event shall the disposition (otchuzhdeniye) of the Purchaser's
Shares or any part thereof take place prior to the registration of the issuance
of the Purchaser's Shares with the FCSM. The Purchaser's Purchase Price shall be
allocable entirely to, and deemed to be in consideration of, all of the
Purchaser's Shares being purchased hereunder and under the Purchaser Share
Purchase Agreements.
2.2 Payment for Common Stock
(a) The Parent's Purchase Price
The Parent's Purchase Price shall consist of the Second Stage Transferred
Assets and the Third Stage Transferred Assets, as specified in Schedule 2.2(a),
valued at US$10,000,000 and US$10,000,000 respectively, unless adjusted by
agreement of the Parties based on a valuation by an independent accounting firm
pursuant to Sections 2.4(a)(v) and 2.4(b)(v), to be transferred to COMCOR-TV by
the Parent in exchange for the Parent's Shares on the Parent's Purchase Dates.
(b) The Purchaser's Purchase Price
The Purchaser's Purchase Price shall consist of three portions to be paid
in three stages:
(i) At the First Stage Closing, the Purchaser shall pay COMCOR-TV the first
portion of the Purchaser's Purchase Price which shall consist of: (A) eight
million five hundred thousand dollars (US$8,500,000) by wire transfer to the
COMCOR-TV Capital Account in accordance with wire transfer instructions; and (B)
the transfer to COMCOR-TV ownership of 10,772 shares of common stock of IAS,
valued by the Parties at approximately US$700,000.
(ii) At the Second Stage Closing, the Purchaser shall pay COMCOR-TV the
second portion of the Purchaser's Purchase Price which shall consist of: (A) ten
million dollars (US$10,000,000), as adjusted by agreement of the Parties for any
payments made by the Purchaser relating to the employment of the First Deputy
General Director and the Chief Financial Officer pursuant to Sections 5.8(b) and
5.9(a), or any other personnel seconded by the Purchaser to COMCOR-TV, and which
cash aspect shall be paid by wire transfer to the COMCOR-TV Capital Account in
accordance with wire transfer instructions; and (B) the transfer to COMCOR-TV
ownership of 4,402 shares of common stock of IAS, valued by the Parties at
approximately US$286,000.
(iii) At the Third Stage Closing, the Purchaser shall pay COMCOR-TV, by
wire transfer to the COMCOR-TV Capital Account in accordance with wire transfer
instructions, the third portion of the Purchaser's Purchase Price which shall
consist of three aspects:
(A) ten million dollars (US$10,000,000) as adjusted, such that this aspect
of the third portion of the Purchaser's Purchase Price plus US$10,000,000 shall
equal the total value of the Additional Transferred Assets as agreed by the
Parties based on a valuation by an independent accounting firm under Sections
2.4(a)(v) and 2.4(b)(v); provided, however, that this aspect of the third
portion of the Purchaser's Purchase Price shall not be more than US$12,000,000;
and provided further that this aspect of the third portion of the Purchaser's
Purchase Price shall be further adjusted by agreement of the Parties for any
payments made by the Purchaser relating to the employment of the First Deputy
General Director and the Chief Financial Officer pursuant to Sections 5.8(b) and
5.9(a), or any other personnel seconded by the Purchaser to COMCOR-TV;
(B) an amount equal to the total amount of payments due under the Lease
Agreement that COMCOR-TV is not obligated to make pursuant to Section 5.22
herein; and
(C) an amount equal to the total amount of payments made by the Parent for
certain personnel as agreed to by the Parties to be used by COMCOR-TV pursuant
to Section 5.23 herein; provided, however, that this aspect of the third portion
of the Purchaser's Purchase Price shall not be more than US$1,000,000 or the
ruble equivalent. Upon "Full Payment" of the relevant portion of the Purchaser's
Purchase Price at each of the Closing Dates as specified in Sections
2.5(a)(iv)(A), 2.5(b)(iv)(A), 2.5(c)(iv)(A), the Purchaser shall have full
voting rights with regard to the shares of Common Stock it has purchased at each
such Closing. For purposes of this Section 2.2(b), "Full Payment" shall mean,
(i) with respect to any cash aspect of the Purchaser's Purchase Price, the
moment when such cash aspect transferred by the Purchaser is received into the
COMCOR-TV Capital Account, and (ii) with respect to any in-kind aspect of the
Purchaser's Purchase Price, the moment when Purchaser shall execute and deliver
to COMCOR-TV a transfer and acceptance act with respect to such in-kind aspect.
2.3 Compliance with the Plan and Issuances to Parent and Purchaser
(a) Mandatory Board Meetings
(i) Seven months after the First Stage Closing Date, a Board meeting shall
be held to vote on the proposition that COMCOR-TV has been conducting its
business in accordance with the Plan and decisions of the Board. If the Board
determines at such meeting by Unanimous Approval that COMCOR-TV has been
conducting its business in accordance with the Plan and decisions of the Board,
then the conditions set forth in Section 2.4(a)(i) and Section 2.5(b)(i)(A)(x)
shall be deemed to be satisfied.
(ii) Thirteen months after the First Stage Closing Date, a Board meeting
shall be held to vote on the proposition that COMCOR-TV has been conducting its
business in accordance with the Plan and decisions of the Board. If the Board
determines at such meeting by Unanimous Approval that COMCOR-TV has been
conducting its business in accordance with the Plan and decisions of the Board,
then the conditions set forth in Section 2.4(b)(i) and Section 2.5(c)(i)(A)
shall be deemed to be satisfied.
(b) Auditors Option
(i) In the event that the Board does not determine by Unanimous Approval
that COMCOR-TV has been conducting its business in accordance with the Plan and
decisions of the Board at the meeting required under Section 2.3(a)(i), then
either Party may refer the issue to the Auditors to decide. If the Auditors
confirm that COMCOR-TV has been conducting its business in accordance with the
Plan and decisions of the Board, then the conditions set forth in Section
2.4(a)(ii) and Section 2.5(b)(i)(A) shall be deemed to be satisfied.
(ii) In the event that the Board does not determine by Unanimous Approval
that COMCOR-TV has been conducting its business in accordance with the Plan and
decisions of the Board at the meeting required under Section 2.3(a)(ii), then
either Party may refer the issue to the Auditors to decide. If the Auditors
confirm that COMCOR-TV has been conducting its business in accordance with the
Plan and decisions of the Board, then the conditions set forth in Section
2.4(b)(ii) and Section 2.5(c)(i)(A) shall be deemed to be satisfied.
(c) So long as the Board determines by Unanimous Approval (or the Auditors
determine) that COMCOR-TV has been conducting its business in accordance with
the Plan and decisions of the Board, each Party hereby agrees (i) to cause its
respective duly-elected Nominees to vote in favor of issuances of the Parent's
Shares and the Purchaser's Shares to the Parent and Purchaser respectively as
contemplated by this Agreement and (ii) to vote in favor of such issuances at
meetings of shareholders of COMCOR-TV, as required by Law and the Charter.
(d) For the purposes of Sections 2.3, 2.4 and 2.5, "conducting its business
in accordance with the Plan" shall mean meeting the Plan's objectives in all
material respects, including, but not limited to, revenues and profits.
2.4 Parent's Purchase of Parent's Shares from COMCOR-TV
(a) Parent's Purchase of Second Stage Parent's Shares
(i) COMCOR-TV shall issue to Parent and Parent shall purchase the Second
Stage Parent's Shares on the date eight months after the First Stage Closing
Date, if, at the meeting required under Section 2.3(a)(i), the Board determines
by Unanimous Approval that COMCOR-TV has been conducting its business in
accordance with the Plan and decisions of the Board; or
(ii) if the Auditors determine pursuant to Section 2.3(b)(i) that COMCOR-TV
has been conducting its business in accordance with the Plan and decisions of
the Board, then COMCOR-TV shall issue to Parent and Parent shall purchase the
Second Stage Parent's Shares on the date 30 days after the Auditors make such a
determination.
(iii) Before the Parent's Second Stage Purchase Date, COMCOR-TV shall
register a decision on issuance for the Second Stage Parent's Shares, which
decision shall remain valid as of the Parent's Second Stage Purchase Date.
(iv) No earlier than 20 days before Parent's Second Stage Purchase Date,
the Party required by Law to secure and appraisal will ensure that an
independent appraisal will be conducted with regard to the Second Stage
Transferred Assets. If pursuant to the independent appraisal the value of the
Second Stage Transferred Assets is higher than the value set forth in Schedule
2.2(a), then the Parent will still be issued 39,998 shares of Common Stock.
(v) Based on a valuation of the Second Stage Transferred Assets by an
independent accounting firm, the Parties may agree to adjust the total value of
the Second Stage Transferred Assets.
(vi) At the Parent's Second Stage Purchase Date, the Parent and COMCOR-TV
shall enter into the Parent Second Share Purchase Agreement, and Parent shall
contribute the Second Stage Transferred Assets to COMCOR-TV in exchange for
which COMCOR-TV shall issue the Second Stage Parent's Shares to the Parent.
(vii) Without delay, COMCOR-TV shall (A) take all actions and make all such
filings with Governmental and Regulatory Authorities which are necessary and/or
required as a result of the Parent acquiring the Second Stage Parent's Shares,
and (B) take all actions and prepare all documents which are necessary and/or
required to register the Parent as the owner of the Second Stage Parent's Shares
in the Register.
(b) Parent's Purchase of Third Stage Parent's Shares
(i) COMCOR-TV shall issue to Parent and the Parent shall purchase the Third
Stage Parent's Shares on the date thirteen months after the First Stage Closing
Date, if, at the meeting required under Section 2.3(a)(ii), the Board determines
by Unanimous Approval that COMCOR-TV has been conducting its business in
accordance with the Plan and decisions of the Board; or
(ii) if the Auditors determine pursuant to Section 2.3(b)(ii) that
COMCOR-TV has been conducting its business in accordance with the Plan and
decisions of the Board, then COMCOR-TV shall issue to Parent and Parent shall
purchase the Third Stage Parent's Shares on the date 30 days after the Auditors
make such a determination.
(iii) Before the Parent's Third Stage Purchase Date, COMCOR-TV shall
register a decision on issuance for the Third Stage Parent's Shares, which
decision shall remain valid as of the Parent's Third Stage Purchase Date.
(iv) No earlier than 20 days before Parent's Third Stage Purchase Date, the
Party required by Law to secure and appraisal will ensure that an independent
appraisal will be conducted with regard to the Third Stage Transferred Assets.
If pursuant to the independent appraisal the value of the Third Stage
Transferred Assets is higher than the value set forth in Schedule 2.2(a), then
the Parent will still be issued 119,994 shares of Common Stock.
(v) Based on a valuation of the Third Stage Transferred Assets by an
independent accounting firm, the Parties may agree to adjust the total value of
the Third Stage Transferred Assets.
(vi) At the Parent's Third Stage Purchase Date, the Parent and COMCOR-TV
shall enter into the Parent Third Share Purchase Agreement, and Parent shall
contribute the Third Stage Transferred Assets to COMCOR-TV in exchange for which
COMCOR-TV shall issue the Third Stage Parent's Shares to the Parent.
(vii) Without delay, COMCOR-TV shall (A) take all actions and make all such
filings with Governmental and Regulatory Authorities which are necessary and/or
required as a result of the Parent acquiring the Third Stage Parent's Shares,
and (B) take all actions and prepare all documents which are necessary and/or
required to register the Parent as the owner of the Third Stage Parent's Shares
in the Register.
2.5 Purchaser's Purchase of Purchaser's Shares from COMCOR-TV
(a) First Stage Closing.
(i) Time and Place of First Stage Closing. The First Stage Closing shall
take place at 10:00 a.m. (Moscow time) on the First Stage Closing Date at the
offices of Akin, Gump, Strauss, Hauer & Feld, L.L.P., 7 Ulitsa Gasheka, Moscow,
Russia, or at such other time and place as agreed to in writing by the Parties.
The obligation of the Parties to close is subject to the fulfillment, on or
before the First Stage Closing Date, of all obligations specified in this
Section 2.5(a); provided, however, that any Party to whom delivery of any of
such obligations is owed may in its sole discretion close despite the
non-fulfillment of the obligation by any other Party. If the First Stage Closing
Date is on a date other than the date of this Agreement, Purchaser's obligation
to purchase the First Stage Purchaser's Shares on the First Stage Closing Date
is further subject to satisfaction of the condition that the representations and
warranties by COMCOR-TV and Parent contained in this Agreement are true,
complete and correct as of the First Stage Closing Date; provided, however, that
the Purchaser may in its sole discretion purchase the First Stage Purchaser's
Shares on the First Stage Closing Date notwithstanding the fact that this
condition has not been satisfied.
(ii) Deliveries by the Parent. At the First Stage Closing, the Parent shall
deliver to the Purchaser:
(A) a copy of the First Parent Share Purchase Agreement, duly executed by
the Parent;
(B) a copy of the Strategic Agreement, duly executed by the Parent;
(C) a copy of the Deferred Share Power of Attorney, duly executed by the
Parent;
(D) a copy of the Deferred Share Purchase Agreement, duly executed by the
Parent;
(E) a copy of the Deferred Share Transfer Acceptance Act, duly executed by
the Parent;
(F) a copy of the Deferred Share Voting Power of Attorney, duly executed by
the Parent;
(G) a copy of the Lease Agreement, duly executed by the Parent;
(H) an opinion from a law firm, serving as counsel to the Parent and
COMCOR-TV and reasonably acceptable to the Purchaser and the Parent, addressed
to the Purchaser and substantially in the form of Exhibit O hereto;
(I) a certificate duly executed by an authorized officer of the Parent
dated the First Stage Closing Date, certifying that:
(1) each of the representations and warranties made by the Parent in this
Agreement are accurate as of the First Stage Closing Date; and
(2) all covenants, obligations, agreements and conditions required by this
Agreement to be complied with or performed by the Parent on or prior to First
Stage Closing have been complied with or performed by the Parent on or prior to
the First Stage Closing Date;
(J) a certificate duly executed by an authorized officer of the Parent,
dated the First Stage Closing Date:
(1) attaching thereto a copy of the resolutions of the board of directors
of the Parent, certified by an authorized officer of the Parent, authorizing the
execution of this Agreement and each of the other Principal Agreements to which
the Parent is a party and the consummation of the transactions contemplated
hereby and thereby, which certification shall state that (a) such resolutions
have been duly adopted by the board of directors of the Parent at a duly
convened meeting thereof, and have been adopted by all such other Persons, if
any, necessary to give such resolutions full force and effect, (b) none of such
resolutions has been amended, modified or repealed in any respect, and (c) all
of such resolutions are in full force and effect on the First Stage Closing
Date, and
(2) certifying as to the incumbency of each individual who shall execute on
behalf of the Parent any of the Principal Agreements to which the Parent is a
party or any document or instrument to be executed in connection therewith;
(K) any other documents, duly executed, necessary to effectuate the
transfer of the Deferred Share; and
(L) all other previously undelivered documents, instruments and writings
required to be delivered by the Parent at or prior to the First Stage Closing
pursuant to this Agreement.
(iii) Deliveries by COMCOR-TV. At the First Stage Closing, COMCOR-TV shall
deliver to the Purchaser:
(A) a receipt for the payment of the first portion of the Purchaser's
Purchase Price as specified in Section 2.2(b)(i) herein, in the form agreed to
between the COMCOR-TV and the Purchaser in advance of such payment (if COMCOR-TV
is unable to provide a receipt on the First Stage Closing Date for any cash
aspect of such amount, COMCOR-TV shall be obligated to provide a receipt to the
Purchaser for such cash contribution within two business days of the First Stage
Closing Date);
(B) an extract from the Register of COMCOR-TV's shareholders, dated the
First Stage Closing Date, showing that the Parent owns 50.0025% (including the
Deferred Share) and the Purchaser owns 49.9975% of the issued and outstanding
shares of Common Stock of COMCOR-TV, such extract bearing the notation that the
Deferred Share is subject to the Deferred Share Voting Power of Attorney as
specified in Section 2.8(a);
(C) a copy of the Strategic Agreement, duly executed by COMCOR-TV;
(D) a copy of the Lease Agreement, duly executed by COMCOR-TV;
(E) a copy of the Purchaser First Share Purchase Agreement, duly executed
by COMCOR-TV;
(F) a certificate duly executed by an authorized officer of COMCOR-TV dated
the First Stage Closing Date, certifying that:
(1) each of the representations and warranties made by COMCOR-TV in this
Agreement are accurate as of the First Stage Closing Date;
(2) all covenants, obligations, agreements and conditions required by this
Agreement to be complied with or performed by COMCOR-TV on or prior to the First
Stage Closing have been complied with or performed by COMCOR-TV on or prior to
the First Stage Closing Date; and
(3) the Charter Capital of COMCOR-TV consists solely of Thirty Nine
Thousand Nine Hundred and Ninety Eight (39,998) issued shares of Common Stock as
of the First Stage Closing Date;
(G) a certificate duly executed by an authorized officer of COMCOR-TV,
dated the First Stage Closing Date:
(1) attaching thereto a copy of a protocol of the meeting of shareholders
of COMCOR-TV, certified by an authorized officer of COMCOR-TV, electing two
Nominees of Purchaser and two Nominees of Parent to the Board, which
certification shall state that (a) such decision has been duly adopted by the
shareholders of COMCOR-TV at a duly convened meeting thereof, (b) such decision
has not been amended, modified or repealed in any respect, and (c) the decision
is in full force and effect on the First Stage Closing Date;
(2) attaching thereto a copy of the resolutions of the Board, certified by
an authorized officer of COMCOR-TV, authorizing the execution of this Agreement
and each of the other Principal Agreements and the consummation of the
transactions contemplated hereby and thereby, which certification shall state
that (a) such resolutions have been duly adopted by the Board at a duly convened
meeting thereof, and all other Persons have taken all actions and executed all
documents, if any, necessary to give such resolutions full force and effect, (b)
none of such resolutions has been amended, modified or repealed in any respect,
and (c) all of such resolutions are in full force and effect on the First Stage
Closing Date;
(3) attaching thereto a copy of the Charter certified by an authorized
officer of COMCOR-TV, which Charter shall have been amended by, and shall
accordingly contain, all of the terms set forth in Exhibit P, and which
certification shall state that (a) such amended Charter has been adopted by the
Board and the shareholders of COMCOR-TV at duly convened meetings thereof and
all other Persons have taken all actions and executed all documents, if any,
necessary to give such Charter full force and effect, (b) such amended Charter
and has been duly registered with each of the MRC and any other Governmental or
Regulatory Authority required to give such amended Charter full force and
effect, (c) none of the provisions contained in such amended Charter has been
amended, modified or repealed in any respect, and (d) such amended Charter is in
full force and effect on the First Stage Closing Date;
(4) attaching thereto a copy of the Board Rules certified by an authorized
officer of COMCOR-TV, which Board Rules shall contain all of the terms set forth
in Exhibit C, and which certification shall state that (a) such Board Rules have
been duly adopted by the Board and have been adopted by or registered with any
other Person required to give such Board Rules full force and effect, (b) none
of the provisions contained in such Board Rules has been amended, modified or
repealed in any respect, and (c) such Board Rules are in full force and effect
on the First Stage Closing Date;
(5) attaching thereto a copy of the resolutions of the Board, certified by
an authorized officer of COMCOR-TV, (1) re-appointing Mr. Pripachkin as the
General Director for a term of one year and (2) adopting the regulations of the
Chief Financial Officer, which certification shall state that (a) such
resolutions have been duly adopted by the Board at a duly convened meeting
thereof, and have been adopted by all such other Persons, if any, necessary to
give such resolutions full force and effect, (b) none of such resolutions has
been amended, modified or repealed in any respect, and (c) all of such
resolutions are in full force and effect on the First Stage Closing Date; and
(6) certifying as to the incumbency of each individual who shall execute on
behalf of COMCOR-TV any of the Principal Agreements or any document or
instrument to be executed in connection herewith or therewith;
(H) a copy of COMCOR-TV's CBR permission allowing it to receive the
Purchaser's Purchase Price in hard currency, if required by Law;
(I) a copy of the Parent First Share Purchase Agreement, duly executed by
COMCOR-TV;
(J) a copy of COMCOR-TV's decision and report on issuance of securities
registered by the FCSM relating to the shares of Common Stock acquired by the
Parent in exchange for the Transferred Assets and copies of any other documents
required under law in connection therewith;
(K) a copy of COMCOR-TV's decision on issuance of securities registered by
the FCSM relating to the First Stage Purchaser's Shares and copies of any other
documents required under law in connection therewith;
(L) a copy of the Financing Agreement, duly executed by COMCOR-TV;
(M) a copy of COMCOR-TV's balance sheet, dated the First Stage Closing Date
and prepared in accordance with US GAAP, in form and substance reasonably
satisfactory to the Purchaser;
(N) the Financial Statements, as defined in and required under Section 3.4;
(O) copies of COMCOR-TV's complete records of meetings of shareholders, the
Board and committees of the Board, if any, up to the First Stage Closing Date;
(P) copies of all executed Contracts described in Section 3.14(a) or, if
none are available despite COMCOR-TV's reasonable efforts to obtain such true
and complete copies, reasonably complete and accurate written descriptions of
which, together with all amendments and supplements thereto and all waivers of
any terms thereof, dated on or after January 1, 1997;
(Q) copies of all Insurance Policies of COMCOR-TV currently in effect as
specified in Section 3.15;
(R) copies of all employment agreements as specified in Sections 5.8 and
5.9;
(S) copies of all documents pursuant to which the General Director has
appointed the First Deputy General Director, the Chief Accountant, and the Chief
Financial Officer, all of whom are serving as of the First Stage Closing Date;
and
(T) all other previously undelivered documents, instruments and writings
required to be delivered by COMCOR-TV at or prior to First Stage Closing
pursuant to this Agreement.
(iv) Deliveries by the Purchaser. At the First Stage Closing, the Purchaser
shall deliver:
(A) to COMCOR-TV, the first portion of the Purchaser's Purchase Price, as
set forth in Section 2.2(b)(i). For any cash aspect of such amount, the
Purchaser shall provide COMCOR-TV with irrevocable wire transfer instructions.
For any in-kind aspects of the Purchaser's Purchase Price, the Purchaser shall
execute transfer and acceptance acts with COMCOR-TV;
(B) to the Parent and COMCOR-TV, a certificate executed by an authorized
officer of the Purchaser dated the First Stage Closing Date, certifying that:
(1) each of the representations and warranties made by the Purchaser in
this Agreement are accurate as of the First Stage Closing Date; and
(2) all covenants, obligations, agreements and conditions required by this
Agreement to be complied with or performed by the Purchaser on or prior to the
First Stage Closing have been complied with or performed by the Purchaser on or
prior to the First Stage Closing Date;
(C) to COMCOR-TV, a copy of the Purchaser's permission from the MAMP
allowing it to purchase the Purchaser's Shares; and
(D) to COMCOR-TV, a copy of the Purchaser First Share Purchase Agreement,
duly executed by the Purchaser.
(v) The delivery of the documents required to be delivered at the First
Stage Closing pursuant to this Agreement shall be deemed to occur
simultaneously. No delivery will be effective until each Party has received or
waived receipt of all the documents that the Agreement entitles such Party to
receive.
(vi) Without delay, COMCOR-TV shall (A) take all actions and make all such
filings with Governmental and Regulatory Authorities which are necessary and/or
required as a result of the Purchaser acquiring the First Stage Purchaser's
Shares, and (B) take all actions and prepare all documents which are necessary
and/or required to register the Purchaser as the owner of the First Stage
Purchaser's Shares in the Register.
(b) Second Stage Closing
(i) Time, Place of Second Stage Closing. The Second Stage Closing shall
take place at 10:00 a.m. (Moscow time) on the Second Stage Closing Date at the
offices of Akin, Gump, Strauss, Hauer & Feld, L.L.P., 7 Ulitsa Gasheka, Moscow,
Russia, or at such other time and place as agreed to in writing by the Parties.
The obligation of the Parties to close is subject to the fulfillment of all
obligations specified in this Section 2.5(b); provided, however, that any Party
to whom delivery of any of such obligations is owed may in its sole discretion
close despite the non-fulfillment of the obligation by any other Party.
Purchaser's obligation to purchase the Second Stage Purchaser's Shares is
further subject to satisfaction of the following conditions: (A) either the
Board shall have determined by Unanimous Approval at the meeting required under
Section 2.3(a)(i) that COMCOR-TV has been conducting its business in accordance
with the Plan and decisions of the Board or the Auditors shall have determined
that COMCOR-TV has been conducting its business in accordance with the Plan and
decisions of the Board pursuant to Section 2.3(b)(i); (B) the representations
and warranties by COMCOR-TV and Parent contained in this Agreement are true,
complete and correct as of the Second Stage Closing Date; and (C) Parent has
purchased the Second Stage Parent's Shares in accordance with the terms of this
Agreement. Notwithstanding the foregoing, the Purchaser may in its sole
discretion purchase the Second Stage Purchaser's Shares on the Second Stage
Closing Date despite the fact that the conditions set forth in this Section
2.5(b)(i) have not been satisfied.
(ii) Deliveries by the Parent. At the Second Stage Closing, the Parent
shall deliver to the Purchaser:
(A) a copy of the Parent Second Share Purchase Agreement, duly executed by
the Parent;
(B) an opinion from a law firm, serving as counsel to the Parent and
COMCOR-TV and reasonably acceptable to the Purchaser and the Parent, addressed
to the Purchaser and substantially in the form of Exhibit O hereto;
(C) a certificate executed by an authorized officer of the Parent dated the
Second Stage Closing Date, certifying that:
(1) each of the representations and warranties made by the Parent in this
Agreement are accurate as of the Second Stage Closing Date; and
(2) all covenants, obligations, agreements and conditions required by this
Agreement to be complied with or performed by the Parent on or prior to Second
Stage Closing have been complied with or performed by the Parent on or prior to
the Second Stage Closing Date;
(D) a certificate executed by an authorized officer of Parent, dated the
Second Stage Closing Date:
(1) attaching thereto a copy of the resolutions of the Board, certified by
an authorized officer of the Parent, authorizing the execution of the Parent
Second Share Purchase Agreement and the consummation of the transactions
contemplated thereby, which certification shall state that (a) such resolutions
have been duly adopted by the Board at a duly convened meeting thereof, and have
been adopted by all such other Persons, if any, necessary to give such
resolutions full force and effect, (b) none of such resolutions has been
amended, modified or repealed in any respect, and (c) all of such resolutions
are in full force and effect on the Second Stage Closing Date;
(2) attaching thereto a copy of the resolutions of the Board, certified by
an authorized officer of the Parent, authorizing the execution of any documents
required under Section 2.6; and
(3) certifying as to the incumbency of the individuals who shall execute on
behalf of the Parent, the Parent Second Share Purchase Agreement, any document
or instrument to be executed in connection therewith, or any documents required
under Section 2.6; and
(E) all other previously undelivered documents, instruments and writings
required to be delivered by the Parent at or prior to the Second Stage Closing
pursuant to this Agreement.
(iii) Deliveries by COMCOR-TV. At the Second Stage Closing, COMCOR-TV shall
deliver to the Purchaser:
(A) a receipt for the payment of the second portion of the Purchaser's
Purchase Price as specified in Section 2.2(b)(ii) herein, in the form agreed to
between the COMCOR-TV and the Purchaser in advance of such payment (if COMCOR-TV
is unable to provide a receipt on the Second Stage Closing Date for any cash
aspect of such amount, COMCOR-TV shall be obligated to provide a receipt to the
Purchaser for such cash contribution within two business days of the Second
Stage Closing Date);
(B) an extract from the Register of COMCOR-TV's shareholders, dated the
Second Stage Closing Date, showing that the Parent owns 50% and the Purchaser
owns 50% of the issued and outstanding shares of Common Stock of COMCOR-TV;
(C) a copy of the Parent Second Share Purchase Agreement, duly executed by
COMCOR-TV;
(D) a copy of the Purchaser Second Share Purchase Agreement, duly executed
by COMCOR-TV;
(E) a certificate executed by an authorized officer of COMCOR-TV dated the
Second Stage Closing Date, certifying that:
(1) all covenants, obligations, agreements and conditions required by this
Agreement to be complied with or performed by COMCOR-TV on or prior to the
Second Stage Closing have been complied with or performed by COMCOR-TV on or
prior to the Second Stage Closing Date;
(2) COMCOR-TV's CBR permission allowing it to receive the Purchaser's
Purchase Price in hard currency remains valid, if required by Law, and all
requirements relating thereto required by Law have been satisfied; and
(3) the Charter Capital of COMCOR-TV consists solely of One Hundred
Nineteen Thousand Nine Hundred and Ninety Four (119,994) issued shares of Common
Stock as of the Second Stage Closing Date or such greater number if additional
shares of Common Stock have been issued;
(F) a certificate executed by an authorized officer of COMCOR-TV, dated the
Second Stage Closing Date:
(1) attaching thereto a copy of the resolutions of the Board, certified by
an authorized officer of COMCOR-TV, authorizing the execution of the Parent
Second Share Purchase Agreement and the Purchaser Second Share Purchase
Agreement and the consummation of the transactions contemplated thereby, which
certification shall state that (a) such resolutions have been duly adopted by
the Board at a duly convened meeting thereof, and have been adopted by all such
other Persons, if any, necessary to give such resolutions full force and effect,
(b) none of such resolutions has been amended, modified or repealed in any
respect, and (c) all of such resolutions are in full force and effect on the
Second Stage Closing Date; and
(2) certifying as to the incumbency of each individual who shall execute on
behalf of COMCOR-TV the Parent Second Share Purchase Agreement and the Purchaser
Second Share Purchase Agreement or any document or instrument to be executed in
connection therewith; (G) a copy of COMCOR-TV's decision and report on issuance
of securities registered by the FCSM relating to the Second Stage Parent's
Shares and any other documents required under law in connection therewith;
(H) a copy of COMCOR-TV's decision on issuance of securities registered by
the FCSM relating to the Second Stage Purchaser's Shares and any other documents
required under law in connection therewith;
(I) a copy of COMCOR-TV's balance sheet, dated the Second Stage Closing
Date, in form and substance reasonably satisfactory to the Purchaser;
(J) the Financial Statements, as defined in and required under Section 3.4;
(K) copies of COMCOR-TV's complete records of meetings of shareholders, the
Board and committees of the Board from the First Stage Closing Date to the
Second Stage Closing Date;
(L) copies of all Contracts described in Section 3.14(a) or, if none are
available despite COMCOR-TV's reasonable efforts to obtain such true and
complete copies, reasonably complete and accurate written descriptions of which,
together with all amendments and supplements thereto and all waivers of any
terms thereof, dated between the First Stage Closing Date and the Second Stage
Closing Date;
(M) copies of all Insurance Policies of COMCOR-TV currently in effect as
specified in Section 3.15; and
(N) all other previously undelivered documents, instruments and writings
required to be delivered by the Parent at or prior to the Second Stage Closing
pursuant to this Agreement.
(iv) Deliveries by the Purchaser. At the Second Stage Closing, the
Purchaser shall deliver:
(A) to COMCOR-TV, the second portion of the Purchaser's Purchase Price, as
set forth in Section 2.2(b)(ii). The Purchaser shall provide COMCOR-TV with
irrevocable wire transfer instructions for such amount;
(B) to the Parent and COMCOR-TV, a certificate executed by an authorized
officer of the Purchaser dated the Second Stage Closing Date, certifying that:
(1) each of the representations and warranties made by the Purchaser in
this Agreement are accurate as of the Second Stage Closing Date; and
(2) the Purchaser's permission from the MAMP allowing it to purchase the
Purchaser's Shares is still valid; and
(C) to COMCOR-TV, a copy of the Purchaser Second Share Purchase Agreement,
duly executed by the Purchaser;
(v) The delivery of the documents required to be delivered at the Second
Stage Closing pursuant to this Agreement shall be deemed to occur
simultaneously. No delivery will be effective until each Party has received or
waived receipt of all the documents that the Agreement entitles such Party to
receive.
(vi) Without delay, COMCOR-TV shall (A) take all actions and make all such
filings with Governmental and Regulatory Authorities which are necessary and/or
required as a result of the Purchaser acquiring the Second Stage Purchaser's
Shares, and (B) take all actions and prepare all documents which are necessary
and/or required to register the Purchaser as the owner of the Second Stage
Purchaser's Shares in the Register.
(c) Third Stage Closing
(i) Time, Place of Third Stage Closing. The Third Stage Closing shall take
place at 10:00 a.m. (Moscow time) on the Third Stage Closing Date at the offices
of Akin, Gump, Strauss, Hauer & Feld, L.L.P., 7 Ulitsa Gasheka, Moscow, Russia,
or at such other time and place as agreed to in writing by the Parties. The
obligation of the Parties to close is subject to the fulfillment of all
obligations specified in this Section 2.5(c); provided, however, that any Party
to whom delivery of any of such obligations is owed may in its sole discretion
close despite the non-fulfillment of the obligation by any other Party.
Purchaser's obligation to purchase the Third Stage Purchaser's Shares is further
subject to satisfaction of the following conditions: (A) either the Board shall
have determined by Unanimous Approval at the meeting required under Section
2.3(a)(ii) that COMCOR-TV has been conducting its business in accordance with
the Plan and decisions of the Board or the Auditors shall have determined that
COMCOR-TV has been conducting its business in accordance with the Plan and
decisions of the Board pursuant to Section 2.3(b)(ii); (B) the representations
and warranties by COMCOR-TV and Parent contained in this Agreement are true,
complete and correct as of the Third Stage Closing Date; and (C) Parent has
purchased the Third Stage Parent's Shares in accordance with the terms of this
Agreement. Notwithstanding the foregoing, the Purchaser may in its sole
discretion purchase the Third Stage Purchaser's Shares on the Third Stage
Closing Date despite the fact that the conditions set forth in this Section
2.5(c)(i) have not been satisfied.
(ii) Deliveries by the Parent. At the Third Stage Closing, the Parent shall
deliver to the Purchaser:
(A) a copy of the Parent Third Share Purchase Agreement, duly executed by
Parent;
(B) an opinion from a law firm, serving as counsel to the Parent and
COMCOR-TV and reasonably acceptable to the Purchaser and the Parent, addressed
to the Purchaser and substantially in the form of Exhibit O hereto;
(C) a certificate executed by an authorized officer of the Parent dated the
Third Stage Closing Date, certifying that:
(1) each of the representations and warranties made by the Parent in this
Agreement are accurate as of the Third Stage Closing Date; and
(2) all covenants, obligations, agreements and conditions required by this
Agreement to be complied with or performed by the Parent on or prior to Third
Stage Closing have been complied with or performed by the Parent on or prior to
the Third Stage Closing Date;
(D) a certificate executed by an authorized officer of Parent, dated the
Third Stage Closing Date:
(1) attaching thereto a copy of the resolutions of the board of directors
of the Parent, certified by an authorized officer of the Parent, authorizing the
execution of the Parent Third Share Purchase Agreement and the consummation of
the transactions contemplated thereby, which certification shall state that (a)
such resolutions have been duly adopted by board of directors of the Parent at a
duly convened meeting thereof, and have been adopted by all such other Persons,
if any, necessary to give such resolutions full force and effect, (b) none of
such resolutions has been amended, modified or repealed in any respect, and (c)
all of such resolutions are in full force and effect on the Third Stage Closing
Date;
(2) attaching thereto a copy of the resolutions of the Board, certified by
an authorized officer of the Parent, authorizing the execution of any documents
required under Section 2.6; and
(3) certifying as to the incumbency of the individuals who shall execute on
behalf of the Parent, the Parent Third Share Purchase Agreement, any document or
instrument to be executed in connection therewith, or any documents required
under Section 2.6;
(E) evidence, reasonably acceptable to the Purchaser, of all amounts that
would have been due under the Lease Agreement which were not made by COMCOR-TV
to the Parent up to the Parent's Third Stage Purchase Date;
(F) evidence, reasonably acceptable to the Purchaser, of all payments made
by the Parent for certain personnel as agreed to by the Parties to be used by
COMCOR-TV pursuant to Section 5.23 herein; and
(G) all other previously undelivered documents, instruments and writings
required to be delivered by the Parent at or prior to the Third Stage Closing
pursuant to this Agreement.
(iii) Deliveries by COMCOR-TV. At the Third Stage Closing, COMCOR-TV shall
deliver to the Purchaser:
(A) a receipt for the payment of the third portion of the Purchaser's
Purchase Price as specified in Section 2.2(b) herein, in the form agreed to
between the COMCOR-TV and the Purchaser in advance of such payment (if COMCOR-TV
is unable to provide a receipt on the Third Stage Closing Date for any cash
aspect of such amount, COMCOR-TV shall be obligated to provide a receipt to the
Purchaser for such cash contribution within two business days of the Third Stage
Closing Date);
(B) an extract from the Register of COMCOR-TV's shareholders, dated the
Third Stage Closing Date, showing that the Parent owns 50% and the Purchaser
owns 50% of the issued and outstanding shares of Common Stock of COMCOR-TV;
(C) a copy of the Parent Third Share Purchase Agreement, duly executed by
COMCOR-TV;
(D) a copy of the Purchaser Third Share Purchase Agreement, duly executed
by COMCOR-TV;
(E) a certificate executed by an authorized officer of COMCOR-TV dated the
Third Stage Closing Date, certifying that:
(1) all covenants, obligations, agreements and conditions required by this
Agreement to be complied with or performed by COMCOR-TV on or prior to the Third
Stage Closing have been complied with or performed by COMCOR-TV on or prior to
the Third Stage Closing Date;
(2) COMCOR-TV's CBR permission allowing it to receive the Purchaser's
Purchase Price in hard currency remains valid, if required by Law and all
requirements relating thereto required by Law have been satisfied; and
(3) the Charter Capital of COMCOR-TV consists solely of Three Hundred Fifty
Nine Thousand Nine Hundred and Eighty Two (359,982) issued shares of Common
Stock as of the Third Stage Closing Date or such greater number if additional
shares of Common Stock have been issued;
(F) a certificate executed by an authorized officer of COMCOR-TV, dated the
Third Stage Closing Date:
(1) attaching thereto a copy of the resolutions of the Board, certified by
an authorized officer of COMCOR-TV, authorizing the execution of the Parent
Third Share Purchase Agreement and Purchaser Third Share Purchase Agreement and
the consummation of the transactions contemplated thereby, which certification
shall state that (a) such resolutions have been duly adopted by the Board at a
duly convened meeting thereof, and have been adopted by all such other Persons,
if any, necessary to give such resolutions full force and effect, (b) none of
such resolutions has been amended, modified or repealed in any respect, and (c)
all of such resolutions are in full force and effect on the Third Stage Closing
Date; and
(2) certifying as to the incumbency of each individual who shall execute on
behalf of COMCOR-TV the Purchaser Third Share Purchase Agreement or any document
or instrument to be executed in connection therewith;
(G) a copy of COMCOR-TV's decision and report on issuance of securities
registered by the FCSM relating to the Third Stage Parent's Shares and any other
documents required under law in connection therewith;
(H) a copy of COMCOR-TV's decision on issuance of securities registered by
the FCSM relating to the Third Stage Purchaser's Shares and any other documents
required under law in connection therewith;
(I) a copy of COMCOR-TV's balance sheet, dated the Third Stage Closing
Date, in form and substance reasonably satisfactory to the Purchaser;
(J) the Financial Statements, as defined in and required under Section 3.4;
(K) copies of COMCOR-TV's complete records of meetings of shareholders, the
Board and committees of the Board from the Second Stage Closing Date to the
Third Stage Closing Date;
(L) copies of all Contracts described in Section 3.14(a) or, if none are
available despite COMCOR-TV's reasonable efforts to obtain such true and
complete copies, reasonably complete and accurate written descriptions of which,
together with all amendments and supplements thereto and all waivers of any
terms thereof, dated between the Second Stage Closing Date and the Third Stage
Closing Date;
(M) copies of all Insurance Policies of COMCOR-TV currently in effect as
specified in Section 3.15; and
(N) all other previously undelivered documents, instruments and writings
required to be delivered by the Parent at or prior to the Third Stage Closing
pursuant to this Agreement.
(iv) Deliveries by the Purchaser. At the Third Stage Closing, the Purchaser
shall deliver:
(A) to COMCOR-TV, the third portion of the Purchaser's Purchase Price, as
set forth in Section 2.2(b)(iii). The Purchaser shall provide the Parent and
COMCOR-TV with irrevocable wire transfer instructions for such amount;
(B) to the Parent and COMCOR-TV, a certificate executed by an authorized
officer of the Purchaser dated the Third Stage Closing Date, certifying that:
(1) each of the representations and warranties made by the Purchaser in
this Agreement are accurate as of the Third Stage Closing Date; and
(2) the Purchaser's permission from the MAMP allowing it to purchase the
Purchaser's Shares is still valid; and
(C) to COMCOR-TV, a copy of the Purchaser Third Share Purchase Agreement,
duly executed by the Purchaser.
(v) The delivery of the documents required to be delivered at the Third
Stage Closing pursuant to this Agreement shall be deemed to occur
simultaneously. No delivery will be effective until each Party has received or
waived receipt of all the documents that the Agreement entitles such Party to
receive.
(vi) Without delay, COMCOR-TV shall (A) take all actions and make all such
filings with Governmental and Regulatory Authorities which are necessary and/or
required as a result of the Purchaser acquiring the Third Stage Purchaser's
Shares, and (B) take all actions and prepare all documents which are necessary
and/or required to register the Purchaser as the owner of the Third Stage
Purchaser's Shares in the Register.
2.6 Transfer of Common Stock by Parent to Purchaser
(a) If, for whatever reason, during the period between the First Stage
Closing Date and the Second Stage Closing Date, the Parent is issued more than
39,998 shares of Common Stock, then the Parent shall be obliged to immediately
sell half of the number of shares of Common Stock it receives in excess of
39,998 shares of Common Stock to Purchaser at a price of one ruble per share.
(b) If, for whatever reason, during the period between the Second Stage
Closing Date and the Third Stage Closing Date, the Parent is issued more than
119,994 shares of Common Stock, then the Parent shall be obliged to immediately
sell half of the number of shares of Common Stock it receives in excess of
119,994 shares of Common Stock to Purchaser at a price of one ruble per share.
(c) If Parent is required to sell shares of Common Stock under either
Section 2.6(a) or 2.6(b), then Parent shall without delay take all such actions
and execute all documents which are necessary and/or required to effectuate the
sale of such shares of Common Stock to Purchaser so that Purchaser shall have
good and valid title to such shares of Common Stock.
(d) If Parent is required to transfer shares of Common Stock under either
Section 2.6(a) or 2.6(b), then COMCOR-TV shall without delay take all such
actions, give any notices and make all such filings which are necessary and/or
required to reflect in the Register Purchaser as owner of such shares of Common
Stock.
2.7 Excluded Liabilities
The Purchaser has not agreed to pay, shall not be required to assume and
shall have no liability or obligation with respect to any Excluded Liabilities,
and the Parent agrees that it (a) will take all actions and do all things
necessary to ensure that the Purchaser is not liable for any Excluded
Liabilities, (b) will refrain from taking any action and will not allow or
permit any action to occur in connection with which the Purchaser could
reasonably be expected to be liable for any of the Excluded Liabilities, and (c)
will indemnify the Purchaser Group and hold each member thereof harmless from
and against any of the Excluded Liabilities.
2.8 Deferred Share
(a) The Purchaser and the Parent agree that as of the First Stage Closing,
the Purchaser and the Parent shall enter into the Deferred Share Purchase
Agreement and the Parent shall execute the Deferred Share Voting Power of
Attorney. The Purchaser and the Parent agree that as of the First Stage Closing,
the Parent shall be reflected in the Register as the owner of the Deferred Share
with a notation that the Deferred Share is subject to the Deferred Share Voting
Power of Attorney. The Deferred Share Purchase Agreement shall provide, among
other things, that the Parent shall sell to the Purchaser and the Purchaser
shall buy from the Parent the Deferred Share at the date six months after the
First Stage Closing Date for a cost of 10 rubles. In connection therewith, at
the First Stage Closing, the Parent shall provide the Purchaser with the
Deferred Share Transfer Acceptance Act duly executed by authorized officers of
the Parent and in the form attached hereto as Exhibit F, and any other documents
required by the Registrar to register the Deferred Share in the Purchaser's
name.
(b) At any time after the First Stage Closing Date, each of the Parent and
COMCOR-TV shall provide without delay to Purchaser any additional necessary
documents for re-registering the Deferred Share which become necessary after the
First Stage Closing Date. Upon Purchaser's acquisition of the Deferred Share
under the Deferred Share Purchase Agreement, each of Parent and COMCOR-TV agree
to take all actions necessary to re-register the Deferred Share in the
Purchaser's name in the Register.
(c) At the First Stage Closing, the Parent shall issue to Purchaser the
Deferred Share Power of Attorney, which shall provide, among other things, that
the Purchaser shall have the authority on behalf of Parent to take all actions
necessary to re-register the Deferred Share in the Purchaser's name in the
Register upon the Purchaser's acquisition of the Deferred Share.
(d) The Deferred Share Voting Power of Attorney shall provide, among other
things, that until (i) the Purchaser has acquired the Deferred Share and (ii)
the Deferred Share has been re-registered in the Register as being owned by the
Purchaser (the "Deferred Share Transfer"), the Parent grants the Purchaser the
right to vote the Deferred Share in the event a general meeting of shareholders,
whether annual or extraordinary, is required to be called or held by COMCOR-TV
prior to completion of the Deferred Share Transfer.
(e) As reflected in Item 12 of Exhibit P hereto, the Parties hereby agree
that the Charter shall be amended prior to the First Stage Closing Date to
require that prior to the completion of the Deferred Share Transfer, any
decisions of the shareholders of COMCOR-TV must be determined by unanimous
approval, which unanimous approval must include the votes of both Parent and
Purchaser. The Parties agree to amend the Charter after the completion of the
Deferred Share Transfer to remove such amendment.
2.9 Failure to Make Capital Contributions
If either Party fails to make a capital contribution as provided in Section
2 on the date when it is required to make such contribution, such Party shall be
required to pay a penalty to COMCOR-TV for each day such capital contribution is
delayed, which penalty shall be the amount calculated as the percentage of the
amount or value (in dollars or rubles) overdue which on an annual basis would
equal 10% per annum. The sum of all daily penalties under this Section 2.9 for a
particular overdue contribution shall not exceed 10% of the total overdue
contribution. For the avoidance of doubt, the daily penalty for an overdue
contribution pursuant to this Section 2.9 shall be derived as follows:
AB/365
where A equals 10% and B equals the total overdue contribution.
ARTICLE III: REPRESENTATIONS AND WARRANTIES OF THE PARENT AND COMCOR-TV
Each of the Parent and COMCOR-TV hereby represents and warrants to the
Purchaser that the following statements are true, complete and correct as of the
date hereof and as of each of the Closing Dates (representations and warranties
relating to the Parent shall be deemed to be made by the Parent, and
representations and warranties relating to COMCOR-TV and all other
representations and warranties made in this Article III shall be deemed to be
made by each of the Parent and COMCOR-TV on a joint and several basis, except
those relating to the Parent only):
3.1 Organization; Charter and Board Rules; Board Members
(a) The Parent is an open joint stock company and COMCOR-TV is a closed
joint stock company and each has been duly organized, is validly existing as a
legal entity properly organized, registered and existing under the laws of the
Russian Federation, with full corporate power and authority to carry on its
business as it is currently being conducted and to own, lease and operate its
respective Assets and Properties, and is not required to be qualified as a
foreign corporation or other entity authorized to do business in any other
jurisdiction.
(b) Attached as Schedule 3.1(b) is a complete and correct copy of
COMCOR-TV's Charter as in effect on the date hereof, reflecting each of the
terms set forth in Exhibit P. Such Charter has been duly registered with the
MRC. Such Charter has not been amended, modified or repealed in any respect, all
of its provisions are in full force and effect on the date hereof, and there are
no resolutions approving any amendments to such Charter.
(c) Attached as Schedule 3.1(c) is a complete and correct copy of
COMCOR-TV's Board Rules as in effect on the date hereof, reflecting each of the
terms set forth in Exhibit C. Such Board Rules have not been amended, modified
or repealed in any respect, and all of the provisions thereof are in full force
and effect on the date hereof.
(d) As of each of the Closings, the Board has two Nominees of Purchaser and
two Nominees of Parent as duly elected members. Attached as Schedule 3.1(d) is a
complete and correct list of each of the members of the Board immediately
preceding each of the Closings.
3.2 Authority; No Conflict
(a) Each of the Parent and COMCOR-TV has full power and authority to
execute and deliver this Agreement and the other Principal Agreements to which
it is a party.
(b) This Agreement and the other Principal Agreements to which the Parent
or COMCOR-TV is a party have been duly and validly authorized, executed and
delivered by the Parent or COMCOR-TV, as the case may be, and constitute the
legal, valid and binding obligations of the Parent or COMCOR-TV, as the case may
be, enforceable against the Parent or COMCOR-TV, as the case may be, in
accordance with their terms, subject to any Law Affecting Creditors' Rights.
(c) The execution, delivery and performance by the Parent or COMCOR-TV of
this Agreement and the other Principal Agreements to which the Parent or
COMCOR-TV, as the case may be, is a party, compliance by the Parent or
COMCOR-TV, as the case may be, with all of the provisions hereof and thereof and
the consummation by the Parent or COMCOR-TV, as the case may be, of the
transactions contemplated hereby and thereby:
(i) will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter of the Parent or the Charter, as
the case may be,
(ii) subject to obtaining the third party consents referred to in Schedule
3.2(c), will not conflict with or constitute a breach of any Contract or License
to which the Parent or COMCOR-TV is a party as of the date of this Agreement or
each of the Closing Dates or by which the Parent or COMCOR-TV or any of their
respective Assets and Properties are bound, and
(iii) subject to obtaining the consents, approvals and actions, making the
filings and giving the notices disclosed in Schedule 3.2(c) hereto, will not
violate or conflict with any Orders or Laws applicable to the Parent or
COMCOR-TV or any of their respective Assets and Properties,
except, in the case of clause (c), any conflict, breach, violation, failure
to obtain consent or approval or make any filing or give any notice, which would
not have a Material Adverse Effect on the Parent or COMCOR-TV.
3.3 Charter Capital of COMCOR-TV; Authorized Share Capital
(a) As of each of the Closing Dates, the Charter Capital of COMCOR-TV
consists solely of the number of issued shares of Common Stock as specified in
the certificates delivered by COMCOR-TV to Purchaser at each of the Closings as
described in Sections 2.5(a)(iii)(F), 2.5(b)(iii)(E) and 2.5(c)(iii)(E) of this
Agreement.
(b) All of the issued and outstanding shares of Common Stock (i)have been
duly authorized and validly issued, (ii)are fully paid and non-assessable,
(iii)except as contemplated by the provision in the Charter granting preemptive
rights to each of the Parent and the Purchaser (and their respective Affiliates)
in connection with any New Issuance (the "Charter Preemptive Right"), are not
subject to any preemptive or similar rights with respect to the Parent or
COMCOR-TV, (iv)were properly registered with the appropriate Governmental or
Regulatory Authorities competent for registration of the issue of such shares
and (v) are free and clear of all Liens. The Purchaser's Shares (i)are duly
authorized and at each of the Closings are validly issued, (ii) upon each of
the Closings are fully paid and non-assessable, (iii)except as contemplated by
the Charter Preemptive Right, are not subject to any preemptive or similar
rights with respect to the Parent or COMCOR-TV, (iv) are on each of the Closing
Dates properly registered with the appropriate Governmental or Regulatory
Authorities competent for registration of the issue of such Purchaser's Shares
and (v) are free and clear of all Liens. All of the shares of COMCOR-TV,
including the Purchaser's Shares, are uncertificated. As of each of the
Closings, COMCOR-TV has transferred to the Purchaser good and valid title to the
relevant Purchaser's Shares, respectively, free and clear of all Liens, and the
Purchaser's shareholding with respect to the Purchaser's Shares are correctly
and properly entered into the shareholder register of COMCOR-TV. (c) Except as
contemplated by the Charter or this Agreement, neither the Parent nor COMCOR-TV
are bound by, nor have either of them granted, issued or made or agreed to
grant, issue or make any warrants, options, subscription rights or any other
commitments of any character relating to COMCOR-TV's issued or unissued shares,
nor is there any Contract providing for the amendment of the Charter (or similar
governing documents) of COMCOR-TV so as to increase the amount of the authorized
capital stock of COMCOR-TV; and except for this Agreement, neither the Parent
nor COMCOR-TV is a party to any voting trust or other Contract with respect to
the voting of the capital of COMCOR-TV. (d) After giving effect to each of the
issuances to the Purchaser of the Purchaser's Shares at each of the Closings,
the Parent and the Purchaser shall each own 50% of the issued and outstanding
Common Stock of COMCOR-TV, except that for a period of time after the First
Stage Closing, the equity interests in COMCOR-TV of the Parent and the Purchaser
may differ in connection with the status of the Deferred Share in accordance
with Section 2.8. 3.4 Financial Statements (a) Prior to the execution of this
Agreement and as of each of the Closing Dates, the Parent has delivered to the
Purchaser true and complete copies of the following financial statements of
COMCOR-TV (the "Financial Statements"): (i) with respect to the First Stage
Closing Date, COMCOR-TV's most recent balance sheet; (ii) with respect to the
Second Stage Closing Date and the Third Stage Closing Date, COMCOR-TV's most
recent (i) balance sheet, (ii) income statement, and (iii) statement of cash
flows; and (iii) with respect to each of the Closing Dates, COMCOR-TV's most
recent financial statements that are required under Russian Law. (b) Except as
disclosed therein: (i) all Financial Statements specified in Sections 3.4(a)(i)
and 3.4(a)(ii) herein were prepared by PricewaterhouseCoopers in accordance with
US GAAP, subject in the case of unaudited Financial Statements to normal
year-end adjustments and the absence of notes to such Financial Statements; (ii)
all Financial Statements specified in Section 3.4(a)(iii) herein were prepared
in accordance with applicable Russian Law and Russian accounting requirements;
and (iii) all Financial Statements specified in Sections 3.4(a)(i)-(iii) herein
present fairly the financial position, and results of operations of COMCOR-TV,
and changes in financial position of COMCOR-TV at the dates for the periods to
which they apply. 3.5 Records COMCOR-TV maintains accurate and complete records
of all meetings held of, and corporate action by, the general meeting of
shareholders of COMCOR-TV, the Board, and committees of the Board, if any, and
no meeting of any such general meeting of shareholders, Board or committee has
been held for which minutes have not been prepared and are maintained by
COMCOR-TV. A true and complete copy of each minutes of each such meeting has
been provided to the Purchaser prior to the date hereof and prior to each of the
Closing Dates. 3.6 Title to Property; Encumbrances (a) Immediately prior to each
of the transfers of the Transferred Assets and the Additional Transferred
Assets, the Parent had good and valid title to each of the Transferred Assets
and Additional Transferred Assets, as the case may be, free and clear of any
Liens (except Permitted Liens). Good and valid title to each of the Transferred
Assets and the Additional Transferred Assets was transferred by the Parent to
COMCOR-TV, free and clear of any Liens (except Permitted Liens) at the relevant
Closing. COMCOR-TV has good and valid title to each of the Transferred Assets
and, as of each relevant Closing to each of the Additional Transferred Assets,
free and clear of all Liens, except Permitted Liens. No default has occurred or
is continuing in respect of any of the Transferred Assets or the Additional
Transferred Assets (b) COMCOR-TV has good and valid title to each of its Assets
and Properties free and clear of any Liens (except Permitted Liens). No default
has occurred or is continuing in respect of any of its Assets and Properties.
3.7 Condition and Sufficiency of the Transferred Assets, the Additional
Transferred Assets and the Assets and Properties of COMCOR-TV (a) Each of the
Transferred Assets and the Additional Transferred Assets are structurally sound,
are in good operating condition and repair, and are adequate for the uses for
which they are being put, and none of such Transferred Assets nor such
Additional Transferred Assets is in need of maintenance or repairs except for
ordinary, routine maintenance and repairs that are not material in nature or in
cost. (b) The Assets and Properties of the COMCOR-TV are structurally sound, are
in good operating condition and repair, and are adequate for the uses for which
they are being put, and none of such Assets and Properties is in need of
maintenance or repairs except for ordinary, routine maintenance and repairs that
are not material in nature or in cost. (c) Each of the Transferred Assets, the
Additional Transferred Assets, and the Assets and Properties of the COMCOR-TV
are appropriate to be used for the purposes of COMCOR-TV's business and
operations as contemplated by the Plan and the Strategic Agreement. 3.8 Accounts
Receivable The accounts and notes receivable of COMCOR-TV reflected on the
balance sheet included in the Financial Statements, and all accounts and notes
receivable arising subsequent to the First Stage Closing Date, (a)arose from
bona fide sales transactions in the ordinary course of business and are payable
on ordinary trade terms, (b)to the Knowledge of the Parent and COMCOR-TV are
legal, valid and binding obligations of the respective debtors generally
enforceable in accordance with their terms, (c)are collectible in the ordinary
course of business consistent with past practice in the aggregate recorded
amounts thereof, net of any applicable reserve reflected in the balance sheet
included in the Financial Statements, and (d)are not the subject of any actions
or proceedings brought by or on behalf of the Parent or COMCOR-TV. 3.9 No
Undisclosed Liabilities Except as disclosed in Schedule 3.9, (a)there is no
Indebtedness of COMCOR-TV, (b)there are no Liens (other than Permitted Liens)
on any of the Assets and Properties of COMCOR-TV (including any of the
Transferred Assets and the Additional Transferred Assets), and (c)there are no
Liabilities against, relating to or affecting the Assets and Properties of
COMCOR-TV (including any of the Transferred Assets and Additional Transferred
Assets), other than Indebtedness, Liens and Liabilities incurred in the ordinary
course of business consistent with past practice which in the aggregate are not
material to the Business or Condition of COMCOR-TV. 3.10 Taxes Except as
disclosed in Schedule 3.10, COMCOR-TV (and the Parent in relation to any Tax due
which affects, or which could reasonably be expected to affect, any of the
Transferred Assets or Additional Transferred Assets) has duly filed with the
appropriate taxing authorities (or has received an extension for filing with
respect to) all Tax Documents required to be filed by it, and each such Tax
Document was, when filed, accurate and complete in all material respects; and
COMCOR-TV (and the Parent in relation to any Tax due which affects, or which
could reasonably be expected to affect any of the Transferred Assets or the
Additional Transferred Assets) has duly paid, on time, or has made adequate
reserves for, or has contested in good faith, all Taxes required to be paid or
remitted by it or levied against it, and no material Tax deficiency is currently
asserted against COMCOR-TV (or against the Parent in relation to any Tax due
which affects, or which could reasonably be expected to affect any of the
Transferred Assets or the Additional Transferred Assets). 3.11 No Material
Adverse Effect Except as disclosed in Schedule 3.11, except for the execution
and delivery of this Agreement and the other Principal Agreements and the
transactions contemplated hereby and thereby, since the First Stage Closing
Date, there has not been any Material Adverse Effect in the operations, Assets
or Properties (including any of the Transferred Assets or the Additional
Transferred Assets), Liabilities, or Business or Condition of COMCOR-TV which,
individually or in the aggregate, would constitute a Material Adverse Effect in
the operations, Assets or Properties (including any of the Transferred Assets or
the Additional Transferred Assets), Liabilities or Business or Condition of
COMCOR-TV, taken as a whole. 3.12 Governmental Approvals and Filings. Except as
disclosed in Schedule 3.12, the execution, delivery and performance by the
Parent and COMCOR-TV of this Agreement and the other Principal Agreements to
which the Parent or COMCOR-TV is a party, the compliance by the Parent and
COMCOR-TV with all of the provisions hereof and thereof, and the consummation of
the transactions by the Parent and COMCOR-TV contemplated hereby and thereby
will not require any consent, approval, authorization or other order of any
Governmental or Regulatory Authority. 3.13 Litigation (a) Except as disclosed in
Schedule 3.13, there is no Action or Proceeding pending or, to the Knowledge of
the Parent and COMCOR-TV, threatened which will result in, orwould reasonably
be expected to result in, the issuance of an Order which (i) questions the
validity of this Agreement or any of the other Principal Agreements or any
action taken or to be taken pursuant hereto or thereto; (ii)restrains, enjoins
or otherwise prohibits or makes illegal consummation of any of the transactions
contemplated by this Agreement or any of the other Principal Agreements;
(iii)otherwise results in a material impairment of the Purchaser's rights under
this Agreement or any of the other Principal Agreements to which the Purchaser
is a party; (iv) would adversely affect the value of the Common Stock owned by
the Purchaser or any of the Transferred Assets, the Additional Transferred
Assets or Assets and Properties of COMCOR-TV; (v)if determined adversely to the
Parent, could reasonably be expected to result in (A)any injunction or other
equitable relief against such Person that would interfere in any material
respect with the business or operations or (B)Losses by such Person,
individually or in the aggregate, in excess of US$100,000; or (vi) if determined
adversely to COMCOR-TV, could reasonably be expected to result in (A)any
injunction or other equitable relief against such Person that would interfere in
any material respect with the business or operations or (B)Losses by such
Person. (b) There are no facts or circumstances Known to the Parent or COMCOR-TV
that could reasonably be expected to give rise to any Action or Proceeding that
would be required to be disclosed pursuant to clause (a) above; (c) There are no
material Orders outstanding against COMCOR-TV or which relate to any of the
Transferred Assets or the Additional Transferred Assets. (d) Neither the Parent
nor COMCOR-TV has any material Liability (and there is no basis for any present
or future Actions or Proceedings against it giving rise to any Liability)
arising out of any injury to Persons or property as a result of any service
rendered by COMCOR-TV. 3.14 Contracts and Commitments (a) Schedule 3.14(a)
contains a true and complete list of all Contracts (true and complete copies of
which or, if none are available despite the Parent's or COMCOR-TV's reasonable
efforts to obtain such true and complete copies, reasonably complete and
accurate written descriptions of which, together with all amendments and
supplements thereto and all waivers of any terms thereof, have been delivered to
the Purchaser prior to the date hereof, as applicable), dated on or after
January 1, 1997, to which COMCOR-TV is a party or which comprise any of the
Transferred Assets or the Additional Transferred Assets or by which any of
COMCOR-TV's Assets and Properties or by which any of the Transferred Assets or
the Additional Transferred Assets are bound which involve an obligation of
COMCOR-TV or the Parent to make payments in any year, other than with respect to
salary or incentive compensation payments in the ordinary course of business, to
any Person. (b) Neither the Parent nor COMCOR-TV has received any notice of
default in connection with the performance of any obligation, Contract,
agreement or condition contained in any bond, debenture, note or any other
evidence of Indebtedness or in any other Contract, agreement, indenture or
instrument constituting any of the Transferred Assets or the Additional
Transferred Assets or to which COMCOR-TV is a party, by which COMCOR-TV or its
respective Assets and Properties are bound, or by which any of the Transferred
Assets or any of the Additional Transferred Assets are bound. (c) Schedule
3.14(c) contains a true and complete list of COMCOR-TV's existing commitments
and obligations to purchase any goods and to retain any services, including with
respect to the Transferred Assets or the Additional Transferred Assets. 3.15
Insurance All of the Assets and Properties presently owned by COMCOR-TV
(including, without limitation, each of the Transferred Assets or the Additional
Transferred Assets), are insured against loss pursuant to an insurance policy
(each such policy, an "Insurance Policy" and, collectively, the "Insurance
Policies"). Each Insurance Policy is in full force and effect, all premiums with
respect thereto have been paid to the extent due, and no notice of cancellation
or termination has been received with respect to any such policy, other than any
policy that will be replaced or is intended to be replaced prior to the
expiration thereof by policies providing substantially the same coverage from an
insurer that is financially sound and reputable. The Insurance Policies provide
COMCOR-TV with adequate insurance coverage against the risks involved in the
conduct of its business and ownership of the Assets and Properties owned
thereby. The coverage provided by the Insurance Policies is not less than the
coverage customary in the Parent's or COMCOR-TV's industry, as applicable, and
will not in any way be affected by or terminate or lapse by reason of the
consummation of the transactions contemplated by this Agreement or any of the
other Principal Agreements. 3.16 Licenses; MFON (a) Schedule 3.16(a) lists all
Licenses held by COMCOR-TV as of each of the Closing Dates. Each such License is
valid, binding and in full force and effect. No Person has infringed upon or
misappropriated any such License. COMCOR-TV owns good and valid title to each
such License. COMCOR-TV has obtained all the required approvals and complied
with all the necessary procedures in order for the Licenses listed on Schedule
3.16(a) to be valid, binding and in full force and effect. The Licenses listed
on Schedule 3.16(a) are operative and COMCOR-TV has taken all necessary steps in
order to conduct its business and own, lease, and operate its Assets and
Properties under the Licenses listed on Schedule 3.16(a). The Licenses listed on
Schedule 3.16(a) are sufficient (i) to own, lease, and operate COMCOR-TV's
Assets and Properties and the Transferred Assets and Additional Transferred
Assets, (ii) to prevent others from infringing on COMCOR-TV's use of its Assets
and Properties and the Transferred Assets and Additional Transferred Assets, and
(iii) to allow COMCOR-TV to conduct the activities listed on Schedule
3.16(a)(iii), such activities falling within the scope of the Plan and the
Strategic Agreement, except where the failure to have any such Licenses would
not have a Material Adverse Effect on COMCOR-TV. (b) COMCOR-TV has fulfilled and
performed all of its material obligations with respect to all of such Licenses
and no event has occurred which allows, or after notice or lapse of time would
allow, suspension, revocation or termination of any such License or results in
any other material impairment of the rights of the holder or any such License,
except where such would not have a Material Adverse Effect on COMCOR-TV nor have
a Material Adverse Effect on the Business and Condition of COMCOR-TV as
contemplated to be operated by the Purchaser and the Parent from and after each
of the Closing Dates. (c) Except as otherwise set forth in Schedule 3.16(c), no
such License of COMCOR-TV contains any restrictions that have or that COMCOR-TV
could reasonably expect to have a Material Adverse Effect on COMCOR-TV or a
Material Adverse Effect on the Business and Condition of COMCOR-TV as
contemplated to be operated pursuant to the Plan or the Strategic Agreement. (d)
Schedule 3.16(d) contains a correct and complete graphic depiction of the MFON
as in operation as of each of the Closing Dates. The Parent owns and operates
the MFON, and the MFON has been funded in accordance with applicable law. (i)
The Parent has good and valid title to all Parent Licenses; (ii) all Parent
Licenses are valid and in full force and effect; (iii) the Parent Licenses are
sufficient to lawfully own and operate the MFON and for Parent to provide
services utilizing the MFON, as contemplated by the Plan and the Strategic
Agreement. (e) COMCOR-TV has all Licenses necessary to provide services to its
subscribers immediately as of the First Stage Closing Date in the municipal
district of "Khamovniki" of the Central Administrative District of the city of
Moscow, and in the municipal districts of "Chertanovo North," "Chertanovo
Central" and "Chertanovo South" of the Southern Administrative District of the
city of Moscow as specified in the Plan and the Strategic Agreement. 3.17
Environmental Matters Neither the Parent nor COMCOR-TV has violated any
Environmental Law which might reasonably be expected to result in a Material
Adverse Effect on COMCOR-TV or have a Material Adverse Effect on any of the
Transferred Assets or the Additional Transferred Assets. 3.18 Employees and
Agents; Labor Relations. (a) Schedule 3.18(a) sets forth (a) a list of the names
and job titles/descriptions of all employees of COMCOR-TV, including (without
limitation) all of the employees which have been transferred or will be
transferred on or before each of the Closing Dates from the employ of the Parent
to the employ of COMCOR-TV (the "Transferred Employees") and (b) a list of each
such person's annual compensation (including fringe benefits) and the amounts
and descriptions of such compensation, including an indication of whether any
Benefit Plans are applicable to such employees. As of each of the Closing Dates,
each of the employees listed on Schedule 3.18(a) shall be an employee of
COMCOR-TV and shall have an employment agreement with COMCOR-TV. The Parent has
taken all action necessary to secure each such person's employment with
COMCOR-TV in accordance with all applicable Laws. As of each of the Closing
Dates, none of the employees listed on Schedule 3.18(a) shall have any accrued
severance benefits, accrued vacation time or bonuses or salary payable in
respect of any prior employment. Neither the Parent nor COMCOR-TV has violated
any applicable Russian or foreign, including in each instance federal, state or
local Law (including, but not limited to, Laws relating to discrimination in the
hiring, promotion or pay of employees), which could reasonably be expected to
result in any Material Adverse Effect on COMCOR-TV. No labor strike, dispute,
disturbance, lockout, slowdown or stoppage of employees of the Parent or
COMCOR-TV exists and, to the Knowledge of the Parent and COMCOR-TV, no such
action is imminent. (b) Except as disclosed in Schedule 3.18(b), COMCOR-TV does
not have and has not had in the past any Benefit Plan. (c) Neither the Parent
nor COMCOR-TV is a party to any collective bargaining agreement or other
contract to or with any labor union, employee representative or group of
employees. The Parent's and COMCOR-TV's employment of each of their respective
employees is terminable at will without any penalty or severance obligation of
any kind on the part of the Parent or COMCOR-TV, as the case may be. 3.19 No
Dividends, Sale of Assets, Etc. Except as disclosed in Schedule 3.19, there has
not been any declaration, setting aside or payment of any dividend or other
distribution in respect of the Common Stock of COMCOR-TV, or any direct or
indirect redemption, purchase or other acquisition by COMCOR-TV of any such
stock or ownership interests; any sale, assignment, transfer or other
disposition of any tangible or intangible asset by COMCOR-TV other than in the
ordinary course of business; or any amendment, termination or waiver of any
right of COMCOR-TV. 3.20 Transactions with Affiliates Except as set forth in
Schedule 3.20, COMCOR-TV has not entered into any Contracts or other
transactions with or on behalf of any of its Affiliates or any of the Parent's
Affiliates. 3.21 Exclusivity Neither the Parent, COMCOR-TV nor any of their
respective Affiliates is a party to, subject to, or bound by any
non-competition, nondisclosure, exclusive dealing or similar agreement which in
any way restricts the operation of COMCOR-TV's business which would be binding
upon COMCOR-TV after any of the Closing Dates. 3.22 Business and Purpose of
COMCOR-TV The Transferred Assets, the Additional Transferred Assets and the
Assets and Properties of COMCOR-TV are sufficient to enable COMCOR-TV to conduct
its business in all respects as heretofore conducted and are appropriate to be
used for purposes contemplated by the Plan and the Strategic Agreement. 3.23
Banks Schedule 3.23 is a true and complete list of all banks or other financial
institutions in which COMCOR-TV has an account, line of credit or safe deposit
box, showing a description of each such account, line of credit or safe deposit
box. All accounts and lines of credit of COMCOR-TV require (i) the signature of
each of the General Director, the Chief Accountant and the Chief Financial
Officer for withdrawals over US$25,000 or the ruble equivalent thereof and (ii)
Unanimous Approval in order to close the account or change the authorized
signatories on the account or line of credit. 3.24 Absence of Certain Commercial
Practices Neither the Parent, COMCOR-TV nor any director, officer, agent,
employee or other person associated with or acting on behalf of COMCOR-TV
(i) has used any corporate funds for any unlawful contributions, gift,
entertainment or other unlawful expense relating to political activity; (ii) has
made any direct or indirect unlawful payment to any governmental official or
employee from corporate funds; (iii) to the Knowledge of the Parent and
COMCOR-TV, has violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or (iv) has made any bribe, unlawful rebate,
payoff, influence payment, kickback or other unlawful payment in connection with
the business of COMCOR-TV. 3.25 Trademarks, Trade Names and Copyrights To the
Knowledge of the Parent and COMCOR-TV, Schedule 3.25 hereto sets forth a true
and complete description and ownership of all Intellectual Property owned by
COMCOR-TV, and a true and complete description of all Intellectual Property
transferred by the Parent to COMCOR-TV prior to the date hereof. All of such
Intellectual Property, is owned by COMCOR-TV, free and clear of any Liens or
other encumbrances on title. No third party is using or has the right to use any
such Intellectual Property. 3.26 Year 2000 Compliance None of the hardware,
software and equipment (including, but not limited to, embedded process devices
and any of the Transferred Assets or any of the Additional Transferred Assets
comprising hardware, software or equipment) used by the Parent or COMCOR-TV: (a)
will cause any interruption in normal business or processes when required to
process or use data from more than one century or when the actual date reaches
January 1, 2000; (b) will incorrectly manage or manipulate data involving dates,
including single century formulas and multi-century formulas, or cause an
application to abnormally end or generate incorrect values or invalid results
when required to process such dates or when the actual date reaches January 1,
2000; (c) will not allow all date-related user interfaces and data fields to
include the indication of a century if it is significant for operations; and (d)
will not allow all output and results, in any form, to be generated with an
indication of a century if it is significant for operations. 3.27 Brokers and
Finders Except as pursuant to the Financing Agreement, neither the Parent nor
COMCOR-TV has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finders' fees in connection with the transactions
contemplated by this Agreement. 3.28 Basic and Social Packages (a) Schedule
3.28(a) sets forth a package of open television and radio channels (the "Social
Package") to be transmitted and broadcast by COMCOR-TV to its subscribers via
the MFON. (b) Schedule 3.28(b) sets forth a package of coded signals of paid
television (the "Basic Package" and, together with the Social Package, the
"Basic and Social Packages") to be transmitted and broadcast by COMCOR-TV to its
subscribers via the MFON. (c) COMCOR-TV has all Licenses to offer lawfully the
Basic and Social Packages to its subscribers as of each of the Closing Dates.
3.29 Disclosure The Parent and COMCOR-TV have disclosed to the Purchaser all
material facts relating to (a) the Assets and Properties of COMCOR-TV
(including, without limitation, the Transferred Assets and the Additional
Transferred Assets), (b) the business of the Parent, (c) the Parent and
COMCOR-TV's respective Licenses, (d) the MFON and (e) COMCOR-TV (including the
business of COMCOR-TV as contemplated to be conducted pursuant to the Plan). No
representation or warranty contained in this Agreement, and no statement
contained in the attached Schedules or Exhibits (including, without limitation,
the Financial Statements) contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements herein
or therein, in the light of the circumstances under which they were made, not
misleading. 3.30 Plan The Parent and COMCOR-TV represent and warrant that the
Board has approved the Plan and that the Plan is in full force and effect as of
each of the Closing Dates. ARTICLE IV: REPRESENTATIONS AND WARRANTIES OF
PURCHASER The Purchaser represents and warrants to the Parent and COMCOR-TV that
the following statements are true, complete and correct as of the date hereof
and each of the Closing Dates: 4.1 Organization of the Purchaser (a) The
Purchaser is a limited liability company and has been duly organized, is validly
existing as a legal entity properly organized, registered and existing under the
laws of Cyprus with full corporate power and authority to carry on its business
as it is currently being conducted and to own, lease and operate its Assets and
Properties. (b) Attached hereto as Schedule 4.1 are copies of (i) the By-Laws of
the Purchaser, (ii) the Certificate of Registration of the Purchaser, (iii) the
Protocol of the Directors of the Purchaser, authorizing the execution of the
Principal Agreements to which it is a party, (iv) a certificate from the
registrar of the Purchaser listing the shareholders of the Purchaser as of the
First Stage Closing Date, and (v) a letter from Citibank, N.A. 4.2 Authority: No
Conflict. (a) The Purchaser has full power and authority to execute and deliver
this Agreement and the other Principal Agreements to which the Purchaser is a
party. (b) This Agreement and the other Principal Agreements to which the
Purchaser is a party have been duly and validly authorized, executed and
delivered by the Purchaser and constitute the legal, valid and binding
obligations of the Purchaser, enforceable against the Purchaser in accordance
with their terms, subject to any Law Affecting Creditors' Rights. (c) The
execution, delivery and performance by the Purchaser of this Agreement and the
other Principal Agreements to which it is a party, compliance by the Purchaser
with all of the provisions hereof and thereof and the consummation by the
Purchaser of the transactions contemplated hereby and thereby: (i) will not
conflict with or constitute a breach of any of the terms or provisions of, or a
default under, the will not conflict with or constitute a breach of any of the
terms of the constituent documents of the Purchaser, (ii) subject to obtaining
the third party consents referred to in Schedule 4.2(c), will not conflict with
or constitute a breach of any Contract or License to which the Purchaser is a
party as of the date of this Agreement and as of each of the Closing Dates or by
which the Purchaser or any of its Assets and Properties is bound, and (iii)
subject to obtaining the consents, approvals and actions, making the filings and
giving the notices disclosed in Schedule 4.2(c) hereto, will not violate or
conflict with any Orders or Laws applicable to the Purchaser or any of its
Assets and Properties, except, in the case of clause (c), any conflict, breach,
violation, failure to obtain consent or approval or make any filing or give any
notice, which would not have a Material Adverse Effect on the Purchaser. 4.3
Governmental Approvals and Filings Except as set forth in Schedule 4.3, the
execution, delivery and performance by the Purchaser of this Agreement and the
other Principal Agreements to which it is a party, the compliance by the
Purchaser with all of the provisions hereof and thereof and the consummation of
the transactions by the Purchaser contemplated hereby and thereby will not
require any consent, approval, authorization or other order of any Governmental
or Regulatory Authority. 4.4 Legal Proceedings There are no Actions or
Proceedings pending or, to the Knowledge of the Purchaser, threatened against
the Purchaser or any of its Assets and Properties which could reasonably be
expected to result in the issuance of an Order restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement or any of the other Principal
Agreements to which the Purchaser is a Party. 4.5 Suitability The Purchaser has
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of its investment in the Purchaser's Shares.
4.6 Brokers and Finders Except as set forth in Schedule 4.6, the Purchaser has
not employed any broker or finder or incurred any liability for any brokerage
fees, commissions or finders' fees in connection with the transactions
contemplated by this Agreement. ARTICLE V: COVENANTS OF THE PARTIES 5.1 Other
Agreements Contemporaneously with the execution and delivery of this Agreement,
each of COMCOR-TV, Parent and Purchaser shall execute the Principal Agreements,
the forms of which are attached hereto, to which it is a party; provided,
however, that any Principal Agreements that must be executed after the First
Stage Closing Date under this Agreement shall be executed at the times required
under this Agreement. 5.2 Nomination and Removal of Directors (a) At any
COMCOR-TV shareholder meeting held after the First Stage Closing, at which there
is a quorum as defined in the Charter, each of the Purchaser and the Parent
shall have the right to nominate two persons to the Board to be elected by
cumulative voting. Neither the Parent nor the Purchaser shall vote its shares of
COMCOR-TV Equity Securities in favor of the removal of a director nominated by
the other; provided, however, that upon the request of the Purchaser or the
Parent to remove a director nominated thereby, each of the Purchaser and the
Parent shall vote all of its shares of COMCOR-TV Equity Securities in favor of
the removal of all directors. (b) At any COMCOR-TV meeting of shareholders held
after the First Stage Closing, neither Purchaser nor Parent may vote for the
removal of any directors if the other is not represented and eligible to vote.
5.3 Use of Proceeds From and after the First Stage Closing Date, COMCOR-TV
shall, and the Parent and Purchaser shall cause COMCOR-TV to, (i) conduct its
business in accordance with all applicable provisions of Law, and (ii) apply
each portion of the Purchaser's Purchase Price in accordance with the Plan, with
such exceptions as are approved by Unanimous Approval. 5.4 Credit Agreement
Pursuant to the Financing Agreement, Andersen will use commercially reasonable
efforts to obtain credit enhancements for COMCOR-TV for the purpose of providing
COMCOR-TV with credit in an amount sufficient to enable it to finance the
expenses incurred in connection with the establishment of a network utilizing
the MFON necessary to enable COMCOR-TV to provide services for up to 1.5 million
subscribers in the operating area set forth in the Plan. 5.5 Public Market The
Parties intend to create a public market for the Common Stock and shall from
time to time meet in good faith to consider the commercial practicability of an
initial public offering of COMCOR-TV Equity Securities either registered under
the Securities Act or the securities Laws of another jurisdiction and
consummated in accordance with all applicable securities Laws (including,
without limitation, all applicable United States securities laws, should the
initial public offering take place in the United States) (the "Initial Public
Offering"). COMCOR-TV agrees that prior to agreeing to register any such Equity
Securities under the Securities Act or the securities Law of another
jurisdiction (or effecting any such registration or otherwise effecting a public
sale or distribution of such securities), (a) if at the time thereof, the
Purchaser, any Affiliate thereof or Andersen Group owns any of the Common Stock
(or any other COMCOR-TV Equity Securities), COMCOR-TV and the Purchaser, such
Affiliate thereof, and/or Andersen Group, as the case may be, will enter into a
registration rights agreement, and (b) if at the time thereof the Parent (or any
Affiliate thereof) owns any of the Common Stock (or any other COMCOR-TV Equity
Securities), COMCOR-TV and the Parent (and/or such Affiliate thereof, as the
case may be) will enter into a registration rights agreement. Except in a public
offering registered under the Securities Act or the securities Laws of another
jurisdiction, COMCOR-TV shall not issue or sell any COMCOR-TV Equity Securities
unless the purchasers thereof shall have agreed in writing with COMCOR-TV not to
effect any public sale or distribution of such Equity Securities during the ten
(10) Business Days prior to and at least ninety (90) calendar days after the
effectiveness of any underwritten registration of securities of COMCOR-TV,
except as part of such underwritten registration or as otherwise permitted
pursuant to applicable securities Laws. 5.6 Plan The Parent represents, warrants
and acknowledges that it agrees with the form and substance of the Plan. The
Parent and the Purchaser agree that all revised or new Plans shall be prepared
by COMCOR-TV's management and shall be approved by Unanimous Approval, prior to
implementation thereof. 5.7 Chairman (a) The Chairman shall be appointed from
the members of the Board and shall be elected in accordance with the Charter. As
set forth in the Charter, the Chairman shall not possess a tiebreaking or
deciding vote in the event of a deadlock by the Board. As soon as practicable
after the First Stage Closing, but not before the Nominees of Purchaser are duly
elected to the Board, each of the Purchaser and the Parent shall cause each of
their Nominees duly elected to the Board to vote in favor of any person
nominated by the Purchaser to serve as the Chairman for a term of one year. (b)
Following the expiration of the term of the Chairman elected to such office
pursuant to Section 5.7(a), the Parent and the Purchaser will, on an alternate
basis, have the right to nominate the Chairman (with the Parent having the first
right to exercise such right of nomination), and each of the Parent and the
Purchaser shall cause each of their respective Nominees duly elected to the
Board to vote in favor of any such person nominated by the Parent or the
Purchaser, as the case may be, to serve as the Chairman for a term of one year.
In the event a person elected to the office of Chairman under this Section 5.7
dies or resigns or withdraws from such office prior to the expiration of his or
her term, the Primary Shareholder who shall have nominated such Chairman shall
have the right to nominate another person to the office of Chairman for the
remainder of such term, and each of the Purchaser and the Parent shall cause
each of their respective Nominees duly elected to the Board to vote in favor of
such nominee to serve as the Chairman for such remainder term. (c) If Mr.
Pripachkin voluntarily resigns from the office of General Director after the
First Stage Closing Date, then the Parent shall have the right to nominate Mr.
Pripachkin to the office of Chairman for a term of one year, and each of the
Purchaser and the Parent shall cause each of their respective Nominees duly
elected to the Board to vote in favor of Mr. Pripachkin to serve as the Chairman
for a term of one year, such term to take effect as of the earlier of (i) the
effective date of the withdrawal from the Board of the then Chairman (the
"Sitting Chairman") or (ii) the first anniversary of the date on which the
Sitting Chairman was elected to the office of Chairman. (d) If, following his
resignation from the office of General Director, Mr. Pripachkin is elected to
the office of Chairman pursuant to Section 5.7(c), then following the expiration
of his one-year term as Chairman, the Purchaser will have the right to nominate
the Chairman, and each of the Purchaser and the Parent shall cause each of their
respective Nominees duly elected to the Board to vote in favor of any such
person nominated by the Purchaser (the "Purchaser Nominee") to serve as the
Chairman for a term of one year. Following the expiration of such term, the
Parent and the Purchaser will, on an alternate basis, have the right to nominate
the Chairman pursuant to Section 5.7(b) in accordance with Section 5.7(a) with
the Parent having first right to nominate the Chairman after the Purchaser
Nominee steps down. 5.8 General Director; First Deputy General Director (a) From
and after the First Stage Closing, the Board shall have the power and authority,
by Unanimous Approval, to appoint and dismiss the General Director. On or before
the First Stage Closing, the Board will re-appoint Mr. Pripachkin as the General
Director for a term of one year; provided, however, that such re-appointment
shall be subject to the execution and delivery of an employment agreement by
each of Mr. Pripachkin and COMCOR-TV. Such employment agreement shall set forth
all material terms relating to Mr. Pripachkin's appointment as General Director
(including, without limitation, the salary and other compensation, if any,
payable to the General Director, all of which amounts payable shall be paid for
the sole account of COMCOR-TV). Any renewal of Mr. Pripachkin's employment
agreement after expiration of his one year term shall require Unanimous
Approval. If the Board is unable to agree on an extension of Mr. Pripachkin's
employment agreement, Mr. Pripachkin's term as General Director shall end as of
the termination date of his current agreement. Should Mr. Pripachkin resign or
be dismissed as General Director, the Purchaser and the Parent agree that
subject to Unanimous Approval the First Deputy General Director shall serve as
the acting General Director until such time as another General Director is
appointed by Unanimous Approval. For the avoidance of doubt, should Mr.
Pripachkin resign or be dismissed as General Director, the position of General
Director shall remain vacant until (i) the Board through Unanimous Approval
determines that the First Deputy General Director shall serve as the acting
General Director or (ii) another General Director is appointed by Unanimous
Approval. (b) On or before the First Stage Closing, the General Director shall
have appointed the First Deputy General Director. The First Deputy General
Director shall be seconded to COMCOR-TV by the Purchaser pursuant to a
secondment agreement entered into by and between the Purchaser and COMCOR-TV
which is effective on or before the First Stage Closing Date. Until the Third
Stage Closing Date, the Purchaser shall waive any payments it is scheduled to
receive from COMCOR-TV pursuant to such secondment agreement. From and after the
First Stage Closing, the General Director shall have the power and authority to
dismiss the First Deputy General Director; provided, however, that the General
Director shall be obliged to inform the Board of his intention to dismiss the
First Deputy General Director thirty (30) days prior to any such dismissal. Any
decision to dismiss the First Deputy General Director shall be in compliance
with the requirements of Russian legislation. 5.9 Chief Financial Officer and
Chief Accountant; Department Heads (a) On or before the First Stage Closing, the
General Director shall have appointed the Chief Financial Officer. The Chief
Financial Officer shall be seconded to COMCOR-TV by the Purchaser pursuant to a
secondment agreement entered into by and between the Purchaser and COMCOR-TV
which is effective on or before the First Stage Closing Date. Until the Third
Stage Closing Date, the Purchaser shall waive any payments it is scheduled to
receive from COMCOR-TV pursuant to such secondment agreement. From and after the
First Stage Closing, the General Director shall have the power and authority to
appoint and dismiss the Chief Financial Officer; provided, however, that (i) the
General Director shall be obliged to inform the Board of his intention to
dismiss the Chief Financial Officer thirty (30) days prior to any such dismissal
and (ii) the General Director can only dismiss the Chief Financial Officer for
"cause" as such term is defined in the Chief Financial Officer's employment
agreement. The Chief Financial Officer shall be appointed only from a list of
candidates proposed by the Purchaser. From and after the First Stage Closing,
the Chief Financial Officer's employment agreement shall be approved by
Unanimous Approval. The Chief Financial Officer's powers and duties shall be set
forth in regulations to be approved by the Board on or before the First Stage
Closing Date, which regulations shall include, but shall not be limited to: (i)
making recommendations to the General Director regarding the hiring and firing
of all of COMCOR-TV's financial personnel. The General Director shall make
decisions regarding the hiring and firing of any of COMCOR-TV's financial
personnel subject to the recommendations of the Chief Financial Officer; (i)
overseeing COMCOR-TV's corporate policy for identification of "interested party"
transactions under Russian law, approving all proposed "interested party"
transactions to be entered into by COMCOR-TV and giving recommendations on such
transactions to the relevant body of COMCOR-TV which is to formally approve such
transactions; (ii) in coordination with COMCOR-TV's Audit Commission,
preliminarily selecting the candidate to be approved by COMCOR-TV's shareholders
as external auditor; (iii) reviewing COMCOR-TV's US GAAP financial statements as
well as any financial and economic reports and information which is to be
submitted to any Governmental or Regulatory Authority or the public, including,
but not limited to, documents to be filed with the United States Securities and
Exchange Commission and/or any other securities commission in the jurisdiction
where COMCOR-TV Equity Securities may be listed or registered; (iv) overseeing
and advising on all COMCOR-TV financial forecasting prepared by COMCOR-TV's
management and the Board; and (v) signature authority on all transfers or
withdrawals from all of COMCOR-TV bank accounts over US$25,000. (b) The Chief
Accountant shall have entered into an employment agreement with COMCOR-TV, which
is effective on or before the First Stage Closing Date. The General Director
shall have the power and authority to dismiss the Chief Accountant; provided,
however, that the General Director shall be obliged to inform the Board of his
intention to dismiss the Chief Accountant thirty (30) days prior to any such
dismissal. Any decision to dismiss the Chief Accountant shall be in compliance
with the requirements of Russian legislation. Until such time as a Chief
Financial Officer is appointed, the Chief Accountant shall exercise the powers
and authority of the Chief Financial Officer. (c) The General Director shall
make decisions regarding the hiring and firing of the employees of COMCOR-TV
subject to the recommendations of the relevant department heads. 5.10 Investment
Manager; Investment Fees; Financing Fees (a) On or before the First Stage
Closing, COMCOR-TV and Andersen Group shall have entered into the Financing
Agreement appointing Andersen Group as the investment manager of COMCOR-TV,
pursuant to which Andersen Group shall be solely responsible for (and Andersen
Group shall have the right to be paid any fees, commissions or other monies in
connection with) capital and other fundraising transactions relating to or
involving COMCOR-TV. (b) The Purchaser and the Parent contemplate that Andersen
Group will use its best efforts to arrange or otherwise secure financing in an
amount up to US$130 million for the benefit of COMCOR-TV. In the event Andersen
Group arranges or otherwise secures financing of any nature whatsoever for the
benefit of COMCOR-TV (whether such financing is recourse or non-recourse and
whether evidenced by a loan or credit agreement or similar agreement,
restructuring agreement or similar agreement, promissory note(s), notes, bonds,
debentures or other similar instruments, letter(s) of credit, operating leases
or otherwise), COMCOR-TV agrees that the cost of such financing to be borne by
COMCOR-TV shall include a financing fee in an amount equal to 4% of the
aggregate amount of the proceeds of such financing (or, in the case of a
restructuring of any of COMCOR-TV's Indebtedness, 4% of the aggregate amount of
the funds contemplated to be saved by COMCOR-TV pursuant to such financing).
Such financing fee (including applicable value added tax, if any, due with
respect thereto under Russian laws, rules or regulations) will be paid to
Andersen Group from amounts withheld from the proceeds of the financing and paid
by means of wire transfer of immediately available funds to an account
designated by Andersen Group. 5.11 Financial Reports (a) The books of account
for COMCOR-TV shall be closed promptly at the end of each fiscal year of
COMCOR-TV. COMCOR-TV shall cause to be delivered to each of the shareholders of
COMCOR-TV, within 90 days after the end of each fiscal year (or as soon
thereafter as the Auditors shall deliver such statements to the Board of
Directors but no later than 60 days after the end of each fiscal year of
COMCOR-TV), audited financial statements for the year then ended prepared in
accordance with US GAAP and consisting of at least (i) a balance sheet as of the
close of such year and (ii) an income statement, statement of cash flows for
such year, together with a report thereon by the Auditors without significant
qualification. (b) In addition to the foregoing, COMCOR-TV shall cause to be
delivered to each of the shareholders and Board members of COMCOR-TV within 30
days after the end of each calendar month and 45 days of each fiscal quarter,
financial statements for the calendar month and fiscal quarter then ended
prepared in accordance with US GAAP (except that notes shall not be required in
such financial statements), certified by the Chief Accountant and Chief
Financial Officer as being true and correct, and consisting of at least (i) a
balance sheet as of the end of such calendar month and fiscal quarter and (ii)
an income statement and statement of cash flows for such calendar month and
fiscal quarter. (c) COMCOR-TV shall also promptly deliver to each of the
shareholders and Board members of COMCOR-TV all of the other copies of all
periodic financial or other reports that COMCOR-TV shall deliver from time to
time to banks and other institutional lenders of COMCOR-TV. 5.12 Deposits;
Withdrawals The Purchaser and the Parent shall cause COMCOR-TV to deposit all
funds (including, without limitation, all funds representing capital
contributions to COMCOR-TV, the proceeds of all borrowings by COMCOR-TV and
receipts from subscribers to its services) in operating or capital accounts of
COMCOR-TV with Citibank, Moscow, or with other banking institutions as approved
by Unanimous Approval, which accounts shall provide that withdrawals may be made
solely upon the signature of each of the General Director and Chief Accountant;
provided, however that with respect to any such withdrawals over US$25,000, the
Chief Financial Officer's signature will be required in addition to the General
Director's and Chief Accountant's. As set forth in Section 2.2(a), all
contributions or payments in cash made by the Purchaser in connection with the
payment of the Purchaser's Purchase Price shall be deposited into the COMCOR-TV
Capital Account. All expenses and distributions of COMCOR-TV shall be paid from
such operating or capital accounts. To the extent that, in the Chief Financial
Officer's judgment, funds of COMCOR-TV are not and will not be for a period in
excess of ninety (90) days required for the conduct of COMCOR-TV's business,
such excess funds may be invested solely in securities or other instruments
approved by Unanimous Approval. Funds of COMCOR-TV shall not be commingled with
the funds of any other Person, shall not be used as a compensating balance by
any officer, director or shareholder of COMCOR-TV, and shall be used only in
furtherance of the Plan. 5.13 Insurance (a) Each of the Purchaser and the Parent
shall cause their respective Nominees duly elected to the Board to cause the
Board to direct that the General Director and Chief Accountant procure and
maintain in full force and effect on behalf of COMCOR-TV and/or its directors
and officers, as the case may be, the following insurance, the premiums for
which shall be an expense of COMCOR-TV: (i) insurance on the Assets and
Properties of COMCOR-TV (including the Transferred Assets and the Additional
Transferred Assets), and all improvements thereto, against all Losses by fire,
lightning, flood, wind and all other risks covered by the standard coverage "all
risk" endorsements; (ii) worker's compensation and similar employee benefits as
required by Law; (iii) commercial general liability insurance on an occurrence
or claims made basis, including personal injury, bodily injury, death or
property damage liability, and automobile liability insurance; (iv) excess
liability coverage insuring the same risks as the underlying coverage for the
benefit of the Purchaser, the Parent and COMCOR-TV as named insureds with limits
of not less than US$10,000,000; (v) environmental liability insurance; (vi)
directors' and officers' liability insurance and (vii) such other insurance as
the Purchaser and the Parent shall from time to time deem necessary. (b) All
insurance policies shall be issued in the name of each of the Purchaser, the
Parent and COMCOR-TV, as named insureds. The insurance shall not contain any
provision for co-insurance coverage and shall include coverage against punitive
damages to the extent allowed by Law. (c) All insurance shall be effected under
valid and enforceable policies issued by insurers of recognized responsibility
satisfactory to all Board members, including at least one Nominee of the
Purchaser duly elected to the Board and at least one Nominee of the Parent duly
elected to the Board, and shall, to the extent reasonably obtainable, provide
that (1) such policies shall not be cancelled without at least thirty (30) days'
prior written notice to each insured named therein, and (2) any loss payable
thereunder shall be payable notwithstanding any act of negligence of any named
insured. 5.14 Public Announcements Each of the Parties hereto agrees to consult
promptly with each other prior to issuing any press releases or otherwise making
public statements with respect to the transactions contemplated by this
Agreement, and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by law;
provided, however, that the foregoing shall not apply to the Purchaser's or
Andersen Group's obligation to make certain filings or press releases as
required by applicable securities Law or the rules and regulations of
Governmental or Regulatory Authorities applicable to it. 5.15 Furnishing
Information. Each of the Parties hereto will, as soon as practicable after
reasonable request therefor, furnish all the information concerning it required
for inclusion in any statement or application made by any of them to any
Governmental or Regulatory Authority in connection with the transactions
contemplated by this Agreement or any of the other Principal Agreements. 5.16
Best Efforts Upon the terms and subject to the conditions hereof, each of the
Parties hereto agrees to use its best efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary, proper or advisable
to consummate and make effective the transactions contemplated by this Agreement
and shall use its best efforts to promptly obtain all waivers, permits, consents
and approvals and to effect all registrations, filings and notices with or to
third parties or Governmental or Regulatory Authorities which are in the
reasonable opinion of the Parent, COMCOR-TV or the Purchaser necessary or
desirable in connection with the transactions contemplated by this Agreement or
any of the other Principal Agreements. The Parent and COMCOR-TV each agrees that
it will, at any time and from time to time after the date hereof, upon request
of the Purchaser, do, execute, acknowledge and deliver or will cause to be done,
executed, acknowledged and delivered, all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney and assurances as may in the
Purchaser's reasonable opinion be necessary or advisable to confirm or make
effective COMCOR-TV's title to, interest in, and control over the Transferred
Assets, the Additional Transferred Assets and its Assets and Properties and the
Purchaser's title to, interest in, and control over the voting and disposition
of, the Purchaser's Shares to be conveyed, transferred and delivered by
COMCOR-TV to the Purchaser under this Agreement. 5.17 Employees. (c) The Parent
covenants that no employees of the Parent which are transferred to COMCOR-TV
after the First Stage Closing Date shall have any accrued severance benefits,
accrued vacation time or bonuses or salary payable in respect of any prior
employment. (d) The Parties agree that COMCOR-TV shall not hire any employees to
fill positions not reflected in the employee organizational chart (shtatnoe
raspisanie) as specified in Schedule 5.17(b). Any changes to the employee
organizational chart as set forth in Schedule 5.17(b) shall require Unanimous
Approval. (e) The Parties agree that every employee of COMCOR-TV who fills a key
position as specified in Schedule 5.17(b) shall be required to sign an
employment contract which shall provide, among other things, that while employed
by COMCOR-TV such employee shall work exclusively for COMCOR-TV. (f) Parent and
Purchaser agree not to solicit for employment, or contract for the services of,
any employee filling a key position as specified in Schedule 5.17(b) at the time
of such solicitation. 5.18 Government and Regulatory Authority Notices and
Filings. COMCOR-TV covenants and agrees that as soon as reasonably practicable
following each of the Closings, but no later than 30 days thereafter, it shall
take all such actions, give any notices and make all such filings with
Governmental and Regulatory Authorities which are necessary and/or required as a
result of the Purchaser becoming a shareholder of COMCOR-TV or increasing its
ownership of Common Stock. Such actions and filings shall include, but shall not
be limited to, (i) registration of a revised version of the Charter (reflecting
amendments taking into account the capital increase as a result of the issuance
of the Purchaser's Shares at each Closing) with the MRC and SRC and (ii) the
filing of a report on the results of the issuance of the Purchaser's Shares with
the FCSM. 5.19 First General Meeting of Shareholders So long as Purchaser is not
a Defaulting Party, COMCOR-TV and the Parent covenant and agree (and the Parent
covenants to cause its Nominees duly elected to the Board) not to call any
general meeting of shareholders of COMCOR-TV, whether annual or extraordinary,
until the Purchaser shall be registered as the owner of 50% of the outstanding
shares of Common Stock (except that prior to the completion of the Deferred
Share Transfer, the percentage used in this Section 5.19(a) shall be 49.9975%).
5.20 Subsequent Meetings of Shareholders (a) So long as Purchaser is not a
Defaulting Party, from and after the First Stage Closing, COMCOR-TV and Parent
covenant and agree not to cause any general meeting of shareholders, whether
annual or extraordinary, to occur in any period during which the Purchaser is
not the registered owner of 50% of the outstanding shares of Common Stock. (b)
If in contravention of Section 5.20(a), a general meeting of shareholders,
whether annual or extraordinary, occurs, and so long as Purchaser is not a
Defaulting Party, then at such meeting, the Parent covenants and agrees: (i) not
to vote (A) the Second Stage Parent's Shares (and any other shares of Common
Stock with regard to which the Parent has not yet fulfilled its obligations
under Section 2.6) in any such meeting called before the Second Stage Closing
Date and (B) the Third Stage Parent's Shares (and any other shares of Common
Stock with regard to which the Parent has not yet fulfilled its obligations
under Section 2.6) in any such meeting called before the Third Stage Closing
Date; and (ii) to permit the Purchaser to exercise its rights under the Deferred
Share Voting Power of Attorney and vote the Deferred Share, if the Deferred
Share Transfer, as specified in Section 2.8(d), has not been completed. (c) If
in contravention of Section 5.20(a)(i), a general meeting of shareholders is
held, and in contravention of Section 5.20(b) the Parent, for whatever reason,
does not refrain from voting the Parent's Shares received in connection with
events prior to the relevant Closing, then, at any such meeting, and so long as
Purchaser is not a Defaulting Party, the Purchaser and Parent covenant and agree
that they shall vote all of their shares of Common Stock to defer this meeting
until such time as Purchaser shall have full right, title and interest to the
relevant Purchaser's Shares, except that any agenda items set for this meeting
may be approved by unanimous vote of the Parent and the Purchaser. (d) So long
as Purchaser is not a Defaulting Party, COMCOR-TV and Parent covenant and agree
not to cause any general meeting of shareholders, whether annual or
extraordinary, to be held by ballot. 5.21 Admission of New Shareholders In the
event that any Person shall be admitted as a new shareholder of COMCOR-TV during
the term of this Agreement, the Parties agree that they shall (i) renogotiate
the terms of this Agreement in good faith, (ii) make all reasonable changes to
this Agreement, and (iii) take any reasonably necessary action in order to
accommodate such Person as a shareholder of COMCOR-TV and carry out the intent
and purpose of this Agreement. 5.22 Payments under the Lease Agreement The
Parent covenants and agrees that COMCOR-TV shall not be obligated to make any
and all payments due under the Lease Agreement for the lease of the Additional
Transferred Assets prior to contribution by Parent to COMCOR-TV. 5.23 Payments
by the Parent for Certain Personnel to be Used by COMCOR-TV The Parent covenants
and agrees that it shall make payments of up to US$1,000,000 or the ruble
equivalent for certain personnel as agreed to by the Parties to be used by
COMCOR-TV. 5.24 Preemptive Rights (a) The Parent covenants and agrees that it
shall not exercise any preemptive rights it may have, by virtue of being a
shareholder of COMCOR-TV, with regard to the issuance by COMCOR-TV to the
Purchaser of the Second Stage Purchaser's Shares and the Third Stage Purchaser's
Shares. (b) The Purchaser covenants and agrees that it shall not exercise any
preemptive rights it may have, by virtue of being a shareholder of COMCOR-TV,
with regard to the issuance by COMCOR-TV to the Parent of the Second Stage
Parent's Shares and the Third Stage Parent's Shares. ARTICLE VI: CERTAIN
RESTRICTIONS ON TRANSFER; PURCHASER'S RIGHTS; DEADLOCK; BUY-SELL PROVISION;
RIGHT OF FIRST REFUSAL; RELATED MATTERS; CHANGE IN CONTROL 6.1 Certain
Restrictions on Transfer Except as contemplated under Sections 5.5, 6.4, 6.8 and
6.9 neither the Purchaser nor the Parent (nor any transferee of either of them
or any subsequent transferee thereof) shall, without in each instance obtaining
the prior unanimous written approval of the Board, sell, assign or otherwise
transfer, mortgage, charge or otherwise encumber (or suffer or permit any third
party to sell, assign or otherwise transfer, or mortgage, charge or otherwise
encumber) ("Transfer") all or any part of its Common Stock (or other COMCOR-TV
Equity Securities, if any) or contract to do, suffer or permit any of the
foregoing; provided, however, that notwithstanding the foregoing provision, (a)
the Purchaser shall have the right to Transfer all or any part of its COMCOR-TV
Equity Securities to Andersen Group, (b) the Purchaser shall have the right to
Transfer all or any part of its COMCOR-TV Equity Securities as security to any
third party in connection with any financing for COMCOR-TV and (c) the Purchaser
or the Parent as the case may be shall have the right to Transfer all of its
COMCOR-TV Equity Securities pursuant to the Deadlock provisions of Sections 6.5
and 6.6. Any Transfer by the Purchaser or the Parent (or any transferee of
either of them or any subsequent transferee thereof) in violation of the
foregoing provisions of this Section 6.1 shall be void and of no force or
effect. 6.2 Restraining Order Notwithstanding Section 9.5 of this Agreement, if
at any time any Transfer is attempted to be made in violation of the provisions
of this Agreement, then the non-transferring COMCOR-TV Shareholder shall, in
addition to its rights and remedies under this Agreement and at law and in
equity, be entitled to a decree or order restraining and enjoining such
Transfer. Each of the Purchaser and the Parent (and any transferee of either of
them and any subsequent transferee thereof) expressly acknowledges and agrees in
this regard that damages at law will be difficult to ascertain in the event of
any such violation of this Agreement, and would constitute an inadequate remedy
for a breach or threat of breach of the provisions of this Agreement concerning
Transfers as set forth above. 6.3 Agreement with Transferees (a) No Transfer by
a Primary Shareholder (or transferee thereof or any succeeding transferees
thereof) of its Common Stock (or other COMCOR-TV Equity Securities, if any) to
any Person other than the other Primary Shareholder shall be effective to make
such transferee a COMCOR-TV Shareholder or entitle such transferee to any of the
benefits or rights hereunder until such transferee agrees in writing (i) to
assume and be bound by all of the terms and provisions of this Agreement and all
of the obligations of the transferring COMCOR-TV Shareholder hereunder, and (ii)
to be subject to all of the restrictions to which the transferring COMCOR-TV
Shareholder is subject under the terms of this Agreement and any further
agreements with respect to COMCOR-TV and its business; provided, however, that
notwithstanding the foregoing, a Transfer by a Primary Shareholder (or
transferee thereof) of its Common Stock (or other COMCOR-TV Equity Securities,
if any) pursuant to the transactions contemplated by Section 5.5. shall be
effective to make such transferee a COMCOR-TV Shareholder. (b) Except as
contemplated under Section 5.5, no permitted Transfer of any Common Stock (or
other COMCOR-TV Equity Securities, if any) to any Person other than a Primary
Shareholder hereunder shall be effective until the Board shall have received and
have accepted the written agreement of the third party transferee required by
Section 6.3(a). A transferee of Common Stock (or other COMCOR-TV Equity
Securities, if any) shall be entitled to receive from COMCOR-TV distributions of
dividends and other property of COMCOR-TV with respect to such Shareholder's
Common Stock (or other COMCOR-TV Equity Securities, if any) if, and only if, the
Transfer of such Common Stock (or other COMCOR-TV Equity Securities, if any) was
effected in accordance with this Section 6.3 and the other provisions of this
Agreement, and only from and after the effective date of such Transfer. 6.4
Right of First Refusal. (a) If either Party (the "Offeror") desires to, subject
to the restrictions on Transfers contained in Article VI of this Agreement,
Transfer any or all of the Shares then owned by it (other than as provided in
Sections 5.5 and 6.9 hereof or a Transfer from Purchaser to Andersen Group),
then it shall first give a written notice (the "Transfer Notice") to the other
Party (the "Offeree") and to COMCOR-TV specifying the number of Shares that the
Party wishes to Transfer (the "Transfer Shares"), containing an irrevocable
offer (open to acceptance for a period of 30 days after the date such Transfer
Notice is received) to sell the Transfer Shares to the Offeree and, if the
Offeree declines to agree to purchase the Transfer Shares as set forth below, to
COMCOR-TV at the price per share stated in the Transfer Notice, which price
shall be equal to the price per Share offered to the Offeror by a bona fide
third party offeror (the "Transfer Price"). (b) The Offeree shall have the right
to purchase all or a portion of the Transfer Shares; provided, however, that the
Offeree must determine the number of Transfer Shares that it will purchase
within 30 days after its receipt of the Transfer Notice. If the Offeree elects
to purchase less than all of the Transfer Shares, it shall, within 30 days after
receipt of the Transfer Notice, deliver a copy of the Transfer Notice and a
written statement of the number of Transfer Shares it has elected not to
purchase to COMCOR-TV. COMCOR-TV shall have the right to purchase all or a
portion of the Transfer Shares not purchased by the Offeree; provided, however,
that COMCOR-TV must determine the number of Transfer Shares it will purchase
within 15 days after its receipt of its copy of the Transfer Notice from the
Offeree. If COMCOR-TV elects to purchase less than all of the Transfer Shares
not purchased by the Offeree, it shall, within 15 days after its receipt of its
copy of the Transfer Notice from the Offeree, deliver a copy of the Transfer
Notice and a written statement of the number of Transfer Shares it has elected
not to purchase (the "Remaining Transfer Shares") to the Offeror. (c) If, at the
end of the 45th day following the initial delivery of the Transfer Notice by the
Offeror, neither the Offeree nor COMCOR-TV (together with the Offeree, the
"Collective Offerees") has delivered a notice of acceptance of the offer
contained in such Transfer Notice (the "Notice of Acceptance"), or if the
Collective Offerees have delivered one or more Notices of Acceptance covering
less than all of the Transfer Shares, then the Offeror shall have 15 days in
which to Transfer the Transfer Shares not purchased by the Collective Offerees,
at a price not lower than the Transfer Price and on terms no more favorable to
the transferee than those contained in the Transfer Notice, to any third party;
provided, however, that no Transfer may be made to any third party unless and
until such third party delivers to COMCOR-TV an executed consent in the form of
Schedule 6.4(c) hereto. Promptly after any Transfer pursuant to this
Section 6.4(c), the Offeror shall notify COMCOR-TV and the Offeree of the
consummation thereof and shall furnish such evidence of the completion and time
of completion of such Transfer and of the terms thereof as COMCOR-TV or the
Offeree may request. If, at the end of such 15 day period, the Offeror has not
completed the Transfer of all of the Transfer Shares, the Offeror shall no
longer be permitted to Transfer such Shares pursuant to this Section 6.4(c)
without again complying with this Section 6.4 in its entirety. If the Offeror
determines at any time within such 15 day period that the Transfer of all or any
part of such Transfer Shares at a price not lower than the Transfer Price and on
terms no more favorable to the transferee than those
contained in the Transfer Notice is impractical, the Offeror may terminate all
attempts to transfer such Transfer Shares and recommence the procedures of this
Section 6.4 in their entirety without waiting for the expiration of such 15 day
period by delivering written notice of such decision to each of the Offeree and
COMCOR-TV. (d) Proposed transfers of Shares under this Section 6.4 for property
other than cash (e.g., in kind) shall be valued by the Offeror so that a cash
equivalent price per Share can be provided to the Offeree and COMCOR-TV. (e) The
Offeree shall have the option to request an appraisal of the value of the
Transfer Shares in accordance with the provisions of Section 6.7. If the
appraisal determines that the fair market value of the Transfer Shares differs
more than 5% from the Transfer Price, the Offeree (or COMCOR-TV, as applicable)
may, at its option, pay the fair market value. If the fair market value of the
Transfer Shares differs by 5% or less from the appraised value, the Offeree (or
COMCOR-TV, as applicable) may pay only the Transfer Price. (f) The closing of
the purchase by the Offeree or COMCOR-TV of the Transfer Shares pursuant to this
Section 6.4(f) shall take place at the principal offices of COMCOR-TV on the
15th Business Day after the Notices of Acceptance are given. At such closing,
each of the Offeree and/or COMCOR-TV who has elected to purchase Transfer Shares
shall deliver by (i) a certified check or checks or (ii) wire transfer the
appropriate amount to the Offeror or if the offer is accepted with payment in
kind, transfer-acceptance acts, upon presentation of a copy of an extract from
COMCOR-TV's share register evidencing that the Offeree or COMCOR-TV, as the case
may be, has been entered into COMCOR-TV's share register as the registered owner
of the Transfer Shares. The Transfer Shares shall be delivered free and clear of
all Liens (except for Permitted Liens) other than those imposed by this
Agreement. 6.5 Deadlock. (a) In the event that the Board or the shareholders of
COMCOR-TV are unable to approve any material action or decision pursuant to this
Agreement, the Board Rules or the Charter or applicable Law, then upon notice in
writing (a "Deadlock Notice") of such determination given by the Purchaser or
the Parent, as the case may be, the Purchaser and the Parent shall be deemed to
have reached a deadlock (a "Deadlock"). If the Purchaser and the Parent are
unable to resolve the Deadlock within thirty (30) Business Days of receipt of
the Deadlock Notice, each of the Purchaser and the Parent shall have the right
to invoke the Buy-Sell procedure set forth in Section 6.6 hereof. (b) The
provisions of Sections 6.5 and 6.6 shall not apply to any failure by a Party to
fulfill its obligations to contribute assets or cash in connection with the
Second Stage Closing and the Third Stage Closing. 6.6 Buy/Sell Procedure. (a)
Offering Notice. Upon the occurrence of Deadlock, either the Purchaser or the
Parent (the "Notifying Shareholder") may, in its sole discretion, give Notice (a
"Buy/Sell Notice") to the other (the "Responding Shareholder") of its intent to
rely on this Section 6.6(a) and to invoke the Buy/Sell procedure set forth in
this Section 6.6 (the "Buy/Sell Offer"); provided, however, that neither the
Purchaser nor the Parent shall be required to provide a Buy/Sell Notice in the
event of Deadlock. (b) The Option. Upon the determination of the fair market
value of the aggregate issued and outstanding COMCOR-TV Equity Securities
pursuant to Section 6.7 (the "Buy/Sell Price"), the Notifying Shareholder shall
have the option to either (x) sell to the Responding Shareholder or its
Affiliate for cash its COMCOR-TV Equity Securities at a price equal to the
Buy/Sell Price multiplied by the Percentage Interest of the Notifying
Shareholder; or (y) purchase the COMCOR-TV Equity Securities held by the
Responding Shareholder for cash at a price equal to the Buy/Sell Price
multiplied by the Percentage Interest of the Responding Shareholder (such option
to sell or purchase herein referred to as the "Buy/Sell Option"). (c) Procedure.
The Responding Shareholder or its Affiliate in its sole discretion shall either
accept or reject the Buy/Sell Offer. If the Responding Shareholder or its
Affiliate accepts the Buy/Sell Offer, then it shall, on a date (the "Response
Date") not more than five (5) Business Days after the date of the determination
of the Buy/Sell Price (the "Determination Date"), as instructed by the Notifying
Shareholder, either buy the Notifying Shareholder's COMCOR-TV Equity Securities
or sell the Responding Shareholder's COMCOR-TV Equity Securities in accordance
with Section 6.6(b). (d) Buy/Sell Closings. (i) The closing of any sale of
COMCOR-TV Equity Securities pursuant to this Section 6.6 (the "Buy/Sell
Closing") shall be held at the offices of Akin, Gump, Strauss, Hauer & Feld,
L.L.P., 7 Ulitsa Gasheka, Moscow Russia, unless otherwise mutually agreed upon,
on a mutually acceptable date not more than fifteen (15) days after the date of
the determination of the Buy/Sell Price. The purchase price payable for such
COMCOR-TV Equity Securities shall be paid at the Buy/Sell Closing by wire
transfer of immediately available funds in U.S. dollars at the direction of the
selling COMCOR-TV Shareholder. If it is unlawful for such transaction to be made
using U.S. dollars, then the ruble equivalent using the CBR or other quoted rate
at the time of the transfer shall be used. (ii) During the period between the
date the Buy/Sell Notice is delivered by the Responding Shareholder and the date
of the Buy/Sell Closing, and except as otherwise provided in this Agreement, the
Board will nonetheless continue to make all decisions on behalf of COMCOR-TV
with respect to its business, except that COMCOR-TV shall not enter into any new
Contracts during such period (except to the extent previously entered into by
COMCOR-TV). (e) Indemnification. The selling COMCOR-TV Shareholder shall
indemnify and hold the purchasing COMCOR-TV Shareholder free and harmless from
and against all Losses and expense that COMCOR-TV or the purchasing COMCOR-TV
Shareholder may incur as a result of acts, omissions, losses or liabilities
arising or occurring in connection with COMCOR-TV or the business operations
thereof prior to the date of the Buy/Sell Closing to the extent that any such
Loss or expense would have been payable by the selling COMCOR-TV Shareholder had
it not sold its COMCOR-TV Equity Securities at the Buy/Sell Closing. The
purchasing COMCOR-TV Shareholder shall indemnify and hold the selling COMCOR-TV
Shareholder free and harmless from and against all Losses and expense that the
selling COMCOR-TV Shareholder may incur as a result of acts, omissions, losses
or liabilities arising or occurring in connection with COMCOR-TV or the business
operations thereof subsequent to the date of the Buy/Sell Closing, other than
for Loss or expense arising in connection with acts or omissions of the selling
COMCOR-TV Shareholder. (f) If pursuant to Section 6.6(c) the Responding
Shareholder decides not to exercise the Buy/Sell Option and does not buy the
Notifying Shareholder's COMCOR-TV Equity Securities or sell the Responding
Shareholder's COMCOR-TV Equity Securities, then the Parties hereto agree that
they shall use their best efforts to sell all COMCOR-TV Equity Securities to any
third party. 6.7 Appraisal Procedure. (a) Selection of Appraisers. Where the
purchase price for the Common Stock (and other COMCOR-TV Equity Securities, if
any) of any COMCOR-TV Shareholder being sold pursuant to this Article 6 is to be
determined by appraisal, then the Person entitled to request an appraisal
pursuant to this Agreement (such Person hereinafter referred to as the
"Submitting Party") shall make such request. The Submitting Party shall, in its
notice to the other Person (hereinafter referred to as the "Receiving Party"),
state that it elects to have the fair market value of its COMCOR-TV Equity
Securities (the "Appraised Value") determined by the appraisal procedure set
forth herein and the name of its appraiser. Within ten (10) days after its
receipt of such notice from the Submitting Party, the Receiving Party shall
notify the Submitting Party of the name of its appraiser. Upon appointment, the
two appraisers shall be sworn to determine faithfully and fairly the value. The
two appraisers shall afford the Submitting Party and the Receiving Party the
right to submit evidence with respect to the Appraised Value and shall, with all
possible speed, make their respective determinations in writing and give notice
thereof to the Submitting Party and the Receiving Party. If there is a variance
of less than five percent (5%) in the Appraised Values determined by the two
appraisers, the average of the values so determined shall be controlling and
shall be binding upon the Submitting Party and the Receiving Party. If there is
a variance of more than five percent (5%) between the Appraised Values
determined by the two appraisers, the appraisers shall, within ten (10) days
after both of the appraisers have made their determinations, appoint in writing
a third appraiser and give notice of such appointment to the Submitting Party
and the Receiving Party. A third appraiser shall be sworn to determine
faithfully and fairly, pursuant to the procedures set forth above, the question
at issue. The third appraiser's determination of Appraised Value shall be
controlling unless it is higher (or lower) than the higher (or lower)
determination of Appraised Value of the original two appraisers, in which case
such previous high (or low) determination shall be controlling and binding upon
the parties. The decision of the appraisers under this Section 6.7(a) shall be
final and binding upon the parties and shall be specifically enforceable in any
court or arbitral forum having jurisdiction. Any appraisers selected pursuant to
this Section 6.7(a) shall be employed by one of the largest five international
accounting firms and shall be experienced in the appraisal of companies
operating in the Russian Federation. (b) Costs of Appraisal. Each COMCOR-TV
Shareholder which appoints (or causes to be appointed) an appraiser shall bear
and pay the costs of such appraiser, and the costs of the third appraiser shall
be borne and paid equally by the Submitting Party and the Receiving Party. All
appraisal proceedings shall be held in Moscow, Russia. The Submitting Party and
the Receiving Party shall be given reasonable advance notice of the time and
place of any appraisal proceedings, and both shall have the right to be present,
heard and represented by counsel. The appraisers shall not have the power to add
to or subtract from or otherwise change the terms and provisions of this
Agreement, and their determination shall be consistent and in accordance with
the terms and provisions of this Agreement. The appraisers shall give prompt
notice of their decision to each party. 6.8 Change in Control (a) Change in
Control of Parent (i) Unless agreed to in writing by the Purchaser, the Parent
agrees, and shall use its best efforts to prevent, directly or indirectly, any
sale or transfer of Equity Securities of the Parent, if such would result in any
Person owning or possessing the power to vote or dispose of 30% or more of the
total Equity Securities or interests of the Parent. (ii) Should any sale or
transfer of Equity Securities of the Parent result in any Person owning or
possessing the power to vote or dispose of 30% or more of the total Equity
Securities or interests of the Parent, then the Parent shall be required, at the
option of the Purchaser, to purchase the full amount of Purchaser's COMCOR-TV
Equity Securities at a price equal to the fair market value as determined in
accordance with Section 6.7 hereof, plus a premium of 10%. (b) Change in Control
of Purchaser If within fifteen months of the First Stage Closing Date, any sale
or transfer of Equity Securities of the Purchaser results in Andersen Group
owning less than 50% of the total Equity Securities of the Purchaser without the
consent of the Parent, then the Purchaser shall be required to sell to Parent
its shares of Common Stock at the price at which it acquired such shares. 6.9
Purchaser's Tag-Along Right (a) Parent shall not, except as set forth below, in
any twelve (12) month period, directly or indirectly Transfer, in a single
transaction or series of related transactions, to any Person that is not an
Affiliate of Parent or group of such non-Affiliates (the "Tag Along Transferee")
COMCOR-TV Equity Securities representing, on a fully diluted basis, more than 5%
of the then issued and outstanding COMCOR-TV Equity Securities, unless the terms
and conditions of such Transfer shall include on a pro-rata basis an offer to
Purchaser at the same price and on the same terms (or terms as similar as
reasonably possible) as the offer made to Parent by the Tag Along Transferee
(the "Tag Along Right"). (b) Purchaser shall be entitled to sell to the Tag
Along Transferee the number of Purchaser's Shares held thereby equal to the
number derived as follows: X (A/B) where X equals the number of shares of Common
Stock (and other shares or units of COMCOR-TV Equity Securities, if any) then
owned or held by Purchaser, A equals the total number of shares of Common Stock
(and other shares or units of COMCOR-TV Equity Securities, if any) owned or held
by Parent to be transferred to the Tag Along Transferee and B equals the total
number of shares of Common Stock (and other shares or units of COMCOR-TV Equity
Securities, if any) owned or held by Parent. (c) Parent shall notify Purchaser
in writing promptly upon receipt of any proposed Transfer of COMCOR-TV Equity
Securities which is subject to the Tag Along Right. Such notice (the "Initial
Tag Along Notice") shall set forth: (i) the name, address telephone and
facsimile number of the Tag Along Transferee, the number of shares of COMCOR-TV
Equity Securities proposed to be Transferred thereto, (ii) the date on which
such Transfer is proposed to be effected, (iii) the proposed amount and form of
consideration and terms and conditions of payment offered by such Tag Along
Transferee (the "Tag Along Terms") and (iv) that such Tag Along Transferee has
been informed of the Tag Along Right. (d) The Tag Along Right may be exercised
by Purchaser by delivery of a written notice to Parent (the "Tag Along
Acceptance Notice") within 30 days following the receipt of the Initial Tag
Along Notice from Parent. The Tag Along Acceptance Notice shall state the number
of shares of Common Stock (or any such other COMCOR-TV Equity Securities, if
applicable) that Purchaser wishes to Transfer to the Tag Along Transferee. (e)
Upon delivery of a Tag Along Acceptance Notice, Purchaser shall be obligated to
sell to the Tag Along Transferee on the Tag Along Terms the number of shares of
Common Stock (and any such other COMCOR-TV Equity Securities, if applicable) set
forth in the Tag Along Acceptance Notice; provided, however, that neither
Purchaser nor Parent shall consummate the sale of any COMCOR-TV Equity
Securities offered by it if the Tag Along Transferee does not purchase all of
the COMCOR-TV Equity Securities from Parent and Purchaser that Parent and
Purchaser are entitled and desire to sell to the Tag Along Transferee pursuant
to the terms hereof. After expiration of the 30-day period referred to above
without acceptance by Purchaser, if the provisions of this Section 6.9 shall
have been complied with in all respects, Parent shall have the right for a sixty
(60) day period to transfer the appropriate COMCOR-TV Equity Securities Shares
to the Tag Along Transferee on the Tag Along Terms without further notice to
Purchaser. (f) At the closing of the transfer to any Tag Along Transferee (the
"Tag Along Closing"), the Tag Along Transferee shall remit to the Purchaser the
consideration for the total sales price of the COMCOR-TV Equity Securities of
Purchaser sold pursuant hereto, against delivery by Purchaser of an extract from
the register of COMCOR-TV's shareholders, dated the date of the Tag Along
Closing, showing that such Tag Along Transferee owns such number of COMCOR-TV
Equity Securities sold to the Tag Along Transferee pursuant to the exercise by
Purchaser of its Tag Along Right. ARTICLE VII: TERMINATION 7.1 Termination of
Agreement. (a) This Agreement shall automatically terminate upon the effective
date of the Initial Public Offering. (b) In addition, this Agreement may be
terminated at any time: (i) by mutual written consent of the Parties; (ii) by
any Party, if the First Stage Closing Date shall not have occurred on or before
April 30, 2000; or (iii) by any Party, which is not a Defaulting Party,
following any Event of Default; provided, however, that the arbitration tribunal
as specified in Section 9.2 shall have determined that such Event of Default has
occurred. 7.2 Procedure Upon Termination. In the event of termination pursuant
to Sections 7.1(b)(ii) or 7.1(b)(iii), the terminating Party immediately shall
give written notice thereof with an explanation as to the basis for termination
to the other Parties. Upon termination of this Agreement, all rights and
obligations hereunder shall terminate, except that the rights and obligations
under Articles VIII, IX and Section 10.6 shall survive such termination. If this
Agreement is terminated as provided herein: (a) each Party shall return all
documents, work papers and other materials of the other Party, whether obtained
before or after the execution hereof, to the party furnishing the same; and (b)
such termination shall not in any way limit, restrict or relieve any Party of
liability for any breach of this Agreement. ARTICLE VIII: INDEMNIFICATION 8.1
Indemnification by the Parent and COMCOR-TV. From and after the First Stage
Closing Date, the Parent and COMCOR-TV shall jointly and severally indemnify and
hold harmless each member of the Purchaser Group from and against any loss,
claim, damage, liability, expense (including, without limitation, court or
arbitration costs and reasonable attorneys' and accountants' fees and reasonable
costs of investigation incurred in connection with the defense of a claim) or
obligation (hereinafter referred to collectively as "Indemnifiable Damages")
which any member of the Purchaser Group may suffer or incur which are related
to, caused by or arise out of any breach or combination of breaches (whether
material or immaterial) of any representation, warranty, covenant or agreement
made by the Parent or COMCOR-TV in this Agreement; provided, however, that the
obligation of the Parent and COMCOR-TV to indemnify the Purchaser Group for such
Indemnifiable Damages shall be effective only if, and only to the extent that,
the aggregate amount of such Indemnifiable Damages exceeds US$100,000 or (or the
ruble equivalent of such amount). 8.2 Indemnification by the Purchaser. From and
after the First Stage Closing Date, the Purchaser shall indemnify and hold
harmless COMCOR-TV and each member of the Parent Group from and against any
Indemnifiable Damages which COMCOR-TV or any member of the Parent Group may
suffer or incur which are related to, caused by or arise out of any breach or
combination of breaches (whether material or immaterial) of any representation,
warranty, covenant or agreement made by the Purchaser in this Agreement;
provided, however, that the obligation of the Purchaser to indemnify COMCOR-TV
and the Parent Group for such Indemnifiable Damages shall be effective only if,
and only to the extent that, the aggregate amount of such Indemnifiable Damages
exceeds US$100,000. 8.3 Payment Adjustment. In the event that the Purchaser owns
any COMCOR-TV Equity Securities as of the time that any payment by COMCOR-TV on
a valid claim for indemnification hereunder is made, such payment shall take
into account that the Purchaser owns such COMCOR-TV Equity Securities and such
payment shall, therefore, be increased in accordance with the following formula:
COMCOR-TV Payment = Claim Amount/ (1 - Purchaser's Equity Percentage) where
"COMCOR-TV Payment" means the amount payable by COMCOR-TV on a valid claim for
indemnification hereunder, Claim Amount means the amount due on a valid claim
for indemnification hereunder, and Purchaser's "Equity Percentage" means the
Purchaser's Percentage Interest, expressed as a decimal. 8.4 Procedures for
Third Party Claims. Any Party making a claim for indemnification under this
Article VIII shall notify the indemnifying party or parties of the claim in
writing, describing the claim, the amount or estimated amount thereof, and the
basis therefor. The party or parties from whom indemnification is sought shall
respond to each such claim within 30 days of receipt of such notice, unless the
claim (a) relates to a lawsuit filed by a third party, in which case the
indemnifying party or parties shall respond at least ten (10) Business Days
prior to the date a responsive pleading is due, or (b) requires an immediate
response (as in the case of, among other things, a cease and desist demand by a
third party or a notice to show cause), in which case the indemnifying party or
parties shall respond in a prompt, timely manner. In the event a response to a
notice of claim involving a third party claim is not timely made, a party
seeking indemnification may respond to such third party claim as it sees fit and
seek indemnification thereafter pursuant to the terms hereof. The omission of
any party seeking indemnification to notify the indemnifying party or parties of
any such claim shall not relieve the indemnifying party from any liability in
respect of such claim which it may have to the indemnified party pursuant to
this Article VIII except, and only to the extent that, such failure shall result
in material prejudice to the indemnifying party or parties. ARTICLE IX:
GOVERNING LAW AND DISPUTE RESOLUTION 9.1 Governing Law and Language (a) This
Agreement is governed by, and shall be construed in accordance with, the laws of
the State of New York without regard to its conflicts of law principles;
provided, however, that (i) any agreements referred to herein which by their
terms are expressly governed by the laws of another jurisdiction shall be
governed by such laws, and (ii) any questions not provided for herein will be
governed by the laws of the State of New York or the Russian Federation as
determined by the arbitrators in accordance with Section 9.2 herein, except for
those questions which are governed exclusively by the laws of the Russian
Federation; provided, however, that nothing in this Section 9.1 will permit any
Party to bring an action, claim, demand, litigation or other legal proceeding
arising out of or relating to this Agreement in any tribunal other than as set
forth in Section 9.2 hereof, except to enforce an award issued by the
arbitrators in accordance with Section 9.2 hereof. (b) This Agreement shall be
written in both the English and Russian languages. Both the English and Russian
texts shall be legally binding texts; provided, however, that in the case of
inconsistency or issues of interpretation between the English and Russian text,
the English text shall control. 9.2 Arbitration Subject to Sections 6.2 and
Section 10.11, any dispute, controversy or claim between or amongst any or all
of the Parties arising out of or relating to this Agreement or the breach,
termination or validity hereof, shall be referred to and finally resolved by
arbitration in New York, New York, to the exclusion of all other procedures, in
accordance with the rules then in force of the American Arbitration Association
which are deemed to be incorporated by reference into this Article. There shall
be three (3) arbitrators appointed in accordance with said rules. Where the
rules of the American Arbitration Association do not provide for a particular
situation the arbitrators shall determine what course of action should be
followed. The English language shall be used throughout the arbitral proceeding.
Subject to Section 10.11, to the maximum extent permitted by applicable Law, the
Parties agree not to assert any rights to have any court rule on a question of
law affecting the arbitration, or to hear any appeal from or entertain any
judicial review of the arbitral award. 9.3 Agreement Not to Assert
Claims/Sovereign Immunity Each Party hereby agrees to the fullest extent
permitted by applicable law that it will not assert a claim with regard to: (a)
any objection that it may have now or in the future to the laying of the venue
of any action, suit, arbitral proceeding or proceeding in any court referred to
in this Article, including forum non-convenience; (b) any claim that any such
action, suit or proceeding has been brought in an inconvenient forum; (c) any
and all rights to demand a trial by jury in any such action, suit or proceeding
brought pursuant to this article; and (d) with respect to all disputes, claims,
controversies and all other matters of any nature whatsoever that may arise
under or in connection with this Agreement or any of the other Principal
Agreements and any other document or instrument contemplated hereby or thereby,
all immunity it may otherwise have as a sovereign, quasi-sovereign or
state-owned entity (or similar entity) from any and all proceedings (whether
legal, equitable, arbitral, administrative or otherwise), attachment of assets,
and enforceability of judicial or arbitral awards. ARTICLE X: MISCELLANEOUS 10.1
Survival of Representations, Warranties and Covenants. All representations,
warranties, covenants and agreements made by any party to this Agreement or
pursuant hereto shall survive each of the Closings hereunder and any
investigation made by or on behalf of any party hereto. 10.2 Further Assurances
From time to time after the date hereof, as and when reasonably requested by the
other party, the requested party shall execute and deliver as promptly as
reasonably possible, at such requesting party's expense, all such documents and
instruments and shall take, or cause to be taken, all such further action as the
parties may reasonably deem necessary to carry out the intent and purpose of
this Agreement and to consummate the transactions contemplated thereby. 10.3
Entire Agreement This Agreement, together with exhibits and schedules hereto,
and the other Principal Agreements, constitutes the entire agreement among the
Parties relating to the subject matter hereof and supersedes all prior
agreements or undertakings, written or oral. 10.4 Construction. The Parties have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties and no
presumption or burden of proof shall arise favoring or disfavoring any Party by
virtue of the authorship of any of the provisions of this Agreement. 10.5
Notices All notices, statements, consents, approvals, requests, demands or other
communications required or permitted to be given under this Agreement shall be
in Russian and English and in writing, duly executed by an authorized officer or
agent, and shall be delivered personally, transmitted by facsimile (provided a
confirming copy is dispatched by overnight courier service on the day the
facsimile is transmitted), or sent via DHL or other reputable overnight courier
service to the following addresses: If to the Purchaser: Treglos Investments
Limited 36 Vyronos Avenue, Nicosia, Cyprus facsimile: 357-2-670-040 Attention:
Francis E. Baker, President With a copy to: Treglos Investments Limited c/o
Andersen Group, Inc. 515 Madison Ave., 20th Fl., New York, NY 10022 facsimile:
1-212-888-5620 Attention: Francis E. Baker If to the Parent: OAO MOSKOVSKAYA
TELECOMMUNIKATSIONNAYA CORPORATSIYA Ul. Neglinnaya, 17/2, Moscow, Russia 103051
facsimile: 7-095-200-1804 Attention: Yuri I. Pripachkin With a copy to: ZAO
JURTELEKOM Kotlenicheskaya naberezhnaya, 17, #438, Moscow, Russian 109240
facsimile: 7-095-200-1804 Attention: Sergei N. Golovin If to COMCOR-TV: ZAO
COMCOR-TV Ul. Neglinnaya, 17/2 7-095-200-1804 Attention: General Director With a
copy to: ZAO JURTELEKOM Kotlenicheskaya naberezhnaya, 17, #438, Moscow, Russian
109240 facsimile: 7-095-200-1804 Attention: Sergei N. Golovin Any notice,
statement, consent, approval, request, demand or other communication shall be
effective upon receipt; provided, however, that in the case of any communication
sent by facsimile transmission, such communication shall be deemed to have been
effective upon the transmission thereof. For purposes of this Section 10.5,
delivery to the "copy to" individual or entity shall not constitute delivery to
the respective Party. 10.6 Confidentiality Each Party hereto will hold, and will
use its best efforts to cause its Affiliates and their respective
representatives to hold, in strict confidence from any Person (other than any
such Affiliate or representative), unless (a) compelled to disclose by judicial
or administrative process (including, without limitation, in connection with
obtaining the necessary approvals of this Agreement and the transactions
contemplated hereby of Governmental or Regulatory Authorities) or by other
requirements of Law (including, without limitation, in connection with any
requirements of applicable securities Laws or requirements of any Governmental
or Regulatory Authorities in connection with any Initial Public Offering) or (b)
disclosed in an Action or Proceeding brought by a party hereto in pursuit of its
rights or in the exercise of its remedies hereunder, all documents and
information concerning the other party hereto or any of its Affiliates and
Andersen Group furnished to it by such other party or such other party's
representatives in connection with this Agreement or the transactions
contemplated hereby, except to the extent that such documents or information can
be shown to have been (i) previously known by the party receiving such documents
or information, (ii) in the public domain (either prior to or after the
furnishing of such documents or information hereunder) through no fault of such
receiving party or (iii) later acquired by the receiving party from another
source if the receiving party is not aware that such source is under an
obligation to another party hereto to keep such documents and information
confidential; provided that following the First Stage Closing Date, the
foregoing restrictions will not apply to the Purchaser's use of documents and
information solely concerning the Parent and COMCOR-TV in accordance with the
terms of this Agreement furnished by the Parent and COMCOR-TV hereunder. 10.7
Severability In the event that any one or more of the provisions contained in
this Agreement shall be declared invalid or unenforceable by the final and
unappealable order, decree or judgment of any court or arbitral tribunal, this
Agreement shall be construed as if such provision had not been inserted,
provided that the economic basis of this Agreement is not fundamentally altered.
10.8 Waiver A waiver by any Party of any of its rights under any provision of
this Agreement shall not constitute a waiver of any other breach of that or any
other provision of this Agreement. Any waiver to be effective must be in
compliance with applicable Law and evidenced by a writing signed by the Party
against whom the waiver is sought to be enforced. 10.9 Assignment No Party may
assign this Agreement or any of its rights, interests or obligations hereunder
without the prior written consent of the other party. 10.10 Counterparts This
Agreement may be executed in separate counterparts each of which shall be an
original and all of which taken together shall constitute one and the same
agreement. 10.11 Remedies The Parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that the Parties shall, subject to applicable law, have the right
to injunctive relief, in addition to all of its rights and remedies at law or in
equity, to enforce the provisions of this Agreement. Except in relation to
Section 2.7 and Article VIII, nothing contained in this Agreement shall be
construed to confer upon any Person who is not a signatory hereto any rights or
benefits, as a third party beneficiary or otherwise. 10.12 Expenses Except as
otherwise set forth in this Agreement, each of the Parties shall pay its
respective expenses incurred in connection with this Agreement, the other
Principal Agreements and the other documents prepared in connection herewith and
therewith and the transactions contemplated hereby and thereby. 10.13 Amendment
This Agreement may not be amended, altered, amended and restated, supplemented
or otherwise modified except by an instrument in writing signed on behalf of all
of the Parties hereto by their authorized representatives. [REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
71 091068.9001 MOSCOW 8903
v42 IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of each of the Parties, as of the date first above
written. OAO MOSKOVSKAYA TELECOMMUNIKATSIONNAYA CORPORATSIYA By: /s/ Aram
Grigoryan Name: Aram Grigoryan Title: General Director By: /s/ Natalia
Vassilieva Name: Natalia Vassilieva Title: Chief Accountant ZAO COMCOR-TV By:
/s/ Yuri Pripachkin Name: Yuri Pripachkin Title: General Director By: /s/
Svetlana Scinitstina Name: Svetlana Scinitstina Title: Chief Accountant TREGLOS
INVESTMENTS LIMITED By: /s/ Frances E. Baker Name: Frances E. Baker Title:
President 091068.9001 MOSCOW 12068 v1 091068.9001 MOSCOW 12068 v1 AGREEMENT
REGARDING CLOSING DATE This Agreement Regarding Closing Date (this Agreement)
is made as of the 15th day of February, 2000, by and among Treglos Investments
Limited, OAO Moskovskaya Telecommunikatsionnaya Corporatsiya, and ZAO COMCOR-TV.
WHEREAS, the parties hereto have entered into that certain General Agreement,
dated as of January 31, 2000 (the General Agreement); and WHEREAS, the
transactions at the First Stage Closing (as defined in the General Agreement)
contemplated by the General Agreement are expected to be completed on March 14,
2000; and WHEREAS, the parties hereto pursuant to the General Agreement wish to
designate March 14, 2000 as the First Stage Closing Date (as defined in the
General Agreement). NOW, THEREFORE, in consideration of the above premises and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows: The General
Agreement is deemed to be incorporated by reference into this Agreement.
Notwithstanding anything to the contrary contained in the General Agreement, the
parties hereto designate March 14, 2000 as the First Stage Closing Date. Except
as expressly amended hereby, the General Agreement shall remain in full force
and effect. This Agreement may be executed in separate counterparts each of
which shall be an original and all of which taken together shall constitute one
and the same agreement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE
PAGE FOLLOWS]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of each of the Parties, as of the date first above
written. OAO MOSKOVSKAYA TELECOMMUNIKATSIONNAYA CORPORATSIYA By: /s/ Aram
Grigoryan Name: Aram Grigoryan Title: General Director By: /s/ Natalia
Vassilieva Name: Natalia Vassilieva Title: Chief Accountant ZAO COMCOR-TV By:
/s/ Yuri Pripachkin Name: Yuri Pripachkin Title: General Director By: /s/
Svetlana Scinitstina Name: Svetlana Scinitstina Title: Chief Accountant TREGLOS
INVESTMENTS LIMITED By: /s/ Frances E. Baker Name: Frances E. Baker Title:
President
Exhibit 2
This Agreement Regarding Closing Date (this "Agreement") is made as of the
15th day of February, 2000, by and among Treglos Investments Limited, OAO
Moskovskaya Telecommunikatsionnaya Corporatsiya, and ZAO COMCOR-TV.
AGREEMENT REGARDING CLOSING DATE
This Agreement Regarding Closing Date (this "Agreement") is made as of the
15th day of February, 2000, by and among Treglos Investments Limited, OAO
Moskovskaya Telecommunikatsionnaya Corporatsiya, and ZAO COMCOR-TV.
WHEREAS, the parties hereto have entered into that certain General
Agreement, dated as of January 31, 2000 (the "General Agreement"); and
WHEREAS, the transactions at the First Stage Closing (as defined in the
General Agreement) contemplated by the General Agreement are expected to be
completed on March 14, 2000; and
WHEREAS, the parties hereto pursuant to the General Agreement wish to
designate March 14, 2000 as the First Stage Closing Date (as defined in the
General Agreement).
NOW, THEREFORE, in consideration of the above premises and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
The General Agreement is deemed to be incorporated by reference into this
Agreement.
Notwithstanding anything to the contrary contained in the General
Agreement, the parties hereto designate March 14, 2000 as the First Stage
Closing Date.
Except as expressly amended hereby, the General Agreement shall remain in
full force and effect.
This Agreement may be executed in separate counterparts each of which shall
be an original and all of which taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of each of the Parties, as of the date first above
written.
OAO MOSKOVSKAYA TELECOMMUNIKATSIONNAYA CORPORATSIYA
By: /s/ Aram Grigoryan
Name: Aram Grigoryan
Title: General Director
By: /s/ Natalia Vassilieva
Name: Natalia Vassilieva
Title: Chief Accountant
ZAO COMCOR-TV
By: /s/ Yuri Pripachkin
Name: Yuri Pripachkin
Title: General Director
By: /s/ Svetlana Scinitstina
Name: Svetlana Scinitstina
Title: Chief Accountant
TREGLOS INVESTMENTS LIMITED
By: /s/ Francis E. Baker
Name: Francis E. Baker
Title: President
