Document:

exv10w1

 

Exhibit 10.1

SUPPLEMENTAL INDENTURE

     This SUPPLEMENTAL INDENTURE, dated as of March 15, 2007 (this “Supplemental
Indenture”), is among Sterling Chemicals, Inc., a Delaware corporation (the “Company”),
Sterling Chemicals Energy, Inc., a Delaware corporation (“Energy,” as guarantor), and U.S.
Bank National Association (as successor to National City Bank), as trustee under the Indenture
referred to below (the “Trustee”) and as collateral agent under the Security Documents
(“Collateral Agent”).

     WHEREAS, the Company, Energy and the Trustee have heretofore executed and delivered an
Indenture, dated as of December 19, 2002 (the “Indenture”), providing for the issuance of
10% Senior Secured Notes due 2007 of the Company (the “Notes”);

     WHEREAS, the Company, Energy, the Trustee and the Collateral Agent are parties to the Security
Agreement dated as of December 19, 2002 (the “Security Agreement”);

     WHEREAS, the Company and Thomas S. Henderson, as trustee for the benefit of the Trustee, are
parties to the Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing
dated as of December 19, 2002 (the “Deed of Trust and Security Agreement”);

     WHEREAS, the only Subsidiary Guarantor is Energy;

     WHEREAS, none of the Notes are owned by the Company or any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the Company;

     WHEREAS, the Company has issued under the Indenture, and there remains outstanding (within the
meaning of Sections 2.08 and 2.09 of the Indenture) on the date of the execution and delivery of
this Supplemental Indenture, $100,579,000 in aggregate principal amount of the Notes;

     WHEREAS, pursuant to Section 9.02 of the Indenture, the Holders of at least a majority in
principal amount of the then outstanding (within the meaning of Sections 2.08 and 2.09 of the
Indenture) Notes have consented in writing to the substance of this Supplemental Indenture,
evidence of which that is satisfactory to the Trustee having been filed therewith;

     WHEREAS, pursuant to Section 9.02 of the Indenture, the Company has delivered a request to the
Trustee, accompanied by a resolution of its Board of Directors authorizing the execution of this
Supplemental Indenture, requesting the Trustee to join with the Company and the Subsidiary
Guarantors in the execution of this Supplemental Indenture;

     WHEREAS, pursuant to Sections 9.02 and 9.06 of the Indenture, the Board of Directors has
authorized and approved this Supplemental Indenture; and

     WHEREAS, pursuant to Sections 9.06 and 12.04 of the Indenture, the Trustee has received an
Officers’ Certificate and Opinion of Counsel.

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     NOW, THEREFORE, in consideration of the premises, each of the Company, Energy and the Trustee
and the Collateral Agent mutually covenant and agree for the equal and ratable benefit of the
respective Holders from time to time of the Notes as follows:

ARTICLE I

Definitions

     SECTION 1.1 Defined Terms. As used in this Supplemental Indenture, terms not defined in
this Supplemental Indenture that are defined in the Indenture are used herein as therein defined.
The words “herein,” “hereof” and “hereby” and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular
section hereof.

ARTICLE II

Amendments

     SECTION 2.1 Acceptance Time. The amendments to the Indenture, the Security Agreement and
the Deed of Trust and Security Agreement specified in this Article II shall become effective at
such time, and only at such time, as Notes are accepted for purchase by the Company pursuant to the
Company’s offer to purchase for cash the outstanding Notes upon the terms and conditions set forth
in the Offer to Purchase and Consent Solicitation Statement dated March 1, 2007 as it may be
amended or supplemented from time to time.

     SECTION 2.2 Definitions.

     (a) Section 1.01 of the Indenture is hereby amended by deleting in their entirety the
following defined terms: “Average Life”, “Capital Expenditures”, “Change of Control”, “Company
Budget”, “Consolidated Net Worth”, “Environmental Law”, “Fiscal Year”, “Net Available Cash”,
“Non-Convertible Capital Stock”, “Permitted Debt”, “Permitted Holders”, “Permitted Investment”,
“Permitted Transferee”, “Refinance”, “Refinancing Debt”, “Required Environmental Capital
Expenditure”, “Restricted Payment”, and “Tangible Property”..

     (b) Section 1.01 of the Indenture is hereby amended by adding the following definition to such
Section:

"Redemption Date”, when used with respect to any Notes to be redeemed, means the
date fixed for such redemption by or pursuant to this Indenture.

     (c) Section 1.01 of the Indenture is hereby amended by modifying the defined term “Permitted
Liens” by deleting “and” at the end of paragraph 22; deleting the period at the end of paragraph 23
and inserting “; and” at the end thereof; and inserting the following new paragraph 24:

"(24) any Lien on Pledged Collateral not prohibited by Article 4 of this
Indenture that is expressly subordinate to the Liens in favor of the
Collateral Agent under the Security Documents for the benefit of the Holders
and that does not otherwise deprive any of the Holders of the

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benefit of the Liens created by the Security Documents except in accordance
with the terms of the Security Documents.”

     SECTION 2.3 The Notes. Article 2 of the Indenture is hereby amended by adding the
following new Section 2.14:

“SECTION 2.14 LIMITATION ON AGGREGATE PRINCIPAL AMOUNT

     Notwithstanding Section 2.02 or any other provision of this Indenture
or any Note, from and after the time at which the Company has purchased all
Notes tendered pursuant to the Company Tender Offer and delivered such Notes
to the Trustee for cancellation (the “Cancellation Time”), (i) the aggregate
principal amount of Notes which may be at any time outstanding under this
Indenture shall be limited to the aggregate principal amount of Notes
outstanding immediately after the Cancellation Time and (ii) no additional
Additional Notes or Notes may be issued under this Indenture.

     For purposes of this Section 2.14, “Company Tender Offer” means the
Company’s offer to purchase all outstanding Notes in accordance with and
subject to the terms and conditions of that certain Offer to Purchase and
Consent Solicitation Statement dated March 1, 2007 of the Company.”

     SECTION 2.4 Redemption and Prepayment.

     (a) Section 3.08 (Mandatory Redemption) of the Indenture is hereby amended by deleting the
clause “, except as may be set forth in Sections 4.11, 4.15 and 4.16 hereof” from such Section.

     (b) Section 3.09 (Offer to Purchase by Application of Net Available Cash) of the Indenture is
hereby amended by deleting such Section in its entirety and inserting the words “[Intentionally
Omitted]” in lieu thereof.

     SECTION 2.5 Covenants.

     (a) Article 4 of the Indenture is hereby amended by deleting the following Sections therein in
their entirety and, in each case, inserting the words “[Intentionally Omitted]” in lieu thereof:
Section 4.03 (Reports), Section 4.04 (Compliance Certificate), Section 4.05 (Taxes), Section 4.06
(Stay, Extension and Usury Laws), Section 4.07 (Limitation on Dividends), Section 4.08 (Limitation
on Restricted Payments), Section 4.09 (Limitation on Restrictions on Distributions from
Subsidiaries), Section 4.10 (Limitation on Debt), Section 4.11 (Asset Sales), Section 4.12
(Limitation on Transactions with Affiliates), Section 4.13 (Liens), Section 4.14 (Corporate
Existence), Section 4.15 (Offer to Repurchase upon Change of Control), Section 4.16 (Sale of the
Texas City Facilities), Section 4.17 (Limitation on the Sale or Issuance of Capital Stock of
Subsidiaries), Section 4.19 (Additional Subsidiaries), Section 4.20 (Capital Expenditures) and
Section 4.21 (Excluded Subsidiaries).

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     (b) Section 4.01 (Payment of Notes) of the Indenture is hereby amended by (i) inserting “the
Trustee or any other” before “Paying Agent” in the second sentence of such Section and (ii) adding
the following as the new third sentence to the first paragraph:

“For purposes of Section 5.4 of the Security Agreement, Section 6 of any
Patent Security Agreement, Section 5.4.1 of the Deed of Trust and Security
Agreement and Section 10.09 of this Indenture and any other provision of
this Indenture, the Notes or any Security Document, all Obligations shall be
deemed and considered, and shall have been, paid in full at such time as all
principal, premium, if any, and interest shall be considered paid on all
outstanding Notes in accordance with the preceding sentence.”

     SECTION 2.6 Successors. Section 5.01 of the Indenture is hereby amended by deleting
the clauses (2) and (3); inserting “and” after the semicolon at the end of clause (1); and
replacing “(4)” with “(2).”

     SECTION 2.7 Events of Default. Section 6.01 of the Indenture is hereby amended by
deleting the text of clauses (4), (6), (7) and (8) of such Section in their entirety and, in each
case, inserting the words “[Intentionally Omitted]” in lieu thereof.

     SECTION 2.8 Covenant Defeasance. Section 8.03 of the Indenture is hereby amended by
deleting such Section in its entirety and inserting the words “[Intentionally Omitted]” in lieu
thereof.

     SECTION 2.9 Collateral and Security.

     (a) Section 10.01 of the Indenture is hereby amended by deleting the last sentence of such
Section.

     (b) The second sentence of Section 10.03(a) of the Indenture is hereby amended by (i)
replacing “met, and stating whether or not such release is in connection with an Asset Disposition
or a Sale of the Texas City Facilities (at the sole cost and expense of the Company)” with
“satisfied”; and (ii) deleting “; provided, that if such sale, conveyance or disposition
constitutes an Asset Disposition or a Sale of the Texas City Facilities, the Company shall comply
with Section 4.11 or Section 4.16, as applicable”.

     (c) Section 10.03(d) of the Indenture is hereby amended by inserting “(unless compliance with
TIA Section 314(d) is no longer required),” before “TIA Section 314(d)” in the second sentence of
such Section.

     (d) Section 10.04 of the Indenture is hereby amended by (i) inserting “, if any,” after “(i)
all documents” and (ii) inserting “or that no documents are so required” after “TIA Section 314(d)”
in the first sentence of such Section.

     (e) Section 10.05 of the Indenture is hereby amended by (i) deleting “10.02 and”; (ii)
inserting “and 10.04” after “Sections 10.03”; and (iii) replacing “10.02(b)” with “10.04” in the
first sentence of such Section.

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     SECTION 2.10 Satisfaction and Discharge of the Indenture.

     (a) Article 13 of the Indenture is hereby amended by adding the following as Section 13.14 of
the Indenture:

     “SECTION 13.14 SATISFACTION AND DISCHARGE OF THE INDENTURE

     This Indenture shall upon request of the Company cease to be of further effect (except as to
any surviving rights expressly provided for in this Indenture), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when:

     (1) either

     (a) all Notes theretofore authenticated and delivered (other than Notes which have been
destroyed, lost or stolen and which have been replaced as provided in Section 2.07 of this
Indenture) have been delivered to the Trustee for cancellation; or

     (b) all such Notes not theretofore delivered to the Trustee for cancellation

     (i) have become due and payable, or

     (ii) will become due and payable at their Stated Maturity within one year, or

     (iii) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the Trustee in
the name, and at the expense, of the Company,

and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Trustee for cancellation, for principal (and premium,
if any) and interest to the date of such deposit (in the case of Notes which have
become due and payable) or to the Stated Maturity or Redemption Date, as the case
may be;

(2) the Company has paid or caused to be paid all other sums payable hereunder by the
Company or any Subsidiary Guarantor; and

(3) the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.

     Notwithstanding the satisfaction and discharge of this Indenture, (i) so long (and only so
long) as the Liens pursuant to the Security Documents have not been released as to any Pledged
Collateral in accordance with Section 10.09 or otherwise as provided herein, the obligations of the
parties to such Security Documents and the Liens pursuant thereto in respect of such Pledged

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Collateral, (ii) the obligations of the Company to the Trustee under Section 7.07 of this
Indenture and (iii) if money shall have been deposited with the Trustee pursuant to subclause (b)
of clause (1) of this Section 13.14, the obligations of the Trustee under the following paragraph
of this Indenture shall survive.

     All money deposited with the Trustee pursuant to this Section 13.14 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the Trustee.”

     SECTION 2.11 Form of Note.

     (a) Paragraph 6 of the “Back of Note” set forth in Exhibit A of the Indenture is hereby
amended by deleting the text of such Paragraph in its entirety and replacing such text with
"[Intentionally Omitted]” in lieu thereof:

     (b) Paragraph 7 of the “Back of Note” set forth in Exhibit A of the Indenture is hereby
amended by deleting the text of such Paragraph in its entirety and inserting the words
"[Intentionally Omitted]” in lieu thereof.

     (c) Paragraph 12 of Exhibit A of the “Back of Note” set forth in the Indenture is hereby
amended by deleting the text of clauses (iv), (vi), (vii), (viii) and (ix) of such Paragraph in
their entirety and, in each case, inserting the words “Intentionally Omitted” in lieu thereof.

     SECTION 2.12 Security Agreement. Section 5.4(c) of the Security Agreement is hereby
amended by (i) inserting “(x)” before “all documentation required” and (ii) inserting “or (y) TIA
Section 314(d) does not require furnishing any documentation to the Trustee” at the end of such
Section.

     SECTION 2.13 Deed of Trust and Security Agreement. Section 5.4.1 of the Deed of Trust and
Security Agreement is hereby amended by (i) inserting “either (x)” after “If” and before “the
Secured Obligations” in such Section and (ii) inserting “or (y) the Security Agreement has
terminated in accordance with Section 5.4 thereof,” before “then on such date” in such Section.

     SECTION 2.14 References. To the extent any clause, definition, Paragraph, Section or
Article of the Indenture has been deleted from the Indenture pursuant to Article II of this
Supplemental Indenture, any reference in any provision of the Indenture, any Note, any Subsidiary
Guarantee or any Security Document to such clause, definition, Paragraph, Section or Article shall
be disregarded in, and be deemed eliminated from, such provisions.

ARTICLE III

Miscellaneous

     SECTION 3.1 Representations and Warranties. The Company hereby represents and
warrants to the Trustee and the Collateral Agent that, immediately prior to the execution and

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delivery of this Supplemental Indenture by each of the parties hereto on the date hereof, none
of the Notes are owned by the Company, or any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.

     SECTION 3.2 Successors and Assigns. The Trustee hereby represents and warrants to the
Company and Energy that (i) in accordance with Section 7.09 of the Indenture, the Trustee is the
successor to National City Bank as the original Trustee under the Indenture and (ii) in accordance
with Section 5.3(b) of the Security Agreement, the Collateral Agent is the duly appointed successor
to National City Bank as the original Collateral Agent under the Security Agreement. All
agreements of the Company and Energy in this Supplemental Indenture shall bind their respective
successors. All agreements of the Trustee in this Supplemental Indenture shall bind its successor.
All agreements of the Collateral Agent in this Supplemental Indenture shall bind its successor.

     SECTION 3.3 Governing Law. This Supplemental Indenture shall be governed by, and construed
in accordance with, the laws of the State of New York.

     SECTION 3.4 Severability Clause. In case any provision in this Supplemental Indenture
shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby and such provision shall
be ineffective only to the extent of such invalidity, illegality or unenforceability.

     SECTION 3.5 Ratification of Indenture; Supplemental Indenture Part of Indenture. Except as
expressly amended hereby, the Indenture and the Notes issued thereunder, the Security Agreement and
the Deed of Trust and Security Agreement are in all respects ratified and confirmed and all the
terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental
Indenture is executed as and shall constitute an indenture supplemental to the Indenture and an
amendment to each of the Security Agreement and the Deed of Trust and Security Agreement and shall
be construed in connection with and form a part of the Indenture, the Security Agreement and the
Deed of Trust and Security Agreement for all purposes, and every Holder of Notes heretofore or
hereafter authenticated and delivered shall be bound hereby. The Trustee makes no representation
or warranty as to the validity or sufficiency of this Supplemental Indenture.

     SECTION 3.6 Counterparts. The parties hereto may sign one or more copies of this
Supplemental Indenture in counterparts, all of which together shall constitute one and the same
agreement. This Supplemental Indenture shall become effective and constitute a binding agreement
between the parties hereto when counterparts hereof shall have been executed and delivered by each
of the parties hereto.

     SECTION 3.7 Headings. The headings of the Articles and the sections herein are for
convenience of reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of date first above written.

	 	 	 	 	 
	 	STERLING CHEMICALS, INC.

 	 
	 	By:  	/s/ Richard K. Crump
 	 
	 	 	Name:  	Richard K. Crump 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	STERLING CHEMICALS ENERGY, INC.

 	 
	 	By:  	/s/ Paul G. Vanderhoven
 	 
	 	 	Name:  	Paul G. Vanderhoven 	 
	 	 	Title:  	Senior Vice President -- Finance and Chief

Financial Officer 	 
	 

[Signature Page]

 

 

	 	 	 	 	 
	 	U. S. BANK NATIONAL ASSOCIATION (as
successor to National City Bank), as Trustee and as
Collateral Agent

 	 
	 	By:  	/s/ T. Scott Fesler
 	 
	 	 	Name:  	T. Scott Fesler 	 
	 	 	Title:  	Vice President 	 
	 

[Signature Page]exv10w14

 

Exhibit 10.14

EMPLOYMENT AGREEMENT No. 81

This Employment Agreement (“Agreement”) is entered into on January 3, 2002 by and between EDN
Sovintel LLC (“Company”), with its registered address at 25 Dubovaya Roshcha St., Moscow 127427,
Russian Federation, and citizen Ilya Alexandrovich Smirnov, residing at 7 Pribrezhnyi Projezd Bldg.
1 Apt. 100, Moscow 125445, holder of the passport series XXIX-MIO No. 616362, issued by the 14th
Militia Precinct, Moscow, on July 12, 1983 (“Employee”).

The Parties hereto hereby agree as follows:

     1. Subject of the Agreement

     1.1 The Company hereby hires the Employee and the Employee hereby agrees to perform work in
the capacity of Director of the Legal Department of the Company’s Administrative Division, on the
terms and conditions and in compliance with the requirements set forth herein.

     1.2 As an employee of the Company the Employee shall perform the duties assigned to him and
shall be vested with the authorities and powers stipulated by this Agreement and designated from
time to time by the 1st Deputy General Director of the Company. During the period of his employment
the Employee shall report to the 1st Deputy General Director of the Company and the higher-level
executives.

     1.3 This Agreement is a agreement of full-time employment.

     1.4 The Employee’s place of work shall be the Company’s Moscow office in the Russian
Federation. Should the Employee be required to fulfill assignments for the Company outside Moscow,
the Employee hereby agrees to perform such assignments.

     2. Term of the Agreement

     This Agreement is concluded for an indefinite period of time.

     3. Payment Procedure

     3.1 On a regular basis, the Company shall pay the Employee his salary together with other
kinds of remuneration in accordance with the policies of the Company.

     3.2 The Employee’s salary, as determined in accordance with the staffing plan of the
Company and the Employee’s position, shall be an equivalent of 4,600 US dollars per month. The
salary shall be paid to the Employee in accordance with the “Regulation on the Amounts, Systems and
Forms of Labor Remuneration of Staff Employees of EDN Sovintel LLC” and shall consist of a fixed
part (basic pay) and a variable part.

 

 

     3.3 As a rule, the salary shall be calculated for payment as of the last calendar date of the
current month. In some cases, provided by the labor laws, salary calculation may be shifted to an
earlier date of the current calendar month, as required for timely payment of the salary. In this
case, the salary calculation date shall be established by an internal regulation. The Company shall
withhold taxes from the aforementioned sum and from the other income paid by the Company, at the
rate and in the procedure established by the applicable Russian laws.

     3.3 This provision does not release the Employee from the responsibility established by the
applicable Russian laws for the payment of taxes on the income from all other sources which are not
connected with the labor relationships between the Company and the Employee.

     3.4 The salary and other remuneration stipulated by this Agreement shall be paid to the
Employee not later than the 10th day of the month which follows the month for which the payment is
to be made.

     4. Bonuses

     The Company may pay the Employee bonuses and other kinds of remuneration depending on the
results of his work and successful activity of the Company, subject to the “Regulation on the
Systems, Amounts and Forms of Bonuses Paid to Employees of the Commercial Division of EDN Sovintel
LLC.”

     5. Benefits and Allowances

     5.1 The Employee shall be entitled to additional benefits and allowances, both individual and
collective, established by the Company, including health insurance, life insurance and disability
insurance for the periods of business trips, in accordance with the general policies of the
Company.

     5.2 The Employee shall, in a timely manner, inform the Company of additional grounds for
receiving benefits, which are provided for by the applicable laws of the Russian Federation.

     5.3 The Employee shall be entitled to receive information about benefits and allowances from
the HR specialist of the Company.

     6. Payment of Expenses

     The Company shall compensate the Employee for all reasonably incurred actual expenses
incidental to the performance of his official duties, provided such expenses have been agreed upon
in advance with the 1st Deputy General Director of the Company. The expenses shall be paid if the
Employee presents proper confirming documents in the procedure established by the Company.

     7. Obligations of the Employee

     The Employee hereby assumes the following obligations:

 

 

     7.1 The Employee shall perform his duties and carry out the assignments of the Company
promptly and efficiently, using his skills and experience to the utmost. He shall always abide by
the instructions and the internal policies of the Company and shall use his best efforts to protect
the interests and reputation of the Company.

     7.2 The Employee shall handle with care the materials, office equipment, communication devices
and other tangible assets given to him by the Company. The Employee shall bear financial liability
both for direct real damages suffered by the Company though his fault and for damages suffered by
the Company because of the damages paid by the Employee to other persons.

     7.3 The Company shall, at all times, keep the Employee advised, and shall have him sign for
being advised, of the requirements of the Safety Engineering Instructions. The Employee shall, upon
the Company’s request, regularly undergo the instruction in this subject and shall not violate the
safety engineering instructions in force in the Company. For breaching the provisions of these
instructions the Employee shall bear responsibility under the applicable laws of the Russian
Federation.

     7.4 The Employee shall not, without a prior written consent of the Company, either directly or
through any third persons:

(i) during the term of this Agreement and for two years after its termination,
encourage or compel any person, who is an employee of the Company or of any of the
related companies, to terminate or refuse to prolong the employment agreement of this
person with the Company or any company related to the Company, or

(ii) during the term of this Agreement and for two years after its termination,
encourage or compel any natural person or legal entity, who/which is a customer or
supplier of the Company or of any of the related companies, to break off or refuse to
prolong his/its relations with the Company or its branch.

     7.5 If the nature of the Employee’s work is such that it is connected with the acceptance,
transfer, safekeeping and movement of tangible assets, the Employee agrees to sign a document
prepared by the administration of the Company, which establishes the full responsibility of the
Employee for the assets entrusted to him.

     7.6 Upon quitting his job the Employee shall not take away from the Company any materials or
any concepts developed while he was employed by the Company.

     7.7 The Employee shall promptly advise the Company of all items of intellectual property
created by him during the term of this Agreement. By signing this Agreement the Employee agrees
that all exclusive rights to the use of any inventions, useful models, industrial designs, domain
names, web pages and software in the source and object codes and in other forms, created in
connection with the performance by the Employee of the duties set forth in this Agreement (“Items
of

 

 

Intellectual Property”), and all related documentation shall be owned by the Company. The
Employee also agrees that the Company shall have exclusive rights to the use of the Items of
Intellectual Property and to their publication in any manner it sees fit. The Company shall have
the right to file, in its name, patent applications, applications for all inventions, useful models
and industrial designs created by the Employee in the course of the performance of his duties. The
Employee shall also assist the Company in the protection of the rights both when these rights are
infringed by third persons and when any claims or lawsuits are filed against the Company in
connection with the use by the Company of these rights.

     7.8 The Employee represents and warrants that Annex 2 to this Agreement is a full list of all
Items of Intellectual Property, patented by the Employee, all trademarks and domain names,
registered by the Employee, and all Items of Intellectual Property, trademarks and domain names,
for which applications for registration have been filed by the Employee. Annex 2 must also contain
the list of all copyrighted materials which are related to the sphere of the Company’s activity.

     8. Obligations of the Employer

     8.1 The Employer shall provide employment for the Employee in accordance with the labor
function stipulated by the Agreement.

     8.2 The Employer shall provide the Employee with the equipment, tools, technical documentation
and other means required by the Employee to perform his duties under this Agreement.

     8.3 The Employer shall ensure the working conditions complying with the requirements of the
applicable laws.

     8.4 The Employer shall, promptly and fully, pay the Employee the salary and other kinds of
remuneration stipulated by this Agreement.

     8.5 The Employer shall bear other obligations in accordance with the Labor Code of the Russian
Federation.

     9. Working Time and Leisure 

     9.1 The normal established duration of the working time is forty (40) hours per week, with a
five-day working week.

     9.2. The Employee shall be entitled to an annual leave twenty four (24) working days long as
calculated on the basis of a six-day working week. The Employee hereby agrees that the schedule of
leaves shall be agreed upon with the 1st Deputy General Director of the Company or with other
Company executives in accordance with the policies of the Company.

     9.3 The schedule of leaves of each division of the Company is approved by the General Director
of the Company or by the person who acts for him.

     10. Temporary Incapacity

 

 

     10.1 In the event of temporary incapacity (sickness, accident, etc.) the Employee shall, if
possible, immediately report this fact to his direct superior or the other authorized official of
the Employer.

     10.2 The Employee shall submit a document confirming his temporary incapacity (sickness,
accident, etc.) to the Employer within three (3) days of the date when the period of such temporary
incapacity ends.

     11. Non-Disclosure of Confidential Information

     During the term of this Agreement and for three years after its expiration, the Employee shall
not disclose, directly or indirectly, to any person, firm, corporation, partnership, association or
any other legal entity any confidential information about the financial position,
suppliers, customers, sources and methods of obtaining new orders or modus operandi of the Company,
the related and subsidiary companies, with the exception of the information which is in the public
domain or subject to disclosure under law.

     12. Real Compliance

     The Employee admits that his failure to comply with the provisions of Sections 11 and 13 of
this Agreement will harm the Company and, therefore, that the Company has the right to enforce real
compliance with these provisions through a court. This right supplements other rights of the
Company to the protection and to compensation for the damages caused by the Employee. The Company
reserves the right to claim damages and other economic compensation for the failure of the Employee
to comply with the obligations and provisions set forth in Sections 11 and 13.

     13. Delegation

     The Parties to this Agreement shall not delegate their obligations to any third persons. The
Company may transfer the Employee to another enterprise, organization or institution in accordance
with the rules established by the Labor Code of the Russian Federation.

     14. Notices

     All notices shall be addressed as follows:

if to the Company:

A.Ya. Vinogradov, General Director

25 Dubovaya Roshcha St., Moscow 127427

Tel.: 258 78 00;

if to the Employee:

I.A. Smirnov

7 Pribrezhnyi Projezd Bldg. 1 Apt. 100, Moscow 125445

Tel.: 283 50 37

 

 

The Parties shall advise each other in writing about changes in their addresses.

     15. Entire Agreement

     15.1 This Agreement and the Annexes hereto constitute the entire employment agreement between
the Parties and shall supersede all previous agreements, written or oral, between the Parties. All
modifications of the essential terms and conditions of this Agreement shall be in the form of
Addenda signed by the Parties.

     15.2 All amendments and modifications hereto shall form integral parts of the Agreement.

     16. Termination of the Agreement

     This Agreement may be terminated on the grounds stipulated by the Labor Code of the Russian
Federation.

     17. Payments Made Upon Termination of the Agreement

     17.1 When this Agreement is terminated by one of the Parties hereto the Company shall pay the
Employee the whole salary due to him up to the date of termination and the cash compensation for
all leaves that were not used by him..

     17.2 If the Company terminates the Agreement on the grounds stipulated by Paras. 3 and 6,
Article 29 and Paras. 2 and 6, Article 33 of the Labor Code of the Russian Federation, the Company
shall pay the Employee a severance pay in the amount of not less than an average two-week salary
and the cash compensation for all leaves that has not been used.

     17.3 If, during the term of this Agreement, the Employee has not used all or a part of the
sums to which he was entitled in accordance with the regulations on the benefits and allowances
(such as health insurance), the Employee shall not receive any compensation in the form of cash or
any other form when this Agreement is terminated.

     18. Binding Force of the Agreement

     This Agreement may be binding upon legal successors of the Parties if this is stipulated by
the Russian Federation laws..

     19. Choice of Law

     This Agreement shall be governed by the Russian Federation laws. In the cases which are not
regulated by this Agreement the Parties shall abide by the applicable laws of the Russian
Federation.

     20. Labor Disputes

 

 

     20.1 The Parties shall settle all disputes or lawsuits connected with this Agreement by means
of negotiation. If the dispute is initiated by the Employee, the negotiations shall be held with
the head of the division and the CEO or the acting CEO of the Company, with the participation of
the HR and legal services of the Company.

     20.2 If the Parties fail to come to terms, the dispute shall be resolved in accordance with
the applicable laws of the Russian Federation.

     21. Miscellaneous

     If the Employee or any member of his family becomes associated with any government structure
or institution, the Employee shall immediately advise the Company of this fact.

     IN WITNESS WHEREOF, the Parties have executed this Agreement in two counterparts as of the
date first referenced above.

	 	 	 
	On behalf of the Company:

	 	Employee:
	 
	 	 
	(Signature)

	 	(Signature)
	 
	 	 
	A.Ya. Vinogradov

	 	I.A. Smirnov
	General Director
	 	 

 

 

Annex 1

to Employment Agreement Dated January 3, 2002

The Parties hereby confirm that the documents listed below form an integral part of this Agreement:

1. “Regulation on the Amounts, Systems and Forms of Labor Remuneration of Staff Employees of EDN
Sovintel LLC.”

2. “Regulation on the Systems, Amounts and Forms of Bonuses Paid to Employees of the Commercial
Division of EDN Sovintel LLC.”

	 	 	 
	On behalf of the Company:

	 	Employee:
	 
	 	 
	(Signature)

	 	(Signature)
	 
	 	 
	A.Ya. Vinogradov

	 	I.A. Smirnov
	General Director
	 	 

 

 

Annex 2

to Employment Agreement Dated January 3, 2002

List of Items of Intellectual Property Owned by the Employee

 

 

AMENDMENT TO THE EMPLOYMENT AGREEMENT No. 81, 03.01.2002

			
	 	 	 
	Moscow
	 	06.12.2006

This
Amendment to the Employment Agreement No 81, 03.01.2002 (“Amendment”) is entered into on
December 6, 2006 by and between LLC “EDN Sovintel” (“Company”), Tax Payer ID Number 7717036194,
represented by the acting Head of HR department Mrs Novikova O.E., acting under the Power of
attorney
No M 213/09/05 from 20.09.2005, with its registered address at 1 Kozhevnichesky projezd, Moscow
115114, Russian Federation, and citizen Ilya Alexandrovich Smirnov, residing at 29 Michurinsky Av.
Bldg. 1 Apt. 108, Moscow 117607, holder of the passport series 45 04 No. 545115, issued by the
Ramenki Militia Precinct, Moscow, on 03.12.2002 (“Employee”).

The Parties hereto hereby agree as follows:

1. To establish the following salary calculation to the Employee starting September 1, 2006:
1.1 The Company pays to the Employee monthly salary according to the Employment Agreement in
Russian Rubles by internal rate 28 (twenty eight) rubles 70 kopeek for 1 (one) US Dollar.
1.2 As a rule, the salary shall be calculated for payment as of the last calendar date of the
current month. In some cases, salary calculation may be shifted to an earlier date of the current
calendar month, as required for timely payment of the salary. In this case, the salary calculation
date shall be established by an internal regulation. The Company shall withhold taxes from the
aforementioned sum and from the other income paid by the Company, at the rate and in the procedure
established by the applicable Russian laws.

2. Statements 1.1, 1.2 replace contract terms, which have been agreed earlier by the parties, and
are an integral part of the Employee’s employment agreement.

3. The other statements of the Employment agreement remain unchanged.

4. This Amendment comes into effect from 01.09.2006

5. This Amendment is made up in two copies — one for each party.

	 	 	 
	On behalf of the Company:

	 	Employee:
	 
	 	 
	                                        (Signature)

	 	                                        (Signature)
	O.E.Novikova

	 	I.A. Smirnov
	Head of HR Department

	 	Registered address:
	LLC EDN “Sovintel”

	 	117607, Moscow, Michurinsky Av., 29,
	115114, Moscow, Kozhevnichesky

	 	building 1, apt.108
	projezd, 1, phone 258 78 00

	 	Phone 683 50 37

 

 

AMENDMENT TO THE EMPLOYMENT AGREEMENT No. 81, 03.01.2002

			
	 	 	 
	Moscow
	 	25.01.2007

This Amendment to the Employment Agreement 1 81, 03.01.2002 (“Amendment”) is entered into on
January 25, 2007 by and between LLC “EDN Sovintel” (“Company”), Tax Payer ID Number 7717036194,
represented by the acting Head of HR department Mrs Novikova O.E., acting under the Power of
attorney
1 M 213/09/05 from 20.09.2005, with its registered address at 1 Kozhevnichesky projezd, Moscow
115114, Russian Federation, and citizen Ilya Alexandrovich Smirnov, residing at 29 Michurinsky Av.
Bldg. 1 Apt. 108, Moscow 117607, holder of the passport series 45 04 No. 545115, issued by the
Ramenki Militia Precinct, Moscow, on 03.12.2002 (“Employee”).

The Parties hereto hereby agree as follows:

1. Due to the Employee transfer to another position, amend the Employment Agreement with regard to
the position and business unit as follows:
“The Company hereby transfers the Employee and the Employee hereby agrees to perform work in the
capacity of Vice-President, acting General Counsel and Corporate Secretary, Head of Legal business
unit, Legal department, on the terms and conditions and in compliance with the requirements of the
Employment Agreement.

As Vice-President, acting General Counsel and Corporate Secretary, Head of Legal business unit the
Employee shall perform the duties assigned to him and shall be vested the authorities and powers
stipulated by the Employment Agreement. During the period of his employment the Employee shall
report to General Director, Executive department and the higher-level executives”.

2. Amend the Employment Agreement with regard to salary statements as follows:

“The Company pays the Employee monthly salary which is an equivalent of 10170.00 (ten thousand and
one hundred seventy dollars 00 cents) USD in Russian Rubles by internal rate 28 (twenty eight)
rubles 70 kopeek for 1 (one) US Dollar.

As a rule, the salary shall be calculated for payment as of the last calendar date of the current
month. In some cases, salary calculation may be shifted to an earlier date of the current calendar
month, as required for timely payment of the salary. In this case, the salary calculation date
shall be established by an internal regulation. The Company shall withhold taxes from the
aforementioned sum and from the other income paid by the Company, at the rate and in the procedure
established by the applicable Russian laws”.

3. The other statements of the Employment agreement remain unchanged.

4. This Amendment comes into effect from 01.02.2007

5. This Amendment is made up in two copies — one for each party.

 

 

	 	 	 
	On behalf of the Company:

	 	Employee:
	 
	 	 
	                                        (Signature)

	 	                                        (Signature)
	O.E.Novikova

	 	I.A. Smirnov
	Head of HR Department

	 	Registered address:
	LLC EDN “Sovintel”

	 	117607, Moscow, Michurinsky Av., 29,
	115114, Moscow, Kozhevnichesky

	 	building 1, apt.108
	projezd, 1, phone 258 78 00

	 	Phone 683 50 37

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