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EXHIBIT F
SHARE PURCHASE AGREEMENT
dated as of May 30, 2001
between
ECO TELECOM LIMITED
and
OVERTURE LIMITED
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND INTERPRETATION 1
1.01 Definitions 1
1.02 Interpretation 11
ARTICLE II PURCHASE OF SHARES 12
2.01 Sale and Purchase of Shares 12
2.02 Payment of the Purchase Price 13
2.03 Closing 14
2.04 Actions at Closing 14
ARTICLE III REPRESENTATIONS AND WARRANTIES 15
3.01 Representations and Warranties of Purchaser 15
3.02 Representations and Warranties of Seller 17
ARTICLE IV COVENANTS OF SELLER 19
4.01 Exclusivity; No Solicitations 20
4.02 Fulfillment of Conditions 20
4.03 Disclosure of Certain Information 20
4.04 Restrictions on Transfer 20
ARTICLE V COVENANTS OF PURCHASER 21
5.01 Payment of Gain on Disposal 21
5.02 Fulfillment of Conditions 21
5.03 Common Stock Pledge and Call Option 21
5.04 Compliance with Supplemental Agreements 22
ARTICLE VI CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATIONS 22
6.01 Representations and Warranties 23
6.02 Performance 23
6.03 Conditions Precedent to Company Closing 23
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6.04 Orders and Laws 23
6.05 Consents and Approvals 23
6.06 Secretary's Certificate 24
6.07 Shares 24
6.08 Legal Opinions 24
6.09 Termination of Original Preferred Stock Call Option 24
6.10 Surety 24
ARTICLE VII CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS 25
7.01 Representations and Warranties 25
7.02 Conditions Precedent to Company Closing 25
7.03 Orders and Laws 25
7.04 Consents and Approvals 25
7.05 Secretary's Certificate 26
7.06 Legal Opinions 26
7.07 Additional Agreements 26
7.08 Sberbank Restructuring 26
7.09 Registration Documents 26
7.10 Personal Account with the ▇▇▇▇▇▇▇▇▇ ▇▇
ARTICLE VIII MISCELLANEOUS 27
8.01 Indemnification 27
8.02 Termination 27
8.03 Effect of Termination 28
8.04 Entire Agreement 29
8.05 Waiver 29
8.06 No Third Party Beneficiary 29
8.07 Assignment 29
8.08 Expenses 30
8.09 Notice 30
8.10 Public Announcements 32
8.11 Confidentiality 32
8.12 Counterparts 33
8.13 Amendment 33
8.14 Arbitration, Consent to Jurisdiction 33
8.15 Survival 34
8.16 Severability 35
8.17 Governing Law 35
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Schedule 1 Shares
Schedule 2 Form of Power of Attorney
Schedule 3A Form of Preferred Share Transfer Order
Schedule 3B Form of Common Share Transfer Order
Schedule 3.01(d)(ii) Purchaser's Consents and Approvals
Schedule 3.02(d)(ii) Seller's Consents and Approvals
Schedule 4 Form of Endorsement
Schedule 5 Form of Guarantee
Schedule 6.07 List of Documents Required from the Seller
Schedule 6.08(a)(i) Form of Seller's New York law opinion
Schedule 6.08(a)(ii) Form of Seller's Russian law opinion
Schedule 6.08(b) Form of Seller's Bermuda law opinion
Schedule 7.06(a) Form of Purchaser's New York law opinion
Schedule 7.06(b) Form of Purchaser's Russian law opinion
Schedule 7.06(c) Form of Purchaser's Gibraltar law opinion
Exhibit A Form of Call Option Agreement
Exhibit B Form of Pledge Agreement
Exhibit C Forms of Supplemental Agreements
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THIS SHARE PURCHASE AGREEMENT dated as of May 30, 2001 is entered into by
and between (i) ECO TELECOM LIMITED, a company organized and existing under the
laws of Gibraltar with its registered office at: 10/8 International Commercial
Centre, Casemates Square, Gibraltar (the "Purchaser"), and (ii) OVERTURE
LIMITED, an exempted limited company organized under the laws of Bermuda
(Registration No. 30335) with its registered office at: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ 08 Bermuda (the "Seller").
WITNESSETH
WHEREAS, the Seller wishes to sell (i) Six Million Four Hundred Twenty Six
Thousand Six Hundred (6,426,600) issued shares of preferred stock, par value
0.005 rubles per share (collectively, the "Preferred Shares"), of Open Joint
Stock Company "Vimpel-Communications", an open joint stock company organized and
existing under the laws of the Russian Federation (the "Company"), which are
specified in Schedule 1 and (ii) Sixteen Thousand Three Hundred Sixty Two
(16,362) shares of common stock, par value 0.005 rubles per share (collectively,
"Common Shares") of the Company, which are specified in Schedule 1 (the
Preferred Shares and Common Shares shall be collectively referred to as
"Shares"); and
WHEREAS, the Purchaser wishes to purchase the Shares from the Seller, in
each case, on and subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:
ARTICLE I DEFINITIONS AND INTERPRETATION
1.01 DEFINITIONS
As used herein, the following terms shall have the following meanings:
"Actions or Proceedings" shall mean any action, suit, proceeding or
arbitration commenced, brought conducted or heard by or before any Governmental
or Regulatory Authority.
"Additional Agreements" shall mean collectively (i) the Pledge Agreement
and (ii) the Call Option Agreement.
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"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, including, if such Person is an individual, any
relative or spouse of such Person, or any relative of such spouse of such
Person, any one of whom has the same home as such Person, and also including any
trust or estate for which any such Person or Persons specified herein, directly
or indirectly, serves as a trustee, executor or in a similar capacity
(including, without limitation, any protector or settlor of a trust or in which
such Person or Persons specified herein, directly or indirectly, has a
substantial beneficial interest) and any Person who is controlled by any such
trust or estate. As used in this definition, "control" (including, with its
correlative meanings, "controlled by" and "under common control with") shall
mean, with respect to any Person, the 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 such Person.
"Agreement" shall mean this Share Purchase Agreement and the Schedules and
Exhibits hereto.
"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.
"Bee Line Fund" shall mean "Bee Line" Non-Profit Fund (known in Russian
and formerly known in English as the Fund for Non-Commercial Programs "Bee
Line"), a nonprofit organization organized and existing under the Laws of the
Russian Federation.
"Board" shall mean the Board of Directors of the Company.
"Business Day" shall mean a day other than a Saturday, a Sunday or any day
on which banks located in Moscow, Russia, London, England, Oslo, Norway or New
York, New York are authorized or obliged to close.
"Call Option Agreement" shall mean the Call Option Agreement, in the form
attached as Exhibit A hereto, by and between the Purchaser and the Seller to be
executed and delivered on and as of the Closing Date with respect to a call
option on the Preferred Stock as provided therein.
"Change of Control" shall mean, with respect to any Party or any
Controlling Person of such Party, (a) the sale or other disposition of all or
substantially all of
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such Party's or such Controlling Person's assets, in one or a series of related
transactions, to any Person or Persons (other than a Controlling Person of such
Party or any Controlled Affiliate or Controlled Affiliates of such Controlling
Person), (b) the sale or other disposition of more than fifty percent (50%) of
the securities having ordinary voting power for the election of directors or
other governing body of such Party or Controlling Person, in one or a series of
related transactions, to any Person or Persons (other than a Controlling Person
of such Party or any Controlled Affiliate or Controlled Affiliates of such
Controlling Person), (c) the merger or consolidation of such Party or
Controlling Person with or into another Person or the merger of another Person
into such Party or Controlling Person with the effect that any Person or Persons
other than the existing shareholders of such Party or Controlling Person prior
to such transaction own or control, directly or indirectly, more than fifty
(50%) of the securities having ordinary voting power for the election of
directors or other governing body of the Person surviving such merger, or the
Person resulting from such consolidation or (d) the liquidation or dissolution
of such Party or Controlling Person; provided, however, that in the event an
individual is a Party or a Controlling Person, the death of such individual and
the transfer, assignment or other disposal taking place at the time of such
individual's death as a result of legal succession, inheritance by will or any
other arrangements made by such individual prior to his (her) death will not be
considered a Change of Control; and, provided, further, that the rights of any
legal entity that is a Party and a Controlled Affiliate of an individual at the
time of such individual's death shall not be affected as a result of such
individual's death irrespective of the Change of Control over such Party
resulting from the arrangements referred to in the preceding proviso.
"Charter" shall mean the most recent version of the charter (ustav) of the
Company, as registered with the MRC on August 23, 1996, and as amended on
October 3, 1996 (approved by the Board on September 30, 1996), December 17, 1996
(approved by the Board on November 20, 1996), December 17, 1996 (approved by the
GMS on November 29, 1996), September 3, 1998 (approved by the GMS on June 16,
1998), February 22, 1999 (approved by the GMS on January 29, 1999), July 7, 1999
(approved by the GMS on June 11, 1999), July 22, 1999 (approved by the Board on
July 6, 1999), July 31, 2000 (approved by the GMS on June 30, 2000) and
September 20, 2000 (approved by the Board on August 24, 2000).
"Closing" shall have the meaning specified in Section 2.03.
"Closing Date" shall mean the date on which the Company Closing is
scheduled to occur.
"Common Shares" shall have the meaning specified in the first recital
hereto.
"Common Share Transfer Order" shall mean a transfer under (peredatochnoye
rasporyazhenie) substantially in the form of Schedule 3B.
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"Common Stock" shall mean the shares of common stock of the Company, as
defined in Section 6.1 of the Charter.
"Common Stock Additional Agreements" shall mean collectively (i) the
Common Stock Pledge Agreement and (ii) the Common Stock Call Option Agreement.
"Common Stock Call Option Agreement" shall mean the Call Option Agreement
in respect of certain shares of Common Stock, in the form attached as Exhibit A
to the Call Option Agreement, by and between the Purchaser and the Seller to be
executed and delivered on and as of the Pledge and Call Option Closing Date.
"Common Stock Pledge Agreement" shall mean the Pledge Agreement in respect
of certain shares of Common Stock, in the form attached as Exhibit A to the
Pledge Agreement, by and between the Purchaser and the Seller to be executed and
delivered on and as of the Pledge and Call Option Closing Date.
"Common Stock Purchase Agreement" shall mean the Share Purchase Agreement
dated as of May 30, 2001 between ▇▇. ▇▇▇▇▇ and the Purchaser.
"Company" shall have the meaning specified in the first recital hereto.
"Company Closing" shall mean the Closing under (and as defined in) the
Primary Agreement.
"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.
"Controlled Affiliate" shall mean, with respect to any Person, any
Affiliate of the such Person in which such Person owns or controls, directly or
indirectly, more than fifty percent (50%) of the securities having ordinary
voting power for the election of directors or other governing body thereof or
more than fifty percent (50%) of the partnership or other ownership interests
therein (other than as a limited partner).
"Controlling Person" shall mean, with respect to any Person, any other
Person which owns or controls, directly or indirectly, more than fifty percent
(50%) of the securities having ordinary voting power for the election of
directors or other governing body of such first named Person or more than fifty
percent (50%) of the partnership or other ownership interests therein (other
than as a limited partner of the such first named Person).
"Controlled Transferee" shall have the meaning specified in Section 2.02.
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"▇▇. ▇▇▇▇▇" shall mean ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, a Russian citizen,
holding a passport XXIV-MIO No.520067, issued on 4 January 1980 by 126 Moscow
Militia Department, residing at:269, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇.
"Eco Telecom Contribution Default" shall have the meaning specified in the
Primary Agreement.
"Endorsement" shall mean an endorsement executed by the Company or its
designee in connection with the assignment to the Company or its designee of the
Purchaser's obligations under this Agreement, substantially in the form of
Schedule 4 hereto.
"Equity Interest" in a Person shall mean any share of stock of such
Person, or any partnership share or other ownership interest in such Person.
"Event of Default" shall mean any of the following events: (A) the failure
of the Purchaser to pay the full amount of the Purchase Price on or before
DECEMBER 25, 2003 at the place at and in the currency in which it is expressed
to be payable, (B) the failure of the Purchaser to comply with its obligations
under Section 3.1(d) of the Common Stock Pledge Agreement, (C) the taking of, or
the failure to take action, which results in (i) the Pledge and/or the Pledge
Agreement or the Common Stock Pledge Agreement, as the case may be, being held
invalid by any court of law in any competent jurisdiction (provided that such
invalidity is not the result of (x) the Seller's breach or failure to perform
any representation, warranty, covenant or agreement contained in, or (y) the
termination of the Pledge pursuant to the terms of, the Pledge Agreement or the
Common Stock Pledge Agreement, as the case may be) or (ii) the Pledge ceasing to
be validly registered in the registry of shareholders of the Company maintained
by the Registrar (provided that the foregoing is not the result of (x) the
Seller's breach or failure to perform any representation, warranty, covenant or
agreement contained in or (y) the termination of the Pledge pursuant to the
terms of, the Pledge Agreement or the Common Stock Pledge Agreement, as the case
may be), or (D) the Pledge and Call Option Closing Date shall not have occurred
within ten (10) Business Days following the Report Registration Date.
"FCSM" shall mean the Federal Commission for the Securities Market of the
Russian Federation (Federalnaya komissiya po rynku tsennikh bumag Rossiiskoy
Federatsii or "FKTsB Rossii"), or any successor thereto, including any
applicable territorial agent thereof.
"Final Date" shall mean November 30, 2001, or such later date as may be
determined in accordance with the Primary Agreement but in no event later than
December 31, 2001.
"Gain on Disposal" shall have the meaning specified in Section 5.01.
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"Glavsotkom" shall mean Glavsotkom LLC, a limited liability company
organized and existing under the Laws of the Russian Federation.
"GMS" shall mean the general meeting of the shareholders (obschee
sobraniye aktsionerov) of the Company, as defined in Article 9 of the Charter.
"Governmental or Regulatory Authority" shall mean any court, tribunal,
arbitrator, legislature, government, ministry, committee, inspectorate,
authority, agency, commission, official or other competent authority of any
country or any state, as well as any county, city or other political subdivision
of any of the foregoing.
"Guarantee" shall mean the Guarantee in the form of Schedule 5 hereto to
be executed and delivered by the Company upon the assignment of the Purchaser's
obligations hereunder to the Company's designee pursuant to an Endorsement by
the Company's designee.
"Indemnified Party" shall have the meaning specified in Section 8.01.
"Indemnifying Party" shall have the meaning specified in Section 8.01.
"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 ▇▇▇▇ 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 debentures, notes and other evidences of
indebtedness, stocks, securities (including rights to purchase and securities
convertible into or exchangeable for other securities), interests in joint
ventures, general and limited partnerships, and other Persons, mortgage loans
and other investment or portfolio assets owned of record or beneficially by a
Person.
"KBI" shall mean Open Joint Stock Company "KB Impuls", an open joint stock
company organized and existing under the Laws of the Russian Federation.
"KB Impuls-TV" shall mean Closed Joint Stock Company "KB Impuls-TV", a
closed joint stock company organized and existing under the Laws of the Russian
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Federation.
"Laws" shall mean all laws, decrees, resolutions, instructions, statutes,
rules, regulations, acts, ordinances and other pronouncements having the effect
of law or regulation of any country or any state, as well as any county, city or
other political subdivision of any of the foregoing.
"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.
"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).
"MAMP" shall mean the Ministry for Anti-Monopoly Policy and Support for
Entrepreneurship of the Russian Federation (Ministerstvo Rossiyskoi Federatsii
po Antimonopolnoy politike i podderzhke predprinimatelstva), or any successor
thereto, including any applicable territorial agent thereof.
"MRC" shall mean the Moscow Registration Chamber (Moskovskaya
registratsionnaya palata), or any successor thereto.
"Option" shall mean, with respect to any Person, any security, right,
subscription, warrant, option, phantom stock right or other Contract that gives
the right to (a) purchase or otherwise receive or be issued any Equity Interest
in such Person or any security of any kind convertible into or exchangeable or
exercisable for any Equity Interest in such Person or (b) receive or exercise
any benefits or rights similar to any rights enjoyed by or accruing to the
holder of any Equity Interest in such Person, including any rights to
participate in the equity or income of such Person or to participate in or
direct the election of any directors or officers of such Person or the manner in
which any Equity Interests in such Person are voted.
"Order" shall mean any writ, judgment, decree, injunction or similar order
of any Governmental or Regulatory Authority.
"Original Preferred Stock Call Option" shall mean the call option on the
Preferred Stock currently owned, of record or beneficially, by ▇▇. ▇▇▇▇▇ in
accordance with the Zimin Preferred Stock Agreements.
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"Party" shall mean either of the Purchaser or the Seller and the plural
thereof shall refer to each of them collectively.
"Payment Date" shall mean the date on which the Purchase Price is or
becomes due pursuant to Section 2.02, whether by acceleration or otherwise.
"Person" shall mean any natural person, corporation, general partnership,
simple partnership, limited partnership, limited liability partnership, limited
liability company, proprietorship, other business organization, trust, union,
association or Governmental or Regulatory Authority, whether incorporated or
unincorporated.
"Pledge" shall mean the pledge created pursuant to the Pledge Agreement or
the Common Stock Pledge Agreement, as the case may be, with the understanding
that the pledge under the Pledge Agreement shall not be required to continue and
shall cease to exist following the creation of a valid pledge under the Common
Stock Pledge Agreement.
"Pledge Agreement" shall mean the Pledge Agreement, in the form attached
as Exhibit B hereto, by and between the Purchaser and the Seller to be executed
and delivered on and as of the Closing Date with respect to the pledge of the
Preferred Stock.
"Pledge and Call Option Closing Date" shall mean the date on which (i) the
Purchaser and the Seller shall have executed and delivered the Common Stock
Pledge Agreement and the Common Stock Call Option Agreement and (ii) the pledge
of the shares of Common Stock under the Common Stock Pledge Agreement has been
registered in the register of shareholders of the Company maintained by the
Registrar.
"Power of Attorney" shall mean the power of attorney, issued by the
Purchaser authorizing the Seller to receive an extract from the Purchaser's
account in the register of shareholders of the Company, as maintained by the
Registrar, on the Closing Date, substantially in the form of Schedule 2 hereto.
"Preferred Share Transfer Order" shall mean a transfer order
(peredatochnoye rasporyazhenie) substantially in the form of Schedule 3A.
"Preferred Shares" shall have the meaning specified in the first recital
hereto.
"Preferred Stock" shall mean, collectively, the shares of preferred stock
of the Company, as defined in Section 6.1 of the Charter.
"Preferred Stock Call Option" shall mean the call option on the Preferred
Stock owed by the Purchaser to the Company in accordance with the Primary
Agreement.
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"Primary Agreement" shall mean the Primary Agreement dated as of May 30,
2001 between and among Telenor East Invest AS, the Purchaser and the Company.
"Principal Agreements" shall have the meaning specified in the Primary
Agreement.
"Purchase Price" shall have the meaning specified in Section 2.01.
"Purchaser" shall have the meaning specified in the preamble hereto.
"Registrar" shall mean Closed Joint Stock Company National Registry
Company (Natsionalnaya Registratsionnaya Kompaniya), a closed joint stock
company organized under the laws of the Russian Federation and the duly
appointed shareholder registrar of the Company, or any successor in such
capacity thereto.
"Report Registration Date" shall mean the date on which the Purchaser
receives from the Company a notarized copy of the report on the results of the
issuance of shares pursuant to the Primary Agreement, registered with the FCSM.
"Restricted Person" shall mean any Person, or any Controlling Person or
Controlled Affiliate of any such Person or Controlling Person, that is engaged
in operating and/or managing (A) any means of mass communication (sredstvo
massovoi informatsii), including, without limitation, agencies of mass
communication, press agencies, newspapers, magazines, radio and television
broadcasting companies and any other print or on-line/internet media, and (B)
companies engaging in, or which own or control a telecommunications license for,
cellular mobile telecommunications business (including GSM, GPRS, UMTS and 3G)
in the Russian Federation, but not including (i) fixed wireless extensions (Last
Mile Digital Subscriber (LMDS), Bluetooth, wireless local area network (wireless
LAN) and any form of Digital Subcriber Line (xDSL) services), (ii) fixed
wireless access, (iii) satellite mobile services, (iv) mobile Internet portals
and (v) similar businesses.
"Russian Rubles" shall mean the lawful currency of the Russian Federation.
"Sberbank" shall mean The Sberegatelny Bank of the Russian Federation, a
commercial bank organized as an open joint stock company and existing under the
Laws of the Russian Federation.
"Sberbank Loan Agreements" shall mean, collectively, the Non-Revolving
Credit Facility Agreement No. 9063 dated April 28, 2000 between Sberbank and
the Company and Amendment Agreement No. 1 to Non-Revolving Credit Facility
Agreement No. 9063 dated July 20, 2000 between Sberbank and the Company.
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"Sberbank Pledge Agreements" shall mean, collectively, the Agreement on
Pledge of Securities No. 3-9063/2-06 dated January 18, 2001 between Sberbank and
Bee Line Fund, the Agreement on Pledge of Securities No. 3-9063/2-05 dated
January 18, 2001 between Sberbank and Bee Line Fund, the Agreement on Pledge of
Securities No. 3-9063/2-04 dated July 21, 2000 between Sberbank and Bee Line
Fund, the Additional Agreement No. 1 to the Agreement on Pledge of Securities
No. 3-9063/2-04 between Sberbank and Bee Line Fund dated January 18, 2001, the
Agreement on Pledge of Securities No. 3-9063/2-03 dated July 21, 2000 between
Sberbank and Glavsotkom, the Securities Pledge Termination Agreement No.
3-9063/2-03 dated January 18, 2001 between Sberbank and Glavsotkom, the
Agreement on Pledge of Securities No. 3-9063/2-02 dated July 3, 2000 between
Sberbank and Bee Line Fund, the Agreement on Pledge of Securities No.
3-9063/2-01 dated July 3, 2000 between Sberbank and Glavsotkom, the Securities
Pledge Termination Agreement No. 3-9063/2-01 dated January 18, 2001 between
Sberbank and Glavsotkom and the Agreement on Pledge of Property No. 3-9063/1
dated May 18, 2000 between Sberbank and KBI.
"Securities Act" shall mean the United States Securities Act of 1933, as
amended, and the rules and regulations of the SEC thereunder.
"Seller" shall have the meaning specified in the preamble hereto.
"Share Pledge Order" shall mean a pledge order (zalogovoye rasporyazhenie)
substantially in the form attached as Schedule 3 to the Pledge Agreement.
"Shares" shall have the meaning specified in the first recital hereto.
"Sota-100" shall mean Closed Joint Stock Company "Sota-100", a closed
joint stock company organized and existing under the Laws of the Russian
Federation.
"Supplemental Agreements" shall mean, collectively, the Supplemental
Agreements, substantially in the forms attached as Exhibit C hereto, to be
entered into as of the Closing in respect of the Zimin Preferred Stock
Agreements.
"Surety" shall mean the Surety Agreement, dated as of May 30, 2001, by and
between ▇▇. ▇▇▇▇▇ and the Purchaser.
"Telenor" shall mean Telenor East Invest AS, a corporation organized and
existing under the Laws of Norway.
"Telenor Share Purchase Agreement" shall mean the Share Purchase Agreement
dated as of May 30, 2001 between Telenor and the Seller.
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"Termination Agreement" shall mean the Termination Agreement dated as
of the date hereof between and among Telenor, Telenor Communication AS, the
Company, VimpelCom Finance B.V., VimpelCom B.V., VC Limited, ▇▇. ▇▇▇▇▇,
Glavsotkom and the Bee Line Fund.
"Transfer" shall mean any direct or indirect sale, exchange, transfer
(including, without limitation, any transfer by gift or operation of law, or any
transfer of an economic interest in any derivative security of any security),
assignment, distribution or other disposition, or issuance or creation of any
option or any voting proxy, voting trust or other voting agreement in respect of
any Person or instrument (including, without limitation, any of the securities),
whether in a single transaction or a series of related transactions, including
without limitation, (a) the direct or indirect enforcement or foreclosure of any
Lien or (b) any Change of Control; provided, that nationalization,
expropriation, confiscation, bankruptcy (other than any bankruptcy initiated by
the petition of any Party, or any Affiliate of any such Party), arrest or any
similar Action or Proceeding initiated by any Governmental or Regulatory
Authority in respect of any Person or instrument shall not constitute a
Transfer.
"US Dollars" and "US$" shall mean the lawful currency of the United
States.
"year" shall mean each twelve-month period commencing on the Closing
Date.
"Zimin Preferred Stock Agreements" shall mean, collectively, this
Agreement, the Share Purchase Agreement No. N-I-1 dated April 13, 1998 between
Closed Joint Stock Company "Sota-100" and ▇▇. ▇▇▇▇▇, the Share Purchase
Agreement No. N-I-2 dated April 13, 1998 between Closed Joint Stock Company
"Sota-100" and ▇▇. ▇▇▇▇▇, the Share Purchase Agreement No. EA-I-1 dated April
13, 1998 between Closed Joint Stock Company "KB Impuls-TV" and ▇▇. ▇▇▇▇▇, the
Share Purchase Agreement No. EA-I-2 dated April 13, 1998 between Closed Joint
Stock Company "KB Impuls-TV" and ▇▇. ▇▇▇▇▇, the Share Swap Agreement dated July
26, 1996 between the Company and Closed Joint Stock Company "Sota-100" and the
Share Swap Agreement dated July 26, 1996 between the Company and Closed Joint
Stock Company "KB Impuls-TV".
1.02 Interpretation
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;
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(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;
(e) a reference to any law, statute, regulation, notification or statutory
provision shall include any amendment, modification or re-enactment thereof, any
regulations promulgated thereunder from time to time, and any interpretations
thereof from time to time by any regulatory or administrative authority;
(f) a reference to any agreement, instrument, contract or other document
shall include any amendment, amendment and restatement, supplement or other
modification thereto;
(g) a reference to any Person shall include such Person's successors and
permitted assigns under any agreement, instrument, contract or other document;
and
(h) whenever this Agreement refers to a number of days, such number shall
refer to calendar days unless Business Days are specified.
ARTICLE II PURCHASE OF SHARES
2.01 SALE AND PURCHASE OF SHARES
On and subject to the terms and conditions set forth herein, the Seller
agrees to sell to the Purchaser, and the Purchaser agrees to purchase from the
Seller, the Shares for an aggregate purchase price equal to Twenty Five Million
US Dollars (US$ 25,000,000) (the "Purchase Price") that is the sum of (i) the
aggregate purchase price of the Common Shares equal to Three Hundred Twenty
Seven Thousand Two Hundred Forty US Dollars (US$ 327,240) and (ii) the aggregate
purchase price of Preferred Shares equal to Twenty Four Million Six Hundred
Seventy Two Thousand Seven Hundred Sixty US Dollars (US$ 24,672,760).
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2.02 PAYMENT OF THE PURCHASE PRICE
Subject to the terms and conditions hereof, in consideration of the sale
and subject to transfer of the Shares at the Closing by the Seller to the
Purchaser, the Purchaser shall pay the Purchase Price to the Seller in full no
later than on DECEMBER 25, 2003; provided, however, that the Purchase Price
shall become due and payable immediately (i) upon the sale, transfer, assignment
or other disposal of the Shares by the Purchaser (other than (x) to a
Controlling Person of the Purchaser or a Controlled Affiliate of the Purchaser
or such Controlling Person (each, a "Controlled Transferee") or (y) to the
Company or its designee pursuant to the third proviso of Section 8.07) or (ii)
if an Event of Default has occurred; provided, further, that following a Change
of Control over the Purchaser or if the Shares have been transferred to a
Controlled Transferee, a such Controlled Transferee, the Purchase Price shall
become due and payable immediately; and, provided, finally, that the two
preceding proviso's shall cease to apply following the assignment by the
Purchaser of its obligations to the Company or its designee pursuant to the
third proviso of Section 8.07. Interest shall accrue on the Purchase Price or
any portion thereof outstanding from the Payment Date until actual payment of
such amount at a rate of twelve percent (12%) per annum.
The Purchaser shall have the right at its sole discretion to fulfil any or
all of its obligations under this Agreement prior to the due date thereof and to
pay the Purchase Price (or any portion thereof) any time prior to the Payment
Date, provided, that the Purchaser shall have given ten (10) Business Days prior
written notice to the Seller of any such payment.
All payments to be made by the Purchaser under this Agreement shall be
made in US Dollars by bank wire transfer in immediately available funds to the
bank account specified by the Seller by written notice to the Purchaser at least
five (5) Business Days prior to the date of payment and the Seller shall cause
such account to be fully operational on the date of payment.
The day of payment shall be the date on which the full amount of the
Purchase Price shall have been received by the Seller's bank. Payments under
this Agreement may be made directly by the Purchaser or by a third party on its
instruction. In the event that any payment hereunder is due on a day other than
a Business Day, such payment shall be due on the next following Business Day.
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2.03 CLOSING
The consummation of the transfer of the Shares contemplated by this
Agreement (the "Closing") shall be held at 10:00 a.m. (Moscow time) at the
offices of Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P., counsel to the Company,
located at Dukat Place II, 7 Ulitsa Gasheka, 123056 Moscow, Russian Federation,
on the Closing Date, simultaneously with the Company Closing and the closing
under the Common Stock Purchase Agreement and the Telenor Share Purchase
Agreement. The Purchaser shall notify the Seller in accordance with Section 8.09
of (i) the proposed date of the Closing at least fifteen (15) Business Days
prior to such date and (ii) the actual date of the Closing at least five (5)
Business Days prior to such date. The Parties are committed to taking all
necessary action so that the Closing Date will occur no later than the Final
Date.
2.04 ACTIONS AT CLOSING
At the Closing, each and all of the following actions shall take place,
all of which shall be considered to be taking place simultaneously and none of
which shall be considered to have taken place until and unless all of these
actions shall have taken place:
(a) the Seller shall deliver to the Purchaser a certificate to the effect
that the representations and warranties of the Seller contained in this
Agreement are true and correct at and as of the Closing Date;
(b) the Seller shall deliver to the Purchaser a certificate to the effect
that the Closing conditions of the Purchaser contained in this Agreement are
satisfied or waived by the Seller;
(c) the Purchaser shall deliver to the Seller a certificate to the effect
that the representations and warranties of the Purchaser contained in this
Agreement are true and correct at and as of the Closing Date;
(d) the Purchaser shall deliver to the Seller a certificate to the effect
that the Closing conditions of the Seller contained in this Agreement are
satisfied or waived by the Purchaser;
(e) the Seller shall deliver to the Purchaser the notarized copies of (i)
the Preferred Share Transfer Order and (ii) Common Share Transfer Order, each
duly executed on behalf of the Seller and accepted by the Registrar;
(f) the Seller shall deliver (or cause to be delivered) to the Purchaser
an extract(s) from the register of the Company's shareholders maintained by the
Registrar, evidencing the registration of the Shares in the name of the
Purchaser free and clear of all Liens;
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(g) subject to the foregoing, the Seller and the Purchaser shall execute
the Share Pledge Order; and
(h) in accordance with Article 29 of the Federal Law of 22 April 1996 No.
39-FZ "On the Securities Market", the Seller and the Purchaser shall execute a
notice to the Russian Federal Commission on the Securities Market regarding the
sale by the Seller and the purchase by the Purchaser of the Shares.
The Purchaser and the Seller shall execute a cross-receipt evidencing
receipt of the various documents set forth above and completion of the Closing
procedures.
ARTICLE III REPRESENTATIONS AND WARRANTIES
3.01 REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents and warrants to the Seller, on and as of the date
of this Agreement and on and as of the Closing Date and unless otherwise
provided herein during the period prior to the Payment Date, that:
(a) The Purchaser is a company duly organized and validly existing as a
legal entity under the Laws of Gibraltar and has all requisite corporate and
other power and authority to carry on its business as now being and heretofore
conducted and to own, use, lease, operate and dispose of the Assets and
Properties which it currently owns, uses, leases and operates.
(b) The Purchaser has full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder, provided, that the Purchaser
must obtain the approval of the MAMP to consummate the acquisition of the
Shares. The execution and delivery of this Agreement by the Purchaser, and the
performance by the Purchaser of its obligations hereunder have been duly and
validly authorized and no other corporate action on the part of the Purchaser,
its board of directors or its shareholders is necessary therefor.
(c) This Agreement has been duly and validly executed and delivered by the
Purchaser and constitutes the legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting creditors' rights and
remedies generally and by general equitable principles (whether applied by a
court of law or equity).
(d) The execution, delivery and performance by the Purchaser of this
Agreement and the consummation by the Purchaser of the transactions contemplated
hereby will not:
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(i) conflict with or result in a violation or breach of any of the
terms or conditions of the Purchaser's constitutive documents;
(ii) on and as of the date of this Agreement and as of the Closing
Date, subject to obtaining the consents, approvals and actions, making the
filings and giving the notices specified in Schedule 3.01(d)(ii), conflict with
or result in a violation or breach of any term or provision of any Law or Order
applicable to the Purchaser or any of its Assets and Properties; or (iii)
conflict with, constitute a breach of or result in a default under any Contract
or License to which the Purchaser is a party or by which any of its Assets and
Properties is bound.
(e) On and as of the date of this Agreement and as of the Closing Date,
except as specified in Schedule 3.01(d)(ii), no consent, approval or action of,
filing with or notice to any Governmental or Regulatory Authority on the part of
the Purchaser is required in connection with the Purchaser's execution, delivery
or performance of this Agreement or the consummation by the Purchaser of the
transactions contemplated hereby.
(f) On and as of the date of this Agreement and as of the Closing Date,
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 which
(i) questions the validity of this Agreement or any action taken or to be taken
pursuant hereto, (ii) restrains, enjoins or otherwise prohibits or makes illegal
the consummation of any of the transactions contemplated by this Agreement or
(iii) would otherwise result in a material impairment of the Seller's rights
under this Agreement.
(g) All negotiations relating to this Agreement and the transactions
contemplated hereby have been carried out by the Purchaser directly with the
Seller without the intervention of any Person on behalf of the Purchaser in such
manner as to give rise to any valid claim by any Person against the Seller for
any finder's fee, brokerage commission or similar payment.
(h) The Purchaser is acquiring the Shares for its own account for
investment purposes only and not with a view to, or for sale or resale in
connection with, any public distribution thereof or with any present intention
of selling, distributing or otherwise disposing of such shares, except in
compliance with the Securities Act and all other applicable securities Laws.
(i) The Purchaser (a) possesses such knowledge and experience in financial
and business matters as to enable it to evaluate the merits and risks of its
investment in the Shares, (b) understands and is able to bear the economic risk
involved in acquiring the Shares, including any Loss relating to or arising out
of such
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investment, (c) understands that, as of the date of this Agreement, the Shares
that are to be acquired by it under this Agreement are not registered under the
Securities Act and may not be offered or sold within the United States or to, or
for the account or benefit of, any "U.S. person", as such term is defined in
Rule 902 of Regulation S under the Securities Act, except in accordance with
Regulation S under the Securities Act or pursuant to another applicable
exemption from the registration requirements of the Securities Act and (d) is
not a "U.S. person" (as so defined), and is not acquiring any Shares for the
account or benefit of any "U.S. person" (as so defined), and (e) is acquiring
the Shares pursuant to an "offshore transaction" as such term is defined in Rule
902 of Regulation S under the Securities Act.
(j) To the best of the knowledge and belief of the Purchaser, as of the
date of this Agreement and as of the Closing Date, the Seller is not in breach
of any representation or warranty made by the Seller in this Agreement.
(k) The Purchaser has delivered to the Seller, prior to the execution of
this Agreement, true and complete copies of all Contracts with Telenor relating
to the Preferred Stock, all amendments and supplements thereto, all waivers of
any terms thereof and any agreement to terminate any such Contracts, to which
such Purchaser or any of its Affiliates and Telenor or any of its Affiliates are
party and which involve, directly or indirectly, the voting rights of, or the
transfer, disposal, purchase, pledge or any other conveyance of, any of the
Preferred Stock.
3.02 REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller represents and warrants to the Purchaser that, on and as of the
date of this Agreement and on and as of the Closing Date (unless otherwise
provided herein):
(a) The Seller is duly organized and validly existing as an exempted
company limited by shares under the laws of Bermuda and has all requisite
corporate and other power and authority to carry on its business as now being
and heretofore conducted and to own, use, lease, operate and dispose of the
Assets and Properties which it currently owns, uses, leases and operates.
(b) The Seller has full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder, and to consummate the
transactions contemplated hereby, including, without limitation, to sell the
Shares to the Purchaser. The execution and delivery of this Agreement by the
Seller and the performance by the Seller of its obligations hereunder have been
duly and validly authorized, and no other corporate action on the part of the
Seller, its board of directors or its shareholders is necessary therefor.
(c) This Agreement has been duly and validly executed and delivered by the
Seller and constitutes the legal, valid and binding obligation of the Seller,
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enforceable against the Seller in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights and remedies generally
and by general equitable principles (whether applied by a court of law or
equity).
(d) The execution, delivery and performance by the Seller of this
Agreement and the consummation by the Seller of the transactions contemplated
hereby will not:
(i) conflict with or result in a violation or breach of any of the
terms or conditions of the Seller's constitutive documents; (ii) subject to
obtaining the consents, approvals and actions, making the filings and giving the
notices specified in Schedule 3.02(d)
(ii), conflict with or result in a violation or breach of any term
or provision of any Law or Order applicable to the Seller or any of its Assets
and Properties; or
(iii) subject to obtaining the third party consents specified in
Schedule 3.02(d)(ii), conflict with or constitute a breach of or result in a
default under any Contract or License to which the Seller is a party or by which
any of its Assets and Properties (including, without limitation, any Shares) is
bound; or
(iv) conflict with any of the Company's internal policies or
procedures, including, without limitation, any policy with respect to ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇.
(e) Except as specified in Schedule 3.02(d)(ii), no consent, approval or
action of, filing with or notice to any Governmental or Regulatory Authority on
the part of the Seller is required in connection with the Seller's execution,
delivery or performance of this Agreement or the consummation by the Seller of
the transactions contemplated hereby.
(f) There are no Actions or Proceedings pending or, to the knowledge of
the Seller, threatened against the Seller or any of its Assets and Properties
which could reasonably be expected to result in the issuance of an Order which
(i) questions the validity of this Agreement or any action taken or to be taken
pursuant hereto, (ii) restrains, enjoins or otherwise prohibits or makes illegal
the consummation of any of the transactions contemplated by this Agreement or
(iii) would otherwise result in a material impairment of the Purchaser's rights
under this Agreement.
(g) On the Closing Date, the Seller will have, good and marketable title
to the Shares, free and clear of all Liens, equities and claims of any nature,
and the Seller will have full right, power, and authority to sell, assign,
transfer and deliver the Shares to the Purchaser. Upon registration of the
Shares in the name of the Purchaser in the register of the Company's
shareholders against payment therefor in accordance with the terms of this
Agreement, good and valid title to the Shares, free
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and clear of all Liens (except, with respect to the Preferred Shares, for the
transfer restrictions imposed by the Principal Agreements), equities and claims
of any nature, will be transferred to the Purchaser.
(h) The Shares were originally acquired by the Seller in compliance with
all applicable United States federal and state securities laws and will be
transferred to the Purchaser in compliance with all applicable United States
federal and state securities laws. The Seller has not made any "directed selling
efforts", as such term is defined in Rule 902 of Regulation S under the
Securities Act, in the United States in connection with the offer and sale of
the Shares to the Purchaser under this Agreement, and the Seller is offering and
selling the Shares outside the United States.
(i) All negotiations relating to this Agreement and the transactions
contemplated hereby have been carried out by the Seller directly with the
Purchaser without the intervention of any Person on behalf of the Seller in such
manner as to give rise to any valid claim by any Person against the Purchaser
for any finder's fee, brokerage commission or similar payment.
(j) To the best of the knowledge and belief of the Seller, as of the date
of this Agreement and as of the Closing Date, the Purchaser is not in breach of
any representation or warranty made by the Purchaser in this Agreement.
(k) On and as of the Closing Date, (i) there are no outstanding Options
with respect to the Shares (other than (x) pursuant to the Call Option Agreement
with respect to the Preferred Shares and (y) this Agreement with respect to the
Common Shares), (ii) the Original Preferred Stock Call Option is validly and
irrevocably terminated, (iii) the Zimin Preferred Stock Agreements have been
amended to that effect to the extent required or appropriate and (iv) the
Supplemental Agreements have been executed and delivered and entered into full
force and effect in this respect.
(l) On and as of the Closing Date, the purchase price for the Seller's
acquisition of the Shares has been paid in full and no amounts are owing by the
Seller to any Person with respect to its acquisition of the Shares.
ARTICLE IV COVENANTS OF SELLER
The Seller covenants and agrees with the Purchaser that, at all times from
and after the date hereof until the Closing, the Seller will comply with all
covenants and provisions of this Article IV.
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4.01 EXCLUSIVITY; NO SOLICITATIONS
The Seller will not take, nor will it permit any of its Affiliates (or
authorize or permit any investment banker, financial advisor, attorney,
accountant or other Person retained by or acting for or on its behalf or on
behalf of any such Affiliate) to take, directly or indirectly, any action to
initiate, assist, solicit, negotiate, encourage or accept any offer or inquiry
from any Person (or any Person known by the Seller to be acting on behalf of
another Person) to engage in, reach any agreement or understanding (whether or
not such agreement or understanding is absolute, revocable, contingent or
conditional) for the transfer, assignment, pledge, acquisition or other
disposition of any of the Shares, except for (i) the Seller's acquisition of the
Shares and (ii) the Seller's dealings with the Purchaser pursuant to this
Agreement, the Pledge Agreement and the Call Option Agreement. If the Seller (or
any Person acting for or on its behalf) receives from any Person any offer,
inquiry or informational request relating to any transaction of this type
referred to in this Section 4.01, the Seller will promptly advise such Person,
by written notice, of the terms of this Section 4.01 and, in each case, will
promptly advise the Purchaser in writing of such offer, inquiry or request and,
if such offer, inquiry or request is in writing, deliver a copy thereof to the
Purchaser.
4.02 FULFILLMENT OF CONDITIONS
The Seller will take all steps necessary and proceed diligently and in
good faith to satisfy each condition precedent contained in Article VI which is
required to be fulfilled by it, and will immediately notify the Purchaser if the
Seller is unable to satisfy any such condition precedent.
4.03 DISCLOSURE OF CERTAIN INFORMATION
The Seller shall, and shall ensure that its Affiliates shall, promptly
provide to the Purchaser, upon the Purchaser's reasonable request, any
information regarding the Seller or any of its Affiliates required to be
included in any application, report or filing required to be made by the
Purchaser with any governmental or administrative authority in connection with
the purchase of the Shares under this Agreement and the actions contemplated by
the Principal Agreements.
4.04 RESTRICTIONS ON TRANSFER
The Seller shall not Transfer any shares of Common Stock and/or Preferred
Stock owned by the Seller, its Controlling Person, or any Controlled Affiliates
of the Seller or such Controlling Person to any Restricted Person.
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ARTICLE V COVENANTS OF PURCHASER
The Purchaser covenants and agrees with the Seller that, at all times from
and after the date hereof, the Purchaser will comply with all covenants and
provisions of this Article V.
5.01 PAYMENT OF GAIN ON DISPOSAL
In the event the Purchaser at any time prior to the earlier to occur of
(i) DECEMBER 25, 2003 or (ii) the payment of the full amount of the Purchase
Price by the Purchaser to the Seller, sells, transfers, assigns or otherwise
disposes of all or any of the Shares to Telenor, the Purchaser shall pay to the
Seller, or shall cause Telenor to pay to the Seller, one hundred percent (100%)
of the excess (if any) (the "Gain on Disposal") of (i) the purchase price
payable by Telenor with respect to such sale, transfer, assignment or other
disposal of the Shares over (ii) the Purchase Price, on such date as such amount
is or becomes due in accordance with the terms and conditions of the relevant
agreement between the Purchaser and Telenor; provided, however, that in the
event the purchase price under the relevant agreement between the Purchaser and
Telenor is payable in installments, the Purchaser shall first be entitled to
receive any such installments up to one hundred percent (100%) of the Purchase
Price and the Seller shall only be entitled to any portion of the aforementioned
excess (if any) from any payments due and made by Telenor after the Purchaser
has received one hundred percent (100%) of the Purchase Price; and, provided,
further, that in the event Telenor does not pay the excess to the Seller
directly but instead pays such amount to the Purchaser, the Purchaser shall be
obliged to transfer any such excess within five (5) Business Days following the
receipt thereof. The provisions of this Section 5.01 shall cease to apply
following the assignment by the Purchaser of its obligations to the Company or
its designee pursuant to the third proviso of Section 8.07.
5.02 FULFILLMENT OF CONDITIONS
Prior to the Closing Date the Purchaser will take all steps necessary and
proceed diligently and in good faith to satisfy each condition precedent
contained in Article VII which is required to be fulfilled by it, and will
immediately notify the Seller if the Purchaser is unable to satisfy any such
condition precedent.
5.03 COMMON STOCK PLEDGE AND CALL OPTION
(a) Within ten (10) Business Days following the Report Registration Date,
the Purchaser (i) shall execute and deliver to the Seller the Common Stock
Pledge Agreement and the Common Stock Call Option Agreement and (ii) upon
execution and delivery of the Common Stock Pledge Agreement by the Seller the
Purchaser shall pledge the shares of Common Stock to the Seller as provided
under the Common Stock Pledge Agreement.
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(b) Solely for the purpose of Russian Law and solely to the extent Russian
Law may be applicable, (i) the obligations of the Purchaser under this Section
5.03 shall be considered a preliminary agreement (predvaritelnyi dogovor) and
not a transaction involving securities (sdelka s tsennymi bumagami); (ii) by
virtue of undertaking the obligations set forth in this Section 5.03, the
Purchaser shall not (x) be obligated to pledge, or grant a call option over, any
shares of Common Stock to the Seller or (y) be considered to have pledged, or
granted a call option over, any such shares of Common Stock to the Seller; (iii)
the actual transactions contemplated by the Common Stock Pledge Agreement and
the Common Stock Call Option Agreement shall in no event take place before the
registration of the issuance of the shares of Common Stock to be acquired by the
Purchaser pursuant to the Primary Agreement, the payment therefore in full by
the Purchaser and the registration of the report on the results of the issuance,
if and to the extent such registration and payment are required under Russian
Law.
(c) The pledge of, and the granting of a call option over, certain shares
of Common Stock shall occur on the date on which the Common Stock Pledge
Agreement and the Common Stock Call Option Agreement are executed and delivered
by the Purchaser and the Seller and the pledge over the shares of Common Stock
to be pledged under the Common Stock Pledge Agreement is registered in the
register of shareholders of the Company maintained by the Registrar, which shall
happen on the Pledge and Call Option Closing Date following the registration and
payment referred to under clause (b) of this Section 5.03.
(d) Clauses (b) and (c) of this Section 5.03 shall have no effect on the
interpretation of this Agreement under the Laws of the State of New York, by
which this Agreement is expressed to be governed.
5.04 COMPLIANCE WITH SUPPLEMENTAL AGREEMENTS
The Purchaser shall comply with the terms and provisions of Clause 4
(Sub-clauses 4.1, 4.2 and 4.3) of the Supplemental Agreements as if the
Purchaser were a party thereto and the Purchaser shall impose a similar
obligation on any subsequent acquiror of the Shares.
ARTICLE VI
CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATIONS
All obligations of the Purchaser under this Agreement are subject to the
fulfillment, on or prior to the Closing Date, of each of the following
conditions (any of which may be waived by the Purchaser in writing). For the
avoidance of doubt, the Purchaser's obligations that are to be fulfilled
following the Closing Date shall cease to be subject to any of the conditions
set forth below following the Closing Date.
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6.01 REPRESENTATIONS AND WARRANTIES
The Seller's representations and warranties contained in this Agreement
shall be true and correct on and as of the Closing Date.
6.02 PERFORMANCE
The Seller shall have fully performed and complied with its obligations
under Article IV.
6.03 CONDITIONS PRECEDENT TO COMPANY CLOSING
All conditions precedent to the obligations of the Company, the Purchaser
and Telenor under the Primary Agreement shall have been fulfilled (or waived by
the Company, the Purchaser or Telenor, as the case may be).
6.04 ORDERS AND LAWS
There shall not be in effect on the Closing Date any Order or Law
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or which
could reasonably be expected to result in a material impairment of the rights of
the Purchaser under this Agreement and there shall not be pending on the Closing
Date any Action or Proceeding or any other action in, before or by any
Governmental or Regulatory Authority (other than any Action or Proceeding
initiated at the request of the Purchaser or any of its Affiliates) which could
reasonably be expected to result in the issuance of any such Order or the
enactment, promulgation or deemed applicability to the Purchaser or the Seller
or the transactions contemplated by this Agreement of any such Law.
6.05 CONSENTS AND APPROVALS
All consents, approvals and actions of, filings with and notices to any
Governmental or Regulatory Authority or any other Person specified in Schedule
3.01(d)(ii) or Schedule 3.02(d)(ii) which are required to have been obtained,
made or given (as applicable) by the Purchaser or the Seller, as the case may
be, pursuant to applicable Law and are necessary for the performance of the
obligations of the Purchaser or the Seller, as the case may be, under this
Agreement (a) shall have been duly obtained, made or given, (b) shall not be
subject to the satisfaction of any condition that has not been satisfied or
waived (unless any such condition relates to reporting or other requirements
which by the terms of such consents, approvals, actions, filings or notices can
only be effected on or after the Closing) and (c) shall be in full force and
effect, and all terminations or expirations of waiting periods imposed by any
Governmental or Regulatory Authority shall have occurred.
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6.06 SECRETARY'S CERTIFICATE
The Seller shall have delivered to the Purchaser a certificate of the
secretary of the Seller as to the incumbency of, and such other documents as are
necessary to evidence the signatory authority of, the Person or Persons
executing this Agreement and the Share Transfer Order on behalf of the Seller,
attached to which are true and correct copies of the Seller's memorandum of
association and bye-laws and resolutions of the Seller's board of directors
authorizing the Seller's execution, delivery and performance of this Agreement
and the sale of the Shares in accordance with the terms hereof.
6.07 SHARES
The Seller shall have delivered to the Purchaser (a) a Preferred Share
Transfer Order and a Common Share Transfer Order, each duly executed by the
Seller, (b) the documents listed in Schedule 6.07 (as applicable) and (c) an
extract(s) from the register of the Company's shareholders, as maintained by the
Registrar, dated the day of the Closing Date, showing the Seller as the owner of
the Shares, free and clear of all Liens.
6.08 LEGAL OPINIONS
The Purchaser shall have received (a) opinions of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special New York and Russian counsel to the Seller, and (b)
an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇, special Bermuda counsel to the Seller,
each substantially in the respective form attached as Schedule 6.08 hereto.
6.09 TERMINATION OF ORIGINAL PREFERRED STOCK CALL OPTION
The Original Preferred Stock Call Option shall have been validly and
irrevocably terminated and the Supplemental Agreements shall have been executed
and delivered and entered into effect in a manner reasonably satisfactory to the
Purchaser and certified copies of such duly executed Supplemental Agreements
shall have been provided to the Purchaser.
6.10 SURETY
▇▇. ▇▇▇▇▇ shall have duly executed and delivered on the date of this
Agreement the Surety Agreement (in full compliance with all requirements of
Russian law) securing the performance of the Seller's obligations under this
Agreement.
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ARTICLE VII
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
All obligations of the Seller under this Agreement are subject to the
fulfillment, on or prior to the Closing Date, of each of the following
conditions (any of which may be waived by the Seller in writing). For the
avoidance of doubt, the Seller's obligations that are continuing following the
Closing Date shall cease to be subject to any of the conditions set forth below
following the Closing Date.
7.01 REPRESENTATIONS AND WARRANTIES
The Purchaser's representations and warranties contained in this
Agreement shall be true and correct on and as of the Closing Date.
7.02 CONDITIONS PRECEDENT TO COMPANY CLOSING
All conditions precedent to the obligations of the Company, the Purchaser
and Telenor under the Primary Agreement shall have been fulfilled (or waived by
the Company, the Purchaser or Telenor, as the case may be).
7.03 ORDERS AND LAWS
There shall not be in effect on the Closing Date any Order or Law
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or which
could reasonably be expected to result in a material impairment of the rights of
the Seller under this Agreement and there shall not be pending on the Closing
Date any Action or Proceeding or any other action in, before or by any
Governmental or Regulatory Authority (other than any Action on Proceeding
initiated at the request of the Seller on any of its Affiliates) which could
reasonably be expected to result in the issuance of any such Order or the
enactment, promulgation or deemed applicability to the Purchaser or the Seller
or the transactions contemplated by this Agreement of any such Law.
7.04 CONSENTS AND APPROVALS
All consents, approvals and actions of, filings with and notices to any
Governmental or Regulatory Authority or any other Person specified in Schedule
3.01(d)(ii) or Schedule 3.02(d)(ii) which are required to have been obtained,
made or given (as applicable) by the Purchaser or the Seller, as the case may
be, pursuant to applicable Law and are necessary for the performance of the
obligations of the Purchaser or the Seller, as the case may be, under this
Agreement (a) shall have been duly obtained, made or given, (b) shall not be
subject to the satisfaction of any condition that has not been satisfied or
waived (unless any such condition relates to reporting or other requirements
which by the terms of such consents, approvals, actions, filings or notices can
only be effected on or after the Closing) and (c) shall
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be in full force and effect, and all terminations or expirations of waiting
periods imposed by any Governmental or Regulatory Authority shall have occurred.
7.05 SECRETARY'S CERTIFICATE
The Purchaser shall have delivered to the Seller a certificate of the
secretary of the Purchaser as to the incumbency of, and such other documents as
are necessary to evidence the signatory authority of, the Person or Persons
executing this Agreement on behalf of the Purchaser, attached to which are true
and correct copies of (i) the Purchaser's certificate of registration with the
competent authorities, (ii) the Purchaser's memorandum of association, (iii) the
Purchaser's bye-laws, (iv) resolutions of the Purchaser's competent body
authorizing the Purchaser's execution, delivery and performance of this
Agreement and the acquisition of the Shares in accordance with the terms hereof,
(v) copy of the passport(s) of the signatories for the Purchaser, (vi) copy of
the power-of-attorney for the representative of the Purchaser executing the
Agreement (if applicable) and (vii) copy of all consents and approvals set forth
on Schedule 3.01(d)(ii) hereto.
7.06 LEGAL OPINIONS
The Seller shall have received (a) an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇, special
New York counsel to the Purchaser, (b) an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ CIS Legal
Services, special Russian counsel to the Purchaser and (c) an opinion of Triay &
Triay, special Gibraltar counsel to the Purchaser, each substantially in the
respective form attached as Schedule 7.06 hereto.
7.07 ADDITIONAL AGREEMENTS
The Purchaser shall have entered into (i) the Pledge Agreement and (ii)
the Call Option Agreement.
7.08 SBERBANK RESTRUCTURING
The Company shall have secured the release of the pledge of all of the
shares of Common Stock owned by Bee Line Fund that are pledged to Sberbank, and
the Company shall have delivered to the Seller and the Purchaser a certified
copy of each of (i) the executed agreements and other documents amending the
Sberbank Loan Agreements and the Sberbank Pledge Agreements and (ii) an extract
from the register of the Company's shareholders maintained by the Registrar
evidencing the release of the shares of Common Stock owned by Bee Line Fund from
the pledge to Sberbank.
7.09 REGISTRATION DOCUMENTS
The Purchaser shall have delivered to the Seller the Power of Attorney,
duly notarized and legalized (apostilled), required to receive an extract(s)
from the
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register of the Company's shareholders maintained by the Registrar from
the Purchaser's personal account(s), evidencing registration of the Shares in
the name of the Purchaser.
7.10 PERSONAL ACCOUNT WITH THE REGISTRAR
The Purchaser shall have opened a personal account(s) with the Registrar
and such personal account(s) shall remain opened and operational on the Closing
Date.
ARTICLE VIII MISCELLANEOUS
8.01 INDEMNIFICATION
Each Party (the "Indemnifying Party") agrees to indemnify, defend and hold
harmless the other Party (and its principals, officers, directors, employees,
Affiliates and assigns) (the "Indemnified Party") from and against any and all
Losses, liabilities, damages, deficiencies, costs or expenses, including
attorneys' fees, disbursements or other charges, based upon, arising out of, or
otherwise in respect of any inaccuracy in or any breach of any representation,
warranty, covenant or undertaking of the Indemnifying Party contained in this
Agreement and the Additional Agreements or the Common Stock Additional
Agreements, as the case may be; provided, however, that the liability of each
Party for indemnification under this Section 8.01 shall not exceed the lesser of
(a) an amount equal to the total of such Losses, liabilities, damages,
deficiencies, costs or expenses indemnified against hereunder and (b) (i) in the
case of the Seller, the portion of the Purchase Price actually received by the
Seller or (ii) in the case of the Purchaser, the Purchase Price; and, provided,
further, that following the assignment by the Purchaser of its obligations to
the Company or its designee pursuant to the third proviso of Section 8.07, (x)
the indemnification obligation set forth above shall not include the Additional
Agreements or the Common Stock Additional Agreements and (y) the original
Purchaser shall remain liable, and the Company or its designee shall not bear
any liability, for any claim for indemnification that has arisen prior to any
such assignment. Each Party's indemnity hereunder shall be in addition to any
liability to which the Indemnifying Party may otherwise be subject, provided
that any recovery by the Indemnified Party from the Indemnifying Party in
respect of a claim under this Section 8.01 shall be without duplication of any
other recovery for such claim by the Indemnified Party from the Indemnifying
Party.
8.02 TERMINATION
This Agreement shall terminate and the transactions contemplated hereby
shall be abandoned:
(a) at any time prior to the Closing, by mutual written agreement of
the Seller and the Purchaser;
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(b) on the Final Date, if the Closing shall not have occurred on or
before such date;
(c) on the date on which a meeting of the shareholders of the Company is
held at which a vote of such shareholders is conducted concerning the
transactions contemplated by the Principal Agreements and such shareholders fail
to approve the transactions contemplated by the Principal Agreements; or
(d) at any time after the tenth (10th) Business Day following the Report
Registration Date, by the Seller by means of written notice to the Purchaser, if
the Purchaser has failed (i) to execute and deliver the Common Stock Pledge
Agreement, or (ii) to pledge the shares of Common Stock as provided thereunder
by means of registering the pledge thereof in the register of shareholders of
the Company maintained by the Registrar or (iii) to execute and deliver the
Common Stock Call Option Agreement.
8.03 EFFECT OF TERMINATION
(a) If this Agreement is validly terminated pursuant to clauses (a)
through (c) of Section 8.02, this Agreement will forthwith become null and void,
and there will be no liability or obligation on the part of the Seller or the
Purchaser (or any of their respective officers, directors, employees, agents or
other representatives or Affiliates), except that the provisions with respect to
expenses in Section 8.08 and confidentiality in Section 8.11 will continue to
apply following any such termination.
(b) If this Agreement is validly terminated pursuant to clause (d) of
Section 8.02, this Agreement will forthwith become null and void and each Party
shall return to the other Party all that it has received hereunder, including
without limitation the return by the Purchaser to the Seller of title to the
Shares, free and clear of any Lien, except that the provisions set forth in this
Article VIII will continue to apply following any such termination.
(c) Notwithstanding any other provision in this Agreement to the contrary,
upon termination of this Agreement pursuant to clauses (b) or (d) of Section
8.02, the Seller will remain liable to the Purchaser for any breach of this
Agreement by the Seller existing at the time of such termination, and the
Purchaser will remain liable to the Seller for any breach of this Agreement by
the Purchaser existing at the time of such termination, and the Seller or the
Purchaser, as the case may be, may seek such remedies, including damages and
legal fees, against the other Party with respect to any such breach as are
provided in this Agreement or as are otherwise available at law or in equity.
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8.04 ENTIRE AGREEMENT
This Agreement supersedes all prior discussions and agreements between the
Parties with respect to the subject matter hereof, and contains the sole and
entire agreement between the Parties hereto with respect to the subject matter
hereof.
8.05 WAIVER
Any term or condition of this Agreement may be waived at any time by the
Party that is entitled to the benefit thereof, but no such waiver shall be
effective unless set forth in a written instrument duly executed by or on behalf
of the Party waiving such term or condition. No waiver by any Party of any term
or condition of this Agreement, in any one or more instances, shall be deemed to
be or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion. All remedies, either under this Agreement or
by law or otherwise afforded, will be cumulative and not alternative. No failure
on the part of the Seller or the Purchaser to exercise and no delay in
exercising, and no course of dealing with respect to, any right, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
8.06 NO THIRD PARTY BENEFICIARY
(a) The terms and provisions of this Agreement are intended solely for the
benefit of each Party hereto and its successors or permitted assigns, and it is
not the intention of the Parties to confer third party beneficiary rights upon
any other Person, except that the Company shall be a third party beneficiary of
Section 5.04 and the third proviso of Section 8.07.
(b) No provision of this Agreement shall oblige any of the Parties to
perform any actions in favour of third parties and, after full payment of the
Purchase Price to the Seller, the Purchaser or any third parties (subsequent
buyers of the Preferred Stock) shall have no obligations under this Agreement or
any of the Zimin Preferred Stock Agreements to the Company or other persons in
respect of the Preferred Stock and the Company shall have no rights arising out
of this Agreement or the Zimin Preferred Stock Agreements.
8.07 ASSIGNMENT
Neither this Agreement nor any right, interest or obligation hereunder may
be assigned by any Party hereto without the prior written consent of the other
Party hereto and any attempt to do so will be void; provided, however, that the
Seller by simple written notice to the Purchaser shall be entitled to assign all
its rights and obligations under this Agreement to a Controlling Person of the
Seller or to any Controlled Affiliate of the Seller or such Controlling Person;
provided, further, that
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(i) following the Pledge and Call Option Closing Date and (ii) in the absence of
an Event of Default, the Purchaser by simple written notice to the Seller may
assign its rights and obligations under this Agreement to a Controlling Person
of the Purchaser or a Controlled Affiliate of the Purchaser or such Controlling
Person simultaneously with the sale, transfer, assignment or other disposal of
the Shares to such Controlling Person or Controlled Affiliate; and, provided,
finally, that the Purchaser by written notice to the Seller shall be entitled to
assign its rights and obligations under this Agreement to the Company or its
designee following the Company's exercise of the Preferred Stock Call Option
under the Primary Agreement upon the occurrence of an Eco Telecom Contribution
Default upon (x) the transfer by the Purchaser of the Shares to the Company or
its designee, (y) execution by the Company or its designee of an Endorsement and
(z) in the event of an assignment to the Company's designee, the execution by
the Company of the Guarantee. Subject to the preceding sentence, this Agreement
is binding upon, inures to the benefit of and is enforceable by the Parties
hereto and their respective successors and assigns.
8.08 EXPENSES
Except as otherwise expressly provided in this Agreement, whether or not
the transactions contemplated hereby are consummated, each of the Parties will
pay its own costs and expenses, including, without limitation, legal fees,
incurred in connection with the negotiation, execution and closing of this
Agreement and the transactions contemplated hereby; provided, that the Purchaser
shall be responsible for payment of the fee charged by the Registrar to register
the Purchaser's ownership of the Shares and other alike payment in connection
with this Agreement.
8.09 NOTICE
All notices, requests and other communications hereunder including any
request for arbitration must be in writing and will be deemed to have been duly
given only if delivered personally or by facsimile transmission or sent by
courier to the parties at the following addresses or facsimile numbers:
(a) If to the Purchaser, to:
Eco Telecom Limited
▇▇▇▇▇ ▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ No.: ▇▇▇▇-▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
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with a copy to:
OOO Alfa-Eco
21, Novy Arbat
121019 Moscow, Russian Federation
Facsimile No.: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
Attention: Stanislav Shekshnya
and a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CIS Legal Services
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, Russian Federation
Facsimile No.: + ▇-▇▇▇-▇▇▇-▇▇-▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(b) If to the Seller, to:
Overture Limited
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ No.: + (1) (▇▇▇) ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, Russian Federation
Facsimile: + ▇▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇ ▇▇▇▇, Esq.
All such notices, requests and other communications including any request
for arbitration will: (a) if delivered personally to the address as provided in
this section, be deemed given and effective upon delivery, (b) if delivered by
facsimile transmission to the facsimile number as provided in this section, be
deemed given and effective upon receipt, and (c) if delivered by courier in the
manner described above to the address as provided in this section, be deemed
given and effective upon confirmed receipt (in each case, regardless of whether
such notice, request or other communication is received by any other Person to
whom a copy of such notice is to be delivered pursuant to this section). Any
Party from time to time may change its address, facsimile number or other
information for the purpose of notices to that Party by giving written notice
specifying such change to the other Party.
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8.10 PUBLIC ANNOUNCEMENTS
At all times at or before the Closing, neither the Purchaser nor the
Seller will issue or make any reports, statements or releases to the public or,
generally, to the employees, customers, suppliers or other Persons to whom the
Company sells goods or provides services or with whom the Company otherwise has
significant business relationships with respect to this Agreement or the
transactions contemplated hereby without the consent of the other Party hereto,
which consent shall not be unreasonably withheld; provided, however, that such
consent shall not be required for any report or filing required to be made by
any party with the U.S. Securities and Exchange Commission and other cases where
reports and filings are required by law. If any Party is unable to obtain the
approval of its public report, statement or release from the other Party and
such report, statement or release is, on the advice of legal counsel to such
Party, required by Law or rule of any stock exchange in order to discharge such
Party's disclosure obligations, then such Party may make or issue the legally
required report, statement or release and promptly furnish the other Party with
a copy thereof.
8.11 CONFIDENTIALITY
(a) 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 (x) compelled to disclose by judicial or administrative process or by
other requirements of Law or (y) 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 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 the
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.
(b) The Seller shall not disclose to any third parties any confidential
information which they received during the period of its participation in the
activities of the Company as a shareholder and/or officer of the Company where
such disclosure may damage the activity of the Company, excepting cases provided
for by Law.
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8.12 COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument, and either Party
hereto may execute this Agreement by signing any such counterpart.
8.13 AMENDMENT
This Agreement may be amended, supplemented or modified only by a
written instrument duly executed by or on behalf of each Party hereto.
8.14 ARBITRATION, CONSENT TO JURISDICTION
(a) Any and all disputes, controversies or claims arising under, relating
to or in connection with this Agreement or the breach, termination or validity
thereof ("Disputes") shall be finally and exclusively settled by arbitration in
accordance with the Arbitration Rules of the International Chamber of Commerce
("ICC") then in effect (the "ICC Rules") by a panel of three (3) arbitrators
with the following terms and conditions:
(i) In the event of any conflict between the ICC Rules and the
provisions of this Agreement, the provisions of this Agreement shall
prevail.
(ii) The place of the arbitration shall be Geneva, Switzerland.
(iii) The claimant and respondent shall each nominate one arbitrator in
accordance with the ICC Rules. The two party-appointed arbitrators
shall have thirty (30) days from the date of the nomination of the
second arbitrator to agree on the nomination a third arbitrator who
shall serve as chair of the tribunal. Any arbitrator not timely
nominated, shall, on the request of any Party, be appointed by the
ICC Court of Arbitration in accordance with the ICC Rules.
(iv) The English language shall be used as the written and spoken
language for the arbitration, the award and all matters connected
with the arbitration.
(v) The award of the arbitrators shall be final and binding on the
Parties may be enforced by any court of competent jurisdiction and
may be executed against the person and assets of the losing Party in
any competent jurisdiction.
(vi) In order to facilitate the comprehensive resolution of related
disputes, all Disputes between any of the parties to this Agreement
that arise under or in connection with the Call Option Agreement,
the Pledge
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Agreement and/or the Common Stock Purchase Agreement ("Other
Agreements") may be brought in a single arbitration. Pursuant to a
Request submitted under Article 4(6) of the ICC Rules or otherwise,
the parties hereby agree that upon the request of any party to an
arbitration proceeding initiated under this Agreement or the Other
Agreements, the ICC Court shall determine whether to consolidate the
arbitration proceeding with any other arbitration proceeding
involving any of the parties hereto arising out of or relating to
the Agreement or the Other Agreements. It is the parties' intention
that any such arbitration proceedings be consolidated in the event
that (i) there are issues of fact or law common to the proceedings
so that a consolidated proceeding would be more efficient than
separate proceedings, and (ii) no party would be unduly prejudiced
as a result of such consolidation through undue delay or otherwise.
(b) Each Party unconditionally and irrevocably agrees to submit to the
non-exclusive jurisdiction of the courts located in Geneva, Switzerland (the
"Geneva Courts"), for the purpose of any proceedings in aid of arbitration and
for interim or conservatory measures before an arbitral tribunal is duly
constituted under this Agreement, and for proceedings arising out of or relating
to the enforcement of any award or order of an arbitral tribunal duly
constituted under this Agreement. Each Party unconditionally and irrevocably
waives any objections that they may have now or in the future to such
jurisdiction including without limitation objections by reason of lack of
personal jurisdiction, improper venue, or inconvenient forum.
8.15 SURVIVAL
Each Party has the right to rely fully upon the representations,
warranties, covenants and agreements of the other Party contained in this
Agreement. All representations and warranties of the Seller contained in Article
III and the covenant of the Seller contained in Section 4.03 shall survive the
Closing and remain in effect for a period of eighteen (18) months following the
Closing Date. The covenant of the Seller contained in Section 4.04 shall survive
the Closing and remain in effect until the earlier to occur of (i) the Seller,
the Controlling Person(s) of the Seller, and the Controlled Affiliates of the
Seller and such Controlling Person(s) ceasing to own any shares of Common Stock
and/or Preferred Stock or (ii) the Purchaser, the Controlling Person(s) of the
Purchaser, and Controlled Affiliates of the Purchaser and such Controlling
Person(s) ceasing to own twenty-five percent (25%) plus one (1) voting shares of
the Company. The obligation of the Purchaser contained in Section 2.02, all
representations and warranties of the Purchaser contained in Article III and the
covenants of the Purchaser contained in Section 5.01 shall survive the Closing
and remain in effect until the payment in full of the Purchase Price or, with
respect to the Purchaser's obligation to pay the Gain on Disposal that has been
triggered pursuant to Section 5.01, until the payment in full of the Gain on
Disposal. In addition to the
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foregoing, the obligations of the Parties under this Article VIII shall survive
the Closing.
8.16 SEVERABILITY
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future Law, and if the rights or obligations
of any Party hereto under this Agreement will not be materially and adversely
affected thereby, (a) such provision will be fully severable, (b) this Agreement
will be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof, (c) the remaining provisions of
this Agreement will remain in full force and effect and will not be affected by
the illegal, invalid or unenforceable provision or by its severance herefrom and
(d) in lieu of such illegal, invalid or unenforceable provision, there will be
added automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.
8.17 GOVERNING LAW
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York, United States of America, without giving effect
to its conflicts of law principles except for New York General Obligations Law
Section 5-1401.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized officers, in two originals as of the date
first above written.
Purchaser
ECO TELECOM LIMITED
By /s/ Serge Barychov
-------------------------------
Name: Serge Barychkov
Title: Attorney-in-Fact
Seller
OVERTURE LIMITED
By /s/ ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
[SCHEDULES INTENTIONALLY OMITTED]
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EXHIBIT A TO SHARE PURCHASE AGREEMENT
FORM OF CALL OPTION AGREEMENT
PREFERRED STOCK
----------------------------------------------------------------
CALL OPTION AGREEMENT
by and between
Eco Telecom Limited
and
Overture Limited
dated _________, 2001
--------------------------------------------------------------
42
TABLE OF CONTENTS
▇. ▇▇▇▇▇ OF OPTION ...................................................... 1
Section 1.1 Grant of Option ....................................... 1
Section 1.2 Exercise Price ........................................ 2
Section 1.3 Option Period ......................................... 2
II. EXERCISE OF OPTION .................................................. 2
Section 2.1 Manner of Exercise .................................... 2
Section 2.2 Transfer of Title to Option Shares .................... 2
Section 2.3 Payment of Taxes ...................................... 2
Section 2.4 Reorganization, Reclassification, Merger,
Consolidation or Disposition of Assets ............... 2
III. REPRESENTATIONS AND WARRANTIES ..................................... 3
Section 3.1 Representations and Warranties of the Grantor ......... 3
Section 3.2 Representations and Warranties of the Grantee ......... 4
IV. COVENANTS ........................................................... 5
Section 4.1 Grantor Affirmative Covenants ......................... 5
Section 4.2 Grantor Negative Covenant ............................. 5
Section 4.3 Grantee Affirmative Covenant .......................... 5
Section 4.4 Indemnification ....................................... 6
V. MISCELLANEOUS ........................................................ 6
Section 5.1 Termination of Agreement .............................. 6
Section 5.2 Suspension ............................................ 6
Section 5.3 Severability .......................................... 7
Section 5.4 Waiver of Compliance; Consents ........................ 7
Section 5.5 Amendments ............................................ 7
Section 5.6 Assignment ............................................ 7
Section 5.7 Survival .............................................. 7
Section 5.8 Notices ............................................... 7
Section 5.9 Governing Law; Arbitration;
Consent to Jurisdiction ............................. 8
Section 5.10 Definitions .......................................... 9
Section 5.11 Captions ............................................. 11
Section 5.12 Counterparts ......................................... 11
ANNEX A
EXHIBIT A
43
THIS CALL OPTION AGREEMENT (the "Agreement"), dated -, 2001, is
entered into by and between (i) Eco Telecom Limited, a company organized and
existing under the laws of Gibraltar with its registered office at: 10/8
International Commercial Centre, Casemates Square, Gibraltar (the "Grantor"),
and (ii) Overture Limited, a company incorporated under the laws of Bermuda
(Registration No. 30335) with its registered office at: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ 08 Bermuda (the "Grantee"). Grantor and Grantee
are sometimes collectively referred to as the "Parties" and individually
referred to as a "Party". Capitalized terms used herein are defined in Section
5.10 hereof.
WHEREAS, pursuant to that certain Share Purchase Agreement, dated as
of May 30, 2001, by and between the Grantor and the Grantee (the "Purchase
Agreement"), the Grantee has agreed to sell, and the Grantor has agreed to
purchase, (i) Six Million Four Hundred Twenty Six Thousand Six Hundred
(6,426,600) preferred shares, par value 0.005 Rubles per share (the "Preferred
Stock") of Open Joint Stock Company "Vimpel-Communications", an open joint stock
company incorporated and existing under the laws of the Russian Federation (the
"Company") and (ii) Sixteen Thousand Three Hundred Sixty Two (16,362) shares of
common stock, par value 0.005 per share, of the Company, for an aggregate
purchase price equal to Twenty Five Million United States dollars (USD
25,000,000) (the "Purchase Price") payable by the Grantor to the Grantee in
accordance with the terms of the Purchase Agreement (the date on which the
Purchase Price shall become due and payable pursuant to the terms and conditions
of the Purchase Agreement shall hereinafter be referred to as the "Payment
Date");
WHEREAS, the Grantor has covenanted under Section 5.03 of the
Purchase Agreement to secure the payment by the Grantor of the Purchase Price
and the Gain on Disposal under the Purchase Agreement by means of (i) executing
and delivering the Common Stock Pledge Agreement and the Common Stock Call
Option Agreement and (ii) pledging shares of Common Stock as required pursuant
to the Common Stock Pledge Agreement, within ten (10) days (not including any
Saturday, Sunday, or any day on which banks located in New York, New York,
London, England, Oslo, Norway or Moscow, Russia are authorized or obliged to
close) following the Report Registration Date; and
WHEREAS, pursuant to that certain Share Pledge Agreement, dated the
date hereof, by and between the Grantor and the Grantee (the "Pledge
Agreement"), the Grantor has agreed to provide adequate security to the Grantee
for the payment by the Grantor of the Purchase Price under the Purchase
Agreement from the date hereof until the Pledge and Call Option Closing Date by
means of pledging all of the Preferred Stock;
WHEREAS, to induce the Grantee to enter into the Purchase Agreement,
the Grantor is willing to grant to the Grantee an option to purchase all of the
Preferred Stock of the Company, now or hereafter owned by the Grantor, on the
terms and conditions set forth in this Agreement.
NOW THEREFORE, intending to be legally bound hereby, for good and
valuable consideration the receipt whereof is hereby acknowledged, the Parties
hereto have agreed as follows:
▇. ▇▇▇▇▇ OF OPTION
Section 1.1 Grant of Option. Subject to the terms and conditions set
forth in this Agreement, the Grantor hereby grants to the Grantee, and the
Grantee hereby accepts from the Grantor, an option to purchase (the "Option")
Six Million Four Hundred Twenty Six Thousand Six Hundred (6,426,600) shares of
Preferred Stock owned by the Grantor (the "Option Shares").
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Section 1.2 Exercise Price. The Parties hereby agree that the
aggregate exercise price to acquire the Option Shares shall be equal to One
Hundred United States dollars (USD 100) (the "Exercise Price").
Section 1.3 Option Period. Subject to Sections 5.1 and 5.2 hereof,
the Grantee shall have the right to exercise the Option and to purchase the
Option Shares at any time commencing on the second (2nd) Business Day following
the Payment Date until the Termination Date (the "Option Period").
II. EXERCISE OF OPTION
Section 2.1 Manner of Exercise. At any time and from time to time
during the Option Period, the Grantee may exercise the Option and purchase the
Option Shares by delivering to the Grantor (i) a written notice in substantially
the form attached hereto as Annex A (the "Exercise Notice") and (ii) payment of
the Exercise Price in immediately available funds by wire transfer to such
account of the Grantor as the Grantor shall advise to the Grantee by a written
notice in compliance with Section 5.8 hereof prior to the Exercise Date.
In the event (i) the Grantor has not advised the Grantee of its
account or (ii) the account of the Grantor is not operational on the Exercise
Date and the Grantee's reasonable attempt to transfer the Exercise Price has
failed, the Grantee shall have fulfilled its obligation to pay the Exercise
Price by depositing the amount of the Exercise Price with such escrow agent as
the Grantee may reasonably appoint (including without limitation its legal
counsel) with written notice to the Grantor for delivery or transfer of the
Exercise Price to the Grantor at its request.
Section 2.2 Transfer of Title to Option Shares. Upon receipt of the
Exercise Notice, the Grantor will, as promptly as practicable and in any event
within three (3) Business Days following the Exercise Date, transfer the Option
Shares to the Grantee and cause the Option Shares to be registered in the name
of the Grantee or its nominee as set forth in the Exercise Notice. As between
the Grantor and the Grantee, the Option will be deemed to have been exercised,
and the Grantee will be deemed to have become the beneficial owner and the
holder of record of the Option Shares for all purposes (including without
limitation the right to vote the Option Shares), as of the Exercise Date. The
Grantor shall be liable for the full amount of the fees due to the registrar for
the registration of the Option Shares in the name of the Grantee.
Section 2.3 Payment of Taxes. Grantor will pay all expenses in
connection with, and all taxes, regardless of designation, that may be imposed
with respect to, the delivery of the Option Shares; provided, however, that such
taxes will be paid by the Grantee if (i) such taxes are imposed by law upon the
Grantee, or (ii) such taxes could have been legally avoided through the
provision by the Grantee of such certifications or declarations as the Grantor
shall reasonably request from the Grantee and the Grantee is in a position to
obtain, but fails to provide, such certifications or declarations.
Section 2.4 Reorganization, Reclassification, Merger, Consolidation
or Disposition of Assets. In case the Company reorganizes its capital,
reclassifies its capital stock, consolidates or merges with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to shares of Preferred Stock of the
Company), or sells, transfers or otherwise disposes of all or substantially all
its property, assets or business to another corporation and, pursuant to the
terms of such reorganization, reclassification, merger, consolidation or
disposition of assets, shares of common stock of the Company (in case of a
reorganization of its capital or reclassification of its capital stock) or
shares of common stock of the successor or acquiring corporation (in any other
instance referred to above), or any cash, shares of stock or other securities or
property of any nature whatsoever
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(including warrants or other subscription or purchase rights) in addition to or
in lieu of the Preferred Stock of the Company or the successor or acquiring
corporation, as the case may be (the "Other Property"), are to be received by or
distributed to the holders of shares of Preferred Stock of the Company, then
Grantee will have the right thereafter to receive, upon exercise of the Option,
the number of shares of Preferred Stock of the Company and the number of shares
of common stock of the Company or the successor or acquiring corporation, as the
case may be, and Other Property that is receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets
by a holder of the number of shares of Preferred Stock of the Company equal to
the number of Option Shares immediately prior to such event.
III. REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Grantor. The
Grantor represents and warrants to the Grantee as of the date hereof and, except
as otherwise set forth below, as of the Exercise Date that:
(i) it is a legal entity duly organized, validly existing and in good
standing under the laws of Gibraltar and has all requisite corporate
power to carry on its business as it is now being, and heretofore
has been, conducted;
(ii) it has the full corporate power and authority to execute, deliver
and perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement have been duly and validly authorized by all necessary
corporate action on the part of the Grantor and no other proceedings
on the part of the Grantor will be necessary to authorize this
Agreement or the consummation of the transactions contemplated
hereby. This Agreement has been duly executed and delivered and
constitutes the legal, valid and binding obligations of the Grantor,
enforceable in accordance with its terms;
(iii) no approval, authorization or consent of any governmental entity, or
of any third party, is required on the part of the Grantor in
connection with the execution and delivery of this Agreement and the
other documents contemplated hereby, the performance by the Grantor
of any of its obligations hereunder or thereunder, and the
consummation of the transactions contemplated hereby or thereby;
(iv) neither the execution and delivery of this Agreement, nor the
performance by the Grantor of any of its obligations under this
Agreement, nor the consummation of the transactions contemplated
hereby will conflict with its charter and other founding documents,
or conflict with or result in a breach or violation of, or
constitute a default under, (i) any agreement to which the Grantor
is a party or by which it is bound or to which any of its property
or assets are or may become subject, or (ii) as of the date hereof,
any applicable law, rule, regulation, judgment, order or decree of
any government, governmental instrumentality or agency or arbitrator
or court having jurisdiction over the Grantor or any of its property
or assets;
(v) it has good, valid and marketable title to the Option Shares and to
all of the rights afforded thereby, free and clear of any security
interest, pledge, claim or any other encumbrance (collectively,
"Liens"), except for those established by the Pledge Agreement, the
Primary Agreement and the Principal Agreements;
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46
(vi) except as may result from the Original Preferred Stock Call Option,
as of the date hereof the Option Shares are not subject to any
rights of first refusal, buy-out and similar rights, calls or
assessments, except for those established by this Agreement, the
Primary Agreement and the Principal Agreements; and
(viii)no person other than the Grantor and the Grantee has any rights in
or over any of the Option Shares and the Option Shares are not
subject to any contract, commitment, agreement, understanding or
arrangement of any kind except this Agreement, the Primary Agreement
and the Principal Agreements; and
(ix) assuming that the representations and warranties contained in
Section 3.02(h) of the Purchase Agreement were true and correct, the
Option Shares were originally acquired by the Grantor in compliance
with all applicable United States federal and state securities laws.
The Grantor has not made any "directed selling efforts" into the
United States, as defined under Regulation S of the Securities Act
("Regulation S") with respect to the granting of the Option, and
will not make any "directed selling efforts" in connection with the
delivery of the Option Shares to the Grantee pursuant to this
Agreement.
Section 3.2 Representations and Warranties of the Grantee. The
Grantee represents and warrants to the Grantor, as of the date hereof and,
except as otherwise set forth below, as of the Exercise Date, that:
(i) it is a legal entity duly organized, validly existing and in good
standing under the laws of Bermuda and has all requisite corporate
power to carry on its business as it is now being, and heretofore
has been, conducted;
(ii) it has the full corporate power and authority to execute, deliver
and perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement have been duly and validly authorized by all necessary
corporate action on the part of the Grantee and no other proceedings
on the part of the Grantee will be necessary to authorize this
Agreement or the consummation of the transactions contemplated
hereby. This Agreement has been duly executed and delivered and
constitutes the legal, valid and binding obligations of the Grantee,
enforceable in accordance with its terms;
(iii) no approval, authorization or consent of any governmental entity, or
of any third party, is required on the part of the Grantee in
connection with the execution and delivery of this Agreement and the
other documents contemplated hereby, the performance by the Grantee
of any of its obligations hereunder or thereunder, or the
consummation of the transactions contemplated hereby or thereby;
(iv) neither the execution and delivery of this Agreement, nor the
performance by the Grantee of any of its obligations under this
Agreement, nor the consummation of the transactions contemplated
hereby will conflict with its charter and other founding documents,
or conflict with or result in a breach or violation of, or
constitute a default under, (i) any agreement to which the Grantee
is a party or by which it is bound or to which any of its property
or assets are or may become subject, or (ii) any applicable law,
rule, regulation, judgment, order or decree of any government,
governmental instrumentality or agency or arbitrator or court having
jurisdiction over the Grantee or any of its property or assets;
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(v) it has been informed that neither the Option nor the Option Shares
have been registered under the Securities Act, or the securities
law of any state or jurisdiction of the United States, and it
acknowledges that neither the Option nor the Option Shares may be
offered, sold, transferred, pledged, hypothecated or otherwise
disposed of other than pursuant to a registration statement which
has been declared effective under the Securities Act or an
exemption from the registration requirements of the Securities Act;
(vi) it is not, and when it exercises the Option and receives the Option
Shares will not be, a "U.S. person" (as such term is defined in
Regulation S), and it is not entering into this Agreement, nor will
its acquisition of Option Shares pursuant to the exercise of the
Option be, for the account or benefit of any U.S. person (as so
defined);
(vii) it has entered into and executed this Agreement in an "offshore
transaction" (as such term is defined in Regulation S) outside of
the United States of America, its territories and possessions;
(viii) it will exercise the Option in an "offshore transaction" (as
such term is defined in Regulation S); and
(ix) the Grantee will, upon the exercise of the Option, acquire the
Option Shares for its own account for investment purposes only and
not with a view to, or for sale or resale in connection with, any
public distribution thereof or with any present intention of
selling, distributing, or otherwise disposing of such Option
Shares, except in compliance with the Securities Act and all other
applicable securities laws.
IV. COVENANTS
Section 4.1 Grantor Affirmative Covenants. (a) Notwithstanding the
representations and warranties set forth in Section 3.1 hereof, if prior to or
during the Option Period the performance of this Agreement or the consummation
of the transactions contemplated hereby shall require any further corporate
action of the Grantor and/or any other approvals, consents, filings or
proceedings, the Grantor shall take, or cause to be taken, any and all such
actions and/or obtain, make or initiate any and all such approvals, consents,
filings or proceedings as may be required to ensure that the Grantee can
exercise the Option at any time during the Option Period.
(b) The Grantor shall make and deliver to the Grantee prior to or
during the Option Period, or upon the exercise of the Option by the Grantee, or
the delivery of the Option Shares by the Grantor, such additional
representations, warranties, covenants or agreements as may be necessary to
ensure that the exercise of the Option and the delivery of the Option Shares
upon such exercise do not violate any applicable United States federal and state
securities laws.
Section 4.2 Grantor Negative Covenant. The Grantor shall refrain
from taking any action, or from causing any other person to take any action,
that may render the Option of the Grantee unexercisable or unenforceable at any
time during the term of this Agreement.
Section 4.3 Grantee Affirmative Covenant. (a) Notwithstanding the
representations and warranties set forth in Section 3.2 hereof, if prior to or
during the Option Period the performance of this Agreement or the consummation
of the transactions contemplated hereby shall require any further corporate
action of the Grantee and/or any other approvals, consents, filings or
proceedings, the Grantee shall take, or cause to be taken, any and all such
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actions and/or obtain, make or initiate any and all such approvals, consents,
filings or proceedings as may be required to ensure that the Grantor can
transfer to the Grantee the Option Shares upon exercise of the Option by the
Grantee at any time during the Option Period.
(b) The Grantee shall make and deliver to the Grantor prior to or
during the Option Period, or upon the exercise of the Option by the Grantee, or
the delivery of the Option Shares by the Grantor, such additional
representations, warranties, covenants or agreements as may be necessary to
ensure that the exercise of the Option and the delivery of the Option Shares
upon such exercise do not violate any applicable United States federal and state
securities laws.
(c) Upon the exercise of the Option by the Grantee, the Grantee
shall comply with the terms and provisions of Clause 4 (Sub-clauses 4.1, 4.2 and
4.3) of the Supplemental Agreements as if the Grantee were a party thereto.
Section 4.4 Indemnification. Each Party (the "Indemnifying Party")
hereby agrees to indemnify and hold harmless the other Party (and its
principals, officers, directors, employees, affiliates and assigns) (the
"Indemnified Party") from and against any and all losses, damages, costs and
reasonable expenses, including attorneys' fees, which the Indemnified Party may
suffer or incur by reason of any breach of any representation, warranty,
agreement, covenant or undertaking by the Indemnifying Party under this
Agreement or in connection with the enforcement by the Indemnified Party of its
rights hereunder; provided, that the aggregate liability of a Party under this
Section 4.4 and under Section 8.01 of the Purchase Agreement shall not exceed
the amount set forth under Section 8.01 of the Purchase Agreement.
V. MISCELLANEOUS
Section 5.1 Termination of Agreement. Unless otherwise agreed
between the Parties in writing, this Agreement shall terminate upon the earlier
to occur of: (a) the payment of the Purchase Price in full by the Grantor to the
Grantee pursuant to the terms of the Purchase Agreement whether directly or as a
result of the enforcement by the Grantee of the Pledge Agreement; or (b) the
registration of the Option Shares in the name of the Grantee following the
Grantee's exercise of the Option pursuant to the provisions of this Agreement;
or (c) upon the assignment by the Grantor of its rights and obligations under
the Purchase Agreement to the Company or its designee following the Company's
exercise of the Preferred Stock Call Option under the Primary Agreement upon the
occurrence of an Eco Telecom Contribution Default, upon (i) the transfer by the
Grantor of the Preferred Stock to the Company or its designee, (ii) execution by
the Company or its designee of an Endorsement in the form attached as Schedule 4
to the Purchase Agreement and (iii) in case of a transfer and assignment to the
Company's designee, the Company's execution of a Guarantee in the form attached
as Schedule 5 to the Purchase Agreement; or (d) upon (i) the execution and
delivery by the Grantor of the Common Stock Pledge Agreement and the Common
Stock Call Option Agreement and (y) the pledge of shares of Common Stock as
required pursuant to the Common Stock Pledge Agreement, on the Pledge and Call
Option Closing Date.
Section 5.2. Suspension. Any and all rights of the Grantee under
this Agreement shall be suspended with respect to such number of the Option
Shares as is equal to the number of shares with respect to which the Grantee has
commenced foreclosure of the pledge under the Pledge Agreement by means of
appointing the Auction Organizer pursuant to the Pledge Agreement. If, however,
after foreclosure of the pledge of such number of shares under the Pledge
Agreement all or a portion of the Grantor's obligations under the Purchase
Agreement remain outstanding, the suspension of rights pursuant to the first
sentence of this Section 5.2 shall cease and the Grantee shall be entitled to
exercise its rights hereunder in respect of the remaining shares of Preferred
Stock of the Company owned by the Grantor.
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If a competent court of law has found that the Grantee has breached
any of its material obligations under Article IV of the Purchase Agreement
outstanding after the Closing Date (as defined in the Purchase Agreement) and
such breach is not cured by the Grantee, the Option shall not be exercisable.
Section 5.3 Severability. In the event and to the extent that any
provision of this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions in such jurisdictions, or of such provision in any other
jurisdiction, shall not in any way be affected or impaired thereby.
Section 5.4 Waiver of Compliance; Consents. The failure of any of
the Parties to comply with any obligations, agreements, covenants, undertakings
or conditions herein may be waived by the Party entitled to the benefits thereof
only by a written instrument signed by the Party granting such waiver. Any such
waiver or failure to insist upon strict compliance with such obligations,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure.
Section 5.5 Amendments. This Agreement may be amended, modified
or supplement only by the written consent of the Parties hereto.
Section 5.6 Assignment. Neither Party may assign this Agreement or
any right, interest or obligation hereunder to any Person without the prior
written consent of the other Party hereto and any attempt to do so will be null
and void. Subject to the preceding sentence, this Agreement shall inure to the
benefit of, be enforceable by, and be binding upon, the Parties and their
successors, transferees and assigns.
Section 5.7 Survival. All agreements, covenants, undertakings,
representations and warranties made herein shall survive the execution and
delivery of this Agreement until the Termination Date; provided, however, that
notwithstanding any investigation heretofore and hereafter made by or on behalf
of a Party, all representations and warranties of the Parties shall survive the
termination of this Agreement pursuant to Section 5.1(b) hereof and shall
continue in full force and effect for a period of twelve (12) months following
the Exercise Date; provided, further, that an Indemnified Party's right for
indemnification in connection with any breach of representation or warranty
asserted prior to the aforementioned date shall survive until the Indemnified
Party shall have been indemnified therefore.
Section 5.8 Notices. Any notice, request or other communication,
including any request for arbitration, to be given hereunder to any Party shall
be in writing and shall be deemed to have been duly given if delivered by
messenger or established overnight courier service or sent by facsimile (with
conformation of receipt and confirmed by registered or certified mail) to the
following address:
(a) if to the Grantor, to:
Eco Telecom Limited
▇▇▇▇▇ ▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: + 350-41988
Attention: ▇▇▇▇▇ ▇▇▇▇
with a copy to:
OOO Alfa-Eco
21, Ulitsa Novy Arbat
121019 Moscow, Russian Federation
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Facsimile: + (7) (095) 201 5914
Attention: Stanislav Shekshnya
and a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CIS Legal Services
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, Russian Federation
Facsimile: + (7) (095) 363 6501
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(b) if to the Grantee, to:
Overture Limited
Richmond ▇▇▇▇▇
▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: + (1) (▇▇▇) ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, Russian Federation
Facsimile: + (7) (095) 797 4601
Attention: ▇▇▇▇▇ ▇▇ ▇▇▇▇, Esq.
or such other address as any Party shall have specified by written notice given
to the other Party in the manner specified above. Any such notices and
communications shall be effective (i) if delivered by messenger or established
courier service, upon receipt or refusal to accept delivery or (ii) if sent by
facsimile, when sent.
Section 5.9 Governing Law; Arbitration; Consent to Jurisdiction.
(a) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York without giving effect to its conflict of
law principles except for New York General Obligations Law Section 5-1401.
(b) Any and all disputes, controversies or claims arising under,
relating to or in connection with this Agreement or the breach, termination or
validity thereof ("Disputes") shall be finally and exclusively settled by
arbitration in accordance with the Arbitration Rules of the International
Chamber of Commerce ("ICC") then in effect (the " ICC Rules") by a panel of
three (3) arbitrators with the following terms and conditions:
(i) In the event of any conflict between the ICC Rules and the
provisions of this Agreement, the provisions of this Agreement shall prevail.
(ii) The place of the arbitration shall be Geneva, Switzerland.
(iii) The claimant and respondent shall each nominate one arbitrator
in accordance with the ICC Rules. The two party-appointed arbitrators shall have
thirty (30) days from the date of the nomination of the second arbitrator to
agree on the nomination a third arbitrator who shall serve as chair of the
tribunal. Any arbitrator not timely nominated, shall, on
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the request of any Party, be appointed by the ICC Court of Arbitration in
accordance with the ICC Rules.
(iv) The English language shall be used as the written and spoken
language for the arbitration, the award and all matters connected with the
arbitration.
(v) The award of the arbitrators shall be final and binding on the
Parties may be enforced by any court of competent jurisdiction and may be
executed against the person and assets of the losing Party in any competent
jurisdiction.
(vi) In order to facilitate the comprehensive resolution of related
disputes, all Disputes between any of the parties to this Agreement that arise
under or in connection with the Purchase Agreement, the Pledge Agreement and/or
the Common Stock Purchase Agreement ("Other Agreements") may be brought in a
single arbitration. Pursuant to a Request submitted under Article 4(6) of the
ICC Rules or otherwise, the parties hereby agree that upon the request of any
party to an arbitration proceeding initiated under this Agreement or the Other
Agreements, the ICC Court shall determine whether to consolidate the arbitration
proceeding with any other arbitration proceeding involving any of the parties
hereto arising out of or relating to the Agreement or the Other Agreements. It
is the parties' intention that any such arbitration proceedings be consolidated
in the event that (i) there are issues of fact or law common to the proceedings
so that a consolidated proceeding would be more efficient than separate
proceedings, and (ii) no party would be unduly prejudiced as a result of such
consolidation through undue delay or otherwise.
(c) Each Party unconditionally and irrevocably agrees to submit to
the non-exclusive jurisdiction of the courts located in Geneva, Switzerland (the
"Geneva Courts"), for the purpose of any proceedings in aid of arbitration and
for interim or conservatory measures before an arbitral tribunal is duly
constituted under this Agreement, and for proceedings arising out of or relating
to the enforcement of any award or order of an arbitral tribunal duly
constituted under this Agreement. Each Party unconditionally and irrevocably
waives any objections that they may have now or in the future to such
jurisdiction including without limitation objections by reason of lack of
personal jurisdiction, improper venue, or inconvenient forum.
Section 5.10 Definitions. The following capitalized terms, used but
not otherwise defined herein, shall have the meanings ascribed to them below:
"Agreement" shall have the meaning ascribed thereto in the
introductory paragraph.
"Auction Organizer" shall have the meaning ascribed thereto in
Annex A to the Pledge Agreement.
"Business Day" shall mean any day except a Saturday, Sunday or
nationally recognized holiday in Bermuda or the Russian Federation.
"Common Stock" shall have the meaning ascribed thereto in the
Purchase Agreement.
"Common Stock Call Option Agreement" shall mean the Call
Option Agreement, in the form attached as Exhibit A hereto, by and between the
Pledgor and the Pledgee to be executed and delivered on and as of the Pledge and
Call Option Closing Date with respect to a call option on shares of Common
Stock.
"Common Stock Pledge Agreement" shall mean the Pledge
Agreement, in the form attached as Exhibit A to the Pledge Agreement, by and
between the
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Pledgor and the Pledgee to be executed and delivered on and as of the Pledge and
Call Option Closing Date with respect to the pledge of shares of Common Stock.
"Company" shall have the meaning ascribed thereto in the first
recital.
"Disputes" shall have the meaning ascribed thereto in Section
5.9(b).
"Eco Telecom Contribution Default" shall have the meaning
ascribed thereto in the Primary Agreement.
"Event of Default" shall have the meaning ascribed thereto in
the Purchase Agreement.
"Exercise Date" shall mean the date of the Exercise Notice.
"Exercise Notice" shall have the meaning ascribed thereto in
Section 2.1.
"Exercise Price" shall have the meaning ascribed thereto in
Section 1.2.
"Geneva Courts" shall have the meaning ascribed thereto in
Section 5.9(c).
"Grantee" shall have the meaning ascribed thereto in the
introductory paragraph.
"Grantor" shall have the meaning ascribed thereto in the
introductory paragraph.
" ICC" shall have the meaning ascribed thereto in Section
5.9(b).
"ICC Rules" shall have the meaning ascribed thereto in Section
5.9(b).
"Indemnified Party" shall have the meaning ascribed thereto in
Section 4.4.
"Indemnifying Party" shall have the meaning ascribed thereto
in Section 4.4.
"Liens" shall have the meaning ascribed thereto in Section
3.1(v).
"Option" shall have the meaning ascribed thereto in Section
1.1.
"Option Period" shall have the meaning ascribed thereto in
Section 1.3.
"Option Shares" shall have the meaning ascribed thereto in
Section 1.1.
"Original Preferred Stock Call Option" shall have the meaning
ascribed thereto in the Purchase Agreement.
"Other Agreements" shall have the meaning ascribed thereto in
Section 5.9(b).
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"Other Property" shall have the meaning ascribed thereto in
Section 2.4.
"Parties" and "Party" hall have the meaning ascribed thereto
in the introductory paragraph.
"Payment Date" shall have the meaning ascribed thereto in the
first recital.
"Pledge Agreement" shall have the meaning ascribed thereto in
the third recital.
"Pledge and Call Option Closing Date" shall have the meaning
ascribed thereto in the Purchase Agreement.
"Preferred Stock" shall have the meaning ascribed thereto in
the first recital.
"Preferred Stock Call Option" shall have the meaning ascribed
thereto in the Purchase Agreement.
"Primary Agreement" shall mean the Primary Agreement dated as
of May 30, 2001 between and among Telenor East Invest AS, the Grantor and the
Company.
"Principal Agreements" shall have the meaning ascribed thereto
in the Purchase Agreement.
"Purchase Agreement" shall have the meaning ascribed thereto
in the first recital.
"Purchase Price" shall have the meaning ascribed thereto in
the first recital.
"Regulation S" shall have the meaning ascribed thereto in
Section 3.1(xi).
"Supplemental Agreements" shall have the meaning ascribed
thereto in the Purchase Agreement.
"Termination Date" shall mean the date of termination of this
Agreement pursuant to Section 5.1 hereof.
Section 5.11 Captions. The Section captions used herein are for
reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 5.12 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each Party has caused this
Agreement to be executed and delivered by a duly authorized officer as of the
date first above written.
ECO TELECOM LIMITED
By:______________________________
Name:
Title:
OVERTURE LIMITED
By:_____________________________
Name:
Title:
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ANNEX A
EXERCISE NOTICE
Eco Telecom Limited
▇▇▇▇▇ ▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
Dear Sirs:
Reference is made to that certain Call Option Agreement (the "Option
Agreement"), dated -, 2001, by and between Eco Telecom Limited, a company
organized and existing under the laws of Gibraltar (the "Grantor"), and Overture
Limited, a company incorporated under the laws of Bermuda (the "Grantee").
Capitalized terms used in this notice, but not otherwise defined, will have the
meanings assigned to such terms in the Option Agreement.
1. Exercise of Option. The Grantee hereby elects to exercise its Option to
purchase the Option Shares pursuant to the Option Agreement.
2. Transfer of the Option Shares. The Grantee hereby directs the Grantor
to transfer the Option Shares in the name of [the Grantee].
3. Tender of Exercise Price. The Grantee will tender the Purchase Price in
the manner provided in Section 2.1 of the Option Agreement.
IN WITNESS WHEREOF, the Grantee has caused this Exercise Notice to
be executed as of the ____ day of _________, _____.
OVERTURE LIMITED
By:______________________________
Name:
Title:
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EXHIBIT A TO PREFERRED CALL OPTION AGREEMENT
FORM OF COMMON STOCK CALL OPTION AGREEMENT
COMMON STOCK
----------------------------------------------------------------
CALL OPTION AGREEMENT
by and between
Eco Telecom Limited
and
Overture Limited
dated ____________, 2001
---------------------------------------------------------------
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▇. ▇▇▇▇▇ OF OPTION ..................................................... 1
Section 1.1 Grant of Option ....................................... 1
Section 1.2 Exercise Price ........................................ 1
Section 1.3 Option Period ......................................... 2
II. EXERCISE OF OPTION ................................................. 2
Section 2.1 Manner of Exercise .................................... 2
Section 2.2 Transfer of Title to Option Shares .................... 2
Section 2.3 Payment of Taxes ...................................... 2
Section 2.4 Fractional Shares ..................................... 2
Section 2.5 Reorganization, Reclassification, Merger,
Consolidation or Disposition of Assets ............... 2
III. REPRESENTATIONS AND WARRANTIES .................................... 3
Section 3.1 Representations and Warranties of the Grantor ......... 3
Section 3.2 Representations and Warranties of the Grantee ......... 4
IV. COVENANTS .......................................................... 5
Section 4.1 Grantor Affirmative Covenants ......................... 5
Section 4.2 Grantor Negative Covenant ............................. 6
Section 4.3 Grantee Affirmative Covenant .......................... 6
Section 4.4 Indemnification ....................................... 6
V. MISCELLANEOUS ....................................................... 6
Section 5.1 Termination of Agreement .............................. 6
Section 5.2 Suspension ............................................ 7
Section 5.3 Severability .......................................... 7
Section 5.4 Waiver of Compliance; Consents ........................ 7
Section 5.5 Amendments ............................................ 7
Section 5.6 Assignment ............................................ 7
Section 5.7 Survival .............................................. 7
Section 5.8 Notices ............................................... 8
Section 5.9 Governing Law; Arbitration;
Consent to Jurisdiction .............................. 8
Section 5.10 Definitions .......................................... 9
Section 5.11 Captions ............................................. 12
Section 5.12 Counterparts ......................................... 12
ANNEX A
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THIS CALL OPTION AGREEMENT (the "Agreement"), dated --, 2001, is
entered into by and between (i) Eco Telecom Limited, a company organized and
existing under the laws of Gibraltar with its registered office at: 10/8
International Commercial Centre, Casemates Square, Gibraltar (the "Grantor"),
and (ii) Overture Limited, a company incorporated under the laws of Bermuda
(Registration No. 30335) with its registered office at: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ 08 Bermuda (the "Grantee"). Grantor and Grantee
are sometimes collectively referred to as the "Parties, " and individually
referred to as a "Party." Capitalized terms used herein are defined in Section
5.10 hereof.
WHEREAS, pursuant to that certain Share Purchase Agreement, dated as
of May 30, 2001, by and between the Grantor and the Grantee (the "Purchase
Agreement"), the Grantee has agreed to sell, and the Grantor has agreed to
purchase, (i) Six Million Four Hundred Twenty Six Thousand Six Hundred
(6,426,600) preferred shares, par value 0.005 Rubles per share (the "Preferred
Stock") of Open Joint Stock Company "Vimpel-Communications", an open joint stock
company incorporated and existing under the laws of the Russian Federation (the
"Company") and (ii) Sixteen Thousand Three Hundred Sixty Two (16,362) shares of
common stock, par value 0.005 per share, of the Company, for an aggregate
purchase price equal to Twenty Five Million United States dollars (USD
25,000,000) (the "Purchase Price") payable by the Grantor to the Grantee in
accordance with the terms of the Purchase Agreement (the date on which the
Purchase Price shall become due and payable pursuant to the terms and conditions
of the Purchase Agreement shall hereinafter be referred to as the "Payment
Date");
WHEREAS, pursuant to that certain Pledge Agreement, dated the date
hereof, by and between the Grantor and the Grantee (the "Pledge Agreement"), the
Grantor has pledged to the Grantee o (o) ordinary voting shares, par value 0.005
Rubles per share, of the Company (which number of shares may be adjusted as
provided in the Pledge Agreement) as collateral for the obligation of the
Grantor to pay the Purchase Price and the Gain on Disposal in accordance with
the Purchase Agreement; and
WHEREAS, to induce the Grantee to enter into the Purchase Agreement,
the Grantor is willing to grant to the Grantee an option to purchase a certain
number of ordinary voting shares of the Company, now or hereafter owned by the
Grantor, on the terms and conditions set forth in this Agreement.
NOW THEREFORE, intending to be legally bound hereby, for good and
valuable consideration the receipt whereof is hereby acknowledged, the Parties
hereto have agreed as follows:
▇. ▇▇▇▇▇ OF OPTION
Section 1.1 Grant of Option. Subject to the terms and conditions set
forth in this Agreement, the Grantor hereby grants to the Grantee, and the
Grantee hereby accepts from the Grantor, an option to purchase (the "Option")
such number of ordinary voting shares of the Company owned by the Grantor as
have an aggregate Market Value on the Exercise Date equal to the amount of the
Purchase Price outstanding as of the Exercise Date (such number of shares as may
be adjusted as provided herein, the "Option Shares"). Without any prejudice to
the foregoing, the amount of the Option Shares as of the date hereof shall be
- (->) ordinary voting shares of the Company.
Section 1.2 Exercise Price. The Parties hereby agree that the
aggregate exercise price to acquire the Option Shares shall be equal to One
Hundred United States dollars (USD 100) (the "Exercise Price").
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Section 1.3 Option Period. Subject to Section 5.1 hereof, the
Grantee shall have the right to exercise the Option and to purchase the Option
Shares at any time commencing on the second (2nd) Business Day following the
Payment Date until the Termination Date (the "Option Period").
II. EXERCISE OF OPTION
Section 2.1 Manner of Exercise. At any time and from time to time
during the Option Period, the Grantee may exercise the Option in whole and not
in part and purchase the Option Shares by delivering to the Grantor (a) a
written notice in substantially the form attached hereto as Annex A (the
"Exercise Notice") and (b) payment of the Exercise Price in immediately
available funds by wire transfer to such account of the Grantor as the Grantor
shall advise to the Grantee by a written notice in compliance with Section 5.8
hereof prior to the Exercise Date.
In the event the aforesaid account of the Grantor is not operational
on the Exercise Date, and the Grantee's reasonable attempt to transfer the
Exercise Price has failed, the Grantee shall have fulfilled its obligation to
pay the Exercise Price by depositing the amount of the Exercise Price with such
escrow agent as the Grantee may reasonably appoint (including without limitation
its legal counsel) with written notice to the Grantor for delivery or transfer
of the Exercise Price to the Grantor at its request.
Section 2.2 Transfer of Title to Option Shares. Upon receipt of the
Exercise Notice, the Grantor will, as promptly as practicable and in any event
within three (3) Business Days following the Exercise Date, transfer the Option
Shares to the Grantee and cause the Option Shares to be registered in the name
of the Grantee or its nominee as set forth in the Exercise Notice. The Grantor
at its sole discretion shall have the right to transfer to the Grantee the
shares pledged to the Grantee under the Pledge Agreement and the Grantee shall
be obliged to permit such transfer and to accept such pledged shares. As between
the Grantor and the Grantee, the Option will be deemed to have been exercised,
and the Grantee will be deemed to have become the beneficial owner and the
holder of record of the Option Shares for all purposes (including without
limitation the right to vote the Option Shares), as of the Exercise Date. The
Grantor shall be liable for the full amount of the fees due to the registrar for
the registration of the Option Shares in the name of the Grantee.
Section 2.3 Payment of Taxes. Grantor will pay all expenses in
connection with, and all taxes, regardless of designation, that may be imposed
with respect to, the delivery of the Option Shares; provided, however, that such
taxes will be paid by the Grantee if (i) such taxes are imposed by law upon the
Grantee, or (ii) such taxes could have been legally avoided through the
provision by the Grantee of such certifications or declarations as the Grantor
shall reasonably request from the Grantee and the Grantee is in a position to
obtain, but fails to provide, such certifications or declarations.
Section 2.4 Fractional Shares. The Grantor will not be required to
sell a fractional share of the Option Shares upon exercise of the Option. As to
any fractional share of the Option Shares which the Grantee would otherwise be
entitled to purchase upon such exercise, the Grantor will pay an adjustment in
cash in an amount equal to such fraction of the Market Value of one (1) ordinary
voting share of the Company.
Section 2.5 Reorganization, Reclassification, Merger, Consolidation
or Disposition of Assets. In case the Company reorganizes its capital,
reclassifies its capital stock, consolidates or merges with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to ordinary voting shares of the
Company), or sells, transfers or otherwise disposes of all or substantially all
its property, assets or business to another corporation and, pursuant to the
terms of such reorganization,
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reclassification, merger, consolidation or disposition of assets, shares of
common stock of the Company (in case of a reorganization of its capital or
reclassification of its capital stock) or of the successor or acquiring
corporation (in any other instance referred to above), or any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of
common stock of the Company or the successor or acquiring corporation, as the
case may be (the "Other Property"), are to be received by or distributed to the
holders of ordinary voting shares of the Company, then Grantee will have the
right thereafter to receive, upon exercise of the Option, the number of shares
of common stock of the Company or the successor or acquiring corporation, as the
case may be, and Other Property that is receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets
by a holder of the number of ordinary voting shares of the Company equal to the
number of Option Shares immediately prior to such event.
III. REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Grantor. The
Grantor represents and warrants to the Grantee as of the date hereof and, except
as otherwise set forth below, as of the Exercise Date that:
(i) it is a legal entity duly organized, validly existing and in good
standing under the laws of Gibraltar and has all requisite corporate
power to carry on its business as it is now being, and heretofore
has been, conducted;
(ii) it has the full corporate power and authority to execute, deliver
and perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement have been duly and validly authorized by all necessary
corporate action on the part of the Grantor and no other proceedings
on the part of the Grantor will be necessary to authorize this
Agreement or the consummation of the transactions contemplated
hereby. This Agreement has been duly executed and delivered and
constitutes the legal, valid and binding obligations of the Grantor,
enforceable in accordance with its terms;
(iii) no approval, authorization or consent of any governmental entity, or
of any third party, is required on the part of the Grantor in
connection with the execution and delivery of this Agreement and the
other documents contemplated hereby, the performance by the Grantor
of any of its obligations hereunder or thereunder, and the
consummation of the transactions contemplated hereby or thereby;
(iv) neither the execution and delivery of this Agreement, nor the
performance by the Grantor of any of its obligations under this
Agreement, nor the consummation of the transactions contemplated
hereby will conflict with its charter and other founding documents,
or conflict with or result in a breach or violation of, or
constitute a default under, (i) any agreement to which the Grantor
is a party or by which it is bound or to which any of its property
or assets are or may become subject, or (ii) as of the date hereof,
any applicable law, rule, regulation, judgment, order or decree of
any government, governmental instrumentality or agency or arbitrator
or court having jurisdiction over the Grantor or any of its property
or assets;
(v) it has good, valid and marketable title to the Option Shares and to
all of the rights afforded thereby, free and clear of any security
interest, pledge, claim or
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any other encumbrance (collectively, "Liens"), except for those
established by the Pledge Agreement, the Primary Agreement and the
Principal Agreements;
(vi) to the Knowledge of the Grantor, as of the date hereof the Option
Shares have been validly issued and properly registered with the
appropriate authorities competent for the registration of the
issuance thereof in accordance with applicable law;
(vii) the Option Shares are fully paid-up in accordance with the laws of
the Russian Federation, are non-assessable and are not subject to
any rights of first refusal, buy-out and similar rights, calls or
assessments, except for those established by this Agreement, the
Primary Agreement and the Principal Agreements; and
(viii)no person other than the Grantor and the Grantee has any rights in
or over any of the Option Shares and the Option Shares are not
subject to any contract, commitment, agreement, understanding or
arrangement of any kind except this Agreement, the Primary Agreement
and the Principal Agreements; and
(xi) the Option Shares were originally acquired by the Grantor in
compliance with all applicable United States federal and state
securities laws. The Grantor has not made any "directed selling
efforts" into the United States, as defined under Regulation S of
the Securities Act ("Regulation S") with respect to the granting of
the Option, and will not make any "directed selling efforts" in
connection with the delivery of the Option Shares to the Grantee
pursuant to this Agreement.
Section 3.2 Representations and Warranties of the Grantee. The
Grantee represents and warrants to the Grantor, as of the date hereof, that:
(i) it is a legal entity duly organized, validly existing and in good
standing under the laws of Bermuda and has all requisite corporate
power to carry on its business as it is now being, and heretofore
has been, conducted;
(ii) it has the full corporate power and authority to execute, deliver
and perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement have been duly and validly authorized by all necessary
corporate action on the part of the Grantee and no other proceedings
on the part of the Grantee will be necessary to authorize this
Agreement or the consummation of the transactions contemplated
hereby. This Agreement has been duly executed and delivered and
constitutes the legal, valid and binding obligations of the Grantee,
enforceable in accordance with its terms;
(iii) no approval, authorization or consent of any governmental entity, or
of any third party, is required on the part of the Grantee in
connection with the execution and delivery of this Agreement and the
other documents contemplated hereby, the performance by the Grantee
of any of its obligations hereunder or thereunder, or the
consummation of the transactions contemplated hereby or thereby;
(iv) neither the execution and delivery of this Agreement, nor the
performance by the Grantee of any of its obligations under this
Agreement, nor the consummation of the transactions contemplated
hereby will conflict with its charter and other founding documents,
or conflict with or result in a breach or violation of, or
constitute a default under, (i) any agreement to which the
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Grantee is a party or by which it is bound or to which any of its
property or assets are or may become subject, or (ii) any applicable
law, rule, regulation, judgment, order or decree of any government,
governmental instrumentality or agency or arbitrator or court having
jurisdiction over the Grantee or any of its property or assets;
(v) it has been informed that neither the Option nor the Option
Shares have been registered under the Securities Act, or the
securities law of any state or jurisdiction of the United States,
and it acknowledges that neither the Option nor the Option Shares
may be offered, sold, transferred, pledged, hypothecated or
otherwise disposed of other than pursuant to a registration
statement which has been declared effective under the Securities
Act or an exemption from the registration requirements of the
Securities Act;
(vi) it is not, and when it exercises the Option and receives the
Option Shares will not be, a "U.S. person" (as such term is
defined in Regulation S), and it is not entering into this
Agreement, nor will its acquisition of Option Shares pursuant to
the exercise of the Option be, for the account or benefit of any
U.S. person (as so defined);
(vii) it has entered into and executed this Agreement in an "offshore
transaction" (as such term is defined in Regulation S) outside of
the United States of America, its territories and possessions;
(viii) it will exercise the Option in an "offshore transaction" (as such
term is defined in Regulation S); and
(ix) the Grantee will, upon the exercise of the Option, acquire the
Option Shares for its own account for investment purposes only and
not with a view to, or for sale or resale in connection with, any
public distribution thereof or with any present intention of
selling, distributing, or otherwise disposing of such Option Shares,
except in compliance with the Securities Act and all other
applicable securities laws.
IV. COVENANTS
Section 4.1 Grantor Affirmative Covenants. (a) Notwithstanding the
representations and warranties set forth in Section 3.1 hereof, if prior to or
during the Option Period the performance of this Agreement or the consummation
of the transactions contemplated hereby shall require any further corporate
action of the Grantor and/or any other approvals, consents, filings or
proceedings, the Grantor shall take, or cause to be taken, any and all such
actions and/or obtain, make or initiate any and all such approvals, consents,
filings or proceedings as may be required to ensure that the Grantee can
exercise the Option at any time during the Option Period.
(b) The Grantor shall make and deliver to the Grantee prior to or
during the Option Period, or upon the exercise of the Option by the Grantee, or
the delivery of the Option Shares by the Grantor, such additional
representations, warranties, covenants or agreements as may be necessary to
ensure that the exercise of the Option and the delivery of the Option Shares
upon such exercise do not violate any applicable United States federal and state
securities laws.
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(c) On the date of execution hereof, the Grantor shall deliver to
the Grantee (i) an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇, special New York counsel to the
Grantor, (ii) an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ CIS Legal Services, special Russian
counsel to the Grantor and (iii) an opinion of Triay & Triay, special Gibraltar
counsel to the Grantor, substantially in the respective form attached as
Schedule 7.06 to the Purchase Agreement (but covering only the opinions rendered
with respect to the Preferred Stock Call Option Agreement and substituting any
references to the Preferred Stock Call Option Agreement with references to this
Agreement).
Section 4.2 Grantor Negative Covenant. The Grantor shall refrain
from taking any action, or from causing any other person to take any action,
that may render the Option of the Grantee unexercisable or unenforceable at any
time during the term of this Agreement.
Section 4.3 Grantee Affirmative Covenant. (a) Notwithstanding the
representations and warranties set forth in Section 3.2 hereof, if prior to or
during the Option Period the performance of this Agreement or the consummation
of the transactions contemplated hereby shall require any further corporate
action of the Grantee and/or any other approvals, consents, filings or
proceedings, the Grante shall take, or cause to be taken, any and all such
actions and/or obtain, make or initiate any and all such approvals, consents,
filings or proceedings as may be required to ensure that the Grantor can
transfer to the Grantee the Option Shares upon exercise of the Option by the
Grantee at any time during the Option Period.
(b) The Grantee shall make and deliver to the Grantor prior to or
during the Option Period, or upon the exercise of the Option by the Grantee, or
the delivery of the Option Shares by the Grantor, such additional
representations, warranties, covenants or agreements as may be necessary to
ensure that the exercise of the Option and the delivery of the Option Shares
upon such exercise do not violate any applicable United States federal and state
securities laws.
Section 4.4 Indemnification. Each Party (the "Indemnifying Party")
hereby agrees to indemnify and hold harmless the other Party (and its
principals, officers, directors, employees, affiliates and assigns) (the
"Indemnified Party") from and against any and all losses, damages, costs and
reasonable expenses, including attorneys' fees, which the Indemnified Party may
suffer or incur by reason of any breach of any representation, warranty,
agreement, covenant or undertaking by the Indemnifying Party under this
Agreement or in connection with the enforcement by the Indemnified Party of its
rights hereunder; provided, that the aggregate liability of a Party under this
Section 4.4 and under Section 8.01 of the Purchase Agreement shall not exceed
the amount set forth under Section 8.01 of the Purchase Agreement.
V. MISCELLANEOUS
Section 5.1 Termination of Agreement. Unless otherwise agreed
between the Parties in writing, this Agreement shall terminate upon the earlier
to occur of: (a) the payment of the Purchase Price in full by the Grantor to the
Grantee pursuant to the terms of the Purchase Agreement whether directly or as a
result of the enforcement by the Grantee of the Pledge Agreement; or (b) the
registration of the Option Shares in the name of the Grantee following the
Grantee's exercise of the Option pursuant to the provisions of this Agreement;
or (c) upon the assignment by the Grantor of its rights and obligations under
the Purchase Agreement to the Company or its designee following the Company's
exercise of the Preferred Stock Call Option under the Primary Agreement upon the
occurrence of an Eco Telecom Contribution Default, upon (i) the transfer by the
Grantor of the Preferred Stock to the Company or its designee, (ii) execution by
the Company or its designee of an Endorsement in the form attached as Schedule 4
to the Purchase Agreement, and (iii) in case of a transfer and assignment to the
Company's designee, the Company's execution of a Guarantee in the form attached
as Schedule 5 to the Purchase Agreement.
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Section 5.2. Suspension. Any and all rights of the Grantee under
this Agreement shall be suspended with respect to such number of the Option
Shares as is equal to the number of shares with respect to which the Grantee has
commenced foreclosure of the pledge under the Pledge Agreement by means of
appointing the Auction Organizer pursuant to the Pledge Agreement. If, however,
after foreclosure of the pledge of such number of shares under the Pledge
Agreement all or a portion of the Grantor's obligations under the Purchase
Agreement remain outstanding, the suspension of rights pursuant to the first
sentence of this Section 5.2 shall cease and the Grantee shall be entitled to
exercise its rights hereunder in respect of such number of ordinary voting
shares of the Company owned by the Grantor as have an aggregate Market Value on
the Exercise Date equal to the outstanding amount of the Purchase Price.
If a competent court of law has found that the Grantee has breached
any of its material obligations under Article IV of the Purchase Agreement
outstanding after the Closing Date (as defined in the Purchase Agreement) and
such breach is not cured by the Grantee, the Option shall not be exercisable.
Section 5.3 Severability. In the event and to the extent that any
provision of this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions in such jurisdictions, or of such provision in any other
jurisdiction, shall not in any way be affected or impaired thereby.
Section 5.4 Waiver of Compliance; Consents. The failure of any of
the Parties to comply with any obligations, agreements, covenants, undertakings
or conditions herein may be waived by the Party entitled to the benefits thereof
only by a written instrument signed by the Party granting such waiver. Any such
waiver or failure to insist upon strict compliance with such obligations,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure.
Section 5.5 Amendments. This Agreement may be amended, modified
or supplement only by the written consent of the Parties hereto.
Section 5.6 Assignment. Neither Party may assign this Agreement or
any right, interest or obligation hereunder to any Person without the prior
written consent of the other Party hereto and any attempt to do so will be null
and void; provided, however, that the Grantee by simple written notice to the
Grantor may transfer, assign or delegate all of its rights and obligations under
this Agreement to a Controlling Person of the Grantee or a Controlled Affiliate
of such Controlling Person to which it simultaneously transfers, assignes or
delegates its rights under the Purchase Agreement and the Pledge Agreement;
provided, further, that in the absence of an Event of Default, the Grantor by
simple written notice to the Grantee may assign its rights and obligations under
this Agreement to a Controlling Person of the Grantor or a Controlled Affiliate
of such Controlling Person simultaneously with the sale, transfer, assignment or
other disposal of the Shares to such Controlling Person or Controlled Affiliate.
Subject to the preceding sentence, this Agreement shall inure to the benefit of,
be enforceable by, and be binding upon, the Parties and their successors,
transferees and assigns.
Section 5.7 Survival. All agreements, covenants, undertakings,
representations and warranties made herein shall survive the execution and
delivery of this Agreement until the Termination Date; provided, however, that
notwithstanding any investigation heretofore and hereafter made by or on behalf
of a Party, all representations and warranties of the Parties shall survive the
termination of this Agreement pursuant to Section 5.1(b) hereof and shall
continue in full force and effect for a period of twelve (12) months following
the Exercise Date; provided, further, that an Indemnified Party's right for
indemnification in connection with any breach of representation or warranty
asserted prior to the aforementioned date shall survive until the Indemnified
Party shall have been indemnified therefore.
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Section 5.8 Notices. Any notice, request or other communication,
including any request for arbitration, to be given hereunder to any Party shall
be in writing and shall be deemed to have been duly given if delivered by
messenger or established overnight courier service or sent by facsimile (with
conformation of receipt and confirmed by registered or certified mail) to the
following address:
(a) if to the Grantor, to:
Eco Telecom Limited
▇▇▇▇▇ ▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: + 350-41988
Attention: ▇▇▇▇▇ ▇▇▇▇
with a copy to:
OOO Alfa-Eco
21, Novy Arbat
121019 Moscow, Russian Federation
Facsimile: + (7) (095) 201 5914
Attention: Stanislav Shekshnya
and a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CIS Legal Services
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, Russian Federation
Facsimile: + (7) (095) 363 6501
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(b) if to the Grantee, to:
Overture Limited
Richmond ▇▇▇▇▇
▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: + (1) (▇▇▇) ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, Russian Federation
Facsimile: + (7) (095) 797 4601
Attention: ▇▇▇▇▇ ▇▇ ▇▇▇▇, Esq.
or such other address as any Party shall have specified by written notice given
to the other Party in the manner specified above. Any such notices and
communications shall be effective (i) if delivered by messenger or established
courier service, upon receipt or refusal to accept delivery or (ii) if sent by
facsimile, when sent.
Section 5.9 Governing Law; Arbitration; Consent to Jurisdiction.
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(a) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York without giving effect to its conflict of
law principles except for New York General Obligations Law Section 5-1401.
(b) Any and all disputes, controversies or claims arising under,
relating to or in connection with this Agreement or the breach, termination or
validity thereof ("Disputes") shall be finally and exclusively settled by
arbitration in accordance with the Arbitration Rules of the International
Chamber of Commerce ("ICC") then in effect (the "ICC Rules") by a panel of three
(3) arbitrators with the following terms and conditions:
(i) In the event of any conflict between the ICC Rules and the
provisions of this Agreement, the provisions of this Agreement shall prevail.
(ii) The place of the arbitration shall be Geneva, Switzerland.
(iii) The claimant and respondent shall each nominate one arbitrator
in accordance with the ICC Rules. The two party-appointed arbitrators shall have
thirty (30) days from the date of the nomination of the second arbitrator to
agree on the nomination a third arbitrator who shall serve as chair of the
tribunal. Any arbitrator not timely nominated, shall, on the request of any
Party, be appointed by the ICC Court of Arbitration in accordance with the ICC
Rules.
(iv) The English language shall be used as the written and spoken
language for the arbitration, the award and all matters connected with the
arbitration.
(v) The award of the arbitrators shall be final and binding on the
Parties may be enforced by any court of competent jurisdiction and may be
executed against the person and assets of the losing Party in any competent
jurisdiction.
(vi) In order to facilitate the comprehensive resolution of related
disputes, all Disputes between any of the parties to this Agreement that arise
under or in connection with the Purchase Agreement, the Pledge Agreement and/or
the Common Stock Purchase Agreement ("Other Agreements") may be brought in a
single arbitration. Pursuant to a Request submitted under Article 4(6) of the
ICC Rules or otherwise, the parties hereby agree that upon the request of any
party to an arbitration proceeding initiated under this Agreement or the Other
Agreements, the ICC Court shall determine whether to consolidate the arbitration
proceeding with any other arbitration proceeding involving any of the parties
hereto arising out of or relating to the Agreement or the Other Agreements. It
is the parties' intention that any such arbitration proceedings be consolidated
in the event that (i) there are issues of fact or law common to the proceedings
so that a consolidated proceeding would be more efficient than separate
proceedings, and (ii) no party would be unduly prejudiced as a result of such
consolidation through undue delay or otherwise.
(c) Each Party unconditionally and irrevocably agrees to submit to
the non-exclusive jurisdiction of the courts located in Geneva, Switzerland (the
"Geneva Courts"), for the purpose of any proceedings in aid of arbitration and
for interim or conservatory measures before an arbitral tribunal is duly
constituted under this Agreement, and for proceedings arising out of or relating
to the enforcement of any award or order of an arbitral tribunal duly
constituted under this Agreement. Each Party unconditionally and irrevocably
waives any objections that they may have now or in the future to such
jurisdiction including without limitation objections by reason of lack of
personal jurisdiction, improper venue, or inconvenient forum.
Section 5.10 Definitions. The following capitalized terms, used but
not otherwise defined herein, shall have the meanings ascribed to them below:
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"Agreement" shall have the meaning ascribed thereto in the
introductory paragraph.
"Auction Organizer" shall have the meaning ascribed thereto in
Annex A to the Pledge Agreement.
"Business Day" shall mean any day except a Saturday, Sunday or
nationally recognized holiday in Bermuda or the Russian Federation.
"Company" shall have the meaning ascribed thereto in the first
recital.
"Closing Date" shall have the meaning ascribed thereto in the
Purchase Agreement.
"Dispute" shall have the meaning ascribed thereto in Section
5.9(b).
"Eco Telecom Contribution Default" shall have the meaning
ascribed thereto in the Purchase Agreement.
"Event of Default" shall have the meaning ascribed thereto in
the Purchase Agreement.
"Exercise Date" shall mean the date of the Exercise Notice.
"Exercise Notice" shall have the meaning ascribed thereto in
Section 2.1.
"Exercise Price" shall have the meaning ascribed thereto in
Section 1.2.
"Gain on Disposal" shall have the meaning ascribed thereto in
the Purchase Agreement.
"Geneva Courts" shall have the meaning ascribed thereto in
Section 5.9(c).
"Grantee" shall have the meaning ascribed thereto in the
introductory paragraph.
"Grantor" shall have the meaning ascribed thereto in the
introductory paragraph.
" ICC" shall have the meaning ascribed thereto in Section
5.9(b).
"ICC Rules" shall have the meaning ascribed thereto in Section
5.9(b).
"Indemnified Party" shall have the meaning ascribed thereto in
Section 4.4.
"Indemnifying Party" shall have the meaning ascribed thereto in
Section 4.4.
"Knowledge of the Grantor" shall mean to the best of the actual
knowledge of the Grantor after having made reasonable inquiries.
"Liens" shall have the meaning ascribed thereto in Section
3.1(v).
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"Market Value" shall mean, with respect to the ordinary voting
shares, the value thereof based on (i) the "daily market price" of the Company's
American Depositary Shares (or, if the Company no longer has its ordinary voting
shares represented by American Depositary Shares, the "daily market price" of
the Company's ordinary voting shares) as defined in the Company's prospectus
dated July 25, 2000 at page 143, or (ii) in the event the Company's American
Depositary Shares (or, if the Company no longer has its ordinary voting shares
represented by American Depositary Shares, the Company's ordinary voting shares)
are not listed, quoted or traded, the market value thereof as determined by a
recognized international investment bank selected by the Grantee (and approved
by the Grantor, which approval shall not unreasonably be withheld).
"Option" shall have the meaning ascribed thereto in Section
1.1.
"Option Period" shall have the meaning ascribed thereto in
Section 1.3.
"Option Shares" shall have the meaning ascribed thereto in
Section 1.1.
"Other Property" shall have the meaning ascribed thereto in
Section 2.5.
"Parties" and "Party" hall have the meaning ascribed thereto in
the introductory paragraph.
"Payment Date" shall have the meaning ascribed thereto in the
first recital.
"Pledge Agreement" shall have the meaning ascribed thereto in
the second recital.
"Preferred Stock" shall have the meaning ascribed thereto in
the first recital.
"Preferred Stock Call Option" shall have the meaning ascribed
thereto in the Purchase Agreement.
"Preferred Stock Call Option Agreement" shall mean the Call
Option Agreement, dated as of the Closing Date, by and between the Grantor and
the Grantee with respect to the Preferred Stock.
"Primary Agreement" shall mean the Primary Agreement dated as
of May 30, 2001 between and among Telenor East Invest AS, the Grantor and the
Company.
"Principal Agreements" shall have the meaning ascribed thereto
in the Purchase Agreement.
"Purchase Agreement" shall have the meaning ascribed thereto in
the first recital.
"Purchase Price" shall have the meaning ascribed thereto in the
first recital.
"Regulations S" shall have the meaning ascribed thereto in
Section 3.1(xi).
"Termination Date" shall mean the date of termination of this
Agreement pursuant to Section 5.1 hereof.
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Section 5.11 Captions. The Section captions used herein are for
reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 5.12 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each Party has caused this
Agreement to be executed and delivered by a duly authorized officer as of the
date first above written.
ECO TELECOM LIMITED
By:______________________________
Name:
Title:
OVERTURE LIMITED
By:_____________________________
Name:
Title:
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ANNEX A
EXERCISE NOTICE
Eco Telecom Limited
▇▇▇▇▇ ▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
Dear Sirs:
Reference is made to that certain Call Option Agreement (the "Option
Agreement"), dated o, 2001, by and between Eco Telecom Limited, a company
organized and existing under the laws of Gibraltar (the "Grantor"), and Overture
Limited, a company incorporated under the laws of Bermuda (the "Grantee").
Capitalized terms used in this notice, but not otherwise defined, will have the
meanings assigned to such terms in the Option Agreement.
1. Exercise of Option. The Grantee hereby elects to exercise its Option to
purchase the Option Shares pursuant to the Option Agreement.
2. Transfer of the Option Shares. The Grantee hereby directs the Grantor
to transfer the Option Shares in the name of [the Grantee].
3. Tender of Exercise Price. The Grantee will tender the Purchase Price in
the manner provided in Section 2.1 of the Option Agreement.
IN WITNESS WHEREOF, the Grantee has caused this Exercise Notice
to be executed as of the ____ day of _________, _____.
OVERTURE LIMITED
By:______________________________
Name:
Title:
72
EXHIBIT B TO SHARE PURCHASE AGREEMENT
FORM OF PLEDGE AGREEMENT
PREFERRED STOCK
PLEDGE AGREEMENT
dated as of ________, 2001
between
ECO TELECOM LIMITED
and
OVERTURE LIMITED
73
TABLE OF CONTENTS
ARTICLE I PLEDGE OF SHARES .............................................. 1
Section 1.1 Pledge of Shares ...................................... 1
ARTICLE II .............................................................. 2
REPRESENTATIONS AND WARRANTIES OF THE PARTIES ........................... 2
Section 2.1 Representations and Warranties of the Pledgor ......... 2
Section 2.2 Representations and Warranties of the Pledgee ......... 4
ARTICLE III RIGHTS AND OBLIGATIONS OF THE PLEDGOR ....................... 5
Section 3.1 Affirmative Covenants of the Pledgor .................. 5
Section 3.2 Negative Covenants of the Pledgor ..................... 5
Section 3.3 Rights of the Pledgor ................................. 6
ARTICLE IV RIGHTS AND OBLIGATIONS OF THE PLEDGEE ........................ 6
Section 4.1 Affirmative Covenants of the Pledgee .................. 6
Section 4.2 Rights of the Pledgee ................................. 6
Section 4.3 No Other Obligations of the Pledgee ................... 7
ARTICLE V FORECLOSURE; REALIZATION OF THE PLEDGED PROPERTY .............. 7
Section 5.1 Foreclosure ........................................... 7
Section 5.2 Realization of the Pledged Property ................... 7
ARTICLE VI MISCELLANEOUS ................................................ 7
Section 6.1 Indemnification ....................................... 7
Section 6.2 Termination ........................................... 8
Section 6.3 Severability .......................................... 8
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Section 6.4 No Waiver ............................................. 8
Section 6.5 Amendments ............................................ 8
Section 6.6 Assignment ............................................ 8
Section 6.7 Notices ............................................... 9
Section 6.8 Governing Law; Arbitration ............................ 10
Section 6.9 Definitions ........................................... 11
Section 6.10 Language ............................................. 13
Section 6.11 Captions ............................................. 14
Section 6.12 Counterparts ......................................... 14
Schedule 1
Schedule 2
Schedule 3
Annex A
Schedule 1 to Annex A
Schedule 2 to Annex A
EXHIBIT A
75
THIS PLEDGE AGREEMENT, dated ___________, 2001 (the "Agreement"), is
entered into by and between (i) ECO TELECOM LIMITED, a company organized and
existing under the laws of Gibraltar with its registered office at: 10/8
International Commercial Centre, Casemates Square, Gibraltar (the "Pledgor") and
(ii) Overture Limited, an exempted limited company organized under the laws of
Bermuda (Registration No. 30335) with its registered office at: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇, ▇▇▇▇▇▇▇ (▇▇▇ "Pledgee"). Both the Pledgor
and the Pledgee are collectively referred to herein as the "Parties" and each
individually as a "Party".
WHEREAS, the Pledgor and the Pledgee have entered into the Share
Purchase Agreement, dated as of May 30, 2001 (the "Purchase Agreement"),
pursuant to which the Pledgor is obliged to pay to the Pledgee Twenty Five
Million United States Dollars (USD 25,000,000) (the "Purchase Price") on the
terms and conditions set forth in the Purchase Agreement (a copy of which is
attached hereto as Schedule 1) which is incorporated herein by reference and
constitutes an integral part hereof;
WHEREAS, pursuant to the Purchase Agreement the Pledgor is obliged
to pay to the Pledgee the Purchase Price in full no later than DECEMBER 25,
2003; provided, however, that the Purchase Price shall become due and payable
immediately (i) upon the sale, transfer, assignment or other disposal of the
Preferred Stock by the Pledgor (other than to a Controlling Person of the
Pledgor or a Controlled Affiliate of the Pledgor or such Controlling Person (a
"Controlled Transferee")) or (ii) if an Event of Default has occurred; provided,
further, that following a Change of Control over the Pledgor or a Controlled
Transferee, the Purchase Price shall become due and payable immediately. (Any
such date on which the Purchase Price shall become due and payable being
referred to as the "Payment Date");
WHEREAS, the Pledgor is a substantial shareholder of Open Joint
Stock Company "Vimpel-Communications" (the "Company");
WHEREAS, the Pledgor has covenanted under Section 5.03 of the
Purchase Agreement to secure the payment by the Pledgor of the Purchase Price
and the Gain on Disposal under the Purchase Agreement by means of (i) executing
and delivering the Common Stock Pledge Agreement and the Common Stock Call
Option Agreement and (ii) pledging shares of Common Stock as required pursuant
to the Common Stock Pledge Agreement, within ten (10) days (not including any
Saturday, Sunday, or any day on which banks located in New York, New York,
London, England, Oslo, Norway or Moscow, Russia are authorized or obliged to
close) following the Report Registration Date; and
WHEREAS, the Pledgor is willing to provide adequate security to the
Pledgee for the payment by the Pledgor of the Purchase Price under the Purchase
Agreement from the date hereof until the Pledge and Call Option Closing Date by
means of pledging the Preferred Stock.
NOW THEREFORE, the Pledgor and the Pledgee, intending to be legally
bound hereby, have agreed as follows:
ARTICLE I
PLEDGE OF SHARES
Section 1.1 Pledge of Shares. In order to secure the payment by the
Pledgor of the Purchase Price under the Purchase Agreement prior to or on
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the Payment Date (the "Secured Obligations"), the Pledgor hereby pledges (the
"Pledge") from the date hereof to the Pledgee the shares (the "Shares") as
described below:
Issuer: Open Joint Stock Company "Vimpel-Communications"
Type of the Shares: Preference Shares Type "A"
Registration Details (a) State Registration No. 73-1-6945 of September 6, 1996
(b) State Registration No. 73-1-7100 of December 4, 1996
Par Value: one half of one ▇▇▇▇▇▇ (RUR 0.005) per Share
Number of Shares: (a) 4,170,000 (Four Million One Hundred Seventy
Thousand)
(b) 2,256,600 (Two Million Two Hundred Fifty Six
Thousand Six Hundred)
Pledge Value
of the Shares: Twenty Five Million United States dollars (USD25,000,000).
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
Section 2.1 Representations and Warranties of the Pledgor.
(a) The Pledgor is a company duly organized, properly
registered and validly existing under the laws of Gibraltar and has all
requisite corporate and other power and authority to carry on its business as
now being and heretofore conducted and to own, use, lease, operate and dispose
of the assets and properties which it currently owns, uses, leases and operates,
including the Shares.
(b) The Shares are not subject to any rights of first refusal,
buy-out and similar rights, calls or assessments, except for those established
by this Agreement, the Call Option Agreement and the Principal Agreements.
(c) No person other than the Pledgor and the Pledgee has any
rights in or over any of the Shares and the Shares are not subject to any
contract, commitment, agreement, understanding or arrangement of any kind except
pursuant to this Agreement, the Call Option Agreement and the Principal
Agreements.
(d) The Pledgor is the legal and beneficial owner of the
Shares, free and clear of any security interest, pledge, claim or any other
encumbrance (the "Liens"), except for (i) any Liens in favor of the Pledgor
pursuant to this Agreement or (ii) any restrictions that may result from the
Call Option Agreement or any that may arise under the Principal Agreements.
There
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77
are no (i) securities convertible into or exchangeable for the Shares or (ii)
options, warrants or other rights to purchase or subscribe to securities
convertible into or exchangeable for the Shares, except for any options,
warranties or other rights granted under the Principal Agreements.
(e) The Shares are properly registered in accordance with the
requirements of the Russian law in the name of the Pledgor in the shareholders
register of the Company (the "Register") which is maintained by ZAO
"Natsionalnaya Registratsionnaya Kompaniya" (the "Registrar") as evidenced by an
extract from the Register issued by the Registrar in accordance with the
requirements of Russian law and attached hereto as Schedule 2.
(f) The Pledgor has full corporate power and authority to
enter into, execute and deliver this Agreement and the other documents
contemplated hereby and to pledge the Shares as provided in this Agreement.
(g) The Pledgor has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement and no other
proceedings on the part of the Pledgor or the Company will be necessary to
authorize this Agreement or the consummation of the transactions contemplated
hereby.
(h) This Agreement has been duly executed and delivered by the
Pledgor. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby will not result in a breach of, or give
rise to a right of termination of, any permit or authorization to which the
Pledgor or the Company is subject or a party and no approval or authorization of
any governmental entity, or of any third party, is required on the part of the
Pledgor or the Company in connection with the execution, delivery and
performance of this Agreement and the other documents contemplated hereby.
(i) The execution, delivery and performance by the Pledgor of
this Agreement do not violate, breach or conflict with (i) the Pledgor's
constituent documents, (ii) any agreement, contract or instrument to which the
Pledgor is a party or by which the Pledgor or its properties are bound except
for any agreement with the Pledgee, or (iii) any applicable law, regulation,
decree, order or rule.
(j) There is no pending or threatened action, suit, claim or
investigation by any third party, or inquiry by a governmental agency, or other
proceeding by or before any court or governmental or other regulatory or
administrative agency or commission requesting or looking toward an order,
judgment or decree which may have adverse effect with regard to (i) the
financial position or activities the Pledgor, (ii) the Pledgor's title to the
Shares or (iii) the legality, validity or enforceability of this Agreement.
(k) This Agreement constitutes the legal, valid and binding
obligation of the Pledgor, enforceable against the Pledgor in accordance
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78
with its terms.
(l) The Pledgor has provided the Pledgee with full, complete
and accurate copies of the Principal Agreements as currently in force and
effect.
(m) On the Closing Date, upon the execution and delivery of
this Agreement and registration of the Pledge of the Shares in the Register
pursuant to Section 3.1(a), a valid first priority pledge and a valid security
interest over the Shares shall have been created in favor and for the benefit of
the Pledgee to secure the Secured Obligations pursuant to this Agreement and no
further filings or recording of any document or instrument or any other action
will be required to perfect such pledge or security interest (except that the
pledge of additional Shares than those pledged on and as of the Closing Date
shall require registration thereof in the Register).
Section 2.2 Representations and Warranties of the Pledgee.
(a) The Pledgee is a company duly organized, properly
registered and validly existing under the laws of Bermuda and has all requisite
corporate and other power and authority to carry on its business and to own,
use, lease, operate and dispose of the assets and properties which it currently
owns, uses, leases and operates.
(b) The Pledgee has full corporate power and authority to
enter into, execute and deliver this Agreement and the other documents
contemplated hereby.
(c) The Pledgee has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement and no other
proceedings on the part of the Pledgee or the Company will be necessary to
authorize this Agreement or the consummation of the transactions contemplated
hereby.
(d) This Agreement has been duly executed and delivered by the
Pledgee. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby will not result in a breach of, or give
rise to a right of termination of, any permit or authorization to which the
Pledgee is subject or a party and no approval or authorization of any
governmental entity, or of any third party, is required on the part of the
Pledgee or the Company in connection with the execution, delivery and
performance of this Agreement and the other documents contemplated hereby.
(e) The execution, delivery and performance by the Pledgee of
this Agreement do not violate, breach or conflict with (i) the Pledgee's
constituent documents, (ii) any agreement, contract or instrument to which the
Pledgee is a party or by which the Pledgee or its properties are bound except
for any agreement with the Pledgor, or (iii) any applicable law, regulation,
decree,
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order or rule.
(f) This Agreement constitutes the legal, valid and binding
obligation of the Pledgee, enforceable against the Pledgee in accordance with
its terms.
ARTICLE III
RIGHTS AND OBLIGATIONS OF THE PLEDGOR
Section 3.1 Affirmative Covenants of the Pledgor. The Pledgor hereby
covenants and agrees that:
(a) on the date of execution and delivery of this Agreement,
the Pledgor shall (i) submit to the Registrar a duly completed and executed
pledge order substantially in the form attached hereto as Schedule 3 with
respect to the Shares to register the Pledge in the Register and (ii) deliver to
the Pledgee an extract from the Register evidencing registration of the Pledge;
(b) the Pledgor shall (i) be solely responsible for all
matters relating to the Shares; (ii) from time to time take all actions, and
make all filings, registration and recordation as may be required by applicable
law or reasonably requested by the Pledgee in connection with the Pledgee's
security interest in the Shares; (iii) promptly notify the Pledgee of the
occurrence of any event which may, or may lead to, affect in adverse manner the
Pledgee's security interest in the Shares; and (iv) defend at its own expense
its ownership rights to the Shares against any and all claims of any third
party; provided, however, that the Pledgor shall not be required to take
insurance on the Shares;
(c) the Pledgor shall, at its own expense, do, make, execute
and deliver any and all additional documents that the Pledgee may reasonably
require to protect the Pledge and the Pledgee's rights over the Shares pursuant
to this Agreement.
Section 3.2 Negative Covenants of the Pledgor. The Pledgor hereby
covenants and agrees with the Pledgee that, unless otherwise agreed in writing
with the Pledgee, until the Termination Date:
(a) the Pledgor shall not dispose of, sell, convert, exchange,
transfer or alienate in any manner all or any portion of the Shares, except for
transferring any or all of the Shares pursuant to this Agreement or to the
Pledgee pursuant to the Call Option Agreement;
(b) the Pledgor shall not grant or suffer any Liens against
the Shares, including, without limitation, any subsequent pledge or retention
rights, or any other pre-emptive rights with respect to the Shares other than
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80
resulting from this Agreement, the Principal Agreements or in favor of the
Pledgee; and
(c) the Pledgor shall not take any action, enter into any
agreement, commitment or arrangement which is intended to or which the Pledgor
knows will result in the delisting of the American Depository Shares
representing ordinary voting shares of the Company from the New York Stock
Exchange, unless such delisting coincides with the listing of the ordinary
voting shares of the Company or depositary receipts thereof on another
recognized international exchange or trading system. For the avoidance of doubt,
any actions by directors or officers designated by the Pledgor in accordance
with the Principal Agreements in the exercise of their fiduciary duties, which
actions may result in the delisting of such American Depository Shares, shall
not be considered actions taken by the Pledgor.
Section 3.3 Rights of the Pledgor. The Pledgee hereby agrees with
the Pledgor that as long as no Event of Default has occurred under the Purchase
Agreement and the Pledgee has not otherwise commenced foreclosure of the Shares
pursuant to Article V hereof, the Pledgor shall continue to enjoy the following
rights with regard to the Shares: (i) to receive dividends on the Shares,
distributed by the Company in accordance with its founding documents; (ii) to
vote the Shares at any general meeting of the shareholders of the Company; and
(iii) to exercise any other rights attached to the Shares in accordance with the
Company's founding documents and applicable law; provided, however, that in the
event the Pledgor exercises any such right that would result in an exchange of
the Shares for other securities of the Company or another legal entity as a
result of a reorganization, the Pledgor shall be required to pledge the
resulting consideration in favor of the Pledgee; and, provided, further, that in
the event the Pledgor exercises any right of redemption of the Shares, the
Pledgor shall be required to grant a security interest over the resulting
consideration in favor of the Pledgee.
ARTICLE IV
RIGHTS AND OBLIGATIONS OF THE PLEDGEE
Section 4.1 Affirmative Covenants of the Pledgee. The Pledgee hereby
covenants and agrees that upon termination of the Pledge pursuant to Section 6.2
of this Agreement, the Pledgee shall execute and deliver to the Pledgor and the
Registrar an order releasing the Shares from the Pledge and such other documents
as are required by the applicable legislation or as may be reasonably requested
by the Pledgor to release the Shares from the Pledge.
Section 4.2 Rights of the Pledgee. In addition to the rights
provided by applicable law or set forth elsewhere in this Agreement, including
without limitation Article V hereof, the Pledgee shall have the following rights
with respect to the Shares:
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(a) to the extent that the Pledgor does not comply with its
covenants hereunder, the Pledgee may take any action with respect to the Shares
that it deems appropriate to maintain or protect its security interest in the
Shares at the Pledgor's expense; and
(b) the Pledgee is authorized to give notice to third parties
regarding the Pledge of the Shares without consent or approval of the Pledgor.
Section 4.3 No Other Obligations of the Pledgee. Except as expressly
set forth in this Agreement, the Pledgee shall have no other obligations with
respect to the Shares, including without limitation no obligation to insure the
Shares.
ARTICLE V
FORECLOSURE; REALIZATION OF THE PLEDGED PROPERTY
Section 5.1 Foreclosure. In the event the Pledgor fails to fully
perform the Secured Obligations in accordance with the Purchase Agreement, the
Pledgee, upon written notice to the Pledgor of such failure (the "Default
Notice"), shall be entitled to take any and all actions with regard to the
Shares which is permitted by applicable law, including, but not limited to, the
foreclosure on the Shares; provided, that the Parties hereby expressly agree
that for such foreclosure on the Shares no decision of any court of law or state
arbitration court, or any award of an arbitration tribunal is required, and the
Pledgor hereby waives its right to apply to any court of law, state arbitration
court or arbitration for foreclosure under any court or arbitration procedure.
Section 5.2 Realization of the Pledged Property. The Shares shall be
sold by the Auction Organizer through a public auction, in accordance with the
procedures provided for in Annex A to this Agreement which constitutes an
integral part of this Agreement.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Indemnification. To the extent permitted by applicable
law, the Pledgor shall indemnify and hold the Pledgee harmless from and against
any and all losses, claims, taxes, costs, fees and expenses, including
attorneys' fees, incurred by the Pledgee in connection with the enforcement by
the Pledgee of its rights hereunder and the realization of the Shares. The
provisions of this Section 6.1 shall survive the termination of this Agreement
as
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set forth in Section 6.2 hereof.
Section 6.2 Termination. The Pledge created by this Agreement shall
terminate and the Shares shall be released from the Pledge on the earlier to
occur of (i) the payment of the Secured Obligations in full by the Pledgor to
the Pledgee pursuant to the terms of the Purchase Agreement, or (ii) the payment
of the sales proceeds from the realization of the Shares to the Pledgee, or
(iii) the transfer of ownership of the Shares to the Pledgee, or (iv) the
delivery by the Pledgor to the Pledgee of the Preferred Stock required to be
delivered by the Pledgor pursuant to the Call Option Agreement following the
Pledgee's exercise of the call option thereunder, or (v) the assignment by the
Pledgor of its rights and obligations under the Purchase Agreement to the
Company or its designee following the Company's exercise of the Preferred Stock
Call Option under the Primary Agreement upon the occurrence of an Eco Telecom
Contribution Default upon (x) the transfer by the Pledgor of the Preferred Stock
to the Company or its designee, (y) the execution by the Company or its designee
of an Endorsement in the form attached as Schedule 4 to the Purchase Agreement,
and (z) in case of a transfer and assignment to the Company's designee, the
execution by the Company of a Guarantee in the form attached as Schedule 5 to
the Purchase Agreement, or (vi) upon (x) the execution and delivery of the
Common Stock Pledge Agreement and the Common Stock Call Option Agreement by the
Pledgor and (y) the pledge of shares of Common Stock as required pursuant to the
Common Stock Pledge Agreement, on the Pledge and Call Option Closing Date.
This Agreement shall terminate upon release of the Shares from the
Pledge in the Register (the "Termination Date"); provided, however, that the
provisions of Sections 6.1, 6.7 and 6.8 shall survive any termination pursuant
to clauses (ii) or (iii) above.
Section 6.3 Severability. In the event and to the extent that any
provision of this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions in such jurisdictions, or of such provision in any other
jurisdiction, shall not in any way be affected or impaired thereby.
Section 6.4 No Waiver. No failure or delay by the Pledgee in
exercising any right or remedy and no course of dealing between the Pledgee and
the Pledgor shall operate as a waiver thereof, nor shall any single or partial
exercise of any right or remedy preclude any other or future exercise thereof.
Section 6.5 Amendments. This Agreement may be amended, modified or
supplement only by the written consent of the Parties hereto.
Section 6.6 Assignment. This Agreement shall inure to the benefit
of, and be enforceable by, the Pledgee and its successors, transferees and
assigns, and shall be binding upon the Parties and their heirs, executors,
successors and assigns; provided, however, that the Pledgor may not, without
prior written consent of the Pledgee, transfer, assign or delegate any of its
rights
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or obligations hereunder, and any such purported transfer, assignment or
delegation shall be null and void, and shall not release the Pledgor of any of
its obligations hereunder.
Section 6.7 Notices. Any notice, request or other document,
including any request for arbitration, to be given hereunder to any Party shall
be in writing and shall be deemed to have been duly given and effective if and
when (i) delivered by a courier against receipt or (ii) sent by fax and
simultaneously confirmed by registered or certified mail, as follows:
(a) if to the Pledgor, to:
Eco Telecom Limited
▇▇▇▇▇ ▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ No.: ▇▇▇▇-▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
with a copy to:
OOO Alfa-Eco
21, Novy Arbat
121019 Moscow
Russian Federation
Facsimile No.: ▇▇▇▇▇-▇▇▇-▇▇▇▇
Attention: Stanislav Shekshnya
and a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CIS Legal Services
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Russian Federation
Facsimile No.: + ▇▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(b) if to the Pledgee, to:
Overture Limited
Richmond ▇▇▇▇▇
▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: + (1) (▇▇▇) ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇
With a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, Russian Federation
Facsimile: + ▇▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇ ▇▇▇▇, Esq.
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or such other address as any Party shall have specified by written notice given
to the other Party in the manner specified above. All such notices and
communications shall, when mailed or sent by facsimile, be effective when
received at the above addresses.
Section 6.8 Governing Law; Arbitration.
(a) This Agreement shall be governed by, and construed in
accordance with, the laws of the Russian Federation.
(b) Any and all disputes, controversies or claims arising
under, relating to or in connection with this Agreement or the breach,
termination or validity thereof ("Disputes") shall be finally and exclusively
settled by arbitration in accordance with the Arbitration Rules of the
International Chamber of Commerce ("ICC") then in effect (the "ICC Rules") by a
panel of three (3) arbitrators with the following terms and conditions:
(i) In the event of any conflict between the ICC Rules
and the provisions of this Agreement, the provisions of this Agreement
shall prevail.
(ii) The place of the arbitration shall be Geneva,
Switzerland.
(iii) The claimant and respondent shall each nominate
one arbitrator in accordance with the ICC Rules. The two party-appointed
arbitrators shall have thirty (30) days from the date of the nomination of
the second arbitrator to agree on the nomination a third arbitrator who
shall serve as chair of the tribunal. Any arbitrator not timely nominated,
shall, on the request of any Party, be appointed by the ICC Court of
Arbitration in accordance with the ICC Rules.
(iv) The English language shall be used as the written
and spoken language for the arbitration, the award and all matters
connected with the arbitration.
(v) The award of the arbitrators shall be final and
binding on the Parties may be enforced by any court of competent
jurisdiction and may be executed against the person and assets of the
losing Party in any competent jurisdiction.
(vi) In order to facilitate the comprehensive resolution
of related disputes, all Disputes between any of the parties to this
Agreement that arise under or in connection with the Purchase Agreement,
the Call Option Agreement and/or the Common Stock Purchase Agreement
("Other Agreements") may be brought in a single arbitration. Pursuant to a
Request submitted under Article 4(6) of the ICC Rules or otherwise, the
parties hereby agree that upon the request of any party to an arbitration
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proceeding initiated under this Agreement or the Other Agreements, the ICC
Court shall determine whether to consolidate the arbitration proceeding
with any other arbitration proceeding involving any of the parties hereto
arising out of or relating to the Agreement or the Other Agreements. It is
the parties' intention that any such arbitration proceedings be
consolidated in the event that (i) there are issues of fact or law common
to the proceedings so that a consolidated proceeding would be more
efficient than separate proceedings, and (ii) no party would be unduly
prejudiced as a result of such consolidation through undue delay or
otherwise
(c) Each Party unconditionally and irrevocably agrees to
submit to the non-exclusive jurisdiction of the courts located in Geneva,
Switzerland (the "Geneva Courts"), for the purpose of any proceedings in aid of
arbitration and for interim or conservatory measures before an arbitral tribunal
is duly constituted under this Agreement, and for proceedings arising out of or
relating to the enforcement of any award or order of an arbitral tribunal duly
constituted under this Agreement. Each Party unconditionally and irrevocably
waives any objections that they may have now or in the future to such
jurisdiction including without limitation objections by reason of lack of
personal jurisdiction, improper venue, or inconvenient forum.
Section 6.9 Definitions. The following capitalized terms, used but
not otherwise defined herein, shall have the meanings ascribed to them below:
"Agreement" shall have the meaning ascribed thereto in the
introductory paragraph and shall include all Schedules, Annexes and Exhibits
hereto.
"Auction Organizer" shall have the meaning ascribed thereto in Annex
A hereto.
"Business Day" shall mean any day except a Saturday, Sunday or
nationally recognized holiday in Bermuda or the Russian Federation.
"Call Option Agreement" shall mean the Call Option Agreement, dated
as of the date hereof, by and between the Pledgor as the grantor and the Pledgee
as the grantee with respect to a call option on the Preferred Stock as provided
therein.
"Closing Date" shall have the meaning ascribed thereto in the
Purchase Agreement.
"Common Stock" shall have the meaning ascribed thereto in the
Purchase Agreement.
"Common Stock Call Option Agreement" shall mean the Call Option
Agreement, in the form attached as Exhibit A to the Call Option Agreement, by
and between the Pledgor and the Pledgee to be executed and delivered on and as
of the Pledge and Call Option Closing Date with respect to a call option on
shares of Common Stock.
"Common Stock Pledge Agreement" shall mean the Pledge Agreement, in
the form attached as Exhibit A hereto, by and between the Pledgor and the
Pledgee to be executed
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and delivered on and as of the Pledge and Call Option Closing Date with respect
to the pledge of shares of Common Stock.
"Company" shall have the meaning ascribed thereto in the third
paragraph of the recitals.
"Controlled Affiliate" shall mean, with respect to any Party, any
Affiliate of such Party in which such Party owns or controls, directly or
indirectly, more than fifty percent (50%) of the securities having ordinary
voting power for the election of directors or other governing body thereof or
more than fifty percent (50%) of the partnership or other ownership interests
therein (other than as a limited partner).
"Controlling Person" shall mean, with respect to any Party, any
other Person which owns or controls, directly or indirectly, more than fifty
percent (50%) of the securities of such Party having ordinary voting power for
the election of directors or other governing body of such Party or more than
fifty percent (50%) of the partnership or other ownership interests therein
(other than as a limited partner of such Party).
"Controlled Transferee" shall have the meaning ascribed thereto in
the second paragraph of the recitals.
"Default Notice" shall have the meaning ascribed thereto in Section
5.1.
"Dispute" shall have the meaning ascribed thereto in Section 6.8(b).
"Event of Default" shall have the meaning ascribed thereto in the
Purchase Agreement.
"Eco Telecom Contribution Default" shall have the meaning ascribed
thereto in the Purchase Agreement.
"Governmental or Regulatory Authority" shall mean any court,
tribunal, arbitrator, legislature, government, ministry, committee,
inspectorate, authority, agency, commission, official or other competent
authority of any country or any state, as well as any county, city or other
political subdivision of any of the foregoing.
"Geneva Courts" shall have the meaning ascribed thereto in Section
6.8(c).
"ICC" shall have the meaning ascribed thereto in Section 6.8(b).
"ICC Rules" shall have the meaning ascribed thereto in Section
6.8(b).
"Liens" shall have the meaning ascribed thereto in Section 2.1(d).
"Parties" shall have the meaning ascribed thereto in the
introductory paragraph.
"Party" shall have the meaning ascribed thereto in the introductory
paragraph.
"Payment Date" shall have the meaning ascribed thereto in the second
paragraph of the recitals.
"Person" shall mean any natural person, corporation, general
partnership, simple partnership, limited partnership, limited liability
partnership, limited liability company, proprietorship, other business
organization, trust, union, association or Governmental or Regulatory Authority,
whether incorporated or unincorporated.
"Pledge" shall have the meaning ascribed thereto in Section 1.1.
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"Pledge and Call Option Closing Date" shall have the meaning
ascribed thereto in the Purchase Agreement.
"Pledgee" shall have the meaning ascribed thereto in the
introductory paragraph.
"Pledgor" shall have the meaning ascribed thereto in the
introductory paragraph.
"Preferred Stock" shall have the meaning ascribed thereto in the
Purchase Agreement.
"Preferred Stock Call Option" shall have the meaning ascribed
thereto in the Purchase Agreement.
"Primary Agreement" shall have the meaning ascribed thereto in the
Purchase Agreement.
"Principal Agreements" shall have the meaning ascribed thereto in
the Purchase Agreement.
"Purchase Agreement" shall have the meaning ascribed thereto in the
first paragraph of the recitals.
"Purchase Price" shall have the meaning ascribed thereto in the
first paragraph of the recitals.
"Register" shall have the meaning ascribed thereto in Section
2.1(e).
"Registrar" shall have the meaning ascribed thereto in Section
2.1(e).
"Report Registration Date" shall have the meaning ascribed thereto
in the Purchase Agreement.
"Secured Obligations" shall have the meaning ascribed thereto in
Section 1.1.
"Shares" shall have the meaning ascribed thereto in Section 1.1.
"Trading Day" shall mean a day on which the American Depositary
Shares of the Company (or, if the Company no longer has its ordinary voting
shares represented by American Depositary Shares, a day on which the Company's
ordinary voting shares) are traded on the exchange or market used to determine
the Market Value of the Shares.
"Termination Date" shall have the meaning ascribed thereto in
Section 6.2.
Section 6.10 Language. This Agreement and any amendment hereto
shall be executed in English and Russian. In the event of a conflict between the
English and Russian language versions of this Agreement, the English language
version shall prevail.
Section 6.11 Captions. The Article and Section captions used herein
are for reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 6.12 Counterparts. This Agreement may be executed
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simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized officers, in two originals as of the date
first above written.
ECO TELECOM LIMITED OVERTURE LIMITED
as Pledgor as Pledgee
By__________________ By__________________
Name: Name:
Title: Title:
[SCHEDULES INTENTIONALLY OMITTED]
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ANNEX A
AUCTION PROCEDURES
1. In case of foreclosure on the Shares in accordance with this Agreement,
the pledged Shares shall be subject to sale exclusively in an open auction
(the "Auction") which shall be carried out in accordance with Russian law.
2. The Auction shall be carried out by a specialized organization (the
"Auction Organizer"), which shall be a legal entity constituted and
existing under Russian Law and bearing a professional securities market
participant license issued by the Federal Commission on the Securities
Market.
3. The Auction Organizer shall be selected by both the Pledgor and the
Pledgee within five (5) Business Days from the date of the Default
Notice from the list set forth on Schedule 1 hereto (or any successor
to an entity listed thereon) (the "Preferred Auction Organizers"),
provided that none of the entities set forth thereon which is then an
affiliate or a consultant (advisor) to either the Pledgor or the
Pledgee shall be eligible to act as an Auction Organizer. If the
Pledgor and the Pledgee fail to agree upon the identity of the Auction
Organizer within the aforementioned time period, then the Pledgee shall
be entitled to select one of the Preferred Auction Organizers at its
sole discretion subject to the proviso set forth in the preceding
sentence. If none of the Preferred Auction Organizers is able or
willing to act as Auction Organizer, then the Pledgor and the Pledgee
shall agree upon the identity of the Auction Organizer within the
aforementioned time period. If the Parties fail to agree upon the
identity of the Auction Organizer within the aforementioned time
period, then the Pledgee shall be entitled to select the Auction
Organizer at its sole discretion subject to the proviso in the first
sentence of this clause 3 and provided that the Auction Organizer meets
the criteria set out in clause 2 above. The Pledgee shall notify the
Pledgor of the identity of the Auction Organizer within two (2)
Business Days from the date of such appointment.
4. The Auction Organizer shall be acting on the basis of a contract
negotiated between the Auction Organizer, the Pledgor and the Pledgee
and entered into between the Auction Organizer and the Pledgor. In the
event the Pledgee and Pledgor fail to agree upon the terms of the
contract with the Auction Organizer within 10 (ten) Business Days
following the appointment of the Auction Organizer, the Pledgee is
hereby authorized and given full power and authority to execute the
contract with the
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Auction Organizer in its own name upon which the Pledgee shall send a true
and full copy of such contract to the Pledgor. The fee charged by the
Auction Organizer shall be paid from the proceeds received from the sale
of the Shares in accordance with these Auction Procedures, provided that
if the Shares are acquired by the Pledgee after failure of the Auction or
the Second Auction or the proceeds are not sufficient to pay the Secured
Obligation and the fee, the fee charged by the Auction Organizer shall be
paid by the Pledgor.
4.1 Auction Procedures. The minimum initial bid price for the Shares
in case they are sold as set forth herein shall be agreed upon in a separate
agreement between the Pledgor and the Pledgee. If the Parties fail to reach an
agreement in respect of the minimum initial bid price within ten (10) Business
Days from the date of the Default Notice, the minimum initial bid price shall be
equal to ninety eight percent (98%) of the Pledge Value of the Shares, unless
otherwise agreed between the Pledgor and the Pledgee.
4.2 The Auction Organizer is entitled to take decisions on the
following matters (and such decisions shall be duly and immediately notified to
the Pledgor and the Pledgee):
4.2.1 to define the date, place and time of the Auction
(provided, however, that the date of the Auction shall not be earlier than the
expiry of one month from the moment of the public announcement by the Auction
Organizer specifying the exact place and time of the Auction);
4.2.2 to define other conditions (except from the minimum
initial bid price), such as the amount of security deposit, the time and method
of deposit. The Auction Organizer shall not allow security deposits to be made
in any form other than that of immediately available funds and shall procure
that a reputable bank of international standing is used for the making of such a
deposit; and
4.2.3 to determine the results of the Auction or recognise the
Auction as not having taken place (the full minutes of the results of the
Auction, duly executed by the Auction Organizer shall be provided to both the
Pledgor and the Pledgee).
4.3 If the Auction is declared invalid the Pledgee is entitled to
acquire the Shares under agreement with the Pledgor and set-off its claim under
the Secured Obligations within three (3) Business Days after the end of the
Auction, provided that (i) the price of each Share to be acquired pursuant to
this clause 4.3 shall be equal to the minimum initial bid price set at the
Auction and (ii) the aggregate price of the Shares to be acquired by the Pledgee
shall not exceed the amount of the Secured Obligations due and outstanding at
the time of such acquisition.
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4.4 If the Pledgee does not exercise its right to acquire the Shares
as set forth in this clause 4.3, the Auction Organizer shall conduct another
auction (the "Second Auction"). The initial bid price at the Second Auction
shall be fixed at ninety five percent (95%) of the Pledge Value of the Shares.
4.5 If the Second Auction is declared as not having taken place or
is declared invalid, the Pledgee shall be entitled to acquire title to the
Shares (or any portion thereof) and the Pledgor shall transfer such Shares
within three (3) Business Days after the end of the Second Auction, at the
price, which shall be equal to ninety percent (90%) of the Pledge Value of the
Shares. If the Pledgee does not exercise its right to acquire the Shares as
described in this clause 4.5 within one month from the date when the Second
Auction was declared as not having taken place or invalid, this Agreement shall
terminate.
5. If the Shares are acquired by the winner of the Auction or, as the case
may be, the Second Auction, the Pledgor within ten (10) Business Days
after the date of respective auction shall enter into the share
purchase agreement substantially in the form attached as Schedule 2
hereto with the winner of the Auction or the Second Auction, as the
case may be, provided that if the Pledgee becomes the winner of the
Auction or the Second Auction, as the case may be, the amount to be
paid by the Pledgee for the Shares shall be set-off against the amount
of the Secured Obligations outstanding at the time of payment and the
Pledgor shall transfer the Shares (or any portion thereof) to the
Pledgee within (2) Business Days after the date of respective auction
without entering into the above-mentioned share purchase agreement.
6. For the avoidance of doubt, after, and only if, all payments and
obligations to the Pledgee, the Auction Organizer and other persons are
made and performed in full as provided herein, the balance of any auction
proceeds left with the Auction Organizer shall be paid to the Pledgor.
[SCHEDULES INTENTIONALLY OMITTED]
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EXHIBIT A TO PREFERRED PLEDGE AGREEMENT
FORM OF COMMON STOCK PLEDGE AGREEMENT
-------------------------------------
COMMON STOCK
PLEDGE AGREEMENT
dated as of __________, 2001
between
ECO TELECOM LIMITED
and
OVERTURE LIMITED
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TABLE OF CONTENTS
ARTICLE I PLEDGE OF SHARES ............................................. 1
Section 1.1 Pledge of Shares ..................................... 1
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE PARTIES ............... 2
Section 2.1 Representations and Warranties of the Pledgor ........ 2
Section 2.2 Representations and Warranties of the Pledgee ........ 4
ARTICLE III RIGHTS AND OBLIGATIONS OF THE PLEDGOR ...................... 5
Section 3.1 Affirmative Covenants of the Pledgor ................. 5
Section 3.2 Negative Covenants of the Pledgor .................... 6
Section 3.3 Rights of the Pledgor ................................ 7
ARTICLE IV RIGHTS AND OBLIGATIONS OF THE PLEDGEE ....................... 7
Section 4.1 Affirmative Covenants of the Pledgee ................. 7
Section 4.2 Rights of the Pledgee ................................ 8
Section 4.3 No Other Obligations of the Pledgee .................. 8
ARTICLE V FORECLOSURE; REALIZATION OF THE PLEDGED PROPERTY ............. 8
Section 5.1 Foreclosure .......................................... 8
Section 5.2 Realization of the Pledged Property .................. 9
ARTICLE VI MISCELLANEOUS ............................................... 9
Section 6.1 Indemnification ...................................... 9
Section 6.2 Termination .......................................... 9
Section 6.3 Severability ......................................... 10
Section 6.4 No Waiver ............................................ 10
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Section 6.5 Amendments ........................................... 10
Section 6.6 Assignment ........................................... 10
Section 6.7 Notices .............................................. 10
Section 6.8 Governing Law; Arbitration ........................... 11
Section 6.9 Definitions .......................................... 12
Section 6.10 Language ............................................ 15
Section 6.11 Captions ............................................ 15
Section 6.12 Counterparts ........................................ 15
Schedule 1
Schedule 2
Schedule 3
Annex A
Schedule 1 to Annex A
Schedule 2 to Annex A
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THIS PLEDGE AGREEMENT, dated ___________, 2001 (the "Agreement"), is
entered into by and between: (i) ECO TELECOM LIMITED, a company organized and
existing under the laws of Gibraltar with its registered office at: 10/8
International Commercial Centre, Casemates Square, Gibraltar (the "Pledgor") and
(ii) OVERTURE LIMITED, an exempted limited company organized under the laws of
Bermuda (Registration No. 30335) with its registered office at: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇, ▇▇▇▇▇▇▇ (▇▇▇ "Pledgee"). Both the Pledgor
and the Pledgee are collectively referred to herein as the "Parties" and each
individually as a "Party".
WHEREAS, the Pledgor and the Pledgee have entered into the Share
Purchase Agreement, dated as of May 30, 2001 (the "Purchase Agreement"),
pursuant to which the Pledgor is obliged to pay to the Pledgee Twenty Five
Million United States Dollars (USD 25,000,000) (the "Purchase Price") on the
terms and conditions set forth in the Purchase Agreement (a copy of which is
attached hereto as Schedule 1) which is incorporated herein by reference and
constitutes an integral part hereof;
WHEREAS, pursuant to the Purchase Agreement the Pledgor is obliged
to pay to the Pledgee the Purchase Price in full no later than DECEMBER 25,
2003; provided, however, that the Purchase Price shall become due and payable
immediately (i) upon the sale, transfer, assignment or other disposal of the
Preferred Stock by the Pledgor (other than to a Controlling Person of the
Pledgor or a Controlled Affiliate of the Pledgor or such Controlling Person (a
"Controlled Transferee")) or (ii) if an Event of Default has occurred; and,
provided, further, that following a Change of Control over the Pledgor or a
Controlled Transferee, the Purchase Price shall become due and payable
immediately (any such date on which the Purchase Price shall become due and
payable being referred to as the "Payment Date");
WHEREAS, the Pledgor is a substantial shareholder of Open Joint
Stock Company "Vimpel-Communications" (the "Company"); and
WHEREAS, the Pledgor is willing to provide adequate security to the
Pledgee for the payment by the Pledgor of the Purchase Price and the Gain on
Disposal under the Purchase Agreement until payment in full thereof.
NOW THEREFORE, the Pledgor and the Pledgee, intending to be legally
bound hereby, have agreed as follows:
ARTICLE VII
PLEDGE OF SHARES
Section 7.1 Pledge of Shares. In order to secure the payment by the
Pledgor of the Purchase Price and the Gain on Disposal that may become due under
the Purchase Agreement prior to or on the Payment Date (the "Secured
Obligations"), the Pledgor hereby pledges (the "Pledge") from the date hereof to
the Pledgee the shares (the "Shares" which defined term shall include, for the
avoidance of doubt, such number of additional ordinary voting shares of the
Company as the Pledgor may from time to time be required to pledge to the
Pledgee pursuant to this Agreement) as described below:
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Issuer: Open Joint Stock Company "Vimpel-Communications"
Type of the Shares: Ordinary Voting Shares
Registration Details ____________________________
Par Value: one half of one ▇▇▇▇▇▇ (RUR 0.005) per Share
Number of Shares:. __________________________ (_______)(1)
Pledge Value
of the Shares:
United States dollars (USD___________).
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
Section 8.1 Representations and Warranties of the Pledgor.
(a) The Pledgor is a company duly organized, properly
registered and validly existing under the laws of Gibraltar and has all
requisite corporate and other power and authority to carry on its business as
now being and heretofore conducted and to own, use, lease, operate and dispose
of the assets and properties which it currently owns, uses, leases and operates,
including the Shares.
(b) To the best of the Pledgor's knowledge, the Shares have
been validly issued and properly registered with the appropriate authorities
competent for the registration of the issuance thereof in accordance with
applicable law.
(c) The Shares are fully paid-up in accordance with the laws
of the Russian Federation, are non-assessable and are not subject to any rights
of first refusal, buy-out and similar rights, calls or assessments, except for
those established by this Agreement, the Call Option Agreement and the Principal
Agreement.
(d) No person other than the Pledgor and the Pledgee has any
rights in or over any of the Shares and the Shares are not subject to any
contract, commitment, agreement, understanding or arrangement of any kind except
pursuant to this Agreement, the Call Option Agreement and the Principal
Agreements.
(e) The Pledgor is the legal and beneficial owner of the
Shares, free and clear of any security interest, pledge, claim or any other
--------
(1)Market Value on the execution date hereof equal to 150% of Purchase Price.
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encumbrance (the "Liens"), except for (i) any Liens in favour of the Pledgor
pursuant to this Agreement or (ii) any restrictions that may result from the
Call Option Agreement or any that may arise under the Principal Agreements.
There are no (i) securities convertible into or exchangeable for the Shares or
(ii) options, warrants or other rights to purchase or subscribe to securities
convertible into or exchangeable for the Shares, except for any options,
warranties or other rights granted under the Principal Agreements.
(f) The Shares are properly registered in accordance with the
requirements of the Russian law in the name of the Pledgor in the shareholders
register of the Company (the "Register") which is maintained by ZAO
"Natsionalnaya Registratsionnaya Kompaniya" (the "Registrar") as evidenced by an
extract from the Register issued by the Registrar in accordance with the
requirements of Russian law and attached hereto as Schedule 2.
(g) The Pledgor has full corporate power and authority to
enter into, execute and deliver this Agreement and the other documents
contemplated hereby and to pledge the Shares as provided in this Agreement.
(h) The Pledgor has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement and no other
proceedings on the part of the Pledgor or the Company will be necessary to
authorize this Agreement or the consummation of the transactions contemplated
hereby.
(i) This Agreement has been duly executed and delivered by the
Pledgor. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby will not result in a breach of, or give
rise to a right of termination of, any permit or authorization to which the
Pledgor or the Company is subject or a party and no approval or authorization of
any governmental entity, or of any third party, is required on the part of the
Pledgor or the Company in connection with the execution, delivery and
performance of this Agreement and the other documents contemplated hereby.
(j) The execution, delivery and performance by the Pledgor of
this Agreement do not violate, breach or conflict with (i) the Pledgor's
constituent documents, (ii) any agreement, contract or instrument to which the
Pledgor is a party or by which the Pledgor or its properties are bound except
for any agreement with the Pledgee, or (iii) any applicable law, regulation,
decree, order or rule.
(k) There is no pending or threatened action, suit, claim or
investigation by any third party, or inquiry by a governmental agency, or other
proceeding by or before any court or governmental or other regulatory or
administrative agency or commission requesting or looking toward an order,
judgment or decree which may have adverse effect with regard to (i) the
financial position or activities the Pledgor, (ii) the Pledgor's title to the
Shares or (iii) the
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legality, validity or enforceability of this Agreement.
(l) This Agreement constitutes the legal, valid and binding
obligation of the Pledgor, enforceable against the Pledgor in accordance with
its terms.
(m) The Pledgor has provided the Pledgee with full, complete
and accurate copies of the Principal Agreements as currently in force and
effect.
(n) On the Closing Date, upon the execution and delivery of
this Agreement and registration of the Pledge of the Shares in the Register
pursuant to Section 3.1(a), a valid first priority pledge and a valid security
interest over the Shares shall have been created in favor and for the benefit of
the Pledgee to secure the Secured Obligations pursuant to this Agreement and no
further filings or recording of any document or instrument or any other action
will be required to perfect such pledge or security interest (except that the
pledge of additional Shares than those pledged on and as of the Closing Date
shall require registration thereof in the Register).
Section 8.2 Representations and Warranties of the Pledgee.
(a) The Pledgee is a company duly organized, properly
registered and validly existing under the laws of Bermuda and has all requisite
corporate and other power and authority to carry on its business and to own,
use, lease, operate and dispose of the assets and properties which it currently
owns, uses, leases and operates.
(b) The Pledgee has full corporate power and authority to
enter into, execute and deliver this Agreement and the other documents
contemplated hereby.
(c) The Pledgee has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement and no other
proceedings on the part of the Pledgee or the Company will be necessary to
authorize this Agreement or the consummation of the transactions contemplated
hereby.
(d) This Agreement has been duly executed and delivered by the
Pledgee. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby will not result in a breach of, or give
rise to a right of termination of, any permit or authorization to which the
Pledgee is subject or a party and no approval or authorization of any
governmental entity, or of any third party, is required on the part of the
Pledgee or the Company in connection with the execution, delivery and
performance of this Agreement and the other documents contemplated hereby.
(e) The execution, delivery and performance by the
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Pledgee of this Agreement do not violate, breach or conflict with (i) the
Pledgee's constituent documents, (ii) any agreement, contract or instrument to
which the Pledgee is a party or by which the Pledgee or its properties are bound
except for any agreement with the Pledgor, or (iii) any applicable law,
regulation, decree, order or rule.
(f) This Agreement constitutes the legal, valid and binding
obligation of the Pledgee, enforceable against the Pledgee in accordance with
its terms.
ARTICLE IX
RIGHTS AND OBLIGATIONS OF THE PLEDGOR
Section 9.1 Affirmative Covenants of the Pledgor. The Pledgor hereby
covenants and agrees that:
(a) on the date of, or on the Business Day immediately
following the date of, execution and delivery of this Agreement by the Pledgor
and the Pledgee, the Pledgor shall (i) submit to the Registrar a duly completed
and executed pledge order substantially in the form attached hereto as Schedule
3 with respect to the Shares to register the Pledge in the Register and (ii)
deliver to the Pledgee an extract from the Register evidencing registration of
the Pledge;
(b) the Pledgor shall (i) be solely responsible for all
matters relating to the Shares; (ii) from time to time take all actions, and
make all filings, registration and recordation as may be required by applicable
law or reasonably requested by the Pledgee in connection with the Pledgee's
security interest in the Shares; (iii) promptly notify the Pledgee of the
occurrence of any event which may, or may lead to, affect in adverse manner the
Pledgee's security interest in the Shares; and (iv) defend at its own expense
its ownership rights to the Shares against any and all claims of any third
party; provided, however, that the Pledgor shall not be required to take
insurance on the Shares;
(c) the Pledgor shall, at its own expense, do, make, execute
and deliver any and all additional documents that the Pledgee may reasonably
require to protect the Pledge and the Pledgee's rights over the Shares pursuant
to this Agreement;
(d) in the event the Market Value of the Shares falls below
One Hundred Twenty percent (120%) of the Purchase Price and the Market Value
remains below One Hundred Twenty percent (120%) of the Purchase Price for a
continuous period of ten (10) Trading Days, the Pledgor at the latest on the
expiration of such ten (10) Trading Day period shall pledge or, as the case may
be, shall cause any other person to pledge to the Pledgee, in accordance with
the terms of this Agreement such number of additional ordinary
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voting shares of the Company such that the total Market Value of the Shares
pledged shall be not less than One Hundred Fifty percent (150%) of the Purchase
Price; provided, however, that the Pledgor shall be relieved from its obligation
set forth in the preceding sentence if, when and as long as the Market Value of
the Shares has increased above One Hundred Twenty percent (120%) of the Purchase
Price; and, provided, further, that if the Pledgor does not pledge additional
ordinary voting shares of the Company as required hereby on the later of (i) the
expiration of the ten (10) Trading Days referred to above and (ii) three (3)
Trading Days following the receipt of a written notice from the Pledgee, then
the Secured Obligations shall automatically become due and payable immediately
without any further demand or notice from the Pledgee;
(e) in order to effect the pledge of additional shares as may
be required by sub-section (d) above, the Pledgor shall duly execute and deliver
to the Registrar the pledge orders in respect of the required number of
additional shares and such other documents as may be required by the Registrar
in accordance with Russian law; and
(f) on the date of execution of this Agreement, the Pledgor
shall deliver to the Pledgee (i) an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇, special New York
counsel to the Pledgor, (ii) an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ CIS Legal Services,
special Russian counsel to the Pledgor and (iii) an opinion of Triay & Triay,
special Gibraltar counsel to the Pledgor, substantially in the respective form
attached as Schedule 7.06(a), (b) and (c) to the Purchase Agreement (but
covering only the opinions rendered with respect to the Preferred Stock Pledge
Agreement and substituting any references to (x) the Preferred Stock Pledge
Agreement with references to this Agreement and (y) the pledge of the shares of
preferred stock thereunder with references to the Pledge of Shares hereunder).
Section 9.2 Negative Covenants of the Pledgor. The Pledgor hereby
covenants and agrees with the Pledgee that, unless otherwise agreed in writing
with the Pledgee, until the Termination Date:
(a) the Pledgor shall not dispose of, sell, convert, exchange,
transfer or alienate in any manner the Shares that are actually pledged to the
Pledgor in accordance with this Agreement, except for transferring any or all of
the Shares pursuant to this Agreement or to the Pledgee pursuant to the Call
Option Agreement;
(b) the Pledgor shall not grant or suffer any Liens against
the Shares, including, without limitation, any subsequent pledge or retention
rights, or any other pre-emptive rights with respect to the Shares other than
resulting from this Agreement, the Principal Agreements or in favor of the
Pledgee; and
(c) the Pledgor shall not take any action, enter into any
agreement, commitment or arrangement which is intended to or which the
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Pledgor knows will result in the delisting of the American Depository Shares
representing ordinary voting shares of the Company from the New York Stock
Exchange, unless such delisting coincides with the listing of the ordinary
voting shares of the Company or depositary receipts thereof on another
recognized international exchange or trading system. For the avoidance of doubt,
any actions by directors or officers designated by the Pledgor in accordance
with the Principal Agreements in the exercise of their fiduciary duties, which
actions may result in the delisting of such American Depository Shares, shall
not be considered actions taken by the Pledgor.
Section 9.3 Rights of the Pledgor. The Pledgee hereby agrees with
the Pledgor that as long as no Event of Default has occurred under the Purchase
Agreement and the Pledgee has not otherwise commenced foreclosure of the Shares
pursuant to Article V hereof, the Pledgor shall continue to enjoy the following
rights with regard to the Shares: (i) to receive dividends on the Shares,
distributed by the Company in accordance with its founding documents; (ii) to
vote the Shares at any general meeting of the shareholders of the Company; and
(iii) to exercise any other rights attached to the Shares in accordance with the
Company's founding documents and applicable law; provided, however, that in the
event the Pledgor exercises any such right that would result in an exchange of
the Shares for other securities of the Company or another legal entity as a
result of a reorganization, the Pledgor shall be required to pledge the
resulting consideration in favor of the Pledgee; and, provided, further, that in
the event the Pledgor exercises any right of redemption of the Shares, the
Pledgor shall be required to grant a security interest over the resulting
consideration in favor of the Pledgee.
ARTICLE X
RIGHTS AND OBLIGATIONS OF THE PLEDGEE
Section 10.1 Affirmative Covenants of the Pledgee. The Pledgee
hereby covenants and agrees that:
(a) in the event the Market Value of the Shares exceeds One
Hundred Fifty percent (150%) of the Purchase Price and the Market Value remains
above One Hundred Fifty percent (150%) of the Purchase Price a continuous period
of ten (10) Trading Days, then the Pledgee shall release from pledge a portion
of the Shares such that the total Market Value of the Shares shall be equal to
but not less than One Hundred Fifty percent (150%) of the Purchase Price;
provided, however, that the Pledgee shall be relieved from its obligation to
release Shares as set forth herein if, when and as long as the Market Value of
the Shares has decreased below One Hundred Fifty percent (150%) of the Purchase
Price; and, provided, further, that the Pledgee shall not be in default of its
obligation hereunder unless the Pledgee has failed to release Shares as required
hereby on the later of (i) the expiration of the ten (10) Trading Days referred
to
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above and (ii) three (3) Trading Days following the receipt of a written notice
from the Pledgor; and
(b) in order to effect such release, the Pledgee shall duly
execute and deliver to the Registrar the pledge orders in respect of the
required number of shares to be released and such other documents as may be
required by the Registrar in accordance with Russian law; and
(c) upon termination of the Pledge pursuant to Section 6.2 of
this Agreement, the Pledgee shall execute and deliver to the Pledgor and the
Registrar an order releasing the Shares from the Pledge and such other documents
as are required by the applicable legislation or as may be reasonably requested
by the Pledgor to release the Shares from the Pledge.
Section 10.2 Rights of the Pledgee. In addition to the rights
provided by applicable law or set forth elsewhere in this Agreement, including
without limitation Article V hereof, the Pledgee shall have the following rights
with respect to the Shares:
(a) to the extent that the Pledgor does not comply with its
covenants hereunder, the Pledgee may take any action with respect to the Shares
that it deems appropriate to maintain or protect its security interest in the
Shares at the Pledgor's expense; and
(b) the Pledgee is authorized to give notice to third parties
regarding the Pledge of the Shares without consent or approval of the Pledgor.
Section 10.3 No Other Obligations of the Pledgee. Except as
expressly set forth in this Agreement, the Pledgee shall have no other
obligations with respect to the Shares, including without limitation no
obligation to insure the Shares.
ARTICLE XI
FORECLOSURE; REALIZATION OF THE PLEDGED PROPERTY
Section 11.1 Foreclosure. In the event the Pledgor fails to fully
pay the Secured Obligations in accordance with the Purchase Agreement, the
Pledgee, upon written notice to the Pledgor of such failure (the "Default
Notice"), shall be entitled to take any and all actions with regard to the
Shares which is permitted by applicable law, including, but not limited to, the
foreclosure on the Shares; provided, that the Parties hereby expressly agree
that for such foreclosure on the Shares no decision of any court of law or state
arbitration court, or any award of an arbitration tribunal is required, and the
Pledgor hereby waives its right to apply to any court of law, state arbitration
court or arbitration for foreclosure under any court or arbitration procedure.
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Section 11.2 Realization of the Pledged Property. The Shares shall
be sold by the Auction Organizer through a public auction, in accordance with
the procedures provided for in Annex A to this Agreement which constitutes an
integral part of this Agreement.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Indemnification. To the extent permitted by applicable
law, the Pledgor shall indemnify and hold the Pledgee harmless from and against
any and all losses, claims, taxes, costs, fees and expenses, including
attorneys' fees, incurred by the Pledgee in connection with the enforcement by
the Pledgee of its rights hereunder and the realization of the Shares. The
provisions of this Section 6.1 shall survive the termination of this Agreement
as set forth in Section 6.2 hereof.
Section 12.2 Termination. The Pledge created by this Agreement shall
terminate and the Shares shall be released from the Pledge on the earlier to
occur of (i) the payment of the Secured Obligations in full by the Pledgor to
the Pledgee pursuant to the terms of the Purchase Agreement or (ii) the payment
of the sales proceeds from the realization of the Shares to the Pledgee or (iii)
the transfer of ownership of the Shares to the Pledgee or (iv) the delivery by
the Pledgor to the Pledgee of the ordinary voting shares of the Company required
to be delivered by the Pledgor pursuant to the Call Option Agreement following
the Pledgee's exercise of the call option thereunder or (v) the assignment by
the Pledgor of its rights and obligations under the Purchase Agreement to the
Company or its designee following the Company's exercise of the Preferred Stock
Call Option under the Primary Agreement upon the occurrence of an Eco Telecom
Contribution Default upon (x) the transfer by the Pledgor of the Preferred Stock
to the Company or its designee, (y) the execution by the Company or its designee
of an Endorsement in the form attached as Schedule 4 to the Purchase Agreement,
and (z) in case of a transfer and assignment to the Company's designee, the
execution by the Company of a Guarantee in the form attached as Schedule 5 to
the Purchase Agreement.
This Agreement shall terminate upon release of the Shares from the
Pledge in the Register (the "Termination Date"); provided, however, that the
provisions of Sections 6.1, 6.7 and 6.8 shall survive any termination pursuant
to clauses (ii) or (iii) above.
Upon payment of any part of the Secured Obligations by the Pledgor
to the Pledgee pursuant to the terms of the Purchase Agreement (the "Partial
Payment"), the Pledgee (i) shall release from the Pledge such number of Shares
(the "Released Shares") as shall result in the remaining Shares having an
aggregate Market Value equal to One Hundred Fifty percent (150%) of the
outstanding amount of the Secured Obligations, and (ii) shall execute and
deliver to the Pledgor an order releasing the Released Shares from the Pledge
and such other documents as may be reasonably required by the Pledgor to release
the Released Shares from the Pledge. Upon such release of the Released Shares
from the Pledge, the Pledgor shall regain full ownership rights to the Released
Shares free and clear from any Liens resulting from the Pledge.
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Section 12.3 Severability. In the event and to the extent that any
provision of this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions in such jurisdictions, or of such provision in any other
jurisdiction, shall not in any way be affected or impaired thereby.
Section 12.4 No Waiver. No failure or delay by the Pledgee in
exercising any right or remedy and no course of dealing between the Pledgee and
the Pledgor shall operate as a waiver thereof, nor shall any single or partial
exercise of any right or remedy preclude any other or future exercise thereof.
Section 12.5 Amendments. This Agreement may be amended, modified or
supplement only by the written consent of the Parties hereto.
Section 12.6 Assignment. This Agreement shall inure to the benefit
of, and be enforceable by, the Pledgee and its successors, transferees and
assigns, and shall be binding upon the Parties and their heirs, executors,
successors and assigns; provided, however, that the Pledgor may not, without
prior written consent of the Pledgee, transfer, assign or delegate any of its
rights or obligations hereunder, and any such purported transfer, assignment or
delegation shall be null and void, and shall not release the Pledgor of any of
its obligations hereunder.
Section 12.7 Notices. Any notice, request or other document,
including any request for arbitration, to be given hereunder to any Party shall
be in writing and shall be deemed to have been duly given and effective if and
when (i) delivered by a courier against receipt or (ii) sent by fax and
simultaneously confirmed by registered or certified mail, as follows:
(a) if to the Pledgor, to:
Eco Telecom Limited
▇▇▇▇▇ ▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ No.: ▇▇▇▇-▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
with a copy to:
OOO Alfa-Eco
21, Novy Arbat
121019 Moscow
Russian Federation
Facsimile No.: ▇▇▇▇▇-▇▇▇-▇▇▇▇
Attention: Stanislav Shekshnya
and a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CIS Legal Services
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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119034 Moscow
Russian Federation
Facsimile No.: + ▇ ▇▇▇-▇▇▇-▇▇-▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(b) if to the Pledgee, to:
Overture Limited
Richmond ▇▇▇▇▇
▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: + (1) (▇▇▇) ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇
With a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, Russian Federation
Facsimile: + 7 095-797-4601
Attention: ▇▇▇▇▇ ▇▇ ▇▇▇▇, Esq.
or such other address as any Party shall have specified by written notice given
to the other Party in the manner specified above. All such notices and
communications shall, when mailed or sent by facsimile, be effective when
received at the above addresses.
Section 12.8 Governing Law; Arbitration.
(a) This Agreement shall be governed by, and construed in
accordance with, the laws of the Russian Federation.
(b) Any and all disputes, controversies or claims arising
under, relating to or in connection with this Agreement or the breach,
termination or validity thereof ("Disputes") shall be finally and exclusively
settled by arbitration in accordance with the Arbitration Rules of the
International Chamber of Commerce ("ICC") then in effect (the " ICC Rules") by a
panel of three (3) arbitrators with the following terms and conditions:
(i) In the event of any conflict between the ICC Rules
and the provisions of this Agreement, the provisions of this Agreement
shall prevail.
(ii) The place of the arbitration shall be Geneva,
Switzerland.
(iii) The claimant and respondent shall each nominate
one arbitrator in accordance with the ICC Rules. The two party-appointed
arbitrators shall have thirty (30) days from the date of the nomination of
the second arbitrator to agree on the nomination a third arbitrator who
shall serve as chair of the tribunal. Any arbitrator not timely nominated,
shall, on the
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request of any Party, be appointed by the ICC Court of Arbitration in
accordance with the ICC Rules.
(iv) The English language shall be used as the written
and spoken language for the arbitration, the award and all matters
connected with the arbitration.
(v) The award of the arbitrators shall be final and
binding on the Parties may be enforced by any court of competent
jurisdiction and may be executed against the person and assets of the
losing Party in any competent jurisdiction.
(vi) In order to facilitate the comprehensive resolution
of related disputes, all Disputes between any of the parties to this
Agreement that arise under or in connection with the Purchase Agreement,
the Call Option Agreement and/or the Common Stock Purchase Agreement
("Other Agreements") may be brought in a single arbitration. Pursuant to a
Request submitted under Article 4(6) of the ICC Rules or otherwise, the
parties hereby agree that upon the request of any party to an arbitration
proceeding initiated under this Agreement or the Other Agreements, the ICC
Court shall determine whether to consolidate the arbitration proceeding
with any other arbitration proceeding involving any of the parties hereto
arising out of or relating to the Agreement or the Other Agreements. It is
the parties' intention that any such arbitration proceedings be
consolidated in the event that (i) there are issues of fact or law common
to the proceedings so that a consolidated proceeding would be more
efficient than separate proceedings, and (ii) no party would be unduly
prejudiced as a result of such consolidation through undue delay or
otherwise.
(c) Each Party unconditionally and irrevocably agrees to
submit to the non-exclusive jurisdiction of the courts located in Geneva,
Switzerland (the "Geneva Courts"), for the purpose of any proceedings in aid of
arbitration and for interim or conservatory measures before an arbitral tribunal
is duly constituted under this Agreement, and for proceedings arising out of or
relating to the enforcement of any award or order of an arbitral tribunal duly
constituted under this Agreement. Each Party unconditionally and irrevocably
waives any objections that they may have now or in the future to such
jurisdiction including without limitation objections by reason of lack of
personal jurisdiction, improper venue, or inconvenient forum.
Section 12.9 Definitions. The following capitalized terms, used but
not otherwise defined herein, shall have the meanings ascribed to them below:
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"Agreement" shall have the meaning ascribed thereto in the
introductory paragraph and shall include all Schedules, Annexes and Exhibits
hereto.
"Auction Organizer" shall have the meaning ascribed thereto in
Annex A hereto.
"Business Day" shall mean any day except a Saturday, Sunday or
nationally recognized holiday in Bermuda or the Russian Federation.
"Call Option Agreement" shall mean the Call Option Agreement,
dated as of the date hereof, by and between the Pledgor as the grantor and the
Pledgee as the grantee with respect to a call option on shares of Common Stock
as provided therein.
"Closing Date" shall have the meaning ascribed thereto in the
Purchase Agreement.
"Company" shall have the meaning ascribed thereto in the third
paragraph of the recitals.
"Controlled Affiliate" shall mean, with respect to any Party,
any Affiliate of such Party in which such Party owns or controls, directly or
indirectly, more than fifty percent (50%) of the securities having ordinary
voting power for the election of directors or other governing body thereof or
more than fifty percent (50%) of the partnership or other ownership interests
therein (other than as a limited partner).
"Controlling Person" shall mean, with respect to any Party,
any other Person which owns or controls, directly or indirectly, more than fifty
percent (50%) of the securities of such Party having ordinary voting power for
the election of directors or other governing body of such Party or more than
fifty percent (50%) of the partnership or other ownership interests therein
(other than as a limited partner of such Party).
"Controlled Transferee" shall have the meaning ascribed
thereto in the second paragraph of the recitals.
"Default Notice" shall have the meaning ascribed thereto in
Section 5.1.
"Dispute" shall have the meaning ascribed thereto in Section
6.8(b).
"Event of Default" shall have the meaning ascribed thereto in
the Purchase Agreement.
"Eco Telecom Contribution Default" shall have the meaning
ascribed thereto in the Purchase Agreement.
"Gain on Disposal" shall have the meaning ascribed thereto in
the Purchase Agreement.
"Geneva Courts" shall have the meaning ascribed thereto in
Section 6.8(c).
"Governmental or Regulatory Authority" shall mean any court,
tribunal, arbitrator, legislature, government, ministry, committee,
inspectorate, authority, agency, commission, official or other competent
authority of any country or any state, as well as any county, city or other
political subdivision of any of the foregoing.
13
109
"ICC" shall have the meaning ascribed thereto in Section
6.8(b).
"ICC Rules" shall have the meaning ascribed thereto in Section
6.8(b).
"Liens" shall have the meaning ascribed thereto in Section
2.1(e).
"Market Value" shall mean, with respect to the Shares, the
value thereof based on (i) the "daily market price" of the Company's American
Depositary Shares (or, if the Company no longer has its ordinary voting shares
represented by American Depositary Shares, the Company's ordinary voting shares)
as defined in the Company's prospectus dated July 25, 2000 at page 143 or (ii)
in the event the Company's American Depositary Shares (or, if the Company no
longer has its ordinary voting shares represented by American Depositary Shares,
the Company's ordinary voting shares) are not listed, quoted or traded, the
market value thereof as determined by a recognized international investment bank
selected by the Pledgee (and approved by the Pledgor, which approval shall not
unreasonably be withheld).
"Partial Payment" shall have the meaning ascribed thereto in
Section 6.2.
"Parties" shall have the meaning ascribed thereto in the
introductory paragraph.
"Party" shall have the meaning ascribed thereto in the
introductory paragraph.
"Payment Date" shall have the meaning ascribed thereto in the
second paragraph of the recitals.
"Person" shall mean any natural person, corporation, general
partnership, simple partnership, limited partnership, limited liability
partnership, limited liability company, proprietorship, other business
organization, trust, union, association or Governmental or Regulatory Authority,
whether incorporated or unincorporated.
"Pledge" shall have the meaning ascribed thereto in Section
1.1.
"Pledgee" shall have the meaning ascribed thereto in the
introductory paragraph.
"Pledgor" shall have the meaning ascribed thereto in the
introductory paragraph.
"Preferred Stock" shall have the meaning ascribed thereto in
the Purchase Agreement.
"Preferred Stock Call Option" shall have the meaning ascribed
thereto in the Purchase Agreement.
"Preferred Stock Pledge Agreement" shall mean the Pledge
Agreement, dated as of the Closing Date, by and between the Pledgor and the
Pledgee with respect to the Preferred Stock.
"Primary Agreement" shall have the meaning ascribed thereto in
the Purchase Agreement.
"Principal Agreements" shall have the meaning ascribed thereto
in the Purchase Agreement.
14
110
"Purchase Agreement" shall have the meaning ascribed thereto
in the first paragraph of the recitals.
"Purchase Price" shall have the meaning ascribed thereto in
the first paragraph of the recitals.
"Register" shall have the meaning ascribed thereto in Section
2.1(f).
"Registrar" shall have the meaning ascribed thereto in Section
2.1(f).
"Released Shares" shall have the meaning ascribed thereto in
Section 6.2.
"Secured Obligations" shall have the meaning ascribed thereto
in Section 1.1.
"Shares" shall have the meaning ascribed thereto in Section
1.1.
"Termination Date" shall have the meaning ascribed thereto in
Section 6.2.
"Trading Day" shall mean a day on which the American
Depositary Shares of the Company (or, if the Company no longer has its ordinary
voting shares represented by American Depositary Shares, a day on which the
Company's ordinary voting shares) are traded on the exchange or market used to
determine the Market Value of the Shares.
Section 12.10 Language. This Agreement and any amendment hereto
shall be executed in English and Russian. In the event of a conflict between the
English and Russian language versions of this Agreement, the English language
version shall prevail.
Section 12.11 Captions. The Article and Section captions used herein
are for reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 12.12 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
[SIGNATURE PAGE FOLLOWS]
15
111
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized officers, in two originals as of the date
first above written.
ECO TELECOM LIMITED OVERTURE LIMITED
as Pledgor as Pledgee
By__________________ By__________________
Name: Name:
Title: Title:
16
112
[SCHEDULES INTENTIONALLY OMITTED]
113
ANNEX A
AUCTION PROCEDURES
7. In case of foreclosure on the Shares in accordance with this Agreement,
the pledged Shares shall be subject to sale exclusively in an open auction
(the "Auction") which shall be carried out in accordance with Russian law.
8. The Auction shall be carried out by a specialized organization (the
"Auction Organizer"), which shall be a legal entity constituted and
existing under Russian Law and bearing a professional securities market
participant license issued by the Federal Commission on the Securities
Market.
9. The Auction Organizer shall be selected by both the Pledgor and the
Pledgee within five (5) Business Days from the date of the Default
Notice from the list set forth on Schedule 1 hereto (or any successor
to an entity listed thereon) (the "Preferred Auction Organizers"),
provided that none of the entities set forth thereon which is then an
affiliate or a consultant (advisor) to either the Pledgor or the
Pledgee shall be eligible to act as an Auction Organizer. If the
Pledgor and the Pledgee fail to agree upon the identity of the Auction
Organizer within the aforementioned time period, then the Pledgee shall
be entitled to select one of the Preferred Auction Organizers at its
sole discretion subject to the proviso set forth in the preceding
sentence. If none of the Preferred Auction Organizers is able or
willing to act as Auction Organizer, then the Pledgor and the Pledgee
shall agree upon the identity of the Auction Organizer within the
aforementioned time period. If the Parties fail to agree upon the
identity of the Auction Organizer within the aforementioned time
period, then the Pledgee shall be entitled to select the Auction
Organizer at its sole discretion subject to the proviso in the first
sentence of this clause 3 and provided that the Auction Organizer meets
the criteria set out in clause 2 above. The Pledgee shall notify the
Pledgor of the identity of the Auction Organizer within two (2)
Business Days from the date of such appointment.
10. The Auction Organizer shall be acting on the basis of a contract
negotiated between the Auction Organizer, the Pledgor and the Pledgee
and entered into between the Auction Organizer and the Pledgor. In the
event the Pledgee and Pledgor fail to agree upon the terms of the
contract with the Auction Organizer within 10 (ten) Business Days
following the appointment of the Auction Organizer, the Pledgee is
hereby authorized and given full power and authority to execute the
contract with the Auction Organizer in its own name upon which the
Pledgee shall send a true and full copy of such contract to the
Pledgor. The fee charged by the Auction Organizer shall be paid from
the proceeds received from the sale of the Shares in accordance with
these Auction Procedures, provided that if the Shares are acquired by
the Pledgee after failure of the Auction or the Second Auction or the
proceeds are not sufficient to pay the Secured Obligation and the fee,
the fee charged by the
114
Auction Organizer shall be paid by the Pledgor.
10.1 Auction Procedures. The minimum initial bid price for the
Shares in case they are sold as set forth herein shall be agreed upon in a
separate agreement between the Pledgor and the Pledgee. If the Parties fail to
reach an agreement in respect of the minimum initial bid price within ten (10)
Business Days from the date of the Default Notice, the minimum initial bid price
shall be equal to ninety eight percent (98%) of the Market Value of the pledged
Shares on the date of the Auction, unless otherwise agreed between the Pledgor
and the Pledgee.
10.2 The Auction Organizer is entitled to take decisions on the
following matters (and such decisions shall be duly and immediately notified to
the Pledgor and the Pledgee):
10.2.1 to define the date, place and time of the Auction
(provided, however, that the date of the Auction shall not be earlier than the
expiry of one month from the moment of the public announcement by the Auction
Organizer specifying the exact place and time of the Auction);
10.2.2 to define other conditions (except from the minimum
initial bid price), such as the amount of security deposit, the time and method
of deposit. The Auction Organizer shall not allow security deposits to be made
in any form other than that of immediately available funds and shall procure
that a reputable bank of international standing is used for the making of such a
deposit; and
10.2.3 to determine the results of the Auction or recognise
the Auction as not having taken place (the full minutes of the results of the
Auction, duly executed by the Auction Organizer shall be provided to both the
Pledgor and the Pledgee).
10.3 If the Auction is declared invalid the Pledgee is entitled to
acquire the Shares under agreement with the Pledgor and set-off its claim under
the Secured Obligations within three (3) Business Days after the end of the
Auction, provided that (i) the price of each Share to be acquired pursuant to
this clause 4.3 shall be equal to the minimum initial bid price set at the
Auction and (ii) the aggregate price of the Shares to be acquired by the Pledgee
shall not exceed the amount of the Secured Obligations due and outstanding at
the time of such acquisition.
10.4 If the Pledgee does not exercise its right to acquire the
Shares as set forth in this clause 4.3, the Auction Organizer shall conduct
another auction (the "Second Auction"). The initial bid price at the Second
Auction shall be fixed at ninety five percent (95%) of the Market Value of the
pledged Shares on the date of the Second Auction.
10.5 If the Second Auction is declared as not having taken place or
is declared invalid, the Pledgee shall be entitled to acquire title to the
Shares (or any portion thereof) and the Pledgor shall transfer such Shares
within three (3) Business
115
Days after the end of the Second Auction, at the price, which shall be equal to
ninety percent (90%) of the Market Value of the pledged Shares on the date of
the Second Auction. If the Pledgee does not exercise its right to acquire the
Shares as described in this clause 4.5 within one month from the date when the
Second Auction was declared as not having taken place or invalid, this Agreement
shall terminate.
11. If the Shares are acquired by the winner of the Auction or, as the case
may be, the Second Auction, the Pledgor within ten (10) Business Days
after the date of respective auction shall enter into the share
purchase agreement substantially in the form attached as Schedule 2
hereto with the winner of the Auction or the Second Auction, as the
case may be, provided that if the Pledgee becomes the winner of the
Auction or the Second Auction, as the case may be, the amount to be
paid by the Pledgee for the Shares shall be set-off against the amount
of the Secured Obligations outstanding at the time of payment and the
Pledgor shall transfer the Shares (or any portion thereof) to the
Pledgee within (2) Business Days after the date of respective auction
without entering into the above-mentioned share purchase agreement.
12. For the avoidance of doubt, after, and only if, all payments and
obligations to the Pledgee, the Auction Organizer and other persons are
made and performed in full as provided herein, the balance of any auction
proceeds left with the Auction Organizer shall be paid to the Pledgor.
[SCHEDULES INTENTIONALLY OMITTED]
116
EXHIBIT C TO SHARE PURCHASE AGREEMENT
AMENDMENT AGREEMENT NO.1
TO SHARE SALE AND PURCHASE CONTRACT NO. [ ] DATED 13 APRIL 1998
Moscow , 2001
This Amendment Agreement No. I (the "AMENDMENT AGREEMENT") has been made between
[ ] (the "SELLER"), represented by _____________, acting under the Charter and
in accordance with Resolution No. dated of the Meeting of Shareholders, and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "BUYER").
1. Whereas Open Joint Stock Company Vimpel-Communications ("AO VIMPELCOM")
having waived (Decision of AO VimpelCom Board of Directors No ___
dated______ 2001) all and any rights granted to AO VimpelCom under
Clauses 6 and 8 of the Share Sale and Purchase Contract No. [
] dated 13 April 1998 (the "CONTRACT"), the Parties have agreed to make
the following amendments to the Contract:
1.1.1 Clause 6 and sub-clause 6.1 of the Contact shall be deleted;
1.1.2 Clause 8 of the Contract shall be deleted;
1.1.3 due to the deletion of Clauses 6 and 8, Clauses 7, 9 and 10
shall be renumbered as Clauses 6, 7 and 8, respectively.
2. The remaining provisions of the Contract shall remain in full force and
effect.
3. The Seller and the Buyer agree that from the date of execution of this
Amendment Agreement neither the Buyer nor any subsequent buyers of the
Preferred Shares (as defined in the Contract) shall have any
obligations under the Contact to AO VimpelCom or other persons arising
out of or in connection with Clauses 6 or 8 of the Contract as deleted
pursuant to Section 1 of this Amendment Agreement and AO VimpelCom
shall have no rights arising out of such provisions of the Contract.
4. In consideration of the waiver by AO VimpelCom of all and any rights
granted to AO VimpelCom under Clauses 6 and 8 of the Contract, as
deleted pursuant to Section 1 of this Amendment Agreement, the parties
hereto agree and acknowledge that:
4.1 this Amendment Agreement shall not amend or affect any other
rights or obligations relating to the Preferred Share (as
defined in the Contract) as set forth in the Decision on
Issuance of Securities, approved by the Board of Directors of
AO VimpelCom (Protocol No. 12, dated September 2, 1996) and
registered by the Department of Finance of the city of Moscow
on September 6, 1996 under No. 73-1-6945, and the Decision on
Issuance of Securities, approved by the Board of Directors of
AO VimpelCom (Protocol No. 15, dated October 7, 1996) and
registered by the Department of Finance of the city of Moscow
on October 8, 1996 under No. 73-1-7100, including the
obligation to pay, prior to the conversion of the Preferred
Shares, the amount in cash equal to the market value of the
common shares into which the Preferred Shares shall be
converted, provided that the market value of common shares
shall be determined at the time of conversion.
1
117
4.2 If for any circumstances irrespective of their nature, the
obligations set forth in sub-clause 4.1 hereof, cannot be
performed, then. in the event of conversion of the Preferred
Shares into common registered shares of' AO VimpelCom, the
holder of the Preferred Shares shall on the conversion date,
pay to AO VimpelCom the "forgiveness" money (as defined in
Article 409 of the effective Civil Code of the Russian
Federation) in cash form, the sum being equal to the aggregate
market value of common shares into which the Preferred Shares
shall be converted, provided that the market value of common
shares shall be determined at the time of conversion.
4.3 Any further sale and purchase, gift or other disposition of
the Preferred Shares may be effected only if the person
acquiring the title to the Preferred Shares acknowledges and
agrees to be bound by the terms set forth in Sub-clauses 4.1
and 4.2 hereof and such agreement shall be reflected in the
corresponding Preferred Shares transfer agreement.
5. The acceptance by AO VimpelCom of this Amendment Agreement shall be an
unconditional and irrevocable waiver of all and any right granted to AO
VimpelCom under Clauses 6 and 8 of the Contract, as deleted pursuant to
Section 1 of this Amendment Agreement.
6. This Amendment Agreement shall be effective from the moment of its
execution by the parties and the acceptance thereof by AO VimpelCom.
7. This Amendment Agreement shall be an integral part of the Contract.
8. This Amendment Agreement has been executed in four counterparts, one to
each party, one to AO VimpelCom and one shall be filed with the
registrar of AO VimpelCom.
9. This Amendment Agreement is made in Russian and English languages. In
the event of inconsistencies the Russian version shall prevail.
ADDRESSES AND SIGNATURES OF THE PARTIES:
The Seller [ ]
Address: Building 1. ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇
---------------- ------------------
General Director Chief Accountant
The Buyer: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Passport XXIV-MIO, No. 520067,
issued on 4 January 1980 by 126 Moscow Police Dept; Place of residence:
▇▇▇▇ ▇▇▇, ▇▇▇▇▇. ▇, ▇▇▇▇▇ ▇▇, ▇▇. Festivalnaya, Moscow, 125502
-------------
▇.▇. ▇▇▇▇▇
Accepted by:
Open Joint Stock Company Vimpel-Communications
2
118
Represented by__________________________
In accordance with Resolution No.___ dated____________ May 2001, of the
General Shareholders Meeting
Signature_________________
3
119
AMENDMENT AGREEMENT NO. 1
TO SHARE SWAP CONTRACT NO. n/n DATED JULY 26, 1996
Moscow , 2001
This Amendment Agreement No. 1 (the "AMENDMENT AGREEMENT") has been made between
Open Joint Stock Company Vimpel-Communications ("AO VIMPELCOM"), represented by
_________ acting under the Charter and in accordance with Resolution No. dated
of the Board of Directors, and __________ (the "COMPANY").
1. Whereas "AO VIMPELCOM" having waived (Decision of AO VimpelCom Board of
Directors No. dated May 30, 2001) all and any rights granted to
AO VimpelCom under Clauses 5.2 and 12.1 of to Share Swap Contract dated
July 26 1996 (the "Contract"), the Parties have agreed to make the
following amendments to the Contract:
1.1 Clause 5.2 of the Contract shall be deleted;
1.2 due to the deletion of Clause 5.2, Clause 5.3 shall be
renumbered as Clause 5.2;
1.3 to delete from Clause 12.1 the following provision "except the
obligation provided for in Clause 5.2" ("hereinafter" "Clause
12.1 Provision").
2. The remaining provisions of the Contract shall remain in full force and
effect
3. AO VimpelCom and the Company agree that from the date of execution of
this Amendment Agreement neither the Company nor any subsequent buyers
of the Preferred Shares (as defined in the Contract) shall have my
obligations under the Contract to AO VimpelCom or other persons arising
out of' or in connection with Clauses 5.2 and Cause 12.1 provision of
the Contract, as deleted pursuant to Section 1 of this Amendment
Agreement, and AO VimpelCom shall have no rights arguing out of such
provisions of the Contract.
4. In consideration of the waiver by AO VimpelCom of all and any rights
granted to AO VimpelCom under Clauses 5.2 and Clause 12.1 provision of
the Contract, as deleted pursuant to Section 1 of this Amendment
Agreement, the parties hereto agree and acknowledge that:
4.1 this Amendment Agreement shall not amend or affect any other
rights or obligations relating to the Preferred Shams (as
defined in the Contract) as set forth in the Decision on
Issuance of Securities, approved by the Board of Directors of
AO VimpelCom (Protocol No. 12, dated September 2, 1996) and
registered by the Department of Finance of the city of Moscow
on September 6,1996 under No. 73-1-6945, and the Decision on
Issuance of Securities, approved by the Board of Directors of
AO VimpelCom (Protocol No. 15, dated October 7, 1996) and
registered by the Department of Finance of the city of Moscow
on October 8,1996 under No. 73-1-7100, including the
obligation to pay, prior to the conversion of the Preferred
Shares, the amount in cash equal to the market value of the
common shares into which the Preferred Shares shall be
converted, provided that the market value of common shares
shall be determined at the time of conversion.
4
120
4.2 If for any circumstances irrespective of their nature, the
obligations set forth in sub-clause 4.1 hereof, cannot be
performed, then, in the event of conversion of the Preferred
Shares into common registered shares of AO VimpelCom, the
holder of the Preferred Shares shall, on the conversion date,
pay to AO VimpelCom the "forgiveness" money (as defined in
Article 409 of the effective Civil Code of the Russian
Federation) in cash form, the sum being equal to the aggregate
market value of common shares into which the Preferred Shares
shall be converted, provided that the market value of common
shares shall be determined at the time of conversion.
4.3 Any further sale and purchase, gift or other disposition of
the Preferred Shares may be effected only if the person
acquiring the title to the Preferred Shares acknowledges and
agrees to be bound by the terms set forth in Sub-clauses 4.1
and 4.2 hereof and such agreement shall be reflected in the
corresponding Preferred Shares transfer agreement.
5. Hereby AO VimpelCom unconditionally and irrevocably waives all and any
rights granted to AO VimpelCom under Clauses 5.2 and Clause 12.1
Provision of the Contract, as deleted pursuant to Section 1 of this
Amendment Agreement
6. This Amendment Agreement shall be effective from the moment of its
execution by the parties.
7. This Amendment Agreement shall be an integral part of the Contract.
8. This Amendment Agreement has been executed in three counterparts, one
to each party, and one shall be filed with the registrar AO VimpelCom.
9. This Amendment Agreement is made in Russian and English languages. In
the event of inconsistencies the Russian version shall prevail.
ADDRESSES AND SIGNATURES OF THE PARTIES:
AG VimpelCom
Address: ▇▇-▇▇, ▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇
---------------------
--------------------- Chief Accountant
---------------------
---------------------
The Company: [ ]
Address:
---------------------------
Name [ ]
5
121
AMENDMENT AGREEMENT NO. 1
TO SHARE PURCHASE AGREEMENT DATED 2001
Moscow , 2001
This Amendment Agreement No. 1 (the "AMENDMENT AGREEMENT") has been made between
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "SELLER") and Overture Limited, represented by
______________, acting under the [ ] and in accordance with Resolution No.
___dated _____of the Meeting of [ ], (the "BUYER").
10. Whereas Open Joint Stock Company Vimpel-Communications ("AO VimpelCom")
having waived (decision of AO VimpelCom Board of Directors No. ____
dated ______ 2001) all and any rights granted to AO VimpelCom under
agreements referred to in Section 2.2 (d), Section 2.2 (e) and Section
2.2 (f) of the Share Purchase Agreement dated _______ 2001 (the
"Agreement"), the Parties have agreed to make the following amendments
to the Agreement:
10.1 Section 2.2 (d) of the Agreement shall read as follows: "(d)
The execution, delivery and performance by the Seller of this
Agreement and the consummation by the Seller of the
transactions contemplated hereby will not (i) conflict with or
result in a violation or breach of any of the terms or
conditions of the Seller's constitutive documents, (ii)
conflict with or result in a violation or breach of any term
or provision of any law or order applicable to the Seller or
any of its assets and properties or (iii) conflict with,
constitute a breach of or result in a default under any
contract or license to which the Seller is a party or by which
any of its assets and properties is bound."
10.2 Section 2.2 (e) of the Agreement shall read as follows: "To
the best of the knowledge of the Seller, the Shares (i) have
been duly authorized and validly issued, and (ii) were
properly registered with the appropriate authorities competent
for registration of the issuance thereof. The Shares are not
subject to any preemptive or similar rights with respect to
the Company or any other person. All of the Shares are
uncertificated."
10.3 Section 2.2 (f) of the Agreement shall read as follows: "No
consent, approval or action of, filing with or notice to any
governmental or regulatory authority or any other person on
the part of the Seller is required in connection with the
Seller's execution, delivery or performance of this Agreement
or the consummation by the Seller of the transactions
contemplated hereby."
11. The remaining provisions of the Agreement shall remain in full force
and effect.
12. The Seller and the Buyer agree that from the date of execution of this
Amendment Agreement, neither the Buyer nor any subsequent buyers of the
Preferred Shares (as defined in the Agreement) shall have any
obligations under the Agreement to AO VimpelCom or other persons
arising out of or in connection with the agreements referred to in
Section 2.2 (d), Section 2.2 (e) and Section 2.2 (f) to the Agreement,
as amended pursuant to Section 1 of this Amendment Agreement, and AO
VimpelCom shall have no rights arising out of such provisions of the
Agreement.
6
122
13. In consideration of the waiver by AO VimpelCom of all and any rights
granted to AO VimpelCom under agreements referred to under Section 2.2
(d), Section 2.2 (e) and Section 2.2 (f) of the Agreement, as amended
pursuant to Section 1 of this Amendment Agreement the parties hereto
agree and acknowledge that:
13.1 this Amendment Agreement shall not amend or affect any other
rights or obligations relating to the Preferred Shares (as
defined in the Agreement) as set forth in the Decision on
Issuance of Securities, approved by the Board of Directors of
AO VimpelCom (Protocol No. 12, dated September 2, 1996) and
registered by the Department of Finance of the city of Moscow
on September 6, 1996 under No. 73-1-6945, and the Decision on
Issuance of Securities, approved by the Board of Directors of
AO VimpelCom (Protocol No. 15, dated October 7, 1996) and
registered by the Department of Finance of the city of Moscow
on October 8,1996 under No. 73-1-7100, including the
obligation to pay, prior to the conversion of the Preferred
Shares, the amount in cash equal to the market value of the
common shares into which the Preferred Shares shall be
converted, provided that the market value of common shares
shall be determined at the time of conversion.
13.2 If for any circumstances irrespective of their nature, the
obligations set forth in sub-clause 4.1 hereof, cannot be
performed, then, in the event of conversion of the Preferred
Shares into common registered shares of AO VimpelCom, the
holder of the Preferred Shares shall, on the conversion date,
pay to AO VimpelCom the "forgiveness" money (as defined in
Article 409 of the effective Civil Code of the Russian
Federation) in cash form, the sum being equal to the aggregate
market value of common shares into which the Preferred Shares
shall be converted, provided that the market value of common
shares shall be determined at the time of conversion.
13.3 Any further sale and purchase, gift or other disposition of
the Preferred Shares may be effected only if the person
acquiring the title to the Preferred Shares acknowledges and
agrees to be bound by the terms set forth in Sub-clauses 4.1
and 4.2 hereof and such agreement shall be reflected in the
corresponding Preferred Shares transfer agreement.
14. The acceptance by AO VimpelCom of this Amendment Agreement shall be an
unconditional and irrevocable waiver of all and any rights granted to
AO VimpelCom under agreements referred to in Section 2.2 (d), Section
2.2 (e) and Section 2.2 (f) of the Agreement, as amended pursuant to
Section 1 of this Amendment Agreement.
15. This Amendment Agreement shall be effective from the moment of its
execution by the parties and the acceptance thereof by AO VimpelCom.
16. This Amendment Agreement shall be an integral part of the Agreement.
17. This Amendment Agreement has been executed in four counterparts, one to
each party, one to AO VimpelCom and one shall be filed with the
registrar of AO VimpelCom.
7
123
ADDRESSES AND SIGNATURES OF THE PARTIES:
The Seller: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Passport: XXIV-MIO, No- 520067, issued on 4
January 1980 by 126 Moscow Police Dept; Place of residence: ▇▇▇▇ ▇▇▇, ▇▇▇▇▇. ▇,
▇▇▇▇▇ ▇▇, ▇▇. Festivalnaya, Moscow, 125502
The Buyer: Overture Limited
Address: [_________________________]
__________________________________
Name:
Accepted by:
Open Joint Stock Company Vimpel-Communications
Represented by ________________________________
In accordance with Resolution No. ___ dated _____ May 2001, of the General
Shareholders Meeting
Signature: ______________________________
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