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EXHIBIT N
REGISTRATION RIGHTS AGREEMENT
Dated as of May 30, 2001
among
CLOSED JOINT STOCK COMPANY "VIMPELCOM-REGION",
as the Company,
and
OPEN JOINT STOCK COMPANY "VIMPEL-COMMUNICATIONS",
ECO TELECOM LIMITED
and
TELENOR EAST INVEST AS
as the Initial Holders
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TABLE OF CONTENTS
PAGE
ARTICLE 1 CERTAIN DEFINITIONS ...................................................................... 1
1.1. Definitions ............................................................................. 1
1.2. Interpretation .......................................................................... 4
ARTICLE 2 DEMAND REGISTRATIONS ..................................................................... 5
2.1. Demand Requests ......................................................................... 5
2.2. Certain Company Obligations ............................................................. 6
2.3. Effective Registration Statement ........................................................ 6
2.4. Selection of Underwriters; Conditions to Underwritten Offering .......................... 6
2.5. Priority for Demand Registration ........................................................ 7
2.6. Limitation on Demand Registrations ...................................................... 7
2.7. Circumstances and Effect of Withdrawal .................................................. 9
ARTICLE 3 PIGGYBACK REGISTRATION ................................................................... 9
3.1. Right to Include Registrable Securities ................................................. 9
3.2. Piggyback Procedure ..................................................................... 9
3.3. Selection of Underwriters; Conditions of Underwritten Offering .......................... 10
3.4. Priority for Piggyback Registration ..................................................... 10
ARTICLE 4 REGISTRATION PROCEDURES .................................................................. 11
4.1. Procedures .............................................................................. 11
ARTICLE 5 REGISTRATION AND SELLING EXPENSES ........................................................ 14
5.1. Registration Expenses ................................................................... 14
5.2. Selling Expenses ........................................................................ 14
5.3. Different Allocations ................................................................... 14
ARTICLE 6 UNDERTAKINGS OF THE HOLDERS OF REGISTRABLE SECURITIES .................................... 14
6.1. Suspension of Sales ..................................................................... 14
6.2. Compliance .............................................................................. 14
6.3. Termination of Effectiveness ............................................................ 14
6.4. Furnish Information ..................................................................... 15
ARTICLE 7 UNDERWRITTEN REGISTRATIONS ............................................................... 15
ARTICLE 8 ASSIGNMENT OF REGISTRATION RIGHTS ........................................................ 15
ARTICLE 9 INDEMNIFICATION .......................................................................... 16
9.1. Indemnification by the Company .......................................................... 16
9.2. Indemnification by Holders .............................................................. 17
9.3. Conduct of Indemnification Proceedings .................................................. 17
9.4. Survival ................................................................................ 18
9.5. Contribution ............................................................................ 18
9.6. Other Rights ............................................................................ 19
9.7. Indemnification and Contribution of Underwriters ........................................ 19
ARTICLE 10 RULE 144; Rule 144A; OTHER EXEMPTIONS; MARKET STANDOFF .................................. 19
10.1. Rule 144; Rule 144A; Other Exemptions ................................................... 19
10.2. "Market Stand-Off" Agreement ............................................................ 20
ARTICLE 11 TERMINATION OF AGREEMENT AND RIGHTS ..................................................... 20
11.1. Termination of Agreement ................................................................ 20
11.2. Termination of Holders Rights ........................................................... 20
ARTICLE 12 MISCELLANEOUS ........................................................................... 21
12.1. Notices ................................................................................. 21
12.2. Entire Agreement ........................................................................ 23
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12.3. Limitations on Subsequent Registration Rights ........................................... 23
12.4. Waiver .................................................................................. 24
12.5. Amendment ............................................................................... 24
12.6. No Assignment; Binding Effect; No Third Party Beneficiary; Obligations Several .......... 24
12.7. Governing Law ........................................................................... 24
12.8. Arbitration; Consent to Jurisdiction; Service of Process; Waiver of Sovereign Immunity .. 24
12.9. Severability ............................................................................ 26
12.10. Headings ................................................................................ 26
12.11. Counterparts ............................................................................ 27
Exhibit A Form of Endorsement
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This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made as of the
30th day of May, 2001, by and among CLOSED JOINT STOCK COMPANY
"VIMPELCOM-REGION", a closed joint stock company organized under the laws of the
Russian Federation (the "COMPANY"), OPEN JOINT STOCK COMPANY
"VIMPEL-COMMUNICATIONS", an open joint stock company organized under the laws of
the Russian Federation ("VIP"), ECO TELECOM LIMITED, a company organized under
the laws of Gibraltar ("ECO TELECOM"), and TELENOR EAST INVEST AS, a company
organized under the laws of Norway ("TELENOR" and, along with Eco Telecom and
VIP, the "INITIAL HOLDERS" and, collectively with such other successors,
transferees and assignees that acquire Registrable Securities from Initial
Holders, in each case, in accordance with the terms hereof, the "HOLDERS").
RECITALS:
WHEREAS, the Company is currently a wholly-owned subsidiary of VIP;
WHEREAS, the Company has agreed to issue and to sell, and the Initial
Holders have agreed, or have the right, to subscribe for and purchase, shares of
Common Stock on the terms and subject to the conditions set forth in the Primary
Agreement, dated as of the date hereof, by and between the Company, as issuer,
and each of the Initial Holders, as purchasers (the "PRIMARY AGREEMENT"); and
WHEREAS, a condition precedent to the obligations of each of the
Initial Holders under the Primary Agreement is that the Company and the Initial
Holders enter into this Agreement in order to provide each of the Initial
Holders with certain registration rights with respect to their ownership of the
Common Stock.
NOW, THEREFORE, to implement the foregoing and in consideration of the
mutual terms, conditions and covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
1.1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:
"ADSs" shall mean any American Depositary Shares issued by the
Company, representing shares of the Common Stock.
"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
any such Person or Persons identified 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,
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with its correlative meanings, "CONTROLLED BY" and "UNDER COMMON CONTROL WITH")
shall mean, with respect to any Person, the possession, direct or indirect, 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; provided, however, that for the purposes
of this definition, neither the Company, nor any of its Controlled Affiliates,
nor VIP, nor any of its Controlled Affiliates shall be deemed an Affiliate of
any Party.
"AGREEMENT" has the meaning specified in the preamble.
"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.
"CHARTER" shall have the meaning specified in the Primary
Agreement.
"CLAIM" has the meaning specified in Section 9.1(a).
"COMMON STOCK" shall mean the shares of common stock of the
Company, as defined in the Charter.
"COMPANY" has the meaning specified in the preamble.
"COMPANY INDEMNIFIED PARTIES" has the meaning specified in
Section 9.2(a).
"COMPANY REGISTRATION" has the meaning specified in Section
3.1.
"CONTROLLED AFFILIATE" shall mean, with respect to any Person,
any Affiliate of 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).
"DEMAND REGISTRATION" has the meaning specified in Section
2.1.
"DEMAND REQUEST" has the meaning specified in Section 2.1.
"ECO TELECOM" has the meaning specified in the preamble.
"ENDORSEMENT" shall mean an endorsement to this Agreement, in
the form annexed to this Agreement as Exhibit A.
"EXCHANGE ACT" shall mean the United States Securities
Exchange Act of 1934, as amended, and the rules and regulations of the SEC
promulgated thereunder, as in effect at the relevant time.
"FINAL DATE" has the meaning specified in the Primary
Agreement.
"FIRST CLOSING" has the meaning specified in the Primary
Agreement.
"HOLDER INDEMNIFIED PARTIES" has the meaning specified in
Section 9.1(a).
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"HOLDERS" has the meaning specified in the preamble.
"INITIAL HOLDERS" has the meaning specified in the preamble.
"INSPECTOR" and "INSPECTORS" have the meanings specified in
Section 4.1(b).
"IPO" has the meaning specified in Section 2.1.
"LOSSES" has the meaning specified in Section 9.1(a).
"PARTICIPATING HOLDERS" has the meaning specified in Section
4.1(b).
"PERMITTED TRANSFEREE" has the meaning specified in the
Shareholders Agreement.
"PERSON" shall mean any natural person, corporation, general
partnership, simple partnership, limited partnership, proprietorship, other
business organization, trust, union, association or governmental or regulatory
authority, whether incorporated or unincorporated.
"PRIMARY AGREEMENT" shall have the meaning set forth in the
first recital to this Agreement.
"REGISTRABLE SECURITIES" shall mean any and all shares of
Common Stock (excluding any warrants or other securities convertible into or
exchangeable for shares of Common Stock) or ADSs that any Holder may own
(whether now owned or acquired after the date hereof), including any such ADSs
or shares of Common Stock acquired by any Holder as a result of the exercise of
any Option as defined in the Option Agreement. As to any particular shares of
Common Stock or ADSs constituting Registrable Securities, such ADSs or shares
will cease to be Registrable Securities when (i) such ADSs or shares, as the
case may be, shall have been sold by a Holder pursuant to an effective
registration statement under the Securities Act, (ii) they shall have been
distributed pursuant to Rule 144, Rule 144A, Rule 145 or any similar provision
then in force under the Securities Act, and the transferee shall not have become
party to this Agreement in accordance with Article 8 hereof, (iii) they have
become eligible for sale by such Holder pursuant to Rule 144(k) under the
Securities Act, (iv) they have been Transferred in violation of this Agreement,
or (v) they have ceased to be outstanding. The terms "REGISTER", "REGISTERED",
and "REGISTRATION" refer to a registration of the Common Stock effected by
preparing and filing a registration statement or similar document (a
"REGISTRATION STATEMENT") in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such Registration Statement. If the
Company registers and maintains its registration of ADSs with the SEC, then
Registrable Securities consisting of shares of Common Stock shall be deposited
with the depositary of such ADSs and registration shall be made of ADSs (for
sale thereof in a public offering), and not Common Stock, under this Agreement.
"REGISTRATION EXPENSES" shall mean all expenses incurred by
the Company in effecting any registration pursuant to this Agreement, including,
without limitation, all registration, qualification and filing fees, depositary
fees, printing expenses, escrow fees, fees and disbursements of counsel for the
Company (including fees incurred by counsel in connection with the delivery of
any opinions required in connection with the filing of any Registration
Statement), blue sky fees and expenses, the expenses of any regular or special
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audits incident to or required by any such registration, but excluding (a)
Selling Expenses and (b) the compensation of regular employees of the Company
(which shall be paid in any event by the Company).
"REGISTRATION STATEMENT" has the meaning specified under the
definition of "Registrable Securities".
"REQUESTING HOLDERS" has the meaning specified in Section 2.1.
"RULE 144" shall mean Rule 144 as promulgated by the SEC under
the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the SEC under the Securities
Act.
"RULE 144A" shall mean Rule 144A as promulgated by the SEC
under the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the SEC under the Securities
Act.
"RULE 145" shall mean Rule 145 as promulgated by the SEC under
the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the SEC under the Securities
Act.
"SECURITIES ACT" shall mean the United States Securities Act
of 1933, as amended, and the rules and regulations of the SEC promulgated
thereunder, as in effect at the relevant time.
"SEC" shall mean the United States Securities and Exchange
Commission, or any successor thereto.
"SELLING EXPENSES" shall mean all underwriting discounts,
selling commissions and stock transfer taxes applicable to the sale of
Registrable Securities and all fees and disbursements of counsel for any Holder
(which shall, in any event, be paid by such Holder).
"SHAREHOLDERS AGREEMENT" shall mean the Shareholders
Agreement, dated as of the date hereof, by and among the Company and each of
VIP, Eco Telecom and Telenor.
"TELENOR" has the meaning specified in the preamble.
"TRANSFER" has the meaning specified in the Shareholders
Agreement.
"UNCITRAL RULES" has the meaning specified in Section 12.8.
"VALID BUSINESS REASON" has the meaning specified in Section
2.6(a).
"VIP" has the meaning specified in the preamble.
1.2. Interpretation
Unless the context of this Agreement otherwise requires, the following
rules of interpretation shall apply to this Agreement:
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(a) the singular shall include the plural, and the plural shall include
the singular;
(b) words of any gender shall include each other gender;
(c) the words "hereof', "herein", "hereby", "hereto" and similar words
refer to this entire Agreement and not to any particular Section or any other
subdivision of this Agreement;
(d) a reference to any Article, Section or Exhibit is a reference to a
specific Article or Section of, or Exhibit to, this Agreement;
(e) a reference to any law, statute, regulation, notification or
statutory provision shall include any amendment, amendment and restatement,
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,
permitted assigns and permitted transferees 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 2
DEMAND REGISTRATIONS
2.1. Demand Requests. At any time following the six (6) month
anniversary of the date on which the Company has completed an initial public
offering pursuant to an effective Registration Statement under the Securities
Act (an "IPO"), a Holder or Holders, as the case may be, holding individually or
in the aggregate not less than five percent (5%) of the issued and outstanding
Common Stock shall have the right to request (each, individually, a "REQUESTING
HOLDER" and, collectively, the "REQUESTING HOLDERS") in writing that the Company
effect a registration under the Securities Act with respect to all or part of
the Registrable Securities held by such Requesting Holder(s) (a "DEMAND
REGISTRATION"), provided the anticipated aggregate offering price to the public
(before deduction of underwriting discounts and expenses of sale) is not less
than US$7.5 million. The Requesting Holders shall deliver to the Company a
written request for a Demand Registration (a "DEMAND REQUEST") in accordance
with Section 12.1 that specifies the number of shares and the methods by which
each Requesting Holder intends to sell or dispose of such Registrable Securities
(including whether the Requesting Holder intends to distribute the Registrable
Securities by means of an underwritten offering).
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2.2. Certain Company Obligations. Following delivery of a Demand
Request, and subject to the conditions of this Article 2, the Company shall:
(a) give prompt written notice of such Demand Request to all
other Holders of Registrable Securities, to which such Holders will have thirty
(30) days from receipt thereof to respond in order to have any Registrable
Securities of such Holders included in such registration; provided, however,
that if such Holder has more than fifty (50) shareholders and is required by
applicable law to obtain the approval of its shareholders in order to sell such
Registrable Securities, then (if prior to the expiration of the thirty (30) day
period such Holder shall so notify the Company in writing) such Holder shall
have seventy (70) days from the receipt of such notice to deliver to the Company
its written response;
(b) use all reasonable efforts to effect such registration as
promptly as practicable (including, without limitation, by filing a Registration
Statement (and executing an undertaking to file any amendments thereto) covering
the Registrable Securities so requested to be registered (subject to Section 2.5
if such registration is an underwritten public offering), qualifying such
Registrable Securities under applicable blue sky or other securities laws of any
state of the United States of America (to the extent set forth in this
Agreement) and complying with applicable regulations issued under the Securities
Act and any other governmental requirements or regulations) as may be so
requested and to the extent necessary to permit or facilitate the sale and
distribution of all or a portion of such Registrable Securities as are specified
in such request; and
(c) refrain from filing any other Registration Statements,
other than pursuant to a Registration Statement on Form F-4 or S-8 (or successor
forms), with respect to any securities, including Registrable Securities, of the
Company until such date that is ninety (90) days following effectiveness of the
Registration Statement filed in connection with such Demand Registration.
2.3. Effective Registration Statement. A Demand Registration shall not
be deemed to have been effected unless a Registration Statement with respect
thereto has become effective and remained effective in compliance with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such Registration Statement for the period of
time required pursuant to Section 4.1(d) hereof.
2.4. Selection of Underwriters; Conditions to Underwritten Offering. In
the event that any Demand Registration is to be an underwritten public offering,
the lead managing underwriter shall be one or more reputable investment banks
selected by the Company and approved by the Requesting Holder(s), such approval
not to be unreasonably withheld. The Company (together with the Holders
proposing to distribute Registrable Securities and any other Person distributing
securities through such underwriting) shall, upon request of the managing
underwriter, enter into any reasonable agreement requested by such managing
underwriter in connection with the offering, including, without limitation, an
underwriting agreement in customary form with such managing underwriter;
provided, however, that (a) the Requesting Holder(s) shall be permitted to
select a co-managing underwriter for such offering, which co-managing
underwriter shall be subject to the approval of the Company, such approval not
to be unreasonably withheld; and (b) subject to Section 2.5 the Company may, but
in no event shall the Company be required to, include securities for its own
account in such offering. If a Holder disapproves of the terms of the
underwriting (including, without limitation, any limits on the number of
Registrable Securities to be included), such Holder
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may elect to withdraw therefrom by written notice to the Company and the
managing underwriter in accordance with Section 12.1.
2.5. Priority for Demand Registration.
(a) Notwithstanding any other provision of this Article 2, if
the lead managing underwriter advises the Company in writing that, in the
opinion of the lead managing underwriter, the number of securities of the
Company requested to be included in the underwriting is likely to have an
adverse effect on the price, timing or distribution of securities offered in
such offering, the lead managing underwriter may limit the Registrable
Securities to be included in such registration and underwriting to such number
of Registrable Securities that, in the opinion of the lead managing underwriter,
can be sold without having such adverse effect. In the event the lead managing
underwriter so advises the Company, the Company shall so advise the Holders
proposing to sell Registrable Securities (and any other Person distributing
securities through such underwriting, if any), and such maximum number of
securities to be included in such registration, as determined by the lead
managing underwriter, shall be allocated in the following priority:
(i) first, all Registrable Securities of the Requesting
Holder(s) in the amount indicated in the Demand Registration, and if
such amount exceeds the maximum number of Registrable Securities to be
included in such registration as determined by the lead managing
underwriter, then pro rata to the amounts of Registrable Securities
requested by each Requesting Holder;
(ii) second, any Registrable Securities requested to be
included in such Demand Registration by other Holders pursuant to
Section 2.2(a), as nearly as practicable, pro rata to the number of
Registrable Securities requested by each Holder to be included in such
Demand Registration;
(iii) third securities proposed by the Company to be included
in such Demand Registration for its own account; and
(iv) fourth, securities of other Persons, if any, that have
requested to have such securities included in such Demand Registration
as a result of piggyback registration rights, pro rata to the amount of
securities that each such Person requested to be included in such
Demand Registration.
(b) Upon the occurrence of any of the foregoing restrictions,
any Holder may elect to withdraw from a registration by written notice to the
Company and the lead managing underwriter. If as a result of such withdrawal, a
greater number of Registrable Securities held by other Holders may be included
in such registration, then the Company shall offer to all other Holders who have
included Registrable Securities in the registration, the right to include
additional Registrable Securities in the same proportions as used in determining
the limitations set forth above.
2.6. Limitation on Demand Registrations.
(a) The Company may delay making a filing of a Registration
Statement in respect of a Demand Registration by not more than ninety (90) days
past the time the
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Company would otherwise be required to file such Registration Statement if the
Company, prior to the time it would otherwise have been required to file such
Registration Statement pursuant to this Article 2 in connection with a Demand
Request determines in the good faith judgment of the Board of Directors of the
Company that the filing of such Registration Statement would be seriously
detrimental to the Company or would otherwise materially adversely affect a
material transaction, such as a financing, acquisition, disposition or merger (a
"VALID BUSINESS REASON"); provided, however, that such right to delay the filing
of such Registration Statement shall be exercised by the Company not more than
once in any twelve-month (12-month) period and the Company shall only have the
right to delay such filing for only so long as such Valid Business Reason
exists.
(b) The Company shall not be required to effect any Demand
Registration:
(i) prior to the six (6) month anniversary of the IPO;
(ii) in response to a request from any Requesting Holder(s)
within six (6) months after the effective date of a Registration
Statement relating to a prior Demand Registration or within six (6)
months after the effective date of any other Registration Statement
effected by the Company for a public offering of Common Stock or ADSs;
(iii) after the Company has, in response to requests for
Demand Registrations from any Requesting Holder, or any Requesting
Holder's predecessors in interest pursuant to this Article 2, effected
the registration of Registrable Securities and has sold such
Registrable Securities on at least three (3) prior occasions; provided,
that for purposes of determining the number of Demand Registrations
effected by a Requesting Holder and its predecessors in interest, (a)
Eco Telecom and Persons acquiring Registrable Securities directly or
indirectly from Eco Telecom (including, without limitation, any
transferee or assignee who obtains registration rights pursuant to the
terms of this Agreement) shall count as one Requesting Holder, (b)
Telenor and Persons acquiring Registrable Securities directly or
indirectly from Telenor (including, without limitation, any transferee
or assignee who obtains registration rights pursuant to the terms of
this Agreement) shall count as one Requesting Holder and (c) VIP and
Persons acquiring Registrable Securities directly or indirectly from
VIP shall count as one Requesting Holder;
(iv) if, in the good faith judgment of the Board of Directors
of the Company, in connection with such registration, the shareholders
of the Company not participating in such registration would be afforded
the right under applicable law to require the Company to repurchase
their shares of Common Stock and such purchase obligation would be
materially detrimental to the Company's financial position, business
and/or strategic plans; or
(v) with respect to any Demand Registration that is
underwritten pursuant to the terms hereunder, if the Company is unable,
after good faith efforts, to retain an underwriter in accordance with
Section 2.4 hereof.
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2.7. Circumstances and Effect of Withdrawal. Except as provided in
Section 2.7(b) below, at the request of any Requesting Holder, or in the event
that a sufficient number of Holders withdraw from a Demand Registration for any
reason such that the amount of Registrable Securities to be included by Holders
in such Demand Registration will result in such Demand Registration failing to
meet the threshold amounts set forth in Section 2.1, the Company shall have the
right to cease proceeding with such Demand Registration and in such event:
(a) The Requesting Holders shall either (i) bear all
Registration Expenses incurred in connection with such Demand Registration, in
which event such Demand Registration shall not count as a Demand Registration
under this Article 2 or (ii) require that the Company bear all such Registration
Expenses, in which event such withdrawn Demand Registration shall count as a
Demand Registration under this Article 2.
(b) Notwithstanding anything in Section 2.7(a) to the
contrary, the Holders shall be entitled to withdraw from a Demand Registration
and neither (i) pay any Registration Expenses in connection therewith nor (ii)
forfeit the right to such Demand Registration if (A) the Holders have learned of
a material adverse change in the financial condition, business or prospects of
the Company that was not known to the Holders at the time of the Demand Request
and (B) the Company failed to disclose such material adverse change to the
Holders at the time the Demand Request was delivered.
ARTICLE 3
PIGGYBACK REGISTRATION
3.1. Right to Include Registrable Securities. If at any time the
Company shall determine to register any of its Common Stock or ADSs under the
Securities Act for its own account or on account of its shareholders (a "COMPANY
REGISTRATION"), other than a Holder and other than pursuant to a Registration
Statement on Form F-1 (solely in connection with the Company's IPO), Form F-4 or
Form S-8 (or successor forms), the Company shall promptly give written notice of
such Company Registration to all Holders of Registrable Securities (which notice
shall be given not less than thirty (30) days prior to the expected effective
date of the Registration Statement in connection with such Company Registration)
and shall offer all Holders the right to request inclusion of any of such
Holder's Registrable Securities in such Company Registration, provided, however,
that rights of Holders in respect of a Demand Registration shall be governed by
Article 2 hereof.
3.2. Piggyback Procedure. Each Holder of Registrable Securities shall
have thirty (30) days from the receipt of notice of a Company Registration to
deliver to the Company a written request in accordance with Section 12.1
specifying the number of Registrable Securities such Holder intends to sell
(which in any one request shall not exceed fifty percent (50%) of the
Registrable Securities owned in the aggregate by such Holder at such time or 5%
of the issued and outstanding Common Stock, whichever is greater); provided,
however, that if such Holder has more than fifty (50) shareholders and is
required by applicable law to obtain the approval of its shareholders in order
to sell such Registrable Securities, then (if prior to the expiration of the
thirty (30) day period such Holder shall so notify the Company in writing) such
Holder shall have seventy (70) days from the receipt of such notice to deliver
to the Company its written response. Any Holder shall have the right to withdraw
such Holder's request for inclusion of such Holder's Registrable Securities in
such Company Registration by delivering written notice to the Company of such
withdrawal in accordance
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with Section 12.1 prior to the anticipated effectiveness of a Registration
Statement in connection therewith. Subject to Section 3.4, the Company shall
include in such Registration Statement all such Registrable Securities so
requested to be included therein, provided, however, that the Company may at any
time withdraw or cease proceeding with any such Company Registration whether or
not any Holder has elected to include Registrable Securities in such Company
Registration.
3.3. Selection of Underwriters; Conditions of Underwritten Offering.
The managing underwriter for any Company Registration that the Company proposes
as an underwritten public offering shall be one or more reputable investment
banks selected by the Company. All Holders proposing to distribute their
Registrable Securities through such underwriting shall, together with the
Company and the other Persons distributing their securities through such
underwriting, if any, enter into an underwriting agreement in customary form
with the underwriter or underwriters selected by the Company. The right of any
Holder to registration pursuant to this Article 3 in connection with any
underwritten public offering shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. If any
Holder disapproves of the terms of any such underwriting, it may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter.
3.4. Priority for Piggyback Registration.
Notwithstanding any other provision of this Article 3, if the managing
underwriter in a Company Registration advises the Company in writing that, in
the opinion of such managing underwriter, the number of securities of the
Company requested to be included in such underwriting is likely to have an
adverse effect on the price, timing or distribution of securities offered in
such offering, the managing underwriter may limit the securities to be included
in such Company Registration and underwriting to the number of securities that,
in the opinion of the managing underwriter, can be sold without having such
adverse effect. In the event the managing underwriter so advises the Company,
the Company shall so advise the Holders proposing to sell Registrable Securities
(and any other Person distributing securities through such underwriting, if
any), and such maximum number of securities to be included in such registration
shall be allocated in the following priority:
(i) first, the securities proposed by the Company to be sold
for its own account;
(ii) second, any Registrable Securities requested to be
included in such Company Registration by the Holders and any securities
requested to be included therein by such other Persons having piggyback
registration rights that are on par with the piggyback registration
rights granted to the Holders, as nearly as practicable, pro rata to
the amounts of Registrable Securities requested by each Holder and
securities requested by each such other Person to be included in the
Company Registration at the time of filing of the Registration
Statement; and
(iii) third, any securities requested to be included in such
Company Registration by other Persons having piggyback registration
rights that are junior to the piggyback registration right granted to
the Holders, as nearly as practicable, pro rata to the amounts of
securities requested by each such other Person to be included in the
Company Registration at the time of filing the Registration Statement;
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provided, however, that notwithstanding anything to the contrary in this Section
3.4, in the circumstance that, as a result of the provisions of this Section
3.4, a Holder shall not be entitled to include all of the Registrable Securities
in a Company Registration that such Holder has requested to be so included, such
Holder may withdraw such Holder's request to include Registrable Securities in
such Registration Statement at the time such Holder is delivered notice of such
circumstance.
ARTICLE 4
REGISTRATION PROCEDURES
4.1. Procedures. Whenever Holders of Registrable Securities have
requested that any Registrable Securities be registered in accordance with the
terms of this Agreement, the Company shall, as soon as practicable:
(a) Prepare and file with the SEC a Registration Statement on
any form that the Company deems appropriate and pursuant to which such
registration and sale may be made in accordance with the intended method of
distribution, and use its best efforts to cause such registration statement to
become effective and to keep such registration statement effective for a period
of not less than one hundred twenty (120) consecutive days or, if earlier, until
the Holder or Holders have completed the distribution related thereto;
(b) Provide any Holders participating, or electing to
participate, in such registration and sale of Registrable Securities (the
"PARTICIPATING HOLDERS"), any underwriter participating in any disposition
pursuant to a Registration Statement, and any attorney, accountant or other
agent retained by any Participating Holder or underwriter (each an "INSPECTOR"
and, collectively, the "INSPECTORS"), the opportunity to participate, including,
without limitation, reviewing, commenting on and attending all meetings, in the
preparation of such Registration Statement, each prospectus included therein or
filed with the SEC and each amendment or supplement thereto;
(c) For a reasonable period prior to the filing of any
Registration Statement pursuant to this Agreement, make available for inspection
and copying by the Participating Holders and the Inspectors such financial and
other information and books and records, pertinent corporate documents and
properties of the Company and its subsidiaries and cause the officers,
directors, employees, counsel and independent certified public accountants of
the Company and its subsidiaries to respond to such inquiries and to supply all
information reasonably requested by any such Inspector in connection with such
Registration Statement, as shall be reasonably necessary, in the judgment of the
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act;
(d) Promptly notify each Participating Holder, the sales or
placement agent, if any, therefor and the managing underwriter of the securities
being sold, (a) when such Registration Statement or the prospectus included
therein or any prospectus amendment or supplement or post-effective amendment
has been filed, and, with respect to any such Registration Statement or any
post-effective amendment, when the same has become effective, (b) of any
comments (oral or written) by the SEC and by the blue sky or securities
commissioner or regulator of any state with respect thereto or (c) of any
request by the SEC for any amendments or supplements to such Registration
Statement or the prospectus or for additional information, and in the case of a
Demand Registration, prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus
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used in connection therewith as may be necessary to keep such Registration
Statement effective for a period of not less than one hundred twenty (120)
consecutive days or such shorter period that will terminate upon the date when
all Registrable Securities covered by such Registration Statement have been sold
(but not before the expiration of the applicable prospectus delivery period),
and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during such
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement;
(e) Furnish to each seller of Registrable Securities such
number of copies of such Registration Statement, each amendment and supplement
thereto, the prospectus included in such Registration Statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(f) Register or qualify such Registrable Securities under such
other securities or blue sky laws of such jurisdictions within the United States
as the sellers or underwriters shall request, to keep such registration or
qualification in effect for so long as the Registration Statement is in effect
and do any and all other acts and things which may be reasonably necessary or
advisable to enable such sellers to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such sellers (provided that
the Company will not be required to qualify generally to do business or file any
general consent to service of process in any jurisdiction where it would not
otherwise be required to qualify or file but for this subparagraph);
(g) Obtain all necessary approvals, covenants, exemptions or
authorizations from such governmental agencies or authorities as may be
necessary to enable the sellers of such Registrable Securities to consummate the
disposition of such Registrable Securities;
(h) Promptly notify each Participating Holder of Registrable
Securities at any time when a prospectus relating to a registration thereof is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such Registration Statement, as
then in effect, contains an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing,
and subject to Section 2.2 hereof, prepare and file as soon as practicable (but
in no event later than fourteen (14) days following notice of the occurrence of
such event to each Participating Holder of Registrable Securities) with the SEC
and promptly notify each Participating Holder of Registrable Securities of the
filing of, a supplement to such prospectus or an amendment to the Registration
Statement so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus will not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made and in the case of an amendment to the
Registration Statement, use reasonable efforts to cause it to become effective
promptly;
(i) Promptly notify in writing the Participating Holders, the
sales or placement agent, if any, therefor and the managing underwriter of the
securities being sold of the issuance by the SEC of (a) any stop order issued or
threatened to be issued by the SEC or (b) any notification with respect to the
suspension of the qualification or exemption from
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qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, and the
Company agrees to use reasonable efforts (x) to prevent the issuance of any such
stop order, and in the event of such issuance, to obtain the withdrawal of any
such stop order and (y) to prevent the issuance of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Registrable Securities included in such Registration Statement for sale in
any jurisdiction, and in the event of such issuance, to obtain the withdrawal of
such order, at the earliest practicable date;
(j) If the offering is to be underwritten, enter into any
necessary agreements in connection therewith (including an underwriting
agreement containing customary representations, warranties and agreements);
(k) Obtain a "cold comfort" letter from the Company's
independent certified public accountants in customary form and covering such
matters of the type customarily covered by "cold comfort" letters as the
managing underwriter may reasonably request;
(l) If such Registrable Securities are being sold through
underwriters, furnish, at the request of any underwriter of Registrable
Securities on the date such Registrable Securities are delivered to the
underwriters for sale in connection with a Registration Statement pursuant to
this Agreement, or, if such Registrable Securities are not being sold through
underwriters, furnish, at the request of any Participating Holder, on the date
that the Registration Statement, with respect to such Registrable Securities,
becomes effective, an opinion, dated such date, of counsel representing the
Company for the purposes of such registration, addressed to the Participating
Holders, the placement agent or sales agent, if any, thereof and the
underwriters, if any, thereof, covering such legal matters with respect to such
registration as any such underwriter, placement agent or Participating Holder
may reasonably request and as are customarily included in such opinions;
(m) Cooperate with each Participating Holder and each
underwriter participating in the disposition of such Registrable Securities and
underwriters' counsel in connection with any filings required to be made with
the exchange or market on which the Registrable Securities are traded;
(n) Cause all Registrable Securities registered pursuant
hereto to be listed on each securities exchange or market on which similar
securities issued by the Company are then listed or, if none of the Company's
securities are so listed, then on any of The New York Stock Exchange, The
American Stock Exchange or The Nasdaq National Market;
(o) Provide a transfer agent and registrar or depositary for
all Registrable Securities registered pursuant hereto and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration; and
(p) Use reasonable efforts to take all other actions necessary
to effect the registration of the Registrable Securities contemplated hereby.
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ARTICLE 5
REGISTRATION AND SELLING EXPENSES
5.1. Registration Expenses.
Subject to Sections 2.7(a) and 2.7(b) hereof, all Registration Expenses
relating to any Registrable Securities registered on behalf of any Holder in
connection with any Demand Registration or Company Registration shall be borne
by the Company.
5.2. Selling Expenses. All Selling Expenses relating to any Registrable
Securities registered on behalf of any Holder in connection with any Demand
Registration or Company Registration shall be borne by the Holders participating
in such registration pro rata on the basis of the number of Registrable
Securities of each such Holder included in such registration to the total number
of Registrable Securities that have been registered in such registration on
behalf of all Holders.
5.3. Different Allocations. Notwithstanding the provisions of Section
5.1 and 5.2, if, as a condition of registration, qualification or compliance of
any offering in any state or jurisdiction in which the Company (by vote of its
Board of Directors) or any underwriter determines in good faith that it wishes
to offer securities registered in an offering to which this Agreement applies,
Registration Expenses and/or Selling Expenses are required to be allocated in a
manner different from that provided in Section 5.1 and 5.2, respectively, such
expenses shall be allocated in whatever permitted manner is most nearly in
compliance with the provisions of this Agreement.
ARTICLE 6
UNDERTAKINGS OF THE HOLDERS OF REGISTRABLE SECURITIES
6.1. Suspension of Sales. If any Registrable Securities are included in
a Registration Statement pursuant to the terms of this Agreement, the Holder
thereof shall not (until further notice) effect sales thereof after receipt of
written notice from the Company pursuant to Section 4.1(h) of the occurrence of
an event specified therein in order to permit the Company to correct or update
the Registration Statement or prospectus as set forth in this Agreement, as
applicable; provided that the obligations of the Company with respect to
maintaining any Registration Statement current and effective shall be extended
by a period of days equal to the period said suspension is in effect.
6.2. Compliance. If any Registrable Securities are being registered in
any registration pursuant to this Agreement, the Holder thereof shall comply
with all anti-stabilization, manipulation and similar provisions of Section 10
of the Exchange Act.
6.3. Termination of Effectiveness. At the end of the period during
which the Company is obligated to keep a Registration Statement current and
effective pursuant hereto, each Holder of Registrable Securities included in the
Registration Statement shall discontinue sales thereof pursuant to such
Registration Statement, unless such Holder has received written notice from the
Company of its intention to continue the effectiveness of such Registration
Statement with respect to any of such Registrable Securities that remain unsold.
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6.4. Furnish Information. A condition precedent to the obligations of
the Company to take any action pursuant to this Agreement with respect to the
Registrable Securities of any selling Holder shall be that such Holder deliver
to the Company notice of certain information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such
Registrable Securities as shall reasonably be required to effect the
registration of such Holder's Registrable Securities or as shall otherwise
reasonably be requested by the Company in connection therewith.
ARTICLE 7
UNDERWRITTEN REGISTRATIONS
No Holder of Registrable Securities may participate in any underwritten
registration hereunder unless such Holder (i) agrees to sell such Holder's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the Holder or Holders entitled hereunder to approve such
arrangements, and (ii) completes and executes all customary questionnaires,
powers of attorney, indemnities, underwriting agreements, "lock-up" agreements
and other documents reasonably required under the terms of such underwriting
arrangements, provided that no Holder of Registrable Securities included in any
underwritten registration hereunder shall be required to make any
representations or warranties to the Company or the underwriters on account of
the registration of Registrable Securities owned by such Holder other than
representations and warranties regarding such Holder (including valid title to
the Registrable Securities being sold free and clear of all liens) and such
Holder's intended method of distribution. Holders of Registrable Securities to
be sold in an underwritten registration hereunder may, at their option, require
that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters also be made to and for the benefit of such Holders of Registrable
Securities and that any or all of the conditions precedent to the obligations of
such underwriters under such underwriting agreement be conditions precedent to
the obligations of such Holders of Registrable Securities hereunder.
ARTICLE 8
ASSIGNMENT OF REGISTRATION RIGHTS
The rights of a Holder of Registrable Securities set forth in this
Agreement, including the right to cause the Company to register Registrable
Securities and pay the Registration Expenses incurred in connection therewith,
to the extent set forth herein, may not be Transferred by such Holder except (i)
in connection with a Transfer of Registrable Securities to a Permitted
Transferee in accordance with the Shareholders Agreement or (ii) in connection
with a Transfer by a Holder of 100% of such Holder's Registrable Securities to a
transferee other than a Permitted Transferee in accordance with the Shareholders
Agreement; and in each case only if such transferee agrees in writing to assume
and be bound by the provisions of both the Shareholders Agreement and this
Agreement by executing an Endorsement (and/or such further documents as may be
necessary in the opinion of the Company and other Holders to make such
transferee a party to each such agreement). No such Transfer shall be deemed to
relieve the transferor Holder of any obligations of such transferor Holder
pursuant to this Agreement, accruing before the date of such Transfer.
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ARTICLE 9
INDEMNIFICATION
9.1. Indemnification by the Company.
(a) The Company shall, notwithstanding termination of this
Agreement, indemnify and hold harmless, to the fullest extent permitted by law,
each Holder of Registrable Securities covered by such Registration Statement,
such Holder's officers, directors, employees, agents and general or limited
partners (and the directors, officers, employees and agents thereof) and each
other Person, if any, who controls such Holder (within the meaning of Section 15
of the Securities Act), with respect to any sale which has been effected
pursuant to the terms of this Agreement, and each underwriter, if any, and each
Person who controls any underwriter (within the meaning of Section 15 of the
Securities Act) (collectively, the "HOLDER INDEMNIFIED PARTIES"), against any
and all losses, claims, damages, liabilities and expenses joint or several
(including without limitation reasonable fees and expenses of counsel and any
amounts paid in settlement effected with the Company's consent, which consent
shall not be unreasonably delayed, withheld or conditioned) (collectively,
"LOSSES") to which any such Holder Indemnified Party may become subject, or in
which the Company has notified the Holder that the Registrable Securities have
otherwise been registered and qualified or are eligible for sale, in each case
insofar as such Losses (or actions or proceedings, whether commenced or
threatened, in respect thereof) are resulting from or arising out of or based
upon (i) any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading or (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary, final or summary prospectus, or any
other Company approved offering circular or other document, or any amendment or
supplement thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or (iii) any violation by the Company of the Securities
Act, the Exchange Act, any state securities law, or any rule or regulation
promulgated under the Securities Act, the Exchange Act (or any rule or
regulation promulgated under the Securities Act or the Exchange Act), the
securities or similar laws of any state or other jurisdiction in which
Registrable Securities are sold in an underwritten offering or, with respect to
any non-underwritten offering effected pursuant to the terms of this Agreement,
the securities laws of those jurisdictions in which the Holders have requested
registration or qualification of the Registrable Securities covered by the
request (unless the Company shall have notified such Holder in a timely manner
that such registration or qualification is not available or has not been made
for any reason permitted by this Agreement), or in which the Company has
notified the Holder that the Registrable Securities have otherwise been
registered and qualified or are eligible for sale; in each such case as
applicable to the Company in connection with any such registration,
qualification, compliance or sale in which such Holder's Registrable Securities
were included as contemplated herein and, in each such case, the Company shall
reimburse each such Holder Indemnified Party for any Losses incurred by any of
them in connection with investigating or defending any such claim, action or
proceeding (collectively a "CLAIM"); provided, however, that the Company shall
not be liable
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to any such Holder Indemnified Party in any such case to the extent that any
such Claim (whether commenced or threatened) arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in such Registration Statement or amendment thereof or supplement thereto
or in any such preliminary, final or summary prospectus in reliance upon and in
strict conformity with written information furnished to the Company by or on
behalf of any such Holder Indemnified Party relating to such Holder Indemnified
Party specifically stating that it is for use in the preparation thereof.
(b) In connection with an underwritten offering, the Company
shall indemnify such underwriters, their officers and directors and each person
who controls such underwriters (within the meaning of Section 15 of the
Securities Act) to the same extent as provided in Section 9.1(a) with respect to
the indemnification of the Holders of Registrable Securities.
9.2. Indemnification by Holders.
(a) Each Holder of Registrable Securities participating in any
registration hereunder shall severally, and not jointly, indemnify and hold
harmless, to the fullest extent permitted by law, the Company and any other
Holder participating in such registration, their respective directors, officers,
employees and agents, and each Person who controls the Company and any such
Holder (within the meaning of the Securities Act), respectively, (collectively,
the "COMPANY INDEMNIFIED PARTIES") to the same extent as the foregoing indemnity
from the Company to the Holders as set forth in Section 9.1 (subject to the
exceptions set forth in the foregoing indemnity, the proviso to this sentence
and applicable law), but only with respect to any such information furnished in
writing by such Holder stated to be specifically for use in connection with any
such registration. Such indemnity obligation shall remain in full force and
effect regardless of any investigation made by or on behalf of the Company
Indemnified Parties (except as expressly provided above) and shall survive the
Transfer of Registrable Securities by such Holder; provided, however, that the
liability of such Holder for indemnification under this Section 9.2(a) shall not
exceed the net proceeds from the offering received by such Holder.
(b) In connection with an underwritten offering, each Holder
of Registrable Securities participating in any registration hereunder shall
severally, and not jointly, indemnify and hold harmless, to the fullest extent
permitted by law, such underwriters, their officers and directors and each
person who controls such underwriters (within the meaning of the Securities Act)
to the same extent as provided in Section 9.2(a) with respect to the
indemnification of the Company.
9.3. Conduct of Indemnification Proceedings. Promptly after a party
indemnified under this Article 9 receives notice or becomes aware of information
regarding the commencement or threatened commencement of any Claim in respect of
which indemnification may be required pursuant to this Article 9, such
indemnified party shall promptly deliver written notice to the indemnifying
party of such commencement or threatened commencement, provided, however, that
the failure to so notify the indemnifying party shall not relieve it from any
liability that it may have to any indemnified party except to the extent that
the indemnifying party's ability to defend such action is materially prejudiced
by such failure to give such timely notice. If any such Claim is brought against
any indemnified party and the indemnifying party is notified thereof, the
indemnifying party shall, upon notice to the indemnified party, be entitled to
participate therein and, to the extent that it wishes, jointly with any other
indemnifying party similarly notified, to assume the
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defense thereof with counsel reasonably satisfactory to such indemnified party.
After delivery of such notice by the indemnifying party to the indemnified
party, the indemnifying party shall not be liable to such indemnified party
under this Article 9 for any legal expenses of counsel or any other expenses
(other than reasonable costs of investigation) subsequently incurred by such
indemnified party in connection with the defense thereof, unless the
indemnifying party has failed to assume the defense of such Claim or to employ
counsel reasonably satisfactory to such indemnified party. Notwithstanding the
foregoing, the indemnified party shall have the right to retain its own counsel,
reasonably acceptable to the indemnifying party, with the fees and expenses to
be paid by the indemnifying party, if representation of such indemnified party
by the counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and any
other party represented by such counsel in such action. The indemnifying party
shall not be required to indemnify the indemnified party with respect to any
amounts paid in settlement of any Claim entered into without the written consent
of the indemnifying party, which consent shall not be unreasonably delayed or
withheld. No indemnifying party shall consent to the entry of any judgment or
enter into any settlement without the consent of the indemnified party unless
(i) such judgment or settlement does not impose any obligation or liability upon
the indemnified party other than the execution, delivery or approval thereof,
and (ii) such judgment or settlement includes as an unconditional term thereof
the giving by the claimant or plaintiff to such indemnified party of a full
release and discharge from all liability in respect of such Claim.
9.4. Survival. The obligations of the Company and the Holders of
Registrable Securities under this Article 9 shall survive the completion of any
offering of Registrable Securities in a Registration Statement under this
Agreement and the termination of this Agreement or the rights of any party
hereunder.
9.5. Contribution. If a claim for indemnification under Section 9.1 or
9.2 is available by its terms but is held by a court of competent jurisdiction
to be unavailable or insufficient to hold harmless an indemnified party, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Losses that would have been indemnified under Section 9.1 or 9.2, as the
case may be, in proportion as is appropriate to reflect the relative fault of
the indemnifying party and the indemnified party in connection with the actions,
statements or omissions that resulted in such Losses as well as any other
relevant equitable considerations. The relative fault of the indemnifying party
and the indemnified party shall be determined by reference to, among other
things, whether the action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the indemnifying party or the
indemnified party, any action or inaction by any such party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement, omission, action or inaction; provided, however, that
the liability of any Holder under this Section 9.5 shall be limited to the
amount of net proceeds received by such Holder in the offering giving rise to
such liability, less any amounts paid pursuant to Section 9.2. The amount of
Losses subject to this Section 9.5 shall be deemed to include any reasonable
legal or other expenses incurred by such indemnified party in connection with
investigating or defending any such Claim (which shall be limited as provided in
Section 9.3 if the indemnifying party has assumed the defense of any such action
in accordance with the provisions thereof). Notwithstanding the foregoing in
this Section 9.5, no Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any
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party who was not guilty of such fraudulent misrepresentation. Promptly after
receipt by an indemnified party of written notice of the commencement or
threatened commencement of any Claims for which a claim for contribution may be
made against an indemnifying party under this Section 9.5 and if a notice for
indemnification has not been otherwise given under this Article 9, such
indemnified party shall give written notice thereof in the manner set forth
hereunder for a Claim for indemnification to the indemnifying party, provided,
however, that the failure to so notify the indemnifying party shall not relieve
it from any obligation to provide contribution hereunder except to the extent
that the indemnifying party's ability to defend such action is materially
prejudiced by the failure to give such timely notice. The parties hereto
acknowledge that determining contribution pursuant to this Section 9.5 by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in this Section 9.5 would not be
just or equitable. For the avoidance of doubt, if indemnification is available
under Sections 9.1 or 9.2, the Indemnifying Parties shall indemnify each
Indemnified Party to the fullest extent provided in Section 9.1 and 9.2, as the
case may be, without regard to the relative fault of said Indemnifying Party or
Indemnified Party or any other equitable consideration provided for in this
Section 9.5.
9.6. Other Rights. Except to the extent expressly provided otherwise,
the provisions of this Article 9 shall be in addition to any other rights to
indemnification or contribution that any indemnified party may have pursuant to
law or contract, shall remain in full force and effect regardless of any
investigation made by or on behalf of any indemnified party, and shall survive
the Transfer of securities by any such party; provided that any indemnification
of similar scope entered into pursuant to an underwriting agreement in
connection with an offering contemplated herein shall supersede this Article 9.
9.7. Indemnification and Contribution of Underwriters. In connection
with any underwritten offering contemplated by this Agreement that includes
Registrable Securities, the Company and all Holders of Registrable Securities
included in any Registration Statement shall agree to customary provisions for
indemnification and contribution (consistent with the other provisions of this
Article 9) in respect of Losses of the underwriters of such offering.
ARTICLE 10
RULE 144; RULE 144A; OTHER EXEMPTIONS; MARKET STANDOFF
10.1. Rule 144; Rule 144A; Other Exemptions. With a view to making
available to the Holders the benefits of certain rules and regulations
promulgated under the Securities Act and other rules and regulations of the SEC
that may at any time permit a Holder to sell securities of the Company to the
public without registration, the Company covenants that, at any time after the
date which is ninety (90) days following an IPO, it shall (i) file in a timely
manner all reports and other documents required to be filed by the Company under
the Securities Act and the Exchange Act and the rules and regulations adopted by
the SEC thereunder, (ii) furnish to a Holder (for so long as such Holder owns
any Registrable Securities), upon request, a written statement by the Company as
to its compliance with reporting requirements of Rule 144 and Rule 144A(d) and a
copy of the most recent annual and quarterly report of the Company, and take
such further action as each Holder may reasonably request (including, without
limitation, providing any information necessary to comply with Rule 144 under
the Securities Act), and to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (x) Rule 144 and Rule
144A under
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the Securities Act, as such rules may be amended from time to time or (y) any
other rules or regulations now existing or hereafter adopted by the SEC.
10.2. "Market Stand-Off" Agreement. During the period of duration (up
to, but not exceeding, one hundred and eighty (180) days) specified by the
Company and/or the underwriters managing any underwriting of the securities of
the Company, following the date of the final prospectus distributed in
connection with the Registration Statement of the Company filed under the
Securities Act with respect to an IPO, no Holder may, to the extent requested by
such underwriter, directly or indirectly sell, offer to sell, contract to sell
(including, without limitation, any short sale), loan, grant any option to
purchase or otherwise Transfer or dispose of (other than to donees who agree to
be similarly bound) any Registrable Securities or other securities of the
Company held by it at any time during such period; provided, however, that the
Company shall utilize its reasonable efforts to ensure that all officers and
directors of the Company, all ten percent (10%) equity holders, and all other
persons with registration rights granted subsequent to the date hereof enter
into similar agreements, provided that to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to each Holder's
Registrable Securities or other securities of the Company (and the shares or
securities of every other person subject to the foregoing restriction) until the
end of such period, and, if so requested, each such Holder shall execute an
agreement in the form provided by the underwriter containing terms that are
essentially consistent with the provisions of this Section 10.2. Notwithstanding
the foregoing, the obligations described in this Section 10.2 shall not apply to
a registration relating solely to employee benefit plans on Form S-8 or similar
forms that may be promulgated in the future, or a registration relating solely
to an SEC Rule 145 transaction on Form F-4 or successor forms that may be
promulgated in the future.
ARTICLE 11
TERMINATION OF AGREEMENT AND RIGHTS
11.1. Termination of Agreement. This Agreement shall take effect on the
date hereof and continue in effect and shall not terminate except (i) upon the
liquidation or dissolution of the Company, (ii) upon the unanimous written
agreement of the Holders and the Company, (iii) at midnight (Moscow time) on the
Final Date, if the First Closing shall not have occurred by such time ; or (iv)
upon the consummation of a Business Combination, as such term is defined in the
Shareholders Agreement, in which VIP is the surviving entity.
11.2. Termination of Holders Rights. The rights granted pursuant to
this Agreement (other than Article 9) shall terminate as to any Holder upon the
earliest of: (i) the occurrence of any of the events set out in Section 11.1,
(ii) at such time, beginning six (6) months after the closing of an IPO, when
such Holder, together with its Affiliates which have executed Endorsements in
accordance with the terms of this Agreement own, in the aggregate, less than
five percent (5%) of the issued and outstanding Common Stock and (iii) with
respect to Telenor only, upon the Third Closing under the Primary Agreement, if
Telenor has not purchased the Second Closing Telenor Shares or the Third Closing
Telenor Shares (as such terms are defined in the Primary Agreement), in each
case pursuant to the terms of the Primary Agreement.
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ARTICLE 12
MISCELLANEOUS
12.1. Notices.
(a) All notices, requests and other communications provided for
hereunder (including, without limitation, any modifications of, waivers or
consents under, this Agreement) 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:
If to VIP, to:
Open Joint Stock Company "Vimpel-Communications"
10 ▇▇▇▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Federation
Facsimile No.: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
General Counsel
With a copy to:
Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇▇▇ Place II
7 Ulitsa Gasheka
123056, Moscow
Russian Federation
Facsimile No.: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
If to Eco Telecom, to:
Eco Telecom Limited
▇▇▇▇▇ ▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ No.: ▇▇ ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇
with a copy to
OOO Alfa-Eco
21 Novy Arbat
121019 Moscow
Russian Federation
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Facsimile No.: 7 095 202 8364
Attention: Stanislav Shekshnya
and a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CIS Legal Services
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Russian Federation
Facsimile No.: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
If to the Company, to:
VimpelCom-Region
10 ▇▇▇▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Federation
Facsimile No.: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
General Counsel
With a copy to:
Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇▇▇ Place II
7 Ulitsa Gasheka
123056, Moscow
Russian Federation
Facsimile No.: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CIS Legal Services
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Russian Federation
Facsimile No.: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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If to Telenor, to:
Telenor East Invest AS
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇-▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
Facsimile No.: ▇▇▇ ▇▇▇▇-▇▇-▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
With a copy to:
Advokatene i Telenor
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇-▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇-▇▇-▇▇-▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
(b) All such notices, requests and other communications will (i) if
delivered personally to the address as provided in this Section 12.1, be deemed
given upon delivery, (ii) if delivered by facsimile transmission to the
facsimile number as provided in this Section 12.1, be deemed given upon receipt,
and (iii) if delivered by courier in the manner described above to the address
as provided in this Section 12.1, be deemed given 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 12.1). 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 parties
hereto.
12.2. Entire Agreement.
This Agreement, together with the Principal Agreements (as
defined in the Primary Agreement), supersedes all prior discussions and
agreements between the parties with respect to the subject matter hereof and
thereof, and contains the sole and entire agreement between the parties hereto
and thereto with respect to the subject matter hereof and thereof.
12.3. Limitations on Subsequent Registration Rights. From and after the
date of this Agreement, the Company shall not, without the prior written consent
of each Holder holding five percent (5%) or more of the Registrable Securities
then held by all Holders, enter into any agreement with any holder or
prospective holder of any securities of the Company that would allow such holder
or prospective holder rights superior or pari passu to those granted to the
Holders pursuant to this Agreement.
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12.4. 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.
12.5. Amendment.
This Agreement may be amended, supplemented or modified only by a
written instrument duly executed by or on behalf of each party hereto.
12.6. No Assignment; Binding Effect; No Third Party Beneficiary;
Obligations Several.
(a) Except as expressly provided herein, 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 parties hereto and any attempt to
do so will be void. 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. The terms and provisions of this
Agreement are intended solely for the benefit of each Party and its respective
successors or permitted assigns, and it is not the intention of the Parties to
confer third party beneficiary rights upon any other Person other than any
Person entitled to indemnity under Article 9.
(b) The obligations of the Shareholders hereunder shall be several (and
not joint). A shareholder shall not be responsible for the failure of any other
Shareholder to perform any obligation required to be performed by it hereunder
or under any other Principal Agreement (as defined in the Primary Agreement).
The obligations of the Company at any time hereunder to each Shareholder shall
be separate and independent obligations. Subject to the terms of this Agreement,
each Shareholder shall be entitled to protect and enforce its rights arising out
of this Agreement as it shall see fit, and it shall not be necessary for any
other Shareholder to consent to, or be joined as an additional party in, any
proceeding for such purposes.
12.7. 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 the conflicts of laws principles thereof which would result in the
application of the laws of a different jurisdiction.
12.8. Arbitration; Consent to Jurisdiction; Service of Process; Waiver
of Sovereign Immunity.
(a) Any and all disputes and controversies arising under, relating to
or in connection with this Agreement shall be settled by arbitration by a panel
of three (3)
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arbitrators under the United Nations Commission on International Trade Law
(UNCITRAL) Arbitration Rules then in force (the "UNCITRAL Rules") in accordance
with the following terms and conditions:
(i) In the event of any conflict between the UNCITRAL 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) Where there is only one claimant party and one respondent party,
each shall appoint one arbitrator in accordance with the UNCITRAL Rules, and the
two arbitrators so appointed shall appoint the third (and presiding) arbitrator
in accordance with the UNCITRAL Rules within thirty (30) days from the
appointment of the second arbitrator. In the event of an inability to agree on a
third arbitrator, the appointing authority shall be the International Court of
Arbitration of the International Chamber of Commerce, acting in accordance with
such rules as it may adopt for this purpose. Where there is more than one
claimant party, or more than one respondent party, all claimants and/or all
respondents shall attempt to agree on their respective appointment(s) (within
thirty (30) Business Days of the date of the notice of arbitration). In the
event that all claimants and all respondents cannot agree upon their respective
appointments(s), all appointments shall be made by the International Court of
Arbitration of the International Chamber of Commerce.
(iv) The English language shall be used as the written and spoken
language for the arbitration and all matters connected to the arbitration.
(v) The arbitrators shall have the power to grant any remedy or relief
that they deem just and equitable and that is in accordance with the terms of
this Agreement, including specific performance, and including, but not limited
to, injunctive relief, whether interim or final, and any such relief and any
interim, provisional or conservatory measure ordered by the arbitrators may be
specifically enforced by any court of competent jurisdiction. Each party hereto
retains the right to seek interim, provisional or conservatory measures from
judicial authorities and any such request shall not be deemed incompatible with
the agreement to arbitrate or a waiver of the right to arbitrate.
(vi) The award of the arbitrators shall be final and binding on the
parties to this Agreement.
(vii) The award of the arbitrators may be enforced by any court of
competent jurisdiction and may be executed against the person and assets of the
losing party in any jurisdiction.
(b) Except for arbitration proceedings pursuant to Section 12.8(a), no
action, lawsuit or other proceeding (other than the enforcement of an
arbitration decision, an action to compel arbitration or an application for
interim, provisional or conservatory measures in connection with the
arbitration) shall be brought by or between the parties to this Agreement in
connection with any matter arising out of or in connection with this Agreement.
(c) Each party hereto irrevocably appoints CT Corporation System,
located on the date hereof at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, 13th Floor, New York, New York
10011, USA, as its true and lawful agent and attorney to accept and acknowledge
service of any and all process
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against it in any judicial action, suit or proceeding permitted by Section
12.8(b), with the same effect as if such party were a resident of the State of
New York and had been lawfully served with such process in such jurisdiction,
and waives all claims of error by reason of such service, provided that the
party effecting such service shall also deliver a copy thereof on the date of
such service to the other parties by facsimile as specified in Section 12.01.
Each party to this Agreement will enter into such agreements with such agent as
may be necessary to constitute and continue the appointment of such agent
hereunder. In the event that any such agent and attorney resigns or otherwise
becomes incapable of acting, the affected party will appoint a successor agent
and attorney in New York reasonably satisfactory to each other party, with like
powers. Each party hereby irrevocably submits to the non-exclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York state court sitting in New York City, in connection with any such
action, suit or proceeding, and agrees that any such action, suit or proceeding
may be brought in such court, provided, however, that such consent to
jurisdiction is solely for the purpose referred to in this Section 12.8 and
shall not be deemed to be a general submission to the jurisdiction of said
courts of or in the State of New York other than for such purpose. Each party
hereby irrevocably waives, to the fullest extent permitted by Law, any objection
that it may now or hereafter have to the laying of the venue of any such action,
suit or proceeding brought in such a court and any claim that any such action,
suit or proceeding brought in such a court has been brought in an inconvenient
forum. Nothing herein shall affect the right of any party to serve process in
any other manner permitted by Law or to commence legal proceedings or otherwise
proceed against any other party in any other jurisdiction in a manner not
inconsistent with Section 12.8(b).
(d) Each of the parties hereto hereby represents and acknowledges that
it is acting solely in its commercial capacity in executing and delivering this
Agreement and each of the other Principal Agreements to which it is a party and
in performing its obligations hereunder and thereunder, and each of the parties
hereto hereby irrevocably waives with respect to all disputes, claims,
controversies and all other matters of any nature whatsoever that may arise
under or in connection with this Agreement or any of the other Principal
Agreements and any other document or instrument contemplated hereby or thereby,
all immunity it may otherwise have as a sovereign, quasi-sovereign or
state-owned entity (or similar entity) from any and all proceedings (whether
legal, equitable, arbitral, administrative or otherwise), attachment of assets,
and enforceability of judicial or arbitral awards.
12.9. Severability.
If any provision in this Agreement or any other document executed in
connection herewith is or shall become invalid, illegal or unenforceable in any
jurisdiction, the invalidity, illegality or unenforceability of such provision
in such jurisdiction shall not affect or impair the validity, legality or
enforceability of (i) any other provision of this Agreement or any such other
document in such jurisdiction or (ii) such provision or any other provision of
this Agreement or any such other document in any other jurisdiction.
12.10. Headings.
The headings contained in this Agreement are for convenience of
reference only, and do not form a part hereof and in no way interpret or
construe the provisions hereof.
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12.11. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same instrument.
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IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be duly executed by its duly authorized officer, effective as of
the day and year first above written.
CLOSED JOINT-STOCK COMPANY "VIMPELCOM-REGION"
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Attorney-in-Fact
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Accountant
OPEN JOINT-STOCK COMPANY "VIMPEL-COMMUNICATIONS"
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇▇▇ Bychenkov
-----------------------------------
Name: ▇▇▇▇▇▇▇▇ Bychenkov
Title: Chief Accountant
ECO TELECOM LIMITED
By: /s/ Serge Barychkov
-----------------------------------
Name: Serge Barychkov
Title: Attorney-in-Fact
TELENOR EAST INVEST AS
By: /s/ Tron ▇▇▇▇▇
-----------------------------------
Name: Tron ▇▇▇▇▇
Title: Attorney-in-Fact
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