EXHIBIT B
DATED June 1 2005
(1) CUKUROVA HOLDING A.S.
(2) CUKUROVA FINANCE INTERNATIONAL LIMITED
(3) ALFA TELECOM TURKEY LIMITED
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SUBSCRIPTION AGREEMENT
in respect of Convertible Bonds
and Shares in the capital of
Cukurova Telecom Holdings Limited
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CONTENTS
CLAUSE PAGE
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1. INTERPRETATION...........................................................2
2. CONDITIONS PRECEDENT....................................................10
3. INTERIM PERIOD..........................................................12
4. AGREEMENT TO SUBSCRIBE..................................................13
5. CONSIDERATION...........................................................14
6. ESCROW COMPLETION.......................................................14
7. TERMINATION.............................................................16
8. CUKUROVA WARRANTIES.....................................................17
9. ALFA WARRANTIES.........................................................19
10. LIMITATIONS ON LIABILITY AND CONDUCT OF CLAIMS..........................19
11. EXCLUDED ASSETS.........................................................21
12. POST-COMPLETION OBLIGATIONS.............................................21
13. MINORITY INTERESTS AND DEBTS............................................22
14. CONFIDENTIALITY.........................................................22
15. ENFORCEABILITY AND SEVERABILITY.........................................24
16. FURTHER ASSURANCE.......................................................24
17. SURVIVAL OF AGREEMENT...................................................24
18. SUCCESSORS AND ASSIGNS..................................................25
19. ANNOUNCEMENTS...........................................................25
20. NOTICES AND REPRESENTATIVES.............................................25
21. ARBITRATION AND GOVERNING LAW...........................................26
22. GENERAL.................................................................27
23. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999............................27
24. COUNTERPARTS............................................................27
SCHEDULE 1 .............................................................28
Part 1 The Company..............................................28
Part 2 CTI......................................................29
SCHEDULE 2 Turkcell Holding and Turkcell.......................30
SCHEDULE 3 Cukurova Warranties.................................34
SCHEDULE 4 Alfa Warranties.....................................43
SCHEDULE 5 Forms of Subscription Instrument....................44
SCHEDULE 6 Existing Interests of the Cukurova Group
in Turkcell........................................46
AGREED FORM DOCUMENTS
Alfa Subscription Instrument
Completion Articles
Convertible Bond Instrument
Cukurova Subscription Instrument
Secured Loan Facility
Share Charge
Shareholders' Agreement
Unsecured Loan Facility
DATED June 1, 2005,
PARTIES
(1) CUKUROVA HOLDING A.S., a company duly incorporated under the laws of the
Republic of Turkey with company number 475064/422646 and having its
place of business at Buyukdere Cad. Yapi Kredi Plaza A Blok K:15 34330
Levent, Istanbul, Turkey ("Cukurova");
(2) CUKUROVA FINANCE INTERNATIONAL LIMITED, a company duly incorporated
under the laws of the British Virgin Islands with company number 1000029
whose registered office is at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("Cukurova Finance"); and
(3) ALFA TELECOM TURKEY LIMITED, a company duly incorporated in the British
Virgin Islands with company number 653203 whose registered office is at
Geneva Place, Waterfront Drive, P.O. Box 3469, Road Town, Tortola,
British Virgin Islands ("Alfa").
RECITALS
(A) Each of Cukurova and Cukurova Finance ("the Cukurova Parties") and Alfa
have decided to make an indirect investment in Turkcell via their
respective holdings in Cukurova Telecom Holdings Limited ("the
Company").
(B) The Company, brief particulars of which are set out in Part 1 of
Schedule 1, is a BVI Business Company incorporated in the British Virgin
Islands under the BVI Business Companies ▇▇▇ ▇▇▇▇. Cukurova Finance is
the legal and beneficial owner of two Shares, being the entire issued
share capital of the Company as at the date of this Agreement. The
Company has, at the date of this Agreement, one wholly owned subsidiary,
Cukurova Telecom International Limited, brief particulars of which are
set out in Part 2 of Schedule 1, and will acquire Intercon at
Completion.
(C) Immediately following Completion, the Company will be the owner of
record of 135,925,790 (representing 52.91%) of the issued and
outstanding shares of Turkcell Holding, which is at the date of this
Agreement the owner of record of 51% of the shares of Turkcell.
(D) The Amendment and Restatement Agreement and the Side Agreement have been
entered into on and will be funded from the date of this Agreement. The
Unsecured Facility and the Secured Facility will, subject to
satisfaction of the Conditions Precedent, be entered into on Completion.
(E) Cukurova Finance is willing to (i) subscribe on Completion for 49
additional Shares, being the Cukurova Subscription Shares and (ii)
jointly and severally with Cukurova to procure that on Completion the
Company issues to Alfa the Convertible Bonds in accordance with the
terms and conditions of the Convertible Bond Instrument, and Alfa is
willing to subscribe for the Convertible Bonds. All such subscriptions
and issues will be subject to and on the terms of this Agreement.
(F) The Convertible Bonds will be convertible, in accordance with the terms
and conditions of the Convertible Bond Instrument, into 49 Shares such
that if Conversion takes place the issued share capital of the Company
will be held as to 51 Shares by Cukurova Finance and as to 49 Shares by
Alfa.
1
IT IS AGREED AS FOLLOWS:-
1. INTERPRETATION
1.1 In this Agreement including the recitals and Schedules hereto the
following words and expressions shall where the context so admits bear
the following meanings:
"the Accounting Date" means 31 December 2004 or in the case of any
company whose most recent Accounts for which have been drawn up to a
different date, that different date;
"Accounts" means the individual accounts of each of Intercon, Turkcell
Holding, Turkcell and each Turkcell Group Company and the profit and
loss account of each such company (which in the case of Turkcell are
audited) for the financial year ended on the Accounting Date and the
notes thereto and directors' and (in the case of Turkcell) auditors'
reports thereon;
"Affiliate" means in relation to a Person, any other Person who,
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with, the first mentioned
person;
"Alfa Group" means Alfa, any holding company of Alfa and the respective
subsidiaries for the time being of each of them and the expression
"member of the Alfa Group" shall be construed accordingly;
"Alfa's Solicitors" means ▇▇▇▇▇ Day;
"Alfa Subscription Instrument" means an application substantially in the
form set out in Part A of Schedule 5 for the subscription by Alfa of the
Convertible Bonds;
"Alfa Warranties" means the warranties and representations set out in
clause 9 and Schedule 4;
"Amendment and Restatement Agreement" means the amendment and
restatement agreement to the Existing Facility, which amendment and
restatement agreement is dated with the date of this Agreement;
"Balancing Payment" has the meaning set out in clause 6.3;
"business day" has the meaning set out in clause 20.2(C);
"Claiming Party" has the meaning given to that term in clause 10.4;
"Company" has the meaning set out in Recital (A);
"Completion" means completion of this Agreement as provided in
clause 6.4;
"Completion Articles" means the articles of association of the Company
in the Agreed Form to be adopted by the Company on Completion;
"Completion Date" means the date on which Completion takes place;
"Conditions Precedent" means the conditions precedent set out in
clause 2;
"Conditions Precedent Date" means 1 September 2005 or such later date as
Alfa and the Cukurova Parties shall agree;
2
"Contemplated Transactions" means
(A) the Cukurova Parties procuring that the Company duly constitute
the Convertible Bonds;
(B) the adoption of the Completion Articles;
(C) the Cukurova/Company Acquisition;
(D) the YKB/Intercon Acquisition;
(E) the Cukurova/Intercon Acquisition;
(F) the Intercon/CTI Acquisition;
(G) the CTI/Company Transfer;
(H) the subscription by Cukurova Finance of the Cukurova
Subscription Shares; and
(I) the subscription by Alfa of the Convertible Bonds and compliance
by the Company with all other requirements of the Convertible
Bond Instrument in relation to such subscription;
or, where the context so admits, any of them;
"Conversion" means conversion of the Convertible Bonds into the
Conversion Shares in accordance with the terms and conditions set out in
the Convertible Bond Instrument;
"Conversion Measures" means
(A) adoption by the Company of the Post-Conversion Articles;
(B) the execution of the Shareholders' Agreement by all parties
thereto becoming effective; and
(C) the issue of the Conversion Shares;
"Conversion Shares" means the 49 Shares to be issued to Alfa upon
Conversion;
"Convertible Bonds" means the US$1,593,000,000 convertible bonds which
are convertible into 49 Shares in accordance with the terms and
conditions set out in the Convertible Bond Instrument;
"Convertible Bond Instrument" means the instrument in the Agreed Form
constituting the Convertible Bonds which is to be executed by the
Company and Cukurova Finance on Completion;
"CTI" means Cukurova Telecom International Limited, a company
incorporated under the laws of the British Virgin Islands with
registered number 658807 and whose registered office is at ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇;
"CTI/Company Transfer" means the dividend in specie (in accordance with
all relevant laws of the British Virgin Islands) by the Company (with
all corporate power and authority to declare and make such dividend) of
the all of the Cukurova Turkcell Holding Shares and the YKB Option
Shares (all of which shares are to be acquired by CTI pursuant to the
Intercon/CTI Acquisition) which at completion of such transfer will be
free from all liens, encumbrances and equities whatsoever;
3
Cukurova/Company Acquisition" means (a) the intra-group transfer (in
accordance with all relevant laws of the Republic of Turkey) by Cukurova
(with full power to transfer and with full legal and beneficial title)
to the Company of all (but four) of the issued shares in the capital of
Intercon (which at completion of such transfer will be free from all
liens, encumbrances and equities whatsoever) for a consideration such
that the transfer will not constitute a transaction at an undervalue or
fraudulent preference or otherwise contravene any insolvency related
Legal Requirements in any jurisdiction and (b) the transfer of the
remaining four such shares to bare nominees of Cukurova in accordance
with Turkish law;
"Cukurova Disclosure Letter" means a disclosure letter addressed by the
Cukurova Parties to Alfa which the Cukurova Parties are obliged under
clause 8.1 to deliver to Alfa before 5.30 p.m. on 7 June 2005;
"Cukurova Group" means the Cukurova Parties and any holding company of
either of them and the respective subsidiaries for the time being of
each of them and the expression "member of the Cukurova Group" shall be
construed accordingly;
"Cukurova/Intercon Acquisition" means the intra-group transfer (in
accordance with all relevant laws of the Republic of Turkey) by Cukurova
(with full power to transfer and with full legal and beneficial title)
to Intercon all of the Cukurova Turkcell Holding Shares (which at
completion of such transfer will be free from all liens, encumbrances
and equities whatsoever) for a consideration such that the transfer will
not constitute a transaction at an undervalue or fraudulent preference
or otherwise contravene any insolvency related Legal Requirements in any
jurisdiction;
"Cukurova Parties" has the meaning set out in Recital (A);
"Cukurova's Solicitors" means White & Case;
"Cukurova Subscription Instrument" means an application, substantially
in the form set out in Part B of Schedule 5 by Cukurova Finance for the
Cukurova Subscription Shares;
"Cukurova Subscription Shares" means the 49 Shares to be subscribed by
Cukurova Finance at Completion;
"Cukurova Turkcell Holding Shares" means the 84,483,199 Turkcell
Holdings Shares representing in aggregate 32.88% of the issued share
capital of Turkcell Holdings which are, at the date of this Agreement,
legally and beneficially owned by members of the Cukurova Group or
Affiliates of such members, which shares do not include the YKB Option
Shares;
"Cukurova Warranties" means the warranties and representations set out
in clause 8 and Schedule 3;
"Defending Party" has the meaning given to that term in clause 10.4;
"Directors" means, unless the context otherwise requires, the directors
of the Company from time to time;
"Escrow Completion" means completion of the matters set out at clause
6.2 and clause 6.3, subject to satisfaction of the Escrow Condition;
"Escrow Condition" means the release of all of the SDIF Pledge(s);
4
"Event" means any event, including (without limitation)
(A) any act, omission, transaction or distribution whether or not
any Relevant Company or Turkcell Group Company is a party
thereto;
(B) the death of any person;
(C) the failure or inability to avoid an apportionment of income
(whether or not it is or was possible by taking action after
Completion to avoid such apportionment), and references to an
Event occurring on or before Completion shall include any such
failure or inability arising in relation to any accounting
period of any company ending before, or current at, Completion;
(D) any Relevant Company or Turkcell Group Company ceasing to be a
member of any group or associated with any person;
(E) Completion; and
(F) any event which is treated as having occurred for the purposes
of any legislation;
and references to the result of an Event occurring on or before
Completion shall include the combined result of two or more Events one
or more of which shall have taken place on or before Completion;
"Excluded Assets" means the assets and liabilities of Intercon other
than the Turkcell Holding Shares;
"Existing Facility" means the existing facility made available to Avor
Investment Company, Inc., by Mogoton Finance Limited pursuant to the
facility agreement dated 27 April 2005 between Avor Investment Company,
Inc., Cukurova, BMC Sanayi ce Ticaret A.S., ▇▇▇▇▇▇ ▇▇▇▇ Karamehmet and
Mogoton Finance Limited in respect of a facility of US$355,000,000 (as
amended and restated pursuant to the Amendment and Restatement
Agreement).
"Existing Shares" the two Shares held by Cukurova Finance as at the date
of this Agreement;
"Governmental Authorisation" means any approval, consent, licence,
permit, waiver or other authorisation issued, granted, given or
otherwise made available by or under the authority of any Governmental
Body or pursuant to any Legal Requirement;
"Governmental Body" means any:
(A) nation, state, county, city, town, district or other
jurisdiction of any nature;
(B) national, state, local, municipal, foreign or other government;
(C) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official
or entity and any court or other tribunal);
(D) multi-national organisation or body; or
(E) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature;
5
"Hazardous Substance" means all poisonous, noxious, hazardous,
infectious, radioactive or polluting substances whether natural or
artificial and whether in solid or liquid form or in the form of a gas
or vapour and whether alone or in combination with any substance which
may either alone or in combination be harmful to man, to the life or
health of any living organisms, to property, or deleterious to the
environment;
"Intellectual Property" and "Intellectual Property Rights" means all
patents, patent applications, utility models, trade marks, service
marks, registered designs, unregistered design rights, copyrights, moral
rights, technical drawings, business names, database rights, Internet
domain names, brand names, computer software programmes and systems,
know how, inventions, confidential information and other industrial or
commercial intellectual property rights whatsoever and wheresoever and
whether registered or capable of registration or not and all
applications for registration or protection of the foregoing;
"Intercon" means Intercon Danismanlik ve Egitim Hizmetleri A.S., a
company formed under the laws of, and registered in, the Republic of
Turkey with company number 265036/212608 whose registered office is at
Buyukdere Cad. Yapi Kredi Plaza ▇. ▇▇▇▇ Kat: 15 1. Levent, Istanbul;
"Intercon/CTI Acquisition" means the intra-group transfer (in accordance
with all relevant laws of the Republic of Turkey) by Intercon (with full
power to transfer and with full legal and beneficial title) to CTI all
of the Cukurova Turkcell Holding Shares and the YKB Option Shares (all
of which shares are to be acquired by Intercon pursuant to the
Cukurova/Intercon Acquisition and the YKB/Intercon Acquisition
respectively) (which at completion of such transfer will be free from
all liens, encumbrances and equities whatsoever) for a consideration
such that the transfer will not constitute a transaction at an
undervalue or fraudulent preference or otherwise contravene any
insolvency related Legal Requirements in any jurisdiction;
"Interim Period" means the period commencing on signing of this
Agreement and ending on the earlier of Completion and lapse or
termination of this Agreement;
"Legal Requirement" means any national, state, local, municipal,
foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation,
statute, or treaty;
"Management Accounts" means the unaudited consolidated accounts of
Turkcell for the period from the Accounting Date and ended on 30 April
2005;
"Material Adverse Effect" means when used in relation to any Person(s),
any event, change or effect (any such item, an "Effect"), which
individually or in the aggregate with another Effect or Effects, is
materially adverse to the business, assets, financial condition, or
results of operations of such Person(s);
"Person" means any individual, corporation, general or limited
partnership, limited liability company, joint venture or other entity or
association (whether incorporated or unincorporated);
"Post Conversion Articles" , means articles of association of the
Company in a form which Alfa, acting reasonably, is satisfied reflects
the agreements set out in the Shareholders Agreement, which articles are
to be adopted by the Company immediately prior to Conversion;
"Principal Claim" has the meaning given to that term in clause 10.4;
6
"Proceeding" means any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal,
administrative, investigative or informal) commenced, brought, conducted
or heard by or before, or otherwise involving, any Governmental Body or
arbitrator;
"Relevant Companies" means each of CTI, Intercon, Turkcell Holding and
Turkcell and "Relevant Company" shall be construed accordingly;
"Relevant Group" has the meaning set out in paragraph 11 of Schedule 3.
"Relevant Proportion" means a proportion equal to the percentage of
indirect ownership interest that Alfa or any of its Affiliates or
associates has, or would if Conversion had taken place, have in the
share capital of any company in respect of which any diminution in asset
value or loss or liability of the kind referred to in clause 8.6(A)
arises;
"Relevant Shares" means each of the Cukurova Turkcell Holding Shares,
the YKB Option shares and all of the shares in the issued share capital
of CTI and Intercon;
"Relief" means any loss, relief, allowance, exemption, set-off,
deduction, right to repayment or credit or other relief of a similar
nature granted by or available in relation to Tax pursuant to any
legislation or otherwise;
"Satisfactory Cukurova Disclosure Letter" means a Cukurova Disclosure
Letter which Alfa has notified Cukurova, in accordance with clause 8.1,
is in a form and substance satisfactory to Alfa, acting in its absolute
discretion;
"SDIF" means the Turkish Savings Deposit Insurance Fund (the TASARRUF
MEVDUATI SIGORTA FONU);
"SDIF Debts" means all of the debts owed by Cukurova to the SDIF and
secured by the SDIF Pledge(s);
"SDIF Pledge(s)" means all of the pledges held by the SDIF over the
Cukurova Turkcell Holding Shares and the YKB Option Shares;
"SDIF Redemption Amount" has the meaning set out in clause 6.3;
"Secured Loan Facility" means the conditional facility agreement in the
Agreed Form to be entered into on Completion between Cukurova, Cukurova
Finance and Alfa in respect of a facility of US$1,352,000,000;
"Share Charge" means the share charge in the Agreed Form to be entered
into on Completion between Cukurova Finance and Alfa in respect of the
Existing Shares and the Cukurova Subscription Shares;
"Shareholders' Agreement" means the shareholders agreement in the Agreed
Form to be entered into by Alfa, Cukurova, Cukurova Finance and the
Company as an escrow on Completion so as to be capable of being in
effect from Conversion;
"Shares" means shares of no par value in the capital of the Company and
designated as either "A shares" or "B shares";
"Side Agreement" means the side agreement to the Existing Facility which
side agreement is dated 31 May 2005;
"TAS" means Turkish Statutory Accounting Standards as set out in the
Turkish Commercial Code (as amended from time to time);
7
"Tax" means any tax (including, without limitation, any income tax,
franchise tax, capital tax, branch profits tax, excise tax, transfer
tax, withholding tax, payroll tax, employment tax, windfall profits tax,
capital gains tax, value-added tax, sales tax, use tax, ad valorem tax,
property tax, gift tax, or estate tax), charge, contribution,
withholding, impost, levy, assessment, tariff, duty (including any
customs duty), deficiency, or other fee, and any related charge or
amount (including any fine, penalty, interest, surcharge or addition to
tax), imposed, assessed, or collected by or under the authority of any
Governmental Body or payable pursuant to any tax-sharing agreement or
any other contract relating to the sharing or payment of any such tax,
charge, contribution, withholding, impost, levy, assessment, tariff,
duty, deficiency, or fee, and includes amounts payable in respect of
Tax;
"Tax Warranties" means the warranties and representations at paragraph
17 of Schedule 3;
"Third Party Claim" has the meaning given to that term in clause 10.4;
"Transaction Documents" means this Agreement, the Convertible Bond
Instrument, the Shareholders' Agreement, the Secured Loan Facility, the
Unsecured Loan Facility, the Amendment and Restatement Agreement, the
Side Agreement, the Share Charge and all further agreements or
obligations referred to in any such agreement;
"Turkcell" means Turkcell Iletisim Hizmetleri A.S., a company formed
under the laws of, and registered in, the Republic of Turkey, brief
particulars of which are set out in Schedule 2;
"Turkcell Group Company" means any direct or indirect subsidiary of
Turkcell as at the date of this Agreement and "Turkcell Group Companies"
shall be construed accordingly;
"Turkcell Holding" means Turkcell Holding A.S., a company formed under
the laws of, and registered in, the Republic of Turkey, brief
particulars of which are set out in Schedule 2;
"Turkcell Holding Shares" means the shares of TL 1,000,000 (Turkish
Liras) each in the capital of Turkcell Holding;
"Unsecured Loan Facility" means the conditional facility agreement in
the Agreed Form to be entered into on Completion between Cukurova,
Cukurova Finance, BMC Sanayi ve Ticaret A.S., ▇▇▇▇▇▇ ▇▇▇▇ Karamehmet and
Alfa in respect of a facility of US$355,000,000;
"YKB" means Yapi ve Kredi Bankasi A.S., a company formed under the laws
of, and registered in, the Republic of Turkey; and
"YKB/Intercon Acquisition" means the exercise by Intercon of the YKB
Option and the consequent transfer (in accordance with all relevant laws
of the Republic of Turkey) by YKB (with full power to transfer and with
full legal and beneficial title) to Intercon of all of the YKB Option
Shares (which at completion of such transfer will be free from all
liens, encumbrances and equities whatsoever) for the consideration
payable under the YKB Option;
"YKB Option" means the various options granted by YKB under which
Cukurova has the right to nominate Intercom to acquire the YKB Option
Shares;
"YKB Option Shares" means such number of Turkcell Holding Shares as
represents 20.024% of the issued share capital of Turkcell Holding as at
Completion, which shares are at the date of this Agreement legally and
beneficially owned by YKB.
1.2 The ejusdem generis rule of construction shall not apply to this
Agreement and accordingly general words shall not be given a restrictive
meaning by reason of their being preceded or followed by words
indicating a particular class or examples of acts, matters, or things.
8
1.3 Words importing the singular shall include the plural and vice versa and
words importing any gender shall include all other genders and
references to persons shall include corporations and unincorporated
associations.
1.4 References in this Agreement to any document in "Agreed Form" are
references to the document described in the form of the draft agreed
between the parties and initialled by them or by Cukurova's Solicitors
and Alfa's Solicitors on their behalf for identification purposes.
1.5 In relation to an undertaking which is not a company, expressions in
this Agreement appropriate to companies are to be construed as
references to the corresponding persons, officers, documents or organs
(as the case may be) appropriate to undertakings of that description.
1.6 Any reference, express or implied, to an enactment includes references
to:
(A) that enactment as amended, extended or applied by or under any
other enactment before or after signature of this Agreement;
(B) any enactment which that enactment re-enacts (with or without
modification); and
(C) any subordinate legislation made (before or after signature of
this Agreement) under any enactment, including one within clause
1.6(A) or 1.6(B),
provided that no such enactment or subordinate legislation made after
the date of this Agreement shall increase the liability of any party
under or pursuant to this Agreement.
1.7 References to this Agreement shall include the Schedules hereto which
shall form part hereof and shall have the same force and effect as if
expressly set out in the body of this Agreement.
1.8 References to any statutory provisions or laws or regulations or orders
or similar requirements of the United Kingdom or any part thereof or to
accounting principles applying in the United Kingdom ("applicable UK
requirements") shall, in the case of a company incorporated or carrying
on business outside the United Kingdom, also include references to any
corresponding or the nearest equivalent provisions or requirements or
laws or regulations or orders or similar requirements and/or, as
appropriate, generally accepted accounting principles applicable in the
jurisdiction concerned ("applicable overseas requirements"); and
references to any governmental or administrative authority or agency or
body shall include reference to the corresponding or nearest equivalent
governmental or administrative authority or agency or body in the
jurisdiction concerned.
1.9 Where a warranty or other provision of this Agreement makes reference to
any notices orders directions requirements or facts matters or
circumstances relevant to any applicable UK requirements, such warranty
or other provisions, as appropriate, shall be construed, in the case
where any jurisdiction outside the United Kingdom may be of relevance,
as including, so far as possible, the corresponding or nearest
equivalent notices orders directions requirements facts matters or
circumstances relevant to any equivalent or corresponding applicable
overseas requirements.
1.10 Where any of the Cukurova Warranties is qualified by the expression "so
far as each of the Cukurova Parties is aware" or any similar expression,
then (unless clearly not admitted by the context) that paragraph shall
be deemed to include an additional warranty to the effect that the
statement has been made after due, diligent, and careful enquiry by each
the Cukurova Parties of, (including without limitation) the auditors,
tax advisers, solicitors and other professional advisers of the Cukurova
Parties.
9
1.11 References in this Agreement to an "associate" (other than in the Tax
Warranties) or a "connected person" in relation to another person, are
references to a person who is an associate of or connected with the
other within the meaning of section 417 or section 839 of the Income and
Corporation Taxes ▇▇▇ ▇▇▇▇, as appropriate. References in this Agreement
to "subsidiary" and "subsidiary undertaking" are references to a
subsidiary or subsidiary undertaking as respectively defined in sections
736 and 259 of the Companies ▇▇▇ ▇▇▇▇. References in this Agreement to a
"holding company" are references to a holding company as defined in
section 736 of the Companies ▇▇▇ ▇▇▇▇.
1.12 The clause headings in this Agreement are for convenience only and shall
not affect the interpretation hereof.
1.13 In this Agreement references to US$ are references to the lawful
currency of the United States of America.
1.14 In this Agreement references to any time of day are to the time in
London, England.
2. CONDITIONS PRECEDENT
2.1 The provisions of clauses 4, 5 and 6 of this Agreement are conditional
on the following having occurred on or before noon (or such other time
as the parties may agree) on the Conditions Precedent Date:
(A) the Turkish Capital Markets Board (the SERMAYE PIYASASI KURULU)
having unconditionally and irrevocably agreed (in a form,
whether by irrevocable waiver or otherwise, satisfactory to
Alfa) that neither Alfa nor the Company will be required to make
a mandatory tender offer for any shares in Turkcell, Turkcell
Holding or any other company as a result of the implementation
of any of the Contemplated Transactions or of Conversion and,
additionally, the Turkish Capital Markets Board not having
imposed any other condition or obligation in relation to any of
the Contemplated Transactions;
(B) if and to the extent required under Turkish law or any
regulations or rules or requirements of any relevant authority,
the Turkish Telecommunications Authorities (the TELEKOMUNIKASYON
KURUMU) having unconditionally and irrevocably issued their
consent to the Contemplated Transactions, and the Turkish
Telecommunications Authorities not having imposed any other
condition or obligation in relation to any such Contemplated
Transactions;
(C) if and to the extent required under Turkish law or any
regulations or rules or requirements of any relevant authority,
the Turkish Competition Authorities (the REKABET KURUMU) having
unconditionally and irrevocably issued their consent to the
Contemplated Transactions, and the Turkish Competition
Authorities not having imposed any other condition or obligation
in relation to such Contemplated Transactions;
(D) without prejudice to any other Condition Precedent, the receipt
of all necessary or desirable Governmental Authorisation or any
other third party consent, approval, licence, permission,
waiver, or other authorisation required for Completion;
(E) Alfa having been provided to its satisfaction with all legal,
financial and commercial due diligence information in relation
to the Relevant Companies, the Turkcell Group Companies and the
Contemplated Transactions and having been satisfied with such
due diligence;
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(F) save as disclosed in the Satisfactory Cukurova Disclosure Letter
(if any) in accordance with clause 8.1, the Cukurova Warranties
being true and correct in all material respects as at the date
of this Agreement and as at the date of Completion;
(G) no event occurring or matter arising which either (1) has had or
is likely to have a Material Adverse Effect on the Company or
any of the Relevant Companies or any of the Turkcell Group
Companies or (2) which had it happened before the date of this
Agreement would have rendered any of the Warranties untrue or
incorrect in any material respect;
(H) Alfa having become satisfied that Cukurova has established the
entities and structure necessary to implement the Contemplated
Transactions;
(I) Alfa having become satisfied that there are binding and
irrevocable commitments and procedures in place (by means of
escrow or otherwise as agreed by Alfa and Cukurova) to ensure
that, on or before Completion, each of the Contemplated
Transactions (other than the CTI/Company Transfer) is effected
and that immediately following Completion the CTI/Company
Transfer will be effected, in each case, fully in accordance
with the terms of the commitments and procedures with which Alfa
has become so satisfied;
(J) Alfa having received from SDIF in a form satisfactory to it
written confirmation of the amount of the SDIF Debts and a
written undertaking from SDIF that SDIF will release the SDIF
Pledge(s) on receipt of a redemption amount made up of the said
amount of the SDIF Debts and a prevailing per diem interest
payment, Alfa being satisfied that at Completion such redemption
amount will not be greater than US$1,593,000,000 and Alfa also
being satisfied that on receipt of such redemption amount SDIF
will be required as a matter of law to release the SDIF
Pledge(s);
(K) there being no pending or threatened Proceedings (a) involving
any challenge to, or seeking damages or other relief in
connection with, any of the Contemplated Transactions, or (b)
that will have the effect of preventing, delaying, making
illegal, or otherwise interfering with any of the Contemplated
Transactions;
(L) the conditions precedent (save for any which relate to this
Agreement) provided for in Schedule 1 of the Unsecured Loan
Facility and Schedule 1 to the Secured Loan Facility having been
satisfied (notwithstanding that such agreements may not yet have
been entered into); and
(M) Alfa having notified Cukurova pursuant to clause 8.1 that it is
satisfied with the form and substance of the Cukurova Disclosure
Letter.
2.2 Each of Alfa and Cukurova shall, on a continuing basis for whilst this
Agreement is in full force and effect, use their respective best
endeavours to procure the satisfaction of the Conditions Precedent in
clauses 2.1(A) to (D) inclusive; Cukurova shall provide the due
diligence information described in clause 2.1(E) and shall use its best
endeavours to procure that the binding and irrevocable commitments
described in clause 2.1(I) are in place, in each case as soon as
possible and in any event not later than noon on the Conditions
Precedent Date.
2.3 Each party shall keep the other fully informed of all progress and
developments with regard to satisfaction of the Conditions Precedent and
in any event shall forthwith notify the other in writing as soon as it
becomes aware that the same or any of the same have been satisfied or
have become incapable of satisfaction and produce to the other such
documentation as it shall reasonably require to evidence any such
satisfaction. Without prejudice to clause 2.2, it is
11
agreed that all requests and enquiries from any government,
governmental, supranational or trade agency, court or other regulatory
body shall be dealt with by Cukurova and Alfa in consultation with each
other and each party shall promptly co-operate with and provide all
necessary information and assistance reasonably required by such
government, agency, court or body upon being requested to do so.
2.4 If at any time between the date of this Agreement and noon on the
Conditions Precedent Date:
(A) any of the authorities or bodies referred to in the Conditions
Precedent set forth in clauses 2.1(A), 2.1(B), or 2.1(C) state
that a mandatory offer as described under clause 2.1(A) would be
required or reject the application for consent required under
clause 2.1(B) or 2.1(C) or impose conditions of the kind
described in clause 2.1(B) or 2.1(C); or
(B) Cukurova is in default of its obligations under clause 2.2;
then Alfa (in its sole discretion) shall have the right to terminate
this Agreement by notice in writing to the Cukurova Parties. For the
avoidance of doubt, if Alfa shall not serve a notice of termination
where the circumstances set forth in paragraph (A) this clause 2.4 shall
exist, then the parties' respective obligations under clause 2.2 shall
continue and, without limitation to the generality of clause 2.2, they
shall continue to use their respective best endeavours to satisfy the
Conditions Precedent set forth in clauses 2.1(A), 2.1(B), or 2.1(C).
2.5 If by noon on the Conditions Precedent Date, any of the Conditions
Precedent shall not have been satisfied, or waived in writing by Alfa
(provided that Alfa may not waive the Conditions Precedent set forth in
clauses 2.1(A), 2.1(B), or 2.1(C)) then either Alfa (on the one hand) or
the Cukurova Parties (on the other) shall have the right to terminate
this Agreement by notice in writing to the other party(ies). Subject to
the proviso set out above in this clause 2.5, Alfa may, in its absolute
discretion, waive any of the Conditions Precedent in whole or in part,
but shall not be obliged under any circumstances to do so. The Cukurova
Parties may not waive any Condition Precedent.
2.6 Immediately upon notice of termination being served pursuant to clause
2.4 or clause 2.5, this Agreement shall have no further force and effect
and none of the parties shall have any liability in respect of this
Agreement, except as regards any antecedent breach, save that this
clause 2.6 and clauses 1.1(B) (Enforceability and Severability), 19
(Announcements), 20 (Notices and Representatives), 21 (Arbitration and
Governing Law) and 22 (General) shall continue in full force and effect
for the avoidance of doubt, if Alfa shall not serve such notice then the
obligations and liabilities of each of the parties shall continue in
full force and effect notwithstanding the passing of the Conditions
Precedent Date.
2.7 If this Agreement is terminated under clause 2.5 by reason only of the
Condition Precedent set out in clause 2.1(M), without prejudice to
Alfa's right to terminate the Existing Facility in accordance with the
Side Letter, the only remedy of Alfa in respect of any breach of the
Cukurova Warranties shall be a claim in damages for the direct
professional costs and disbursements and its other disbursements
incurred in connection with the negotiation of the Transaction Documents
or in relation to the Contemplated Transactions.
3. INTERIM PERIOD
3.1 During the Interim Period, the Cukurova Parties shall (except with the
prior written consent of Alfa or as expressly provided otherwise in this
Agreement):
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(A) procure that the Company will not carry on any business or incur
any liability of any kind except pursuant to the Contemplated
Transactions and obligations to be performed under the terms of
such transactions;
(B) themselves not take any action and use their best endeavours to
procure that no other Person will take any action, which (save
in the ordinary course of trading) results in the net assets of
any Relevant Company or of any Turkcell Group Company being
materially reduced or which could have a Material Adverse Effect
on the financial or trading position or prospects of any such
company;
(C) without prejudice to the generality of clause 3.1(B), themselves
not take any action and use their best endeavours to procure
that no other Person will take any action (save in the ordinary
course of trading or as permitted in accordance with clause 3.3)
to reduce the cash balances by a material amount (whether as one
transaction or series of transactions) of any Relevant Company
or of any Turkcell Group Company (on an individual basis or on a
consolidated basis across all of such companies);
(D) themselves not take any action and use their best endeavours to
procure that no other Person will take any action to dispose of
or deal in any Cukurova Turkcell Holding Shares, and/or any YKB
Option Shares, or any interest in any such shares, except as may
be required to give effect to the Contemplated Transactions; and
(E) not themselves and shall procure that neither any member of the
Cukurova Group nor any of their representatives will directly
solicit, initiate, continue or encourage any inquiries or
proposals from, discuss or negotiate with, provide any
non-public information to, or consider the merits of any
unsolicited inquiries or proposals from, any Person (other than
Alfa) relating to any transaction involving any direct or
indirect ownership of any shares in Turkcell, Turkcell Holding
or any Turkcell Group Company other than those of which details
are set out in Schedule 6.
3.2 During the Interim Period, the Cukurova Parties shall also provide, and
shall procure that there is provided, to Alfa, its accountants,
solicitors and all other persons authorised by it promptly after request
such facilities and information regarding the business assets
liabilities affairs and records of each Relevant Company and each
Turkcell Group Company as Alfa may reasonably from time to time require.
3.3 Nothing in clause 3.1(C) shall oblige the Cukurova Parties to procure
that Turkcell Holding refrains from paying the dividends declared in
respect of the shares in Turkcell Holding in relation to the financial
years ended 31 December 2003 and 31 December 2004 if such dividends
shall be paid to the lender under the Existing Facility by way of
repayment(s) of any principal, interest or other amounts owing
thereunder, in which case the aggregate amount of Alfa's commitment
under the Secured Facility will be reduced by the amount of such
repayment(s) in accordance with the Secured Facility.
4. AGREEMENT TO SUBSCRIBE
4.1 Subject to satisfaction of the Conditions Precedent, Cukurova hereby
agrees to procure that the Company will issue the Convertible Bonds in
accordance with the terms of the Convertible Bond Instrument to Alfa
pursuant to the Alfa Subscription Instrument, free from all liens
charges encumbrances and other equities of any description (whether
known about or not) and Alfa hereby agrees to subscribe for the same on
and subject to the terms of this Agreement.
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4.2 Nothing in this Agreement shall oblige Alfa to subscribe for any of the
Convertible Bonds or otherwise complete this Agreement unless the
subscription of all of the Convertible Bonds is completed
simultaneously.
5. CONSIDERATION
5.1 The consideration for the subscription of the Convertible Bonds shall be
US$1,593,000,000.
5.2 The consideration for the subscription of the Cukurova Subscription
Shares shall be an amount equal to the amount payable to YKB pursuant to
the YKB/Intercom Acquisition.
6. ESCROW COMPLETION
6.1 Unless otherwise agreed Escrow Completion shall take place at the
offices of Alfa's Solicitors in London on or before 2.00 p.m. on the
fifth day after all of the Conditions Precedent have been satisfied or
waived in accordance with clause 2.4 or procure to be paid on its
behalf;
6.2 On Escrow Completion and subject to clause 6.3 and clause 6.4:
(A) Cukurova Finance will, pursuant to the Cukurova Subscription
Instrument, subscribe for the Cukurova Subscription Shares and
shall pay, or procure to be paid on its behalf, the subscription
monies specified in clause 5.2 to the Company or as it shall
direct at a bank account which the Cukurova Parties will procure
the Company to notify to Cukurova Finance;
(B) Alfa will deliver to the Company the Alfa Subscription
Instrument duly executed but not dated;
(C) The Cukurova Parties will procure that the Company shall:
(1) duly execute the Convertible Bond Instrument and
Cukurova Finance will also duly execute the same;
(2) deliver a duly executed certificate in respect of the
Convertible Bonds in the form attached to the
Convertible Bond Instrument and a duly executed
certificate in respect of any other security to which
the holder of the Convertible Bond is entitled under the
terms of the convertible Bond Instrument in favour of
Alfa or (at Alfa's sole discretion) Alfa's nominee(s);
(3) appoint such persons as Cukurova shall nominate to be
directors of the Company and deliver to Alfa the written
resignations of such number of directors of the Company
as shall be necessary to ensure that the Company has
three directors, all of which have been appointed by
Cukurova, each such resignation to be executed as a deed
and to confirm that the person resigning has no claims
against the Company for compensation for loss of office
or otherwise;
(D) The Cukurova Parties will procure that:
(1) the Company's name shall be Cukurova Telecom Holdings
Limited;
(2) the Completion Articles shall be adopted by the Company;
and
(3) the Company shall have an authorised share capital of
100 Shares to be designated as provided for in the
Completion Articles;
14
(E) The Cukurova Parties will procure that a meeting of the Board of
Directors of the Company shall be held at which:
(1) the Convertible Bonds and any additional securities
issuable by the Company at the time of the subscription
of the Convertible Bonds, under the terms of the
Convertible Bond Instrument, and the Cukurova
Subscription Shares shall be approved for registration;
(2) the resignations referred to at clause 6.2(C)(3) shall
be accepted with effect from the conclusion of the
meeting and two persons as Alfa shall nominate shall be
appointed Directors in accordance with the Completion
Articles; and
(3) such other business shall be attended to as Alfa shall
reasonably require;
(F) Cukurova will or will procure that:
(1) each of the Contemplated Transactions (other than the
CTI/Company Transfer) which has not already been
effected at or before Completion, shall be completed in
accordance with the terms of the commitments and
procedures with which Alfa has become satisfied in
accordance with clause 2.1(I);
(2) show to Alfa the original stock transfer forms (duly
executed and stamped) relating to each of the
Cukurova/Company Acquisition, the Cukurova/Intercon
Acquisition, the YKB/Intercon Acquisition, and the
Intercon/CTI Acquisition (and provide copies thereof);
(3) show to Alfa the written up register of members of each
of Intercon and Turkcell Holdings evidencing the
transferees referred to in the stock transfer forms at
clause 6.2(F)(2) have been entered into the relevant
register of members, together with the duly signed board
minutes approving such registration, and provide copies
thereof; and
(4) the Secured Facility and Unsecured Facility and all
documents which are to be entered into pursuant to them
at the time of their signing, shall be duly executed by
all parties to them other than Alfa;
(5) to the extent not previously satisfied, all conditions
precedent to drawdown under the Secured Facility and the
Unsecured Facility will be satisfied;
(6) the Shareholders Agreement will be executed by the
Cukurova Parties and the Company and delivered to Alfa's
Solicitors to be held as an escrow subject to the escrow
condition that it shall be released from escrow and be
dated and become effective on Conversion but not
otherwise; and
(7) all necessary shareholder approvals and authorities of
the Company are passed to adopt the Post Conversion
Articles with effect from Conversion.
(G) The Cukurova Parties will procure that a representative of the
SDIF shall attend Completion and shall hold a release of the
SDIF Pledge(s) and that such representative has authority to
execute, date and deliver such release immediately upon receipt
of sufficient funds to discharge the SDIF Debts.
6.3 Subject to conclusion of all of the matters referred to in clause 6.2,
Alfa shall:-
15
(A) duly execute the Secured Facility Unsecured Facility, Share
Charge and all documents which are to be entered into pursuant
to them at the time of their signing and duly execute the
Shareholders Agreement and deliver the same to Alfa's Solicitors
to be held as an escrow subject to the escrow condition
described in clause 6.2(F)(6); and
(B) shall in part satisfaction of the subscription monies due from
it in respect of the Convertible Bonds, as set out in clause
5.1, pay to SDIF, at a bank account details of which have
previously been notified by SDIF to Alfa and pursuant to the
Company's instructions, the amount notified by SDIF to Alfa in
accordance with clause 2.1(J) as being the amount necessary, on
the day in question to repay the SDIF Debts in full in order
that the SDIF Pledge(s) may be released ("the SDIF Redemption
Amount").
Following such payment, Escrow Completion shall be deemed to have taken
place, and Completion shall be conditional only upon (1) satisfaction of
the Escrow Condition and (2) payment by Alfa to the Company of an amount
("the Balancing Payment") equal to the subscription monies payable for
the Convertible Bonds pursuant to clause 5.1 less the amount paid to
SDIF pursuant to clause 6.3(B).
6.4 Immediately following Escrow Completion having taken place:-
(A) the Cukurova Parties shall procure satisfaction of the Escrow
Condition; and
(B) Alfa shall pay to the Company or as the Company shall direct at
a bank account details of which have previously been notified by
the Company to Alfa and pursuant to the Company's instructions,
the Balancing Payment (if any).
Completion shall take place automatically upon the Escrow Condition
having been satisfied and, if applicable, the Balancing Payment having
been paid.. All deeds, agreements and documents executed and/or
delivered under clause 6.2 and clause 6.3 shall thereupon be deemed to
have come into effect and shall become the absolute property of the
parties entitled thereto and shall be dated with the date of Completion.
6.5 As soon as reasonably practicable following Completion, each of the
Cukurova Parties and Alfa shall procure that (i) the CTI/Company
Transfer shall be effected fully in accordance with the commitments and
procedures with which Alfa has become satisfied in accordance with
clause 2.1 (I) and (ii) the Company is entered into the register of
members of Turkcell Holding in respect of the Turkcell Holding Shares
thereby transferred.
7. TERMINATION
7.1 If Alfa shall before Completion become aware of any matter which is a
material breach of or materially inconsistent with any of the warranties
covenants agreements or undertakings on the part of either or both of
the Cukurova Parties contained in this Agreement Alfa may terminate this
Agreement at any time before Completion by giving notice in writing to
the Cukurova Parties.
7.2 If either of the Cukurova Parties fails to comply with its obligations
under clause 6, Alfa may (provided that it is in compliance with clause
6.3 and 6.4) by notice in writing to the Cukurova Parties (i) defer
Completion to a date not more than 28 days following the Completion Date
(and the provisions of this clause 7.2 shall apply to Completion as so
deferred) or (ii) proceed to Completion so far as practicable but
without prejudice to its rights hereunder or (iii) terminate this
Agreement.
16
7.3 If Alfa shall fail to comply with its obligations under clause 6
(provided the Cukurova Parties are each in compliance with clause 6.2
and clause 6.4) or if Mogoton Finance Limited shall be in breach of its
obligations to advance drawdowns under the Existing Facility in
immediately available funds on the dates such drawdowns are due under
such facility, the Cukurova Parties may by notice in writing to Alfa (i)
defer Completion to a day not more than 28 days following the Completion
Date (and the provisions of this clause shall apply to Completion as so
deferred) or (ii) proceed to Completion so far as practicable but
without prejudice to the rights of Cukurova hereunder or (iii) terminate
this Agreement.
7.4 If this Agreement is terminated pursuant to this clause, it shall have
no further force and effect and none of the parties shall have any
liability in respect thereof, except as regards any antecedent breach,
save that the provisions of clauses 15 (Enforceability and
Severability), 19 (Announcements), 20 (Notices and Representatives), 21
(Arbitration and Governing Law) and 22 (General) shall continue in full
force and effect.
8. CUKUROVA WARRANTIES
8.1 The Cukurova Parties hereby jointly and severally warrant and represent
to Alfa (for the benefit of Alfa and its successors in title) in the
terms of the Cukurova Warranties, acknowledges that Alfa is entering
into this Agreement in reliance on the Cukurova Warranties and may treat
them as conditions of this Agreement; provided, however, that Cukurova
Warranties shall not be given in relation to any Excluded Asset. The
Cukurova Parties shall deliver the Cukurova Disclosure Letter to Alfa
before 5.30 p.m. on 7 June and if they do so, Alfa shall notify to
Cukurova in writing within three business days after delivery of the
Cukurova Disclosure Letter whether the Cukurova Disclosure Letter is in
a form and substance which is satisfactory to Alfa, acting in its
absolute discretion. If Alfa notifies Cukurova that the Cukurova
Disclosure Letter is in a form and substance which is satisfactory to
Alfa, the Cukurova Warranties will be deemed to have been given at the
date of this Agreement subject to any matters fairly disclosed in the
Cukurova Disclosure Letter.
8.2 The Cukurova Warranties shall be deemed repeated immediately before
Completion with reference to the then existing facts and circumstances,
subject only to any matter which is fairly disclosed in the Satisfactory
Cukurova Disclosure Letter (if any). Notwithstanding clause 7.1, no
right to damages or compensation or right of termination in respect of
breach of any of the Cukurova Warranties as deemed to have been repeated
under this clause 8.2 shall arise in consequence of any act or thing
done or omitted to be done at any time after the date of this Agreement
as required by this Agreement or at the request of or with the prior
written approval of Alfa unless such breach occurs as a deliberate act,
omission or default of either of the Cukurova Parties.
8.3 Each of the Cukurova Warranties is given independently from and shall
not be limited by reference to any of the others of them or anything
else contained in this Agreement or any other agreement or document
referred to herein.
8.4 Save as necessary to give effect to the express terms of this Agreement,
the Cukurova Parties shall not, and shall procure that the Relevant
Companies, the Turkcell Group Companies and all other members of
Cukurova's Group shall not, do, allow or permit before Completion
anything which is or might cause or constitute or result in a breach of
any of the Cukurova Warranties as given on the date hereof and/or as
deemed to be repeated immediately prior to Completion.
8.5 The Cukurova Parties shall forthwith disclose to Alfa in writing any
matter or thing which may arise or become known to it after the date
hereof (whether or not prior to Completion) which is or could be a
breach of or inconsistent with or may render inaccurate or misleading
any of the Cukurova Warranties as given on the date hereof and/or as
deemed to be repeated immediately prior to Completion.
17
8.6 In the event of any breach of the Cukurova Warranties or any breach by
either of the Cukurova Parties of any of its covenants, undertakings or
obligations under any of the Transaction Documents (and without
restricting Alfa's rights elsewhere under this Agreement and/or to claim
damages from either of the Cukurova Parties and on any bases available
to Alfa in respect of such breach), the Cukurova Parties shall (on a
joint and several basis) on demand at the sole option of Alfa pay to
Alfa
(A) (i) the Relevant Proportion of the amount by which the value of
any asset or assets of such Relevant Company or Turkcell Group
Company is or are less than would have been the case if there
had been no such breach or (as the case may be) (ii) the
Relevant Proportion of the amount of any loss and/or liability
or liabilities of the company in question to the extent that it
or they would not have existed or would have been less had there
been no such breach; or
(B) either (if Conversion has taken place) the amount by which the
aggregate value of the Conversion Shares is less or (if
Conversion has not taken place) the aggregate value of the
conversion rights of the Convertible Bonds is less than would
have been the case if there had been no such breach;
together with an amount equal to any expenses losses or liabilities of
Alfa and/or such company which it would not have incurred or which would
not have existed if there had been no such breach; and so that for the
purposes of the foregoing and in the case only of a breach of paragraphs
1, 2 or 16 any such loss of Alfa and/or any company shall also include
the amount of any benefit reasonably expected to be obtained by Alfa or,
as the case may be, any company which by reason of the breach or the
matters giving rise to the breach was not or will not be obtained in
whole or in part.
8.7 The Cukurova Parties hereby irrevocably waive all rights and claims
which each of them may have against the Company, any Relevant Company or
any Turkcell Group Company and the officers and employees of the
Company, any Relevant Company or any Turkcell Group Company in respect
of any misrepresentation, inaccuracy or omission in or from any
information or advice given by it or any of its officers or employees to
the Cukurova Parties (or either of them) to enable it to give any of the
Cukurova Warranties or to assume any of the obligations assumed or to be
assumed by it under or pursuant to this Agreement.
8.8 For the purposes of determining the amount payable by the Cukurova
Parties pursuant to clause 8.6 above in relation to a breach of any Tax
Warranty, no account shall be taken of the availability of any Relief
except to the extent that such Relief arises as a result of any matter
in respect of which either of the Cukurova Parties are liable to make a
payment pursuant to this clause 8 and such payment has been made in
full. For the purposes of this clause 8 the term liability shall include
deferred tax liabilities as determined using the generally accepted
accounting practice relevant to each particular Relevant Company.
8.9 If any deduction or withholding is required from any payment made
pursuant to clause 8.6 the amount paid shall be increased so that the
net amount received by the relevant company is equal, after such
deduction or withholding, to the amount which would have been paid if
this clause 8.9 were not part of this Agreement. If the receipt of any
amount payable under clause 8.6 is taxable on the recipient, the amount
of tax so payable shall be treated as a deduction or withholding for the
purposes of this clause so that the amount payable is correspondingly
increased.
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9. ALFA WARRANTIES
9.1 Alfa hereby warrants and represents to the Cukurova Parties (for the
benefit of the Cukurova Parties and their successors in title) in the
terms of the Alfa Warranties and acknowledges that the Cukurova Parties
are entering into this Agreement in reliance on the Alfa Warranties and
may treat them as conditions of this Agreement.
9.2 The Alfa Warranties shall be deemed repeated immediately before
Completion with reference to the then existing facts and circumstances.
9.3 Each of the Alfa Warranties is given independently from and shall not be
limited by reference to any of the others of them or anything else
contained in this Agreement or any other agreement or document referred
to herein.
9.4 Save as necessary to give effect to the express terms of this Agreement,
Alfa shall not allow or procure before Completion anything which is or
might cause or constitute or result in a breach of any of the Alfa
Warranties as given on exchange hereof and/or immediately prior to
Completion.
9.5 Alfa shall forthwith disclose to the Cukurova Parties in writing any
matter or thing which may arise or become known to it after the date
hereof (whether or not prior to Completion) which is or could be a
breach of or inconsistent with or may render inaccurate or misleading
any of the Alfa Warranties as given on exchange hereof and/or
immediately prior to Completion.
10. LIMITATIONS ON LIABILITY AND CONDUCT OF CLAIMS
10.1 Subject as provided below, the liability of the Cukurova Parties under
or in respect of the Cukurova Warranties shall be limited as follows:
(A) except as otherwise set forth herein, no claim under the
Cukurova Warranties ("a relevant claim") may be made unless
Completion has occurred and (i) in the case of a relevant claim
in respect of paragraph 1, paragraph 2 or paragraph 16 of
Schedule 3, written notice of the claim concerned has been given
to Cukurova before the date falling six (6) years following
Completion or (ii) in the case of a relevant claim under the Tax
Warranties, written notice of the claim concerned has been given
to Cukurova before the date falling three months following the
date that all actions arising from liabilities relating to the
underlying matter giving rise to the relevant claims become
barred by the relevant statute at limitation, or (iii) in
respect of all other relevant claims, written notice of the
claim concerned has been given to Cukurova before the date
falling two (2) years following Completion.
(B) no relevant claim may be made unless and until the aggregate
amount of all relevant claims exceeds US$10,000,000 although
(subject to clause 10.1(C)) once such limit is exceeded the full
amount of all such claims and any other claims shall be
recoverable;
(C) the maximum aggregate liability of the Cukurova Parties under
the Cukurova Warranties shall not exceed an amount equal to the
aggregate of (i) in the case of relevant claims in respect of
paragraph 1, paragraph 2 or paragraph 16 Schedule 3,
US$3,300,000,000; or in the case of all other relevant claims,
US$1,593,000,000 provided that the maximum aggregate liability
of the Cukurova Parties under paragraphs 3 to 15 (inclusive) and
paragraph 18 shall not exceed US$1,000,000,000 and (ii) the
total amount of any costs charges and expenses incurred by the
claimants in investigating bringing and/or enforcing any
claim(s) or rights in respect thereof; and
19
(D) no relevant claim may be made in respect of loss of opportunity
unless the claim is made under paragraphs 1, 2 or 16 of Schedule
3.
10.2 Subject as provided below, the liability of Alfa under or in respect of
the Alfa Warranties shall be limited as follows:
(A) no claim under the Alfa Warranties ("a relevant claim") may be
made unless (i) Completion has occurred and (ii) written notice
of the claim concerned has been given to Alfa before the third
anniversary of Completion; and
(B) no relevant claim may be made unless and until the aggregate
amount of all relevant claims exceeds US$3,000,000 although once
such limit is exceeded the full amount of all such claims and
any other claims shall be recoverable;
(C) no relevant claim may be made in respect of loss of opportunity.
10.3 The maximum aggregate liability of Alfa under the Alfa Warranties shall
not exceed an amount equal to the aggregate of (i) US$25,000,000 and
(ii) the total amount of any costs charges and expenses incurred by the
claimants in investigating bringing and/or enforcing any claim(s) or
rights in respect thereof.
10.4 Any party ("the Claiming Party") entitled to bring a claim ("the
Principal Claim") under this Agreement in connection with any third
party claim, action or Proceeding ("a Third Party Claim") shall give the
party against whom the Principal Claim is being or is to be made (the
"Defending Party") prompt written notice of such Third Party Claim.
10.5 If the Defending Party so elects, the Defending Party will assume the
defence of such Third Party Claim, including the employing of counsel
reasonably satisfactory to the Claiming Party. If the Defending Party
shall so assume the defence of the Third Party Claim, the Defending
Party shall consult fully with the Claiming Party before taking (or
authorising its advisers or agents to take) any material action in
connection with the defence thereof.
10.6 (A) Neither the Claiming Party nor the Defending Party will
(together in this clause 10 "the Parties", each a "Party") and
the Parties shall (i) procure that neither the Company nor any
Relevant Company will, and (ii) use their respective best
endeavours to ensure that no Turkcell Group Company will,
settle, compromise or consent to any entry of any judgement in
an ongoing or threatened Third Party Claim, without the prior
written consent of the Defending Party or the Claiming Party as
the case may be or, in the case of a Third Party Claim against
the Company or any of its subsidiaries, the prior written
consent of the Company, such consent no to be unreasonably
withheld, and for the purposes of this clause 10.6(A) the
Claiming Party or the Defending Party or the Company, as the
case may be, shall be deemed not to be withholding its consent
unreasonably if it believes, acting reasonably, that the
settlement or compromise of or the entry of judgement in
relation to the Third Party Claim would have a material adverse
effect on its reputation.
(B) If the Third Party Claim is being made against the Company or
any of its Affiliates or if any Party has any claim against any
other party under this Agreement as a result of any liability
owed by the Company or any of its Affiliates to a third party,
then each Party shall procure that no admission of liability
shall be made on behalf of the Company or of such Affiliate
without the consent of the Company, such consent not to be
unreasonably withheld or delayed.
20
10.7 The Claiming Party shall co-operate with the Defending Party and its
employees and professional advisers in investigating the circumstances
alleged to give rise to such Third Party Claim and whether and to what
extent any amount is payable in respect of such claim and for such
purpose the Claiming Party shall procure that any relevant Affiliate of
the Claiming Party, including, for the avoidance of doubt, the Company,
shall give, subject to their being paid all reasonable costs and
expenses, all such assistance and information as is reasonable.
10.8 Except in the case of a fraudulent misrepresentation, no party shall in
relation to this Agreement be liable in respect of any representations
or warranties or similar assurances which are not contained and
expressly given or assumed by them in this Agreement or any agreement or
document entered into pursuant hereto or referred to herein.
10.9 Nothing in this Agreement or otherwise shall limit the liability of Alfa
hereunder where Alfa has been fraudulent or wilfully deceptive.
10.10 Nothing in this Agreement or otherwise shall limit the liability of
either of the Cukurova Parties hereunder where either of them has been
fraudulent or wilfully deceptive.
11. EXCLUDED ASSETS
11.1 The Cukurova Parties shall on or before Completion (or as soon as
reasonably practicable after Completion) procure the sale of any
Excluded Assets in accordance with all Legal Requirements.
11.2 Notwithstanding anything to the contrary, the Cukurova Parties agree and
shall procure that the sale of the Excluded Assets is only effected on
the basis that any purchaser or transferee thereof shall accept such
right title and interest as the Company or any of its Affiliates may
have to the Excluded Assets and subject to such encumbrances and other
third party rights as may attach to them on completion of the purchase,
and that no contrary warranties representations or similar assurances
are made by or on behalf of the Company or any of its Affiliates in that
regard.
11.3 The Cukurova Parties hereby jointly and severally undertake to Alfa (for
itself and separately as trustee for the Company and each Relevant
Company) fully to indemnify and hold harmless and keep indemnified and
hold harmless Alfa and the Company each Relevant Company and each of
them against any and all losses costs claims expenses proceedings and
other liability they or any of them may incur or hereafter incur by
reason of the existence of, or the sale and purchase or transfer of, all
or any of the Excluded Assets hereby contemplated and/or in relation to
or otherwise in respect of the Excluded Assets or any of them and/or any
obligations and liabilities referable thereto.
12. POST-COMPLETION OBLIGATIONS
The Cukurova Parties hereby agree, undertake, and covenant to Alfa and
to the Company to take, as soon as reasonably practicable following
Completion (and in any event in sufficient time so as to ensure that the
following matters are implemented within 14 days after Completion), all
necessary steps (including without limitation convening board meetings
and shareholders' meetings) to:
(A) appoint (i) to the board of directors of Turkcell Holding and to
the board of Turkcell, two persons nominated by Alfa (who may,
at Alfa's sole discretion, be the same or different persons as
between Turkcell Holding and Turkcell) and (ii) to the board of
directors of Turkcell, a further director agreed by the parties;
and
21
(B) to secure the resignation from the board of Turkcell Holding of
two directors previously appointed by Cukurova and the
resignation from the board of Turkcell of three directors
previously appointed by ▇▇▇▇▇▇▇▇.
▇▇. MINORITY INTERESTS AND DEBTS
13.1 Alfa (on the one hand) and the Cukurova Parties (on the other) will
procure (save as contemplated by this Agreement) as a continuing
obligation both before and after Completion and for the duration that
they shall remain holders of Convertible Bonds and/or, as the case may
be, any shares in the capital of the Company, that:
(A) respectively, no member the Alfa Group and no member of the
Cukurova Group will (directly or indirectly) acquire or hold
(other than as set out in Schedule 6) any interest (minority or
otherwise) in any Relevant Company or Turkcell Group Company;
provided that this clause shall not prohibit any member of the
Alfa Group or any member of the Cukurova Group from acquiring up
to fifteen per cent. of the issued and outstanding equity
securities of Turkcell (but not, for the avoidance, of any other
Relevant Company or Turkcell Group Company), provided that
Turkcell remains listed on an internationally recognised stock
exchange and provided further that such acquisition is made
through an internationally recognised stock exchange;
(B) subject to the prior agreement of the Board, if the opportunity
arises to acquire any interests in any Relevant Company or
Turkcell Group Company, the parties shall procure that such
acquisition is only carried out through the Company.
13.2 Alfa (on the one hand) and the Cukurova Parties (on the other) will
respectively procure that no member of the Alfa Group and no member of
the Cukurova Group will (directly or indirectly) acquire or hold any
debt of any Relevant Company or Turkcell Group Company unless otherwise
approved in writing by Cukurova, in the case of debts held by any member
of the Alfa Group or by Alfa in the case of any debt held by any member
of the Cukurova Group, or as contemplated by this Agreement.
13.3 To the extent that any Alfa Group or member of the Cukurova Group holds
directly any shares in Turkcell, Alfa shall procure that such member of
the Alfa Group, and Cukurova shall procure that such member of the
Cukurova Group, shall vote, and take all other actions in respect of,
such shares as agreed between Alfa and Cukurova and documented in duly
adopted resolutions of the board of Directors of the Company.
14. CONFIDENTIALITY
14.1 The Cukurova parties (on the one hand) and Alfa (on the other) shall
respectively use (and shall ensure that each member of their/its Group
shall use) reasonable endeavours to keep confidential (and to ensure
that its officers, employees, agents and professional and other advisers
keep confidential) any information:
(A) which it may have, or acquire, before or after the date of this
Agreement in relation to any parties customers, business, assets
or affairs resulting from:
(1) negotiating this Agreement;
(2) being a shareholder or bondholder in the Company;
(3) having appointees on the board of any Relevant Company;
or
(4) exercising its rights or performing its obligations
under this Agreement; or
22
(B) which relates to the contents of this Agreement (or any
agreement or arrangement entered into pursuant to this
Agreement),
and no party shall use for its own business purposes or disclose to any
third party any such information (collectively, the "Confidential
Information") without the prior written consent of the other parties. In
performing its obligations under this clause 1.1(B), each party shall
apply the confidentiality standards and procedures it applies generally
in relation to its own confidential information.
14.2 The obligation of confidentiality under clause 14.1 does not apply to:
(A) the disclosure (subject to clause 14.3) on a "need to know"
basis by Alfa to a company which is another member of the Alfa
Group or Affiliate of Alfa or by either Cukurova Party to a
company which is another member of the Cukurova Group or an
Affiliate either of the Cukurova Parties (as the case may be)
where the disclosure is for a purpose reasonably incidental to
this Agreement;
(B) information which is independently developed by the relevant
party or acquired from a third party to the extent that it is
acquired with the right to disclose the same;
(C) the disclosure of information to the extent required to be
disclosed by law, any stock exchange regulation or any binding
judgement, order or requirement of any court, regulatory body or
other competent authority;
(D) the disclosure of information to any tax authority to the extent
required for the purposes of the tax affairs of the party
concerned or any member of its Group;
(E) the disclosure (subject to clause 14.3) in confidence to a
party's professional advisers of information reasonably required
to be disclosed for a purpose reasonably incidental to this
Agreement;
(F) the disclosure (subject to clause 14.3) by either of Alfa or the
Cukurova Parties to their respective institutional financiers
and bankers and the professional advisers to such institutional
financiers and bankers for a purpose reasonably incidental to
and to the extent reasonably required by such institutional
financiers and bankers for the purposes of them considering
extending financing to the party in question;
(G) information which becomes within the public domain (otherwise
than as a result of a breach of this clause 1.1(B)); or
(H) any announcement made in accordance with the terms of clause 19
(Announcements).
14.3 Each party shall inform (and shall ensure that each member of its Group
shall inform) any officer, employee, agent or professional or other
adviser advising it in relation to the matters referred to in this
Agreement, or to whom it provides Confidential Information, that such
information is confidential and shall instruct them:
(A) to keep it confidential; and
(B) not to disclose it to any third party (other than those Persons
to whom it has already been disclosed in accordance with the
terms of this Agreement),
and the disclosing party is responsible for any breach of this clause
1.1(B) by the Person to whom the Confidential Information is disclosed.
23
14.4 If this Agreement terminates, either Alfa or the Cukurova Parties may by
written notice require the other to return or destroy the Confidential
Information relating to the party serving the notice whereupon the other
of them shall (and shall ensure that each member of its Group shall):
(A) return all documents containing Confidential Information which
have been provided by or on behalf of the party demanding the
return of Confidential Information; and
(B) destroy any copies of such documents and any document or other
record reproducing, containing or made from or with reference to
the Confidential Information,
save, in each case, for any submission to or filings with governmental,
tax or regulatory authorities. The other party shall return or destroy
(and shall confirm such destruction in writing) the Confidential
Information as soon as practicable after receiving notice.
14.5 The provisions of this clause 1.1(B) continue to apply if this Agreement
is terminated for a period of five (5) years following any such
termination.
15. ENFORCEABILITY AND SEVERABILITY
15.1 Each of the agreements, undertakings, covenants, warranties, indemnities
and other obligations of the parties entered into pursuant hereto is
considered reasonable by the parties but in the event that any provision
or part thereof shall be held void or unenforceable or in conflict with
the law of any state or jurisdiction any provision or part so held void
or unenforceable or in conflict as aforesaid shall be severed from this
Agreement or other document in which it is contained or otherwise
modified to become valid and enforceable insofar as it relates to that
state or jurisdiction only and the enforceability and validity of any
other parts or provisions of this Agreement and such document shall not
be affected by such severance or modification.
15.2 Where any agreement, undertaking, covenant, warranty or indemnity given
pursuant to this Agreement is stated to be for the benefit of the
Company or any member of Alfa's Group or other third party the same
shall be directly enforceable by the Company or third party concerned or
by Alfa on its behalf as if it were named as a party hereto and had duly
executed this Agreement.
16. FURTHER ASSURANCE
The Cukurova Parties hereby agree for no additional consideration or
payment to do execute and deliver any such further acts documents and
things as Alfa may reasonably require to vest in Alfa the beneficial
ownership of the Convertible Bonds and to vest in the Company the
beneficial ownership of the Relevant Shares free from all encumbrances,
charges, liens and other adverse interests and to vest the benefit of
this Agreement in Alfa.
17. SURVIVAL OF AGREEMENT
This Agreement (and in particular the warranties, representations,
covenants, agreements and undertakings of the Cukurova Parties
hereunder) shall insofar as the terms thereof remain to be performed or
are capable of subsisting remain in full force and effect after and
notwithstanding Completion.
24
18. SUCCESSORS AND ASSIGNS
This Agreement is personal to the parties to it and no party may,
without the prior written consent of the other party, assign, hold on
trust or otherwise transfer the benefit of all or any of the obligations
of any other party under this Agreement.
19. ANNOUNCEMENTS
Save in respect of statutory returns or matters required to be disclosed
by law or to any or other Governmental Body, none of the parties hereto
shall make any press statement or other public announcement in
connection with this Agreement without the prior written approval of the
text of such statement or announcement (in the case either of the
Cukurova Parties) by Alfa or (in the case of Alfa) by the Cukurova
Parties.
20. NOTICES AND REPRESENTATIVES
20.1 Any notice or other document to be served under this Agreement may be
delivered, or sent by prepaid first class mail or internationally
recognised courier service, or sent by facsimile to the party to be
served at its address or facsimile number set out in clause 20.4 or at
such other address or number as it may have notified to the other
parties in accordance with this clause 20 and shall (where the party to
be served is not an individual) be marked for the attention of the
individual specified in this Agreement or such other individual as the
relevant party may have notified to the other parties in accordance with
this clause 20. Service on one of the Cukurova Parties shall constitute
service on both for the purposes of this clause 20.
20.2 Any notice or document shall be deemed to have been served:
(A) if delivered, at the time of delivery; or
(B) if sent by first class mail or internationally recognised
courier service, five days after it was sent; or
(C) if sent by facsimile , the time of transmission if transmitted
before 3.00 p.m. on any business day, and in any other case at
10.00 a.m. on the business day after the date of transmission;
provided that for the purposes of this clause, the term
"business day" means any day that is not a Saturday, Sunday, or
public holiday in the place at, or to which, a notice is left or
sent.
20.3 In proving service of a notice or document it shall be sufficient to
prove that delivery was made or that the envelope containing the notice
or document was properly addressed and posted as a prepaid first class
letter or that the facsimile message was properly addressed and
transmitted as the case may be.
20.4 The addresses and fax numbers of the parties for the purpose of clause
20.1 are:
(A) Alfa:
Address: c/o Alfa Finance Holdings S.A.
▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇
▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
Fax No: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
25
For the attention of: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(B) The Cukurova Parties:
Address: Cukurova Holding A.S
Buyukdere Cad. Yapi Kredi Plaza A Blok
K:15 34330 Levent, Istanbul, Turkey
Fax No: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇ ▇▇
For the attention of: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Demirtas
20.5 All notices or formal communications under or in connection with this
Agreement shall be in the English language or, if in any other language,
accompanied by a translation into English. In the event of any conflict
between the English text and the text in any other language, the English
text shall prevail.
20.6 Each of the Parties shall ensure that there is at all times appointed an
agent for service of process on it in England in relation to any matter
arising out of the Agreement, service upon whom shall be deemed
completed whether or not forwarded to or received by that Party and any
Party appointing an agent pursuant to this clause 20.6 shall notify the
other Parties of the name of such agent and their contact details.
20.7 Any of the Parties may from time to time appoint a new process agent
acceptable to the other Parties (acting reasonably) to receive service
of process in England pursuant to clause 20.6 and shall notify the other
Parties of the name and address of such agent without delay (and in any
event within seven days) following such appointment.
20.8 Each of the Parties which has made an appointment under clause 20.6
shall inform the other Parties, in writing, of any change in the address
of its process agent within 28 days.
20.9 If any process agent appointed by any of the Parties pursuant to clause
20.6 or 20.7 ceases to have an address in England, each of the relevant
Parties irrevocably agrees to appoint a new process agent acceptable to
the other Parties (acting reasonably) and to deliver to the other
Parties within 14 days a copy of a written acceptance of appointment by
its new process agent.
20.10 Pursuant to clause 20.6 above, (i) Cukurova agrees, prior to Completion,
to appoint BMC Sanayi ve Ticaret A.S. located at Havenfields, ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇ (to the attention of ▇▇.
▇▇▇▇▇ ▇▇▇▇; telephone: ▇▇▇ ▇ ▇▇▇ ▇▇▇ ▇▇▇, fax: ▇▇▇ ▇ ▇▇▇ ▇▇▇ ▇▇▇) and
(ii) Alfa agrees, prior to Completion, to appoint Capita IRG Trustee
Limited of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇/▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ as its
agent for service of process on it in England in relation to any matter
arising out of the Agreement.
21. ARBITRATION AND GOVERNING LAW
21.1 Any dispute arising out of or in connection with this Agreement,
including any question regarding its existence, validity or termination,
shall be referred to and finally resolved by arbitration under the LCIA
Rules, which Rules are deemed to be incorporated by reference into this
clause.
21.2 The number of arbitrators shall be three.
21.3 The place of arbitration shall be London, England.
26
21.4 The language to be used in the arbitral proceedings shall be English.
21.5 The governing law of the contract shall be the substantive law of
England.
22. GENERAL
22.1 The obligations and liabilities of any party hereto shall not be
prejudiced released or affected by any time or forbearance or indulgence
release or compromise given or granted by any person to whom such
obligations and liabilities are owed or by any other person to such
party or any other party so obliged or liable nor by any other matter or
circumstance which (but for this provision) would operate to prejudice
release or affect any such obligations except an express written release
by all the parties to whom the relevant obligations and liabilities are
owed or due.
22.2 This Agreement together with all documents in agreed form represents the
entire agreement between the parties and it may only be varied by
written document signed by all the parties.
22.3 Any party may take action for any breach of any warranties on behalf of
any other party or parties before or after Completion notwithstanding
that such breach was known to or discoverable by such party before
Completion and notwithstanding that such party shall delay or otherwise
fail to exercise its rights hereunder or generally in such regard.
22.4 Except where expressly provided to the contrary, the rights and remedies
reserved to the parties or any of them under any provision of this
Agreement or in any document to be executed pursuant hereto shall be in
addition and without prejudice to any other rights or remedies available
to such parties whether under this Agreement or any such document by
statute common law or otherwise.
23. CONTRACTS (RIGHTS OF THIRD PARTIES) ▇▇▇ ▇▇▇▇
23.1 The parties agree and acknowledge that:
(A) save as provided in clause 15.2, nothing in this Agreement is
intended to benefit any person who is not a party to it ("a
Non-Party") and accordingly no Non-Party has any right under the
Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ to enforce any term
of this Agreement; and
(B) no consent of any Non-Party shall be required for any rescission
of or amendment to this Agreement.
23.2 The provisions of clause 23.1 do not affect any right or remedy of a
third party which exists or is available otherwise than by operation of
the Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇.
24. COUNTERPARTS
This Agreement may be executed in any number of counterparts and by the
parties on separate counterparts, each of which shall be an original but
all of which together shall constitute one and the same instrument.
IN WITNESS whereof this Agreement has been executed in London as a deed of each
of the parties the day and year first before written.
27
SCHEDULE 1
PART 1
THE COMPANY
1. Date of Incorporation: 27 May 2005
2. Registered Number: 1000030
3. Authorised Share Capital: 100 shares
4. Issued Share Capital (including Two Shares issued to and legally
names of Shareholder(s)): and beneficially held by
Cukurova Finance
5. Director: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Cetinalp
6. Registered Office: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇,
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
28
PART 2
CTI
1. Date of Incorporation: 27 May 2005
2. Registered Number: 658807
3. Authorised Share Capital: 100 shares
4. Issued Share Capital (including Two shares issued to and legally
names of Shareholder(s)): and beneficially held by the
Company
5. Director: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Cetinalp
6. Registered Office: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇,
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
29
SCHEDULE 2
TURKCELL HOLDING AND TURKCELL
A. TURKCELL HOLDING
1. Date of Incorporation: 1999
2. Registered Number: Istanbul Trade Registry
430991/378573
3. Authorised Share Capital: 256,900,000,000,000 TL
4. Issued Share Capital: 256,900,000,000,000 TL
5. Shareholders: Sonera Holding B.V. holding
120,974,210 (Group A) shares
representing 47.09% of the
issued share capital
Cukurova Holding A.S. holding
44,856,320 (Group B) shares
representing 17.46% of the
issued share capital
Yapi ve Kredi Bankasi A.S.
holding 51,442,591 (Group B)
shares representing 20.02% of
the issued share capital
Pamukbank T.A.S. holding
39,626,878 (Group B) shares
representing 15.43% of the
issued share capital
Sinai ve Mali Yatirimlar Holding
A.S. holding 1 (Group B) share
representing 0.0000000389% of
the issued share capital
Intercon - 1 (Group B) Share
representing 0.0000000389% of
the issued share capital
The balance of the issued shares
are held by various other
shareholders.
6. Directors: ▇▇▇▇▇▇ ▇▇▇▇ Karahmet
▇▇▇▇▇ ▇▇▇▇▇▇▇
Ali ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ Vargi
Kaj-▇▇▇▇ ▇▇▇▇▇▇▇▇
Matti ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Esko ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
7. Secretary: N/A
30
8. Registered Office: Mesrutiyet Caddesi ▇▇. ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ -
▇▇▇▇▇▇▇▇
▇. Accounting Reference Date: 31 December
31
B. TURKCELL
1. Date of Incorporation: 1993
2. Registered Number: Istanbul Trade Registry
304844-252426
3. Authorised Share Capital: 2,200,000,000,000,000 TL
4. Issued Share Capital: 1,474,639,361,000,000 TL
5. Shareholders: Turkcell Holding A.S. holding
752,066,074,110 shares
representing 51.00% of the
issued share capital
Cukurova Investments N.V.
holding 43,230,288,153 shares
representing 2.93% of the issued
share capital
Cukurova Holding A.S. holding
109,195,314,495 shares
representing 7.40% of the issued
share capital
Yapi ve Kredi Bankasy A.S.
holding 42,807,402,352 shares
representing 2.90% of the issued
share capital
T. Genel Sigorta A.S. holding
1,044,616,090 shares
representing 0.07% of the issued
share capital
Sonera Holding B.V. holding
192,797,151,875 shares
representing 13.07% of the
issued share capital
MV Holding A.S. holding
63,692,162,456 shares
representing 4.32% of the issued
share capital
MV Investments N.V. holding
25,802,787,220 shares
representing 1.75% of the issued
share capital
▇▇▇▇▇ Bilgi Kaynak ve
Iletisim San. Ve Tic.
A.S. 2,631,038,768 shares
representing 0.18% of the issued
share capital
Publicly traded -
241,372,525,481 shares
representing 16.38% of the
issued share capital
6. Directors: ▇▇▇▇▇▇ ▇▇▇▇ Karamehmet
Erdal ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
32
Kim Juhani Ignatius
Mehmet ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
7. Secretary: N/A
8. Registered Office: Mesrutiyet Cad. No: 153, 80050
Tepebasi Istanbul
9. Accounting Reference Date: 31 December
33
SCHEDULE 3
CUKUROVA WARRANTIES
1. CAPACITY AND AUTHORITY
1.1 INCORPORATION
Each of Cukurova, Cukurova Finance, the Company, each Relevant Company
and each Turkcell Group Company (together with each of their Affiliates,
"the Relevant Group") is a company duly incorporated and validly
existing under the laws of the country in which it is incorporated.
1.2 AUTHORITY TO ENTER INTO TRANSACTION DOCUMENTS
Each of Cukurova, Cukurova Finance and the Company has the legal right
and full power and authority to enter into, and perform its obligations
under, the Transaction Documents, which when executed will constitute
valid and binding obligations of each of Cukurova, Cukurova Finance and
the Company in accordance with their respective terms.
1.3 NO BREACH
The execution and delivery of, and the performance by each of Cukurova,
Cukurova Finance, the Company and each Relevant Company of each of their
respective obligations under the Transaction Documents, the Contemplated
Transactions, and the Conversion Measures will not as at the date of
Completion or (in the case of the Conversion Measures) at the date of
Conversion :-
(A) result in a breach of any provisions of the constitutional
documents of any member of either of any member of the Relevant
Group;
(B) result in a breach by any member of the Relevant Group of any
order, judgment, injunction or decree of any Court, governmental
agency or regulatory body having appropriate authority;
(C) conflict with or result in a breach of, or give rise to an event
of default under, or require the consent of a person under, or
relieve a person from an obligation under, any agreement or
arrangement (written or otherwise) to which any member of the
Relevant Group is a party and which is of material importance to
them;
(D) result in any member of the Relevant Group losing the benefit of
any permit of material importance to them including, without
limitation, any material environmental permit, asset, licence,
grant, subsidy, right, or privilege which it enjoys in any
jurisdiction; or
(E) make any member of the Relevant Group liable under their
articles of association, constitutional documents or any
agreement or arrangement to offer for sale, transfer or
otherwise dispose of (i) any assets of material importance to
any of them and/or (ii) shares held by any of them in other
bodies corporate.
1.4 AUTHORITY TO CARRY ON BUSINESS
Each of Cukurova, Cukurova Finance, the Company, each Relevant Company
and each Turkcell Group Company has and has had since the Accounting
Date the legal right and full power and authority to carry on its
business.
34
1.5 AUTHORISATION
All corporate action, and all applicable governmental, statutory,
regulatory or other consents required by any Cukurova, Cukurova Finance,
the Company, each Relevant Company, and each Turkcell Group Company to
authorise the execution and delivery of, and to perform the obligations
of any member of the Relevant Group under the Transaction Documents, the
Contemplated Transactions and the Conversion Measures has been taken
and/or obtained or will be taken and/or obtained.
2. PRE-EMPTION ETC.
No person has the right (whether exercisable now or in the future and
whether contingent or not) to call for the allotment, conversion, issue,
sale or transfer of any share or loan capital or any other security (i)
giving rise to a right over the capital of the Company, of any Relevant
Company or of any Turkcell Group Company or (ii) in respect of any
Relevant Shares and there are no encumbrances or other third party
rights on the shares of the Company or the Relevant Shares or
obligations to create any such encumbrances or other third party rights.
3. ACCOUNTS
3.1 The Accounts:
(A) are true and accurate and show a true and fair view of the state
of affairs of each Relevant Company and each Turkcell Group
Company as at the Accounting Date and of its results for the
accounting reference period ended on that date;
(B) are prepared on bases and policies of accounting consistent with
those adopted in preparing the accounts for each such company
for the two financial years immediately preceding the financial
year ended on the Accounting Date and make full and proper
provision for (or, if appropriate, disclose by way of note) all
assets and liabilities (whether actual, contingent, quantified
or disputed) and all capital and financial commitments of each
Relevant Company and each Turkcell Group Company as at or on the
Accounting Date.
3.2 The profits shown in the Accounts have not to a material extent been
affected (except as disclosed in those accounts) by any extraordinary or
exceptional event or circumstance or by any other factor rendering them
unusually high or low.
4. SINCE THE ACCOUNTING DATE
4.1 Since the Accounting Date:
(A) the business of each Relevant Company and each Turkcell Group
Company has been carried on in the ordinary course and so as to
maintain it as a going concern and there has been no Material
Adverse Change in the financial position or trading or prospects
of any such Relevant Company and/or Turkcell Group Company;
(B) there has been no material reduction in the aggregate value of
the net assets of any Relevant Company and/or any Turkcell Group
Company as shown in the Accounts and each Relevant Company and
each Turkcell Group Company has maintained rates of
profitability not less than the rates of profitability for the
corresponding months in the financial year ended on the
Accounting Date;
35
(C) no Relevant Company and no Turkcell Group Company has made or
agreed to make any payment or entered into any transaction or
commitment or incurred any liability except in the ordinary
course of its trading and for full value;
(D) no Relevant Company and no Turkcell Group Company has acquired
or disposed of or agreed to acquire or dispose of any business
or any material asset other than trading stock in the ordinary
course of business.
4.2 Since the Accounting Date the business of each Relevant Company and each
Turkcell Group Company has not been materially and adversely affected by
the loss of any important customer(s) or source(s) of supply or any
abnormal factor(s) not affecting similar businesses to a similar extent,
and neither of the Cukurova Parties is aware of any facts likely to give
rise to any such effect whether before or after Completion.
4.3 The Management Accounts have been prepared in accordance with generally
accepted accountancy practice and principles consistently applied (and
on a basis consistent with that upon which the Accounts were prepared)
and adequately reflect in all material respects the assets and
liabilities (whether actual or contingent) and the state of affairs and
financial position of Turkcell Holding, Turkcell and each Turkcell Group
Company at the dates to which they have been prepared and their results
over the period from the Accounting Date ended thereon.
5. ENVIRONMENTAL AND HEALTH MATTERS
5.1 Each Relevant Company and each Turkcell Group Company has complied and
is complying in all respects with all statutes regulations orders codes
of practice or guidance notes issued by any competent authority or
agency (whether or not having the force of law) which protect or relate
to the protection of the environment (including, without limitation, the
conservation of natural resources or the production, emission, storage,
transportation, treatment, recycling or disposal of any waste or any
noxious, offensive or Hazardous Substance) and/or the health and well
being of human beings and/or other living things ("Environmental Laws")
and all recommendations requests or demands from any body or authority
charged with overseeing or enforcing Environmental Laws.
5.2 None of the properties owned or occupied by any Relevant Company or any
Turkcell Group Company ("the Properties") nor any premises adjacent to
any of the Properties is or has been or is likely to have been
contaminated by any Hazardous Substance and/or has been subject to any
land use which might reasonably be expected to have resulted in its
being contaminated.
6. ASSETS AND UNDISCLOSED LIABILITIES
6.1 The assets included in the Accounts or acquired by any Relevant Company
or any Turkcell Group Company since the Accounting Date and all other
assets used or employed by each Relevant Company and each Turkcell Group
Company are the absolute property of the relevant company free from any
mortgage charge ▇▇▇▇ ▇▇▇▇ of sale retention of title arrangement or
other encumbrance and are not the subject of any leasing hiring or any
hire purchase agreement or agreement for payment on deferred terms or
assignment or factoring or other similar agreement; and all such assets
are in the possession or under the control of the relevant company and
are sufficient for the operation of the business in all material
respects.
6.2 No Relevant Company and no Turkcell Group Company has any liabilities or
obligations, of the type required to be disclosed on a balance sheet
prepared in accordance with TAS, except for liabilities or obligations
reflected in the Accounts or current liabilities incurred in the
ordinary course of business since the date thereof.
36
7. INTELLECTUAL PROPERTY
7.1 All of the Intellectual Property Rights of each Relevant Company and
each Turkcell Group Company are valid and enforceable and none of them
are and nothing has been done or omitted to be done whereby any of them
might be used claimed opposed or attacked by any other person. No
Relevant Company and no Turkcell Group Company is a party to any
agreement or arrangement for the licensing or the use or provision or
acquisition of any Intellectual Property or which prohibits or restricts
the ability of the relevant such company to disclose or use any such
Intellectual Property.
7.2 No Relevant Company and no Turkcell Group Company requires any
Intellectual Property Rights or any licence to use any Intellectual
Property Rights for any of the operations of any of its businesses or
for the use of any of its assets.
7.3 Each Relevant Company and each Turkcell Group Company is entitled to
carry on the businesses now carried on by it in the manner in which
each of them is now carried on and neither the manner of such
businesses nor the operations of any Relevant Company or any Turkcell
Group Company infringes or is likely to infringe or conflict with any
Intellectual Property Rights of any other person or will or may give
rise to a liability on the relevant company to make payment of any
royalty or other compensation pursuant to any applicable legislation or
otherwise.
7.4 No Relevant Company and no Turkcell Group Company has disclosed or
permitted to be disclosed or undertaken or arranged to disclose to any
person any of its know how secrets confidential information technical
processes or lists of customers or suppliers.
8. COMMITMENTS AND CONTRACTS
8.1 No Relevant Company and no Turkcell Group Company is a party to nor
liable in respect of and none of the assets or property owned or used by
any Relevant Company or any Turkcell Group Company is affected by:
(A) any partnership joint venture consortium trade association or
society or any agreement or arrangement relating thereto;
(B) any contract covenant commitment or arrangement which in any way
restricts the freedom of any Relevant Company or any Turkcell
Group Company to deal with or realise its assets or any of them
and/or carry on its business or any part thereof in any part of
the world in such a manner as it thinks fit;
(C) any contract covenant commitment or arrangement which is or is
liable to be terminated or altered by another party as a result
of any change in the control management or shareholders of any
Relevant Company or any Turkcell Group Company.
8.2 None of the products manufactured or promoted or sold or otherwise
supplied by or through Turkcell or any Turkcell Group Company have at
any time infringed any applicable statutes, regulations, orders or other
provisions of law or codes of practice or have given rise or could
reasonably be expected to give rise to any material product liability on
the part of any such Company.
8.3 No Relevant Company and no Turkcell Group Company has ever been the
subject of any enquiry investigation or complaint (or the threat
thereof) by any competition or any regulatory authority including the EC
Commission, or any national competition authority.
37
8.4 No Relevant Company and no Turkcell Group Company has ever been engaged
in or threatened with legal proceedings for any breach or alleged breach
of EU or national competition laws or taken steps to compromise any such
action or threatened action.
9. FINANCIAL COMMITMENTS, BORROWINGS AND CASH BALANCES
9.1 No event has occurred which has resulted or could result in any present
or future indebtedness of any Relevant Company or any Turkcell Group
Company becoming due or capable of being declared due and payable prior
to its date of maturity and no event has occurred which is or would with
the giving of notice or the passing of time or otherwise be an event
upon which the relevant company's bank facilities or other borrowings or
any of them have or could become immediately repayable or any security
granted by or over any property or assets of any Relevant Company or any
Turkcell Group Company becoming enforceable.
9.2 No Relevant Company and no Turkcell Group Company is and none have
agreed to become bound by any guarantee or indemnity or suretyship or
similar commitment and there is not now outstanding any such guarantee
indemnity suretyship or similar commitment given for the accommodation
of or in respect of any obligation or liability of any Relevant Company
or any Turkcell Group Company.
9.3 No order has been made or petition presented or resolution passed for
the winding up of any Relevant Company or any Turkcell Group Company nor
has any administrator or receiver been appointed or any distress
execution or other process been levied in respect of any Relevant
Company's or any Turkcell Group Company's undertaking or assets or any
part thereof, and no Relevant Company and no Turkcell Group Company has
received any notice under nor is it or could it be deemed unable to pay
its debts for the purposes of section 123 of the Insolvency Act 1986 or
such other legislation in the relevant jurisdiction of incorporation or
operation of the relevant company.
9.4 There will be set out in the Cukurova Disclosure Letter cash balances on
the accounts of each Relevant Company and each Turkcell Group Company on
the latest practicable day prior to the date of this Agreement.
10. BUSINESS
10.1 All licences consents permissions and authorities necessary to enable
each Relevant Company and each Turkcell Group Company to carry on its
business and/or use its assets effectively in the places and in the
manner in which such business is now carried on and/or assets are
presently used have been obtained by the relevant such company; all such
licences consents permissions and authorities are in full force and
effect and fully complied with by the relevant company; and neither of
the Cukurova Parties is aware of any circumstances indicating that any
of the same is likely to be suspended cancelled revoked or not renewed
in the ordinary course.
11. LITIGATION
11.1 No Relevant Company and no Turkcell Group Company is engaged or
proposing to engage in or the subject of any litigation, arbitration,
investigation, prosecution, or other Proceedings or any claims or
actions which involve an amount in controversy in excess of $10,000,000.
11.2 So far as each of the Cukurova Parties are aware, no such litigation
arbitration investigation prosecution or other tribunal or legal
proceedings or claims or actions are in progress, outstanding, pending,
or threatened by or against any Relevant Company or any Turkcell Group
Company, any of their respective assets or any person for whom any such
company is vicariously responsible, or in respect of which any such
company is or could be liable to indemnify or compensate any third
party.
38
11.3 So far as each of the Cukurova Parties are aware, there are no facts or
other circumstances which will or could reasonably be expected to give
rise to or result in such litigation arbitration investigation
prosecution or other tribunal or legal proceedings or claims or actions.
12. BREACHES
No Relevant Company and no Turkcell Group Company nor any person for
whom any such company is vicariously responsible has committed any
breach of or failed to perform or observe any provision of its
Memorandum or Articles of Association or of any legislation in any part
of the world or any covenant or agreement or the terms or conditions of
any consent or licence or any judgment or order of a Court or other
competent tribunal or authority by which any such company is bound or to
which it is a party or which affects any of its assets.
13. INSURANCE
13.1 Each Relevant Company and each Turkcell Group Company is and has at all
material times been fully covered by valid insurances against all normal
risks having regard to the type of business carried on and assets owned
or used by it including adequate insurance for the full replacement or
reinstatement value of such business and assets against liability to
third parties (including product liability).
13.2 Each of the policies of insurance to which any of the Relevant Companies
and any of Turkcell Group Companies is a party are valid and enforceable
and all premiums due have been paid
14. EMPLOYEES
14.1 Since the Accounting Date no material alteration has been made in the
terms of the employment or conditions of service of any senior officer
or employee or consultant or agent of any Relevant Company or any
Turkcell Group Company.
14.2 No senior officer or employee consultant or agent of the any Relevant
Company or any Turkcell Group Company has given or received notice
terminating his employment or engagement or is entitled (without giving
proper notice) to terminate his employment or engagement with any
Relevant Company or any Turkcell Group Company.
15. ARRANGEMENTS WITH CONNECTED PERSONS
15.1 None of Cukurova, Cukurova Finance nor any Cukurova Director nor any
Relevant Company nor any connected person or associate of any of them
has any interest, direct or indirect, in any agreement or arrangement to
which any Relevant Company or Turkcell Group Company is a party or in
any business which has a close trading relationship with that of any
Relevant Company or Turkcell Group Company or which is or is likely to
become competitive with the business of any Relevant Company or Turkcell
Group Company.
15.2 Save for remuneration and expenses properly due to its directors in the
ordinary course, there are no amounts owing by or to any Relevant
Company or any Turkcell Group Company to or by any member of the
Cukurova Group or Cukurova Director or any connected person or associate
of any of them respectively and no Relevant Company and no Turkcell
Group Company is under any liability (contingent or otherwise) in
respect of any guarantee suretyship indemnity or like obligation given
by or binding on the relevant such company in respect of any liabilities
or obligations of any such shareholders directors or connected persons
or associates.
39
16. THE COMPANY AND THE RELEVANT SHARES
16.1 The information set out in the Recitals and in Schedules 1, 2 and 6 is
true, correct and not misleading.
16.2 (A) The Relevant Shares have been issued in proper legal form and
are fully paid or credited as fully paid.
(B) On Completion, the Company will be the absolute legal and
beneficial owner directly or indirectly of all of the Relevant
Shares, free from all claims, liens, encumbrances and equities
whatsoever.
(C) Cukurova Finance is the absolute legal and beneficial owner of
the Existing Shares and will on Completion be the absolute legal
and beneficial owner of the Cukurova Subscription Shares in each
case free from all claims, liens, encumbrances and equities
whatsoever, save in each case, for encumbrances, liens or
equities granted by the Cukurova Parties pursuant to the
Transaction Documents.
(D) The Company will on Completion have the full power, right and
authority to issue the Cukurova Subscription Shares to Cukurova
and to issue the Convertible Bonds to Alfa and to issue any
other securities issuable pursuant to the Convertible Bond
Instrument in accordance with its terms.
16.3 There is not now any debenture or loan capital or any agreement to
create or issue any debenture or loan or share capital of the Company,
any Relevant Company or any Turkcell Group Company or any option to
subscribe for or acquire of any agreement to put under option any
debenture or loan or share capital of the Company, any Relevant Company
or any Turkcell Group Company and no person has the right (whether
pursuant to conversion or otherwise) to call for the issue of any
debenture or share or loan capital of the Company, any Relevant Company
or any Turkcell Group Company under any agreement or other arrangement
presently in force.
16.4 Except for CTI and Intercon, the Company does not have and has never
been or had any subsidiary and nor has it ever been the legal or
beneficial owner of any share or loan capital of any company.
16.5 Since incorporation neither the Company nor CTI have (except for as
contemplated by this Agreement):
(A) granted any option or right to subscribe for, or issued any
securities convertible into, any share in the capital of the
Company or CTI or agreed to do so (in each case whether or not
conditional or contingent);
(B) redeemed or purchased, or agreed to redeem or purchase, any of
its shares;
(C) declared or paid any dividend or made any other distribution to
its shareholders;
(D) acquired, or agreed to acquire, any asset or property;
(E) traded or carried on any business or activities of any nature;
40
(F) entered into, or agreed to enter into, any agreement,
arrangement, commitment or transaction of any nature or incurred
any liability or obligation (whether actual, conditional,
contingent or otherwise), except for its formation expenses and
the fees of professional advisers incurred in connection with
this Agreement and the other agreements contemplated by it;
(G) obtained any employees; or
(H) passed any resolution of shareholders or directors;
16.6 The statutory books and all minute books of the Company and CTI have
been properly kept and contain a true, complete and accurate record of
the matters which should be dealt with in those books and are not
misleading.
17. TAX
17.1 All liabilities, whether actual, deferred, contingent or disputed, of
each Relevant Company and each Turkcell Group Company for Tax measured
by reference to income, profits or gains earned, accrued or received on
or before the Accounting Date or arising in respect of an event
occurring or deemed to occur on or before the Accounting Date are fully
provided for in the Accounts. No Relief taken into account in computing
or eliminating any provision for deferred tax in the Accounts has been
or could be prejudiced by any event occurring or occurred after the
Accounting Date.
17.2 Since the Accounting Date:
(A) no Relevant Company and no Turkcell Group Company has been
involved in any transaction which has given or may give rise to
a liability to Tax on any Relevant Company or any Turkcell Group
Company (ignoring for these purposes the availability of any
Relief) other than Tax in respect of normal trading income or
receipts of the relevant company concerned arising from
transactions entered into by it in the ordinary course of
business; and
(B) no disposal or other event has taken place which has or may have
the effect crystallising a liability to Tax which, if such
disposal or event had been planned or predicted at the
Accounting Date, should have been reflected in the provision for
deferred tax contained in the Accounts.
17.3 Each Relevant Company and each Turkcell Group Company has duly, and
within any appropriate time limits, paid all Tax due, made all returns,
given all notices, and supplied all other information required to be
supplied to all relevant tax authorities; all such information was and
remains complete and accurate in all material respects and all such
returns and notices were and remain compete and accurate in all material
respects and were made on the proper basis and do not, and are not
likely to, reveal any transactions which may be the subject to any
dispute with any tax authority.
17.4 No Relevant Company and no Turkcell Group Company is involved in any
current dispute with any Tax authority or has in the last 6 years been
the subject of any investigation, audit or non-routine visit by any Tax
authority, and there is no planned investigation, audit or non-routine
visit to the knowledge of the officers of the Relevant Companies. There
are no circumstances under which any Relevant Company or any officer of
any Relevant Company (in that capacity) or any Turkcell Group Company or
any officer of any Turkcell Group Company (in that capacity) could
become liable to pay any interest, fine or penalty to any Tax authority.
41
17.5 No action, omission or practice of any Relevant Company or any Turkcell
Group Company is or has been in material breach of any Tax law and all
transactions between persons associated for the purposes of any transfer
pricing or their capitalisation provisions are and have been conducted
on arms length terms so are not subject to adjustment for transfer
pricing purposes in any jurisdiction.
17.6 No Relevant Company and no Turkcell Group Company has a liability to Tax
which is properly payable by either of the Cukurova Parties or any of
their respective Affiliates (other than a Relevant Company or Turkcell
Group Company) and which has fallen to be paid by a Relevant Company or
Turkcell Group Company due to the failure of either of the Cukurova
Parties or their respective Affiliates aforesaid to pay that Tax when
due and no such liability to Tax on the part of Alfa, the Company, a
Relevant Company or Turkcell Group Company will arise if either of the
Cukurova Parties or any of their respective Affiliates aforesaid or
associates fails to pay any liability to Tax when due.
18. PENSIONS
18.1 For the purposes of this paragraph 18, "Benefits Plans" means any
scheme, agreement or arrangement (whether legally enforceable or not and
including any ex gratia amounts) for the provision of any pension,
retirement, death, incapacity, sickness, disability, accident or other
like benefits for any employee, director, former employee or former
director of any Relevant Company or Turkcell Group Company or for the
widow, widower, child or dependant of any such employee.
18.2 There are disclosed in the Cukurova Disclosure Letter full details of
all Benefits Plans that any Relevant Company or Turkcell Group Company
is a party to or participates in or contributes to, sufficient to allow
Alfa to fully analyse any liability that it or any Relevant Company may
have under the Benefits Plans.
18.3 Each Relevant Company and each Turkcell Group Company has each complied
with all legal requirements of any country in which it operates to be a
party to or participate in or contribute to any Benefits Plan, including
participation in any state or other statutory Benefits Plan.
18.4 All Benefits Plans are operated in full compliance with any laws that
relate thereto and no employees have been excluded from them in
contravention of any legal right or duty.
18.5 The ongoing cost and liability of any Benefits Plan is fully and fairly
disclosed in the Accounts of the relevant company and is fully funded
and no promise or undertaking (whether legally binding or not) has been
given to any employees of such companies or any other party which would,
if carried out, lead to a material increase in such costs or
liabilities.
42
SCHEDULE 4
ALFA WARRANTIES
1. CAPACITY AND AUTHORITY
1.1 INCORPORATION
Alfa is a company duly incorporated and validly existing under the laws
of its country of incorporation. Its entire issued share capital is
beneficially owned by Alfa Finance Holdings S.A.
1.2 AUTHORITY TO ENTER INTO TRANSACTION DOCUMENTS
Alfa has the legal right and full power and authority to enter into, and
perform its obligations under, the Transaction Documents, which when
executed will constitute valid and binding obligations on it in
accordance with their respective terms.
1.3 NO BREACH
The execution and delivery of. and the performance by Alfa of its
obligations under the Transaction Documents will not:-
(A) result in a breach of any provisions of its constitutional
documents;
(B) result in a breach by it of any order, judgment, injunction or
decree of any Court, governmental agency or regulatory body
having appropriate authority;
(C) conflict with or result in a breach of, or give rise to an event
of default under, or require the consent of a person under, or
relieve a person from an obligation under, any agreement or
arrangement to which it is a party and which is of material
importance to it; or
(D) make it liable under their articles of association,
constitutional documents or any agreement or arrangement to
offer for sale, transfer or otherwise dispose of (i) any assets
of material importance to any of them and/or (ii) shares held by
it in other bodies corporate.
1.4 Authority to carry on business
Alfa has and has had since the Accounting Date the legal right and full
power and authority to carry on its business.
1.5 Authorisation
All corporate action, and all applicable governmental, statutory,
regulatory or other consents required by Alfa to authorise the execution
and delivery of, and to perform its obligations under the Transaction
Documents will have been taken and/or obtained by Completion.
43
SCHEDULE 5
FORMS OF SUBSCRIPTION INSTRUMENT
PART A - ALFA SUBSCRIPTION INSTRUMENT
ALFA TELECOM TURKEY LIMITED
Geneva Place, Waterfront Driv
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
[ date ]
The Directors
Cukurova Telecom Holdings Limited
Craigmuir ▇▇▇▇▇▇▇▇, P.O. Box 71
Road Town, Tortola
British Virgin Islands
Dear Sirs
SUBSCRIPTION FOR CONVERTIBLE BONDS AND A SPECIAL SHARE
We hereby subscribe for US$1,593,000,000 Convertible Bonds (the "Convertible
Bonds") in Cukurova Telecom Holdings Limited, a BVI Business Company with
company number 1000030 (the "Company") constituted by an Instrument dated [ ]
2005 (the "Instrument") for a consideration of US$1,593,000,000 in cash,
together with the other securities which are issuable to the holder of the
Convertible Bonds under the terms and conditions of the Instrument at the time
of such subscription.
The Convertible Bonds shall be issued subject to the Instrument and shall not be
subject to any additional designations powers preferences rights qualifications
or limitations.
We consent to becoming the holder of the Convertible Bonds and any other such
securities.
This letter is governed by British Virgin Islands law. Any disputes relating to
this letter shall be resolved by arbitration in accordance with the provisions
for arbitration in the articles of association of the Company.
Yours faithfully
ALFA TELECOM TURKEY LIMITED
---------------------------
44
PART B - CUKUROVA SUBSCRIPTION INSTRUMENT
CUKUROVA FINANCE INTERNATIONAL LIMITED
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[ date ]
The Directors
Cukurova Telecom Holdings Limited
Craigmuir ▇▇▇▇▇▇▇▇, P.O. Box 71
Road Town, Tortola
British Virgin Islands
Dear Sirs
SUBSCRIPTION FOR SHARES
We hereby subscribe for 49 B Shares (the "Shares") of no par value in the
capital of Cukurova Telecom Holdings Limited, a BVI Business Company with
company number 1000030 (the "Company") for [figure to be inserted as per
Subscription Agreement prior to signature of Instrument.]
The Shares shall be issued subject to the memorandum and articles of association
of the Company, and shall not be subject to any additional designations, powers,
preferences, rights, qualifications or limitations.
We consent to becoming the holder of the Shares.
This letter is governed by British Virgin Islands law. Any disputes relating to
this letter shall be resolved by arbitration in accordance with the provisions
for arbitration in the articles of association of the Company.
Yours faithfully
CUKUROVA FINANCE INTERNATIONAL LIMITED
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SCHEDULE 6
EXISTING INTERESTS OF THE CUKUROVA GROUP IN TURKCELL
PERCENTAGE OF ISSUED
SHAREHOLDER NUMBER OF SHARES SHARE CAPITAL
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Cukurova Holding A.S. 109,195,314,495 7.40%
Cukurova Investments N.V. 43,230,288,153 2.93%
Yapi ve Kredi Bankasi A.S. 42,807,402,352 2.90%
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Total 195,233,005,000 13.23%
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CUKUROVA HOLDING A.S.:
/s/ ▇▇▇▇▇▇ ▇▇▇▇ Karamehmet
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For and on behalf of CUKUROVA HOLDING A.S.
By: ▇▇▇▇▇▇ ▇▇▇▇ Karamehmet
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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For and on behalf of CUKUROVA HOLDING A.S.
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
being persons who, in accordance with the laws of
the Republic of Turkey, are acting under the authority
of that company
In the presence of:
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/s/ ▇▇▇▇ ▇▇▇▇▇▇, Attorney
EXECUTED and DELIVERED AS )
A DEED for and on behalf of )
ALFA TELECOM TURKEY LIMITED )
by its duly constituted attorney-in-fact )
Attorney /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Witness: /s/ ▇▇▇▇▇▇ ▇▇▇▇
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EXECUTED and DELIVERED AS )
A DEED for and on behalf of )
CUKUROVA FINANCE )
INTERNATIONAL LIMITED )
by its duly constituted attorney-in-fact )
Attorney /s/ ▇▇▇▇▇▇ ▇▇▇▇ Karamehmet
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Witness: /s/ ▇▇▇▇ ▇▇▇▇▇▇, Attorney
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