1
EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
dated as of May 30, 2001
between and among
TELENOR EAST INVEST AS,
ECO TELECOM LIMITED
and
OPEN JOINT STOCK COMPANY "VIMPEL-COMMUNICATIONS"
1
2
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND INTERPRETATION ............................................... 1
1.01 DEFINITIONS .................................................................... 1
1.02 INTERPRETATION ................................................................. 12
ARTICLE II TRANSFERS ................................................................... 13
2.01 TRANSFERS; NOTICE OF CERTAIN TRANSFERS ...................................... 13
2.02 EFFECT OF TRANSFERS ............................................................ 14
ARTICLE III REGISTRATION RIGHTS ........................................................ 15
3.01 DEMAND REGISTRATION ............................................................ 15
3.02 PIGGY-BACK REGISTRATION; PRIORITY ON UNDERWRITTEN OFFERINGS .................... 16
3.03 EXPENSES OF REGISTRATION ....................................................... 18
3.04 INDEMNIFICATION ................................................................ 19
3.05 ECO TELECOM CONTRIBUTION DEFAULT ............................................... 21
3.06 INFORMATION TO BE PROVIDED BY HOLDERS .......................................... 22
3.07 OBLIGATIONS OF THE COMPANY ..................................................... 22
3.08 REPORTING ...................................................................... 24
3.09 STANDOFF AGREEMENT ............................................................. 24
3.10 CURRENCY OF REGISTRATION AND PUBLIC INFORMATION ................................ 24
ARTICLE IV COVENANTS OF THE COMPANY .................................................... 25
ARTICLE V COVENANTS OF TELENOR AND ECO TELECOM ......................................... 25
5.01 [INTENTIONALLY OMITTED] ........................................................ 25
5.02 NON-COMPETE .................................................................... 25
5.03 DEBT ACQUISITION ............................................................... 27
5.04 COMPLIANCE WITH TRADING POLICY ................................................. 29
ARTICLE VI MISCELLANEOUS ............................................................... 29
6.01 EFFECTIVENESS; TERM ............................................................ 29
6.02 NOTICES ........................................................................ 29
6.03 ENTIRE AGREEMENT ............................................................... 31
6.04 WAIVER ......................................................................... 31
6.05 AMENDMENT ...................................................................... 32
6.06 NO ASSIGNMENT; BINDING EFFECT; NO THIRD PARTY BENEFICIARY; OBLIGATIONS SEVERAL . 32
6.07 HEADINGS ....................................................................... 32
6.08 INVALID PROVISIONS ............................................................. 32
6.09 ARBITRATION; CONSENT TO JURISDICTION; SERVICE OF PROCESS;
WAIVER OF SOVEREIGN IMMUNITY ................................................... 33
6.10 GOVERNING LAW .................................................................. 34
6.11 COUNTERPARTS ................................................................... 34
EXHIBIT A FORM OF ENDORSEMENT
SCHEDULE 1 PROCEDURES FOR DETERMINATION OF FAIR MARKET VALUE
SCHEDULE 5.02(B) EXISTING INVESTMENTS
SCHEDULE 5.02(C) EXCLUDED OPPORTUNITIES
i
3
REGISTRATION RIGHTS AGREEMENT dated as of May 30, 2001 between and
among TELENOR EAST INVEST AS, a company organized and existing under the laws of
Norway ("Telenor"), ECO TELECOM LIMITED, a company organized and existing under
the laws of Gibraltar ("Eco Telecom"), and OPEN JOINT STOCK COMPANY
"VIMPEL-COMMUNICATIONS", an open joint stock company organized and existing
under the laws of the Russian Federation (the "Company").
WHEREAS, Telenor, Eco Telecom and the Company desire to enter into this
Agreement to provide for, among other things, certain rights and obligations of
the Parties relating to their respective ownership of the Shares (as hereinafter
defined);
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I DEFINITIONS AND INTERPRETATION
1.01 Definitions
As used herein, the following terms shall have the following meanings:
"Account Bank" shall mean Citibank T/O (OOO), as the account bank under
the Escrow Agreement.
"Account Bank and Overdraft Facility" shall mean the Account Bank and
Overdraft Facility dated the date hereof between and among the Company, VIP-R,
Eco Telecom and the Account Bank.
"ADSs" shall mean the Company's American Depositary Shares, each
representing three quarters (3/4) of one (1) share of the Company's Common
Stock, which are currently listed on the NYSE.
"Affiliate" shall mean, with respect to any Person, any other Person
which directly or indirectly controls, or is under common control with, or is
controlled by, such Person, including, if such Person is an individual, any
relative or spouse of such Person, or any relative of such spouse of such
Person, any one of whom has the same home as such Person, and also including any
trust or estate for which any such Person or Persons specified herein, directly
or indirectly, serves as a trustee, executor or in a similar capacity
(including, without limitation, any protector or settlor of a trust) or in which
such Person or Persons specified herein, directly or indirectly, has a
substantial beneficial interest and any Person who is controlled by any such
trust or estate. As used in this definition, "control" (including, with its
correlative meanings, "controlled by" and "under common control with") shall
mean, with respect to any Person, the possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
Contract or otherwise) of such Person; provided, however, that for the purposes
of this definition, neither the Company nor any of its Controlled Affiliates,
nor VIP-R nor any of its Controlled Affiliates, shall be deemed Affiliates of
any Shareholder.
4
"Agreement" shall mean this Registration Rights Agreement.
"Alfa Bank" shall mean OAO "Alfa-Bank", an open joint stock company
organized and existing under the Laws of the Russian Federation.
"Alfa Bank Guarantee" shall mean the Guarantee dated as of the date
hereof, executed and delivered by Alfa Bank, as guarantor, in favor of the
Company, as beneficiary.
"Bee Line Fund" shall mean "Bee Line" Non-Profit Fund (known in Russian
and formerly known in English as the Fund for Non-Commercial Programs "Bee
Line"), a nonprofit organization organized and existing under the Laws of the
Russian Federation.
"Board" shall mean the Board of Directors of the Company.
"Business" shall mean the cellular mobile telecommunications business
(including, without limitation, GSM, UMTS and 3G and other new standards or
technologies), it being understood that this shall not include fixed wireless
extensions (including, without limitation, Last Mile Digital Subscriber (LMDS),
Bluetooth, wireless local area network (wireless LAN) or any form of Digital
Subscriber Line (xDSL) services), fixed wireless access (including, without
limitation, point to point and point to multipoint), satellite mobile services,
mobile Internet portals and related content services, and similar businesses.
"Business Day" shall mean a day other than a Saturday, a Sunday or any
day on which banks located in Moscow, Russia, London, England, Oslo, Norway, or
New York, New York are authorized or obliged to close.
"Change of Control" shall mean, with respect to any Party or any
Controlling Person of such Party, (a) the sale or other disposition of all or
substantially all of such Party's or such Controlling Person's assets, in one or
a series of related transactions, to any Person or Persons (other than a
Controlling Person of such Party or any Controlled Affiliate or Controlled
Affiliates of such Controlling Person), (b) the sale or other disposition of
more than fifty percent (50%) of the securities having ordinary voting power for
the election of directors or other governing body of such Party or Controlling
Person, in one or a series of related transactions, to any Person or Persons
(other than a Controlling Person of such Party or any Controlled Affiliate or
Controlled Affiliates of such Controlling Person), (c) the merger or
consolidation of such Party or Controlling Person with or into another Person or
the merger of another Person into such Party or Controlling Person with the
effect that any Person or Persons other than the existing shareholders of such
Party or Controlling Person prior to such transaction own or control, directly
or indirectly, more than fifty (50%) of the securities having ordinary voting
power for the election of directors or other governing body of the Person
surviving such merger, or the Person resulting from such consolidation, or (d)
the liquidation or dissolution of such Party or Controlling Person; provided,
however, that a Change of Control shall not include (i) a bona fide underwritten
public offering of the capital stock of such Party or any Controlling Person of
such Party, or (ii) any of (A) the sale of all or substantially all of the
assets of Telenor ASA, Telenor Communication AS, Telenor Mobile Communications
AS or CTF Holdings, (B) the sale of more than fifty percent (50%) of the
securities having ordinary voting power for the election of directors or other
governing body of Telenor ASA, Telenor Communication AS, Telenor Mobile
Communications AS or CTF Holdings, (C) the liquidation or dissolution of Telenor
ASA, Telenor Communication
2
5
AS, Telenor Mobile Communication AS or CTF Holdings or (D) any merger,
consolidation, divestiture or de-merger to which Telenor ASA, Telenor
Communication AS, Telenor Mobile Communications AS or CTF Holdings is a party.
"Charter" shall have the meaning specified in the Primary Agreement
III.
"Closing" shall have the meaning specified in the Primary Agreement
III.
"Closing Date" shall have the meaning specified in the Primary
Agreement III.
"Common Stock" shall mean shares of common stock of the Company, as
defined in Section 6.1 of the Charter.
"Company" shall have the meaning specified in the preamble hereto.
"Consolidated Subsidiary" shall mean, at any time, a consolidated
subsidiary of a Person, as identified in such Person's financial statements for
its most recent fiscal year audited in accordance with GAAP.
"Contract" shall mean any agreement, letter of intent, lease, license,
evidence of Indebtedness, mortgage, indenture, security agreement or other
contract or understanding (whether written or oral), in each case, to the extent
legally binding.
"Controlled Affiliate" shall mean, with respect to any Person, any
Affiliate of such Person in which such Person owns or controls, directly or
indirectly, more than fifty percent (50%) of the securities having ordinary
voting power for the election of directors or other governing body thereof or
more than fifty percent (50%) of the partnership or other ownership interests
therein (other than as a limited partner).
"Controlling Interest" shall mean the ownership or control, direct or
indirect, of more than fifty percent (50%) of the securities having ordinary
voting power for the election of directors or other governing body of a Person
or more than fifty percent (50%) of the partnership or other ownership interests
therein (other than as a limited partner of such Person).
"Controlling Person" shall mean, with respect to any Person, any other
Person which owns or controls, directly or indirectly, more than fifty percent
(50%) of the securities having ordinary voting power for the election of
directors or other governing body of such first Person or more than fifty
percent (50%) of the partnership or other ownership interests therein (other
than as a limited partner of such first Person).
"CTF Holdings" shall mean CTF Holdings Limited, a company organized and
existing under the Laws of Gibraltar.
"Debt Obligation" shall mean, with respect to any Person, any
obligation of such Person (a) for borrowed money; (b) evidenced by notes, bonds,
debentures or similar instruments; (c) for the deferred purchase price of goods
or services (other than trade payables or accruals incurred in the ordinary
course of business); (d) arising out of any credit facility or similar financial
accommodation; (e) in respect of any liabilities and obligations of
3
6
third parties (referred to in this definition or otherwise) to the extent that
they are guaranteed by such Person or such Person has otherwise assumed or
become liable for the payment of such liabilities or obligations or to the
extent that they are secured by any Lien upon property owned by such Person,
whether or not such Person has assumed or become liable for the payment of such
liabilities or obligations; (f) arising under any lease that would be
capitalized on the balance sheet of such Person in accordance with GAAP or
Russian Accounting Standards (RAS) that is otherwise in substance a financing
lease; (g) arising in respect of any security, any acceptance or documentary
credit or any receivables sold or discounted other than on a non-recourse basis;
(h) for trade payables incurred in the ordinary course of business; (i) arising
in connection with damages, fines, penalties, compensatory damages and other
charges of similar kind or nature that may be assessed, charged or appraised
against such Person under any loan agreement, sale-purchase agreement, delivery
of goods (works, services) agreement, lease agreement or any other agreement of
commercial nature; (j) arising in connection with any other transaction that, in
accordance with GAAP or RAS, results in such obligation being treated as
"indebtedness"; (k) any other monetary obligation of a Person to pay an amount
of money in excess of 500 minimum monthly wages (as such minimum monthly wage is
determined in accordance with Russian law) to a counter-party either under an
agreement or on another basis, including without limitation on the basis of a
normative act of a state body (including without limitation payments to state
bodies such as taxes, fees or fines) or a judicial decree or order; and (l) any
other obligation or liability of a Person (whether absolute, accrued,
contingent, fixed or otherwise, and whether due or to become due).
"Debt Transaction" shall mean any transaction by which a Standstill
Party directly or indirectly makes any loan or extends any credit to any
Protected Party or otherwise becomes an obligee or holds or is a beneficiary of
any Debt Obligation of any Protected Party (other than the Telenor Service
Obligation Agreement).
"Demand" shall have the meaning specified in Section 3.01(a).
"Depositary" shall mean The Bank of New York, as depositary, under the
Deposit Agreement dated as of November 20, 1996, as amended, between and among
the Company, the Depositary and the owners and beneficial owners from time to
time of the Company's American Depositary Receipts.
"Direct Competitor" shall mean, as at any date of determination, any
Person, or any Controlling Person of such Person or any Controlled Affiliate of
any such Controlling Person (other than the Company or VIP-R or any of their
respective Controlled Affiliates), which is engaged in or proposes to engage in
the Business and which owns or controls a telecommunications license for the
Business in the Moscow License Area or any ten (10) subjects (subiyekti) of the
Russian Federation for which any of the Company, VIP-R or any of their
respective Controlled Affiliates holds a telecommunications license for the
Business.
"▇▇. ▇▇▇▇▇" shall mean ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, a Russian citizen.
"Eco Holdings" shall mean Eco Holdings Limited, a company organized and
existing under the Laws of Gibraltar.
4
7
"Eco Shareholders" shall mean, collectively, Eco Telecom (which, for
the avoidance of doubt, shall be deemed a Shareholder upon its execution and
delivery of this Agreement) and any Permitted Transferee of Eco Telecom which
becomes a party to this Agreement in accordance with Article II, and
individually, any of them.
"Eco Shares" shall mean the shares of Common Stock and shares of
Preferred Stock which will be owned by Eco Telecom after giving effect to the
transactions contemplated by the Principal Agreements.
"Eco Telecom" shall have the meaning specified in the preamble hereto.
"Eco Telecom Contribution Default" shall have the meaning specified in
the VIP-R Primary Agreement.
"Eco Telecom Guarantee Agreement" shall mean the Guarantee Agreement
dated as of the date hereof between and among CTF Holdings, Eco Holdings,
Telenor, the Company and VIP-R.
"Eco Telecom VIP-R Preferred Stock Purchase Agreement" shall mean the
Stock Purchase Agreement substantially in the form attached as Annex A to
Schedule 2.07(a) to the VIP-R Primary Agreement, to be entered into at the
Preferred Stock Closing Date by Eco Telecom and VIP-R.
"Eco Telecom Share Purchase Agreements" shall mean, collectively, the
Share Purchase Agreement dated as of the date hereof between Eco Telecom and ▇▇.
▇▇▇▇▇ with respect to shares of Common Stock and the Share Purchase Agreement
dated the date hereof between Overture and Eco Telecom with respect to shares of
Preferred Stock and shares of Common Stock.
"Equity Interest" shall mean any share of capital stock of such Person,
or any partnership share or other ownership interest in such Person.
"Endorsement" shall mean an endorsement to this Agreement in the form
of Exhibit A.
"Escrow Agent" shall mean Citibank, N.A., London Branch, as escrow
agent under the Escrow Agreement.
"Escrow Agreement" shall mean the Escrow Agreement dated the date
hereof between and among Eco Telecom, the Escrow Agent and the Company.
"Exchange Act" shall mean the United States Securities Exchange Act of
1934, as amended, and the rules and regulations of the SEC promulgated
thereunder.
"Existing Investments" shall have the meaning specified in Section
5.02(b)(ii).
"Fair Market Value" shall mean, as of any date of determination for any
securities which are listed, traded or quoted on a national or international
securities exchange, the average of the Market Prices for such securities for
the thirty (30) trading days prior to such
5
8
date of determination. For any securities not so listed, traded or quoted, "Fair
Market Value" shall have the meaning specified in Schedule 1 to this Agreement.
"Final Date" shall have the meaning specified in the Primary Agreement
III.
"GAAP" shall mean United States generally accepted accounting
principles.
"Glavsotkom" shall mean Glavsotkom LLC, a limited liability company
organized and existing under the Laws of the Russian Federation.
"Governmental or Regulatory Authority" shall mean any court, tribunal,
arbitrator, legislature, government, ministry, committee, inspectorate,
authority, agency, commission, official or other competent authority of the
Russian Federation, any other country or any state, as well as any county, city
or other political subdivision of any of the foregoing.
"Holder" shall mean the Eco Shareholders, the Telenor Shareholders and
such of their respective successors, assigns and transferees that acquire
Registrable Securities, directly or indirectly, from them, in each case, in
accordance with Section 2.02.
"Indebtedness" shall mean, with respect to any Person, all obligations
of such Person (a) for borrowed money, (b) evidenced by notes, bonds, debentures
or similar instruments, (c) for the deferred purchase price of goods or services
(other than trade payables or accruals incurred in the ordinary course of
business), (d) under capital leases or (e) in the nature of a guarantee of any
obligation described in clauses (a) through (d) above of any other Person.
"Indemnified Party" shall have the meaning specified in Section
3.04(c).
"Indemnifying Party" shall have the meaning specified in Section
3.04(c).
"Investments" shall mean all debentures, notes and other evidences of
Indebtedness, stocks, securities (including rights to purchase and securities
convertible into or exchangeable for other securities), interests in joint
ventures, general and limited partnerships, and other Persons, mortgage loans
and other investment or portfolio assets owned of record or beneficially by a
Person (other than (a) any direct or indirect Subsidiaries of the Company or any
ownership interests therein and (b) any short-term trade receivables generated
in the ordinary course of business).
"Lien" shall mean any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or
any conditional sale Contract, title retention Contract or other Contract to
give any of the foregoing.
"Market Price" shall mean the price of one Share or unit on the
relevant date, determined:
(a) on the basis of the last reported sales price regular way on the
NYSE, or, if the securities are not listed or admitted to trading on the NYSE,
on the principal US national securities exchange on which the securities are
listed or admitted to trading;
6
9
(b) if there is no such reported sale price on such day, on the basis
of the average of the reported closing bid and asked prices regular way on the
NYSE, or, if the securities are not listed or admitted to trading on the NYSE,
on the principal US national securities exchange on which the securities are
listed or admitted to trading;
(c) if the securities are not listed on any national securities
exchange, on the basis of the average of the high bid and low asked quotations
on the over-the-counter market as furnished by any NYSE firm selected from time
to time by the issuer for that purpose; or
(d) if not so quoted, on the basis of the closing prices on the
principal international stock exchange on which the securities are then listed
and traded.
"Moscow License Area" shall mean the city of Moscow and the Moscow
region (Moskovskaya Oblast).
"New Securities" shall mean any capital stock of the Company, whether
or not authorized, and any rights, options or warrants to purchase such capital
stock, and securities of any type whatsoever that are, or may become,
convertible into or exchangeable for capital stock.
"NYSE" shall mean The New York Stock Exchange.
"Offer Notice" shall have the meaning specified in Section 5.03(b)(i).
"Opportunity" shall have the meaning specified in Section 5.02(c).
"Option Agreement" shall mean the Option Agreement dated as of the date
hereof between Eco Telecom and Telenor.
"Overture" shall mean Overture Limited, an exempted company limited by
shares organized and existing under the Laws of Bermuda.
"Party" shall mean (a) each of the Company, Eco Telecom and Telenor and
(b) each Person who acquires Shares in accordance with Article II and executes
an Endorsement.
"Permitted Transferee" shall mean, with respect to any Shareholder, any
Controlling Person of such Shareholder, or any Controlled Affiliate of any such
Controlling Person or Shareholder.
"Person" shall mean any natural person, corporation, general
partnership, simple partnership, limited partnership, limited liability
partnership, limited liability company, proprietorship, other business
organization, trust, union, association or Governmental or Regulatory Authority,
whether incorporated or unincorporated.
"Preferred Stock" shall mean collectively, the shares of preferred
stock of the Company, as defined in the Charter.
"Preferred Stock Call Option" shall have the meaning specified in the
Primary Agreement III.
7
10
"Preferred Stock Closing Date" shall have the meaning specified in the
VIP-R Primary Agreement.
"Price Notice" shall have the meaning specified in Section 5.03(b)(ii).
"Primary Agreement I" shall mean the Primary Agreement dated as of
December 1, 1998 between the Company and Telenor.
"Primary Agreement II" shall mean the Primary Agreement (Financing
Vehicles) dated as of June 23, 2000 between and among Telenor, VimpelCom Finance
B.V. and designees of VimpelCom Finance B.V. party thereto from time to time.
"Primary Agreement III" shall mean the Primary Agreement dated as of
the date hereof between and among the Company, Eco Telecom and Telenor.
"Primary Agreements" shall mean, collectively, the Primary Agreement I,
the Primary Agreement II and the Primary Agreement III
"Principal Agreements" shall mean this Agreement, the Primary Agreement
III, the Shareholders Agreement, the Escrow Agreement, the Account Bank and
Overdraft Facility, the Option Agreement, the Zimin Principal Agreements, the
Eco Telecom VIP-R Preferred Stock Purchase Agreement, the Eco Telecom Guarantee
Agreement, the Alfa Bank Guarantee, the Telenor Guarantee Agreement, the
Undertaking Letters, the VIP/Eco Telecom Share Purchase Agreement, the VIP-R
Primary Agreement, the VIP-R Shareholders Agreement, the VIP-R Registration
Rights Agreement, the Termination Agreement, the Supplemental Agreements and the
Trademark Agreements.
"Protected Party" shall mean any of the Company, VIP-R or any of their
respective Controlled Affiliates.
"Register", "Registered", and "Registration" shall mean a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act and the declaration or ordering of the effectiveness of such
registration statement.
"Registrable Securities" shall mean any ADSs or shares of Common Stock
(excluding any warrants or other securities convertible into or exchangeable for
shares of Common Stock) that any Holder may own (whether now owned or acquired
after the date hereof), including any such ADSs or shares of Common Stock
acquired by any Holder as a result of the exercise by such Holder of any Option
as defined in the Option Agreement. As to any ADSs or shares of Common Stock
which are Registrable Securities, such ADSs or shares shall cease to be
Registrable Securities when (a) such ADSs or shares, as the case may be, have
been sold by such Holder pursuant to a registration statement which shall have
become effective under the Securities Act, (b) such ADSs or shares shall have
been distributed pursuant to Rule 144, Rule 144A, Rule 145 or any similar
provision then in force, under the Securities Act, and the transferee(s) thereof
have not become party to this Agreement in accordance with Article II, (c) such
ADSs or shares shall have been Transferred, in violation of this Agreement, (d)
such ADSs or shares shall be eligible for sale by such Holder pursuant to Rule
144(k) under the Securities Act or (e) such ADSs or shares shall cease to be
8
11
outstanding. So long as the Company maintains its registration with the SEC of
the ADSs, Registrable Securities consisting of shares of Common Stock shall be
deposited with the Depositary and registration shall be made of ADSs (for sale
thereof in a public offering), and not of Common Stock, under this Agreement.
"Registration Expenses" shall mean all expenses incurred by the Company
in effecting any registration pursuant to this Agreement, including, without
limitation, all registration, qualification and filing fees, depositary fees,
printing expenses, escrow fees, fees and disbursements of counsel for the
Company, blue sky fees and expenses, the expenses of any regular or special
audits incident to or required by any such registration, but excluding (a)
Selling Expenses, (b) the compensation of regular employees of the Company
(which shall be paid in any event by the Company) and (c) premiums in respect of
the insurance policy described in Section 3.04(e).
"Relevant Obligation" shall have the meaning specified in Section
5.03(b)(i).
"Requesting Holder" shall have the meaning specified in Section
3.01(a).
"Rule 144", "Rule 144A" and "Rule 145" shall mean Rules 144, 144A and
145, and any successor rules thereto, as promulgated by the SEC under the
Securities Act.
"SEC" shall mean the Securities and Exchange Commission of the United
States of America, or any successor thereto.
"Second Closing Date" shall have the meaning specified in the VIP-R
Primary Agreement.
"Securities Act" shall mean the United States Securities Act of 1933,
as amended, and the rules and regulations of the SEC promulgated thereunder.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the sale of Registrable
Securities and all fees and disbursements of counsel for any Holder (which
shall, in any event, be paid by such Holder).
"Shareholders" shall mean, collectively, the Telenor Shareholders and
the Eco Shareholders and, individually, any of them and such of their respective
successors, assigns and transferees that acquire Registrable Securities from
them, in each case, in accordance with Article II.
"Shareholders Agreement" shall mean the Shareholders Agreement dated as
of the date hereof between Telenor and Eco Telecom.
"Shares" shall mean shares of Common Stock or Preferred Stock, or ADSs,
as the case may be.
"Significant Bee Line Names" shall have the meaning specified in the
Primary Agreement III.
"Specified Legislation" shall have the meaning specified in the VIP-R
Primary Agreement.
9
12
"Specified Percentage" shall mean twenty-five percent (25%) plus one
(1) share of the issued and outstanding shares of voting capital stock of the
Company.
"Standstill Parties" shall mean, with respect to any Shareholder, such
Shareholder, its Controlling Persons, its Controlled Affiliates, any Controlled
Affiliate of any Controlling Person of such Shareholder and any Person acting on
behalf of any of the foregoing, in each case, pursuant to a Contract; provided
that for the purposes of this definition, neither the Company, nor any of its
Controlled Affiliates, nor VIP-R, nor any of its Controlled Affiliates, shall be
deemed Controlled Affiliates of any Shareholder or any Controlling Person of any
Shareholder.
"Subsidiary" shall mean, with respect to any Person, (a) any
corporation in which such Person owns or controls, directly or indirectly, more
than fifty percent (50%) of the securities having ordinary voting power for the
election of directors or other governing body of such corporation and/or (b) any
partnership, association, joint venture or other entity in which such Person
owns or controls, directly or indirectly, more than fifty percent (50%) of the
Equity Interest of such partnership, association, joint venture or other entity.
"Supplemental Agreements" shall mean, collectively, the Supplemental
Agreements, each substantially in the forms attached as Exhibit A to the VIP-R
Primary Agreement, to be entered into as of the Closing in respect of the Zimin
Preferred Stock Agreements.
"Telenor" shall have the meaning specified in the preamble hereto.
"Telenor Guarantee Agreement" shall mean the Guarantee Agreement dated
as of the date hereof between and among Telenor ASA, Eco Telecom, the Company
and VIP-R.
"Telenor Service Obligation Agreement" shall mean the Telenor Service
Obligation Agreement dated as of April 1, 1999 between Telenor Russia AS and the
Company.
"Telenor Share Purchase Agreement" shall mean the Share Purchase
Agreement dated as of the date hereof between Telenor and Overture.
"Telenor Shareholders" shall mean, collectively, Telenor and any
Permitted Transferee of Telenor which becomes a party to this Agreement in
accordance with Article II, and, individually, any of them.
"Telenor Shares" shall mean ten million four hundred fifty two thousand
six hundred (10,452,600) shares of Common Stock owned by Telenor on the date
hereof and the Shares which will be owned by Telenor after giving effect to the
transactions contemplated by the Principal Agreements.
"Termination Agreement" shall mean the Termination Agreement dated as
of the date hereof between and among Telenor, Telenor Communication AS, the
Company, VimpelCom B.V., VimpelCom Finance B.V., VC Limited, ▇▇. ▇▇▇▇▇,
Glavsotkom and the Bee Line Fund.
10
13
"Third Closing Date" shall have the meaning specified in the VIP-R
Primary Agreement.
"Trademark Agreements" shall mean, collectively, the License Agreements
dated the date hereof between the Company and VIP-R listed on Schedule 1.01(c)
to the Primary Agreement III and relating to the licensing by the Company to
VIP-R of certain rights to use the Significant Bee Line Names.
"Transfer" shall mean any direct or indirect sale, exchange, transfer
(including, without limitation, any transfer by gift or operation of law, or any
transfer of an economic interest in any derivative security of any Share),
assignment, distribution or other disposition, or issuance or creation of any
option, or any voting proxy, voting trust or other voting agreement in respect
of any Person or instrument (including, without limitation, any of the Shares),
whether in a single transaction or a series of related transactions, including
without limitation, (a) the direct or indirect enforcement or foreclosure of any
Lien or (b) any Change of Control; provided that nationalization, expropriation,
confiscation, bankruptcy (other than any bankruptcy initiated by the petition of
any Shareholder or any Affiliate of such Shareholder), arrest or any similar
Action or Proceeding initiated by any Governmental or Regulatory Authority in
respect of any Person or instrument shall not constitute a Transfer.
"UNCITRAL Rules" shall have the meaning specified in Section 6.09.
"Undertaking Letters" shall mean, collectively, the letter agreement
dated the date hereof between Eco Telecom and the Company relating to certain
obligations of Eco Telecom and the letter agreement dated the date hereof
between Telenor and the Company relating to certain obligations of Telenor, and,
individually, any of them.
"Valid Business Reason" shall have the meaning specified in Section
3.01(a)(iii).
"VIP/Eco Telecom Share Purchase Agreement" shall mean the Share
Purchase Agreement substantially in the form attached as Exhibit F to the VIP-R
Primary Agreement, to be entered into at the Preferred Stock Closing Date by Eco
Telecom and VIP-R.
"VIP-R" shall mean Closed Joint Stock Company "VimpelCom-Region", a
closed joint stock company organized and existing under the Laws of the Russian
Federation, and its legal successors.
"VIP-R Primary Agreement" shall mean the Primary Agreement dated as of
the date hereof between and among Telenor, Eco Telecom, the Company and VIP-R.
"VIP-R Registration Rights Agreement" shall mean the Registration
Rights Agreement dated as of the date hereof between and among Eco Telecom,
Telenor, the Company and VIP-R.
"VIP-R Shareholders Agreement" shall mean the Shareholders Agreement
dated as of the date hereof between and among Eco Telecom, Telenor, the Company
and VIP-R.
"VIP-R Specified Percentage" shall mean such number of securities of
VIP-R as represent twenty-five percent (25%) plus one (1) share of the then
issued and outstanding
11
14
shares of voting capital stock of VIP-R (excluding any shares of Preferred Stock
held by VIP or any wholly-owned Subsidiary of VIP).
"Zimin Common Call Option Agreement" shall mean the Call Option
Agreement substantially in the form attached as Exhibit A to the Zimin Preferred
Call Option Agreement, to be entered into following the Closing by Eco Telecom
and Overture with respect to shares of Common Stock.
"Zimin Common Pledge Agreement" shall mean the Pledge Agreement
substantially in the form attached as Exhibit A to the Zimin Preferred Pledge
Agreement, to be entered into following the Closing by Eco Telecom and Overture
with respect to shares of Common Stock.
"Zimin Preferred Call Option Agreement" shall mean the Call Option
Agreement substantially in the form of Exhibit A to the Eco Telecom Preferred
Stock Purchase Agreement, to be entered into at the Closing by Eco Telecom and
Overture with respect to shares of Preferred Stock.
"Zimin Preferred Pledge Agreement" shall mean the Pledge Agreement
substantially in the form attached as Exhibit B to the Eco Telecom Preferred
Stock Purchase Agreement, to be entered into at the Closing by Eco Telecom and
Overture with respect to shares of Preferred Stock.
"Zimin Preferred Stock Agreements" shall mean, collectively, the Share
Purchase Agreement dated as of the date hereof between ▇▇. ▇▇▇▇▇ and Overture,
the Share Purchase Agreement No. N-I-1 dated April 13, 1998 between Closed Joint
Stock Company "Sota-100" and ▇▇. ▇▇▇▇▇, the Share Purchase Agreement No. N-I-2
dated April 13, 1998 between Closed Stock Company "Sota-100" and ▇▇. ▇▇▇▇▇, the
Share Purchase Agreement No. EA-I-1 dated April 13, 1998 between Closed Stock
Company "KB Impuls-TV" and ▇▇. ▇▇▇▇▇, the Share Purchase Agreement No. EA-I-2
dated April 13, 1998 between Closed Stock Company "KB Impuls-TV" and ▇▇. ▇▇▇▇▇,
the Share Swap Agreement dated July 26, 1996 between the Issuer and Closed Joint
Stock Company "Sota-100" and the Share Swap Agreement dated July 26, 1996
between the Issuer and Closed Joint Stock Company "KB Impuls-TV".
"Zimin Principal Agreements" shall mean, collectively, the Telenor
Share Purchase Agreement, the Eco Telecom Share Purchase Agreements, the Zimin
Pledge Agreements, the Zimin Call Option Agreements and the Zimin Surety
Agreement.
"Zimin Share Purchase Agreements" shall mean, collectively, the Eco
Telecom Share Purchase Agreements and the Telenor Share Purchase Agreement.
"Zimin Surety Agreement" shall mean the Surety Agreement dated as of
the date hereof between Eco Telecom and ▇▇. ▇▇▇▇▇.
1.02 Interpretation
Unless the context of this Agreement otherwise requires, the following
rules of interpretation shall apply to this Agreement:
12
15
(a) the singular shall include the plural, and the plural shall include
the singular;
(b) words of any gender shall include the other gender;
(c) the words "hereof', "herein", "hereby", "hereto" and similar words
refer to this entire Agreement and not to any particular Section or any other
subdivision of this Agreement;
(d) a reference to any "Article", "Section" or "Exhibit" is a reference
to a specific Article or Section of, or Exhibit to, this Agreement;
(e) a reference to any law, statute, regulation, notification or
statutory provision shall include any amendment, amendment and restatement,
modification or re-enactment thereof, any regulations promulgated thereunder
from time to time, and any interpretations thereof from time to time by any
regulatory or administrative authority;
(f) a reference to any agreement, instrument, contract or other
document shall include any amendment, amendment and restatement, supplement or
other modification thereto;
(g) a reference to any Person shall include such Person's successors,
permitted assigns and permitted transferees under any agreement, instrument,
contract or other document; and
(h) whenever this Agreement refers to a number of days, such number
shall refer to calendar days unless Business Days are specified.
ARTICLE II TRANSFERS
2.01 Transfers; Notice of Certain Transfers
(a) No Shareholder shall, individually or together with any of its
Controlled Affiliates, Transfer (or permit the Transfer of) any Shares to (i)
any Person convicted of a felony in the United States, Norway or the Russian
Federation, (ii) any Controlling Person of any Person convicted of such a felony
or (iii) any Direct Competitor.
(b) In addition to the foregoing, no Shareholder shall Transfer (or
permit the Transfer of) (i) any Shares such that such Shareholder together with
its Permitted Transferees will own less than the Specified Percentage following
such Transfer, or (ii) the Specified Percentage (or any greater number) of
Shares to any Person who is not a Permitted Transferee of such Shareholder,
unless, in each case, such Shareholder, in its capacity as transferor, has, at
least thirty (30) Business Days prior to the proposed Transfer, given written
notice to the Company (with a copy to the other Shareholders) in accordance with
Section 6.02 of the intention of such Shareholder to effect such Transfer.
(c) Notwithstanding the foregoing, it shall not be a breach of this
Article II for any Eco Shareholder to enter into, or Transfer Shares in
accordance with the terms of, the Option Agreement, any Zimin Principal
Agreement or the Preferred Stock Call Option.
13
16
2.02 Effect of Transfers
(a) In the event of any Transfer of Shares by a Shareholder to a
Permitted Transferee of such Shareholder, such Permitted Transferee shall
receive and hold any and all Shares so transferred subject to the terms and
conditions of this Agreement, the Shareholders Agreement and Section 7.04 of the
Primary Agreement III and all of the rights and obligations, if any, of the
transferor hereunder (including, without limitation, the registration rights set
forth in Section 3.01 and Section 3.02) and thereunder, and shall forthwith
execute and deliver to the other Shareholders and the Company an Endorsement.
Each Shareholder hereby undertakes to cause, as a condition precedent to the
effectiveness of any such Transfer subject to this Section 2.02(a), each of its
Permitted Transferees to which Shares are so transferred to execute and deliver
an Endorsement to each of the other Shareholders and the Company.
(b) In the event of any Transfer or Transfers by one or more
Shareholders of the Specified Percentage (or any greater number) of Shares to a
single transferee or a group of transferees which are Controlled Affiliates of
the same Controlling Person, such transferee(s) shall receive and hold any and
all Shares so transferred subject to the terms and conditions of this Agreement,
the Shareholders Agreement and Section 7.04 of the Primary Agreement III and all
of the rights and obligations, if any, of the transferor hereunder (including,
without limitation, the registration rights set forth in Section 3.01 and
Section 3.02) and thereunder, and shall forthwith execute and deliver to the
other Shareholders and the Company an Endorsement or Endorsements, as
applicable. Each Shareholder hereby undertakes to cause, as a condition
precedent to the effectiveness of any such Transfer subject to this Section
2.02(b), each of its transferees to execute and deliver an Endorsement to each
of the other Shareholders and the Company.
(c) A Shareholder which effects a Transfer of all of such Shareholder's
Shares in accordance with the terms of this Agreement shall, after giving effect
to such Transfer, cease to be a party to, or be bound by the terms of, this
Agreement from and after the date of such Transfer; provided that such
Shareholder shall remain liable for any of its obligations or liabilities
accrued hereunder at the time of such Transfer.
(d) In the event of any Transfer of any Shares (i) in an amount less
than the Specified Percentage by a Shareholder to any Person who is not a
Permitted Transferee of such Shareholder, or (ii) by one or more Shareholders to
a single transferee or a group of transferees who do not, individually or
together with its (or their) Controlling Person or the Controlled Affiliates of
such Controlling Person, own or control, directly or indirectly, a number of
Shares equal to or greater than the Specified Percentage, such Person shall not
be entitled to any rights, or be subject to any obligations, under this
Agreement.
(e) Without prejudice to any other rights or remedies of any Party to
this Agreement, if any Shareholder transfers any Shares to any Person in
violation of this Article II, then any transferee of such Shares shall receive
and hold any and all Shares so transferred without any of the rights, but
subject to all of the obligations, set forth in this Agreement, the Shareholders
Agreement and Section 7.04 of the Primary Agreement III.
14
17
ARTICLE III REGISTRATION RIGHTS
3.01 Demand Registration
(a) Exercise of Demand. At any time following the Closing a Holder or
Holders (a "Requesting Holder" or "Requesting Holders") may deliver a written
request to the Company in accordance with Section 6.02 (a "Demand") that the
Company effect any registration with respect to the Registrable Securities under
the Securities Act, provided that the anticipated aggregate offering price of
such Demand exceeds US$20,000,000. Such Demand shall specify the number of
Registrable Securities such Requesting Holder intends to include in such
registration and the methods by which such Requesting Holder intends to sell or
dispose of such Registrable Securities (including whether such Requesting Holder
intends to distribute the Registrable Securities by means of an underwritten
offering). As soon as practicable after receipt of such Demand, the Company
shall, subject to the terms and conditions of this Article III, use its best
efforts to effect such registration (including, without limitation, by using
reasonable efforts to file a registration statement (and executing an
undertaking to file any amendments thereto) covering the Registrable Securities
so requested to be registered, using its best efforts to cause such filed
registration statement to become effective promptly, and qualifying such
Registrable Securities under applicable blue sky or other securities laws of any
state of the United States of America to the extent set forth herein and
complying with applicable regulations issued under the Securities Act and any
other governmental requirements or regulations) as may be so requested and as
would permit or facilitate the sale and distribution in an underwritten offering
of all or such portion of such Registrable Securities as are specified in such
request; provided, however, that the Company shall not be obligated to take any
action to effect any such registration, qualification or compliance pursuant to
this Section 3.01:
(i) within six (6) months after the effective date of a
prior registration statement effected in response to a request from any Holder
pursuant to this Section 3.01(a) or within six (6) months after the effective
date of any other registration statement effected by the Company for a public
offering of Shares;
(ii) if at such time such Requesting Holder, its Controlling
Person and any Controlled Affiliates of such Controlling Person hold Shares
representing less than five percent (5%) of the issued and outstanding Common
Stock;
(iii) for a period of not more than one hundred eighty (180)
days past the time the Company would otherwise be required to file such
registration statement if the Board, prior to the time the Company would
otherwise have been required to file such registration statement pursuant to
this Section 3.01, determines in its good faith judgment that the filing of such
registration statement would be seriously detrimental to the completion of a
merger or consolidation of the Company and VIP-R (a "Valid Business Reason");
provided, however, that such right to delay the filing of such registration
statement shall be exercised by the Company not more than once in any
twenty-four (24) month period and the Company shall only have the right to delay
such filing for only so long as such Valid Business Reason exists; or
(iv) if at such time the Company has, in response to requests
from any such Requesting Holder or any Requesting Holder's predecessors in
interest pursuant to this
15
18
Section 3.01(a), effected the registration of Registrable Securities and has
sold such Registrable Securities on at least three (3) prior occasions; provided
that (A) for purposes of determining the number of demand registrations effected
by a Requesting Holder and its predecessors in interest, the Eco Shareholders
and Persons acquiring Registrable Securities directly or indirectly from the Eco
Shareholders (including, without limitation, any transferee or assignee who
obtains registration rights pursuant to Section 2.02) shall count as one Holder,
and the Telenor Shareholders and Persons acquiring Registrable Securities
directly or indirectly from the Telenor Shareholders (including, without
limitation, any transferee or assignee who obtains registration rights pursuant
to Section 2.02) shall count as one Holder, and (B) if the Company withdraws a
registration of Registrable Securities at the request of any Requesting Holder
at any time after the filing of a registration statement that is a matter of
public record at the SEC, then such withdrawn registration statement shall count
as a registration by such Requesting Holder; provided, however, that if any
Requesting Holder withdraws from a registration because such Requesting Holder
has learned of a material adverse change in the financial condition, business or
prospects of the Company which was not known to such Requesting Holder at the
time of its request and the Company failed to disclose such material adverse
change to such Requesting Holder, then such withdrawn registration statement
shall not count as a registration by such Requesting Holder.
(b) Limitations on Subsequent Registration Rights. The Company shall
not enter into any agreement with any holder or prospective purchaser of any
securities of the Company that would allow such holder or prospective purchaser
to require the Company to include shares or securities in any registration
initiated under this Section 3.01, nor shall the Company include any shares or
securities for its own account in any such registration, without the prior
written consent of the Eco Shareholders and the Telenor Shareholders.
(c) Underwriting. The Company (together with the Holder(s) proposing to
distribute Registrable Securities through such underwriting) shall, upon request
of the lead managing underwriter selected for such underwriting by the Company
(which lead managing underwriter shall be reasonably acceptable (taking into
account, among other things, whether such underwriter is of international
standing) to the Requesting Holder), enter into any reasonable agreement
requested by such lead managing underwriter in connection with the offering,
including, but not limited to, an underwriting agreement in customary form with
such lead managing underwriter; provided, however, that (a) the Requesting
Holder(s) shall be permitted to select a co-managing underwriter for such
offering (which co-managing underwriter shall be reasonably acceptable to the
Company); and (b) in no event shall the Company be required to include Shares
for its own account in such offering. If a Holder disapproves of the terms of
the underwriting, such Holder may elect to withdraw therefrom by written notice
to the Company and the lead managing underwriter.
3.02 Piggy-Back Registration; Priority on Underwritten Offerings
(a) Exercise. Each of the Eco Shareholders and the Telenor Shareholders
shall have the piggyback registration rights set forth in this Section 3.02 at
any time following the Closing, provided that (i) as a prerequisite to any Eco
Shareholder having such rights, the Eco Shareholders shall, at the time of
exercise of such rights, hold Shares representing not less than five percent
(5%) of the issued and outstanding Common Stock and (ii) as a prerequisite to
any Telenor Shareholder having such rights, the Telenor Shareholders shall, at
the time of the exercise of such rights, hold Shares representing not less than
five percent
16
19
(5%) of the issued and outstanding Common Stock. If at any time after the
Closing the Company shall propose to register any of its securities in
connection with the underwritten offering and sale thereof for cash, either for
its own account or the account of a Requesting Holder pursuant to Section 3.01
other than (A) a registration relating solely to an employee benefit plan, or
(B) a registration relating solely to a Rule 145 transaction, then, provided
that at such time such Holder is eligible for piggyback registration rights in
accordance with the immediately preceding sentence, the Company shall:
(1) promptly give the Eco Shareholders and the Telenor
Shareholders written notice thereof; and
(2) subject to Section 3.02(b), include in such registration
(and any related qualification under blue sky laws or other applicable laws and
regulations with which the Company is required to comply), and in any
underwriting relating thereto, all of the Registrable Securities specified in a
written request (which in any one request, shall not exceed an aggregate of
fifty percent (50%) of the Shares owned by the requesting Eco Shareholders or
the Telenor Shareholders, as applicable, at such time, unless either such
Shareholder is then the holder of less than seven point five percent (7.5%) of
the issued and outstanding Common Stock), made within thirty (30) calendar days
after delivery of such written notice by the Company.
(b) Underwriting. The right of the Eco Shareholders and the Telenor
Shareholders to registration pursuant to this Section 3.02 shall be conditioned
upon their participation in the underwriting described in Section 3.02(a) and
the inclusion of Registrable Securities in such underwriting to the extent
provided herein. The Holders proposing to sell Registrable Securities shall
(together with the Company and any other Person distributing securities through
such underwriting) enter into an underwriting agreement in customary form with
the lead managing underwriter selected for such underwriting by the Company.
Notwithstanding any other provision of Section 3.01 and this Section 3.02, if
the lead managing underwriter advises the Company in writing that, in the
opinion of the lead managing underwriter, the number of Registrable Securities
requested to be included in such an underwritten offering effected pursuant to
Section 3.01 or 3.02 exceeds the number of ADSs which can be sold in such
offering, so as to be likely to have an adverse effect on the price, timing or
distribution of ADSs offered in such offering, the lead managing underwriter may
limit the Registrable Securities to be included in such registration to the
number of Registrable Securities requested to be included in such registration
which, in the opinion of the lead managing underwriter, can be sold without
having such adverse effect. In the event the lead managing underwriter so
advises the Company, the Company shall so advise the Holders proposing to sell
Registrable Securities (and any other Person distributing securities through
such underwriting), and the Company will include in such registration the
maximum number of Registrable Securities which the lead managing underwriter
advises the Company can be sold in such offering in the following priority:
(i) first, if such registration is a Demand Registration made
pursuant to Section 3.01, Registrable Securities of the Requesting Holder(s) up
to the amount of Registrable Securities that such Requesting Holder(s) requested
to be included in such Demand Registration;
17
20
(ii) second, if such registration is not a Demand Registration
made pursuant to Section 3.01, up to the amount of securities proposed by the
Company to be included in such registration for its own account;
(iii) third, whether or not such registration is a Demand
Registration made pursuant to Section 3.01, Registrable Securities of other
Holders, if any, that have requested to have such Registrable Securities
included in such registration as a result of their exercise of piggyback
registration rights, pro rata to the amount of Registrable Securities that each
such Holder requested to be included in such registration pursuant to Section
3.02(a);
(iv) fourth, if such registration is a Demand Registration
made pursuant to Section 3.01 and the Telenor Shareholders and the Eco
Shareholders have agreed to the inclusion by the Company in such registration of
shares or securities for the Company's own account pursuant to Section 3.01(b),
securities proposed by the Company to be included in such registration; and
(v) fifth, securities of other Persons, if any, that have
requested to have such securities included in such registration as a result of
piggyback registration rights, pro rata to the amount of securities that each
such Person requested to be included in such registration.
If, as a result of the foregoing restrictions, any Holder elects to withdraw
from a registration and a greater number of Registrable Securities held by other
Holders may be included in such registration, then the Company shall offer to
all other Holders who have included Registrable Securities in the registration,
the right to include additional Registrable Securities, in the same proportions
as are used in determining the limitations set forth above.
(e) Right to Terminate Registration. The Company shall have the right
to terminate or withdraw any registration initiated by the Company under this
Section 3.02 prior to the effectiveness of such registration, whether or not any
eligible Holder has elected to include securities in such registration.
3.03 Expenses of Registration
(a) All Registration Expenses incurred in connection with any
registration pursuant to Section 3.01 or Section 3.02 shall be borne by the
Company except for Registration Expenses consisting of Selling Expenses with
respect to a Holder's Shares and transfer taxes on a Holder's Shares, which
shall be paid by such Holder. Any insurance costs as provided in Section 3.04(e)
shall be shared equally by the Holders and any other Person participating in
such registration. The Holders and any other Person participating in such
registration shall bear all such specified Selling Expenses, transfer taxes and
insurance costs pro rata to the number of their respective Shares and
Registrable Securities which have been registered.
(b) Notwithstanding the provisions of Section 3.03(a), if, as a
condition of registration, qualification or compliance of any offering in any
state or jurisdiction in which the Company (by vote of the Board) or any
underwriter determines in good faith that it wishes to offer securities
registered in an offering to which this Agreement applies, it is required that
offering expenses be allocated in a manner different from that provided in
18
21
Section 3.03(a), the offering expenses shall be allocated in whatever permitted
manner is most nearly in compliance with the provisions of this Agreement.
3.04 Indemnification
(a) To the extent permitted by law, the Company will indemnify each
Holder, each of its officers and directors and partners, and each Person
controlling such Holder (within the meaning of Section 15 of the Securities
Act), with respect to any registration, qualification, compliance or sale which
has been effected pursuant to this Article III, and each underwriter, if any,
and each Person who controls any underwriter (within the meaning of Section 15
of the Securities Act), against all expenses, claims, losses, damages or
liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising out
of or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, prospectus, offering circular or
other document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance or sale, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, or any violation (or alleged violation) by
the Company of (i) the Securities Act, the Exchange Act or any rule or
regulation promulgated thereunder, (ii) the securities or similar laws of any
state or other jurisdiction in which Registrable Securities are sold in an
underwritten offering or (iii) if the Registrable Securities are sold in a
non-underwritten offering effected pursuant to Article III, the securities laws
of those jurisdictions in which the Holders have requested registration or
qualification of the Registrable Securities covered by the request (unless the
Company shall have notified such Holder in a timely manner that such
registration or qualification is not available or has not been made for a reason
permitted by the Agreement), or in which the Company has notified such Holder
that the Registrable Securities have otherwise been registered and qualified or
are eligible for sale, in each case, applicable to the Company in connection
with any such registration, qualification, compliance or sale, and the Company
will reimburse or pay for the account of each Holder, each of its officers and
directors, each Person controlling such Holder, each such underwriter and each
Person who controls any such underwriter, for any legal and any other expenses
reasonably incurred (as and when incurred) in connection with investigating,
preparing the defense of or defending any such claim, loss, damage, liability or
action, provided that the Company will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on any untrue statement or omission or alleged untrue statement or
omission, made in reliance upon and in conformity with written information
furnished to the Company in writing by such Holder, such controlling person or
underwriter and stated to be specifically for use therein.
(b) To the extent permitted by law, each Holder will, if Registrable
Securities held by such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers, each underwriter, if any, of the
Company's securities covered by such a registration statement, each Person who
controls the Company or such underwriter (within the meaning of Section 15 of
the Securities Act), and any other Person participating in such registration,
each of its officers and directors and each Person controlling (within the
meaning of Section 15 of the Securities Act) such Person participating in such
registration, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue
19
22
statement (or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse or pay for the account of the Company, such Persons, such
directors, officers, Persons, underwriters or control Persons for any legal or
any other expenses reasonably incurred (as and when incurred) in connection with
investigating, preparing the defense of or defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company in writing by such Holder and stated to be specifically
for use therein; provided however that the liability of such Holder for
indemnification under this Section 3.04(b) shall not exceed the net proceeds
from the offering received by such Holder.
(c) Each Party entitled to indemnification under this Section 3.04 (the
"Indemnified Party") shall give notice to the Party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (which approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
Indemnified Party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement except to the extent
that the failure to give such notice is materially prejudicial to an
Indemnifying Party's ability to defend such action. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
(d) The obligations of the Company and each Holder under this Section
3.04 shall survive the completion of any offering of Registrable Securities in a
registration statement pursuant to this Agreement.
(e) If requested by all Holders participating in a Registration, the
Company shall obtain, and each Holder and each other Person participating in a
registration (including, without limitation, if it is participating in such
registration, the Company) shall pay its ratable share of the cost of, an
insurance policy, naming as insureds each of the Indemnified Parties eligible
for indemnification by the Company under Section 3.04(a), which insurance policy
shall provide coverage in an amount of not less than thirty-five percent (35%)
of the aggregate monetary face value of the offering to which such registration
relates, insuring such insureds against any of the expenses, claims, Losses,
damages or liabilities (or actions in respect thereof) for which the Company is
obligated to indemnify any Indemnified Party under Section 3.04(a).
Notwithstanding any other provision in this Agreement, the Company will be
obligated to indemnify any Indemnified Party eligible for indemnification under
Section 3.04(a) only to the extent payments under such insurance policy are
insufficient to
20
23
hold harmless such Indemnified Party in respect of any such expenses, claims,
Losses, damages or liabilities (or actions in respect thereof).
(f) If a claim for indemnification under Section 3.04(a) or (b) is
available by its terms but is held by a court of competent jurisdiction to be
unavailable or insufficient to hold harmless an Indemnified Party, then each
Indemnifying Party in lieu of indemnifying such Indemnified Party shall
contribute to the amount paid or payable by such Indemnified Party as a result
of any such claim, loss, liability or action that otherwise would have been
indemnified under Section 3.04(a) or (b), as the case may be, in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party, on
the one hand, and the Indemnified Party, on the other, in connection with the
statements, omissions, actions or inactions that resulted in such claim, loss,
liability or action, as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Indemnifying Party or the
Indemnified Party, any action or inaction by any such Party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement, omission, action or inaction; provided, however, that
the liability of any Holder under this Section 3.04(f) shall be limited to the
amount of net proceeds received by such Holder in the offering giving rise to
such liability, less any amounts paid pursuant to Section 3.04(b). The amount of
such claim, loss, liability or action subject to this Section 3.04(f) shall be
deemed to include any reasonable legal or other expenses incurred by such
Indemnified Party in connection with investigating or defending any such claim,
loss, liability or action (which shall be limited as provided in Section 3.04(c)
if the Indemnifying Party has assumed the defense of any such action in
accordance with the provisions thereof). Notwithstanding the foregoing in this
Section 3.04(f), no Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Party who was not guilty of such fraudulent
misrepresentation. Promptly after receipt by an Indemnified Party of written
notice of the commencement or threatened commencement of any claims for which a
claim for contribution may be made against an Indemnifying Party under this
Section 3.04(f) and if a notice for indemnification has not been otherwise given
under this Section 3.04, such Indemnified Party shall give written notice
thereof in the manner set forth hereunder for a claim for indemnification to the
Indemnifying Party, provided, however, that the failure to so notify the
Indemnifying Party shall not relieve it of any obligation to provide
contribution hereunder except to the extent that the Indemnifying Party's
ability to defend such action is materially prejudiced by the failure to give
such timely notice. The Parties acknowledge that determining contribution
pursuant to this Section 3.04(f) by pro rata allocation or by any other method
of allocation that does not take account of the equitable considerations
referred to in this Section 3.04(f) would not be just or equitable. For the
avoidance of doubt, if indemnification is available under Section 3.04(a) or
(b), the Indemnifying Parties shall indemnify each Indemnified Party to the
fullest extent provided in Section 3.04(a) and (b) without regard to the
relative fault of said Indemnifying Party or Indemnified Party or any other
equitable consideration provided for in this Section 3.04(f).
3.05 Eco Telecom Contribution Default
In the event of an Eco Telecom Contribution Default on the Second
Closing Date, all rights granted to Eco Telecom pursuant to this Article III
(including, without limitation, the
21
24
registration rights set forth in Sections 3.01 and 3.02) shall be immediately
suspended with respect to any Registrable Securities held by Eco Telecom, any
Affiliate of Eco Telecom and any other Person who acquires or holds any such
Registrable Securities, and such rights shall automatically be reinstated on the
first anniversary of the Second Closing Date, provided, however, that if such
Eco Telecom Contribution Default on the Second Closing Date is caused by any
Specified Legislation which prevents the Second Closing any rights granted to
Eco Telecom pursuant to this Article III shall not be suspended.
3.06 Information to be Provided by Holders
Each Holder shall furnish to the Company such information regarding
such Holder, the Registrable Securities held by it and the distribution proposed
by such Holder as the Company may reasonably request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Agreement.
3.07 Obligations of the Company
Whenever required under this Agreement to effect the registration of
any Registrable Securities, the Company shall, as soon as practicable:
(a) Prepare and file with the SEC a registration statement with respect
to such Registrable Securities and use its best efforts to cause such
registration statement to become effective.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act until the earlier of (i) the disposition of all securities
covered by such registration statement and (ii) 120 days after the effective
date thereof.
(c) Furnish to each Holder such numbers of copies as it may reasonably
request, in order to facilitate the disposition of Registrable Securities owned
by it, of any prospectus or preliminary prospectus prepared in conformity with
the Securities Act.
(d) Use its best efforts to register and qualify the securities covered
by such registration statement under such other securities or blue sky laws of
such jurisdictions as shall be reasonably requested by any Holder; provided,
however, that the Company shall not be required to qualify any such securities
under the laws of any jurisdiction where such qualification would require the
qualification of the Company to transact business in such jurisdiction (which
qualification would not otherwise be required).
(e) Notify each Holder at any time when a prospectus relating to a
registration of Registrable Securities is required to be delivered under the
Securities Act of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing.
22
25
(f) Furnish, at the request of any Holder, on the date that any
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Agreement, if such securities are being
sold through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement, with respect to such
securities, becomes effective, (i) an opinion dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to such Holder and (ii) a
letter dated such date, from independent certified public accountants of the
Company in form and substance as is customarily given to underwriters in an
underwritten public offering, addressed to the underwriters, if any, and to such
Holder. Any opinion or letter given shall be subject to all of the
qualifications, exceptions and conditions appropriate to the then existing
circumstances.
(g) Maintain a depositary for the ADSs and a registrar for the Common
Stock.
(h) Otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC.
(i) Use its best efforts to maintain the listing of the ADSs on a
national securities exchange in the United States of America and on each
additional national securities exchange on which similar securities issued by
the Company are then listed, if the listing of the Registrable Securities is
then permitted under the rules of such exchange.
(j) Make available for inspection and copying by each Holder, by any
underwriter participating in any disposition to be effected pursuant to such
registration statement and by any attorney, accountant or other agent retained
by such Holder or any such underwriter, all pertinent financial and other
records and pertinent corporate documents and properties of the Company, and
cause all of the Company's officers, directors and employees to supply all
information reasonably requested by such Holder, underwriter, attorney,
accountant or agent in connection with such registration statement.
(k) Use every reasonable effort to prevent the issuance of any stop
order suspending the effectiveness of such registration statement or of any
order preventing or suspending the use of any preliminary prospectus and, if any
such order is issued, to obtain the lifting thereof at the earliest reasonable
time.
(l) Make such representations and warranties to each Holder and the
underwriters as are customarily made by issuers to underwriters and selling
shareholders, as the case may be, in secondary underwritten public offerings.
(m) Furnish to each Holder, upon request by such Holder, a copy of all
documents filed and all correspondence from or to the SEC in connection with the
registration statement and the offering to which it relates.
(n) Use its reasonable best efforts to obtain all necessary approvals
from the National Association of Securities Dealers, Inc. in connection with any
such offering.
23
26
3.08 Reporting
With a view to making available the benefits of certain rules and
regulations of the SEC which may at any time permit the sale of the Shares to
the public without registration, at all times at which the Company has had
securities registered pursuant to Section 12 of the Exchange Act for the
preceding ninety (90) days, the Company agrees to use its best efforts to:
(a) make and keep public information available, as such terms are
understood and defined in Rule 144 and Rule 144A(d) under the Securities Act;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) so long as any Holder owns any Shares, furnish to such Holder upon
request a written statement by the Company as to its compliance with the
reporting requirements of said Rule 144 and Rule 144A(d), a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents of the Company and other information in the possession of or
reasonably obtainable by the Company as such Holder may reasonably request in
availing itself of any rule or regulation of the SEC allowing such Holder to
sell any such Shares without registration.
3.09 Standoff Agreement
Each Holder agrees in connection with any registration of the Company's
securities, upon request of the Company or the underwriters managing any
underwritten offering of the Company's securities, not to sell, make any short
sale of, loan, grant any option for the purchase of or otherwise dispose of any
Registrable Securities (other than those (a) included in the registration or
sold to Telenor or a Permitted Transferee of Telenor (as the term "Permitted
Transferee" is defined in the Option Agreement in accordance with the terms of
the Option Agreement or (b) sold pursuant to any Zimin Principal Agreement or
the Preferred Stock Call Option) without the prior written consent of the
Company or such underwriters, as the case may be, for such period of time (not
to exceed one hundred eighty (180) days) from the effective date of such
registration as may be requested by the Company or such underwriters, provided
that each of the Company's officers and directors shall have agreed to be bound
by the same restrictions in connection with such public offering.
3.10 Currency of Registration and Public Information
In case any Registrable Securities are registered pursuant to this
Agreement the Company will maintain the currency of all registration and other
public information required by law until the expiration of the time period
specified in Section 3.07(b) or as may otherwise be specified in any
underwriting agreement applicable to such offering, provided, however, that if,
at any time during the effectiveness of such registration, the Board of
Directors determines in good faith that the public disclosure of any such
information would be seriously detrimental to the Company, then (a) the Company
will so inform each Holder and will be relieved of its obligation to maintain
the currency of the registration and other public information required in
connection with sales of the Registrable Securities during the period in which
the determination of the Board of Directors continues to apply and (b) the
period during which the Company is obligated to maintain the currency of the
registration and other
24
27
public information will be extended by one day for each day during which it is
relieved of such obligation.
ARTICLE IV COVENANTS OF THE COMPANY
The Company hereby covenants and agrees that, without prejudice to any
rights of Telenor or Eco Telecom under the Primary Agreements to which each is a
party, in the case of Telenor, so long as Telenor has not sold or otherwise
Transferred any of the Telenor Shares, and, in the case of Eco Telecom, so long
as Eco Telecom has not sold or otherwise transferred any of the Eco Shares, if
after the Closing any Person makes a bona fide and otherwise valid claim (as
determined by the Board in its reasonable discretion) to an ownership right,
which right arose before the date hereof, to any shares of voting capital stock
of the Company and, as a direct result of the exercise of which right the
holdings of shares of voting capital stock of the Company by Telenor or Eco
Telecom are diluted, then, upon the request of Telenor or Eco Telecom, as the
case may be, the Company shall cause Telenor or Eco Telecom, as the case may be,
to be offered the opportunity to purchase shares of Common Stock or ADSs
representing a sufficient number of shares of voting capital stock of the
Company (at the then fair market value thereof (as defined below)) such that,
after giving effect to such purchase, Telenor or Eco Telecom, as the case may
be, shall own in the aggregate the same percentage of the outstanding voting
capital stock of the Company that Telenor or Eco Telecom, as the case may be,
would have owned had such ownership claim never existed. For purposes of this
Article IV, the fair market value of such Shares of Common Stock or ADSs shall
be calculated based on the weighted average market value of the ADSs on the NYSE
during the thirty (30) trading days immediately preceding the date on which the
Board determined that such ownership claim was bona fide and otherwise valid.
Any offer made to Telenor or Eco Telecom, as the case may be, pursuant to this
Article IV must be accepted within five (5) Business Days and, if not accepted
within such period, shall thereafter expire, and payment in full in US Dollars
for the offered shares of Common Stock or ADSs shall be made within five (5)
Business Days of such acceptance against delivery of such shares of Common Stock
or ADSs.
ARTICLE V COVENANTS OF TELENOR AND ECO TELECOM
Each Shareholder hereby covenants and agrees with the Company and one
another that:
5.01 [Intentionally Omitted]
5.02 Non-Compete
(a) Each Shareholder agrees that, from and after the date hereof until
such Shareholder and its Affiliates have sold or otherwise disposed of their
respective Shares such that such Shareholder and its Affiliates no longer own or
control, directly or indirectly, the Specified Percentage or the VIP-R Specified
Percentage (or an amount in excess thereof), subject to Section 5.02(b) and (c)
and except for each such Shareholder's and its Affiliates' Existing Investments,
such Shareholder will not, without the prior written consent of the Company, (i)
engage in the Business in any region in Russia, (ii) own or control, directly or
indirectly, more than five percent (5%) of the voting capital stock of any
Person (other than the Company, VIP-R or any of their respective Controlled
Affiliates) engaged in the Business
25
28
in any region in Russia or (iii) permit any of its Controlled Affiliates (other
than the Company, VIP-R or any of their respective Controlled Affiliates) to
engage in the Business in any region in Russia or own or control, directly or
indirectly, more than five percent (5%) of the voting capital stock of any
Person (other than the Company, VIP-R or any of their respective Controlled
Affiliates) engaged in the Business in any region in Russia; provided, that from
and after the date hereof until the earlier of the Closing or the termination of
this Agreement, Eco Telecom shall be deemed, for purposes of this Section 5.02,
to own and control the Specified Percentage and the VIP-R Specified Percentage.
(b) The parties acknowledge that this Section 5.02 shall not in any way
limit any Shareholder's or any of its Affiliates' right to:
(i) maintain, increase the amount of, or otherwise develop its
Investments in the Company or any of the Company's Controlled Affiliates, or in
VIP-R or any of VIP-R's Controlled Affiliates;
(ii) maintain, increase the amount of, or otherwise develop
any of the Investments made or scheduled to be made by such Shareholder or
Affiliate of such Shareholder on or prior to the date hereof in Persons engaged
in the Business in Russia on the date hereof, in each case, as listed in
Schedule 5.02(b) ("Existing Investments"), so long as, as a consequence of any
such maintenance, increase or development of an Existing Investment, such
Shareholder or Affiliate does not own or control, directly or indirectly, a
Controlling Interest in any Person (other than the Company, VIP-R or any of
their respective Controlled Affiliates or any Existing Investments) which is
engaged in the Business in Russia;
(iii) acquire through a merger or exchange of shares or
assets of an Existing Investment (which may include cash and/or other property),
or a consolidation or other similar business combination involving an Existing
Investment, or maintain as a result of the foregoing, directly or indirectly, an
ownership interest in any Person engaged in the Business in Russia, so long as,
as a consequence of any such transaction, such Shareholder or Affiliate does not
own or control, directly or indirectly, a Controlling Interest in any Person
(other than the Company, VIP-R or any of their respective Controlled Affiliates)
engaged in the Business in Russia; provided, however, that such Party or
Affiliate shall be permitted to maintain its ownership interest in such Existing
Investments;
(iv) without limiting in any way any transactions permitted by
clauses (i), (ii), (iii) or (v) of this Section 5.02(b), acquire or maintain,
directly or indirectly, any ownership interest in any Person which, on a
consolidated basis, derives less than twenty-five percent (25%) of its revenues
(calculated on a consolidated basis for such Person under GAAP) from the
Business in Russia; or
(v) with respect to any Existing Investment, sell to, merge
with or into, consolidate with, or otherwise effect a change of control with
respect to, any Person which is engaged in the Business in Russia, so long as,
as a consequence of such sale, merger, consolidation or change of control, such
Shareholder or Affiliate does not own or control, directly or indirectly, a
Controlling Interest in any Person (other than the Company, VIP-R or any of
their respective Controlled Affiliates) which is engaged in the Business in
Russia;
26
29
provided, however, that such Party or Affiliate shall be permitted to maintain
its ownership interest in such Existing Investments.
(c) The parties acknowledge that this Section 5.02 shall not, in any
way limit the right of Telenor or Eco Telecom or any of their respective
Permitted Transferees to identify and pursue on a preliminary basis an
opportunity to obtain a telecommunications license to engage in the Business or
acquire all or a portion of the shares of a Person holding directly or
indirectly a telecommunications license to engage in the Business, or
participate in a tender for a telecommunications license to engage in the
Business, in any region in the Russian Federation, excluding the Moscow License
Area and excluding those opportunities set forth in Schedule 5.02(c) (an
"Opportunity"); provided that the conditions specified in Section 6.02(c) of the
VIP-R Shareholders Agreement are met.
5.03 Debt Acquisition
(a) A Shareholder and its other Standstill Parties may enter into any
Debt Transactions, if and only if such Shareholder and its Standstill Parties
comply with the provisions of this Section 5.03.
(b) In the event a Shareholder or any of its other Standstill Parties
enters into a Debt Transaction, such Shareholder shall, and shall procure that
its other Standstill Parties shall:
(i) Provide written notice thereof to the Protected Party
(with a copy to the Company) within 10 days of entering into a Debt Transaction,
which notice shall constitute an offer to such Protected Party (an "Offer
Notice") (which offer shall be legally binding on the Standstill Party upon
acceptance by such Protected Party or the Company or the Company's designee on
behalf of such Protected Party; provided such designee is either a recognized
financial institution or a telecommunications equipment vendor of the Company,
VIP-R or the Protected Party) to sell to such Protected Party, the Company or
the Company's designee, such Debt Obligation (and, if applicable, the underlying
obligation to which such Debt Obligation relates, such underlying obligation or
Debt Obligation, as applicable, being the "Relevant Obligation") at a purchase
price equal to the lesser of the Fair Market Value thereof, or one hundred
percent (100%) of the aggregate unpaid principal amount of the Relevant
Obligation plus any accrued interest and other amounts, if any, owing under the
Relevant Obligation up to (but excluding) the purchase date thereof.
(ii) Within ten (10) Business Days from the date of notice of
an intention to accept such offer by the Protected Party, the Company or the
Company's designee, the Standstill Party shall provide a copy of the document(s)
evidencing the outstanding amount of the Relevant Obligation and a calculation
of the purchase price thereof showing the amount of unpaid principal, any
accrued interest thereon and any other amounts owing thereunder, as well as the
basis for determining the Fair Market Value thereof (a "Price Notice"). Within
five (5) Business Days from the date of receipt of the Price Notice, the
Protected Party, the Company or the Company's designee shall notify the
Standstill Party whether it accepts the offer at such time and, if so, shall
purchase such Relevant Obligation at such time. If the Protected Party, the
Company or the Company's designee, as applicable, do not accept such offer at
such time, the provisions of this Section 5.03(b) shall remain in effect with
respect to such Relevant Obligation.
27
30
(iii) The Standstill Party shall not be restricted from
selling or otherwise disposing of the Relevant Obligation at any time prior to
the acceptance of the Offer Notice in accordance with the terms hereof;
provided, however, that the Standstill Party shall provide written notice to the
Protected Party (with a copy to the Company) within ten (10) days of such sale
or disposition.
(c) In the event a Shareholder or any of its other Standstill Parties
enters into a Debt Transaction, such Shareholder shall, and shall procure that
its other Standstill Parties shall, prior to initiating or participating in any
enforcement action or bankruptcy proceeding against any Protected Party with
respect to any Debt Obligation, provide at least ninety (90) days, prior written
notice thereof to the Protected Party (with a copy to the Company) and adhere to
the procedures set forth in Section 5.03(b)(i) and 5.03(b)(ii).
(d) In the event a Shareholder or any of its other Standstill Parties
initiates or participates in the initiation of any enforcement action or
bankruptcy proceeding against any Protected Party with respect to any Debt
Obligation without adhering to the provisions of Section 5.03(c), such
Shareholder shall, and shall procure that its other Standstill Parties shall,
immediately file all documents necessary to terminate or cause the termination
of such action or proceeding within five (5) Business Days of receiving notice
from the Protected Party, the Company or any Shareholder that the entity against
whom such bankruptcy proceeding was initiated is a Protected Party, and shall
thereafter use its best efforts to ensure that such enforcement action or
bankruptcy proceeding is terminated, and immediately thereafter or
simultaneously with such actions, the relevant Standstill Party shall make an
offer to sell to such Protected Party (which offer shall be legally binding on
the Standstill Party upon acceptance by such Protected Party or the Company or
the Company's designee, as the case may be, on behalf of such Protected Party)
and shall sell such Relevant Obligation to the relevant Protected Party or the
Company or the Company's designee, as the case may be, pursuant to Section
5.03(b), if such offer is accepted.
(e) Any breach of Section 5.03(b) shall be deemed cured and no
violation of Section 5.03(b) shall be deemed to have occurred or to exist if (x)
the aggregate principal amount of the Relevant Obligation is less than
US$10,000,000 (calculated without any accrued interest, penalties or other
similar amounts thereon), and (y) the terms of Section 5.03(b) are complied with
immediately upon the Shareholder becoming aware that it or any of its Standstill
Parties have entered into the Debt Transaction.
(f) Any breach of Section 5.03(c) shall be deemed cured and no
violation of Section 5.03(c) shall be deemed to have occurred or to exist if (x)
the aggregate principal amount of the Relevant Obligation is less than
US$10,000,000 (calculated without any accrued interest, penalties or other
similar amounts thereon), (y) the Protected Party is neither the Company, nor
any Consolidated Subsidiary of the Company, nor VIP-R nor any Consolidated
Subsidiary of VIP-R, and (z) the Standstill Party complies with Section 5.03(d)
and such enforcement action or bankruptcy proceeding is thereafter terminated.
(g) The Company will promptly inform, and will cause any Protected
Party affected by any Debt Transaction, to promptly inform each Shareholder if
the Company becomes aware of any violation of the terms of this Section 5.03.
28
31
5.04 Compliance with Trading Policy
During the period in which it is an affiliate (as such term is defined
in the Securities Act) of the Company, each of Telenor and Eco Telecom shall at
all times comply, and shall cause each of its Controlled Affiliates to comply,
with (a) the Company's policies relating to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as in effect on the
date hereof and as such policies may from time to time be amended in accordance
with Article 10.5.10 of the Charter, and (b) applicable law relating to the
holding or Transfer of such securities.
ARTICLE VI MISCELLANEOUS
6.01 Effectiveness; Term
This Agreement shall take effect on the date hereof and remain in
effect until the earliest of:
(a) the date on which all of the Parties agree in writing to the
termination of this Agreement;
(b) at midnight (Moscow time) on the Final Date if the Closing has not
occurred by such time; and
(c) the date on which a meeting of the shareholders of the Company is
held at which a vote of such shareholders is conducted concerning the
transactions contemplated by this Agreement and the other Principal Agreements
and such shareholders fail to approve such transactions as are required by
Russian Law and the Charter to be approved by such shareholders;
provided that, after the Closing, (i) the rights and obligations of any
Shareholder hereunder shall terminate on the date on which such Shareholder, its
Controlling Person and any Controlled Affiliates of such Controlling Person,
having achieved the Specified Percentage (or a greater number of Shares), own,
in the aggregate, Shares representing less than five percent (5%) of the issued
and outstanding Common Stock, (ii) the obligations of the Parties specified in
Sections 3.03 and 3.04 shall survive any such termination and remain in effect
indefinitely, (iii) following an Eco Telecom Second Closing Contribution
Default, the obligations of Eco Telecom and its Permitted Transferees under
Section 5.02(a), 5.02(b) and 5.03 shall remain in effect until the Third Closing
Date and (iv) Section 5.02(c) shall remain in effect with respect to any
Shareholder until all call options with respect to any Opportunities under
Section 5.02(c) have lapsed or been exercised.
6.02 Notices
(a) All notices and other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made by facsimile or by hand in writing
and transmitted by facsimile or courier and delivered to the "Address for
Notices" specified below or at such other address as shall be designated by such
Shareholder on at least fourteen (14) days written notice to each other
Shareholder:
29
32
If to Eco Telecom, to:
Eco Telecom Limited
▇▇▇▇▇ ▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ No.: ▇▇▇▇-▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇
With a copy to:
OOO ▇▇▇▇-▇▇▇
▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
Facsimile No.: ▇▇▇▇▇-▇▇▇-▇▇▇▇
Attn: Stanislav Shekshnya
and a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CIS Legal Services
▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Russian Federation
Facsimile No.: ▇▇-▇▇▇-▇▇▇-▇▇-▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
If to Telenor, to:
Telenor East Invest AS
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇-▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇-▇▇-▇▇-▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
With a copy to:
Advokatene i Telenor
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇-▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇-▇▇-▇▇-▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
30
33
If to the Company, to:
Open Joint Stock Company "Vimpel-Communications"
10 ▇▇▇▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Federation
Facsimile No.: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
General Counsel
With a copy to:
Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇▇▇ Place II
7 Ulitsa Gasheka
123056, Moscow
Russian Federation
Facsimile No.: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given and shall be effective when transmitted by
facsimile, personally delivered or, in the case of any notice delivered by
courier, upon receipt, in each case, given or addressed as aforesaid.
(b) Any Demand made by an Eco Shareholder or a Telenor Shareholder
pursuant to Section 3.01(a) shall be delivered by courier (i) to the Company and
(ii) to Telenor, if such Demand is made by an Eco Shareholder, and (iii) to Eco
Telecom, if such Demand is made by a Telenor Shareholder. A Demand shall be
effective for all purposes (including, without limitation, for purposes of
determining when such Demand was exercised) as of the date and time of receipt
by the Company of such Demand (as evidenced by an original receipt indicating
such date and time).
6.03 Entire Agreement
This Agreement and the other Principal Agreements supersede all prior
discussions and agreements among the Parties or to which any Shareholder is a
party with respect to the subject matter hereof and thereof, and contain the
sole and entire agreement among the parties hereto and thereto with respect to
the subject matter hereof and thereof.
6.04 Waiver
Any term or condition of this Agreement may be waived at any time by
the Party that is entitled to the benefit thereof, but no such waiver shall be
effective unless set forth in a written instrument duly executed by or on behalf
of the Party waiving such term or condition. No waiver by any Party of any term
or condition of this Agreement, in any one or more
31
34
instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion. All remedies,
either under this Agreement or by law or otherwise afforded, will be cumulative
and not alternative.
6.05 Amendment
This Agreement may be amended, supplemented or modified only by a
written instrument duly executed by or on behalf of each Party.
6.06 No Assignment; Binding Effect; No Third Party Beneficiary; Obligations
Several
(a) Neither this Agreement nor any right, interest or obligation
hereunder may be assigned by any Party without the prior written consent of the
other Parties and any attempt to do so will be void, except for assignments and
transfers in accordance with the terms of this Agreement. Subject to the
preceding sentence, this Agreement is binding upon, inures to the benefit of and
is enforceable by the Parties and their respective successors and permitted
assigns. The terms and provisions of this Agreement are intended solely for the
benefit of each Party and its respective successors or permitted assigns, and it
is not the intention of the Parties to confer third party beneficiary rights
upon any other Person other than any Person entitled to indemnity under Section
3.04.
(b) The obligations of the Shareholders hereunder shall be several (and
not joint). A Shareholder shall not be responsible for the failure of any other
Shareholder to perform any obligation required to be performed by it hereunder
or under any other Principal Agreement. The obligations of the Company at any
time hereunder to each Shareholder shall be separate and independent
obligations. Each Shareholder shall be entitled to protect and enforce its
rights arising out of this Agreement and the other Principal Agreements as it
shall see fit, and it shall not be necessary for any other Shareholder to
consent to, or be joined as an additional party in, any proceedings for such
purposes.
6.07 Headings
The headings used in this Agreement have been inserted for convenience
of reference only and do not define or limit the provisions hereof
6.08 Invalid Provisions
If any provision contained in this Agreement or any other document
executed in connection herewith is or shall become invalid, illegal or
unenforceable in any jurisdiction, the invalidity, illegality or
unenforceability of such provision in such jurisdiction shall not affect or
impair the validity, legality or enforceability of (a) any other provision of
this Agreement or any such other document in such jurisdiction or (b) such
provision or any other provision of this Agreement or any such other document in
any other jurisdiction.
6.09 Arbitration; Consent to Jurisdiction; Service of Process; Waiver of
Sovereign Immunity
(a) Any and all disputes and controversies arising under, relating to
or in connection with this Agreement shall be settled by arbitration by a panel
of three (3)
32
35
arbitrators under the United Nations Commission on International Trade Law
(UNCITRAL) Arbitration Rules then in force (the "UNCITRAL Rules") in accordance
with the following terms and conditions:
(i) In the event of any conflict between the UNCITRAL Rules
and the provisions of this Agreement, the provisions of this Agreement shall
prevail.
(ii) The place of the arbitration shall be Geneva,
Switzerland.
(iii) Where there is only one claimant party and one
respondent party, each shall appoint one arbitrator in accordance with the
UNCITRAL Rules, and the two arbitrators so appointed shall appoint the third
(and presiding) arbitrator in accordance with the UNCITRAL Rules within thirty
(30) days from the appointment of the second arbitrator. In the event of an
inability to agree on a third arbitrator, the appointing authority shall be the
International Court of Arbitration of the International Chamber of Commerce,
acting in accordance with such rules as it may adopt for this purpose. Where
there is more than one claimant party, or more than one respondent party, all
claimants and/or all respondents shall attempt to agree on their respective
appointment(s). In the event that all claimants and all respondents cannot agree
upon their respective appointment(s) within thirty (30) Business Days of the
date of the notice of arbitration, all appointments shall be made by the
International Court of Arbitration of the International Chamber of Commerce.
(iv) The English language shall be used as the written and
spoken language for the arbitration and all matters connected to the
arbitration.
(v)The arbitrators shall have the power to grant any remedy or
relief that they deem just and equitable and that is in accordance with the
terms of this Agreement, including specific performance, and including, but not
limited to injunctive relief, whether interim or final, and any such relief and
any interim, provisional or conservatory measure ordered by the arbitrators may
be specifically enforced by any court of competent jurisdiction. Each Party
retains the right to seek interim, provisional or conservatory measures from
judicial authorities and any such request shall not be deemed incompatible with
the agreement to arbitrate or a waiver of the right to arbitrate.
(vi) The award of the arbitrators shall be final and binding
on the Parties.
(vii) The award of the arbitrators may be enforced by any
court of competent jurisdiction and may be executed against the person and
assets of the losing Party in any competent jurisdiction.
(b) Except for arbitration proceedings pursuant to Section 6.09(a), no
action, lawsuit or other proceeding (other than the enforcement of an
arbitration decision, an action to compel arbitration or an application for
interim, provisional or conservatory measures in connection with the
arbitration) shall be brought by or between the Parties in connection with any
matter arising out of or in connection with this Agreement.
(c) Each Party irrevocably appoints CT Corporation System, located on
the date hereof at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, 13th Floor, New York, New York 10011, USA,
as its true and lawful agent and attorney to accept and acknowledge service of
any and all process against it
33
36
in any judicial action, suit or proceeding permitted by Section 6.09(b), with
the same effect as if such Party were a resident of the State of New York and
had been lawfully served with such process in such jurisdiction, and waives all
claims of error by reason of such service, provided that the Party effecting
such service shall also deliver a copy thereof on the date of such service to
the other Parties by facsimile as specified in Section 6.02. Each Party will
enter into such agreements with such agent as may be necessary to constitute and
continue the appointment of such agent hereunder. In the event that any such
agent and attorney resigns or otherwise becomes incapable of acting, the
affected Party will appoint a successor agent and attorney in New York
reasonably satisfactory to each other Party, with like powers. Each Party hereby
irrevocably submits to the non-exclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York state
court sitting in New York City, in connection with any such action, suit or
proceeding, and agrees that any such action, suit or proceeding may be brought
in such court, provided, however, that such consent to jurisdiction is solely
for the purpose referred to in this Section 6.09 and shall not be deemed to be a
general submission to the jurisdiction of said courts of or in the State of New
York other than for such purpose. Each Party hereby irrevocably waives, to the
fullest extent permitted by Law, any objection that it may now or hereafter have
to the laying of the venue of any such action, suit or proceeding brought in
such a court and any claim that any such action, suit or proceeding brought in
such a court has been brought in an inconvenient forum. Nothing herein shall
affect the right of any Party to serve process in any other manner permitted by
Law or to commence legal proceedings or otherwise proceed against any other
Party in any other jurisdiction in a manner not inconsistent with Section
6.09(b).
(d) Each Party hereby represents and acknowledges that it is acting
solely in its commercial capacity in executing and delivering this Agreement and
each of the other Principal Agreements to which it is a party and in performing
its obligations hereunder and thereunder, and each Party hereby irrevocably
waives with respect to all disputes, claims, controversies and all other matters
of any nature whatsoever that may arise under or in connection with this
Agreement or any of the other Principal Agreements and any other document or
instrument contemplated hereby or thereby, all immunity it may otherwise have as
a sovereign, quasi-sovereign or state-owned entity (or similar entity) from any
and all proceedings (whether legal, equitable, arbitral, administrative or
otherwise), attachment of assets, and enforceability of judicial or arbitral
awards.
6.10 Governing Law
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, United States of America, without giving
effect to any conflicts of laws principles thereof which would result in the
application of the laws of another jurisdiction.
6.11 Counterparts
This Agreement may be executed in any number of counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.
34
37
IN WITNESS WHEREOF, this Registration Rights Agreement has been duly
executed and delivered by each Party as of the day and year first above written.
Eco Telecom
ECO TELECOM LIMITED
By /s/ Serge Barychkov
-------------------------------
Serge Barychkov
Attorney-in-Fact
Telenor
TELENOR EAST INVEST AS
By /s/ Tron 0stby
-------------------------------
Tron 0stby
Attorney-in-Fact
The Company
OPEN JOINT STOCK COMPANY
"VIMPEL-COMMUNICATIONS"
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
By /s/ ▇▇▇▇▇▇▇▇ ▇. Bychenkov
-------------------------------
▇▇▇▇▇▇▇▇ ▇. Bychenkov
Chief Accountant
35