EXHIBIT C
Conformed Copy
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ESCROW AGREEMENT
Dated December 1, 1998
by and among
TELENOR EAST INVEST AS,
as the Purchaser,
OPEN JOINT STOCK COMPANY "VIMPEL-COMMUNICATIONS",
as the Issuer
and
DEN NORSKE BANK ASA,
as the Escrow Agent
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ESCROW AGREEMENT ("Agreement") dated December 1, 1998 by and among TELENOR
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EAST INVEST AS, a corporation organized and existing under the laws of Norway
(the "Purchaser"), OPEN JOINT STOCK COMPANY "VIMPEL-COMMUNICATIONS", an open
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joint stock company organized and existing under the laws of the Russian
Federation (the "Issuer"), and DEN NORSKE BANK ASA, a bank organized and
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existing under the laws of Norway, as escrow agent (the "Escrow Agent").
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WHEREAS, concurrently with the execution and delivery of this Agreement and
pursuant to the Primary Agreement dated as of December 1, 1998 between the
Purchaser and the Issuer (as amended, supplemented or otherwise modified and in
effect from time to time, the "Primary Agreement"), the Issuer has agreed to
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issue and the Purchaser has agreed to purchase 8,902,201 shares of the Issuer's
common stock (the "Shares"), in each case, on the terms and subject to the
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conditions of the Primary Agreement; and
WHEREAS, the Primary Agreement requires that, as a condition to the
consummation of the transactions contemplated by the Primary Agreement, the
Purchaser, the Issuer and the Escrow Agent shall have entered into this
Agreement and the Purchaser shall have deposited the Escrow Amount (as defined
herein) with the Escrow Agent;
NOW, THEREFORE, the Purchaser, the Issuer and the Escrow Agent hereby agree
as follows:
1. APPOINTMENT OF THE ESCROW AGENT; DEPOSIT OF ESCROW AMOUNT
The Purchaser hereby appoints the Escrow Agent as, and the Escrow Agent
hereby agrees to assume and perform the duties of, the escrow agent under and
pursuant to this Agreement, and the Issuer acknowledges and agrees to such
appointment. The Escrow Agent acknowledges receipt of One Hundred Sixty-One
Million Nine Hundred Thirty-One Thousand Thirty-Six U.S. Dollars (US $
161,931,036) (the "Escrow Amount") from the Purchaser and has deposited or shall
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immediately deposit such Escrow Amount in the Escrow Account (as defined in
Section 2 hereof).
2. THE ESCROW FUNDS
The Escrow Amount and all interest thereon (the Escrow Amount and all such
interest being referred to herein, collectively, as the "Escrow Funds") shall be
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held by the Escrow Agent in a separate account in the name of "Den norske Bank
ASA, as Escrow Agent under the Escrow Agreement dated December 1, 1998", which
account (the "Escrow Account") shall be maintained for the purpose, and on the
terms and subject to the conditions, of this Agreement. The holder of the Escrow
Account shall be the Escrow Agent, and neither the Purchaser nor the Issuer
shall be the holder, or shall be deemed to be the holder, of the Escrow Account.
Neither the Escrow Funds nor the Escrow Account shall be subject to any Lien or
attachment by any creditor of any party hereto and the Escrow Funds and the
Escrow Account shall be used solely for the purpose set forth in this Agreement.
None of the amounts held in the Escrow Account shall be available to, and none
of such amounts shall be used by, the Escrow Agent to set off any obligations of
the Purchaser or the Issuer owing to the Escrow Agent in any capacity. The
obligation of the Escrow Agent to release from the Escrow Account and pay to the
Issuer in accordance with the terms of this Agreement any amounts constituting
the Escrow Funds constitute an
independent and separate obligation of the Escrow Agent, and the Escrow Agent
shall under no circumstances whatsoever deduct from or otherwise offset against
such amounts any amounts owed, or alleged to be owed, from the Issuer to the
Purchaser or from the Issuer to the Escrow Agent under or in connection with
this Agreement, the Primary Agreement or any other agreement, or any claim,
obligation or other liability of any nature whatsoever incurred or alleged to
have been incurred by the Issuer under or in connection with any such agreement
or any other matter whatsoever.
3. INTEREST; TAXES
The Escrow Amount shall bear interest at a rate of 4.25 % per annum, which
rate shall be net all of taxes due or withheld with respect thereto (the
Applicable Rate"), for the period from (and including) the date hereof to (but
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excluding) the date on which this Agreement terminates in accordance with its
terms. The Applicable Rate shall be calculated on the basis of a 360-day year
consisting of 12 months of 30 days each. All such accrued interest shall be
credited to the Escrow Account.
4. DETERMINATIONS; RELEASE OF ESCROW FUNDS
(a) (i) If the Escrow Agent shall not have received a Certificate and
Instruction in the form of Annex A hereto, signed by the Issuer, by the close of
business on February 15, 1999, then the Escrow Agent, on the third Business Day
thereafter, shall pay to the Purchaser by wire transfer of immediately available
funds to an account of the Purchaser's designation, the balance of the Escrow
Account as at the date of such payment, and this Agreement (other than Sections
6, 7 and 8 hereof) shall terminate.
(ii) If, on or before the close of business on February 15, 1999,
the Escrow Agent shall have received a Certificate and Instruction in the form
of Annex A hereto, signed by the Issuer, then the Escrow Agent, on the third
Business Day thereafter, shall pay to the Purchaser by wire transfer of
immediately available funds to an account designated by Purchaser the amount
specified in such Certificate and Instruction, representing interest accrued on
the Escrow Amount at the Applicable Rate from the date hereof until (but
excluding) January 29, 1999.
(b) If the Escrow Agent shall not have received a Joint Certificate and
Instruction in the form of Annex B hereto, signed by the Purchaser and the
Issuer, by the close of business on June 1, 1999, then the Escrow Agent, on the
third Business Day thereafter, shall pay to the Purchaser by wire transfer of
immediately available funds to an account of the Purchaser's designation, the
balance of the Escrow Account as at the date of such payment, and this Agreement
(other than Sections 6, 7 and 8 hereof) shall terminate.
(c) If, on or before June 1, 1999, the Escrow Agent receives the Joint
Certificate and Instruction described in Section 4(b) hereof, then the Escrow
Agent, on or before the third Business Day thereafter (the "First Payment
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Date"), shall pay to the Issuer from the Escrow Account by wire transfer of
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immediately available funds in accordance with the wire transfer instructions
set forth in Annex E hereto, a portion of the Escrow Funds in an amount equal to
the product of (A) the number of Shares to be paid for on the First Payment Date
(as set forth in Schedule I hereto), multiplied by (B) the purchase price per
Share for the First Payment Date (as set forth in Schedule II hereto), provided
that on the First Payment Date the Escrow Agent shall have confirmed in writing
to the Issuer and the Purchaser by facsimile transmission that it has given
irrevocable wire transfer instructions to effect the payments to
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be made from the Escrow Account on the First Payment Date and the Subsequent
Payment Date falling two Business Days after the First Payment Date.
(d) On each Payment Date set forth on Schedule I hereto after the First
Payment Date, (each a "Subsequent Payment Date"), provided the payments on the
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First Payment Date have been made and without further instruction from the
Purchaser or the Issuer, the Escrow Agent shall pay to the Issuer from the
Escrow Account by wire transfer of immediately available funds in accordance
with the wire instructions set forth in Annex E hereto, the product of (i) the
number of Shares to be paid for on such Subsequent Payment Date (as set forth in
Schedule I hereto), multiplied by (ii) the purchase price per Share for such
Subsequent Payment Date (as set forth in Schedule II hereto). Without prejudice
to the right of the Purchaser to accelerate the payments for Shares unilaterally
as provided in Section 4(e), the Issuer and the Purchaser may otherwise change
any Subsequent Payment Date or the amount to be paid to the Issuer on any
Subsequent Payment Date by a Joint Certificate in the form of Annex C hereto
amending Schedule I hereto executed by the Issuer and the Purchaser and
delivered to the Escrow Agent at least five Business Days prior to first
Subsequent Payment Date to be changed; provided, however, that no such amendment
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will result in there being insufficient funds in the Escrow Account to make all
required payments thereunder.
(e) If at any time on or after the First Payment Date the Escrow Agent
receives a Certificate and Instruction in the form of Annex D hereto signed by
the Purchaser, then on the third Business Day thereafter, the Escrow Agent shall
pay to the Issuer from the Escrow Account by wire transfer of immediately
available funds in accordance with the wire transfer instructions set forth in
Annex E hereto a portion of the Escrow Funds in an amount equal to the amount
set forth in such Certificate and Instruction; provided, however, that no such
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Certificate and Instruction shall accelerate any portion of an amount payable on
a particular Subsequent Payment Date unless the entire amount payable on such
Subsequent Payment Date is accelerated.
5. ISSUER'S WIRE TRANSFER INSTRUCTIONS
The wire transfer instructions set forth in Annex E hereto in respect
of payments to the Issuer under this Agreement may be modified from time to time
by written notice to the Escrow Agent signed by the Issuer to an account in the
name of the Issuer.
6. DUTIES AND OBLIGATIONS OF THE ESCROW AGENT
The duties and obligations of the Escrow Agent shall be limited to and
determined solely by the provisions of this Agreement and the certificates
delivered in accordance herewith, and the Escrow Agent is not charged with
knowledge of or any duties or responsibilities in respect of any other agreement
or document. In furtherance and not in limitation of the foregoing:
(a) the Escrow Agent shall be fully protected in relying in good faith
upon any written certification, notice, direction, request, waiver, consent,
receipt or other document that the Escrow Agent reasonably believes to be
genuine and duly authorized, executed and delivered;
(b) the Escrow Agent shall not be liable for any error of judgment, or for
any act done or omitted by it, or for any mistake in fact or law, or for
anything that it may do or
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refrain from doing in connection herewith; provided, however, that
notwithstanding any other provision in this Agreement, the Escrow Agent shall be
liable for its recklessness, willful misconduct or breach of this Agreement;
(c) the Escrow Agent may seek the advice of legal counsel selected with
reasonable care to assist it in the event of any dispute or question as to the
construction of any of the provisions of this Agreement or its duties hereunder,
and it shall incur no liability and shall be fully protected in respect of any
action taken, omitted or suffered by it in good faith in accordance with the
opinion of such counsel;
(d) in the event that the Escrow Agent shall in any instance, after
seeking the advice of legal counsel pursuant to the immediately preceding
clause, in good faith be uncertain as to its duties or rights hereunder, it
shall be entitled to refrain from taking any action in that instance and its
sole obligation, in addition to those of its duties hereunder as to which there
is no such uncertainty, shall be to keep safely all property held in the Escrow
Account until it shall be directed otherwise in writing jointly by the parties
hereto or by a final, nonapplicable order of an arbitral tribunal; provided,
however, in the event that the Escrow Agent has not received such written
direction or order within thirty (30) calendar days after requesting the same,
it shall have the right to interplead the Purchaser and the Issuer in any court
of competent jurisdiction and request that such court determine its rights and
duties hereunder; and
(e) the Escrow Agent may execute any of its powers or responsibilities
hereunder and exercise any rights hereunder either directly or by or through
agents or attorneys selected with reasonable care, and nothing in this Agreement
shall be deemed to impose upon the Escrow Agent any duty to qualify to do
business or to act as fiduciary or otherwise in any jurisdiction other than
Norway and the Escrow Agent shall not be responsible for and shall not be under
a duty to examine into or pass upon the validity, binding effect, execution or
sufficiency of this Agreement or of any agreement amendatory or supplemental
hereto.
7. COOPERATION
The Purchaser and the Issuer shall provide to the Escrow Agent all
instruments and documents within their respective powers to provide that are
necessary for the Escrow Agent to perform its duties and responsibilities
hereunder.
8. FEES AND EXPENSES; INDEMNITY
The Purchaser shall pay all of the fees of the Escrow Agent for its
services hereunder as and when billed by the Escrow Agent; provided, however,
that each of the Purchaser and the Issuer shall reimburse and indemnify the
Escrow Agent for, and hold it harmless against, one-half (1/2) of any loss,
liability, cost or expense, including but not limited to reasonable attorneys'
fees, reasonably incurred by the Escrow Agent in connection with the Escrow
Agent's performance of its duties and obligations under this Agreement, as well
as the reasonable costs and expenses of defending against any claim or liability
relating to this Agreement; provided that notwithstanding the foregoing, neither
the Purchaser nor the Issuer shall be required to indemnify the Escrow Agent for
any such loss, liability, cost or expense arising as a result of the Escrow
Agent's recklessness, willful misconduct or breach of this Agreement.
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9. RESIGNATION AND REMOVAL OF THE ESCROW AGENT
(a) The Escrow Agent may resign as such thirty (30) calendar days
following the giving of prior written notice thereof to the Issuer and the
Purchaser. In addition, the Escrow Agent may be removed and replaced on a date
designated in a written instrument signed by the Issuer and the Purchaser and
delivered to the Escrow Agent. Notwithstanding the foregoing, no such
resignation or removal shall be effective until a successor escrow agent has
acknowledged its appointment as such as provided in Section 9(c) hereof. In
either event, upon the effective date of such resignation or removal, the Escrow
Agent shall deliver the property comprising the Escrow Funds to such successor
escrow agent, together with such records maintained by the Escrow Agent in
connection with its duties hereunder and other information with respect to the
Escrow Funds as such successor may reasonably request.
(b) If a successor escrow agent shall not have acknowledged its
appointment as such as provided in Section 9(c) hereof, in the case of a
resignation, prior to the expiration of thirty (30) calendar days following the
date of a notice of resignation or, in the case of a removal, on the date
designated for the Escrow Agent's removal, as the case may be, because the
Issuer and the Purchaser are unable to agree on a successor escrow agent, or for
any other reason, the Escrow Agent may select a successor escrow agent and any
such resulting appointment shall be binding upon all of the parties to this
Agreement, provided that any such successor selected by the Escrow Agent shall
be a bank of recognized international standing which is not affiliated with
either the Purchaser or the Issuer.
(c) Upon written acknowledgement by a successor escrow agent appointed in
accordance with the foregoing provisions of this Section 9 of its agreement to
serve as escrow agent hereunder and the receipt of the property then comprising
the Escrow Funds, the Escrow Agent shall be fully released and relieved of all
duties, responsibilities and obligations under this Agreement, subject to the
proviso contained in Section 6(b) hereof, and such successor escrow agent shall
for all purposes hereof be the Escrow Agent.
10. NOTICES
All notices, certificates, instructions and other communications hereunder
must be in writing and will be deemed to have been duly given if delivered
personally or by facsimile transmission or courier to the parties at the
following addresses or facsimile numbers:
If to the Purchaser, to:
Telenor East Invest AS
Keysers Xxxx 00
X-0000 Xxxx
Xxxxxx
Facsimile No.: x00-00-000000
Attn: Xxxxxx Xxxxxxxxx
with a copy to:
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Advokatene i Xxxxxxx
Xxxxxxxxxxxxxxxxx 0
X-0000 Xxxx
Xxxxxx
Facsimile No.: x00-00-000000
Attn: Xxxxx X. Risung
If to the Issuer, to:
OJSC "Vimpel-Communications"
00-00 0xx xx Xxxxx Xxxxxx
Xxxxxx 000000, Xxxxxx
Facsimile No.: x0000-000-0000
Attn: Xx. X. X. Xxxxx, President
with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0 Xxxxxxx Xxxxxx, Xxxxx Xxxxx II
Xxxxxx 000000, Xxxxxx
Facsimile No.: x0000-000-0000
Attn: Xxxxxxx X. Xxxxxxxx
If to the Escrow Agent, to:
Den norske Bank XXX
Xxxxxxxx 00
0000 Xxxx
Xxxxxx
Facsimile No.: x0000-00-00-00
Attn: Espen Gjerstrom
All such notices, requests and other communications will (a) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (b) if delivered by facsimile transmission to the facsimile number as
provided in this Section 10, be deemed given upon printed electronic
confirmation of receipt, and (c) if delivered by courier in the manner described
above to the address provided in this Section 10, be deemed given upon receipt
(in each case regardless of whether such notice, request or other communication
is received by any other Person to whom a copy of such notice is to be delivered
pursuant to
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this Section 10). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other parties hereto.
11. AMENDMENTS, ETC.
This Agreement may be amended or modified, and any of the terms hereof may
be waived, only by a written instrument duly executed by or on behalf of the
Purchaser and the Issuer and, except as otherwise expressly set forth herein,
the Escrow Agent. No waiver by any party of any term or condition contained in
this Agreement, in any one or more instances, shall be deemed to be or construed
as a waiver of the same or any other term or condition of this Agreement on any
future occasion.
12. GOVERNING LAW; SUBMISSION TO JURISDICTION; ARBITRATION
(a) This Agreement (and any dispute, controversy or claim arising out of
or relating to this Agreement) shall be governed by, and construed in accordance
with, English law, without giving effect to the principles of private
international law thereof which would result in the application of a different
law.
(b) Except as permitted by Section 6(d) hereof, any dispute, controversy
or claim arising out of or relating to this Agreement (including, without
limitation, any such dispute, controversy or claim relating to any breach,
alleged breach, termination, invalidity or alleged invalidity hereof) shall be
settled by arbitration, to the exclusion of all other proceedings, in accordance
with the UNCITRAL Arbitration Rules as at present in force. There shall be three
(3) arbitrators. The Purchaser shall appoint one arbitrator, the Issuer shall
appoint one arbitrator and the Escrow Agent shall appoint the third arbitrator.
The seat of the arbitration shall be Stockholm Sweden, and the English language
shall be used throughout the arbitral proceeding. Each party shall bear its own
costs of arbitration, including attorneys' fees.
13. Business Day
For all purposes of this Agreement, the term "Business Day" shall mean a
day other than Saturday, Sunday or any day on which banks located in Oslo,
Norway, or New York, New York, United States of America, or Moscow, Russia are
authorized or obligated to close.
14. MISCELLANEOUS
This Agreement is binding upon and will inure to the benefit of the parties
hereto and their respective successors and permitted assigns. The headings used
in this Agreement have been inserted for convenience of reference only and do
not define or limit the provisions hereof. 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.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to
be executed as of the date first above written.
TELENOR EAST INVEST AS
By /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
Title: Attorney-in-Fact
OPEN JOINT STOCK COMPANY "VIMPEL-
COMMUNICATIONS"
By /s/ Xx. Xxxxxx Xxxxxxxxxx Xxxxx
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Name: Xx. Xxxxxx Xxxxxxxxxx Xxxxx
Title: President and Chief Executive
Officer
By /s/ Xxxxxxxx X. Bychenkov
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Name: Xxxxxxxx Bychenkov
Title: Chief Accountant
DEN NORSKE BANK ASA,
as the Escrow Agent
By /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Title: General Manager
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