EXHIBIT 4.2
DATED MARCH 19, 2003
(1) TELESYSTEM INTERNATIONAL WIRELESS INC.
- AND -
(2) TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.
- AND -
(3) CLEARWAVE N.V.
- AND -
(4) CLEARWAVE HOLDINGS B.V.
- AND -
(5) EEIF MELVILLE B.V.
--------------------------------------------------------------------------------
EXIT DEED
--------------------------------------------------------------------------------
XXXXXX, XXXX & XXXXXXXX
----------
A MULTINATIONAL PARTNERSHIP OF SOLICITORS
AND REGISTERED FOREIGN LAWYERS
----------
Xxxxxxxxx Xxxxx
0-0 Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX
000 0000 0000 000 0000 0000 Fax
Ref: EMP-Exit Deed/File no. 26449/00003
CONTENTS
CLAUSE SUBJECT MATTER PAGE
------ -------------- ------
1. INTERPRETATION ................................................... 1
2. TAG ALONG RIGHTS ON CLEARWAVE TOTAL SALE ......................... 7
3. TAG ALONG RIGHTS ON CLEARWAVE PARTIAL SALE ....................... 9
4. DRAG ALONG RIGHTS ON CLEARWAVE TOTAL SALE ........................ 11
5. CONSULTATION IN RELATION TO CLEARWAVE TOTAL OR PARTIAL SALE ..... 12
6. TAG ALONG OR DRAG ALONG UPON A PUBLIC SALE OF CLEARWAVE ......... 12
7. LONG STOP POSITION .............................................. 14
8. ISSUE OF SHARES ................................................. 15
9. AFFILIATES ...................................................... 15
10. TERMINATION ..................................................... 15
11. NON APPLICABILITY ............................................... 16
12. TRANSFERS OF SHARES IN MOBIFON .................................. 16
13. VALUATION ....................................................... 17
14. MISCELLANEOUS ................................................... 17
15. NOTICES ......................................................... 18
16. ARBITRATION ..................................................... 18
SCHEDULE 1 ............................................................... 20
Examples ................................................................. 20
SCHEDULE 2 ............................................................... 24
Terms of MobiFon Tag-Along and Drag-Along Rights ......................... 24
SCHEDULE 3 ............................................................... 29
Disclosure of Options .................................................... 29
SCHEDULE 4 ............................................................... 30
Addresses for Notice ..................................................... 30
SCHEDULE 5 ............................................................... 32
Form of Control Confirmation Certificate ................................. 32
i
EXIT DEED
DATE: MARCH 19, 2003
PARTIES:
(1) TELESYSTEM INTERNATIONAL WIRELESS INC., a company incorporated and
existing under the laws of Canada and having its head office and principal
place of business at 0000 xx xx Xxxxxxxxxxx Xxxxxx West, 16th Floor,
Montreal, Quebec, H3B 4WS, Canada ("TIWI");
(2) TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V., a public limited
liability company organised and existing under the laws of The Netherlands
and having its registered office at World Trade Centre, Strawinskylaan
707, Amsterdam 1077XX, The Netherlands ("TIWC");
(3) CLEARWAVE N.V., (previously TIW Eastern Europe N.V.) a public limited
liability organised and existing under the laws of The Netherlands and
having its registered office at World Trade Centre, Strawinskylaan 707,
Amsterdam 1077XX, The Netherlands ("CLEARWAVE");
(4) CLEARWAVE HOLDINGS B.V., a company organised and existing under the laws
of The Netherlands, having its registered office at World Trade Centre,
Strawinskylaan 707, Amsterdam 1077XX, The Netherlands ("CLEARWAVE
HOLDINGS"); and
(5) EEIF MELVILLE B.V., a limited liability company organised and existing
under the laws of The Netherlands and having its seat at Professor X X
Xxxxxxxxxxx 0, 0000 XX Xxxxxxxxxx, Xxx Xxxxxxxxxxx ("EEIF").
IT IS AGREED AS A DEED as follows:
1. INTERPRETATION
1.1 In this Agreement:
Term Definition
"AFFILIATE" of a Person means another Person that directly
or indirectly Controls is Controlled by or is
under common Control with, such Person;
"APPRAISED VALUE" means the fair market value established in
accordance with Section 13;
"BUSINESS DAY" means any day, other than Saturday, Sunday or
any statutory holiday in The Netherlands,
Romania, London,
England or Montreal, Canada;
"CAPITAL PERCENTAGE" is as defined in section 3.4 hereof;
"CASH EQUIVALENT" shall mean the sum certified by the independent
evaluator pursuant to section 13 as being in
their opinion the monetary value of the
Marketable Securities being offered as the
consideration at that time;
"CHANGE OF CONTROL" shall have occurred where, as a result of, or in
the context of, a particular sale of securities
in CLEARWAVE, either (A) the TIW Group shall,
either independently or pursuant to an agreement
with other shareholders of CLEARWAVE, no longer
directly or indirectly possess either (i) the
power, by contract or otherwise, to appoint or
remove a majority of the members of the relevant
board (and for this purpose the relevant board
shall be the management board, supervisory board
or other board of CLEARWAVE that has the power
and authority to appoint and remove senior
management of CLEARWAVE and to independently
direct or cause the direction of management and
policies of CLEARWAVE), or (ii) the ownership of
more than 50% (fifty per cent) of the
outstanding voting securities of CLEARWAVE; or
(B) the TIW Group's direct and indirect interest
in CLEARWAVE falls to below 50 % plus one of the
issued and outstanding equity securities of
CLEARWAVE.
"CLEAR WAVE INVESTEE %" is as defined in sections 2.3.2 and 3.4 hereof;
"CLEARWAVE PARTIAL SALE" is as defined in section 3.1 hereof;
"CLEARWAVE'S %" is as defined in section 2.3.2 hereof;
"CLEARWAVE TOTAL SALE" is as defined in section 2.1 hereof;
"CONTROL" means the possession, directly or indirectly, of
either (i) the power to direct or cause the
direction of management and policies of a
Person, or (ii) the power to appoint or remove a
majority of the directors or supervisory or
management board members or directors of a
Person by contract or otherwise, or (iii) the
ownership of more than 50% (fifty per cent) of
the outstanding voting securities of another
Person;
2
"CONTROL CONFIRMATION" means a certificate, duly executed by the chief
legal officer of TIWI and the chief executive
officer or the chief financial officer of TIWI,
in the form of Schedule 5 and accompanied by
such relevant documentation as set out in such
certificate, to the effect that following a
CLEARWAVE Partial Sale, either (A) the TIW Group
will maintain Control over CLEARWAVE either
independently or pursuant to an enforceable
agreement with other shareholders of CLEARWAVE
and, for this purpose, "Control" means the
direct or indirect possession of either (i) the
power, by contract or otherwise, to appoint or
remove a majority of the members of the relevant
board (and for this purpose the relevant board
shall be the management board, supervisory board
or other board of CLEARWAVE that has the power
and authority to appoint and remove senior
management of CLEARWAVE and to independently
direct or cause the direction of management and
policies of CLEARWAVE), or (ii) the ownership of
more than 50% (fifty per cent) of the
outstanding voting securities of CLEARWAVE; or
(B) a Change of Control of CLEARWAVE has
occurred;
"CONTRACT OF ASSOCIATION" means the contract of association of MobiFon, as
amended from time to time;
"CZECH HOLDCO" means TIW Czech N.V., a public limited company
organised and existing under the laws of The
Netherlands and having its registered seat at
Rotterdam, The Netherlands;
"ENCUMBRANCE" means a mortgage, charge, pledge, lien, option,
usufruct, restriction, right of first refusal or
pre-emption, third Party right or interest,
other encumbrance or security interest of any
kind, or another type of preferential
arrangement having similar effect;
"EXCHANGED SHARES" is as defined in section 6.2.2;
"EXIT AGREEMENT" means the Amended and Restated Exit Agreement
dated 3 May 2001 (as amended or restated from
time to time) between TIWC, Clearwave, ROMGSM
Holdings Limited and others;
"INVESTEE COMPANY" is as defined in section 2.3.2;
3
"INVESTORS" is as defined in the Exit Agreement and ROMGSM
Holdings Limited;
"IPO" means an initial public flotation of equity
shares of the relevant corporation under
applicable securities legislation or the stock
exchange requirements of any Major Stock
Exchange, where the market value of the
securities to be sold of the relevant
corporation would be no less than $100,000,000
(US Dollars one hundred million);
"IRR" shall mean the annual rate of discount which
equates the value of the cash outflows
associated with the aggregate purchase price
with the value of the total sum of cash inflows
accruing from it, expressed as a percentage;
"LOAN AGREEMENTS" means the loan facility agreements entered into
between MobiFon and the Senior Lenders, all
dated 27 August 2002, as well as the working
capital facility agreements entered into between
MobiFon and ABN AMRO Bank (Romania) S.A., dated
19 February 1999, and MobiFon and Citibank,
dated 25 March 1999;
"MAJOR STOCK EXCHANGE" means a US National Stock Exchange, NASDAQ,
EASDAQ, the stock exchanges of Toronto,
Frankfurt, Amsterdam, London or New York or any
other recognised investment exchange (as defined
in section 285 of the Financial Services and
Markets Xxx 0000 of
England);
"MARKETABLE SECURITIES" means marketable securities quoted or listed for
trading on a Major Stock Exchange that are
subject to no greater restriction on transfer or
"tradeability" (or registrability) than those
imposed on TIW Group or other like institutional
shareholders;
"MERGER" means a merger or reorganisation of the relevant
corporation with another unconnected corporation
(the "MERGER CORPORATION") whereupon the
shareholders of the relevant corporation receive
cash or Marketable Securities of the Merger
Corporation;
"MOBIFON" means MobiFon S.A., a joint stock company,
existing and organised in accordance with the
laws of Romania;
4
"MOBIFON SHARES" means issued and outstanding shares in MobiFon;
"NUMBER OF QUALIFYING
MOBIFON SHARES" is defined in section 3.3.2 hereof;
"OBLIGORS" means TIWI, TIWC, CLEARWAVE and CLEARWAVE
HOLDINGS;
"OUTSTANDING
SHARE NUMBER" is as defined in section 2.3.2 hereof;
"PARTIES" means each of the Obligors and EEIF;
"PERSON" means any individual, any entity which is
recognised as having legal personality under the
laws of a relevant jurisdiction and any grouping
of individuals and/or such entities which, as a
grouping, has a distinct legal identity under
applicable law;
"PROPORTIONATE APPRAISED
VALUE" is as defined in section 2.3.2 hereof;
"PURCHASER" is defined in Section 2.1 hereof;
"PUBLIC SALE" means either (i) an IPO of CLEARWAVE where the
market value of the Marketable Securities of
CLEARWAVE to be sold under the IPO would be no
less than $100,000,000 (US Dollars one hundred
million) or (ii) a Merger of CLEARWAVE where the
market value of the Marketable Securities of the
Merger Corporation after the Merger is at least
$100,000,000 (US Dollar one hundred million)
(without taking into account the Exchanged
Shares or any Marketable Securities of the
Merger Corporation owned by the TIW Group or by
any controlling shareholders of the Merger
Corporation);
"PUBLIC SALE
CONSIDERATION" means the Marketable Securities issued by
CLEARWAVE upon an IPO or the cash paid and
Marketable Securities issued by the Merger
Corporation upon a Merger;
"PUBLIC SALE TOTAL PRICE" is as defined in section 6.2.2(b) hereof;
"PUBLIC SALE OFFER" is as defined in section 6.1 hereof;
"QUALIFYING MOBIFON
SHARE" means a share in MobiFon owned by EEIF;
"RELEVANT PERCENTAGE" is as defined in section 2.3.2 hereof;
5
"RELEVANT VALUE" is as defined in sections 2.3.2, 3.4 and 6.2
hereof;
"SENIOR LENDERS" means the European Bank for Reconstruction and
Development, Nordic Investment Bank and Export
Development Canada;
"SHAREHOLDERS' AGREEMENT" means the Shareholders' Agreement dated 3
December 1999 between the Investors as therein
defined, CLEARWAVE and Czech Holdco (as amended
from time to time);
"SHAREHOLDERS'
RESOLUTION" means the resolution of the shareholders of the
Corporation scheduled to the Shareholders
Agreement as Schedule 5.4;
"SHARE SUBSCRIPTION
AGREEMENT" means the Amended and Restated Share
Subscription Agreement dated 2 December 1999
between the Investors as therein defined, AIG
Emerging Europe Infrastructure Fund LP,
CLEARWAVE, Czech HoldCo and TIWC (as amended
and/or restated from time to time);
"SOLD %" is as defined in section 3.3.2 hereof;
"SPA" means the share purchase agreement dated 18
December 2002 between the Obligors and Cablecom
Limited which provides for the purchase by
Cablecom Limited of the Qualifying MobiFon
Shares;
"TIW GROUP" means TIWI and its Affiliates from time to time;
"TIW GROUP %" is as defined in section 3.4 hereof.
1.2 Schedules 1 to 5 are hereby incorporated by reference.
1.3 The inclusion of headings and a table of contents in this Agreement are
for convenience of reference only and shall not affect the construction or
interpretation hereof.
1.4 In this Agreement, unless the context otherwise requires, words importing
the singular include the plural and vice versa and words importing gender
include all genders.
1.5 The Parties shall endeavour in good faith negotiations to modify any
invalid, illegal or unenforceable provision of this Agreement to the
extent necessary to make such provision valid, legal and enforceable. Each
of the Parties hereto agrees that it shall not allege the invalidity,
illegality or unenforceability of this Agreement, or any one or more of
the provisions contained herein.
6
1.6 Except as expressly provided in this Agreement, no amendment, waiver or
termination of this Agreement shall be binding unless executed in writing
by the Party to be bound thereby.
1.7 No waiver of any provision of this Agreement shall constitute a waiver of
any other provision nor shall any such waiver constitute a continuing
waiver unless otherwise expressly provided.
1.8 This Agreement shall be governed by and construed in accordance with the
laws of
England.
1.9 A reference to a company or other legal entity shall be construed so as to
include any legal entity or entities into which such company may during
the continuance of this Agreement be merged by means of a statutory merger
(jurisdische fusie) or into which it may be split up or demerged, by means
of a statutory split up or demerger;
1.10 In this Agreement, a reference to:
1.10.1 a document is a reference to that document as modified from time
to time;
1.10.2 a person includes a reference to a government, state, state
agency, corporation, body corporate (rechtspersoon), an
unincorporated association or partnership;
1.10.3 a section or schedule, unless the context otherwise requires, is a
reference to a section of or schedule to this Agreement;
1.10.4 ownership of shares includes owning shares both directly or
through nominees.
1.11 In this Agreement, whenever an obligation is expressed to be given or
undertaken by the Obligors, it shall be given or undertaken by them
jointly and severally.
2. TAG ALONG RIGHTS ON CLEARWAVE TOTAL SALE
2.1 This section 2, as well as sections 4 and 5, shall apply in the event that
the TIW Group wishes to sell, in one or a series of related transactions,
all the CLEARWAVE Shares owned by the members of the TIW Group to an
unconnected third party or parties (the "PURCHASER") in a bona fide arms'
length transaction for cash or Marketable Securities (a "CLEARWAVE Total
Sale").
2.2 The TIW Group shall ensure that no CLEARWAVE Total Sale shall take place
unless either:
2.2.1 EEIF has agreed in writing; or
2.2.2 CLEARWAVE or the Purchaser has made a legally binding offer to buy
all the Qualifying MobiFon Shares on the terms set out in section
2.3 below and the offer closes and is completed with respect to
each such accepted offer simultaneously with the CLEARWAVE Total
Sale, unless failure to complete is the fault of EEIF.
7
2.3 The terms of the offer by CLEARWAVE or the Purchaser hereunder shall be as
close as reasonably practicable to the terms of the CLEARWAVE Total Sale
(mutatis mutandis) except as follows:
2.3.1 the offer shall be open for acceptance for not less than 15
Business Days;
2.3.2 the consideration for each Qualifying MobiFon Share shall be "c"
which is calculated as follows:
Relevant Value
c = ---------------- (divided by) Outstanding Share Number
CLEARWAVE's %
where:
For the purposes hereof, it is assumed that the outstanding Class
A, Class B and Class C Shares of Czech HoldCo shall have been
converted into Common Shares of Czech HoldCo in accordance with
the Shareholders' Resolution and the terms as used in the
foregoing formula have the following meaning:
"APPRAISED VALUE" means the value, as determined in accordance
with section 13 hereof;
"CLEARWAVE'S %" is CLEARWAVE's Investee % in relation to MobiFon;
"CLEARWAVE'S INVESTEE %" is the percentage that the equity
interest CLEARWAVE owns in each Investee Company on a fully
diluted basis (taking into account, without limitation, in the
case of Czech Holdco, the potential or actual dilutive effect of
the Shareholders' Resolution) is of the aggregate equity of the
relevant Investee Company;
"INVESTEE COMPANY" means each company or body corporate in which
CLEARWAVE has an equity interest at the time;
"OUTSTANDING SHARE NUMBER" means the number of shares issued and
outstanding of MobiFon, excluding any shares of MobiFon held by
such corporation in its own capital;
"RELEVANT VALUE" equals the total consideration payable by the
Purchaser for CLEARWAVE on a CLEARWAVE Total Sale multiplied by
the Relevant Percentage;
"RELEVANT PERCENTAGE" is the percentage that the Proportional
Appraised Value for an Investee Company is of the aggregate
Proportional Appraised Value of all Investee Companies;
"PROPORTIONAL APPRAISED VALUE" is, for each Investee Company, the
Appraised Value of its entire issued and outstanding share capital
multiplied by CLEARWAVE's Investee %;
8
2.3.3 the sole obligation of EEIF shall be to transfer good title to its
Qualifying MobiFon Shares free from Encumbrance (except as
pursuant to the Contract of Association and the Loan Agreements)
and no other warranties shall be required to be given.
2.3.4 the consideration will be payable in cash or Marketable Securities
or a combination of both or with the ability to choose between
both on the same basis as is the consideration payable to the
members of the TIW Group. If the consideration is Marketable
Securities, they will be of the same nature as those issued to
members of the TIW Group and subject to no greater restrictions
and the provisions of section 6.4 will apply mutatis mutandis to
such Marketable Securities.
2.3.5 insofar as it relates to Qualifying MobiFon Shares, the provisions
of section 12 will apply.
2.4 The failure of EEIF to accept, or to accept within the relevant time
frame, an offer made in accordance with section 2.2 will not prevent a
CLEARWAVE Total Sale.
2.5 A worked example of the formula in section 2.3 is set out in Part 1 of
Schedule 1 for illustration purposes only.
2.6 If the Appraised Value of any Investee Company is negative, then in
calculating the "Relevant Value", the total consideration payable by the
Purchaser for CLEARWAVE will be deemed to be increased by the extent to
which the Proportional Appraised Value of such Investee Company is less
than zero and the Proportional Appraised Value of such Investee Company
shall be deemed to be zero for the purposes of determining the Relevant
Percentage. A worked example of this calculation is set out in Part 2 of
Schedule 1 for illustration purposes only.
3. TAG ALONG RIGHTS ON CLEARWAVE PARTIAL SALE
3.1 The provisions of sections 3 to 5 (inclusive) shall apply if a member or
members of the TIW Group wishes to sell, in one or a series of related
transactions, some but not all of the shares of CLEARWAVE owned by the
members of the TIW Group to an unconnected third party or parties (the
"Partial Purchaser") in a bona fide arms length transaction for cash or
Marketable Securities (a "CLEARWAVE Partial Sale").
3.2 Upon notifying EEIF that a CLEARWAVE Partial Sale may occur and, in all
events before any CLEARWAVE Partial Sale has occurred, the TIW Group shall
deliver to EEIF a Control Confirmation. The TIW Group shall, however, be
released from its obligation to deliver further Control Confirmations for
any CLEARWAVE Partial Sale after such time as the TIW Group has confirmed,
in one or more previous Control Confirmation(s), that Changes of Control
have occurred by reason of the events set forth in both (A) and (B) of the
definition of "Change of Control" in this Agreement. The TIW Group shall
ensure that no CLEARWAVE Partial Sale shall take place unless either:
3.2.1 EEIF has consented to such sale in writing, or
9
3.2.2 CLEARWAVE or the Partial Purchaser has made a legally binding
offer (the "Partial Sale Offer") to buy such number of Qualifying
MobiFon Shares on the terms set out herein and the Partial Sale
Offer closes and is completed with respect to each such accepted
offer simultaneously with the CLEARWAVE Partial Sale, unless
failure to complete is the fault of EEIF; or
3.2.3 following such CLEARWAVE Partial Sale the TIW Group will own more
than 50% of the equity shares of CLEARWAVE and there will be no
Change of Control.
3.3 In the event of a Partial Sale Offer, EEIF shall have the right, for a
period of 10 days from the date that it receives the Partial Sale Offer
and a Control Confirmation (where applicable):
3.3.1 if and when the Control Confirmation confirms that a Change of
Control has occurred, to sell all its Qualifying MobiFon Shares in
accordance with a Partial Sale Offer and the consideration shall
be calculated in accordance with section 3.4; or
3.3.2 whether or not the Control Confirmation is delivered, or, if
delivered, whether or not it confirms that a Change of Control has
occurred, to sell part of its Qualifying MobiFon Shares in
accordance with a Partial Sale Offer and the consideration shall
be calculated in accordance with section 3.4 except that:
the offer to be made under this section 3 to EEIF shall be in
respect of such number of Qualifying MobiFon Shares as is equal to
"n" which is calculated as follows:
n = Sold % x Number of Qualifying MobiFon Shares
where:
"NUMBER OF QUALIFYING MOBIFON SHARES" is the number of the
outstanding Qualifying MobiFon Shares that EEIF owns at the
relevant time; and
"SOLD %" is the percentage that the number of CLEARWAVE shares
purchased in the CLEARWAVE Partial Sale is of the total
outstanding shares of CLEARWAVE then owned by the TIW Group;
and sections 2.3.1, 2.3.3, 2.3.4, 2.3.5, 2.4 and 2.6 shall apply mutatis
mutandis to such Partial Sale Offer.
3.4 For the purposes of section 3.3, the consideration for each Qualifying
MobiFon Share, shall be "c" which is calculated as follows:
Relevant Value
c = -------------- x Capital Percentage (divided by) Number of Qualifying
CLEARWAVE's %
MobiFon Shares
where:
10
"APPRAISED VALUE" means the value, as determined in accordance with
section 13 hereof;
"CAPITAL PERCENTAGE" means the percentage that the Qualifying MobiFon
Shares is of the aggregate equity of MobiFon on a fully diluted basis;
"CLEARWAVE'S %" is CLEARWAVE's Investee % in relation to MobiFon;
"CLEARWAVE'S INVESTEE %" is the percentage that the equity interest that
CLEARWAVE owns in each Investee Company on a fully diluted basis is of the
aggregate equity of the relevant Investee Company;
"INVESTEE COMPANY" means each company or body corporate in which CLEARWAVE
has an equity interest at the time;
"RELEVANT VALUE" is (i) the total consideration payable by the Purchaser
for the equity of CLEARWAVE being sold by the TIW Group on the CLEARWAVE
Partial Sale, divided by the TIW Group % (ii) multiplied by the Relevant
Percentage;
"RELEVANT PERCENTAGE" is the percentage that the Proportional Appraised
Value for an Investee Company is of the aggregate Proportional Appraised
Value of all Investee Companies;
"PROPORTIONAL APPRAISED VALUE" is, for each Investee Company, the
Appraised Value of its entire issued and outstanding share capital
multiplied by CLEARWAVE's Investee %;
"TIW GROUP %" is the percentage that the equity being sold by the TIW
Group on the CLEARWAVE Partial Sale represents of the aggregate equity of
CLEARWAVE.
3.5 For the avoidance of doubt, in relation to Czech HoldCo (and any other
Investee Company where equity value is calculated by reference is paid in
capital) any calculation of percentage equity interest shall mean the
percentage that the paid-in capital (including any share premium)
attributable to the shares of the relevant class or series of such
Investee Company held by CLEARWAVE is of the aggregate paid-in capital
(including any share premium) of such Investee Company.
3.6 For the purposes hereof, it is assumed that the outstanding Class A, Class
B and Class C Shares of Czech HoldCo shall not have been converted into
Common Shares in accordance with the Shareholders Resolution.
3.7 A worked example of the formula in section 3.4, is set out in Part 3 of
Schedule 1 for illustration purposes only.
3.8 Notwithstanding section 3.2 above, in the event that the TIW Group regains
Control of CLEARWAVE, the provisions of sections 3.3 and 3.4 shall apply
to any subsequent CLEARWAVE Partial Sale.
4. DRAG ALONG RIGHTS ON CLEARWAVE TOTAL SALE
11
4.1 In the circumstances described in section 2, but subject to section 4.2
below, the TIW Group may require EEIF to accept the offer to be made for
its Qualifying MobiFon Shares under section 2.2 (the "Drag Along Offer")
and to complete the sale of such shares under the Drag Along Offer
(provided CLEARWAVE and the Purchaser, as the case may be, are ready and
able to comply with their obligations under any such offer and the TIW
Group simultaneously completes the sale to which section 2 refers).
4.2 The requirement of EEIF to accept the offer as provided in section 4.1 is
subject to the Drag Along Offer providing for a consideration in cash or
Cash Equivalent in Marketable Securities of the greater of:
4.2.1 $48,000,000 (US Dollars forty-eight million); and
4.2.2 an amount in US Dollars which will generate an IRR of 20% on the
initial investment amounts (being the aggregate purchase price
paid by EEIF for its Qualifying MobiFon Shares under clauses 4.1
and 4.2 of the SPA) from the date of disbursement of such initial
investment amounts to the date that the sale of such Qualifying
MobiFon Shares is to be completed in accordance with the terms of
the Drag Along Offer, taking account of all dividends or other
distributions received by EEIF (net of withholding taxes) during
such period in respect of such Qualifying MobiFon Shares.
4.3 For the avoidance of doubt the provisions of section 2.3 shall apply to
the terms of the Drag Along Offer.
5. CONSULTATION IN RELATION TO CLEARWAVE TOTAL OR PARTIAL SALE
5.1 The Obligors agree that should the TIW Group wish to make a CLEARWAVE
Total Sale or a CLEARWAVE Partial Sale, they shall inform in advance EEIF
of this intention and consult with EEIF. TIWC and EEIF shall during such
consultation seek in good faith to agree on the key terms of any such sale
(including without limitation a range of acceptable prices but subject, in
any event, to section 2.3.3). If such agreement is reached within 14 days
then EEIF agrees that TIWC shall take the leadership in marketing (in
consultation with EEIF) the sale of the shares in CLEARWAVE held by the
TIW Group together with the Qualifying MobiFon Shares as one block only
and provided that neither TIWC nor EEIF is authorised to incur any
obligation on behalf of the other Party and no Party acting reasonably,
shall be obliged to enter into any agreement without its consent (subject
as provided in section 4). In the event that EEIF decides not to sell its
Qualifying MobiFon Shares as a block with those of the TIW Group, then
TIWC shall be allowed to proceed alone in the marketing and selling of its
shares in CLEARWAVE, subject to rights granted to EEIF under section 2 and
3 above and rights granted to TIWC under section 4 above.
6. TAG ALONG OR DRAG ALONG UPON A PUBLIC SALE OF CLEARWAVE
6.1 In the event of a Public Sale, CLEARWAVE shall (and the Obligors other
than CLEARWAVE shall ensure that CLEARWAVE shall) make a binding and
unconditional offer (such offer to be made in accordance with section 2.3,
which shall apply mutatis mutandis) to exchange each Qualifying Share at
the same time as the completion of the Public Sale for a Public Sale
Consideration having an aggregate
12
value equal to the value of each such Qualifying Share, as determined in
accordance with section 6.2 ("PUBLIC SALE OFFER").
6.2 The value of the Marketable Securities issued by CLEARWAVE upon an IPO
will be deemed to be the price per share at which such Marketable
Securities are offered pursuant to a prospectus registration statement or
similar document. The value of the Marketable Securities issued by the
Merger Corporation will be their market value as used in determining the
value of the Public Sale Consideration. The value of the Qualifying
MobiFon Shares shall be determined in accordance with the provisions of
section 2.3 which will apply mutatis mutandis to an offer to be made under
section 6.1 except that:
6.2.1 the definition of "Relevant Value" will be deemed to be the
following:
"RELEVANT VALUE" is Public Sale Total Price multiplied by the
Relevant Percentage; and
6.2.2 the following definitions will be deemed to be included:
"PUBLIC SALE TOTAL PRICE" is the value of the Public Sale
Consideration per CLEARWAVE share multiplied by the number of
shares of CLEARWAVE outstanding at the time of the Public Sale on
a fully diluted basis excluding any new shares issued as part of
the Public Sale and including, in the case of an IPO, any
CLEARWAVE Shares issued under this section 6 ("EXCHANGED SHARES").
6.3 TIWC or CLEARWAVE may require EEIF to accept the Public Sale Offer and to
complete the exchange of such shares under such offer at the same time as
the completion of the Public Sale (provided CLEARWAVE or the Merger
Corporation as appropriate is ready and able to comply with its
obligations under any such offer).
6.4 The requirement of EEIF to accept the Public Sale Offer and to complete
the exchange of its Qualifying MobiFon Shares under such offer at the same
time as the completion of the Public Sale is subject to the Public Sale
Consideration paid to EEIF having an aggregate value of the greater of:
6.4.1 $48,000,000 (US Dollars forty-eight million); and
6.4.2 an amount in US Dollars which will generate an IRR of 20% on the
initial investment amounts (being the aggregate purchase price
paid by EEIF for its Qualifying MobiFon Shares under clauses 4.1
and 4.2 of the SPA) from the date of disbursement of such initial
investment amounts to the date that the sale of such Qualifying
MobiFon Shares is to be completed in accordance with the terms of
the Drag Along Offer, taking account of all dividends or other
distributions received by EEIF (net of withholding tax) during
such period in respect of such Qualifying MobiFon Shares.
6.5 The Obligors shall procure that EEIF shall have rights in relation to the
Exchanged Shares substantially the same (mutatis mutandis) as those set
out in section 13.2 to 13.7 of the Shareholders' Agreement (as if
references to Registerable Securities were references to Exchanged
Shares).
13
6.6 The Obligors undertake to EEIF that any Merger will be on arms' length
terms.
6.7 In the event of a dispute as to the market value of the Marketable
Securities in relation to a Merger, it will be referred to an independent
evaluator and the provisions of section 13 will apply mutatis mutandis.
7. LONG STOP POSITION
7.1 The provisions of this section 7 apply if there has not been an IPO of
MobiFon by 1 October 2004.
7.2 In the event there has been no IPO of MobiFon by 1 October 2004, upon
written request by EEIF made to TIWC not earlier than 1 October 2004, and
not later than 31 October 2004, TIWC or CLEARWAVE (at TIWC's option) shall
promptly make a legally binding offer to buy all the Qualifying MobiFon
Shares owned by EEIF on the terms set out in this section 7.
7.3 The terms of an offer under this section 7 shall be as follows:
7.3.1 the offer shall be open for acceptance for not less than 30 days;
7.3.2 the consideration for each Qualifying MobiFon Share shall be its
value determined in accordance with section 13 and shall be
payable, at the offeror's option, in cash or Marketable Securities
of TIWI ("TIWI Consideration Shares"), valued in accordance with
section 7.3.4 and issued in accordance with section 8;
7.3.3 the sole obligation of EEIF shall be to transfer good title to its
Qualifying MobiFon Shares free from Encumbrance (except pursuant
to the Contract of Association and the Loan Agreements) and no
other warranties shall be required to be given;
7.3.4 the value of each TIWI Consideration Share will be deemed to be
the weighted average trading price for such security of TIWI on a
Major Stock Exchange during the 20 trading days ended on the day
of such written request.
7.4 In the event that an offer has been made to EEIF under section 7.2, TIWC
or CLEARWAVE (as the case may be) may require EEIF to accept such offer
and to complete the sale of its Qualifying MobiFon Shares (provided that
TIWC or CLEARWAVE, as the case may be, is ready and able to comply with
its obligations under any such offer).
7.5 The requirement of EEIF to accept the offer referred to in section 7.4 and
to complete the sale or exchange (as the case may be) of its Qualifying
MobiFon Shares under such offer is subject to the consideration (cash or
TIWI Consideration Shares) paid to EEIF having an aggregate value of the
greater of:
7.5.1 $48,000,000 (US Dollars forty-eight million); and
7.5.2 an amount in US Dollars which will generate an IRR of 20% on the
initial investment amounts (being the aggregate purchase price
paid by EEIF for its Qualifying MobiFon Shares under clauses 4.1
and 4.2 of the SPA) from the
14
date of disbursement of such investment amounts to the date that
the sale of such Qualifying MobiFon Shares is to be completed in
accordance with the terms of offer referred to in section 7.4
above, taking account of all dividends or other distributions
received by EEIF (net of withholding tax) during such period in
respect of such Qualifying MobiFon Shares.
7.6 The Obligors will procure that EEIF shall have rights in relation to the
TIWI Consideration Shares substantially the same (mutatis mutandis) as
those set out in section 13.2 to 13.7 of the Shareholders' Agreement (as
if references to Registerable Securities were references to TIWI
Consideration Shares).
8. ISSUE OF SHARES
8.1 In the event that any shares are to be issued pursuant to this Agreement
such shares shall be issued fully paid up, non-assessable, and free of
Encumbrance and in accordance with all requirements of relevant law and,
where appropriate, share certificates in respect thereof shall be promptly
given to the relevant allottees and such shares shall where relevant, be
fully tradeable on the relevant Major Stock Exchange without the filing of
a registration statement or prospectus.
9. AFFILIATES
9.1 The Obligors shall procure that all members of the TIW Group comply with
the terms of this Agreement as if named herein as TIWC.
9.2 The Obligors will procure that, at any time, all shares owned by the TIW
Group in MobiFon are owned by only one member of the TIW Group (the "TIW
Holding Vehicle") or a wholly owned subsidiary of such TIW Holding
Vehicle.
9.3 In the event that the TIW Holding Vehicle ceases to be CLEARWAVE or its
wholly owned subsidiary, the Obligors will promptly notify EEIF. In such
circumstances, EEIF may from time to time give notice to TIWC to the
effect that the provisions of this Agreement shall apply to any such TIW
Holding Vehicle named in such notice as if it were CLEARWAVE and the
definitions of CLEARWAVE Total Sale and CLEARWAVE Partial Sale shall be
amended accordingly.
9.4 The Obligors will procure that there shall be no public sale or floatation
of equity shares of CLEARWAVE HOLDINGS, without the prior written consent
of EEIF.
9.5 The provisions of sections 2 to 5 shall apply mutatis mutandis to any sale
of shares of CLEARWAVE HOLDINGS by CLEARWAVE.
9.6 The Obligors shall procure that, upon EEIF receiving any Exchanged Shares
hereunder, no member of the TIW Group holding indebtedness of CLEARWAVE
shall convert such indebtedness to securities of CLEARWAVE, unless such
conversion is done on arms' length terms and at fair market value.
10. TERMINATION
10.1 Without prejudice to any accrued rights and obligations:
15
10.1.1 EEIF shall cease to have any rights or obligations under this
Agreement upon an IPO of MobiFon;
10.1.2 The provisions of section 2 to 5 (inclusive) and 7 shall cease to
have effect upon an IPO of CLEARWAVE which amounts to a Public
Sale.
11. NON APPLICABILITY
11.1 For the avoidance of doubt, the provisions of section 3 shall not apply to
any sale by the TIW Group if, following such sale, the TIW Group would
continue to own 50.1% or more of the issued voting and equity shares of
CLEARWAVE.
11.2 A reduction in the ownership by a member of the TIW Group of shares in
CLEARWAVE as a result of any of the following shall not be treated as a
sale of shares in CLEARWAVE for the purposes of sections 2 to 5
(inclusively):
11.2.1 Dilution from successive capital calls or from the exercise of any
option, existing on the date hereof and fairly disclosed to EEIF
in Schedule 3;
11.2.2 The bona fide conversion (on arms' length terms) into equity of
any securities or debt instruments issued and outstanding at the
date hereof;
11.2.3 A transfer by a member of the TIW Group to another member of the
TIW Group (so long as the transferee remains a member of the TIW
Group); and
11.2.4 The entering into by a member of the TIW Group of any pledge or
other security interest by a bona fide creditor over the shares of
CLEARWAVE owned by the TIW Group, provided that any sale by a
creditor of shares of CLEARWAVE subject to such pledge or other
security interest will be treated as a sale for the purposes of
sections 2 to 5 inclusive.
12. TRANSFERS OF SHARES IN MOBIFON
12.1 It is recognised that the transfer of MobiFon Shares is subject to
restrictions imposed under the Contract of Association and statutes and
law governing MobiFon and the ability of EEIF to sell or transfer such
shares shall be subject to such restrictions.
12.2 Each of the Obligors and EEIF shall use all reasonable endeavours to
procure that such restrictions are released in respect of the sale and/or
transfer of MobiFon Shares pursuant to this Agreement.
12.3 In the event that any such restriction applies to any such sale or
transfer:
12.3.1 the terms of any offer for Qualifying MobiFon Shares shall be
consistent with such restrictions (including without limitation
the terms of a Transfer Notice as referred to in the Contract of
Association);
12.3.2 the terms of the offer shall permit the sale of the Qualifying
MobiFon Shares to CLEARWAVE pursuant to this Agreement upon EEIF
being entitled to sell such shares to CLEARWAVE free from such
restrictions;
16
12.3.3 the terms of any offer for MobiFon Qualifying MobiFon Shares shall
also allow for delays in completing the sale of the Qualifying
MobiFon Shares as a result of such restriction.
13. VALUATION
13.1 The Appraised Value will be calculated by an independent evaluator in
accordance with this section. The Parties agree to appoint the same
evaluator as is appointed for the same purposes pursuant to the Exit
Agreement.
13.2 The independent evaluator appointed pursuant to the Exit Agreement shall
prepare a valuation of the fair market value of the entire issued share
capital of the relevant companies, as at the end of a twenty (20) Business
Day period from its appointment. The independent evaluator shall prepare
and deliver the valuation and provide such to the Parties on or before the
twentieth (20th) day following his or her appointment. In preparing the
valuation the independent evaluator shall be guided by the following
principles:
13.2.1 the value of the entire issued and outstanding share capital of
the relevant companies will be determined on the basis of a sale
to a willing independent third Party purchaser, at a fair market
value as a going concern, assuming such sale is conducted in an
orderly manner (i.e. during the 3 (three) month period following
the event giving rise to the valuation) with no discount for
minority ownership or non liquidity of the shares;
13.2.2 the independent evaluator shall consider, among other matters, the
value of companies in comparable businesses whose securities are
publicly traded;
13.2.3 each of the Parties shall have an opportunity to meet with and
express their views on the valuation to the independent evaluator;
and
13.2.4 the independent evaluator shall act as expert and not arbitrator.
13.3 The independent evaluator shall be formally appointed by Czech HoldCo and
his fees paid by Czech HoldCo and if such appointment is unable to occur
for any reason within a period of 30 days, EEIF shall be entitled to
appoint the independent evaluator for the purposes of this Agreement and
his fees shall be paid by CLEARWAVE.
13.4 The date of the valuation must be within 6 months of the CLEARWAVE Total
Sale, CLEARWAVE Partial Sale or Public Sale, as the case may be. The
valuation must be available to the Parties at the time of the relevant
offer.
13.5 For the avoidance of doubt, the same independent evaluator should be used
for all relevant calculations in relation to the same transaction.
14. MISCELLANEOUS
14.1 The provision of section 7.1, 7.6, 7.8, 7.9, 7.10, 7.11, 7.12, 7.13, 7.14
and 7.15 of the Share Subscription Agreement shall apply mutatis mutandis
to this Agreement.
14.2 If EEIF transfers any Qualifying MobiFon Shares, it shall transfer its
rights and obligations under this Agreement insofar as they relate to such
Qualifying MobiFon
17
Shares to such transferee and shall procure that such transferee executes
a deed of adherence in a form reasonably satisfactory to the other Parties
in respect of such obligations. No consent of any Party shall be required
for such transfer (other than as may be required under the terms of the
Contract of Association). Subject thereto, a Party may not assign or
transfer or purport to assign or transfer a right or obligation under this
Agreement without the consent in writing of the other Parties (such
consent not to be unreasonably withheld in the case of a transfer to an
Affiliate or a related fund, in the case of EEIF, and provided that such
transferee executes a deed of adherence in a form reasonably satisfactory
to the other Parties).
14.3 This Agreement and any document referred to in this Agreement constitutes
the entire agreement and supersedes any previous agreements between the
Parties relating to the subject matter of this Agreement.
14.4 The Parties agree that the provisions of Schedule 2 (Terms of MobiFon
Tag-Along and Drag Along Rights) shall be incorporated herein and shall
apply and that the Obligors shall accept the liabilities and obligations
thereunder.
14.5 No person who is not a Party to this Agreement shall have any right under
the Contracts (Rights of Third Parties) Xxx 0000 to enforce any term of
this Agreement.
14.6 The invalidity or unenforceability of any provision of this Agreement in
any jurisdiction shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of this Agreement, including that provision, in any other
jurisdiction.
15. NOTICES
15.1 Any notice or other communication permitted or required pursuant to this
Agreement must be given in writing; any notice is validly given by the
delivery thereof to its recipient, either personally, or by registered
mail at the addresses set forth in Schedule 4 hereof.
15.2 Any notice or other communication given in the foregoing manner is deemed
to have been received at the time of its delivery, if delivered in person,
or on the fifth (5th) Business Day following its sending, if sent by mail;
however, if the mail is interrupted by a strike, a slow-down, force
majeure or any other cause, the Party sending the notice or other
communication shall use the service that is not interrupted or shall
deliver the said notice or other communication in a manner such that the
notice or other communication shall be received as quickly as possible.
Each Party may advise the other Party, in the foregoing manner, of any
change of address for the giving of a notice or other communication.
16. ARBITRATION
16.1 Each Party hereby expressly agrees that any dispute, controversy or claim
arising out of or relating to this Agreement, or the breach, termination
or invalidity hereof, shall be submitted to and finally resolved by
arbitration in accordance with the UNCITRAL Arbitration Rules as in force
and effect on the date of this Agreement (the "Rules"). There shall be
three arbitrators and the appointing authority for the purposes of the
18
Rules shall be the London Court of International Arbitration. Where the
Rules do not provide for a particular situation, the arbitrators shall, in
their absolute discretion, determine what course of action should be
followed and the arbitrators' decision shall be final. The place of
arbitration shall be London,
England and the English language shall be
used throughout the arbitral proceedings.
16.2 Each of the Parties represents and warrants to the other Parties that this
Agreement and their obligations hereunder are commercial obligations, and
confirm that they are not entitled to claim immunity from legal
proceedings in an action brought for the enforcement of this Agreement.
16.3 The Parties acknowledge that damages alone may not be an adequate remedy
for breach of this Agreement and, accordingly, without prejudice to any
rights and remedies that a Party may have under this Agreement, a Party
shall be entitled without proof of special damages to the remedies of
injunction, specific performance and other equitable relief for any
threatened or actual breach of this Agreement, and notwithstanding Section
16.1, the rights of the Parties referred to in this section 16.3 may be
enforced by a Party in the courts of
England or other relevant
jurisdiction. For this purpose, each member of the TIW Group hereby
irrevocably designates, appoints and empowers Law Debenture Corporate
Services Limited at its registered office (being, on the date hereof, at
000 Xxxx Xxxxxx, 0xx Xxxxx, Xxxxxx XX0X 0XX, Xxxxxxx), to act as its
authorised agent to receive service of process and any other legal summons
in
England for the purposes of any such action or proceeding, and EEIF
hereby irrevocably designates, appoints and empowers Emerging Markets
Partnership at its registered office (being, on the date hereof, at 00-00
Xxxxxxx Xxxxxx, Xxxxxx X0X 0XX, Xxxxxxx), to act as its authorised agent
to receive service of process and any other legal summons in
England for
the purposes of any such action or proceeding. Each of the Parties
covenants and agrees that, so long as it has any obligation under this
Agreement, it shall maintain a duly appointed agent to receive service of
process and any other legal summons in any legal action or proceeding
brought in
England pursuant to section 16.3 of this Agreement and shall
keep the other Parties advised of the identity and location of such agent.
16.4 In the event that a Party shall seek to initiate legal proceedings
pursuant to section 16.1 in relation to any dispute, controversy or claim
in respect of which similar legal proceedings have already been initiated
pursuant to and by a party to the Exit Agreement, the Parties hereby agree
that (i) they shall seek to have the action brought pursuant to this
Agreement joined with such similar action pursuant to the Exit Agreement
and, in so far as this may not be possible, (ii) to appoint the same
arbitral tribunal in respect of the proceedings pursuant to this Agreement
as that already appointed in respect of the similar proceedings under the
Exit Agreement (in which event such arbitral tribunal shall have authority
to consider and include in any proceeding, decision or award, any dispute
properly brought before it by any of the parties to the Exit Agreement
insofar as such dispute arises out of the Exit Agreement).
THIS AGREEMENT is executed as a deed by each of the Parties and delivered on the
date first stated on page 1
19
SCHEDULE 1
EXAMPLES
BASE CASE:
CLEARWAVE has three Investee Companies - Czech HoldCo, MobiFon and Bulgaria Co.
Investee CLEARWAVE's FMV of Outstanding Number of Number of
Company Investee % total equity Number of Investor Shares/
Shares/ Shares Post Paid-In
Paid-In Conversion Capital of
Capital post pursuant to Investors'
conversion Shareholders Shares Pre
pursuant to Resolution Conversion
Shareholders
Resolution
------------ ----------- ------------- ------------ ------------ ----------
Czech HoldCo 30% (post 700 600,000 420,000 300,000
conversion) shares/$250 shares/$200
20% (pre million million
conversion)
------------ ----------- ------------- ------------ ------------ ----------
MobiFon 50% 800 7,000,000 980,000 980,000
shares/$360 shares/$50
million milion
------------ ----------- ------------- ------------ ------------ ----------
Bulgaria Co. 40% 000 X/X X/X X/X
------------ ----------- ------------- ------------ ------------ ----------
The market value of the entire share capital of each of these calculated in
accordance with section 14 are $700 million, $800 million and $500 million,
respectively.
CLEARWAVE's Investee % is respectively 30%, 50% and 40% of each Investee Company
(post performance Incentive).
20
PART 1
The Purchaser is offering to pay $1.0 billion for 100% of CLEARWAVE
The Proportion Appraised Value:
Czech Holdco: 30% x 700 = $210 million
MobiFon 50% x 800 = $400 million
Bulgaria Co.: 49% x 500 = $200 million
____
Aggregate Proportional Appraisal Value is: $810 million
Relevant Percentage:
MobiFon $400/810 = 49.38%
Relevant Value:
MobiFon: 1 billion x 49.38% = $493.8 million
MobiFon per share price
= 493.81 million
______________ (divided by) 7,000,000 = $141.09
0.5
PART 2
Using the base case exposed above, except that the FMV of Bulgaria Co. is minus
200.
The Purchaser is offering to pay $1.0 billion for 100% of CLEARWAVE.
This amount must be increased by the negative value of the Proportional
Appraised Value:
Bulgaria Co.: 40% x 200 = $80 million
The Purchaser is deemed to be offering to pay $1.08 billion for 100% of
CLEARWAVE
The Proportional Appraised Values:
Czech HoldCo.: 30% x 700 = $210 million
MobiFon: 50% x 800 = $400 million
Bulgaria Co.: 40% x 200 = $0 million
__
Aggregate Proportional Appraised Value is $610 million
Relevant Percentage:
21
MobiFon: $400/610 = 65.57%
Relevant Value:
MobiFon: 1.08 billion x 65.57% = $708.20 million
MobiFon per share price:
708.16 million
= ______________ (divided by) 7,000,000 = $202.34
0.5
PART 3
Using the base case exposed above, the Purchaser is offering to pay $100 Million
for 10% of CLEARWAVE; before the sale TIWC Group owns 50% of CLEARWAVE.
Sold % = 10% (divided by) 50% = 20%
TIWC Group % = 10%
The number of shares to be sold by:
An Investor: 20% x 980,000 = 196,000 shares
And the purchase price for each share:
Total consideration payable
by Purchaser divided by $100 Million (divided by) 10% = $1 Billion
TIW Group%:
The Proportional Appraised Values:
Czech HoldCo: 20% x 700 = $140 million
MobiFon: 50% x 800 = $400 million
Bulgaria Co.: 40% x 500 =
Aggregate Proportional Appraised Value is: $740 million
Relevant Percentage:
MobiFon: $400/740 = 54.05%
Capital Percentage:
Investor: Paid In capital on Qualifying MobiFon Shares
divided by aggregate paid in capital equity of
Mobifon
$50M (divided by) $360M = 13.89%
MobiFon per share price for Investor:
22
= 540.5 million
______________ x 13.89% (divided by) 980,000 = $153.21
0.5
PART 4
Using the base case exposed above, the Public Sale provides for 10,000,000
shares of CLEARWAVE outstanding after the Public Sale (excluding the shares
issued as part of the Public Sale but including the dilutive effect of the
Shareholders' Resolution) at a price of $100.
Public Sale Share Capital: 10,000,000
Public Sale Consideration: $100
CLEARWAVE Public Sale Total Price: 10,000,000 x $100 = $1 billion
The Proportional Appraised Values:
Czech HoldCo: 30% x 700 = $210 million
MobiFon: 50% x 800 = $400 million
Bulgaria Co.: 40% x 500 = $200 million
____
Aggregate Proportional Appraised Value is: $810 million
Relevant Percentage:
MobiFon: $400/810 = 49.38%
Relevant Value:
MobiFon: $1 billion x 49.38% = $493.8 million
MobiFon per share price:
= 493.8 million
______________ (divided by) 7,000,000 = $141.09
0.5
Public Sale Consideration on an IPO for each Investor, for each Qualifying
Share, is 1.411 CLEARWAVE shares.
23
SCHEDULE 2
TERMS OF MOBIFON TAG-ALONG AND DRAG-ALONG RIGHTS
Terms not otherwise defined in this Schedule shall have the meaning ascribed to
them in the Agreement. In this Schedule the following words and expressions have
the following meanings:
"CHANGE OF CONTROL" shall have occurred where, as a result of a
particular sale of MobiFon Shares, either (A) the
TIW Group shall, either independently or pursuant
to an agreement with other shareholders of
MobiFon, no longer directly or indirectly possess
either (i) the power, by contract or otherwise, to
appoint or remove a majority of the members of the
relevant board (and for this purpose the relevant
board shall be the management board, supervisory
board or other board of MobiFon that has the power
and authority to appoint and remove senior
management of MobiFon and to independently direct
or cause the direction of management and policies
of MobiFon), or (ii) the ownership of more than
45% (forty-five per cent) of the outstanding
voting securities of MobiFon; or (B) the TIW
Group's direct and indirect interest in MobiFon
falls to below 45% of the issued and outstanding
equity shares of MobiFon.
"CONTROL CONFIRMATION" means a certificate, duly executed by the chief
legal officer of TIWI and the chief executive
officer or the chief financial officer of TIWI, in
the form of Schedule 5 (as amended for the
purposes of this Schedule 2) and accompanied with
such relevant documentation as set out in such
certificate, to the effect that following a
MobiFon Partial Sale (as defined below), either
(A) the TIW Group will maintain Control over
MobiFon either independently or pursuant to an
enforceable agreement with other shareholders of
MobiFon and, for this purpose, "Control" means the
direct or indirect possession of either (i) the
power, by contract or otherwise, to appoint or
remove a majority of the members of the relevant
board (and for this purpose the relevant board
shall be the management board, supervisory board
or other board of MobiFon that has the power and
authority to appoint and remove
24
senior management of MobiFon and to independently
direct or cause the direction of management and
policies of MobiFon), or (ii) the ownership of
more than 45% (forty-five per cent) of the
outstanding voting securities of MobiFon; or (B) a
Change of Control of MobiFon has occurred;
The Obligors and EEIF agree as follows:
1 In the event that the TIW Group wishes to sell its MobiFon Shares pursuant
to the terms of an offer (a "SHARE PURCHASE OFFER") (in accordance with
the terms of the Contract of Association), from or to a proposed buyer (a
"PROPOSED BUYER") to purchase all, but not less than all, of the MobiFon
Shares held by the TIW Group, the Obligors shall comply with the following
terms and conditions:
1.1 TIW Group shall cause the Proposed Buyer to execute and deliver to
EEIF a bona fide offer (a "TAG-ALONG OFFER") in writing to
purchase from EEIF all, but not less than all, of the Qualifying
MobiFon Shares, which Tag-Along Offer, if accepted, shall
constitute a binding agreement enforceable in accordance with its
terms against the Proposed Buyer; and
1.2 the terms and conditions of the Tag-Along Offer (to be open for at
least 14 days) shall be identical to the terms and conditions of
the Share Purchase Offer and, without limiting the generality of
the foregoing, the price per share offered by the Proposed Buyer
for the Qualifying MobiFon Shares to be purchased by the Proposed
Buyer pursuant to the Tag-Along Offer shall be identical to that
offered by it for the MobiFon Shares to be purchased pursuant to
the Share Purchase Offer.
2 Notwithstanding section 1 above, the Obligors agree that, should the TIW
Group wish to sell all of the MobiFon Shares held by the TIW Group, it
shall inform in advance EEIF of its intention and consult with EEIF. The
TIW Group and EEIF will during such consultation seek in good faith to
agree on the key terms of any such sale (including a range of acceptable
prices and what liabilities are to be accepted in relation to the proposed
sale but subject to section 2.3.3 above). If such agreement is reached
within 14 days, then the Parties agree that the TIW Group will take the
leadership in marketing (in consultation with EEIF) the sale of their
MobiFon Shares as one block only and provided that neither the TIW Group
nor EEIF is authorised to incur any obligation on behalf of the other
Party and neither Party, acting reasonably, will be obliged to enter into
any agreement without its consent. In the event that EEIF decides not to
sell its Qualifying MobiFon Shares with those of the TIW Group, then the
TIW Group shall be allowed to proceed alone in the marketing, and selling
of its MobiFon Shares, subject to rights granted to EEIF under section 1
above and subject to the rights granted to the TIW Group under section 8
below.
3 If the TIW Group decides to sell MobiFon Shares representing less than all
of its MobiFon Shares to a Proposed Buyer (a "MOBIFON PARTIAL SALE") and
before any MobiFon Partial Sale may occur, the TIW Group shall deliver to
EEIF a Control Confirmation. The TIW Group shall, however, be released
from its obligation to deliver further Control Confirmations for any
MobiFon Partial Sale after such time as
25
the TIW Group has confirmed, in one or more previous Control
Confirmation(s), that Changes of Control have occurred by reason of the
events set forth in both (A) and (B) of the definition of "Change of
Control" in this Schedule. The TIW Group shall ensure that no MobiFon
Partial Sale shall take place unless either:
3.1 EEIF has consented to such sale in writing, or
3.2 A member of the TIW Group or the Proposed Buyer has made a legally
binding offer (the "Partial Sale Offer") to buy such number of
Qualifying MobiFon Shares on the terms set out herein and the
Partial Sale Offer closes and is completed with respect to each
such accepted offer simultaneously with the MobiFon Partial Sale,
unless failure to complete is the fault of EEIF; or
3.3 following such MobiFon Partial Sale the TIW Group will own more
than 45% of the equity shares of MobiFon and there has been no
Change of Control.
4 In the event of a Partial Sale Offer, EEIF shall have the right, for a
period of 10 days from the date that it receives the Partial Sale Offer
and a Control Confirmation (if applicable):
4.1 if and when the Control Confirmation confirms that a Change of
Control has occurred, to sell all its Qualifying MobiFon Shares in
accordance with a Partial Sale Offer and the provision of
paragraph 1 above shall apply mutatis mutandis to such proposed
sale; or
4.2 whether or not the Control Confirmation is delivered, or, if
delivered, whether or not it confirms that a Change of Control has
occurred, to sell part of its Qualifying MobiFon Shares in
accordance with a Partial Sale Offer and the provision of
paragraph 1 above shall apply mutatis mutandis to such proposed
sale except that:
the Partial Sale Offer to be made to EEIF shall be in respect of
such number of Qualifying MobiFon Shares as is equal to "n" which
is calculated as follows:
n = MobiFon Sold % x Number of Qualifying MobiFon Shares
where:
"NUMBER OF QUALIFYING MOBIFON SHARES" is the number of the
outstanding Qualifying MobiFon Shares that EEIF owns at the
relevant time; and
"MOBIFON SOLD %" is the percentage that the number of
MobiFon Shares to be sold by the TIW Group is of the total
outstanding MobiFon Shares then owned by the TIW Group.
5 Notwithstanding sections 3 and 4, the Obligors agree that should the TIW
Group wish to sell some (but not all) of its MobiFon Shares in the
circumstances described in sections 3 and 4 above, it shall inform in
advance EEIF of its intention and consult with EEIF. TIWC and EEIF will
during such consultation seek in good faith to agree on the key terms of
any such sale (including a range of acceptable prices and what liabilities
are to be accepted in relation to the proposed sale, subject to section
2.3.3 of
26
the Agreement). If such agreement is reached within 14 days, then the
Parties agree that the TIW Group will take the leadership in marketing the
sale of the MobiFon Shares and neither the TIW Group nor EEIF is
authorised to incur any obligation on behalf of the other Party and
neither party, acting reasonably will be obliged to enter into any
agreement without its consent. Failure by EEIF to reach agreement with the
TIW Group as aforesaid will entitle the TIW Group to sell alone such
MobiFon Shares without EEIF benefiting from any Tag-Along rights
hereunder.
6 The Obligors will procure that their Affiliates comply with the terms
hereof as if named herein.
7 The provisions of this Schedule 2 shall not apply to any of the following
events:
7.1 a reduction in the TIW Group's holdings of MobiFon Shares as a
result of (i) dilution from successive capital calls or from the
exercise of options from MobiFon fairly disclosed in Schedule 3;
(ii) the bona fide conversion (on arms' length terms) into equity
of any securities or debt instruments; (iii) a transfer by the TIW
Group of MobiFon Shares to its Affiliates (so long as the
transferee remains an Affiliate) and (iv) the entering into by any
member of the TIW Group of any pledge or other security interest
by a bona fide creditor on the MobiFon Shares held by the TIW
Group, (provided that any sale by a creditor of MobiFon Shares
under such pledge or other security interest will be treated as a
sale of MobiFon Shares hereunder); or
7.2 if a sale of MobiFon Shares by TIW Group takes effect upon or
after an IPO of MobiFon, provided that the TIW Group will ensure
that upon an IPO the Qualifying MobiFon Shares will be Marketable
Securities;
8 Drag-Along Rights
8.1 In the circumstances described in paragraph 1 of this schedule,
but subject to paragraph 8.2 below, the TIW Group may require EEIF
to accept the offer to be made for its Qualifying MobiFon Shares
under paragraph 1.1 (the "Drag-Along Offer") and to complete the
sale of such shares under the Drag-Along Offer (provided the TIW
Group and the Proposed Buyer as the case may be, are ready and
able to comply with their obligations under any such offer and the
TIW Group simultaneously completes the sale to which paragraph 1
refers).
8.2 The requirement of EEIF to accept the offer as provided in section
8.1 is subject to the Drag Along Offer providing for a
consideration in cash or Cash Equivalent in Marketable Securities
of the greater of:
8.2.1 $48,000,000 (US Dollars forty-eight million); and
8.2.2 an amount in US Dollars which will generate an IRR of 20% on
the initial investment amounts (being the aggregate purchase
price paid by EEIF for its Qualifying MobiFon Shares under
clauses 4.1 and 4.2 of the SPA) from the date of
disbursement of such initial investment amounts to the date
that the sale of such Qualifying MobiFon Shares is to be
completed in accordance with the terms of the Drag Along
Offer,
27
taking account of all dividends or other distributions
received by EEIF (net of withholding taxes) during such
period in respect of such Qualifying MobiFon Shares.
9. In the event that the Exit Agreement or any other agreement of similar
effect entered into by a member of the TIW Group and ROMGSM Holdings
Limited ("ROMGSM") in respect of the purchase of shares of CLEARWAVE or
MobiFon after the date hereof (the " Relevant Agreements") provide for
treatment of ROMGSM that is more favourable than the treatment provided
for in this Schedule, the provisions of this Schedule shall be amended,
mutatis mutandis, so that EEIF shall have the same or similar treatment,
provided that nothing herein shall result in the loss of the TIW Group's
rights under this Schedule.
28
SCHEDULE 3
DISCLOSURE OF OPTIONS
The options set out in the Exit Agreement are deemed to be disclosed for the
purposes of this Schedule 3.
29
SCHEDULE 4
ADDRESSES FOR NOTICE
In the case of EEIF, to:
Professor X X Xxxxxxxxxxx 0
0000 XX Xxxxxxxxxx,
Xxx Xxxxxxxxxxx
Tel: x00 00 000 0000
Fax: x00 00 000 0000
Attn: Xxxxxxx Xxxxxxxx
With a copy to:
Emerging Markets Partnership (Europe) Limited
00-00 Xxxxxxx Xxxxxx
Xxxxxx XXX 0XX
Tel: x00 00 0000 0000
Fax: x00 00 0000 0000
Attn: Xxxxx Xxxxxx and Xxxx Xxxxxx
In the case of the ClearWave Holdings, to:
Clearwave Holdings B.V.
World Trade Center Xxxxxxxxxxxxxx 000
Xxxxxxxxx 0000XX
Xxx Xxxxxxxxxxx
Tel: x00 00 000 0000
Fax: x00 00 000 0000
Attn: Managing Director
With a copy to:
Telesystem International Wireless Inc.
0000 xx xx Xxxxxxxxxxx Xxxxxx West, 16th Floor
Xxxxxxxx, Xxxxxx
Xxxxxx X0X 0X0
Tel: x0 000 000 0000
Fax: x0 000 000 0000
Attn: General Counsel
In the case of ClearWave, to:
30
ClearWave N.V.
World Trade Center Xxxxxxxxxxxxxx 000
Xxxxxxxxx 0000XX
Xxx Xxxxxxxxxxx
Tel: x00 00 000 0000
Fax: x00 00 000 0000
Attn: Managing Director
With a copy to:
Telesystem International Wireless Inc.
0000 xx xx Xxxxxxxxxxx Xxxxxx West, 16th Floor
Xxxxxxxx, Xxxxxx Xxxxxx X0X 0X0
Tel: x0 000 000 0000
Fax: x0 000 000 0000
Attn: General Counsel
In the case of TIWC, to
World Trade Center Xxxxxxxxxxxxxx 000
Xxxxxxxxx 0000XX
Xxx Xxxxxxxxxxx
Tel: x00 00 000 0000
Fax: x00 00 000 0000
Attn: Managing Director
With a copy to:
Telesystem International Wireless Inc.
0000 xx xx Xxxxxxxxxxx Xxxxxx West, 16th Floor
Xxxxxxxx, Xxxxxx Xxxxxx X0X 0X0
Tel: x0 000 000 0000
Fax: x0 000 000 0000
Attn: General Counsel
In the case of TIWI:
Telesystem International Wireless Inc.
0000 xx xx Xxxxxxxxxxx Xxxxxx West, 16th Floor
Xxxxxxxx, Xxxxxx Xxxxxx X0X 0X0
Tel: x0 000 000 0000
Fax: x0 000 000 0000
Attn: General Counsel
31
SCHEDULE 5
FORM OF CONTROL CONFIRMATION CERTIFICATE
Date:
TO: EEIF MELVILLE B.V.
Professor X X Xxxxxxxxxxx 0
0000 XX Xxxxxxxxxx,
Xxx Xxxxxxxxxxx
Tel: x00 00 000 0000
Fax: x00 00 000 0000
Attn: Xxxxxxx Xxxxxxxx
Dear Sirs:
RE: PROPOSED CLEARWAVE PARTIAL SALE
Reference is hereby made to that certain Exit Deed (the "Exit Deed") executed
between you and, inter alia, Telesystem International Wireless Inc. ("TIWI") on
2003. Terms not otherwise defined in this Certificate shall have the meaning
ascribed to them in the Exit Deed.
TIWI hereby informs you that a CLEARWAVE/MobiFon Partial Sale may occur.
[Insert details of CLEARWAVE/MobiFon Partial Sale]
The undersigned are (i) the [insert title of chief legal officer] a barrister
and solicitor qualified in the provinces of Xxxxxx xxx Xxxxxxx, Xxxxxx and (ii)
the [Chief Executive Officer/Chief Financial Officer] of TIWI and are duly
authorized to make the following certificate on behalf of TIWI and have made
such inquiries as they consider necessary or appropriate.
[Insert one or more of A, B, C, or D as applicable]
A. [As a result of the above-mentioned CLEARWAVE/MobiFon Partial Sale, the
TIW Group shall, either independently or pursuant to an agreement with
other shareholders of CLEARWAVE/MobiFon, no longer directly or indirectly
possess either (i) the power, by contract or otherwise, to appoint or
remove a majority of the members of the relevant board (and for this
purpose the relevant board shall be the management board, supervisory
board or other board of CLEARWAVE/MobiFon that has the power and authority
to appoint and remove senior management of CLEARWAVE/MobiFon and to
independently direct or cause the direction of management and policies of
CLEARWAVE/MobiFon), or (ii) the ownership of more than 50% (fifty per
cent) of the
32
outstanding voting securities of CLEARWAVE/ 45% (forty-five per cent) of
the outstanding voting securities MobiFon.] [To include the following
language if applicable: Attached are true and complete copies of the
arrangements, if any, evidencing that the events in (i) and/or (ii) above
have occurred.]
B. [As a result of the above-mentioned CLEARWAVE/MobiFon Partial Sale, the
TIW Group's direct and indirect interest in CLEARWAVE/MobiFon shall fall
to below 50% plus one of the issued and outstanding equity securities of
CLEARWAVE/ 45% of the issued and outstanding equity securities of
MobiFon.]
C. [After the completion of the above-mentioned CLEARWAVE/MobiFon Partial
Sale, the TIW Group will maintain Control over CLEARWAVE/MobiFon through
the direct or indirect ownership of more than 50% (fifty per cent)/45%
(forty-five per cent) of the outstanding voting securities of
CLEARWAVE/MobiFon.]
D. [After the completion of the above-mentioned CLEARWAVE/MobiFon Partial
Sale, the TIW Group will maintain Control over CLEARWAVE/MobiFon either
independently or pursuant to an enforceable agreement with other
shareholders of CLEARWAVE/MobiFon and, for this purpose, "Control" means
the direct or indirect possession of the power, by contract or otherwise,
to appoint or remove a majority of the members of the relevant board (and
for this purpose the relevant board shall be the management board,
supervisory board or other board of CLEARWAVE/MobiFon that has the power
and authority to appoint and remove senior management of CLEARWAVE/MobiFon
and to independently direct or cause the direction of management and
policies of CLEARWAVE/MobiFon). Attached are true and complete copies of
all arrangements, understandings and agreements between the TIW Group and
third parties that evidence such power.]
AND we have signed, this day of , .
[Signature block]
33
EXECUTED and DELIVERED )
as a DEED for and on behalf of )
EEIF MELVILLE B.V.. )
EXECUTED and DELIVERED )
as a DEED for and on behalf of )
CLEARWAVE HOLDINGS B.V. )
EXECUTED and DELIVERED )
as a DEED for and on behalf of )
CLEARWAVE N.V. )
EXECUTED and DELIVERED )
as a DEED for and on behalf of )
TELESYSTEM INTERNATIONAL )
WIRELESS CORPORATION NV. )
EXECUTED and DELIVERED )
as a DEED for and on behalf of )
TELESYSTEM INTERNATIONAL )
WIRELESS INC. )
Copy to:
Emerging Markets Partnership (Europe) Limited
00-00 Xxxxxxx Xxxxxx
Xxxxxx XXX 0XX
Tel: x00 00 0000 0000
Fax: x00 00 0000 0000
Attn: Xxxxx Xxxxxx and Xxxx Xxxxxx
34
