DATED MAY 30, 2001
ECO TELECOM LIMITED
and
OPEN JOINT STOCK COMPANY "VIMPEL-COMMUNICATIONS"
and
CITIBANK, N.A.
(acting through its London Branch)
as Escrow Agent
___________________________
ESCROW AGREEMENT
___________________________
CONTENTS
1. INTERPRETATION........................................................1
2. APPOINTMENT OF ESCROW AGENT...........................................3
3. THE ESCROW ACCOUNT AND THE VIP DOLLAR ACCOUNT.........................3
4. ESCROW AMOUNT.........................................................3
5. OPERATING PROCEDURES..................................................3
6. ESCROW AGENT..........................................................6
7. REPLACEMENT OF ESCROW AGENT...........................................7
8. FEES AND EXPENSES.....................................................8
9. NOTICES...............................................................9
10. GENERAL..............................................................10
11. TERMINATION..........................................................12
12. EFFECTIVE DATE.......................................................12
THIS AGREEMENT IS DATED MAY 30, 2001
BETWEEN:
1. ECO TELECOM LIMITED a company organized and existing under the laws of
Gibraltar (the "Investor");
2. CITIBANK, N.A., a commercial bank organized and existing under the laws of
the United States of America acting through its London Branch (the "Escrow
Agent"); and
3. OPEN JOINT STOCK COMPANY "VIMPEL-COMMUNICATIONS", an open joint stock
company organized and existing under the laws of the Russian Federation
("VIP" and, together with the Investor, the "Transaction Parties," and the
Transaction Parties, together with the Escrow Agent, being the "Parties").
WHEREAS:
(A) Concurrently with the execution and delivery of this Agreement, the
Transaction Parties are entering into a series of agreements, pursuant to
which the Investor intends, among other things, to invest in VIP (the
transactions contemplated by such agreements being, collectively, the
"Transaction");
(B) The Investor is a party to a primary agreement dated on or about the date
of this Agreement (the "VIP Primary Agreement"), pursuant to which VIP has
agreed to issue and sell, and the Investor has agreed to subscribe for and
purchase, 5,150,000 shares of VIP common stock ("VIP Stock") on the terms
and subject to the conditions set forth therein;
(C) As part of the Transaction, at the Closing under and as defined in the VIP
Primary Agreement, the Investor is to pay XXX XXXXXXX XXX XXXXX XXXXXXX
XXXXXX XXXXXX DOLLARS (US$103,000,000) for the VIP Stock, of which FIFTY
MILLION UNITED STATES DOLLARS (US$50,000,000) (the "Initial Deposit
Amount") is to be deposited in escrow with the Escrow Agent for
disbursement in accordance with this Agreement; and
(D) To facilitate the Transaction, the Transaction Parties have requested the
Escrow Agent to open and operate an escrow account in accordance with the
terms of this Agreement.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
(1) The definitions of the terms listed on Schedule 8 may be found at the
location specified therein. In addition, the following terms shall
have the meanings specified below:
"Account Bank" shall mean Citibank T/O (OOO), a commercial bank organized
and existing under the laws of the Russian Federation.
"Account Bank Agreement" shall mean the account bank and overdraft
agreement dated on or about the date of this Agreement entered into among
the Account Bank, the Transaction Parties and Closed Joint-Stock Company
"VimpelCom-Region".
"Authorised Representatives" shall mean the persons set out in Schedule 4,
Part A, as amended pursuant to Clause 5(4).
"Business Day" means a day other than a Saturday, a Sunday, or any day on
which banks in any of London, England, Moscow, Russia, New York, USA and
Oslo, Norway are authorized or obliged to close.
"Callback Contact" means:
(a) any Authorised Representative; and
(b) the persons set out in Schedule 4, Part B, as amended from time to
time, pursuant to Clause 5(4).
1
"Certificate and Payment Instruction" means a certification by VIP to the
Escrow Agent substantially in the form of Schedule 1 with the dates
appropriately completed.
"Closing Date" shall mean the date notified as such in the Preliminary
Closing Notice which date shall be no later than the Latest Closing Date
and at least 5 (five) Business Days after the receipt by the Escrow Agent
from VIP of such Preliminary Closing Notice.
"Escrow Amount" means the Principal Amount and any Interest Due Amount.
"Execution Date" means such date as the VIP Primary Agreement and all
Principal Agreements, as defined therein, are duly executed and delivered
by each of the parties thereto.
"Final Closing Notice" means a notice from the Investor and VIP to the
Escrow Agent substantially in the form of Schedule 6 with the dates
appropriately completed.
"Interest Due Amount" means any interest accrued on the Principal Amount in
accordance with the terms of this Agreement and not yet added to the
Principal Amount.
"Investor Refund Account" shall mean the account specified as such in
Schedule 5.1 hereto, as amended from time to time pursuant to Clause 5(8).
"Latest Closing Date" means November 30, 2001 subject to (i) the Escrow
Agent not having received a Preliminary Closing Notice, Final Closing
Notice and Readiness Notice by the Latest Readiness Notice Time on such
date in accordance with the terms of this Agreement and (ii) the
Transaction Parties notifying the Escrow Agent in writing signed by the
Authorised Representatives of the Investor and VIP on November 30, 2001
promptly after the Latest Readiness Notice Time or at the latest by 4:00
p.m. (London time) on the first Business Day after November 30, 2001, that
the Latest Closing Date shall be the sixth Business Day after November 30,
2001, in which event the Latest Closing Date shall be the sixth Business
Day after November 30, 2001.
"LIBID" shall mean the rate certified by the Escrow Agent to be the
"Citibank Overnight LIBID Rate".
"Meeting Date" means July 27, 2001.
"Preliminary Closing Notice" means a notice from VIP to the Escrow Agent
substantially in the form of Schedule 2 with the dates appropriately
completed.
"Principal Amount" means, at the date hereof, the Initial Deposit Amount,
and thereafter means the Initial Deposit Amount and any interest
capitalized and added to the Principal Amount, subject to any payment
thereof, in accordance with the terms of this Agreement.
"Readiness Notice" means a notice from the Account Bank to the Escrow Agent
substantially in the form of Schedule 7 with the date appropriately
completed.
"Rubles" means the lawful currency of the Russian Federation.
"Termination Notice" means a notice from the Investor and VIP to the Escrow
Agent substantially in the form of Schedule 3 with the date appropriately
completed.
"US$" means lawful currency of the United States of America.
"VIP Dollar Account" shall mean the account specified as such in Schedule
5.2 hereto.
(2) Construction
The index to and headings in this Agreement are for convenience only and
should not be taken into account in construing this Agreement.
2
2. APPOINTMENT OF ESCROW AGENT
The Transaction Parties hereby designate and appoint the Escrow Agent as
escrow agent and the Escrow Agent hereby accepts such designation and
appointment in accordance with the terms and conditions of this Agreement.
The term "Escrow Agent" shall include the Escrow Agent for the time being
and all its successors pursuant to the provisions of Clause 7 (Replacement
of Escrow Agent).
3. THE ESCROW ACCOUNT and THE VIP Dollar ACCOUNT
(1) The Investor has the following bank account in the name of and for
the benefit of the Investor with the Escrow Agent: Purchase Account,
designated account number 00000000 denominated in US$ (the "Escrow
Account").
(2) VIP has the VIP Dollar Account in the name of and for the benefit
of VIP with the Account Bank.
4. ESCROW AMOUNT
(1) The Escrow Agent hereby acknowledges and confirms to the
Transaction Parties that it has received cleared funds in the amount of the
Initial Deposit Amount from or for the benefit of the Investor and that it
has deposited such sum into the Escrow Account.
(2) The Principal Amount from time to time shall bear interest at a
per annum rate of interest of not less than LIBID minus 35 basis points.
Such interest shall begin to accrue on the date that cleared funds
representing the Initial Deposit Amount are received by the Escrow Agent in
connection herewith and shall accrue monthly, and such interest shall be
capitalized and added to the Principal Amount on the first Business Day of
the following calendar month or on such other date determined in accordance
with this Agreement, as applicable, unless other terms are agreed to in
accordance with Clauses 4(3) or 4(4).
(3) After the date hereof and until (but excluding) the Meeting Date,
the Investor may agree with the Escrow Agent to deposit the Principal
Amount into time deposit(s) with the Escrow Agent upon terms agreed upon by
the Investor and the Escrow Agent, provided that the end of the term of
such deposit(s) shall not occur after the day preceding the Meeting Date.
(4) At any time after the Meeting Date, the Investor and VIP may agree
with the Escrow Agent to deposit the Principal Amount into time deposit(s)
with the Escrow Agent upon terms agreed upon by the Investor, VIP and the
Escrow Agent.
(5) Any interest rate agreed in accordance with Clause 4(3) or 4(4) or
determined in accordance with Clause 4(2) (the "Applicable Rate") shall be
net of all taxes due or withheld with respect thereto and 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.
5. OPERATING PROCEDURES
(1) The Escrow Agent shall act as custodian of the Escrow Amount and
shall disburse the same in accordance with the terms of this Agreement;
provided, that notwithstanding anything to the contrary in this Agreement,
the Escrow Account may not go into overdraft.
(2) The Transaction Parties hereby instruct the Escrow Agent to
release the Escrow Amount or the relevant portion thereof from the Escrow
Account as follows:
(i) No Shareholders' Approval. Subject to Clause 5(3), if the
Escrow Agent shall not have received from VIP within five (5) Business Days
after the Meeting Date (the fifth Business Day after the Meeting Date being
the "Latest Approval Notice Date"), a duly executed Certificate and Payment
Instruction substantially in the form of Schedule 1 hereto, signed by VIP,
then the Escrow Agent is instructed to pay to the Investor by wire transfer
of immediately available funds to the Investor Refund Account, (i) no later
than the second Business Day after the Latest Approval Notice Date, the
Principal Amount and (ii) no later than the fifth Business Day after the
Latest Approval Notice Date, the Interest Due Amount to but excluding the
date of payment of the Principal Amount.
3
The Escrow Agent shall confirm in writing to the Investor and VIP that it
has effected the transfers to be made in accordance with this Clause
5(2)(i) promptly after having executed each such transfer.
(ii) Shareholders' Approval. Subject to Clause 5(3), if, on or
before the close of business on August 3, 2001, the Escrow Agent shall have
received a duly executed Certificate and Payment Instruction substantially
in the form of Schedule 1 hereto, signed by VIP, then the Escrow Agent is
instructed to pay to the Investor by wire transfer of immediately available
funds to the Investor Refund Account, no later than the fifth Business Day
after receipt of such notice, the amount representing interest accrued on
the Principal Amount at the Applicable Rate from the date cleared funds in
the amount of the Initial Deposit Amount are credited to the Escrow Account
to (but excluding) the Meeting Date. The Escrow Agent shall confirm in
writing to the Investor and VIP that it has effected the transfer to be
made in accordance with this Clause 5(2)(ii) promptly after having executed
such transfer.
(iii) Closing. Subject to Clauses 5(3), 5(5) and 5(6), upon receipt
by the Escrow Agent of all of the following:
(a) no later than the fifth Business Day prior to the Latest
Closing Date, a duly executed Preliminary Closing Notice
substantially in the form of Schedule 2 signed by VIP;
(b) no later than the Latest Closing Date, a duly executed
Final Closing Notice substantially in the form of Schedule 6
signed by VIP and the Investor; and
(c) no later than the Latest Closing Date, a duly executed
Readiness Notice substantially in the form of Schedule 7 signed
by the Account Bank;
the Escrow Agent is instructed to:
(aa) transfer on the Closing Date from the Escrow Account to
the VIP Dollar Account with details of payment as specified in
the Preliminary Closing Notice, by wire transfer of immediately
available funds, the Initial Deposit Amount;
(bb) transfer on the Closing Date from the Escrow Account to
the Investor Refund Account, by wire transfer of immediately
available funds, the amount representing the difference between
the Principal Amount on the Closing Date and the Initial Deposit
Amount; and
(cc) transfer from the Escrow Account to the Investor no later
than the fifth Business Day after the Closing Date, by wire
transfer of immediately available funds to the Investor Refund
Account the Interest Due Amount to but excluding the Closing
Date.
The Escrow Agent shall (x) by the close of business (London time) on the
Business Day preceding the Closing Date, notify the Account Bank and the
Transaction Parties that, subject to receipt of a Final Closing Notice and
a Readiness Notice, the transfer of the Initial Deposit Amount to the VIP
Dollar Account will be effected by the Escrow Agent on the Closing Date
(such notice being an "Escrow Agent Funding Notice"), and (y) subject to
the other provisions of this Clause 5(2)(iii), promptly confirm in writing
to VIP and the Investor on the Closing Date that the Escrow Agent has
effected the transfers to be made in accordance with this Clause 5(2)(iii)
promptly after having executed each such transfer.
(iv) Termination (Agreement of the Parties). Subject to Clause 5(3),
upon the receipt by the Escrow Agent of a duly executed Termination Notice
substantially in the form of Schedule 3 hereto signed by VIP and the
Investor (the date of such receipt being the "Termination Date"), the
Escrow Agent is instructed to transfer to the Investor by wire transfer of
immediately available funds to the Investor Refund Account (i) no later
than the second Business Day immediately following the Termination Date,
the Principal Amount and (ii) no later than the fifth Business Day
immediately following such payment of the Principal Amount, the Interest
Due Amount to but excluding the date of such payment of the Principal
Amount. The Escrow Agent shall confirm in writing to the Investor and VIP
that it has effected each transfer to be made in accordance with this
Clause 5(2)(iv) promptly after having executed each such transfer.
4
(v) Termination (Latest Closing Date). Subject to Clause 5(2)(ii)
and Clause 5(3), if immediately after the Latest Readiness Notice Time (as
defined below), the Escrow Agent has not received a duly executed
Preliminary Closing Notice, Final Closing Notice and Readiness Notice in
each case signed by the relevant party or parties, then the Escrow Agent is
instructed to transfer to the Investor by wire transfer of immediately
available funds to the Investor Refund Account (i) on and not before the
fifth Business Day immediately following the Latest Closing Date, the
Principal Amount and (ii) no later than the fifth Business Day immediately
following such payment of the Principal Amount, the Interest Due Amount to
but excluding the date of such payment of the Principal Amount. The Escrow
Agent shall confirm in writing to the Investor and VIP that it has effected
each transfer to be made in accordance with this Clause 5(2)(v) promptly
after having executed each such transfer.
(3)
(i) Upon the Escrow Agent's receipt in accordance with Clause 9 of
a notice from any Transaction Party, executed by a person purporting
to be an executive officer or director of such Transaction Party, that
any dispute, controversy or claim in connection with the transactions
contemplated by this Agreement has been submitted to arbitration in
accordance with Clause 10(5) of this Agreement (an "Arbitration
Notice"), the Escrow Agent shall continue to hold any sums in the
Escrow Account (and shall continue to credit interest to the Escrow
Account in accordance with Clause 4 of this Agreement) until
authorized to release such funds in accordance with this Clause 5(3).
(ii) Notwithstanding anything to the contrary in this Agreement,
forthwith upon receipt by the Escrow Agent of an order, judgment,
award or decree ordering the release of the Escrow Amount, the sum on
deposit in the Escrow Account, or any portion of either thereof (a
"Release Order"), accompanied by a legal opinion satisfactory to the
Escrow Agent given by counsel for the party requesting such release (a
"Legal Opinion," and, together with the Release Order, a "Final
Adjudication Notice") to the effect that such order, judgment or
decree represents a final adjudication of the rights of the Parties by
a court or arbitral tribunal of competent jurisdiction, and that the
time for appeal from such order, judgment, award or decree has expired
without an appeal having been made, the Escrow Agent shall release the
Escrow Amount in accordance with the Release Order.
(4) Each of the Transaction Parties undertakes to give the Escrow Agent
five (5) Business Days' notice in writing of any amendment to its
Authorised Representatives or Callback Contacts, as specified in Schedule
4, Part A or Part B, as applicable. Any amendment of the Authorised
Representatives or Callback Contacts of any Transaction Party shall take
effect upon the expiry of such five (5) Business Days' notice.
(5) Any Preliminary Closing Notice delivered to the Escrow Agent pursuant
to Clause 5(2)(iii) shall be void and without effect and this Agreement
shall remain in effect and the Escrow Agent shall continue to hold and
disburse the Escrow Amount in accordance with this Agreement as if such
Preliminary Closing Notice had not been so delivered to the Escrow Agent,
unless, on or before the Latest Readiness Notice Time, the Escrow Agent
shall have received (i) a duly executed Final Closing Notice signed by the
Investor and VIP and (ii) a duly executed Readiness Notice signed by the
Account Bank. As used in this Agreement, "Latest Readiness Notice Time"
means 7:00 a.m. (London time) on the Closing Date or such later time, not
later than 7:45 a.m. (London time) on the Closing Date, as the Account Bank
may, in its sole discretion, have determined in accordance with the Account
Bank Agreement that it is willing to accept a duly executed Final Closing
Notice, the Account Bank in such case shall have consulted with and
informed the Escrow Agent of such decision before 7:00 a.m. (London time)
on the Closing Date, such determination to be conclusively evidenced by the
delivery by the Account Bank to the Escrow Agent by 7:45 a.m. (London time)
on the Closing Date of a duly executed Readiness Notice. For the
avoidance of doubt, the Escrow Agent shall be fully protected and
indemnified in accordance with the terms of this Agreement, in transferring
the Initial Deposit Amount to the VIP Dollar Account and transferring the
amount representing the difference between the Principal Amount on the
Closing Date and the Initial Deposit Amount to the Investor Refund Account
on the Closing Date upon receipt by the Latest Readiness Notice Time of a
duly executed Final Closing Notice signed by the Investor and VIP and a
duly executed Readiness Notice signed by the Account Bank and, subject to
Clause 5(3), in transferring the Interest Due Amount to but excluding the
Closing Date to the Investor Refund Account no later than the fifth
Business Day after the Closing Date.
5
(6) The Escrow Agent shall not initiate the transfer of funds from the
Escrow Account as stipulated in Clause 5(2)(iii) unless it has received:
(i) the Preliminary Closing Notice;
(ii) the Final Closing Notice; and
(iii) the Readiness Notice.
(7) If, after the Escrow Agent transfers the Initial Deposit Amount to
the Account Bank in accordance with Clauses 5(2)(iii) and 5(6), the Account
Bank returns the Initial Deposit Amount to the Escrow Agent and notifies
the Escrow Agent that such sum is being returned because of a "Completion
Difficulty" in accordance with the Account Bank Agreement, then the Escrow
Agent shall deposit such sum in the Escrow Account and this Agreement shall
remain in effect and the Escrow Agent shall hold and disburse the Escrow
Amount in accordance with this Agreement as if any Preliminary Closing
Notice, Final Closing Notice and Readiness Notice delivered to the Escrow
Agent in accordance with this Agreement had not been so delivered to the
Escrow Agent.
(8) The Investor may amend Schedule 5.1 hereto from time to time by
delivering an amended Schedule 5.1 to the other Parties in accordance with
Clause 9, which amendment shall state expressly that such amended Schedule
5.1 is to replace the Schedule 5.1 hereto (or any prior amendment to
Schedule 5.1 delivered in accordance with this Clause 5(8)) and shall be
signed by an Authorised Representative of the Investor. No such amendment
will take effect until five (5) Business Days after the amended Schedule
5.1 is received by the Parties in accordance with this Clause 5(8).
6. ESCROW AGENT
It is further agreed that:
(1) the Escrow Agent shall be obliged to exercise the same degree of care
with respect to the Escrow Amount that it exercises with respect to its own
property;
(2) this Agreement expressly sets forth all the duties and obligations of
the Escrow Agent. The Escrow Agent shall not be bound by the provisions of
any other agreement between or among any of the Transaction Parties except
this Agreement and the instructions delivered in accordance herewith and no
implied duties or obligations of the Escrow Agent shall be read into this
Agreement;
(3) the Escrow Agent shall not be liable to any person or entity for any
loss, liability, claim, action, damages or expenses arising out of or in
connection with its performance of or its failure to perform any of its
obligations under this Agreement, provided the Escrow Agent has exercised
the standard of care described in Clause 6(1) above, and provided, however,
that notwithstanding any other provision in this Agreement, the Escrow
Agent shall be liable for its own gross negligence or wilful misconduct
(except for consequential losses or special damages of any kind whatsoever,
in each case however caused and whether or not foreseen). The liability of
the Escrow Agent hereunder shall be limited to an amount equal to the
Escrow Amount;
(4) except with respect to Pre-Signing Legal Fees, for which VIP is
solely responsible pursuant to Clause 8.1, the Transaction Parties shall
jointly and severally indemnify and hold harmless the Escrow Agent from and
against any and all losses, liabilities, claims, actions, damages and
expenses (including but not limited to reasonable lawyers' fees and
disbursements) arising out of or in connection with this Agreement, save as
are caused by its own gross negligence or wilful misconduct (all sums
payable pursuant to this Clause 6(4) being "Reimbursable Items");
(5) the Escrow Agent shall not be obliged to make any payment or
otherwise to act on any Certificate and Payment Instruction, Preliminary
Closing Notice, Final Closing Notice, Termination Notice, or other request
or instruction notified to it under this Agreement if it is unable:
(i) to verify any signature on the notice, request, or instruction
against the specimen signature provided for the relevant
Authorised Representative hereunder; and
6
(ii) (in the case of any such notice received by fax) to validate
the authenticity of the request by telephoning a Callback
Contact for the relevant Party.
(6) the Escrow Agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, or other written instrument delivered to it
hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or validity or the service thereof.
The Escrow Agent may act in reliance upon any instrument or signature
believed by it to be genuine and may assume that any person purporting to
give receipt or advice or make any statement or execute any document in
connection with the provisions hereof has been duly authorised to do so;
(7) the Escrow Agent may consult lawyers over any question as to the
provisions of this Agreement or its duties hereunder. The Escrow Agent may
act pursuant to the advice of lawyers or other professional advisers with
respect to any matter relating to this Agreement and shall not be liable
for any action taken or omitted in accordance with such advice;
(8) the Escrow Agent does not have any interest in the Escrow Amount
deposited hereunder but is serving as custodian only. Without limiting the
generality of the foregoing sentence of this Clause 6(8), none of the sums
on deposit in the Escrow Account shall be used by, or available to the
Escrow Agent to set off any obligations of the Investor or any of the other
Transaction Parties owing to the Escrow Agent in any capacity. The Escrow
Amount shall not be subject to any lien or attachment by any creditor of
any party (other than those arising by operation of law) and the Escrow
Amount shall be used solely for the purpose set forth in this Agreement.
The obligation of the Escrow Agent to disburse the Escrow Amount in
accordance with the terms of this Agreement constitutes an independent and
separate obligation of the Escrow Agent, and the Escrow Agent shall not
under any circumstances whatsoever deduct from or otherwise offset against
such amounts any amounts owed, or alleged to be owed, by a Transaction
Party to the Escrow Agent or any other party under or in connection with
this Agreement or any other agreement, or any claim, obligation or other
liability of any nature whatsoever incurred or alleged to have been
incurred by a Transaction Party under or in connection with any such
agreement or any other matter whatsoever. This Clause 6(8), Clause 6(3) and
Clause 6(4), above, shall survive notwithstanding any termination of this
Agreement or the resignation or replacement of the Escrow Agent;
(9) the Escrow Agent shall have no responsibility for the contents of any
ruling of the arbitrators or any third party contemplated in any other
document between or among any of the Transaction Parties as a means to
resolve disputes and may rely without any liability upon the contents
thereof;
(10) in the event of any disagreement between or among the Transaction
Parties resulting in an Arbitration Notice being delivered to the Escrow
Agent in accordance with Clause 5(3), or in the event that the Escrow Agent
in good faith is in doubt as to its duties and rights hereunder, the Escrow
Agent shall be entitled to refrain from taking any action in that instance
and its sole obligation, in addition to those duties hereunder as to which
there is no such uncertainty (including the crediting of accrued interest
to the Escrow Account in accordance with Clause 4(2) hereto), shall be to
safely keep all property held in the Escrow Account until it shall be
required to release it in accordance with Clause 5(3) or as directed in
writing jointly by the Transaction Parties; and
(11) The Escrow Agent shall not be required to make any disbursement under
this Agreement to the extent that the funds available for such purpose
under this Agreement are insufficient.
7. REPLACEMENT OF ESCROW AGENT
(1) The Transaction Parties, acting together, may at any time replace the
Escrow Agent by delivering to the Escrow Agent written notice signed by
each Transaction Party to such effect; such notice to include the removal
date and the details of a successor escrow agent. Within thirty (30)
calendar days of receipt of such notice and details, the Escrow Agent shall
execute and deliver such documents and take such action as may be
reasonably necessary, in its opinion, to transfer to the successor escrow
agent the Escrow Amount together with such records maintained by the Escrow
Agent in connection with its duties hereunder and other information with
respect to the Escrow Amount as such successor may reasonably request
(provided such information is not of a commercially sensitive nature). The
successor escrow agent named in the notice and details shall be an
internationally recognized bank which is not affiliated with any
Transaction Party.
7
(2) The Escrow Agent may at any time and for any reason resign by giving
written notice to such effect to the Transaction Parties.
(3) Such resignation or removal of the Escrow Agent will take effect on
the earlier of:
(a) the appointment of a successor escrow agent designated by the
Transaction Parties in writing pursuant to this Clause 7 or by order
of a court or arbitral tribunal of competent jurisdiction and the
acceptance of such successor of such appointment; or
(b) if no successor escrow agent shall have been appointed and/or the
successor escrow agent shall not have accepted such appointment (i) in
the case of resignation, thirty (30) calendar days after the date of
delivery of the Escrow Agent's written notice of resignation to the
Transaction Parties, or (ii) in the case of removal, upon confirmation
by the Transaction Parties to the Escrow Agent of the appointment of
an internationally recognised bank which is not affiliated with any
Transaction Party to be the successor escrow agent, the acceptance by
such bank of such appointment, and confirmation by the Account Bank in
accordance with Clause 7(5).
If 30 days after (i) in the case of resignation, delivery of the
notice of resignation of the Escrow Agent or (ii) in the case of
removal, the date designated for the Escrow Agent's removal, a
successor escrow agent has not been appointed in accordance with the
terms hereof, the Escrow Agent's sole responsibility shall be to
safekeep the Escrow Amount until receipt of (w) notice of such an
appointment, (x) a Certificate and Payment Instruction, Preliminary
Closing Notice, Final Closing Notice and Readiness Notice or (y) a
Termination Notice in accordance with the terms hereunder or (z) a
Final Adjudication Notice in accordance with Clause 5(3) hereof.
(4) Notwithstanding the foregoing, no resignation or removal of the Escrow
Agent shall be effective until a successor escrow agent has acknowledged
its appointment as such is provided in this Clause 7 hereof.
(5) The Transaction Parties shall ensure that the appointment of a
successor escrow agent is made on the terms of this Agreement and the
Transaction Parties shall ensure such appointment shall be binding on all
of the Parties. The appointment of a successor escrow agent shall be
subject to confirmation by the Account Bank that such appointment will not
prevent timely performance by the Account Bank of its obligations under the
Account Bank Agreement or any amendment thereto.
(6) Upon written acknowledgement by a successor escrow agent appointed in
accordance with this Clause 7 of its agreement to serve as escrow agent
hereunder and the receipt of property then comprising the Escrow Amount,
the Escrow Agent shall be fully released and relieved of all duties,
responsibilities and obligations under this Agreement, subject to such
liability as the Escrow Agent may have under Clause 6(3) for any gross
negligence or wilful misconduct prior thereto, and such successor escrow
agent shall for all purposes hereof be the Escrow Agent.
8. FEES AND EXPENSES
(1) In consideration of the performance of its role under this Agreement,
VIP shall pay to the Escrow Agent:
(i) an acceptance fee of US$5,000 (the "Acceptance Fee");
(ii) an administration fee of US$10,000 (the "Administration Fee");
and
(iii) legal fees and all out of pocket expenses incurred by the
Escrow Agent in connection with the negotiation and preparation of
this Agreement (the "Pre-Signing Legal Fees");
in each case, payable on the date of this Agreement and otherwise in
accordance with the letter agreement dated as of 22 March 2001 between the
Escrow Agent and VIP, without regard to the "Assumptions" set forth
therein.
8
(2) As between the Transaction Parties and without prejudice to Clause 8(1),
the Investor shall reimburse VIP for one-half of the Acceptance Fee and one-
half of the Administration Fee on the date of this Agreement, but shall have
no liability for any Pre-Signing Legal Fees.
(3) All amounts of whatever nature payable to, and recoverable by, the
Escrow Agent pursuant to the terms of this Agreement shall be payable,
without set-off or counterclaim, by the Transaction Parties, as applicable,
on the earlier of the date specified in this Agreement and thirty (30)
Business Days following the receipt of any invoice from the Escrow Agent,
which invoice shall be delivered to VIP and the Investor in accordance with
Clause 9 hereof.
(4) Without prejudice to Clause 6(4), the Transaction Parties agree among
themselves that any liability for Reimbursable Items shall be allocated
between themselves as follows:
(i) if a Reimbursable Item is not incurred in connection with an
arbitration proceeding or other claim under this Agreement which
results in an arbitrators' award or final judgment, then the
Transaction Parties shall share liability for such Reimbursable
Item equally;
(ii) if a Reimbursable Item is incurred in connection with an
arbitration proceeding or other claim under this Agreement which
results in an arbitrators' award or final judgment, then
liability for such Reimbursable Item shall be allocated between
the Transaction Parties (a) in accordance with such arbitrators'
award or final judgment, if liability for the Reimbursable Item
is expressly addressed therein, (b) pro-rata in accordance with
the liability assessed against the respective Transaction
Parties, if liability for the Reimbursable Item is not expressly
addressed therein and either or both of the Transaction Parties
is held to have any liability for any matter thereunder, or (c)
evenly if neither Transaction Party is held to have any
liability; provided, that notwithstanding the preceding clauses
(a), (b) and (c), to the extent that the Reimbursable Item
consists of reimbursing the Escrow Agent for damages payable to a
Transaction Party (the "Damaged Transaction Party") as a
consequence of the Escrow Agent making a disbursement of funds to
the other Transaction Party, such other Transaction Party shall
be liable for such Reimbursable Item; and
(iii) to the extent that either Transaction Party (the "Overpaying
Transaction Party") has paid more than its share of a
Reimbursable Item to the Escrow Agent in accordance with Clause
6(4), the other Transaction Party shall, so long as the liability
under Clause 6(4) has been fully and finally discharged,
forthwith on demand of the Overpaying Transaction Party,
reimburse the Overpaying Transaction Party such amount as shall
be necessary for each of the Transaction Parties to have borne
the cost of such Reimbursable Item in accordance with their
liability, as between the Transaction Parties, determined in
accordance with this Clause 8.4.
9. NOTICES
All communications required pursuant to this Agreement shall be addressed
to the respective party as follows:
(1) If to the Investor, to:
Eco Telecom Limited
Xxxxx 0, 0 Xxxxx Xxxxx
Xxxxxxxxx
Xxxxxxxxx: Xxxxx Xxxx
Facsimile: x000-00000
with a copy to:
OOO Alfa-Eco
21, Novy Arbat
121019 Moscow
Russian Federation
Attention: Stanislav Shekshnya
Fax: x0 000 000 0000
9
and a copy to:
Xxxxxxx Xxxxx CIS Legal Services
00, Xxxxxxxxxxxx Xxxxxxxx
000000 Xxxxxx
Russian Federation
Attention: Xxxxxxxx Xxxxxxx
Fax: x0 000 000 0000
(2) If to the Escrow Agent, to:
Citibank, N.A.
Xxxxxxx Xxxxxx
Xxx'x Xxxx
Xxxxxx XX0 0XX
Attention: Xxxx Xxxxxx/Xxxx X'Xxxx
Fax: (x00 00) 0000 0000/2931
(3) If to VIP, to:
OJSC "Vimpel-Communications"
10 Xxxxxx 0-Xxxxx, Xxxxxxxx 00
Xxxxxx, Xxxxxxx Xxxxxxxxxx 000000
Attention: Xx Xxxxxx
Fax: x0 000 000 0000
with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0 Xxxxxxx Xxxxxx, Xxxxx Xxxxx XX
Xxxxxx 000000, Russian Federation
Attention: Xxxxxxx X. Xxxxxxxx
Fax: x0 000 000 0000
(4) If to the Account Bank, to:
Citbank T/O (OOO)
0-00 Xxxxxxx Xx.
000000 Xxxxxx, Russian Federation
Attention: Xxxxxx Xxxxxx
Fax: x0 000 000 0000
All such notices, requests and other communications will (a) if delivered
personally to the address provided in this Clause 9, be deemed given upon
delivery, (b) if delivered by facsimile transmission to the facsimile
number provided in this Clause 9, be deemed given upon printed electronic
confirmation of receipt, and (c) if delivered by courier to the address
provided in this Clause 9, 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 this Clause 9). Any Party from time to time may
change its address, facsimile number or other information for the purpose
of notices hereunder by giving notice of such change to the other Parties.
10. GENERAL
(1) This Agreement shall be binding upon and inure solely for the benefit
of the Parties and their respective successors and assigns. Unless
otherwise expressly permitted by this Agreement, no Party
10
may assign or otherwise transfer any of its rights, interests or
obligations under this Agreement without the prior written consent of the
other Parties.
(2) No Party shall be bound by any amendment or modification of this
Agreement, including the transfer of any interest hereunder, unless such
amendment or modification is in writing and signed by or on behalf of each
Party; provided, however, that the Parties shall be bound by any amendment
to Schedule 4 or Schedule 5.1 hereto effected in accordance with the
provisions of this Agreement.
(3) Terms of this Agreement may only be waived by written consent signed
by or on behalf of each Party. The waiver by any Party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver
of any other provision and any extension of time for the performance of any
obligation shall not be deemed to be an extension of time for the
performance of any other obligation.
(4) This Agreement and any dispute, controversy or claim arising out of
or relating to this Agreement shall be construed in accordance with and
governed by English law, without giving effect to any conflicts of laws
principles thereof which would result in the application of laws of another
jurisdiction.
(5) Arbitration; Consent to Jurisdiction; Service of Process; Waiver of
-------------------------------------------------------------------
Sovereign Immunity
-------------------
(a) Any and all disputes and controversies arising under,
relating to or in connection with this Agreement shall be settled by
arbitration by a panel of three (3) arbitrators under the United
Nations Commission on International Trade Law (UNCITRAL) Arbitration
Rules then in force (the "UNCITRAL Rules") in accordance with the
following terms and conditions:
(i) In the event of any conflict between the UNCITRAL Rules and
the provisions of this Agreement, the provisions of this Agreement
shall prevail.
(ii) The place of the arbitration shall be Geneva, Switzerland.
(iii) Where there is only one claimant party and one respondent
party, each shall appoint one arbitrator in accordance with the
UNCITRAL Rules, and the two arbitrators so appointed shall appoint
the third (and presiding) arbitrator in accordance with the
UNCITRAL Rules within thirty (30) days from the appointment of the
second arbitrator. In the event of an inability to agree on a third
arbitrator, the appointing authority shall be the International
Court of Arbitration of the International Chamber of Commerce,
acting in accordance with such rules as it may adopt for this
purpose. Where there is more than one claimant party, or more than
one respondent party, all claimants and/or all respondents shall
attempt to agree on their respective appointment(s). In the event
that all claimants and all respondents cannot agree upon their
respective appointment(s) within thirty (30) Business Days of the
date of the notice of arbitration, all appointments shall be made
by the International Court of Arbitration of the International
Chamber of Commerce.
(iv) The English language shall be used as the written and
spoken language for the arbitration and all matters connected to
the arbitration.
(v) The arbitrators shall have the power to grant any remedy or
relief that they deem just and equitable and that is in accordance
with the terms of this Agreement, including specific performance,
and including, but not limited to injunctive relief, whether
interim or final, and any such relief and any interim, provisional
or conservatory measure ordered by the arbitrators may be
specifically enforced by any court of competent jurisdiction. Each
Party retains the right to seek interim, provisional or
conservatory measures from judicial authorities and any such
request shall not be deemed incompatible with the agreement to
arbitrate or a waiver of the right to arbitrate.
(vi) The award of the arbitrators shall be final and binding on
the Parties .
(vii) The award of the arbitrators may be enforced by any court of
competent jurisdiction and may be executed against the person and
assets of the losing party in any competent jurisdiction.
11
(b) Except for arbitration proceedings pursuant to Clause 10(5), no
action, lawsuit or other proceeding (other than the enforcement of an
arbitration decision, an action to compel arbitration or an application
for interim, provisional or conservatory measures in connection with the
arbitration in accordance with Clause 10(5)(a)(v)) shall be brought by or
between the Parties and/or any of their affiliates in connection with any
matter arising out of or in connection with this Agreement.
(c) Each Transaction Party irrevocably appoints Law Debenture
Corporation, located on the date hereof at 0xx Xxxxx, 000 Xxxx Xxxxxx,
Xxxxxx, Xxxxxxx XX0X 0XX, as its true and lawful agent and attorney to
accept and acknowledge service of any and all process against it in any
action, suit or proceeding permitted by Clause 10(5), with the same
effect as if such Party were a resident of England and had been lawfully
served with such process in such jurisdiction, and waives all claims of
error by reason of such service, provided that the Party effecting such
service shall also deliver a copy thereof to the other Parties at their
addresses specified in Clause 9 hereof. Each Transaction Party will enter
into such agreements with such agent as may be necessary to constitute
and continue the appointment of such agent hereunder. In the event that
any such agent and attorney resigns or otherwise becomes incapable of
acting, the affected Transaction Party will appoint a successor agent and
attorney in London reasonably satisfactory to each other Party, with like
powers.
(d) Each Party hereto hereby represents and acknowledges that it is
acting solely in its commercial capacity in executing and delivering this
Agreement and in performing its obligations hereunder, and each such
Party hereby irrevocably waives with respect to all disputes, claims,
controversies and all other matters of any nature whatsoever that may
arise under or in connection with this Agreement and any other document
or instrument contemplated hereby, all immunity it may otherwise have as
a sovereign, quasi-sovereign or state-owned entity (or similar entity)
from any and all proceedings (whether legal, equitable, arbitral,
administrative or otherwise), attachment of assets, and enforceability of
judicial or arbitral awards.
(6) If any provision in this Agreement or any other document executed in
connection herewith is or shall become invalid, illegal or unenforceable in
any jurisdiction, the invalidity, illegality or unenforceability of such
provision in such jurisdiction shall not affect or impair the validity,
legality or enforceability of (i) any other provision of this Agreement or
any such other document in such jurisdiction or (ii) such provision or any
other provision of this Agreement or any such other document in any other
jurisdiction.
(7) This Agreement may be executed in any number of counterparts, each
having the same effect as if the signatures on the counterparts were on a
single copy of this Agreement.
(8) A person who is not party to this Agreement may not enforce its terms
under the Contracts (Rights of Third Parties) Xxx 0000.
(9) Each of the Transaction Parties 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.
(10) Unless otherwise agreed in writing by the Transaction Parties, the
Escrow Agent shall not be entitled to appoint any sub-agents for
performance of any rights or obligations under this Agreement.
11. TERMINATION
This Agreement shall terminate and the Escrow Agent shall be discharged
from all duties and liabilities hereunder, only upon such date as the
Escrow Agent shall have distributed all of the Escrow Amount and all
sums on deposit in the Escrow Account in accordance with this Agreement,
without prejudice to the rights of the Parties accruing hereunder during
the term of this Agreement. Clauses 6, 8 and 10 of this Agreement shall
survive the termination of this Agreement.
12. EFFECTIVE DATE
This Agreement shall come into effect upon signing thereof.
12
IN WITNESSETH WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above and shall be effective on the
Execution Date.
The Investor
------------
ECO TELECOM LIMITED
By: /s/ Serge Barychkov
-----------------------------
Name: Serge Barychkov
Title: Attorney-in-Fact
VIP
---
OPEN JOINT STOCK COMPANY
"VIMPEL-COMMUNICATIONS"
By: /s/ Xxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: President
By: /s/ Xxxxxxxx X. Bychenkov
-----------------------------
Name: Xxxxxxxx X. Bychenkov
Title: Chief Accountant
The Escrow Agent
----------------
CITIBANK, N.A.
acting through its London Branch
By: /s/ Xxxx X'Xxxx
----------------------------
Name: Xxxx X'Xxxx
Title: Assistant Vice President
