_____________________________________________
PRIMARY AGREEMENT
dated as of May 30, 2001
between
ECO TELECOM LIMITED,
TELENOR EAST INVEST AS
and
OPEN JOINT STOCK COMPANY "VIMPEL-COMMUNICATIONS",
as the Purchasers
and
CLOSED JOINT STOCK COMPANY "VIMPELCOM-REGION",
as the Issuer
with respect to shares of Common Stock and Preferred Stock of
CLOSED JOINT STOCK COMPANY "VIMPELCOM-REGION"
_____________________________________________
TABLE OF CONTENTS
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Page Nos
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ARTICLE I - DEFINITIONS AND INTERPRETATION.......................................................... 1
1.01 Definitions............................................................................. 1
1.02 Interpretations......................................................................... 20
ARTICLE II - SALE OF SHARES AND CLOSINGS; GRANT OF OPTIONS.......................................... 21
2.01 First Closing........................................................................... 21
2.02 Second Closing.......................................................................... 23
2.03 Third Closing........................................................................... 26
2.04 Second Closing Purchase Options......................................................... 30
2.05 Third Closing Purchase Options.......................................................... 34
2.06 Effect of Eco Telecom Contribution Default on Purchase Options; Deemed Breach........... 38
2.07 Preferred Stock......................................................................... 38
2.08 Redistribution of Preferred Stock At The Second Closing................................. 40
2.09 Redistribution of Preferred Stock At The Third Closing.................................. 40
2.10 Redistribution of Preferred Stock Upon Exercise Of Vip-r Call Option................... 41
2.11 Conversion of Preferred Stock; Further Assurances....................................... 41
2.12 Call Right on Preferred Stock........................................................... 42
2.13 Non-transferability of Preferred Stock.................................................. 43
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF ISSUER.............................................. 43
3.01 Organization of The Issuer.............................................................. 43
3.02 Authority............................................................................... 43
3.03 Charter Capital of Issuer............................................................... 44
3.04 No Conflicts............................................................................ 45
3.05 Governmental Approvals and Filings...................................................... 46
3.06 Compliance With Securities Laws......................................................... 46
3.07 Subsidiaries of The Issuer.............................................................. 46
3.08 Books and Records....................................................................... 46
3.09 Financial Statements.................................................................... 47
3.10 No Undisclosed Indebtedness, Liens And Liabilities...................................... 47
3.11 Compliance With Laws and Orders......................................................... 47
3.12 Licenses................................................................................ 48
3.13 Investments............................................................................. 48
3.14 Brokers................................................................................. 48
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF PURCHASERS........................................... 49
4.01 Organization; Ability to Consummate Transactions........................................ 49
4.02 Authority............................................................................... 49
4.03 No Conflicts............................................................................ 49
4.04 Governmental Approvals and Filings...................................................... 50
4.05 Legal Proceedings....................................................................... 50
4.06 Brokers................................................................................. 50
4.07 Investment Intent....................................................................... 50
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4.08 Status of Each Purchaser.................................................................... 51
4.09 No Knowledge of Breach...................................................................... 51
4.10 Independent Investigation................................................................... 51
ARTICLE V - COVENANTS OF THE ISSUER..................................................................... 52
5.01 Regulatory and Other Approvals.............................................................. 52
5.02 Delivery of Information..................................................................... 52
5.03 Fulfillment of Conditions................................................................... 52
5.04 Further Assurances.......................................................................... 52
5.05 Use of Proceeds............................................................................. 53
5.06 Issuance of Shares.......................................................................... 53
5.07 Transactions With Affiliates................................................................ 53
5.08 Cooperation With Vip Audit; Accounting Controls; Non-disclosure of Information.............. 54
5.09 Required Disclosure By Vip Concerning Issuer................................................ 54
5.10 Compliance With Indenture................................................................... 54
5.11 Telecom Licenses............................................................................ 54
5.12 Covenants Under Vip Primary Agreement....................................................... 55
5.13 Contract Provision Regarding Cancellation of Preferred Stock................................ 55
ARTICLE VI - NOTICE AND CURE............................................................................ 55
ARTICLE VII - COVENANTS OF THE PURCHASERS............................................................... 55
7.01 Regulatory and Other Approvals.............................................................. 55
7.02 Delivery of Information..................................................................... 56
7.03 Fulfillment of Conditions................................................................... 56
7.04 Further Assurances.......................................................................... 56
ARTICLE VIII - ADDITIONAL COVENANTS..................................................................... 56
8.01 Reimbursement of Certain Tax Liabilities.................................................... 56
8.02 Repayment of Loans to Vip................................................................... 57
8.03 Trademark License Covenant.................................................................. 57
8.04 Vip/eco Telecom Share Purchase Agreement.................................................... 57
8.05 Certain Information......................................................................... 57
ARTICLE IX - CONDITIONS PRECEDENT TO OBLIGATIONS OF VIP AND ISSUER FOR FIRST CLOSING.................... 57
9.01 Conditions Precedent to Obligations of Vip for First Closing................................ 58
9.02 Conditions Precedent to Obligations of Issuer for First Closing............................. 58
ARTICLE X - CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASERS AND ISSUER FOR SECOND CLOSING............. 58
10.01 Conditions Precedent to Obligations of Purchasers for Second Closing........................ 58
10.02 Conditions Precedent to Obligations of Issuer for Second Closing............................ 59
ARTICLE XI - CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASERS AND ISSUER FOR THIRD CLOSING, ADDITIONAL
CLOSINGS AND PREFERRED STOCK CLOSING.................................................................... 59
11.01 Conditions Precedent to Obligations for Third Closing....................................... 59
11.02 Conditions Precedent to Obligations for Additional Closings................................. 60
11.03 Conditions Precedent to Obligations for Preferred Stock Closing............................. 60
ARTICLE XII - SURVIVAL OF REPRESENTATIONS AND WARRANTIES................................................ 61
12.01 Survival of Issuer Representations and Warranties........................................... 61
12.02 Survival of Purchasers, Representations and Warranties...................................... 61
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ARTICLE XIII - INDEMNIFICATION.......................................................................... 61
13.01 Indemnification............................................................................. 61
13.02 Determination of Losses..................................................................... 63
13.03 Limitations on Liability.................................................................... 63
13.04 Other Indemnification Provisions............................................................ 64
ARTICLE XIV - TERMINATION............................................................................... 65
14.01 Termination................................................................................. 65
14.02 Effect of Termination....................................................................... 65
ARTICLE XV - MISCELLANEOUS.............................................................................. 65
15.01 Notices..................................................................................... 66
15.02 Entire Agreement............................................................................ 69
15.03 Expenses.................................................................................... 69
15.04 Public Announcements........................................................................ 69
15.05 Confidentiality............................................................................. 70
15.06 Waiver; Enforcement of Rights............................................................... 70
15.07 Amendment................................................................................... 70
15.08 Obligations of Purchasers Several; No Third Party Beneficiary............................... 71
15.09 No Assignment; Binding Effect............................................................... 71
15.10 Headings.................................................................................... 71
15.11 Arbitration; Consent to Jurisdiction; Service of Process; Waiver of Sovereign Immunity...... 71
15.12 Invalid Provisions.......................................................................... 73
15.13 Governing Law............................................................................... 73
15.14 Counterparts................................................................................ 73
iii
EXHIBITS
EXHIBIT A - FORM OF SUPPLEMENTAL AGREEMENTS
EXHIBIT B - FORM OF SECOND AND THIRD CLOSING DISCLOSURE LETTERS
EXHIBIT C - FORM OF SECOND AND THIRD CLOSING OPTION WAIVER NOTICES
EXHIBIT D - BUSINESS PLAN
EXHIBIT E - FORM OF FUTURE TRADEMARK LICENSE AGREEMENT
EXHIBIT F - VIP/ECO TELECOM SHARE PURCHASE AGREEMENT
EXHIBIT G - FORM OF VIP OFFICER'S CERTIFICATE TO BE DELIVERED AT SECOND CLOSING
EXHIBIT H - FORM OF VIP OFFICER'S CERTIFICATE TO BE DELIVERED AT THIRD CLOSING
iv
SCHEDULES
SCHEDULE 1.01(A) PERSONS WITH ACTUAL KNOWLEDGE
SCHEDULE 1.01(B) PURCHASERS' DESIGNEES FOR ELECTION TO THE BOARD
SCHEDULE 1.01(C) PER SHARE PRICE
SCHEDULE 1.01(D) LIST OF TRADEMARK LICENSE AGREEMENTS
SCHEDULE 2.01(a)(i) FORM OF FIRST CLOSING INDIVIDUAL SHARE PURCHASE
AGREEMENT
SCHEDULE 2.01(b) FIRST CLOSING VIP PURCHASE PRICE
SCHEDULE 2.02(a)(i) FORM OF SECOND CLOSING ECO TELECOM INDIVIDUAL SHARE
PURCHASE AGREEMENT
SCHEDULE 2.02(a)(ii) FORM OF SECOND CLOSING VIP INDIVIDUAL SHARE PURCHASE
AGREEMENT
SCHEDULE 2.02(a)(iii) FORM OF SECOND CLOSING TELENOR INDIVIDUAL SHARE
PURCHASE AGREEMENT
SCHEDULE 2.02(b)(i) SECOND CLOSING ECO TELECOM PURCHASE PRICE
SCHEDULE 2.03(a)(i) FORM OF THIRD CLOSING ECO TELECOM INDIVIDUAL SHARE
PURCHASE AGREEMENT
SCHEDULE 2.03(a)(ii) FORM OF THIRD CLOSING VIP INDIVIDUAL SHARE PURCHASE
AGREEMENT
SCHEDULE 2.03(a)(iii) FORM OF THIRD CLOSING TELENOR INDIVIDUAL SHARE
PURCHASE AGREEMENT
SCHEDULE 2.03(b)(i) THIRD CLOSING ECO TELECOM PURCHASE PRICE
SCHEDULE 2.07(a) FORM OF PREFERRED STOCK PURCHASE AGREEMENT
SCHEDULE 3.03(h) OUTSTANDING OPTIONS
SCHEDULES 3.04(b) ISSUER THIRD PARTY CONSENTS
SCHEDULES 3.04(c) ISSUER REGULATORY CONSENT AND APPROVALS
SCHEDULE 3.07(a) ISSUER SUBSIDIARIES
SCHEDULE 3.08(a) GMS AND BOARD PROTOCOLS OF ISSUER
SCHEDULE 3.08(b) SHARE REGISTER OF ISSUER AND LIST OF SHAREHOLDERS OF
SUBSIDIARIES
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SCHEDULE 3.08(c) LOCATION OF SHARE REGISTER, TELECOM LICENSES AND
ACCOUNTING RECORDS
SCHEDULE 3.09 FINANCIAL STATEMENTS
SCHEDULE 3.10 UNDISCLOSED INDEBTEDNESS, LIENS AND LIABILITIES
SCHEDULE 3.12(a) POSSESSION OF LICENSES
SCHEDULE 3.12(b) PERFORMANCE OF OBLIGATIONS UNDER LICENSES/
REVOCATIONS
SCHEDULE 3.12(c) LICENSE RESTRICTIONS
SCHEDULE 3.13 INVESTMENTS
SCHEDULE 3.14 ISSUER BROKERS
SCHEDULE 4.02 VIP SHAREHOLDER APPROVAL REQUIRED
SCHEDULE 4.03(b)(i) ECO TELECOM REGULATORY CONSENTS AND APPROVALS
SCHEDULE 4.03(b)(ii) VIP REGULATORY CONSENTS AND APPROVALS
SCHEDULE 4.03(b)(iii) TELENOR REGULATORY CONSENTS AND APPROVALS
SCHEDULE 4.03(c) VIP THIRD PARTY CONSENTS
SCHEDULE 4.06 PURCHASERS' BROKERS
SCHEDULE 5.08 INFORMATION NOT TO BE DISCLOSED BY VIP-R
SCHEDULE 5.13 CONTRACT PROVISION REGARDING CANCELLATION OF
PREFERRED STOCK
SCHEDULE 8.01 CERTAIN EXPENSES AND VAT
SCHEDULE 8.01(b) CERTAIN TAX LIABILITIES
SCHEDULE 8.02 LOAN AGREEMENTS AND OTHER ARRANGEMENTS
vi
PRIMARY AGREEMENT dated as of May 30, 2001 between ECO TELECOM LIMITED, a
company organized and existing under the Laws of Gibraltar ("Eco Telecom"),
TELENOR EAST INVEST AS, a company organized and existing under the Laws of
Norway ("Telenor"), 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 Eco Telecom and Telenor, the "Purchasers")
and CLOSED JOINT STOCK COMPANY "VIMPELCOM-REGION", a closed joint stock company
organized and existing under the Laws of the Russian Federation (the "Issuer").
WITNESSETH:
WHEREAS, the Issuer currently is a wholly-owned subsidiary of VIP;
WHEREAS, VIP and the Issuer desire to enter into a strategic relationship
with Eco Telecom for the purpose, among other things, of accelerating the
development, through the Issuer, of VIP's regional GSM license portfolio;
WHEREAS, the Issuer desires to issue and to sell, and each of VIP and Eco
Telecom desires to subscribe for and purchase, shares of Common Stock, on the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, the Issuer desires to grant to each of VIP and Telenor an option
to subscribe for and purchase shares of Common Stock, on the terms and subject
to the conditions set forth in this Agreement; and
WHEREAS, the Issuer desires to issue and sell, and Eco Telecom desires to
subscribe for and purchase, shares of Preferred Stock, on the terms and subject
to the conditions (including conditions regarding the subsequent repurchase of
such shares of Preferred Stock) set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I - DEFINITIONS AND INTERPRETATION
1.01 Definitions
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As used herein, the following terms shall have the following meanings:
"Account Bank" shall mean Citibank T/O (OOO), as account bank under the
Account Bank and Overdraft Agreement.
"Account Bank and Overdraft Agreement" shall mean the Account Bank and
Overdraft Agreement, dated the date hereof, by and among the Issuer, VIP, Eco
Telecom and the Account Bank.
"Actions or Proceedings" shall mean any action, suit, proceeding or
arbitration commenced, brought, conducted or heard by or before any Governmental
or Regulatory Authority.
"Actually known to such Purchaser" shall mean, with respect to each
Purchaser, to the knowledge and belief of the Persons specified immediately
below the name of such Purchaser on Schedule 1.01(A), except that for purposes
----------------
of Sections 2.04 and 2.05, such phrase shall have the respective meanings set
forth in Section 2.04(e)(iii) and 2.05(e)(iii).
"Additional Closings" shall mean the Additional Second Closings and the
Additional Third Closings.
"Additional Closings Shares" shall mean the number of shares of Common
Stock that VIP and/or Telenor, as the case may be, may purchase pursuant to
Sections 2.04(e), 2.04(g), 2.05(e) and 2.05(g).
"Additional Second Closings" shall mean the consummation of the sale of
Common Stock to Telenor or VIP, as the case may be, pursuant to Sections 2.04(e)
and 2.04(g).
"Additional Third Closings" shall mean the consummation of the sale of
Common Stock to Telenor or VIP, as the case may be, pursuant to Sections 2.05(e)
and 2.05(g).
"Additional Closings Purchase Price" shall mean the aggregate cash
amount, if any, paid by VIP or Telenor, as the case may be, at the Additional
Closings.
"Affiliate" shall mean, with respect to any Person, any other Person
which directly or indirectly controls, or is under common control with, or is
controlled by, such Person, including, if such Person is an individual, any
relative or spouse of such Person, or any relative of such Person's spouse, any
one of whom has the same home as such Person, and also including any trust or
estate for which any such Person or Persons specified herein, directly or
indirectly, serves as a trustee, executor or in a similar capacity (including,
without limitation, any protector or settlor of a trust) or in which any such
Person or Persons identified herein, directly or indirectly, has a substantial
beneficial interest and any Person who is controlled by any such trust or
estate. As used in this definition, "control" (including, with its correlative
meanings, "controlled by" and "under common control with") shall mean, with
respect to any Person, the possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by Contract
or otherwise) of such Person.
"Agreement" shall mean this Primary Agreement, the Disclosure Letters,
the Exhibits and the Schedules hereto and the certificates delivered in
accordance with Article VIII and Article IX.
2
"Alfa Bank Guarantee" shall mean the Guarantee, dated as of the date
hereof, executed and delivered by OAO Alfa Bank, as guarantor, in favor of VIP,
as beneficiary.
"Applicable Rate" shall mean the rate of interest from time to time
announced by X.X. Xxxxxx Xxxxx & Co. as its prime commercial lending rate.
"Assets and Properties" shall mean, with respect to any Person, all
assets and properties of every kind, nature, character and description (whether
real, personal or mixed, whether tangible or intangible, whether absolute,
accrued, contingent, fixed or otherwise and wherever situated), including the
goodwill related thereto, used, operated, owned or leased by such Person,
including, without limitation, cash, cash equivalents, Investments, accounts and
notes receivable, chattel paper, documents, instruments, general intangibles,
real estate, equipment, inventory, goods and Intellectual Property.
"Bee Line Fund" shall mean "Bee Line" Non-Profit Fund (known in Russian
and formerly known in English as the Fund for Non-Commercial Programs "Bee
Line"), a nonprofit organization organized and existing under the Laws of the
Russian Federation.
"Board" shall mean the Board of Directors of the Issuer.
"Books and Records" shall mean the documents and information which the
Issuer is obliged to disclose to its shareholders in accordance with the laws of
the Russian Federation and the Charter.
"Business" shall have the meaning specified in the VIP-R Shareholders
Agreement.
"Business Combination" shall mean, with respect to any Person, any
merger, consolidation or combination to which such Person is a party, the
issuance or disposition or acquisition of any shares to or from, as applicable,
any third party, any sale, dividend, split or other disposition or acquisition
of Equity Interests of such Person, any sale, dividend or other disposition or
acquisition of all or substantially all of the Assets or Properties of such
Person or the creation of any Subsidiary, the value of which exceeds US$5
million.
"Business Day" shall mean a day other than a Saturday, a Sunday or any
day on which banks located in Moscow, Russia, Oslo, Norway, London, England or
New York, New York are authorized or obliged to close.
"Business or Condition of the Issuer" shall mean the business, condition
(financial or otherwise), results of operations and Assets and Properties of the
Issuer and its Subsidiaries taken as a whole.
"Business Plan" shall have the meaning specified in Section 5.05.
"CBR" shall mean the Central Bank of the Russian Federation (Tsentralniy
bank Rossiiskoy Federatsii or Bank Rossii), including any applicable territorial
agency thereof, or any successor thereto.
3
"CEO" shall mean the individual executive body (edinolichniy ispolnitelniy
organ) of the Issuer, whether the title of such officer is "Chief Executive
Officer", "General Director" or otherwise.
"Charter" shall mean the most recent version of the charter (ustav) of the
Issuer, as registered with the MRC on August 31, 1999, amended November 24, 2000
and as may be amended from time to time.
"Charter Capital" (ustavniy kapital) shall mean the aggregate value of the
ownership interests in a Person as stated in its charter, provided that, with
respect to a joint stock company, the Charter Capital shall mean the aggregate
nominal value of its issued and outstanding shares.
"Closings" shall mean the First Closing, the Second Closing, the Third
Closing, the Additional Closings and the Preferred Stock Closing.
"Common Stock" shall mean the shares of common stock of the Issuer, as
defined in the Charter.
"Compensating Sections" shall have the meaning specified in Section 2.11.
"Contract" shall mean any agreement, letter of intent, lease, license,
evidence of Indebtedness, mortgage, indenture, security agreement or other
contract (whether written or oral), in each case, to the extent legally binding.
"Conversion" shall have the meaning specified in Section 2.11.
"Convertible Decision on Issuance" shall have the meaning specified in
Section 2.11.
"Convertible Notes" shall mean the 5.5% Senior Convertible Notes due 2005
of VimpelCom B.V., guaranteed by VIP and issued under the Indenture.
"Default Date" shall have the meaning specified in Section 2.12.
"Default Repurchase Notice" shall have the meaning specified in Section
2.12.
"Disclosure Letters" shall mean the Second Closing Disclosure Letter and/or
the Third Closing Disclosure Letter, as the case may be.
"Xx. Xxxxx" shall mean Xx. Xxxxxx Xxxxxxxxxx Xxxxx, a Russian citizen.
"Eco Telecom" shall have the meaning specified in the preamble to this
Agreement.
"Eco Telecom Contribution Default" shall mean an Eco Telecom Second Closing
Contribution Default and/or an Eco Telecom Third Closing Contribution Default.
"Eco Telecom Guarantee Agreement" shall mean the Guarantee Agreement, dated
as of the date hereof, by and among CTF Holdings Limited, Eco Holdings Limited,
Telenor, the Issuer and VIP.
4
"Eco Telecom Preferred Stock" shall mean 1,323 shares of Preferred Stock
issued by the Issuer to Eco Telecom at the Preferred Stock Closing.
"Eco Telecom Preferred Stock Purchase Agreement" shall mean the Share
Purchase Agreement, dated the date hereof, between Eco Telecom and Overture
Limited with respect to shares of preferred stock and shares of common stock of
VIP.
"Eco Telecom Second Closing Contribution Default" shall be deemed to have
occurred if Eco Telecom does not pay the Second Closing Eco Telecom Purchase
Price to the Issuer on the Second Closing Date for any reason other than due to
the non-fulfillment on the Second Closing Date of the conditions precedent
contained in paragraphs (c) through (g) of Section 10.01.
"Eco Telecom Share Purchase Agreements" shall mean, collectively, the Share
Purchase Agreement, dated the date hereof, between Eco Telecom and Xx. Xxxxx in
respect of shares of common stock of VIP and the Eco Telecom Preferred Stock
Purchase Agreement.
"Eco Telecom Third Closing Contribution Default" shall be deemed to have
occurred if Eco Telecom does not pay the Third Closing Eco Telecom Purchase
Price to the Issuer on the Third Closing Date for any reason other than due to
the non-fulfillment on the Closing Date of the conditions precedent contained in
paragraphs (a)(iii) through (a)(vii) of Section 11.01.
"Eco Telecom Undertaking Letter" shall mean the letter of undertaking,
dated the date hereof, between Eco Telecom and the Issuer.
"Equity Interest" in a Person shall mean any share of capital stock of such
Person, or any partnership share or other ownership interest in such Person.
"Escrow Agent" shall mean Citibank, N.A., London Branch, as escrow agent
under the Escrow Agreement.
"Escrow Agreement" shall mean the Escrow Agreement dated the date hereof
among the Escrow Agent, Eco Telecom and VIP.
"Exchange Act" shall mean the United States Securities Exchange Act of
1934, as amended, and the rules and regulations of the United States Securities
and Exchange Commission thereunder.
"Exercise Transfer" shall have the meaning specified in Section 2.10.
"Existing Subsidiaries" shall mean the Subsidiaries of the Issuer other
than Closed Joint Stock Company "Sotovaya Compania".
"FCSM" shall mean the Federal Commission for the Securities Market of the
Russian Federation (Federalnaya komissiya po xxxxx tsennikh bumag Rossiiskoy
Federatsii or "FKTsB"), or any successor thereto, including any applicable
territorial agency thereof.
"Final Date" shall have the meaning specified in the VIP Primary Agreement.
5
"Financial Statements" shall have the meaning specified in Section 3.09.
"First Closing" shall mean the consummation of the purchase and sale of the
First Closing VIP Shares.
"First Closing Date" shall mean the date on which the First Closing is to
occur, which date shall be the same day as the VIP Closing.
"First Closing Issuer/Eco Telecom Indemnity Amount" shall mean the amount
of that portion of the purchase price as is specified opposite Eco Telecom's
name in Schedule 2.02 to the VIP Primary Agreement.
"First Closing Issuer/VIP Indemnity Amount" shall equal the First Closing
VIP Purchase Price.
"First Closing VIP Purchase Price" shall mean a cash amount equal to the
amount as set forth on Schedule 2.01(b).
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"First Closing VIP Shares" shall mean 2,969 shares of Common Stock.
"First VIP-R Board Date" shall mean the date of the first meeting (or
unanimous written consent in lieu of a meeting) of the Board at which all
designees of each Purchaser listed on Schedule 1.01(B) and then legally capable
----------------
of serving on the Board are members of the Board.
"FLSM" shall mean the Russian Federation Federal Law on Securities Markets
dated 22 April, 1996 No 39-FZ, as amended.
"Future Trademark License Agreement" shall have the meaning specified in
Section 8.04.
"Future VIP Trademarks" shall mean any trademarks of VIP registered by
Rospatent following the date hereof which are used by VIP in the Business (it
being understood that this shall not include trademarks used for the promotion
of mobile Internet/WAP portals and related content services provided by means of
mobile access to such content and services/resources).
"GAAP" shall mean United States generally accepted accounting principles,
as in effect from time to time.
"GMS" shall mean the general meeting of the shareholders (obschee sobraniye
aktsionerov) of the Issuer, as defined in the Charter.
"Governmental or Regulatory Authority" shall mean any court, tribunal,
arbitrator, legislature, government, ministry, committee, inspectorate,
authority, agency, commission, official or other competent authority of the
Russian Federation, any other country or any state, as well as any county, city
or other political subdivision of any of the foregoing.
6
"Indebtedness" shall mean, with respect to any Person, all obligations of
such Person (a) for borrowed money, (b) evidenced by notes, bonds, debentures or
similar instruments, (c) for the deferred purchase price of goods or services
(other than trade payables or accruals incurred in the ordinary course of
business), (d) under capital leases or (e) in the nature of a guarantee of any
obligation described in clauses (a) through (d) above of any other Person.
"Indenture" shall mean the Indenture dated as of July 28, 2000 among
VimpelCom B.V., as the issuer, VIP, as the guarantor, and The Bank of New York,
as trustee.
"Individual Share Purchase Agreement" shall mean the share purchase
agreement substantially in the form attached as Annex A to the Schedules to
Article II, as indicated in Article II.
"Intellectual Property" shall mean patents and patent rights, licenses,
inventions, copyrights and copyright rights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks and trademark rights, service
marks and service xxxx rights, trade names and trade name rights, service names
and service name rights, brand names, processes formulae, trade dress, business
and product names, logos, slogans, industrial models, processes, designs,
methodologies, software programs (including all source codes) and related
documentation, technical information, manufacturing, engineering and technical
drawings and all pending applications for and registrations of patents,
trademarks, service marks and copyrights.
"Issuer" shall have the meaning specified in the preamble to this
Agreement.
"Investments" shall mean all debentures, notes and other evidences of
Indebtedness, stocks, securities (including rights to purchase and securities
convertible into or exchangeable for other securities), interests in joint
ventures, general and limited partnerships, and other Persons, mortgage loans
and other investment or portfolio assets owned of record or beneficially by a
Person (other than (a) any direct or indirect Subsidiaries of the Issuer or any
ownership interests therein and (b) any short-term trade receivables generated
in the ordinary course of business).
"KBI" shall mean Public Joint Stock Company KB Impuls, an open joint stock
company organized and existing under the Laws of the Russian Federation.
"Knowledge" of a Person or "Known" to a Person shall mean to the best of
the knowledge and belief of such Person after having made reasonable inquiries.
"Laws" shall mean all laws, decrees, resolutions, instructions, statutes,
rules, regulations, acts, ordinances and other pronouncements having the effect
of law or regulation of the Russian Federation, any other country or any state
as well as any county, city or other political subdivision of any of the
foregoing.
"Liabilities" shall mean all Indebtedness, obligations and other
liabilities of a Person (whether absolute, accrued, contingent, fixed or
otherwise, or whether due or to become due).
7
"Licenses" shall mean all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority, including,
without limitation, all Telecom Licenses.
"Lien" shall mean any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or
any conditional sale Contract, title retention Contract or other Contract to
grant any of the foregoing.
"Loss" shall mean any and all damages, fines, fees, penalties,
deficiencies, losses and expenses (including, without limitation, interest,
court costs, fees of attorneys, accountants and other experts or other expenses
of litigation or other similar proceedings or of any claim, default or
assessment).
"MAMP" shall mean the Ministry for Anti-Monopoly Policy and Support for
Entrepreneurship of the Russian Federation (Ministerstvo Rossiiskoy Federatsii
po Antimonopolnoy politike i podderzhke predprinimatelstva), or any successor
thereto, including any applicable territorial agency thereof.
"Material Adverse Effect" shall mean, with respect to any Person, a
material adverse effect on or with respect to the business, assets, financial
condition or results of operations of such Person and its Subsidiaries taken as
a whole, or upon such Person's ability to perform its obligations under this
Agreement and the other Principal Agreements, if any, to which it is a party.
"MRC" shall mean the Moscow Registration Chamber (Moskovskaya
registratsionaya palata), or any successor thereto.
"Moscow License Area" shall mean the city of Moscow and the Moscow region
(Moskovskaya Oblast).
"Non-Deductible VAT" shall have the meaning specified in Section 8.02.
"One Share of VIP-R Common Stock" shall have the meaning specified in
Section 8.05.
"Option" shall mean, with respect to any Person, any security, right,
subscription, warrant, option, phantom stock right or other Contract that gives
the right to (a) purchase or otherwise receive or be issued any Equity Interest
in such Person or any security of any kind convertible into or exchangeable or
exercisable for any Equity Interest in such Person or (b) receive or exercise
any benefits or rights similar to any rights enjoyed by or accruing to the
holder of any Equity Interest in such Person, including any rights to
participate in the equity or income of such Person or to participate in or
direct the election of any directors or officers of such Person or the manner in
which any Equity Interests in such Person are voted.
"Option Agreement" shall mean the Option Agreement dated the date hereof,
between Eco Telecom and Telenor.
8
"Order" shall mean any writ, judgment, decree, injunction or similar order
of any Governmental or Regulatory Authority.
"Per Share Price" shall mean the price per share of Common Stock as set
forth in Schedule 1.01(C); provided, however, if in connection with the Second
---------------- -------- -------
Closing and/or Third Closing, the Board determines, upon written advice of legal
counsel and an independent licensed appraiser (otsenshik), that the Per Share
Price shall represent an amount less than or greater than set forth in Schedule
--------
1.01(C), then the parties hereto agree that for purposes of Sections 2.02, 2.03,
--------
2.04 and 2.05 of this Agreement, the Per Share Price shall mean such amount as
determined by the Board..
"Permitted Lien" shall mean (a) any Lien for taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP, (b) any
statutory Lien arising in the ordinary course of business by operation of Law
with respect to a Liability that is not yet due or delinquent, and (c) any
mechanic's, materialman's or other similar Lien arising by operation of Law or
any minor imperfection of title or similar Lien, none of which individually or
in the aggregate with other such Liens materially impairs the value of the
property subject to such Lien or the use of such property in the conduct of the
business of the Issuer.
"Person" shall mean any natural person, corporation, general partnership,
simple partnership, limited partnership, limited liability partnership, limited
liability company, proprietorship, other business organization, trust, union,
association or Governmental or Regulatory Authority, whether incorporated or
unincorporated.
"Preferred Stock" shall mean, collectively, the shares of type A
convertible preferred stock of the Issuer, as will be defined in the Charter.
"Preferred Stock Closing" shall mean the consummation of the purchase and
sale of the Eco Telecom Preferred Stock on the Preferred Stock Closing Date.
"Preferred Stock Closing Date" shall mean the date on which the Preferred
Stock Closing is scheduled to occur, which date shall occur within seventy-five
(75) days after the First Closing Date as notified in writing by the Issuer or
such other date as the Issuer, VIP and Eco Telecom may mutually determine.
"Preferred Stock Purchase Agreement" shall mean the purchase agreement
attached as Annex A to Schedule 2.07(a) to this Agreement to be entered into at
----------------
the Preferred Stock Closing between Eco Telecom and the Issuer.
"Preferred Stock Purchase Price" shall mean a cash amount, to be paid in US
dollars, equal to the aggregate nominal value of the Eco Telecom Preferred
Stock.
9
"Principal Agreements" shall mean this Agreement, the VIP-R Shareholders
Agreement, the Escrow Agreement, the Account Bank and Overdraft Agreement, the
Option Agreement, the Zimin Principal Agreements, the VIP-R Registration Rights
Agreement, the Preferred Stock Purchase Agreement, the VIP/Eco Telecom Share
Purchase Agreement, the Eco Telecom Guarantee Agreement, the Alfa Bank
Guarantee, the Telenor Guarantee Agreement, the VIP Primary Agreement, the VIP
Shareholders Agreement, the VIP Registration Rights Agreement, the Termination
Agreement, the Supplemental Agreements, the Telenor Undertaking Letter, the Eco
Telecom Undertaking Letter and the Trademark Agreements.
"Purchasers" shall have the meaning specified in the preamble to this
Agreement.
"Purchasers' Shares" shall mean the First Closing VIP Shares, the Second
Closing Shares, the Third Closing Shares and the Additional Closings Shares
collectively.
"Registrar" shall mean the duly appointed shareholder registrar of the
Issuer or any successor thereto, as of the date of this Agreement, being the
Russian closed joint stock company National Registry Company.
"Representatives" shall mean, with respect to any Person, its officers,
directors, shareholders, employees, agents, counsel, accountants, financial
advisors, consultants and other representatives.
"Rospatent" shall mean the patent agency (office) of the Russian
Federation.
"Second Closing" shall mean the consummation of the purchase and sale of
the Second Closing Eco Telecom Shares as provided in the Agreement.
"Second Closing Applicable Percentage" shall have the meaning specified in
Section 2.08(a).
"Second Closing Contribution Default Percentage" shall mean, in respect of
any Purchaser, the percentage of the issued and outstanding voting capital stock
of the Issuer that such Purchaser would have owned if
(i) the issuance of the Second Closing VIP Shares (if any) and the Second
Closing Telenor Shares (if any) at the Second Closing was effected at the
Per Share Price specified in Schedule 1.01(C) without redistribution of
Preferred Stock as contemplated in Section 2.08;
(ii) (if Telenor has exercised the VIP-R Call Option before the Second
Closing Date) Telenor exercised the VIP-R Call Option, but redistribution
of the Preferred Stock as contemplated in Section 2.10 did not occur; and
(iii) the Preferred Stock Closing has occurred and the Issuer repurchased
from Eco Telecom and cancelled all the shares of Eco Telecom Preferred
Stock.
10
"Second Closing Date" shall mean the date on which the Second Closing is
scheduled to occur, which date will be the twelve (12) month anniversary of the
First Closing Date (or, if such date is not a Business Day, then on the first
Business Day following such date), or such other date as the parties hereto may
mutually determine; provided, however, that Eco Telecom may extend the Second
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Closing Date by written notice to the Issuer, VIP and Telenor, to a date which
is a Business Day and which is not more than seven (7) months following the 12
month anniversary of the First Closing Date, if it has complied with Section
7.01 and notwithstanding such compliance, MAMP approval has not yet been
obtained by Eco Telecom on such 12 month anniversary.
"Second Closing Disclosure Letter" shall have the meaning specified in
Section 2.04(e).
"Second Closing Eco Telecom Purchase Price" shall mean a cash amount equal
to the amount as set forth on Schedule 2.02(b)(i), reduced by the Second Closing
-------------------
Redirection Amount, if any.
"Second Closing Eco Telecom Shares" shall mean the number of shares of
Common Stock determined by dividing the Second Closing Eco Telecom Purchase
Price by the Per Share Price.
"Second Closing Implied Percentage" shall mean, in respect of any
Purchaser, the percentage of the issued and outstanding voting capital stock of
the Issuer that such Purchaser would have owned if:
(i) (if Telenor has exercised the VIP-R Call Option before the Second
Closing Date) Telenor exercised the VIP-R Call Option, but redistribution
of the Preferred Stock as contemplated by Section 2.10 did not occur,
(ii) the issuance of the Second Closing Shares at the Second Closing was
effected at the Per Share Price specified in Schedule 1.01(C), without
----------------
redistribution of shares of Eco Telecom Preferred Stock as contemplated by
Section 2.08, and
(iii) the Preferred Stock Closing has occurred and the Issuer repurchased
from Eco Telecom and cancelled such number of shares of Eco Telecom
Preferred Stock which would have been required to have been repurchased and
cancelled for Eco Telecom to own twenty-five percent (25%) plus one (1)
share of the issued and outstanding voting capital stock of the Issuer
(after giving effect to the transactions described in clauses (ii) and
(iii)).
"Second Closing Issuer/Eco Telecom Indemnity Amount" shall mean the sum of
(a) the First Closing Issuer/Eco Telecom Indemnity Amount plus (b) (x) if Eco
Telecom has purchased the Second Closing Eco Telecom Shares, US$58.5 million or
(y) if Eco Telecom has not purchased the Second Closing Eco Telecom Shares,
US$0.
"Second Closing Issuer/Telenor Indemnity Amount" shall mean, (x) if Telenor
has exercised its Second Closing Telenor Option and purchased shares in
connection therewith, an
11
amount equal to the Second Closing Telenor Purchase Price or (y) if Telenor has
not exercised its Second Closing Telenor Option and purchased shares in
connection therewith, an amount equal to US$0.
"Second Closing Issuer/VIP Indemnity Amount" shall mean the sum of (a) the
First Closing Issuer/VIP Indemnity Amount plus (b) (x) if VIP has exercised its
Second Closing VIP Option and purchased shares in connection therewith, an
amount equal to the Second Closing VIP Purchase Price or (y) if VIP has not
exercised its Second Closing VIP Option and purchased shares in connection
therewith, an amount equal to US$0.
"Second Closing Notice of Intention" shall have the meaning specified in
Section 2.04(d).
"Second Closing Option" shall have the meaning specified in Section
2.04(d).
"Second Closing Pre-Closing Meeting" shall have the meaning specified in
Section 2.02(c)(i).
"Second Closing Purchase Price" shall mean the aggregate of the Second
Closing Eco Telecom Purchase Price, the Second Closing VIP Purchase Price and
the Second Closing Telenor Purchase Price.
"Second Closing Redirection Amount" shall mean the cash amount (up to a
maximum of US$25 million), if any, paid by Eco Telecom in the aggregate between
the First Closing and the Second Closing to purchase New Securities of VIP in
connection with an issuance of New Securities of VIP with respect to which Eco
Telecom voted in favor pursuant to the Eco Telecom Undertaking Letter and only
(i) in the amount necessary to maintain its aggregate percentage ownership
interest in the voting capital stock of VIP at the Specified Percentage and (ii)
in connection with issuances of New Securities the proceeds of which are not
used to purchase new shares of voting capital stock of the Issuer in connection
with a share issuance by the Issuer to acquire an Opportunity offered to the
Issuer by Eco Telecom pursuant to Section 5.02(c) of the VIP Registration Rights
Agreement or Section 6.02(c) of the VIP-R Shareholders Agreement. As used in
this definition, the terms "New Securities", "Specified Percentage" and
"Opportunity" shall have the meanings specified in the VIP Registration Rights
Agreement.
"Second Closing Shares" shall mean the Second Closing Eco Telecom Shares,
the Second Closing VIP Shares, if any, and the Second Closing Telenor Shares, if
any.
"Second Closing Telenor Option" shall have the meaning specified in Section
2.04(b).
"Second Closing Telenor Primary Option Shares" shall have the meaning
specified in Section 2.04(b).
"Second Closing Telenor Primary Option Purchase Price" shall have the
meaning specified in Section 2.04(b).
12
"Second Closing Telenor Purchase Price" shall mean the cash amount to be
paid by Telenor as determined pursuant to Section 2.04(b).
"Second Closing Telenor Reduced Shares" shall have the meaning specified in
Section 2.04(b).
"Second Closing Telenor Secondary Option Shares" shall have the meaning
specified in Section 2.04(b).
"Second Closing Telenor Shares" shall mean the number of shares of Common
Stock that Telenor elects to purchase at the Second Closing pursuant to Section
2.04(b).
"Second Closing VIP Option" shall have the meaning specified in Section
2.04(a).
"Second Closing VIP Primary Option Shares" shall have the meaning specified
in Section 2.04(a).
"Second Closing VIP Primary Option Purchase Price" shall have the meaning
specified in Section 2.04(a).
"Second Closing VIP Purchase Price" shall mean the cash amount to be paid
by VIP as determined pursuant to Section 2.04(a).
"Second Closing VIP Secondary Option Shares" shall have the meaning
specified in Section 2.04(a).
"Second Closing VIP Shares" shall mean the number of shares of Common Stock
that VIP elects to purchase at the Second Closing pursuant to Section 2.04(a).
"Securities Act" shall mean the United States Securities Act of 1933, as
amended, and the rules and regulations of the United States Securities and
Exchange Commission thereunder.
"Specified Legislation" shall mean a presidential decree (yka3),
governmental resolution (nocmaHobreHue) or law enacted by the Duma and signed by
the President (3akoH).
"SRC" shall mean the State Registration Chamber under the Ministry of
Justice of the Russian Federation (Gosudarstvennaya registratsionnaya palata pri
Ministerstve iustitsii Rossiiskoy Federatsii), or any successor thereto.
"Subsidiary" shall mean, with respect to any Person, (a) any corporation in
which such Person owns or controls, directly or indirectly, more than fifty
percent (50%) of the securities having ordinary voting power for the election of
directors or other governing body of such corporation and/or (b) any
partnership, association, joint venture or other entity in which such Person
owns or controls, directly or indirectly, more than fifty percent (50%) of the
Equity Interest of such partnership, association, joint venture or other entity.
13
"Supplemental Agreements" shall mean, collectively, each of the
Supplemental Agreements, each substantially in the form attached as Exhibit A,
---------
to be entered into as of the First Closing, in respect of the Zimin Preferred
Stock Agreements.
"Taxes" shall mean any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added alternative or add-on minimum, estimated, or other
tax, duty, governmental fee or charge or any kind whatsoever, including any
interest, penalty, or addition thereto.
"Telecom Licenses" shall mean (a) the Issuer's four (4) licenses for GSM
900/1800 services in the following regions: the Central and the Central Black
Earth region, the North Caucasus region, the Siberian region and the Volga
region and (b) frequency permits (razreshenia na ispolzovanie radiochastot dlya
exploitazii RES) relating to the licenses referred to in clause (a).
"Telenor" shall have the meaning specified in the preamble to this
Agreement.
"Telenor Guarantee Agreement" shall mean the Guarantee Agreement, dated as
of the date hereof, by and among Telenor ASA, Eco Telecom, the Issuer and VIP.
"Telenor Option Exercise Percentage" shall mean, in respect of any
Purchaser, the percentage of the issued and outstanding voting capital stock of
the Issuer that such Purchaser would have owned if:
(i) Telenor exercised the VIP-R Call Option;
(ii) (if Telenor has exercised the VIP-R Call Option between the Second
Closing Date and the Third Closing Date) the issuance of the shares of
Common Stock of the Issuer at the Second Closing was effected at the Per
Share Price specified in Schedule 1.01(C) (if an Eco Telecom Second Closing
Contribution Default has actually occurred, taking such Eco Telecom Second
Closing Contribution Default into account) without redistribution of
Preferred Stock as contemplated in Section 2.08;
(iii) (if Telenor has exercised the VIP-R Call Option after the Third
Closing Date) the issuance of the shares of Common Stock of the Issuer at
the Third Closing was effected at the Per Share Price specified in Schedule
1.01(C), (if an Eco Telecom Third Closing Contribution Default has actually
occurred, taking such Eco Telecom Third Closing Contribution Default into
account) without redistribution of the Preferred Stock as contemplated in
Section 2.09; and
(iv) the Preferred Stock Closing has occurred and the Issuer repurchased
from Eco Telecom and cancelled all the Eco Telecom Preferred Stock.
14
"Telenor Share Purchase Agreement" shall mean the Share Purchase Agreement
dated the date hereof, between Telenor and Overture Limited.
"Telenor Third Closing Notice of Intention" shall have the meaning
specified in Section 2.05(c)(ii).
"Telenor Undertaking Letter" shall mean the letter of undertaking, dated
the date hereof, between Telenor and the Issuer.
"Termination Agreement" shall mean the Termination Agreement, dated the
date hereof, between and among Telenor, Telenor Communication AS, VIP, VimpelCom
Finance B.V., VimpelCom B.V., VC Limited, Xx. Xxxxx, Glavsotkom and the Bee Line
Fund.
"Third Closing" shall mean the consummation of the purchase and sale of the
Third Closing Eco Telecom Shares as provided in this Agreement.
"Third Closing Applicable Percentage" shall have the meaning specified in
Section 2.09(a).
"Third Closing Contribution Default Percentage" shall mean, in respect of
any Purchaser, the percentage of the issued and outstanding voting capital stock
of the Issuer that such Purchaser would have owned if:
(i) the issuance of the Second Closing Shares at the Second Closing was
effected at the Per Share Price specified in Schedule 1.01(C) without
redistribution of Preferred Stock as contemplated in Section 2.08;
(ii) the issuance of the Third Closing VIP Shares (if any) and the Third
Closing Telenor Shares (if any) at the Third Closing was effected at the
Per Share Price specified in Schedule 1.01(C) without redistribution of
Preferred Stock as contemplated in Section 2.09;
(iii) (if Telenor has exercised the VIP-R Call Option before the Third
Closing Date) Telenor exercised the VIP-R Call Option, but redistribution
of the Preferred Stock as contemplated in Section 2.10 did not occur; and
(iv) the Preferred Stock Closing has occurred and the Issuer repurchased
from Eco Telecom and cancelled all the shares of Preferred Stock.
"Third Closing Date" shall mean the date on which the Third Closing is
scheduled to occur, which date will be the twelve (12) month anniversary of the
Second Closing Date, (or, if such date is not a Business Day, then on the first
Business Day following such date) or such other date as the parties hereto may
mutually determine; provided, however, that Eco Telecom may extend the Third
-------- -------
Closing Date by written notice to the Issuer, VIP and Telenor to a date which is
a Business Day and which is not more than seven (7) months following the 12
month anniversary
15
of the Second Closing Date, if, it has complied with Section 7.01 and
notwithstanding such compliance, MAMP approval has not yet been obtained by Eco
Telecom on such 12 month anniversary.
"Third Closing Disclosure Letter" shall have the meaning specified in
Section 2.05(e).
"Third Closing Eco Telecom Purchase Price" shall mean a cash amount equal
to amount as set forth on Schedule 2.03(b)(i), reduced by the Third Closing
-------------------
Redirection Amount, if any.
"Third Closing Eco Telecom Shares" shall mean the number of shares of
Common Stock determined by dividing the Third Closing Eco Telecom Purchase Price
by the Per Share Price.
"Third Closing Implied Percentage" shall mean, in respect of any Purchaser,
the percentage of the issued and outstanding voting capital stock of the Issuer
that such Purchaser would have owned if
(i) the issuance of the Second Closing Shares at the Second Closing was
effected at the Per Share Price specified in Schedule 1.01(C), without
----------------
redistribution of shares of Eco Telecom Preferred Stock contemplated by
Section 2.08;
(ii) the issuance of the Third Closing Shares at the Third Closing was
effected at the Per Share Price specified in Schedule 1.01(C), without
----------------
redistribution of shares of Eco Telecom Preferred Stock contemplated by
Section 2.09;
(iii) (if Telenor has exercised the VIP-R Call Option before the Third
Closing Date) Telenor exercised the VIP-R Option, without redistribution of
the Preferred Stock as contemplated by Section 2.10; and
(iv) the Preferred Stock Closing has occurred and the Issuer repurchased
from Eco Telecom and cancelled the shares of Eco Telecom Preferred Stock.
"Third Closing Notice of Intention" shall have the meaning specified in
Section 2.05(c)(ii).
"Third Closing Pre-Closing Meeting" shall have the meaning specified in
Section 2.03(c)(i).
"Third Closing Purchase Price" shall mean the aggregate of the Third
Closing Eco Telecom Purchase Price, the Third Closing VIP Purchase Price and the
Third Closing Telenor Purchase Price.
"Third Closing Redirection Amount" shall mean the cash amount (up to a
maximum of US$25 million less any Second Closing Redirection Amount), if any,
paid by Eco Telecom in the aggregate between the Second Closing and the Third
Closing to purchase New Securities of VIP
16
in connection with an issuance of New Securities of VIP with respect to which
Eco Telecom has voted in favor pursuant to the Eco Telecom Undertaking Letter
and only (i) in the amount necessary to maintain its aggregate percentage
ownership interest in the voting capital stock of VIP at the Specified
Percentage and (ii) in connection with issuances of New Securities the proceeds
of which are not used to purchase new shares of voting capital stock of the
Issuer in connection with a share issuance by the Issuer to acquire an
Opportunity offered to the Issuer by Eco Telecom pursuant to Section 5.02(c) of
the VIP Registration Rights Agreement or Section 6.02(c) of the VIP-R
Shareholders Agreement. As used in this definition, the terms "New Securities",
"Specified Percentage" and "Opportunity" shall have the meanings specified in
the VIP Registration Rights Agreement.
"Third Closing Shares" shall mean the Third Closing Eco Telecom Shares, the
Third Closing VIP Shares, if any, and the Third Closing Telenor Shares, if any.
"Third Closing Telenor Option" shall have the meaning specified in Section
2.05(b).
"Third Closing Telenor Primary Option Shares" shall have the meaning
specified in Section 2.05(b).
"Third Closing Telenor Primary Option Purchase Price" shall have the
meaning specified in Section 2.05(b).
"Third Closing Telenor Purchase Price" shall mean the cash amount to be
paid by Telenor as determined pursuant to Section 2.05(b).
"Third Closing Telenor Secondary Option Shares" shall have the meaning
specified in Section 2.05(b).
"Third Closing Telenor Secondary Option Purchase Price" shall have the
meaning specified in Section 2.05(b).
"Third Closing Telenor Shares" shall mean the number of shares of Common
Stock that Telenor elects to purchase at the Third Closing pursuant to Section
2.05(b).
"Third Closing Telenor Tertiary Option Shares" shall have the specified in
Section 2.05(b).
"Third Closing VIP Option" shall have the meaning specified in Section
2.05(a).
"Third Closing VIP Primary Option Shares" shall have the meaning specified
in Section 2.05(a).
"Third Closing VIP Primary Option Purchase Price" shall have the meaning
specified in Section 2.05(a).
"Third Closing VIP Purchase Price" shall mean the cash amount to be paid by
VIP as
17
determined pursuant to Section 2.05(a).
"Third Closing VIP Secondary Option Purchase Price" shall have the meaning
specified in Section 2.05(a).
"Third Closing VIP Secondary Option Shares" shall have the meaning
specified in Section 2.05(a).
"Third Closing VIP Shares" shall mean the number of shares of Common Stock
that VIP elects to purchase at the Third Closing pursuant to Section 2.05(a).
"Total Issuer/Eco Telecom Indemnity Amount" shall mean, (a) from the First
Closing Date to (but excluding) the date on which the Second Closing occurs, the
First Closing Issuer/Eco Telecom Indemnity Amount, (b) from (and including) the
date on which the Second Closing occurs to (but excluding) the date on which the
Third Closing occurs, the Second Closing Issuer/Eco Telecom Indemnity Amount,
and (c) from (and including) the date on which the Third Closing occurs to the
date the representations, warranties, covenants and agreements of the parties to
this Agreement cease to survive as provided in Article XII herein, the sum of
(i) the First Closing Issuer/Eco Telecom Indemnity Amount, (ii) the Second
Closing Issuer/Eco Telecom Indemnity Amount and (iii) (x) if Eco Telecom has
purchased the Third Closing Eco Telecom Shares, US$58.5 million or (y) if Eco
Telecom has not purchased the Third Closing Eco Telecom Shares, US$0.
"Total Issuer/Telenor Indemnity Amount" shall mean (a) from (and
including) the date on which the Second Closing occurs to (but excluding) the
date on which the Third Closing occurs, the Second Closing Issuer/Telenor
Indemnity Amount, and (b) from (and including) the date on which the Third
Closing occurs to the date the representations, warranties, covenants and
agreements of the parties to this Agreement cease to survive as provided in
Article XII herein, the sum of (i) the Second Closing Issuer/Telenor Indemnity
Amount and (ii) (x) if Telenor has exercised its Third Closing Telenor Option
and purchased shares in connection therewith, an amount equal to the Third
Closing Telenor Purchase Price or (y) if Telenor has not exercised its Third
Closing Telenor Option and purchased shares in connection therewith, an amount
equal to US$0.
"Total Issuer/VIP Indemnity Amount" shall mean (a) from the First Closing
Date to (but excluding) the date on which the Second Closing occurs, the First
Closing Issuer/VIP Indemnity Amount, (b) from (and including) the date on which
the Second Closing occurs to (but excluding) the date on which the Third Closing
occurs, the Second Closing Issuer/VIP Indemnity Amount, and (c) from (and
including) the date on which the Third Closing occurs to the date the
representations, warranties, covenants and agreements of the parties to this
Agreement cease to survive as provided in Article XII herein, the sum of (i) the
First Closing Issuer/VIP Indemnity Amount, (ii) the Second Closing Issuer/VIP
Indemnity Amount and (iii) (x) if VIP has exercised its Third Closing VIP Option
and purchased shares in connection therewith, an amount equal to the Third
Closing VIP Purchase Price or (y) if VIP has not exercised its Third Closing VIP
Option and purchased shares in connection therewith, an amount equal to US$0.
18
"Trademark Agreements" shall mean the Trademark License Agreements, dated
the date hereof, between the Issuer and VIP, as listed on Schedule 1.01(D).
----------------
"UNCITRAL Rules" shall have the meaning specified in Section 15.11.
"Updated Second Closing Disclosure Letter" shall have the meaning specified
in Section 2.04(e).
"Updated Third Closing Disclosure Letter" shall have the meaning specified
in Section 2.05(e).
"US dollars" and "US$" shall mean the lawful currency of the United States.
"VIP" shall have the meaning specified in the preamble to this Agreement.
"VIP Closing" shall mean the "Closing" as defined in the VIP Primary
Agreement.
"VIP LLC" shall have the meaning specified in Section 2.07(d).
"VIP Primary Agreement" shall mean the Primary Agreement, dated the date
hereof, among Eco Telecom, Telenor and VIP.
"VIP Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated the date hereof, among Eco Telecom, Telenor and VIP.
"VIP Shareholders Agreement" shall mean the Shareholders Agreement, dated
the date hereof, among Telenor and Eco Telecom.
"VIP Sub" shall have the meaning specified in Section 2.12.
"VIP Third Closing Notice of Intention" shall have the meaning specified in
Section 2.05(c)(i).
"VIP/Eco Telecom Share Purchase Agreement" has the meaning specified in
Section 8.04.
"VIP-R Call Option" shall have the meaning specified in the Option
Agreement.
"VIP-R Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated the date hereof, among the Issuer, VIP, Eco Telecom and
Telenor.
"VIP-R Shareholders Agreement" shall mean the Shareholders Agreement, dated
the date hereof, among Eco Telecom, Telenor, VIP and the Issuer.
"Zimin Call Option Agreements" shall mean (i) the Zimin Common Call Option
Agreement and (ii) the Zimin Preferred Call Option Agreement.
19
"Zimin Common Call Option Agreement" the Call Option Agreement, to be
entered into following the First Closing, between Eco Telecom and Overture
Limited in respect of shares of common stock of VIP substantially in the form
attached as Exhibit A to the Zimin Preferred Call Option Agreement.
"Zimin Common Pledge Agreement" shall mean the Pledge Agreement, to be
entered into following the First Closing, between Eco Telecom and Overture
Limited in respect of shares of common stock of VIP substantially in the form
attached as Exhibit A to the Zimin Preferred Pledge Agreement.
"Zimin Pledge Agreements" shall mean (i) the Zimin Common Pledge Agreement
and the Zimin Preferred Pledge Agreement.
"Zimin Preferred Call Option Agreement" shall mean the Call Option
Agreement, to be entered into at the First Closing, between Eco Telecom and
Overture Limited in respect of shares of preferred stock of VIP substantially in
the form attached as Exhibit A to the Eco Telecom Preferred Stock Purchase
Agreement.
"Zimin Preferred Pledge Agreement" shall mean the Pledge Agreement, to be
entered into at the First Closing, between Eco Telecom and Overture Limited in
respect of shares of preferred stock of VIP substantially in the form attached
as Exhibit B to the Eco Telecom Preferred Stock Purchase Agreement.
"Zimin Preferred Stock Agreements" shall mean, collectively, the Share
Purchase Agreement, dated the date hereof, between Xx. Xxxxx and Overture, the
Share Purchase Agreement No. C-P-1 dated April 13, 1998 between Closed Joint
Stock Company "Sota-100" and Xx. Xxxxx, the Share Purchase Agreement No. C-P-2
dated April 13, 1998 between Closed Joint Stock Company "Sota-100" and Xx.
Xxxxx, the Share Purchase Agreement No. Kb-P-1 dated April 13, 1998 between
Closed Joint Stock Company "KB Impuls-TV" and Xx. Xxxxx, the Share Purchase
Agreement No. Kb-P-2 dated April 13, 1998 between Closed Joint Stock Company
"KB Impuls-TV" and Xx. Xxxxx, the Share Swap Agreement dated July 26, 1996
between the Issuer and Closed Joint Stock Company "Sota-100" and the Share Swap
Agreement dated July 26, 1996 between the Issuer and Closed Joint Stock Company
"KB Impuls-TV".
"Zimin Principal Agreements" shall mean, collectively, the Telenor Share
Purchase Agreement, the Eco Telecom Share Purchase Agreements, the Zimin Pledge
Agreements, the Zimin Call Option Agreements and the Zimin Surety Agreement.
"Zimin Surety Agreement" shall mean the Surety Agreement, dated the date
hereof, between Eco Telecom and Xx. Xxxxx.
1.02 Interpretations
---------------
Unless the context of this Agreement otherwise requires, the following
rules of interpretation shall apply to this Agreement:
20
(a) the singular shall include the plural, and the plural shall include the
singular;
(b) words of any gender shall include each other gender;
(c) the words "hereof", "herein", "hereby", "hereto" and similar words
refer to this entire Agreement and not to any particular Section or any other
subdivision of this Agreement;
(d) a reference to any Article, Section, Schedule or Exhibit is a reference
to a specific Article or Section of, or Schedule or Exhibit to, this Agreement;
(e) a reference to any law, statute, regulation, notification or statutory
provision shall include any amendment, modification or re-enactment thereof, any
regulations promulgated thereunder from time to time, and any interpretations
thereof from time to time by any regulatory or administrative authority;
(f) a reference to any agreement, instrument, contract or other document
shall include any amendment, amendment and restatement, supplement or other
modification thereto;
(g) a reference to any Person shall include such Person's successors and
permitted assigns under any agreement, instrument, contract or other document;
(h) the phrases "ordinary course of business" and "ordinary course of
business consistent with past practice" shall refer to the business and practice
of the Issuer;
(i) the word "pending" shall mean, with respect to a particular matter, the
service of process or delivery of written notice to the Person to whom such
matter relates;
(j) whenever this Agreement refers to a number of days, such number shall
refer to calendar days unless Business Days are specified; and
(k) all accounting terms used herein and not expressly defined herein shall
have the meanings given to them under GAAP.
ARTICLE II - SALE OF SHARES AND CLOSINGS; GRANT OF OPTIONS
2.01 First Closing
-------------
(a) Purchase and Sale
-----------------
(i) Subject to the terms and conditions contained in this Agreement
and in accordance with the procedures set forth in Schedule 2.01(a)(i) attached
-------------------
hereto, on the First Closing Date, (i) the Issuer shall issue and sell to VIP,
and (ii) VIP shall purchase from the Issuer, the First Closing VIP Shares.
(ii) Subject to the terms and conditions of this Agreement, solely
for the purpose of Russian Law and solely to the extent Russian Law may be
applicable (i) this Agreement shall be considered a preliminary agreement
(predvaritelnyi dogovor) and not a
21
transaction involving securities (sdelka s tsennymi bumagami); (ii) by virtue of
entering into this Agreement, (x) the Issuer shall not be obligated to transfer
any First Closing VIP Shares to VIP or be considered to have offered any First
Closing VIP Shares to VIP and (y) VIP shall not be obligated to purchase any
First Closing VIP Shares from the Issuer or to make payment for any First
Closing VIP Shares; (iii) the actual transactions contemplated by Section
2.01(a)(i) shall not constitute transactions involving securities (sdelki s
tsennymi bumagami); and (iv) in no event shall such transactions take place
before the registration of the issuance of the First Closing VIP Shares with the
FCSM and payment in full for the First Closing VIP Shares by VIP, if and to the
extent such registration and payment are required under Russian Law. The
placement of the First Closing VIP Shares shall occur on the date on which the
First Closing VIP Shares are disposed of (otchuzdeny) by the Issuer in favor of
VIP, by transferring the title to the First Closing VIP Shares to VIP at the
First Closing. This Section 2.01(a)(ii) shall have no effect on the
interpretation of this Agreement under the laws of the State of New York, by
which this Agreement is expressed to be governed. Subject to the terms and
conditions contained in this Agreement, immediately upon the registration of the
issuance of the First Closing VIP Shares with the FCSM and in any event prior to
the Issuer's execution of any other agreement with respect to any of the First
Closing VIP Shares, the Issuer and VIP shall execute the Individual Share
Purchase Agreement (osnovnoi dogovor) attached as Annex A to Schedule 2.01(a)(i)
which shall incorporate by reference the terms and conditions of this Agreement
applicable to VIP, except that this Section 2.01(a)(ii) shall be excluded.
(b) Purchase Price
--------------
Subject to the terms and conditions hereof and in consideration of the
sale and transfer to VIP by the Issuer of the First Closing VIP Shares, on the
First Closing Date, VIP shall pay to the Issuer the First Closing VIP Purchase
Price in the manner provided in Section 2.01(c)(ii) and the First Closing VIP
Purchase Price shall be allocable entirely to, and deemed to be in consideration
of, the First Closing VIP Shares being purchased hereunder.
(c) Pre-Closing; Closing
--------------------
(i) Pre-Closing. VIP shall notify the Issuer and Eco Telecom of the
-----------
proposed date of the First Closing at the same times VIP is obligated to provide
notice of the VIP Closing to Eco Telecom and Telenor under Article II of the VIP
Primary Agreement. On the same date scheduled for the pre-closing meeting in
Section 2.03(a) of the VIP Primary Agreement, VIP, the Issuer and Eco Telecom
shall (i) attend a pre-closing meeting at the offices of VIP's counsel, located
at Xxxxx Place II, Xxxxxx Xxxxxxx 0, Xxxxxx 000000, Xxxxxx (or at such other
place as VIP, the Issuer and Eco Telecom mutually agree) at 10:00 am (Moscow
time), and (ii) review the documents to be delivered at the First Closing to
determine whether the conditions precedent specified in Article IX have been, or
will on the First Closing Date be capable of being, fulfilled.
(ii) Closing. The First Closing will take place at the offices of
-------
VIP's counsel at the address set out in the immediately preceding paragraph, or
at such other place as VIP, Eco Telecom and the Issuer mutually agree, at 10:00
am local time on the First Closing Date. On the First Closing Date, if the
conditions precedent specified in Article IX have been fulfilled (or
22
properly waived in writing in accordance with Article IX), then (i) VIP shall
pay to the Issuer the First Closing VIP Purchase Price in rubles based on the
CBR dollar to xxxxx exchange rate for the Business Day immediately preceding the
First Closing Date, by wire transfer of immediately available funds to the
account(s) designated by the Issuer, as specified in the Account Bank and
Overdraft Agreement, and (ii) upon receipt by the Issuer of the First Closing
VIP Purchase Price, the Issuer shall deliver immediately to VIP an extract from
the share register of the Issuer issued by the Registrar and showing VIP as the
owner of the First Closing VIP Shares.
2.02 Second Closing
--------------
(a) Purchase and Sale.
-----------------
(i) Eco Telecom.
-----------
(A) Subject to the terms and conditions contained in this
Agreement and in accordance with the procedures set forth in Schedule 2.02(a)(i)
-------------------
attached hereto, on the Second Closing Date, (x) the Issuer shall issue and sell
to Eco Telecom, and (y) Eco Telecom shall purchase from the Issuer, the Second
Closing Eco Telecom Shares.
(B) Subject to the terms and conditions of this Agreement,
solely for the purpose of Russian Law and solely to the extent Russian Law may
be applicable (i) this Agreement shall be considered a preliminary agreement
(predvaritelnyi dogovor) and not a transaction involving securities (sdelka s
tsennymi bumagami); (ii) by virtue of entering into this Agreement, (x) the
Issuer shall not be obligated to transfer any Second Closing Eco Telecom Shares
to Eco Telecom or be considered to have offered any Second Closing Eco Telecom
Shares to Eco Telecom and (y) Eco Telecom shall not be obligated to purchase any
Second Closing Eco Telecom Shares from the Issuer or to make payment for any
Second Closing Eco Telecom Shares; (iii) the actual transactions contemplated by
Section 2.02(a)(i)(A) shall not constitute transactions involving securities
(sdelki s tsennymi bumagami); and (iv) in no event shall such transactions take
place before the registration of the issuance of the Second Closing Eco Telecom
Shares with the FCSM and payment in full for the Second Closing Eco Telecom
Shares by Eco Telecom, if and to the extent such registration and payment are
required under Russian Law. The placement of the Second Closing Eco Telecom
Shares shall occur on the date on which the Second Closing Eco Telecom Shares
are disposed of (otchuzdeny) by the Issuer in favor of Eco Telecom, by
transferring the title to the Second Closing Eco Telecom Shares to Eco Telecom
at the Second Closing. This Section 2.02(a)(i)(B) shall have no effect on the
interpretation of this Agreement under the laws of the State of New York, by
which this Agreement is expressed to be governed. Subject to the terms and
conditions contained in this Agreement, immediately upon the registration of the
issuance of the Second Closing Eco Telecom Shares with the FCSM and in any event
prior to the Issuer's execution of any other agreement with respect to any of
the Second Closing Eco Telecom Shares, the Issuer and Eco Telecom shall execute
the Individual Share Purchase Agreement (osnovnoi dogovor) attached as Annex A
to Schedule 2.02(a)(i) which shall incorporate by reference the terms and
conditions of this Agreement applicable to Eco Telecom, except that this Section
2.02(a)(i)(B) shall be excluded.
23
(ii) VIP.
---
(A) Subject to the terms and conditions contained in this
Agreement and in accordance with the procedures set forth in Schedule 2.02(a)
----------------
(ii) attached hereto, on the Second Closing Date, in the event that VIP
----
exercises the Second Closing VIP Option pursuant to Section 2.04, (x) the Issuer
shall issue and sell to VIP, and (y) VIP shall purchase from the Issuer, the
Second Closing VIP Shares .
(B) Subject to the terms and conditions of this Agreement,
solely for the purpose of Russian Law and solely to the extent Russian Law may
be applicable (i) this Agreement shall be considered a preliminary agreement
(predvaritelnyi dogovor) and not a transaction involving securities (sdelka s
tsennymi bumagami); (ii) by virtue of entering into this Agreement, (x) the
Issuer shall not be obligated to transfer any Second Closing VIP Shares to VIP
or be considered to have offered any Second Closing VIP Shares to VIP and (y)
VIP shall not be obligated to purchase any Second Closing VIP Shares from the
Issuer or to make payment for any Second Closing VIP Shares; (iii) the actual
transactions contemplated by Section 2.02(a)(ii)(A) shall not constitute
transactions involving securities (sdelki s tsennymi bumagami); and (iv) in no
event shall such transactions take place before the registration of the issuance
of the Second Closing VIP Shares with the FCSM and payment in full for the
Second Closing VIP Shares by VIP, if and to the extent such registration and
payment are required under Russian Law. The placement of the Second Closing VIP
Shares shall occur on the date on which the Second Closing VIP Shares are
disposed of (otchuzdeny) by the Issuer in favor of VIP, by transferring the
title to the Second Closing VIP Shares to VIP at the Second Closing. This
Section 2.02(a)(ii)(B) shall have no effect on interpretation of this Agreement
under the laws of the State of New York, by which this Agreement is expressed to
be governed. Subject to the terms and conditions contained in this Agreement,
immediately upon the registration of the issuance of the Second Closing VIP
Shares with the FCSM and in any event prior to the Issuer's execution of any
other agreement with respect to any of the Second Closing VIP Shares, the Issuer
and VIP shall execute the Individual Share Purchase Agreement (osnovnoi dogovor)
attached as Annex A to Schedule 2.02(a)(ii) which shall incorporate by reference
the terms and conditions of this Agreement applicable to VIP, except that this
Section 2.02(a)(ii)(B) shall be excluded.
(iii) Telenor.
-------
(A) Subject to the terms and conditions contained in this
Agreement and in accordance with the procedures set forth in Schedule
--------
2.02(a)(iii) attached hereto, on the Second Closing Date, in the event that
------------
Telenor exercises the Second Closing Telenor Option pursuant to Section 2.04,
(x) the Issuer shall issue and sell to Telenor, and (y) Telenor shall purchase
from the Issuer, the Second Closing Telenor Shares.
(B) Subject to the terms and conditions of this Agreement,
solely for the purpose of Russian Law and solely to the extent Russian Law may
be applicable (i) this Agreement shall be considered a preliminary agreement
(predvaritelnyi dogovor) and not a transaction involving securities (sdelka s
tsennymi bumagami); (ii) by virtue of entering into this Agreement, (x) the
Issuer shall not be obligated to transfer any Second Closing Telenor Shares to
24
Telenor or be considered to have offered any Second Closing Telenor Shares to
Telenor and (y) Telenor shall not be obligated to purchase any Second Closing
Telenor Shares from the Issuer or to make payment for any Second Closing Telenor
Shares; (iii) the actual transactions contemplated by Section 2.02(a)(iii)(A)
shall not constitute transactions involving securities (sdelki s tsennymi
bumagami); and (iv) in no event shall such transactions take place before the
registration of the issuance of the Second Closing Telenor Shares with the FCSM
and payment in full for the Second Closing Telenor Shares by Telenor, if and to
the extent such registration and payment are required under Russian Law. The
placement of the Second Closing Telenor Shares shall occur on the date on which
the Second Closing Telenor Shares are disposed of (otchuzdeny) by the Issuer in
favor of Telenor, by transferring the title to the Second Closing Telenor Shares
to Telenor at the Second Closing. This Section 2.02(a)(iii)(B) shall have no
effect on the interpretation of this Agreement under the laws of the State of
New York, by which this Agreement is expressed to be governed. Subject to the
terms and conditions contained in this Agreement, immediately upon the
registration of the issuance of the Second Closing Telenor Shares with the FCSM
and in any event prior to the Issuer's execution of any other agreement with
respect to any of the Second Closing Telenor Shares, the Issuer and Telenor
shall execute the Individual Share Purchase Agreement (osnovnoi dogovor)
attached as Annex A to Schedule 2.02(a)(iii) which shall incorporate by
reference the terms and conditions of this Agreement applicable to Telenor,
except that this Section 2.02(a)(iii)(B) shall be excluded.
(b) Purchase Price.
--------------
(i) Eco Telecom. Subject to the terms and conditions hereof
-----------
and in consideration of the sale and transfer to Eco Telecom by the Issuer of
the Second Closing Eco Telecom Shares, on the Second Closing Date, Eco Telecom
shall pay to the Issuer the Second Closing Eco Telecom Purchase Price in the
manner provided in Section 2.02(c)(ii) and the Second Closing Eco Telecom
Purchase Price shall be allocable entirely to, and deemed to be in consideration
of, the Second Closing Eco Telecom Shares being purchased hereunder.
(ii) VIP. Subject to the terms and conditions hereof and in
---
consideration of the sale and transfer to VIP by the Issuer of the Second
Closing VIP Shares, on the Second Closing Date, in the event that VIP exercises
the Second Closing VIP Option pursuant to Section 2.04, VIP shall pay to the
Issuer the Second Closing VIP Purchase Price in the manner provided in Section
2.02(c)(ii) and the Second Closing VIP Purchase Price shall be allocable
entirely to, and deemed to be in consideration of, the Second Closing VIP Shares
being purchased hereunder.
(iii) Telenor. Subject to the terms and conditions hereof an
-------
in consideration of the sale and transfer to Telenor by the Issuer of the Second
Closing Telenor Shares, on the Second Closing Date, in the event that Telenor
exercises the Second Closing Telenor Option pursuant to Section 2.04, Telenor
shall pay to the Issuer the Second Closing Telenor Purchase Price in the manner
provided in Section 2.02(c)(ii) and the Second Closing Telenor Purchase Price
shall be allocable entirely to, and deemed to be in consideration of, the Second
Closing Telenor Shares being purchased hereunder.
(c) Pre-Closing; Closing
--------------------
25
(i) Pre-Closing. On a date which is five (5) Business Days
-----------
prior to the Second Closing Date the Issuer, Eco Telecom, VIP and Telenor, if
applicable, shall (i) attend a pre-closing meeting (the "Second Closing Pre-
Closing Meeting") at the offices of VIP's counsel, located at Xxxxx Xxxxx XX, 0
Xxxxxxx Xxxxxx, Xxxxxx 000000, Russian Federation (or at such other place as Eco
Telecom and the Issuer, and VIP and Telenor if applicable, mutually agree) at
10:00 am local time, and (ii) review the documents to be delivered at the Second
Closing to determine whether the conditions precedent specified in Article X
with respect to the Second Closing have been, or will on the Second Closing Date
be capable of being, fulfilled. At the Second Closing Pre-Closing Meeting, VIP
shall present its calculations concerning the re-distributions of Preferred
Stock required at the Second Closing pursuant to Section 2.08.
(ii) Closing. The Second Closing will take place at the
-------
offices of VIP's counsel at the address set out in the immediately preceding
paragraph, or at such other place as Eco Telecom and the Issuer, and VIP and
Telenor, if applicable, mutually agree, at 10:00 am local time on the Second
Closing Date. On the Second Closing Date, (A) if the conditions precedent
specified in Article-X with respect to the Second Closing have been fulfilled
(or properly waived in writing in accordance with Article X), then (i) Eco
Telecom shall pay to the Issuer the Second Closing Eco Telecom Purchase Price in
US dollars, by wire transfer of immediately available funds to the account(s)
designated by the Issuer, and (ii) upon receipt by the Issuer of the Second
Closing Eco Telecom Purchase Price, the Issuer shall deliver immediately to Eco
Telecom an extract from the share register of the Issuer issued by the Registrar
and showing Eco Telecom as the owner of the Second Closing Eco Telecom Shares;
(B) in the event-that VIP exercises the Second Closing VIP Option and if the
conditions precedent specified in Article X have been fulfilled (or properly
waived in writing in accordance with Article X), then (i) VIP shall pay to the
Issuer the Second Closing VIP Purchase Price in rubles based on the CBR dollar
to xxxxx exchange rate for the Business Day immediately preceding the Second
Closing Date, by wire transfer of immediately available funds to the account(s)
designated by the Issuer, and (ii) upon receipt by the Issuer of the Second
Closing VIP Purchase Price, the Issuer shall deliver immediately to VIP an
extract from the share register of the Issuer issued by the Registrar and
showing VIP as the owner of the Second Closing VIP Shares; and (C) in the event
that Telenor exercises the-Second Closing Telenor Option and if the conditions
precedent specified in Article X have been fulfilled (or properly waived in
writing in accordance with Article X), then (i) Telenor shall pay to the Issuer
the Second Closing Telenor Purchase Price in US dollars, by wire transfer of
immediately available funds to the account(s) designated by the Issuer, and (ii)
upon receipt by the Issuer of the Second Closing Telenor Purchase Price, the
Issuer shall deliver immediately to Telenor an extract from the share register
of the Issuer issued by the Registrar and showing Telenor as the owner of the
Second Closing Telenor Shares.
2.03 Third Closing
-------------
(a) Purchase and Sale
-----------------
(i) Eco Telecom.
-----------
26
(A) Subject to the terms and conditions contained in this
Agreement and in accordance with the procedures set forth in Schedule 2.03(a)(i)
-------------------
attached hereto, on the Third Closing Date, (x) the Issuer shall issue and sell
to Eco Telecom, and (y) Eco Telecom shall purchase from the Issuer, the Third
Closing Eco Telecom Shares.
(B) Subject to the terms and conditions of this Agreement,
solely for the purpose of Russian Law and solely to the extent Russian Law may
be applicable (i) this Agreement shall be considered a preliminary agreement
(predvaritelnyi dogovor) and not a transaction involving securities (sdelka s
tsennymi bumagami); (ii) by virtue of entering into this Agreement, (x) the
Issuer shall not be obligated to transfer any Third Closing Eco Telecom Shares
to Eco Telecom or be considered to have offered any Third Closing Eco Telecom
Shares to Eco Telecom and (y) Eco Telecom shall not be obligated to purchase any
Third Closing Eco Telecom Shares from the Issuer or to make payment for any
Third Closing Eco Telecom Shares; (iii) the actual transactions contemplated by
Section 2.03(a)(i)(A) shall not constitute transactions involving securities
(sdelki s tsennymi bumagami); and (iv) in no event shall such transactions take
place before the registration of the issuance of the Third Closing Eco Telecom
Shares with the FCSM and payment in full for the Third Closing Eco Telecom
Shares by Eco Telecom, if and to the extent such registration and payment are
required under Russian Law. The placement of the Third Closing Eco Telecom
Shares shall occur on the date on which the Third Closing Eco Telecom Shares are
disposed of (otchuzdeny) by the Issuer in favor of Eco Telecom, by transferring
the title to the Third Closing Eco Telecom Shares to Eco Telecom at the Third
Closing. This Section 2.03(a)(i)(B) shall have no effect on the interpretation
of this Agreement under the laws of the State of New York, by which this
Agreement is expressed to be governed. Subject to the terms and conditions
contained in this Agreement, immediately upon the registration of the issuance
of the Third Closing Eco Telecom Shares with the FCSM and in any event prior to
the Issuer's execution of any other agreement with respect to any of the Third
Closing Eco Telecom Shares, the Issuer and Eco Telecom shall execute the
Individual Share Purchase Agreement (osnovnoi dogovor) attached as Annex A to
Schedule 2.03(a)(i) which shall incorporate by reference the terms and
conditions of this Agreement applicable to Eco Telecom, except that this Section
2.03(a)(i)(B) shall be excluded.
(ii) VIP.
---
(A) Subject to the terms and conditions contained in this
Agreement
and in accordance with the procedures set forth in Schedule 2.03(a)(ii) attached
--------------------
hereto, on the Third Closing Date, in the event that VIP exercises the Third
Closing VIP Option pursuant to Section 2.05, (x) the Issuer shall issue and sell
to VIP, and (y) VIP shall purchase from the Issuer, the Third Closing VIP
Shares.
(B) Subject to the terms and conditions of this Agreement,
solely for the purpose of Russian Law and solely to the extent Russian Law may
be applicable (i) this Agreement shall be considered a preliminary agreement
(predvaritelnyi dogovor) and not a transaction involving securities (sdelka s
tsennymi bumagami); (ii) by virtue of entering into this Agreement, (x) the
Issuer shall not be obligated to transfer any Third Closing VIP Shares to VIP or
be considered to have offered any Third Closing VIP Shares to VIP and (y) VIP
shall not be obligated to purchase any Third Closing VIP Shares from the Issuer
or to make payment for any
27
Third Closing VIP Shares; (iii) the actual transactions contemplated by Section
2.03(a)(ii)(A) shall not constitute transactions involving securities (sdelki s
tsennymi bumagami); and (iv) in no event shall such transactions take place
before the registration of the issuance of the Third Closing VIP Shares with the
FCSM and payment in full for the Third Closing VIP Shares by VIP, if and to the
extent such registration and payment are required under Russian Law. The
placement of the Third Closing VIP Shares shall occur on the date on which the
Third Closing VIP Shares are disposed of (otchuzdeny) by the Issuer in favor of
VIP, by transferring the title to the Third Closing VIP Shares to VIP at the
Third Closing. This Section 2.03(a)(ii)(B) shall have no effect on
interpretation of this Agreement under the laws of the State of New York, by
which this Agreement is expressed to be governed. Subject to the terms and
conditions contained in this Agreement, immediately upon the registration of the
issuance of the Third Closing VIP Shares with the FCSM and in any event prior to
the Issuer's execution of any other agreement with respect to any of the Third
Closing VIP Shares, the Issuer and VIP shall execute the Individual Share
Purchase Agreement (osnovnoi dogovor) attached as Annex A to Schedule
2.03(a)(ii) which shall incorporate by reference the terms and conditions of
this Agreement applicable to VIP, except that this Section 2.03(a)(ii)(B) shall
be excluded.
(iii) Telenor.
-------
(A) Subject to the terms and conditions contained in this
Agreement
and in accordance with the procedures set forth in Schedule 2.03(a)(iii)
---------------------
attached hereto, on the Third Closing Date, in the event that Telenor exercises
the Third Closing Telenor Option pursuant to Section 2.05, (x) the Issuer shall
issue and sell to Telenor, and (y) Telenor shall purchase from the Issuer, the
Third Closing Telenor Shares.
(B) Subject to the terms and conditions of this Agreement,
solely for the purpose of Russian Law and solely to the extent Russian Law may
be applicable (i) this Agreement shall be considered a preliminary agreement
(predvaritelnyi dogovor) and not a transaction involving securities (sdelka s
tsennymi bumagami); (ii) by virtue of entering into this Agreement, (x) the
Issuer shall not be obligated to transfer any Third Closing Telenor Shares to
Telenor or be considered to have offered any Third Closing Telenor Shares to
Telenor and (y) Telenor shall not be obligated to purchase any Third Closing
Telenor Shares from the Issuer or to make payment for any Third Closing Telenor
Shares; (iii) the actual transactions contemplated by Section 2.03(a)(iii)(A)
shall not constitute transactions involving securities (sdelki s tsennymi
bumagami); and (iv) in no event shall such transactions take place before the
registration of the issuance of the Third Closing Telenor Shares with the FCSM
and payment in full for the Third Closing Telenor Shares by Telenor, if and to
the extent such registration and payment are required under Russian Law. The
placement of the Third Closing Telenor Shares shall occur on the date on which
the Third Closing Telenor Shares are disposed of (otchuzdeny) by the Issuer in
favor of Telenor, by transferring the title to the Third Closing Telenor Shares
to Telenor at the Third Closing. This Section 2.03(a)(iii)(B) shall have no
effect on the interpretation of this Agreement under the laws of the State of
New York, by which this Agreement is expressed to be governed. Subject to the
terms and conditions contained in this Agreement, immediately upon the
registration of the issuance of the Third Closing Telenor Shares with the FCSM
and in any event prior to the Issuer's execution of any other agreement with
respect to any of the Third Closing Telenor Shares, the Issuer and Telenor shall
execute the Individual Share Xxxxxxxx
00
Xxxxxxxxx (xxxxxxxx dogovor) attached as Annex A to Schedule 2.03(a)(iii) which
shall incorporate by reference the terms and conditions of this Agreement
applicable to Telenor, except that this Section 2.03(a)(iii)(B) shall be
excluded.
(b) Purchase Price
--------------
(i) Eco Telecom. Subject to the terms and conditions
-----------
hereof and in consideration of the sale and transfer to Eco Telecom
by the Issuer of the Third Closing Eco Telecom Shares, on the Third Closing
Date, Eco Telecom shall pay to the Issuer the Third Closing Eco Telecom Purchase
Price in the manner provided in Section 2.03(c)(ii) and the Third Closing Eco
Telecom Purchase Price shall be allocable entirely to, and deemed to be in
consideration of, the Third Closing Eco Telecom Shares being purchased
hereunder.
(ii) VIP. Subject to the terms and conditions hereof
---
and in consideration of the sale and transfer to VIP by the Issuer of the
Third Closing VIP Shares, on the Third Closing Date, in the event that VIP
exercises the Third Closing VIP Option pursuant to Section 2.05, VIP shall pay
to the Issuer the Third Closing VIP Purchase Price in the manner provided in
Section 2.03(c)(ii) and the Third Closing VIP Purchase Price shall be allocable
entirely to, and deemed to be in consideration of, the Third Closing VIP Shares
being purchased hereunder.
(iii) Telenor. Subject to the terms and conditions
-------
hereof and in consideration of the sale and transfer to Telenor by the Issuer of
the Third Closing Telenor Shares, on the Third Closing Date, in the event that
Telenor exercises the Third Closing Telenor Option pursuant to Section 2.05,
Telenor shall pay to the Issuer the Third Closing Telenor Purchase Price in the
manner provided in Section 2.03(c)(ii) and the Third Closing Telenor Purchase
Price shall be allocable entirely to, and deemed to be in consideration of, the
Third Closing Telenor Shares being purchased hereunder.
(c) Pre-Closing; Closing
--------------------
(i) Pre-Closing. On a date which is five (5)
-----------
Business Days prior to the Third Closing Date the Issuer and Eco Telecom, and
VIP and Telenor, if applicable, shall (i) attend a pre-closing meeting ("the
Third Closing Pre-Closing Meeting") at the offices of the VIP's counsel, located
at Xxxxx Xxxxx XX, 0 Xxxxxxx Xxxxxx, Xxxxxx 000000, Russian Federation (or at
such other place as Eco Telecom and the Issuer, and VIP and Telenor, if
applicable, mutually agree) at 10:00 am local time, and (ii) review the
documents to be delivered at the Third Closing to determine whether the
conditions precedent specified in Article XI with respect to the Third Closing
have been, or will on the Third Closing Date be capable of being, fulfilled. At
the Third Closing Pre-Closing Meeting, VIP shall present its calculations
concerning the re-distributions of Preferred Stock required at the Third Closing
pursuant to Section 2.09.
(ii) Closing. The Third Closing will take place
-------
at the offices of VIP's counsel at the address set out in the immediately
preceding paragraph, or at such other place as Eco Telecom and the Issuer, and
VIP and Telenor, if applicable, mutually agree, at 10:00 am local time on the
Third Closing Date. On the Third Closing Date, (A) if the conditions precedent
-
specified in Article XI with respect to the Third Closing have been fulfilled
(or properly waived
29
in writing in accordance with Article XI), then (i) Eco Telecom shall pay to the
Issuer the Third Closing Eco Telecom Purchase Price in US dollars, by wire
transfer of immediately available funds to the account(s) designated by the
Issuer, and (ii) upon receipt by the Issuer of the Third Closing Eco Telecom
Purchase Price, the Issuer shall deliver immediately to Eco Telecom an extract
from the share register of the Issuer issued by the Registrar and showing Eco
Telecom as the owner of the Third Closing Eco Telecom Shares; (B) in the event
-
that VIP exercises the Third Closing VIP Option and if the conditions precedent
specified in Article XI with respect to the Third Closing have been fulfilled
(or properly waived in writing in accordance with Article XI), then (i) VIP
shall pay to the Issuer the Third Closing VIP Purchase Price in rubles based on
the CBR dollar to xxxxx exchange rate from the Business Day immediately
preceding the Third Closing Date, by wire transfer of immediately available
funds to the account(s) designated by the Issuer, and (ii) upon receipt by the
Issuer of the Third Closing VIP Purchase Price, the Issuer shall deliver
immediately to VIP an extract from the share register of the Issuer issued by
the Registrar and showing VIP as the owner of the Third Closing VIP Shares; and
(C) in the event that Telenor exercises the Third Closing Telenor Option and if
-
the conditions precedent specified in Article XI have been fulfilled (or
properly waived in writing in accordance with Article XI), then (i) Telenor
shall pay to the Issuer the Third Closing Telenor Purchase Price in US dollars,
by wire transfer of immediately available funds to the account(s) designated by
the Issuer, and (ii) upon receipt by the Issuer of the Third Closing Telenor
Purchase Price, the Issuer shall deliver immediately to Telenor an extract from
the share register of the Issuer issued by the Registrar and showing Telenor as
the owner of the Third Closing Telenor Shares. Upon payment by Eco Telecom of
the Third Closing Eco Telecom Purchase Price in accordance with this Section
2.03, the Issuer shall cause to be delivered to each party to this Agreement a
certificate of the bank to which the Third Closing Eco Telecom Purchase Price is
paid confirming that the Third Closing Eco Telecom Purchase Price has been
received by the Issuer into its account.
2.04 Second Closing Purchase Options
-------------------------------
(a) VIP Option. Subject to the terms and conditions hereof,
----------
including without limitation Section 2.02(a)(ii), on but not later than the
Second Closing Date, VIP shall have the option, exercisable by written notice to
the Issuer and Telenor (the "Second Closing VIP Option"):
(i) to purchase from the Issuer newly-issued shares of
Common Stock in the amount (but not less than the amount) equal to fifty percent
(50%) of the number of Second Closing Eco Telecom Shares required to be
purchased by Eco Telecom at the Second Closing (assuming the conditions
precedent specified in Article X have been fulfilled or properly waived by Eco
Telecom) (the "Second Closing VIP Primary Option Shares") for a purchase price
in an amount equal to the product of the Second Closing VIP Primary Option
Shares and the Per Share Price (the "Second Closing VIP Primary Option Purchase
Price"); or
(ii) in the event Telenor does not exercise the Second
Closing Telenor Option at the Second Closing, to purchase from the Issuer newly-
issued shares of Common Stock in the amount (but not less than the amount) equal
to one hundred percent (100%) of the number of Second Closing Eco Telecom Shares
required to be purchased by Eco Telecom at the Second Closing (assuming the
conditions precedent specified in Article X have been fulfilled or properly
30
waived by Eco Telecom) (the "Second Closing VIP Secondary Option Shares") for a
purchase price in an amount equal to the product of the Second Closing VIP
Secondary Option Shares and the Per Share Price.
(b) Telenor Option. Subject to the terms and conditions hereof, including
--------------
without limitation Section 2.02(a)(iii), on but not later than the Second
Closing Date, Telenor shall have the option, exercisable by written notice to
the Issuer and VIP (the "Second Closing Telenor Option"):
(i) to purchase from the Issuer newly-issued shares of Common
Stock in the amount (but not less than the amount) equal to fifty percent (50%)
of the number of Second Closing Eco Telecom Shares required to be purchased by
Eco Telecom at the Second Closing (assuming the conditions precedent specified
in Article X have been fulfilled or properly waived by Eco Telecom) (the "Second
Closing Telenor Primary Option Shares") for a purchase price in an amount equal
to the product of the Second Closing Telenor Primary Option Shares and the Per
Share Price (the "Second Closing Telenor Primary Option Purchase Price"); or
(ii) in the event VIP does not exercise the Second Closing VIP
Option at the Second Closing, to purchase from the Issuer newly-issued shares of
Common Stock in the amount (but not less than the amount) equal to one hundred
percent (100%) of the number of Second Closing Eco Telecom Shares required to be
purchased by Eco Telecom at the Second Closing (assuming the conditions
precedent specified in Article X have been fulfilled or properly waived by Eco
Telecom) (the "Second Closing Telenor Secondary Option Shares") for a purchase
price in an amount equal to the product of the Second Closing Telenor Secondary
Option Shares and the Per Share Price; provided, however, that Telenor may, at
------- ---------
its further option, reduce the number of Second Closing Telenor Secondary Option
Shares to be purchased by it hereunder by such number of shares as is necessary
in order to result in Telenor owning, immediately following the Second Closing,
twenty percent (20%) minus one (1) share of the outstanding voting capital stock
of the Issuer (determined after taking into account all shares issued in the
Second Closing) (the number of shares by which the Second Closing Telenor
Secondary Option Shares are reduced hereunder, the "Second Closing Telenor
Reduced Shares").
(c) Second Closing Due Diligence Review.
-----------------------------------
(i) During the period commencing ninety (90) calendar days prior
to the Second Closing Date and ending on the Second Closing Date, the Issuer
shall grant VIP and Telenor (and their respective authorized Representatives)
reasonable access during normal business hours to its, and its Subsidiaries',
premises, Books and Records and employees in order for VIP and Telenor to
perform a due diligence review of the Issuer's business and operations.
(ii) With respect to each of VIP and Telenor, the Issuer shall,
no later than thirty (30) Business Days prior to the Second Closing Date,
deliver to each of VIP and Telenor in writing all information reasonably
requested in writing by such Purchaser (provided that such written request by
such Purchaser was delivered to the Issuer no later than forty (40) Business
31
Days prior to the Second Closing Date).
(iii) Between such fortieth (40th) Business Day prior to the
Second Closing Date and the Second Closing Date, the Issuer shall use reasonable
efforts to promptly supply in writing all other information reasonably requested
by VIP and Telenor in writing.
(d) Notice of Intention. At the Second Closing Pre-Closing Meeting,
-------------------
each of VIP and Telenor shall deliver written notice (the "Second Closing Notice
of Intention") to the other and the Issuer stating whether (and to what extent)
it intends to exercise its option pursuant to Section 2.04 (with respect to each
of VIP and Telenor, its "Second Closing Option"). The Second Closing Notice of
Intention shall be for the sole purpose of providing reasonable notice to the
Issuer and each of VIP and Telenor of VIP's and/or Telenor's intention to
exercise its Second Closing Option and shall in no way obligate VIP or Telenor
to exercise its Second Closing Option on the Second Closing Date in the manner
indicated in the Second Closing Notice of Intention or otherwise; provided,
--------
however, that each of VIP and Telenor shall be deemed to have elected not to
-------
exercise its Second Closing Option if it fails to attend the Second Closing Pre-
Closing Meeting and deliver a Second Closing Notice of Intention as provided
herein.
(e) Disclosure Letter.
-----------------
(i) Ten (10) Business Days prior to the Second Closing
Date, the Issuer deliver to VIP and Telenor the Disclosure Letter in the form
attached as Exhibit B with the information contemplated to be included in the
-------
schedules thereto to be provided as of the date of delivery of such letter (the
"Second Closing Disclosure Letter").
(ii) By no later than 10:00 a.m. (Moscow time) on the
Business Day immediately preceding the Second Closing Date, the Issuer shall re-
deliver to VIP and Telenor the Second Closing Disclosure Letter with the
information included in the letter and the schedules thereto updated as of the
date of delivery of such letter (the "Updated Second Closing Disclosure
Letter"). The Updated Second Closing Disclosure Letter (including the schedules
thereto) shall be clearly marked to show all changes from the Second Closing
Disclosure Letter. If notwithstanding the foregoing, the Updated Second Closing
Disclosure Letter shall be delivered after 10:00 a.m. (Moscow time) on such
date, then the closing date with respect to the Second Closing VIP Shares and
the Second Closing Telenor Shares only shall be postponed to (A) one (1)
Business Day following the date of delivery of such Updated Second Closing
Disclosure Letter (if such letter is delivered by 10:00 a.m. (Moscow time) on
the date of delivery) or (B) two (2) Business Days following the date of
delivery of such Updated Second Closing Disclosure Letter (if such letter is
delivered after 10:00 a.m. (Moscow time) on the date of delivery). At such later
closing date, VIP and Telenor shall have the right, but not the obligation, to
purchase (and the Issuer shall have the obligation to sell to VIP and Telenor)
the Second Closing VIP Shares and the Second Closing Telenor Shares, at the same
price and in the same manner as VIP and Telenor were each entitled to purchase
such shares at the Second Closing. The Second Closing Disclosure Letter and the
Updated Second Closing Disclosure Letter shall be considered delivered to VIP
and Telenor for purposes of this Agreement if such letters are delivered to the
Moscow offices of VIP and the Moscow offices of both Telenor and Telenor's
32
legal counsel, respectively, as indicated in Section 15.01.
(iii) Provided that the Issuer has complied with its
obligations under Section 2.04(c), on the Second Closing Date (or such later
closing date as contemplated in clause (ii) above or Section 2.04(g)), each of
VIP and Telenor (if they exercise their respective Second Closing Options) shall
represent to the Issuer in writing (by a certificate signed by the President or
member of the Board of Directors of such Purchaser) as to whether there is any
breach by the Issuer actually known to such Purchaser of any representation or
warranty made by the Issuer in the Updated Second Closing Disclosure Letter.
"Actually known" for purposes of this clause (iii) shall mean that such
Purchaser has been informed in writing, whether in the form of written responses
or any written materials or documentation provided to such Purchaser by the
Issuer or its counsel, independent accountants or financial advisor.
(f) Waivers of Option Exercise. In the event that either VIP or
--------------------------
Telenor elect not to exercise its Second Closing Option, VIP and/or Telenor, as
the case may be shall (not later than the Second Closing Date or such later
date, if applicable, to which the closing date with respect to the Second
Closing VIP Shares and/or the Second Closing Telenor Shares has been postponed
in accordance with Section 2.04(e) or Section 2.04(g)) deliver an option waiver
notice to the Issuer in the form attached hereto as Exhibit C.
---------
(g) Consequences of Failure to Consummate Second Closing: Additional
----------------------------------------------------------------
Second Closing.
--------------
(i) Notwithstanding any provision of this Agreement to the
contrary, if Eco Telecom for whatever reason does not pay the Second Closing Eco
Telecom Purchase Price to the Issuer on the Second Closing Date, all rights and
obligations of each party hereto under Sections 2.03 and 2.05 shall terminate;
provided, however, that Eco Telecom will be deemed to have breached its
-------- -------
obligations under this Agreement to pay the Second Closing Eco Telecom Purchase
Price and the Third Closing Eco Telecom Purchase Price, respectively, if Eco
Telecom does not pay the Second Closing Eco Telecom Purchase Price to the Issuer
on the Second Closing Date for any reason other than due to non-fulfillment on
the Second Closing Date of the conditions precedent contained in paragraphs (b)
through (g) of Section 10.01
(ii) Notwithstanding any provision of this Agreement to the
contrary, following an Eco Telecom Second Closing Contribution Default and
provided that at the Second Closing VIP has the right pursuant to Section
2.04(a)(ii) to purchase the Second Closing VIP Secondary Option Shares, VIP may,
in its sole discretion by written notice to the Issuer and Telenor delivered on
the Second Closing Date, elect to postpone the closing date with respect only to
its purchase of fifty percent (50%) of the aggregate amount of shares of Common
Stock which VIP has the right to purchase pursuant to Section 2.04(a)(ii) to a
date which is no later than five (5) Business Days following the Second Closing
Date. At such later closing date, VIP shall have the right, but not the
obligation, to purchase (and the Issuer shall have the obligation to sell to
VIP) such shares, at the same purchase price and in the same manner as VIP was
entitled to purchase such shares at the Second Closing, provided that no
additional Disclosure Letter need be delivered.
33
(iii) Notwithstanding any provision of this Agreement to the
contrary, following an Eco Telecom Second Closing Contribution Default and
provided that at the Second Closing Telenor has the right pursuant to Section
2.04(b)(ii) to purchase the Second Closing Telenor Secondary Option Shares,
Telenor may, in its sole discretion by written notice to the Issuer and VIP
delivered on the Second Closing Date, elect to postpone the closing date with
respect only to its purchase of fifty percent (50%) of the aggregate amount of
shares of Common Stock which Telenor has the right to purchase pursuant to
Section 2.04(b)(ii) to a date which is no later than five (5) Business Days
following the Second Closing Date. At such later closing date, Telenor shall
have the right, but not the obligation, to purchase (and the Issuer shall have
the obligation to sell to Telenor) such shares, at the same purchase price and
in the same manner as Telenor was entitled to purchase such shares at the Second
Closing, provided that no additional Disclosure Letter need be delivered.
2.05 Third Closing Purchase Options
------------------------------
(a) VIP Option. Subject to the terms and conditions hereof, including
----------
without limitation Section 2.03(a)(ii), on but not later than the Third Closing
Date, VIP shall have the option, exercisable by written notice to the Issuer and
Telenor (the "Third Closing VIP Option"):
(i) to purchase from the Issuer newly-issued shares of
Common Stock in the amount equal to (A) fifty percent (50%) of the number of
Third Closing Eco Telecom Shares required to be purchased by Eco Telecom at the
Third Closing (assuming the conditions precedent specified in Article XI have
been fulfilled or properly waived by Eco Telecom) or (B) a lesser number of such
shares of Common Stock as may be required for VIP to maintain its ownership in
the Issuer at fifty percent (50%) plus one share of the outstanding voting
capital stock of the Issuer (the "Third Closing VIP Primary Option Shares") for
a purchase price in an amount equal to the product of the Third Closing VIP
Primary Option Shares and the Per Share Price (the "Third Closing VIP Primary
Option Purchase Price"); or
(ii) (x) to purchase from the Issuer newly-issued shares of
Common Stock in the amount equal to (A) the third Closing VIP Primary Option
Shares plus (B) the Second Closing VIP Primary Option Shares (or, at VIP's
----
further option, such lesser number of such shares of Common Stock as may be
required for VIP to maintain its ownership in the Issuer at fifty percent (50%)
plus one share of the outstanding voting capital stock of the Issuer) provided
that the Second Closing VIP Primary Option Shares were not purchased by VIP or
Telenor at the Second Closing (the shares as provided in this clause (B), the
"Third Closing VIP Secondary Option Shares"), (y) for a purchase price equal to
(A) the Third Closing VIP Primary Option Purchase Price plus (B) the product of
----
the Third Closing VIP Secondary Option Shares and the Per Share Price (the
"Third Closing VIP Secondary Option Purchase Price"); or
(iii) in the event Telenor does not exercise its option to
purchase the Third Closing Telenor Primary Option Shares or, if available, the
Third Closing Telenor Secondary Option Shares or exercises neither such option
at the Third Closing, and provided further, that
34
VIP purchases the Third Closing VIP Primary Option Shares in the maximum amount
and, if available, the Third Closing VIP Secondary Option Shares in the maximum
amount at the Third Closing (x) to purchase from the Issuer newly-issued shares
of Common Stock in the amount (but not less than the amount) equal to the Third
Closing Telenor Primary Option Shares or the Third Closing Telenor Secondary
Option Shares or both, as VIP may elect (provided that Telenor has not
previously exercised such options), (y) for a purchase price equal to (in
addition to the Third Closing VIP Primary Option Purchase Price and the Third
Closing VIP Secondary Option Purchase Price, if applicable) the Third Closing
Telenor Primary Option Purchase Price and/or the Third Closing Telenor Secondary
Option Purchase Price, as the case may be.
(b) Telenor Option. Subject to the terms and conditions hereof,
--------------
including without limitation, Section 2.03(a)(iii), on but not later than the
Third Closing Date, Telenor shall have the option, exercisable by written notice
to the Issuer and VIP (the "Third Closing Telenor Option"):
(i) to purchase from the Issuer newly-issued shares of Common
Stock in the amount (but not less than the amount) equal to fifty percent (50%)
of the number of Third Closing Eco Telecom Shares required to be purchased by
Eco Telecom at the Third Closing (assuming the conditions precedent specified in
Article XI have been fulfilled or properly waived by Eco Telecom) plus the
Second Closing Telenor Reduced Shares if not previously purchased (the "Third
Closing Telenor Primary Option Shares") for a purchase price in an amount equal
to the product of the Third Closing Telenor Primary Option Shares and the Per
Share Price (the "Third Closing Telenor Primary Option Purchase Price"); or
(ii) (x) to purchase from the Issuer newly-issued shares of
Common Stock in the amount (but not less than the amount) equal to (A) the Third
Closing Telenor Primary Option Shares plus (B) the Second Closing Telenor
----
Primary Option Shares provided that the Second Closing Telenor Primary Option
Shares were not purchased by Telenor or VIP at the Second Closing (the shares as
provided in this clause (B), the "Third Closing Telenor Secondary Option
Shares"), (y) for a purchase price equal to (A) the Third Closing Telenor
Primary Option Purchase Price plus (B) the product of the Third Closing Telenor
----
Secondary Option Shares and the Per Share Price (the "Third Closing Telenor
Secondary Option Purchase Price"); or
(iii) in the event VIP does not exercise all or any portion of its
option to purchase the Third Closing VIP Primary Option Shares or, if available,
the Third Closing VIP Secondary Option Shares or exercises neither such option
at the Third Closing, and provided further, that Telenor purchases the Third
Closing Telenor Primary Option Shares and, if available, the Third Closing
Telenor Secondary Option Shares) at the Third Closing (x) to purchase from the
Issuer newly-issued shares of Common Stock in the amount (but not less than the
amount) equal to the Third Closing VIP Primary Option Shares or the Third
Closing VIP Secondary Option Shares or both, as Telenor may elect (but only to
the extent that VIP has not previously exercised such options with respect to
such shares) (the "Third Closing Telenor Tertiary Option Shares"), (y) for a
purchase price equal to (in addition to the Third Closing Telenor Primary Option
Purchase Price and the Third Closing Telenor Secondary Option Purchase Price, if
applicable) the product of the Third Closing Telenor Tertiary Option Shares
35
and the Per Share Price.
(c) Notice of Intention.
-------------------
(i) VIP Notice of Intention. At least ninety (90) days
-----------------------
prior to the Third Closing Date, VIP must provide written notice (the "VIP Third
Closing Notice of Intention") to the Issuer and Telenor stating whether and to
what extent VIP intends to exercise at the Third Closing its option to purchase
the Third Closing VIP Primary Option Shares and/or the Third Closing VIP
Secondary Option Shares, if applicable. At the Third Closing, Telenor shall have
the option pursuant to Section 2.05(b)(iii) to purchase (i) any such shares
which VIP has the right to purchase but indicates in the VIP Third Closing
Notice of Intention that it is not intending to purchase or (ii) all such shares
if VIP fails to deliver the VIP Third Closing Notice of Intention on or prior to
the first day of such ninety (90) day period. Notwithstanding anything in this
Section 2.05(c) to the contrary, VIP shall be under no obligation to purchase at
the Third Closing any shares of Common Stock that the Notice of Intention
indicates an intention by VIP to purchase.
(ii) Telenor Notice of Intention. At the Third Closing Pre-
---------------------------
Closing Meeting, Telenor shall deliver written notice (the "Telenor Third
Closing Notice of Intention") to VIP and the Issuer stating whether (and to what
extent) it intends to exercise its Third Closing Telenor Option. The Telenor
Third Closing Notice of Intention shall be for the sole purpose of providing
reasonable notice to the Issuer and VIP of Telenor's intention to exercise its
Third Closing Telenor Option and shall in no way obligate Telenor to exercise
its Third Closing Telenor Option on the Third Closing Date in the manner
indicated in the Telenor Third Closing Notice of Intention or otherwise;
provided, however, that Telenor shall be deemed to have elected not to exercise
-------- -------
its Third Closing Telenor Option if it fails to attend the Third Closing Pre-
Closing Meeting and deliver a Telenor Third Closing Notice of Intention as
provided herein.
(d) Third Closing Due Diligence Review.
----------------------------------
(i) During the period commencing one hundred twenty (120)
calendar days prior to the Third Closing Date and ending on the Third Closing
Date, the Issuer shall grant VIP and Telenor (and their respective authorized
Representatives), reasonable access during normal business hours to its, and its
Subsidiaries', premises, Books and Records and employees in order for VIP and
Telenor to perform a due diligence review of the Issuer's business and
operations.
(ii) With respect to each of VIP and Telenor, the Issuer
shall, no later than thirty (30) Business Days prior to the Third Closing Date,
deliver to each of VIP and Telenor in writing all information reasonably
requested in writing by such Purchaser (provided that such written request by
such Purchaser was delivered to the Issuer no later than forty (40) Business
Days prior to the Third Closing Date).
(iii) Between such fortieth (40th) Business Day prior to the
Third Closing Date and the Third Closing Date, the Issuer shall use reasonable
efforts to promptly supply in writing all other information reasonably requested
by VIP and Telenor in writing.
36
(e) Disclosure Letter.
-----------------
(i) Ten (10) Business Days prior to the Third Closing Date,
the Issuer shall deliver to VIP and Telenor the Disclosure Letter in the form
attached hereto as Exhibit B with the information contemplated to be included in
---------
the schedules thereto to be provided as of the date of delivery of such
letter (the "Third Closing Disclosure Letter").
(ii) By no later than 10:00 a.m. (Moscow time) on the
Business Day immediately preceding the Third Closing Date, the Issuer shall re-
deliver to VIP and Telenor the Third Closing Disclosure Letter with the
information included in the letter and the schedules thereto updated as of the
date of delivery of such letter (the "Updated Third Closing Disclosure Letter").
The Updated Third Closing Disclosure Letter (including the schedules thereto)
shall be clearly marked to show all changes from the Third Closing Disclosure
Letter. If notwithstanding the foregoing, the Updated Third Closing Disclosure
Letter shall be delivered after 10:00 a.m. (Moscow time) on such date, then the
closing date with respect to the Third Closing VIP Shares and the Third Closing
Telenor Shares only shall be postponed to (A) one (1) Business Day following the
date of delivery of such Updated Third Closing Disclosure Letter (if such letter
is delivered by 10:00 a.m. (Moscow time) on the date of delivery) or (B) two (2)
Business Days following the date of delivery of such Updated Third Closing
Disclosure Letter (if such letter is delivered after 10:00 a.m. (Moscow time) on
the date of delivery). At such later closing date, VIP and Telenor shall have
the right, but not the obligation, to purchase (and the Issuer shall have the
obligation to sell to VIP and Telenor) the Third Closing VIP Shares and the
Third Closing Telenor Shares, at the same price and in the same manner as VIP
and Telenor were each entitled to purchase such shares at the Third Closing. The
Third Closing Disclosure Letter and the Updated Third Closing Disclosure Letter
shall be considered delivered to VIP and Telenor for purposes of this Agreement
if such letters are delivered to the Moscow offices of VIP and the Moscow
offices of both Telenor and Telenor's legal counsel, respectively, as indicated
in Section 15.01.
(iii) Provided that the Issuer has complied with its
obligations under Section 2.05(d), on the Third Closing Date (or such later
closing date as contemplated in clause (ii) above or Section 2.05(g)), each of
VIP and Telenor (if they exercise their respective Third Closing Options) shall
represent to the Issuer in writing (by a certificate signed by the President or
member of the Board of Directors of such Purchaser) as to whether there is any
breach by the Issuer actually known to such Purchaser of any representation or
warranty made by the Issuer in the Updated Third Closing Disclosure Letter.
"Actually known" for purposes of this clause (iii) shall mean that such
Purchaser has been informed in writing, whether in the form of written responses
or any written materials or documentation provided to such Purchaser by the
Issuer or its counsel, independent accountants or financial advisor.
(f) Waivers of Option Exercise. In the event that either VIP or
--------------------------
Telenor elect not to exercise its Third Closing VIP Option or Third Closing
Telenor Option, respectively, VIP and/or Telenor, as the case may be, shall (not
later than the Third Closing Date or such later date, if applicable, to which
the closing date with respect to the Third Closing VIP Shares and/or the
37
Third Closing Telenor Shares has been postponed in accordance with Section
2.05(e) or Section 2.05(g)) deliver an option waiver notice to the Issuer in the
form attached hereto as Exhibit C.
---------
(g) Additional Closing
------------------
(i) At the Third Closing, if VIP has the right pursuant to Section
2.05(a)(iii) to purchase the Third Closing Telenor Primary Option Shares and/or
the Third Closing Telenor Secondary Option Shares, VIP may, in its sole
discretion by written notice to the Issuer and Telenor delivered on the Third
Closing Date, elect to postpone the closing date with respect only to its
purchase of such shares to a date which is no later than five (5) Business Days
from the Third Closing Date. At such later closing date, VIP shall have the
right, but not the obligation, to purchase (and the Issuer shall have the
obligation to sell to VIP) the same number of such shares, at the same purchase
price and in the same manner as VIP was entitled to purchase such shares at the
Third Closing, provided that no additional Disclosure Letter need be delivered.
(ii) At the Third Closing, if Telenor has the right pursuant to
Section 2.05(b)(iii) to purchase the Third Closing VIP Primary Option Shares
and/or the Third Closing VIP Secondary Option Shares, Telenor may, in its sole
discretion by written notice to the Issuer and VIP delivered on the Third
Closing Date, elect to postpone the closing date with respect only to its
purchase of such shares to a date which is no later than five (5) Business Days
from the Third Closing Date. At such later closing date, Telenor shall have the
right, but not the obligation, to purchase (and the Issuer shall have the
obligation to sell to Telenor) the same number of such shares, at the same
purchase price and in the same manner as Telenor was entitled to purchase such
shares at the Third Closing, provided that no additional Disclosure Letter need
be delivered.
2.06 Effect of Eco Telecom Contribution Default on Purchase Options; Deemed
----------------------------------------------------------------------
Breach
------
(a) Subject to Section 2.04(g)(i), the rights of VIP and Telenor under
Sections 2.04 and 2.05 above shall not be affected by the occurrence of an Eco
Telecom Second Closing Contribution Default or an Eco Telecom Third Closing
Contribution Default, respectively.
(b) Eco Telecom will be deemed to have breached its obligations under
this Agreement to pay the Third Closing Eco Telecom Purchase Price if Eco
Telecom does not pay the Third Closing Eco Telecom Purchase Price to the Issuer
on the Third Closing Date for any reason other than due to non-fulfillment on
the Third Closing Date of the conditions precedent contained in paragraphs
(a)(ii) through (a)(vii) of Section 11.01.
2.07 Preferred Stock
---------------
(a) Purchase and Sale
-----------------
(i) Subject to the terms and conditions contained in this Agreement
and in accordance with the procedures set forth in Schedule 2.07(a) attached
----------------
hereto, on the Preferred Stock Closing Date, (i) the Issuer shall issue and sell
to Eco Telecom, and (ii) Eco Telecom shall purchase from the Issuer, the Eco
Telecom Preferred Stock.
38
(ii) Subject to the terms and conditions of this Agreement, solely for
the purpose of Russian Law and solely to the extent Russian Law may be
applicable (i) this Agreement shall be considered a preliminary agreement
(predvaritelnyi dogovor) and not a transaction involving securities (sdelka s
tsennymi bumagami); (ii) by virtue of entering into this Agreement, (x) the
Issuer shall not be obligated to transfer the Eco Telecom Preferred Stock to Eco
Telecom or be considered to have offered the Eco Telecom Preferred Stock to Eco
Telecom and (y) Eco Telecom shall not be obligated to purchase the Eco Telecom
Preferred Stock from the Issuer or to make payment for the Eco Telecom Preferred
Stock; (iii) the actual transactions contemplated by Section 2.07(a)(i) shall
not constitute transactions involving securities (sdelki s tsennymi bumagami);
and (iv) in no event shall such transactions take place before the registration
of the issuance of the Eco Telecom Preferred Stock with the FCSM and payment in
full for the Eco Telecom Preferred Stock by Eco Telecom, if and to the extent
such registration and payment are required under Russian Law. The placement of
the Eco Telecom Preferred Stock shall occur on the date on which the Eco Telecom
Preferred Stock are disposed of (otchuzdeny) by the Issuer in favor of Eco
Telecom, by transferring the title to the Eco Telecom Preferred Stock to Eco
Telecom at the Preferred Stock Closing. This Section 2.07(a)(ii) shall have no
effect on the interpretation of this Agreement under the laws of the State of
New York, by which this Agreement is expressed to be governed. Subject to the
terms and conditions contained in this Agreement, immediately upon the
registration of the issuance of the Eco Telecom Preferred Stock with the FCSM
and in any event prior to the Issuer's execution of any other agreement with
respect to the Eco Telecom Preferred Stock, the Issuer and Eco Telecom shall
execute a Preferred Stock Purchase Agreement (osnovnoi dogovor) which shall
incorporate by reference the terms and conditions of this Agreement applicable
to Eco Telecom, except that this Section 2.07(a)(ii) shall be excluded.
(b) Purchase Price
--------------
Subject to the terms and conditions hereof and in consideration of the sale
and transfer to Eco Telecom by the Issuer of the Eco Telecom Preferred Stock, on
the Preferred Stock Closing Date, Eco Telecom shall pay to the Issuer the
Preferred Stock Purchase Price in the manner provided in Section 2.07(c)(ii) and
the Preferred Stock Purchase Price shall be allocable entirely to, and deemed to
be in consideration of, the Eco Telecom Preferred Stock being purchased
hereunder.
(c) Pre-Closing; Closing
--------------------
(i) Pre-Closing. On a date which is five (5) Business Days prior to
-----------
the Preferred Stock Closing Date (as notified by the Issuer to Eco Telecom, VIP
and Telenor in writing) the Issuer, Eco Telecom, VIP and Telenor shall (i)
attend a pre-closing meeting at the offices of VIP's counsel, located at Xxxxx
Xxxxx XX, 0 Xxxxxxx Xxxxxx, Xxxxxx 000000, Russian Federation (or at such other
place as the Issuer, Eco Telecom, VIP and Telenor mutually agree) at 10:00 am
local time, and (ii) review the documents to be delivered at the Preferred Stock
Closing.
(ii) Closing. The Preferred Stock Closing will take place at the
-------
offices of VIP's counsel at the address set out in the immediately preceding
paragraph, or at such other
39
place as the Issuer, Eco Telecom, VIP and Telenor mutually agree, at 10:00 am
local time on the Preferred Stock Closing Date. At the Preferred Stock Closing,
if the conditions precedent specified in Article XI with respect to the
Preferred Stock Closing have been fulfilled (or properly waived in writing in
accordance with Article XI), then (i) Eco Telecom shall pay to the Issuer the
Preferred Stock Purchase Price by wire transfer of immediately available funds
to the account(s) designated by the Issuer, and (ii) upon receipt by the Issuer
of the Preferred Stock Purchase Price, the Issuer shall deliver immediately to
Eco Telecom an extract from the share register of the Issuer issued by the
Registrar and showing Eco Telecom as the owner of the Eco Telecom Preferred
Stock.
2.08 Redistribution of Preferred Stock at the Second Closing
-------------------------------------------------------
(a) The parties hereto agree that simultaneously with the Second Closing
(or on the Second Closing Date in the event of an Eco Telecom Second Closing
Contribution Default), Eco Telecom will sell at nominal value to each other
Purchaser such number of shares of Preferred Stock, and each other Purchaser
will purchase at nominal value from Eco Telecom such number of shares of
Preferred Stock, so that after taking into account all shares of Common Stock
actually issued in the Second Closing and the transfers of the Preferred Stock
pursuant to this Section 2.08(a), each of the Purchasers will own the Second
Closing Implied Percentage (or the Second Closing Contribution Default
Percentage in the event of a Second Closing Eco Telecom Contribution Default)
(the Second Closing Implied Percentage or the Second Closing Contribution
Default Percentage, as the case may be, the "Second Closing Applicable
Percentage"). For the avoidance of doubt, it is understood that Eco Telecom
shall own twenty-five percent (25%) plus one (1) share of the voting capital
stock of the Issuer after giving effect to the transactions contemplated in this
Section 2.08, assuming that no Second Closing Eco Telecom Contribution Default
has occurred and that Eco Telecom has not sold or otherwise disposed of any
shares of Preferred Stock prior to the Second Closing.
(b) If shares of Common Stock are purchased at any Additional Second
Closing following the Second Closing Date, then, simultaneously with such
Additional Second Closing, each Purchaser will sell at nominal value to each
other Purchaser such number of shares of Preferred Stock, and/or each Purchaser
will purchase at nominal value from each other Purchaser, such number of shares
of Preferred Stock, so that each of the Purchasers will own the Second Closing
Applicable Percentage as if the Additional Second Closing occurred
simultaneously with the Second Closing.
2.09 Redistribution of Preferred Stock at the Third Closing
------------------------------------------------------
(a) The parties hereto agree that simultaneously with the Third Closing
(or simultaneously with any Additional Third Closing described in Section
2.05(g) if Eco Telecom believes, in good faith, that it would be required to
obtain MAMP approval in connection with the purchase of shares of Preferred
Stock under Section 2.09(b)), or on the Third Closing Date in the event of an
Eco Telecom Third Closing Contribution Default, each Purchaser will sell at
nominal value to each other Purchaser such number of shares of Preferred Stock,
and/or each Purchaser will purchase at nominal value from each other Purchaser
such number of shares of Preferred Stock, so that after taking into account all
shares of Common Stock actually issued in
40
the Third Closing and the transfers of the shares of the Preferred Stock
pursuant to this Section 2.09(a), each of the Purchasers will own the Third
Closing Implied Percentage (or the Third Closing Contribution Default Percentage
in the event of a Third Closing Eco Telecom Contribution Default) (the Third
Closing Implied Percentage or the Third Closing Default Percentage, as the case
may be, the "Third Closing Applicable Percentage").
(b) If shares of Common Stock are purchased at any Additional Third Closing
following the Third Closing Date, then each Purchaser will sell at nominal value
to each other Purchaser such number of shares of Preferred Stock, and/or each
Purchaser will purchase at nominal value from each other Purchaser such number
of shares of Eco Telecom Preferred Stock, so that each of the Purchasers will
own the Third Closing Applicable Percentage as if the Additional Third Closing
occurred simultaneously with the Third Closing.
2.10 Redistribution of Preferred Stock Upon Exercise of VIP-R Call Option
---------------------------------------------------------------------
The parties hereto agree that on any date prior to the Conversion when Eco
Telecom transfers to Telenor any shares of Common Stock of the Issuer as a
result of Telenor's exercise of the VIP-R Call Option (the "Exercise Transfer")
the following shall occur (and shall be deemed to occur simultaneously): each
Purchaser will sell at nominal value to each other Purchaser such number of
shares of Preferred Stock and/or each Purchaser will purchase at nominal value
from the other Purchasers such number of shares of Preferred Stock, so that
after taking into account the Exercise Transfer and the transfers of the
Preferred Stock pursuant to this Section 2.10 each of the Purchasers will own
the Telenor Option Exercise Percentage.
2.11 Conversion of Preferred Stock; Further Assurances
-------------------------------------------------
(a) Immediately following the later of the Third Closing and any Additional
Third Closings and the completion of all regulatory steps in connection
therewith, or the exercise by VIP (through VIP Sub) of the right to repurchase
shares of Preferred Stock as specified in Section 2.12, the Issuer shall approve
a decision on the issuance of the shares of Common Stock (the "Convertible
Decision on Issuance"). The Convertible Decision on Issuance shall provide (x)
for the issuance of an amount of shares of Common Stock equal to the amount of
shares of Preferred Stock then outstanding and held by all Purchasers and (y)
that such shares of Common Stock shall be issued only in exchange for such
shares of Preferred Stock without any additional payments or premium. As soon
as practicable following such approval the Issuer will effect the registration
of the Convertible Decision on Issuance with the FCSM and shall take all
measures necessary to effect the conversion of such shares of the Preferred
Stock into shares of Common Stock (the "Conversion").
(b) In the event that the magnitude of (i) any redistribution of shares of
Preferred Stock at the Second Closing and/or the Third Closing and/or Exercise
Transfer as set forth in Sections 2.08, 2.09 or 2.10 or (ii) the exercise by VIP
(through VIP Sub) of the right to repurchase shares of Preferred Stock as
specified in Section 2.12, results in any Purchaser having fewer shares of
Preferred Stock than such Purchaser is required to sell to the other Purchasers
(or VIP Sub) to comply fully with the provisions of Sections 2.08, 2.09 or 2.10
(as applicable for such particular Closing or Exercise Transfer) or Section
2.12, then such Second Closing, Third
41
Closing or Exercise Transfer (as applicable) shall be effected and shall be
completed but the provisions of Sections 2.08, 2.09 or 2.10 (as applicable for
such particular Closing or Exercise Transfer) shall not apply and the parties
agree to negotiate in good faith and use reasonable efforts to reach an
alternative arrangement which will allow the parties to attain the results
contemplated in Sections 2.08, 2.09 2.10, 2.11(a) and 2.12.
(c) Each of the Issuer and each Purchaser agrees to take all actions
reasonably necessary to effect the transactions set forth in, or contemplated
by, Article II of this Agreement, including, but not limited to waiving any
rights under Articles 30 and 75 of the Federal Law of the Russian Federation "On
Joint Stock Companies", dated December 26, 1996, as amended, or similar rights
which may be established by laws and regulations amending or replacing the
provisions of the above-mentioned Articles.
(d) The Parties hereby acknowledge that the general purpose of the
provisions of Sections 2.08, 2.09 2.10, 2.11(a), 2.11(b) and 2.12 (the
"Compensating Sections") hereof is that (A) after the implementation of the
provisions of the Compensating Sections (and, for the avoidance of doubt, after
the Conversion) each of the Purchasers own the same percentage of the shares of
the Common Stock of the Issuer (which percentage shall then be equal to the
percentage of the voting capital stock of the Issuer) as if (x) all the
Purchasers' Shares, ever issued by the Issuer to the Purchasers pursuant to this
Agreement, were issued at the Per Share Price specified in Schedule 1.01(C), (y)
the Eco Telecom Preferred Stock was never issued, and (z) all transactions in
respect of the shares of Common Stock occurred as they actually occurred before
the Conversion, and, at the same time, that (B) after the Second Closing, if no
Eco Telecom Second Closing Contribution Default has occurred and assuming Eco
Telecom has not previously sold or otherwise disposed of its Common Stock or
Preferred Stock, Eco Telecom owns twenty-five percent (25%) plus one (1) share
of the voting capital stock of the Issuer.
2.12 Call Right on Preferred Stock
-----------------------------
(a) Subject to the terms and conditions of this Agreement, (A) upon (i) the
occurrence of an Eco Telecom Contribution Default or (ii) an Exercise Transfer
(the date of such default or Exercise Transfer, the "Default Date") and (B)
provided that for any reason the redistribution of shares of Preferred Stock
contemplated by Sections 2.08, 2.09, or 2.10, as applicable, has not occurred as
required by such sections, VIP, through a wholly-owned Subsidiary of VIP ("VIP
Sub"), shall have the right to purchase from the Purchasers (including VIP), as
soon as possible following the Default Date, upon written notice to the
Purchasers (the "Default Repurchase Notice"), such number of shares of Preferred
Stock owned by such Purchasers (including VIP), and such Purchasers shall sell
to VIP Sub at a purchase price equal to nominal value, on the date indicated in
the Default Repurchase Notice, such number of shares of Preferred Stock so that
after taking into account all shares of Common Stock actually issued in the
Second Closing and Third Closing, any redistributions of the shares of Preferred
Stock effected prior to the Default Date pursuant to Sections 2.08 and/or 2.09,
and the transfers of the shares of Preferred Stock pursuant to this Section
2.12, each of the Purchasers will own the Second Closing Contribution Default
Percentage, the Third Closing Contribution Default Percentage or the Telenor
Option Exercise Percentage (as applicable). For the avoidance of doubt, for the
purposes of determination of the actual percentage of voting capital stock of
the Issuer owned by any
42
Purchaser pursuant to this Section 2.12(a), it shall be assumed that the shares
of Preferred Stock repurchased by VIP Sub have been cancelled pursuant to the
provisions of paragraph (b) below and such shares shall not be counted as issued
and outstanding voting capital stock of the Issuer.
(b) If VIP Sub repurchases the shares of Preferred Stock pursuant to
Section 2.12(a), it shall not exercise any voting rights or be considered as
present for quorum purposes at any meeting of shareholders of the Issuer with
respect to such repurchased shares of Preferred Stock. Such repurchased shares
of Preferred Stock shall be transferred by VIP Sub to, and cancelled by, the
Issuer as soon as practicable under the Laws of the Russian Federation.
2.13 Non-Transferability of Preferred Stock
--------------------------------------
No Purchaser shall Transfer or otherwise create or permit a Lien upon
(as such terms are defined in the VIP-R Shareholders Agreement) any shares of
Preferred Stock which it now owns or hereinafter acquires, except as
contemplated by this Article II.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF ISSUER
Subject to the information contained in the Schedules hereto, the Issuer
hereby represents and warrants to each of the Purchasers that, as of the date of
this Agreement:
3.01 Organization of the Issuer
--------------------------
The Issuer is a closed joint stock company and has been duly organized,
is validly existing as a legal entity properly organized, registered and
existing under the Laws of the Russian Federation, with corporate power and
authority to carry on its business as it is currently being conducted and to
own, lease and operate its Assets and Properties, and is not required to be
qualified as a foreign corporation or other entity authorized to do business in
any other jurisdiction.
3.02 Authority
---------
(a) The Issuer has full corporate power and authority to execute and
deliver this Agreement and the other Principal Agreements to which the Issuer is
a party.
(b) The execution and delivery by the Issuer of this Agreement and the
other Principal Agreements to which it is a party, and the performance by the
Issuer of its obligations hereunder and thereunder, have been duly and validly
authorized by the shareholder of the Issuer, no other corporate action on the
part of the Issuer or its shareholder being necessary. This Agreement has been
duly and validly executed and delivered by the Issuer and constitutes, and upon
the execution and delivery by the Issuer of the other Principal Agreements to
which it is a party, such other Principal Agreements will constitute, the legal,
valid and binding obligations of the Issuer enforceable against the Issuer in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting
creditors' rights and remedies generally and by general equitable principles
(whether applied by a
43
court of law or equity), except as rights to indemnity and contribution may be
limited by applicable Law or public policy and except to the extent any clause
hereof or thereof provides for the payment of a penalty.
(c) Subject only to the actions and proceedings identified in Schedule
--------
3.04(c) (Regulatory Consents and Approvals) and Schedule 3.04(b) (Third Party
------- ----------------
Consents), the Issuer has full power and authority to perform the Issuer's
obligations hereunder and under the other Principal Agreements to which the
Issuer is a party, and to consummate the transactions contemplated hereby and
thereby, including, without limitation, to issue and sell (pursuant to this
Agreement) the Purchasers' Shares to the Purchasers and the Eco Telecom
Preferred Stock to Eco Telecom.
3.03 Charter Capital of Issuer
-------------------------
(a) As of the date of this Agreement, the Charter Capital of the
Issuer consists solely of one thousand (1,000) issued shares of Common Stock.
(b) All of the outstanding Equity Interests of the Issuer (i) have
been duly authorized and validly issued, (ii) are fully paid, and non-
assessable, (iii) are not subject to any preemptive or similar rights or any
Lien with respect to the Issuer except as may be provided by Law, the Charter or
the Principal Agreements and (iv) were properly registered with the appropriate
authorities competent for registration of the issue of such shares. All of the
shares of the Issuer, including the Purchasers' Shares and the Eco Telecom
Preferred Stock, are, or will be when issued, uncertificated.
(c) As of each of the Closings, assuming the completion of each of the
steps specified in Section 6.03 of the VIP-R Shareholders Agreement, the
Purchasers' Shares and the Eco Telecom Preferred Stock, as applicable, issued
and purchased on the respective Closings (i) will have been duly authorized,
(ii) when issued and delivered to and paid for by the Purchasers as provided
herein and in accordance with the documents filed with the FCSM, will be validly
issued, fully paid and non-assessable, (iii) (upon registration of a report on
the issuance thereof with the FCSM, compliance with the disclosure requirements
of the FLSM and regulations of the FCSM, and corporate approval of the
amendments to the Charter and their registration with the MRC and SRC), the
issuance of such Purchasers' Shares and Eco Telecom Preferred Stock, as
applicable, shall have been properly registered with the appropriate authorities
competent therefor, and (iv) (upon registration of a report on the issuance
thereof with the FCSM, full payment for the Purchasers' Shares and the Eco
Telecom Preferred Stock, as applicable, compliance with the disclosure
requirements of the FLSM and regulations of the FCSM, and approval of the
amendments to the Charter by the Board and their registration with the MRC and
SRC), the Purchasers shall acquire from the Issuer their respective Purchasers'
Shares and Eco Telecom Preferred Stock, as applicable, free and clear of all
Liens, except as may be set out herein or in the Principal Agreements.
(d) No holder of any security of the Issuer, other than the Purchasers
pursuant to the VIP-R Registration Rights Agreement, has any right to require
registration of the shares of Common Stock or any other security of the Issuer
under the Securities Act.
44
(e) Immediately following (x) the issuance to Eco Telecom of the Eco
Telecom Preferred Stock, and payment in full therefor, and (y) the sale by VIP
to Eco Telecom of the One Share of VIP-R Common Stock, the Eco Telecom Preferred
Stock together with the One Share of VIP-R Common Stock, shall represent twenty-
five percent (25%) plus one (1) share of the outstanding voting capital stock of
the Issuer on a fully diluted basis.
(f) Immediately following the issuance to Eco Telecom of the Second
Closing Eco Telecom Shares, and payment in full therefor, the Second Closing Eco
Telecom Shares, together with any shares of Eco Telecom Preferred Stock held by
Eco Telecom immediately following the Second Closing (provided that Eco Telecom
has not sold or otherwise disposed of any shares of Eco Telecom Preferred Stock
prior to the Second Closing), shall represent at least twenty-five percent (25%)
plus one (1) share of the issued and outstanding voting capital stock of the
Issuer on a fully diluted basis.
(g) Subject to Section 2.11(b), immediately following the issuance to
Eco Telecom of the Third Closing Eco Telecom Shares, and payment in full
therefor, the Third Closing Eco Telecom Shares, when aggregated with the Second
Closing Eco Telecom Shares and any shares of Eco Telecom Preferred Stock held by
Eco Telecom immediately following the Third Closing (provided that Eco Telecom
has not sold or otherwise disposed of any Second Closing Eco Telecom Shares or
shares of Eco Telecom Preferred Stock prior to the Third Closing), shall
represent, immediately following the Third Closing and the redistribution of
shares of Preferred Stock pursuant to Section 2.09, at least twenty-five percent
(25%) plus one (1) share of the issued and outstanding voting capital stock of
the Issuer on a fully-diluted basis.
(h) Except as otherwise set forth in the Principal Agreements or
Schedule 3.03(h), there are no outstanding Options related to or entitling any
----------------
Person to purchase or otherwise acquire from the Issuer or any of its
Subsidiaries any Equity Interest in the Issuer or any such Subsidiary, as the
case may be.
3.04 No Conflicts
------------
Except as set forth in Schedule 3.04, the execution, delivery and
-------------
performance by the Issuer of this Agreement and the other Principal Agreements
to which it is a party, compliance by the Issuer with all of the provisions
hereof and thereof and the consummation by the Issuer of the transactions
contemplated hereby and thereby:
(a) will not conflict with or constitute a breach of any of the terms or
provisions of the Charter (after giving effect to the amendments described in
Section 6.03 of the VIP-R Shareholders Agreement);
(b) subject to obtaining the third party consents referred to in
Schedule 3.04(b), will not conflict with or constitute a breach of, or a default
----------------
under, or give rise to a right of termination of any Contract or License to
which the Issuer is a party as of the date of this Agreement or by which the
Issuer or any of its Assets and Properties is bound;
45
(c) subject to obtaining the consents, approvals and actions, making
the filings and giving the notices disclosed in Schedule 3.04(c), will not
----------------
violate or conflict with any Orders or Laws applicable to the Issuer or any of
its Assets and Properties; and
(d) will not (i) result in a Change of Control (as such term is defined
in the Indenture), (ii) require VimpelCom B.V. to offer to repurchase any of the
Convertible Notes pursuant to the terms of the Indenture, (iii) require an
adjustment to the Conversion Price (as such term is defined in the Indenture),
(iv) constitute a Default or Event of Default under (and as defined in) the
Indenture, (v) constitute a default in respect of, or require the mandatory
prepayment prior to the scheduled due date of, any other Indebtedness of the
Issuer or any of its Subsidiaries having an aggregate principal amount of US$5
million or more, or (vi) result in the imposition of any Lien on any of the
Issuer's or any of its Subsidiaries' Assets and Properties (other than a Lien
arising under the Principal Agreements or Russian Law),
except, in the case of clauses (b), (c) and (d)(vi), any conflict, breach,
violation, failure to obtain consent or approval or make any filing or give any
notice, or any incurrence of any Lien, in each case, which would not have a
Material Adverse Effect on the Issuer.
3.05 Governmental Approvals and Filings
----------------------------------
Except as set forth in Schedule 3.04(c), the execution, delivery and
----------------
performance by the Issuer of this Agreement and the other Principal Agreements
to which it is a party, the compliance by the Issuer with all of the provisions
hereof and thereof and the consummation by the Issuer of the transactions
contemplated hereby and thereby will not require any consent, approval,
authorization or other order of any Governmental or Regulatory Authority, except
for those consents, approvals, authorizations or orders already obtained or the
failure to obtain which would not have a Material Adverse Effect on the Issuer.
3.06 Compliance with Securities Laws
-------------------------------
Assuming the accuracy of the representations and warranties of the
Purchasers contained in Article IV hereof, the offer, sale and issuance of the
Purchasers' Shares and the Eco Telecom Preferred Stock by the Issuer as
contemplated by this Agreement are exempt from the registration requirements of
the Securities Act.
3.07 Subsidiaries of the Issuer
--------------------------
The direct and indirect Subsidiaries of the Issuer consist entirely of
the entities set forth in Schedule 3.07(a).
----------------
3.08 Books and Records
-----------------
(a) Schedule 3.08(a) is a true and complete list of all written
----------------
protocols of meetings and all written consents in lieu of GMSs of the Issuer
from the inception of the Issuer up to and including the date of this Agreement.
A true and complete copy of each such consent and the minutes of each such
meeting has been made available for review by the Purchasers.
46
(b) True and complete copies of the share register of the Issuer (as
provided by the share registrar of the Issuer), and a complete list of
shareholders of each Subsidiary of the Issuer, are attached hereto as Schedule
--------
3.08(b).
-------
(c) The Issuer holds its share register, Telecom Licenses and
accounting records at the locations specified in Schedule 3.08(c).
----------------
(d) The Issuer makes and keeps accurate books and records and maintains
a system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of the financial statements in conformity with GAAP and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
3.09 Financial Statements
--------------------
(a) Prior to the execution of this Agreement, the Issuer has delivered
to each Purchaser a true and complete copy of the GAAP audited balance sheet,
income statement and statement of cash flows of the Issuer as of December 31,
2000 and for the period then ended (the "Financial Statements").
(b) Except as disclosed therein or in Schedule 3.09, such Financial
-------------
Statements were prepared in accordance with GAAP.
3.10 No Undisclosed Indebtedness, Liens and Liabilities
--------------------------------------------------
Except as disclosed in Schedule 3.10, (a) there is no Indebtedness of the
-------------
Issuer and its Existing Subsidiaries the value of which exceeds US$1 million,
(b) there are no Liens (other than Permitted Liens) on any of the Assets and
Properties of the Issuer and its Existing Subsidiaries and (c) there are no
Liabilities against, relating to or affecting the Issuer and its Existing
Subsidiaries or any of their Assets and Properties, other than Indebtedness,
Liens and Liabilities incurred in the ordinary course of business consistent
with past practice which in the aggregate are not material to the Business or
Condition of the Issuer.
3.11 Compliance With Laws and Orders
-------------------------------
(a) Except for any violation or alleged violation of, or default or
alleged default under, any Law or Order applicable to the Issuer or any of its
Assets and Properties which has been settled or otherwise resolved, neither the
Issuer nor any Subsidiary is, or has at any time since its organization,
received any written notice that it is, or has at any time since its
organization been, in violation of or in default under any Law or Order
applicable to it or any of its Assets and Properties, in each case, which could
have a Material Adverse Effect on the Issuer.
47
(b) Neither the Issuer, nor any director, officer, agent, employee or other
person associated with or acting on behalf of the Issuer, (i) has used any
corporate funds for any unlawful contributions, gift, entertainment or other
unlawful expense relating to political activity; (ii) made any direct or
indirect unlawful payment to any governmental official or employee from
corporate funds; (iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, unlawful rebate,
payoff, influence payment, kickback or other unlawful payment in connection with
the business of the Issuer.
3.12 Licenses
--------
(a) Except as otherwise set forth in Schedule 3.12(a), the Issuer and each
----------------
of the Subsidiaries have such Licenses as are used or necessary to own, lease,
and operate its respective Assets and Properties and to conduct its business,
except where the failure to have such Licenses would not have a Material Adverse
Effect on the Issuer;
(b) Except as otherwise set forth in Schedule 3.12(b), the Issuer and each
----------------
of the Subsidiaries have fulfilled and performed all of their material
obligations with respect to such Licenses and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of the holder
or any such License, except such events as would not have a Material Adverse
Effect on the Issuer;
(c) Except as otherwise set forth in Schedule 3.l2(c), no such License
----------------
contains any restrictions that have or that the Issuer could reasonably expect
to have a Material Adverse Effect on the Issuer;
(d) Except as set forth on Schedule 3.12(b), no event has occurred which
----------------
allows, or after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of the Issuer
or any Subsidiary in respect of any Telecom License.
3.13 Investments
-----------
Schedule 3.13 sets forth a list of each equity Investment of the Issuer
-------------
(other than in respect of its Subsidiaries). All such equity Investments are
free and clear of all Liens other than Permitted Liens.
3.14 Brokers
-------
Except as described on Schedule 3.14, all negotiations relating to this
-------------
Agreement and the transactions contemplated hereby have been carried out by the
Issuer directly with the Purchasers without the intervention of any Person on
behalf of the Issuer in such manner as to give rise to any valid claim by any
Person against any Purchaser or the Issuer for any finder's fee, brokerage
commission or similar payment.
48
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Each Purchaser, as to itself only, hereby represents and warrants to the
Issuer and the other Purchasers that, as of the date of this Agreement and as of
the date of each Closing (to the extent such Purchaser is purchasing shares of
Common Stock or Preferred Stock at such Closing):
4.01 Organization; Ability to Consummate Transactions
------------------------------------------------
Such Purchaser is a corporation duly organized and validly existing under
the Laws of the jurisdiction of its formation. Such Purchaser has full
corporate power and authority to execute and deliver this Agreement and the
other Principal Agreements to which it is a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby.
4.02 Authority
---------
The execution and delivery by such Purchaser of this Agreement and the
other Principal Agreements to which it is a party, and the performance by such
Purchaser of its obligations hereunder and thereunder, have been duly and
validly authorized by the Board of Directors or the equivalent governing body of
such Purchaser, no other corporate action on the part of such Purchaser or its
stockholders being necessary, except as set out in Schedule 4.02 with respect to
-------------
VIP. This Agreement has been duly and validly executed and delivered by such
Purchaser and constitutes, and upon the execution and delivery by such Purchaser
of the other Principal Agreements to which it is a party, such other Principal
Agreements will constitute, the legal, valid and binding obligations of such
Purchaser enforceable against such Purchaser in accordance with their terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting creditors' rights and
remedies generally and by general equitable principles (whether applied by a
court of law or equity), except as rights to indemnity and contribution may be
limited by applicable Law or public policy and except to the extent any clause
hereof or thereof provides for the payment of a penalty.
4.03 No Conflicts
------------
The execution, delivery and performance by such Purchaser of this
Agreement and the other Principal Agreements to which it is a party and the
consummation of the transactions contemplated hereby and thereby:
(a) will not conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the charter, or equivalent governing
documents, of such Purchaser;
(b) subject to obtaining the consents, approvals and actions, making
the filings and giving the notices disclosed in Schedule 4.03(b)(i) hereto with
-------------------
respect to Eco Telecom, Schedule 4.03(b)(ii) hereto with respect to VIP and
--------------------
Schedule 4.03(b)(iii) hereto with respect to Telenor, will not conflict with or
---------------------
result in a violation or breach of any term or provision of any Law or Order
applicable to such Purchaser or any of its Assets and Properties, unless such a
violation or
49
conflict would not have a material adverse effect on such Purchaser's ability to
perform its obligations under this Agreement and the other Principal Agreements
to which it is a party; or
(c) (subject to obtaining the third party consents disclosed in
Schedule 4.03(c) hereto with respect to VIP only), will not conflict with,
----------------
constitute a breach of or a default under, or give rise to a right of
termination of any Contract or License to which such Purchaser is a party as of
the date of this Agreement or by which any of its Assets and Properties is
bound, unless such a conflict, breach, default or termination right would not
have a material adverse effect on such Purchaser's ability to perform its
obligations under this Agreement and the other Principal Agreements to which it
is a party.
4.04 Governmental Approvals and Filings
----------------------------------
Except as disclosed in Schedule 4.03(b)(i) hereto with respect to Eco Telecom,
-------------------
Schedule 4.03(b)(ii) hereto with respect to VIP and Schedule 4.03(b)(iii) hereto
-------------------- ---------------------
with respect to Telenor, no consent, approval or action of, filing with or
notice to any Governmental or Regulatory Authority on the part of such Purchaser
is required in connection with the execution, delivery and performance of this
Agreement or the other Principal Agreements to which it is a party, compliance
with all of the provisions hereof and thereof or the consummation of the
transactions contemplated hereby or thereby, except for those consents,
approvals, authorizations or order already obtained or the failure to obtain
which would not have a material adverse effect on such Purchaser's ability to
perform its obligations under this Agreement and the other Principal Agreements
to which it is a party.
4.05 Legal Proceedings
-----------------
There are no Actions or Proceedings pending, or, to the Knowledge of such
Purchaser, threatened, against such Purchaser or any of its Assets and
Properties as of the date of this Agreement which could reasonably be expected
to result in the issuance of an Order restraining, enjoining or otherwise
prohibiting or making illegal the consummation of any of the transactions
contemplated by this Agreement or any of the other Principal Agreements to which
such Purchaser is a party.
4.06 Brokers
-------
Except as described on Schedule 4.06, all negotiations relative to this
-------------
Agreement and the transactions contemplated hereby have been carried out by such
Purchaser directly with the Issuer without the intervention of any Person on
behalf of such Purchaser in such manner as to give rise to any valid claim by
any Person against the Issuer for any finder's fee, brokerage commission or
similar payment.
4.07 Investment Intent
-----------------
Such Purchaser is acquiring its portion of the Purchasers' Shares and the
Preferred Stock, as applicable, for its own account for investment purposes only
and not with a view to, or for sale or resale in connection with, any public
distribution thereof or with any present intention of
50
selling, distributing or otherwise disposing of such shares, except in
compliance with the Securities Act and all other applicable securities Laws.
4.08 Status of Each Purchaser
------------------------
Such Purchaser (a) possesses such knowledge and experience in financial
and business matters as to enable it to evaluate the merits and risks of its
investment in the Purchasers' Shares and Preferred Stock, as applicable, that
are to be acquired by it under this Agreement (b) understands that the
Purchasers' Shares and Preferred Stock, as applicable, that are to be acquired
by it under this Agreement are not registered under the Securities Act and may
not be offered or sold or otherwise transferred within the United States or to
or for the account or benefit of a "U.S. person" (as such term is defined under
Rule 902 of Regulation S under the Securities Act) unless such securities are
registered under the Securities Act or an exemption from the registration
requirements of the Securities Act and relevant states securities laws are
available, (c) understands that the Purchasers' Shares and the Preferred Stock,
as applicable, to be acquired by it under this Agreement may, in certain
jurisdictions, be subject to restrictions on any resale by such Purchaser, (d)
understands and is able to bear the economic risk involved in acquiring the
Purchasers' Shares and Preferred Stock, as applicable, that are to be acquired
by it under this Agreement including any loss relating to or arising out of such
investment, (e) is not a "U.S. person", as such term is defined under Rule 902
of Regulations S under the Securities Act, and is not acquiring the Purchasers'
Shares or Preferred Stock, as applicable, that are to be acquired by it under
this Agreement for the account of a U.S. person (as so defined), (f)
acknowledges and agrees that the offer and sale of the Purchasers' Shares and
the Preferred Stock, as applicable, to such Purchaser has taken place outside of
the United States of America or any of its territories or possessions, and such
Purchaser has executed this Agreement outside of the United States or any of its
territories or possessions and (g) has not, and its Affiliates and any Person
acting on its or their behalf have not, engaged in any directed selling efforts
(as defined in Rule 902 of Regulation S) with respect to the Purchasers' Shares
or the Preferred Stock that are to be acquired by it under this Agreement.
4.09 No Knowledge of Breach
----------------------
As of the date of this Agreement, there is no breach by the Issuer
Actually known to such Purchaser of any representation or warranty made by the
Issuer in this Agreement.
4.10 Independent Investigation
-------------------------
Such Purchaser has (a) conducted its own investigation with respect to
the Issuer and its Affiliates and the Purchasers' Shares and Preferred Stock, as
applicable, that are to be acquired by it under this Agreement and has had the
opportunity to ask executive officers of the Issuer such questions as it has
considered necessary, relevant or appropriate with respect to the Issuer and its
Affiliates and the Purchasers' Shares or Preferred Stock, as applicable, that
are to be acquired by it under this Agreement; (b) consulted its own legal
advisors with respect to its investment in the Purchasers' Shares and Preferred
Stock, as applicable, that are to be acquired by it under this Agreement and the
risks associated with such investment to the extent such Purchaser deems
necessary or appropriate; and (c) received all information that it believes is
51
necessary, relevant or appropriate in connection with its acquisition of the
Purchasers' Shares and Preferred Stock, as applicable, that are to be acquired
by it under this Agreement.
ARTICLE V - COVENANTS OF THE ISSUER
5.01 Regulatory and Other Approvals
------------------------------
The Issuer will (a) take all commercially reasonable steps necessary or
desirable, and proceed diligently and in good faith and use all commercially
reasonable efforts, as promptly as practicable to obtain and maintain all
consents, approvals or actions of, to make all filings with and to give all
notices to Governmental or Regulatory Authorities or any other Person required
of the Issuer to consummate the transactions contemplated hereby and by the
other Principal Agreements, including, without limitation, those described in
Schedule 3.04(b) and Schedule 3.04(c) hereto and (b) take all commercially
---------------- ----------------
reasonable steps to cooperate with such Purchasers as promptly as practicable in
obtaining all consents, approvals or actions of, making all filings with, and
giving all notices to, Governmental or Regulatory Authorities or other Persons
required of each Purchaser to consummate the transactions contemplated hereby
and by the other Principal Agreements.
5.02 Delivery of Information
-----------------------
The Issuer will (a) provide prompt notification to each Purchaser when
any consent, approval, action, filing or notice referred to in Section 5.01 is
obtained, taken, made or given, as applicable, (b) deliver to each Purchaser
from time to time as soon as practicable after they become available, copies of
public filings relating to any actions related to the Purchasers' Shares or the
Eco Telecom Preferred Stock, agreements entered into between the Issuer and each
Purchaser, publications required to be made in accordance with Russian
securities laws and evidence of payment for any Purchasers' Shares or the Eco
Telecom Preferred Stock, and (c) advise each Purchaser in writing of any written
communications (and, unless precluded by Law, provide copies of any such
communications that are in writing) with any Governmental or Regulatory
Authority or other Person regarding any of the transactions contemplated by this
Agreement or any of the other Principal Agreements.
5.03 Fulfillment of Conditions
-------------------------
The Issuer will take all commercially reasonable steps necessary and
proceed diligently and in good faith to satisfy each condition to the
obligations of the Purchasers contained in this Agreement that is within its
control.
5.04 Further Assurances
------------------
The Issuer agrees to execute and deliver each other Principal Agreement
to which it is a party and such other documents and take such other acts, as the
other parties to this agreement may reasonably request for the purpose of
carrying out the intent of this Agreement and the Principal Agreements.
52
5.05 Use of Proceeds
---------------
(a) The First Closing VIP Purchase Price shall be used by the Issuer
(i) to repay the outstanding amounts pursuant to Section 8.02, and (ii) the
remainder in accordance with its business plan attached as Exhibit D (the
---------
"Business Plan") or as the Board may otherwise direct.
(b) The Second Closing Purchase Price, the Third Closing Purchase
Price, the Additional Closings Purchase Price and the Preferred Stock Purchase
Price shall be applied by the Issuer in accordance with its Business Plan or as
the Board may otherwise direct.
5.06 Issuance of Shares
------------------
As soon as practicable following each Closing, the Issuer shall take all
actions necessary to cause the registration of a report on the issuance of the
relevant Purchasers' Shares and Eco Telecom Preferred Stock, as applicable, with
the FCSM and compliance with the disclosure requirements of the FLSM and
regulations of the FCSM.
5.07 Transactions with Affiliates
----------------------------
(a) Except as expressly permitted by this Agreement (including, without
limitation, Section 5.07(b) hereof) and the other Principal Agreements, the
Issuer will not, and will not permit any of its Subsidiaries to, directly or
indirectly: (a) make any Investment in an Affiliate; (b) transfer, sell, lease,
assign or otherwise dispose of any assets to an Affiliate; (c) merge into or
consolidate with or purchase or acquire assets from an Affiliate; or (d) enter
into any other transaction directly or indirectly with or for the benefit of an
Affiliate (including, without limitation, guarantees and assumptions of
obligations of an Affiliate).
(b) (i) any Affiliate who is an individual may serve as a director,
officer or employee of the Issuer or any of its Subsidiaries and receive
reasonable compensation for his or her services in such capacity and (ii)
(subject to the provisions of Section 5.03 of the VIP-R Shareholders Agreement
and Section 5.03 of the VIP Registration Rights Agreement) the Issuer and its
Subsidiaries may enter into (x) transactions (other than extensions of credit by
the Issuer or any of its Subsidiaries to an Affiliate) providing for the leasing
of property, the rendering or receipt of services or the purchase or sale of
inventory and other assets in the ordinary course of business if the monetary or
business consideration arising therefrom would be substantially as advantageous
to the Issuer and its Subsidiaries as the monetary or business consideration
which would obtain in a comparable transaction with a Person who is not an
Affiliate or (y) any transaction (including any Business Combination between the
Issuer and any of its Subsidiaries, on the one hand, and any Affiliate, on the
other) which is approved by the Board or shareholders in accordance with the
Charter or in accordance with the internal documents of the Company approved by
the Board in accordance with Section 10.5.10 of the Charter.
(c) Each Purchaser will be entitled to enforce this Section 5.07 only
so long as such Purchaser owns five percent (5%) or more of the issued and
outstanding voting capital stock of the Issuer.
53
5.08 Cooperation with VIP Audit; Accounting Controls; Non-disclosure of
------------------------------------------------------------------
Information
-----------
As long as the financial results of the Issuer and its Subsidiaries are
required to be consolidated with VIP's financial results pursuant to GAAP:
(a) the Issuer shall assist, and cooperate with, VIP and VIP's auditors
and accountants with respect to the preparation and audit of VIP's consolidated
financial statements;
(b) the Issuer shall, and shall ensure that its Subsidiaries shall,
make and keep accurate books and records and maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences;
(c) the Issuer shall not, and shall ensure that its Subsidiaries shall
not, disclose publicly its financial results, operating information,
acquisitions and dispositions or any other material information (including,
without limitation, the information specified in Schedule 5.08) without the
--------------
prior written consent of VIP, except to the extent disclosure is, on the advice
of legal counsel to Issuer, required by Law.
5.09 Required Disclosure by VIP Concerning Issuer
--------------------------------------------
The Issuer shall, and shall ensure that its Subsidiaries shall, promptly
provide such information about it as is requested by VIP to be provided in order
for VIP to comply with its disclosure and/or reporting obligations under U.S.
securities Laws, New York Stock Exchange requirements or any other Laws or rules
(including the requirements of applicable tax authorities) which apply to VIP
from time to time and require the inclusion by VIP of information concerning the
Issuer and its Subsidiaries.
5.10 Compliance with Indenture
-------------------------
The Issuer shall, and shall ensure that its Subsidiaries shall, use its
best efforts to not take any actions (or omit to take any actions) that would
result in a breach of any of the covenants or result in an "Event of Default"
occurring under the Indenture, dated July 28, 2000, among VIP, VimpelCom B.V.
and The Bank of New York, as trustee relating to the 5.5% Senior Convertible
Notes due 2005 (including, without limitation, Section 5.9 (Limitations on
Guarantees and Liens in favor of Relevant Securities), Section 5.10 (Limitation
on Status as Investment Company) and Article VIII (Events of Default and
Remedies)).
5.11 Telecom Licenses
----------------
Promptly upon their becoming available, the Issuer shall provide to VIP
copies of all telecom Licenses and telecom License revocations, if any, received
after the date hereof with any
54
Governmental or Regulatory Authority (other than routine, recurring filings made
in the ordinary course of business consistent with past practice).
5.12 Covenants Under VIP Primary Agreement
-------------------------------------
Following the First VIP-R Board Date, the Issuer shall not take any
actions that would cause VIP to breach any covenant or agreement made by VIP in
Sections 5.01, 5.02, 5.03, 5.09 and 5.10 of the VIP Primary Agreement.
5.13 Contract Provision Regarding Cancellation of Preferred Stock.
-------------------------------------------------------------
From the date hereof until such time as the Eco Telecom Preferred Stock
has been cancelled in full in accordance with Russian Law, the Issuer shall (i)
as soon as reasonably practicable following the date hereof, use its reasonable
efforts to amend all existing Contracts to which it is a party to include the
language set forth in Schedule 5.13, and (ii) use its best efforts to include
-------------
the language set forth in Schedule 5.13 in every Contract entered into by the
-------------
Issuer following the date hereof.
ARTICLE VI - NOTICE AND CURE
Each party will notify the other parties in writing of, and will use all
commercially reasonable efforts to cure before the relevant Closings, any
violation or breach, as soon as practicable after such party becomes aware of
such violation or breach of any representation, warranty, covenant or agreement
made by such party in this Agreement, whether occurring or arising before, on or
after the date of this Agreement, provided that no notice given pursuant to this
Article VI shall have any effect on the representations, warranties, covenants
or agreements contained in this Agreement for purposes of determining
satisfaction of any condition contained herein, or shall in any way relieve the
breaching party from any obligations or affect the rights of the other parties
hereto or be deemed to amend or supplement any Schedule or to prevent or cure
any misrepresentation, breach of warranty or breach of covenant.
ARTICLE VII - COVENANTS OF THE PURCHASERS
7.01 Regulatory and Other Approvals
------------------------------
Each Purchaser will (a) take all commercially reasonable steps necessary
or desirable, and proceed diligently and in good faith and use all commercially
reasonable efforts, as promptly as practicable, to obtain and maintain all
consents, approvals or actions of, to make all filings with and to give all
notices to Governmental or Regulatory Authorities or any other Person required
of the Purchaser to consummate the transactions contemplated hereby and by the
other Principal Agreements, including, without limitation, those described in
Schedule 4.03(b)(i), Schedule 4.03(b)(ii), Schedule 4.03(b)(iii) and Schedule
------------------- -------------------- --------------------- --------
4.03(c) hereto as applicable to such Purchaser (and in any event Eco Telecom
-------
shall make all necessary applications to, and file all notices and other filings
with, MAMP as soon as practicable but not later than thirty (30) calendar days
after the date of the First Closing with respect to the Second Closing, and as
soon as practicable but
55
not later than ninety (90) calendar days after the Second Closing with respect
to the Third Closing) and (b) take all commercially reasonable steps to
cooperate with the Issuer as promptly as practicable in obtaining all consents,
approvals or actions of, making all filings with, and giving all notices to,
Governmental or Regulatory Authorities or other Persons required of the Issuer
to consummate the transactions contemplated hereby and by the other Principal
Agreements.
7.02 Delivery of Information
-----------------------
Each Purchaser will (a) provide prompt notification to the Issuer each
other Purchaser when any consent, approval, action, filing or notice referred to
in Section 7.01 is obtained, taken, made or given, as applicable, (b) deliver to
the Issuer and each other Purchaser from time to time as soon as practicable
after they become available, copies of public filings relating to any actions
related to the Purchasers' Shares or Eco Telecom Preferred Stock, agreements
entered into between or among the Purchasers, publications required to be made
in accordance with Russian securities laws, and (c) advise the Issuer and each
other Purchaser in writing of any written communications (and, unless precluded
by Law, provide copies of any such communications that are in writing) with any
Governmental or Regulatory Authority or other Person regarding any of the
transactions contemplated by this Agreement or any of the other Principal
Agreements
7.03 Fulfillment of Conditions
-------------------------
Each Purchaser will take all commercially reasonable steps necessary or
desirable and proceed diligently and in good faith to satisfy each condition to
the obligations of the Issuer contained in this Agreement that is within its
control.
7.04 Further Assurances
------------------
Each Purchaser agrees to execute and deliver each other Principal
Agreement to which it is a party and such other documents and take such other
acts, as the other parties to this Agreement may reasonably request for the
purpose of carrying out the intent of this Agreement and the Principal
Agreements.
ARTICLE VIII - ADDITIONAL COVENANTS
8.01 Reimbursement of Certain Tax Liabilities
----------------------------------------
(a) In the event Russian Law does not allow the Issuer to claim for the
set-off of all or a portion of the value added tax (such portion being referred
to as the "Non-Deductible VAT") relating to expenses indicated on Schedule
--------
8.01, incurred by the Issuer prior to May 30, 2001 and such amount of expenses
---- --
shall not exceed the amount which is set forth on Schedule 8.01, VIP shall, upon
-------------
request of the Issuer, reimburse the Issuer for the amount of such Non-
Deductible VAT in a manner to be agreed between VIP and the Issuer, provided,
however, that such request shall be accompanied by a confirmation specifying the
amount of such Non-Deductible VAT from the Issuer's duly appointed auditor for
the GAAP financial statements.
56
(b) In the event Russian Law requires the Issuer to pay any Taxes in
connection with (and caused by) the execution and performance by the Issuer of
the documents specified in Schedule 8.01 (b), VIP shall, upon request of the
-----------------
Issuer, reimburse the Issuer for the amount of such taxes in a manner to be
agreed between VIP and the Issuer, provided, however, that such request shall be
-------- -------
accompanied by a confirmation specifying the amount of such Taxes from the
Issuer's duly appointed auditor for the GAAP financial statements.
8.02 Repayment of Loans to VIP
-------------------------
Simultaneously with the First Closing, the Issuer shall repay to VIP all
amounts previously drawn upon by the Issuer or paid by VIP to other Persons on
the order of the Issuer and not yet repaid under those loan agreements and
other arrangements listed on Schedule 8.02 as such schedule may be amended in
-------------
writing by VIP and the Issuer between the date hereof and the First Closing.
8.03 Trademark License Covenant
--------------------------
VIP hereby agrees that as long as the Trademark License Agreements remain
in effect, VIP shall grant to the Issuer licenses to use each Future VIP
Trademark within the territory of the Russian Federation with the exclusion of
the Moscow License Area. With respect to each such Future VIP Trademark, VIP
and the Issuer shall enter into a License Agreement substantially in the form
attached as Exhibit E (the "Future Trademark License Agreement") or shall amend
---------
the relevant existing Trademark License Agreement to include such Future VIP
Trademark, as appropriate, in each case, as promptly as practicable following
the registration of each Future VIP Trademark with the Rospatent. Following the
execution and delivery of the Future Trademark License Agreement or an
amendment to an existing Trademark License Agreement, VIP shall promptly
register such license agreement with Rospatent.
8.04 VIP/Eco Telecom Share Purchase Agreement
----------------------------------------
On the Preferred Stock Closing Date, VIP and Eco Telecom shall execute a
Share Purchase Agreement, in the form attached hereto as Exhibit F (the "VIP/Eco
---------
Telecom Share Purchase Agreement"), whereby simultaneously with the Preferred
Stock Closing VIP shall sell and Eco Telecom shall purchase one share of Common
Stock of the Issuer (the "One Share of VIP-R Common Stock").
8.05 Certain Information
-------------------
Upon each other Purchaser's reasonable request, VIP shall provide each
other Purchaser with information necessary for such Purchaser to make an
independent determination that the consummation of the Second Closing and the
Third Closing will not cause VIP to become an "investment company" under the
United States Investment Company Act of 1940, as amended.
ARTICLE IX - CONDITIONS PRECEDENT TO OBLIGATIONS OF VIP AND ISSUER
FOR FIRST CLOSING
57
9.01 Conditions Precedent to Obligations of VIP for First Closing
------------------------------------------------------------
The obligation of VIP to pay the First Closing VIP Purchase Price at the
First Closing to the Issuer is subject to the fulfillment, at or before the
First Closing, of the condition precedent (which may be waived by VIP in writing
in its sole discretion) that the VIP Closing shall occur prior to, or
simultaneously with, the First Closing.
9.02 Conditions Precedent to Obligations of Issuer for First Closing
---------------------------------------------------------------
The obligations of the Issuer hereunder with respect to the First Closing
are subject to the fulfillment, at or before the First Closing, of the condition
precedent (which may be waived by the Issuer in writing in its sole discretion)
that the VIP Closing shall occur prior to, or simultaneously with, the First
Closing.
ARTICLE X - CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASERS
AND ISSUER FOR SECOND CLOSING
10.01 Conditions Precedent to Obligations of Purchasers for Second Closing
--------------------------------------------------------------------
The obligation of each Purchaser to pay its portion of the Second Closing
Purchase Price at the Second Closing to the Issuer is subject to the
fulfillment, at or before the Second Closing, of the following conditions
precedent (all or any of which may be waived in whole or in part by such
Purchaser in writing in its sole discretion):
(a) Orders and Laws. There shall not be in effect on the Second Closing
---------------
Date any Order (including any Order issued by MAMP) or Law (other than Specified
Legislation which is subject to paragraph (b) below) restraining, enjoining or
otherwise prohibiting or making illegal the Second Closing.
(b) Specified Legislation. There shall not be in effect on the Second
---------------------
Closing Date any Specified Legislation which prevents the Second Closing.
(c) Option Agreement. Eco Telecom shall not have exercised its option to
----------------
sell its shares of VIP common stock to Telenor under the Option Agreement.
(d) No Breach of VIP-R Shareholders Agreement. VIP shall not be in
-----------------------------------------
breach of its obligations under Article II or Section 4.02(e) of the VIP- R
Shareholders Agreement.
(e) Preferred Stock. The Eco Telecom Preferred Stock shall have been
---------------
issued in accordance with the terms of this Agreement; provided, however, that
-------- -------
Eco Telecom will have the benefit of this condition precedent only if the Issuer
fails to issue the Eco Telecom Preferred Stock and (i) such failure is due to
the failure by VIP, in its capacity as a shareholder of the Issuer, to vote in
favor of such issuance, or (ii) VIP is then in breach of its obligations under
section 2 of the Board Rules of the Issuer with respect to the exercise by VIP
of its rights as a shareholder of the Issuer.
58
(f) Delivery of VIP Officer's Certificate. VIP shall have delivered to
-------------------------------------
each Purchaser a certificate dated the Second Closing Date and executed by the
CEO of VIP, substantially in the form of Exhibit G.
---------
(g) Consummation of Sale of the One Share of VIP-R Common Stock. VIP
-----------------------------------------------------------
shall not have breached its obligation under this Agreement and the VIP/Eco
Telecom Share Purchase Agreement to sell the One Share of VIP-R Common Stock to
Eco Telecom at the Preferred Stock Closing.
10.02 Conditions Precedent to Obligations of Issuer for Second Closing
----------------------------------------------------------------
The obligations of the Issuer hereunder to issue to the Purchasers the
Second Closing Shares at the Second Closing are subject to the fulfillment, at
or before the Second Closing, of the conditions precedent (which may be waived
by the Issuer in writing in its sole discretion) that there shall not be in
effect on the Second Closing Date any Order or Law (including Specified
Legislation) restraining, enjoining or otherwise prohibiting or making illegal
the Second Closing.
ARTICLE XI - CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASERS
AND ISSUER FOR THIRD CLOSING, ADDITIONAL CLOSINGS AND PREFERRED
STOCK CLOSING
11.01 Conditions Precedent to Obligations for Third Closing
-----------------------------------------------------
(a) Purchasers. The obligation of each Purchaser to pay its portion of
----------
the Third Closing Purchase Price at the Third Closing to the Issuer is subject
to the fulfillment, at or before the Third Closing, of the following conditions
precedent (all or any of which may be waived in whole or in part by such
Purchaser in writing in its sole discretion):
(i) Orders and Laws. There shall not be in effect on the Third Closing
---------------
Date any Order (including any Order issued by MAMP) or Law (other than Specified
Legislation which is subject to clause (ii) below) restraining, enjoining or
otherwise prohibiting or making illegal the Third Closing.
(ii) Specified Legislation. There shall not be in effect on the Third
---------------------
Closing Date any Specified Legislation which prevents the Third Closing.
(iii) Option Agreement. Eco Telecom shall not have exercised its option
----------------
to sell its shares of VIP common stock to Telenor under the Option
Agreement.
(iv) No Breach of VIP-R Shareholders Agreement. VIP shall not be in
-----------------------------------------
breach of its obligations under Article II or Section 4.02(e) of the VIP-R
Shareholders Agreement.
(v) Preferred Stock. The Eco Telecom Preferred Stock shall have been
---------------
issued in accordance with the terms of this Agreement; provided, however, that
-------- -------
Eco Telecom will have the benefit of this condition precedent only if the Issuer
fails to issue the Eco Telecom Preferred Stock and (i) such failure is due to
the failure by VIP, in its capacity as a shareholder of the
59
Issuer, to vote in favor of such issuance, or (ii) VIP is then in breach of its
obligations under section 2 of the Board Rules of the Issuer with respect to the
exercise by VIP of its rights as a shareholder of the Issuer.
(vi) Delivery of VIP Officer's Certificate. VIP shall have delivered
-------------------------------------
to each Purchaser a certificate dated the Third Closing Date and executed by the
CEO of VIP, substantially in the form of Exhibit H.
---------
(vii) Consummation of Sale of the One Share of VIP-R Common Stock.
-----------------------------------------------------------
VIP shall not have breached its obligation under this Agreement and the VIP/Eco
Telecom Share Purchase Agreement to sell the One Share of VIP-R Common Stock to
Eco Telecom at the Preferred Stock Closing.
(b) Issuer. The obligations of the Issuer hereunder to issue to
------
Purchasers the Third Closing Shares at the Third Closing are subject to the
fulfillment, at or before the Third Closing, of the conditions precedent (which
may be waived by the Issuer in writing in its sole discretion) that there shall
not be in effect on the Third Closing Date any Order or Law restraining,
enjoining or otherwise prohibiting or making illegal the Third Closing.
11.02 Conditions Precedent to Obligations for Additional Closings
-----------------------------------------------------------
The obligations of the Issuer hereunder to issue to VIP or Telenor, as
the case may be, the shares of Common Stock at the Additional Closings, and the
obligations of VIP and Telenor, as the case may be, to pay the relevant portion
of the Additional Closings Purchase Price, are subject to the fulfillment, at or
before the respective Additional Closings, of the condition precedent (which may
be waived in writing by the Issuer or VIP or Telenor, as the case may be, with
regard to their respective obligations) that there shall not be in effect on the
date of an Additional Closing any Order or Law (including Specified Legislation)
restraining, enjoining or otherwise prohibiting or making illegal such
Additional Closing.
11.03 Conditions Precedent to Obligations for Preferred Stock Closing
---------------------------------------------------------------
(a) Eco Telecom. The obligation of Eco Telecom to pay the Preferred Stock
-----------
Purchase Price at the Preferred Stock Closing to the Issuer is subject to the
fulfillment, at or before the Preferred Stock Closing, of the condition
precedent (which may be waived by Eco Telecom in writing in its sole discretion)
that there shall not be in effect on the Preferred Stock Closing Date any Order
or Law (including Specified Legislation) restraining, enjoining or otherwise
prohibiting or making illegal the Preferred Stock Closing.
(b) Issuer. The obligations of the Issuer hereunder to issue to Eco
------
Telecom the Eco Telecom Preferred Stock at the Preferred Stock Closing are
subject to the fulfillment, at or before the Preferred Stock Closing, of the
condition precedent (all or any of which may be waived in whole or in part by
the Issuer in writing in its sole discretion) that there shall not be in effect
on the Preferred Stock Closing Date any Order or Law (including Specified
Legislation) restraining, enjoining or otherwise prohibiting or making illegal
the Preferred Stock Closing.
60
ARTICLE XII - SURVIVAL OF REPRESENTATIONS AND WARRANTIES
12.01 Survival of Issuer Representations and Warranties
-------------------------------------------------
Unless otherwise noted herein, (i) all representations and warranties
of the Issuer contained in Article III of this Agreement will survive the First
Closing and remain in effect until three (3) months from the publication date of
the audited, consolidated financial statements for VIP's fiscal year ending
December 31, 2002 and (ii) all representations and warranties of the Issuer
contained in the Disclosure Letters will survive the Closing, at which such
letters were delivered, and remain in effect until the eighteen (18) month
anniversary of the relevant Closing, provided in each case that any such
representation or warranty that would otherwise terminate will continue to
survive if a written claim for indemnity shall been made under Article XIII on
or prior to such termination date, until such claim has been satisfied or
otherwise resolved.
12.02 Survival of Purchasers, Representations and Warranties
------------------------------------------------------
Unless otherwise noted herein, all representations and warranties of
each of the Purchasers contained in Article IV of this Agreement that are deemed
to be given at any Closing will survive the Closings at which they are deemed to
be given and remain in effect until the eighteen (18) month anniversary of the
relevant Closing, provided that any such representation or warranty that would
otherwise terminate will continue to survive if a written claim for indemnity
shall been made under Article XIII on or prior to such termination date, until
such claim has been satisfied or otherwise resolved.
ARTICLE XIII - INDEMNIFICATION
13.01 Indemnification
---------------
Subject to Section 13.03, in the event the First Closing occurs:
(a) The Issuer shall indemnify Eco Telecom in respect of, and hold Eco
Telecom harmless from and against, any and all Losses suffered, incurred or
sustained by Eco Telecom resulting from, arising out of or relating to any non-
fulfillment of or failure to perform, following the First VIP-R Board Date, any
covenant or agreement on the part of the Issuer contained in this Agreement (to
the extent not waived in writing by Eco Telecom); provided that such non-
--------
fulfillment of or failure to perform any covenant or agreement on the part of
the Issuer was not caused by (i) a breach by Eco Telecom of its obligations
under any of the Principal Agreements (including, without limitation, its
obligations under the VIP-R Shareholders Agreement to vote its shares of Common
Stock as necessary to effect the performance by the Issuer of the obligations of
the Issuer undertaken pursuant to this Agreement) or (ii) any willful
misconduct, or bad faith action or failure to act by the CEO of the Issuer
(appointed by the members of the Board nominated to the Board by Eco Telecom (or
by VIP as instructed by Eco Telecom)
61
pursuant to the VIP-R Shareholders Agreement) and/or any member of the senior
management of the Issuer appointed by such CEO.
(b) The Issuer shall indemnify Telenor in respect of, and hold Telenor
harmless from and against, any and all Losses suffered, incurred or sustained by
Telenor resulting from, arising out of or relating to (i) any non-fulfillment of
or failure, following the First VIP-R Board Date, to perform any covenant or
agreement on the part of the Issuer contained in this Agreement (to the extent
not waived in writing by Telenor); provided that such non-fulfillment of or
--------
failure to perform any covenant or agreement on the part of the Issuer was not
caused by a breach by Telenor of its obligations under any of the Principal
Agreements (including, without limitation, its obligations under the VIP-R
Shareholders Agreement to vote its shares of Common Stock as necessary to effect
the performance by the Issuer of the obligations of the Issuer undertaken
pursuant to this Agreement) and (ii) any misrepresentation or breach of warranty
on the part of the Issuer contained in the Disclosure Letters delivered to
Telenor in connection with the Second Closing and/or Third Closing in accordance
with this Agreement.
(c) The Issuer shall indemnify VIP in respect of, and hold VIP harmless
from and against, any and all Losses suffered, incurred or sustained by VIP
resulting from, arising out of or relating to (i) non-fulfillment of or failure,
following the First VIP-R Board Date, to perform any covenant or agreement on
the part of the Issuer contained in this Agreement (to the extent not waived in
writing by VIP); provided that such non-fulfillment of or failure to perform any
--------
covenant or agreement on the part of the Issuer was not caused by a breach by
VIP of its obligations under any of the Principal Agreements (including, without
limitation, its obligations under the VIP-R Shareholders Agreement to vote its
shares of Common Stock as necessary to effect the performance by the Issuer of
the obligations of the Issuer undertaken pursuant to this Agreement) and (ii)
any misrepresentation or breach of warranty on the part of the Issuer contained
in the Disclosure Letters delivered to VIP in connection with the Second Closing
and/or Third Closing in accordance with this Agreement.
(d) Each Purchaser shall indemnify the Issuer in respect of, and hold
the Issuer harmless from and against, any and all Losses suffered, incurred or
sustained by the Issuer resulting from, arising out of or relating to any
misrepresentation, breach of warranty or non-fulfillment of or failure to
perform any covenant or agreement on the part of such Purchaser contained in
this Agreement (to the extent not waived in writing by the Issuer).
(e) In the event that any claim is asserted against any party hereto,
or any party hereto is made a party defendant in any Action or Proceeding, and
such claim, Action or Proceeding involves a matter which is the subject of a
claim for indemnification under Section 13.01(a), (b), (c) or (d), then such
party (an "Indemnified Party") shall (i) promptly give written notice pursuant
to Section 15.01 to each Purchaser or the Issuer, as the case may be (the
"Indemnifying Party"), of such claim, Action or Proceeding, and (ii) not make
any admission of liability, agreement or compromise with any Person in relation
to such claim without the prior written consent of the Indemnifying Party; and
such Indemnifying Party shall have the right to join in the defense of said
claim, Action or Proceeding at such Indemnifying Party's own cost and expense
and, if the Indemnifying Party agrees in writing to be bound by and to promptly
pay the full
62
amount of any final judgment from which no further appeal may be taken to the
extent such judgment involves an indemnifiable claim under this Section 13.01
and subject to the limitations in Section 13.03, and if the Indemnified Party is
reasonably assured of the Indemnifying Party's ability to satisfy such
agreement, then, at the option of the Indemnifying Party, such Indemnifying
Party may take over the defense of such claim, Action or Proceeding, except
that, in such case, the Indemnified Party shall have the right to join in the
defense of said claim, Action or Proceeding at its own cost and expense, and the
Indemnifying Party shall not make any admission of liability, agreement or
compromise with respect to such claim without the prior written consent of the
Indemnified Party.
13.02 Determination of Losses
-----------------------
The parties shall take into account the time value of money (using the
Applicable Rate as the discount rate) in determining Losses for purposes of this
Article XIII.
13.03 Limitations on Liability
------------------------
Notwithstanding any other provision of this Agreement to the contrary:
(a) the aggregate liability of the Issuer in respect of all claims of
Eco Telecom shall be limited to the Total Issuer/Eco Telecom Indemnity Amount;
provided, that the aggregate liability of the Issuer and VIP in respect of all
--------
claims of Eco Telecom under this Agreement and the VIP Primary Agreement may not
exceed the Total Issuer/Eco Telecom Indemnification Amount.
(b) the aggregate liability of Eco Telecom in respect of all claims
of the Issuer, shall be limited to US$117 million;
(c) the aggregate liability of the Issuer in respect of all claims of
Telenor, and the aggregate liability of Telenor, in respect of all claims of the
Issuer shall be limited to the Total Issuer/Telenor Indemnity Amount;
(d) the aggregate liability of the Issuer in respect of all claims of
VIP, and the aggregate liability of VIP, in respect of all claims of the Issuer
shall be limited to the Total Issuer/VIP Indemnity Amount;
(e) a party shall have no liability in respect of any claim unless
such claim is made in good faith and unless written particulars of such claim
(giving such details of the specific matter in respect of which such claim is
made as are then in the possession the claimant party) shall have been given to
such party pursuant to Section 15.01 within the survival period specified in
Article XII;
(f) no party shall have any liability in respect of any claim:
(i) to the extent that it arose or is increased as a result of
an increase in rates of Tax on or after the date immediately prior to the First
Closing Date or the passing of any
63
legislation (or making of any subordinate legislation or any change in any
published practice of any Tax authority) with retrospective effect;
(ii) to the extent such claim:
(A) relates to any matter provided for, or included as a
liability in (but only to the extent so provided for or included in), the
Financial Statements; or
(B) relates to any liability for Tax arising out of the
ordinary course of business of the Issuer after the First Closing Date;
(g) no party shall have any liability in respect of any claim:
(i) if the amount of such claim does not exceed US$250,000;
(ii) if, as of the date such claim is made, the aggregate amount
of all claims made against such party under this Article XIII does not exceed
US$2,000,000; or
(iii) to the extent that such claim relates to any Loss for which
the claimant party actually recovers under the terms of any insurance policy;
(h) no party shall be entitled to be paid more than once in respect
of any claim arising out of the same subject matter (including, without
limitation, with respect to the VIP Primary Agreement);
(i) if any potential claim shall arise by reason of a liability of a
party which is contingent only, then such party shall have no obligation to make
any payment in respect of such claim until such time as the contingent liability
ceases to be contingent and becomes actual;
(j) without prejudice to the generality of Section 15.08(a), any
liability of any Purchaser under Section 13.01 shall be several (and not joint);
and
(j) as used in this Article XIII, "claim" shall mean any claim under
Section 13.01.
13.04 Other Indemnification Provisions
--------------------------------
The foregoing indemnification provisions are in addition to, and not in
derogation of, any statutory, equitable, or common law remedy any party may have
for any misrepresentation made in connection with the transactions contemplated
by this Agreement, or any breach of warranty or non-fulfillment of or failure to
perform any covenant or agreement.
64
ARTICLE XIV - TERMINATION
14.01 Termination
-----------
This Agreement shall take effect on the date hereof and shall terminate
and the transactions contemplated hereby shall be abandoned:
(a) at midnight (Moscow time) on the Final Date if the First Closing
has not occurred by such time;
(b) on the date on which a meeting of the shareholders of VIP is held
at which a vote of such shareholders is conducted concerning the transactions
contemplated by this Agreement and the other Principal Agreements and such
shareholders fail to approve such transactions as are required to be approved by
such shareholders; and
(c) with respect to Telenor only if, at the time of the later of the
Third Closing or the Additional Third Closing, if applicable, Telenor shall not
have exercised the Second Closing Telenor Option or the Third Closing Telenor
Option.
14.02 Effect of Termination
---------------------
(a) If this Agreement is validly terminated pursuant to Section
14.01(b), this Agreement will forthwith become null and void, and there will be
no liability or obligation on the part of the Issuer or the Purchasers (or any
of their respective officers, directors, employees, agents or other
representatives or Affiliates), except that the provisions contained in this
Section 14.02 and Article XV will continue to apply following any such
termination.
(b) Notwithstanding any other provision in this Agreement to the
contrary, upon termination of this Agreement pursuant to Section 14.01(a), the
Issuer will remain liable to the Purchasers for any breach of this Agreement by
the Issuer existing at the time of such termination, and each Purchaser,
severally and not jointly, will remain liable to the Issuer and each of the
other Purchasers for any breach of this Agreement by such Purchaser existing at
the time of such termination, and the Issuer or the Purchasers may seek such
remedies, including damages and fees of attorneys, against the other with
respect to any such breach as are provided in this Agreement or as otherwise
available at law or in equity.
ARTICLE XV - MISCELLANEOUS
65
15.01 Notices
-------
All notices, requests and other communications hereunder must be in
writing and will be deemed to have been duly given only if delivered personally
or by facsimile transmission or sent by courier to the parties at the following
addresses or facsimile numbers:
If to Eco Telecom, to:
Eco Telecom Limited
Suite 2
4 Irish Place
Gibraltar
Attention: Xxxxx Xxxx
Facsimile No.: x000-00000
-and-
OOO Alfa-Eco
21 Novy Arbat
121019 Moscow
Russian Federation
Attention: Stanislav Shekshnya
Facsimile No.: x0000-000-0000
with a copy to:
Xxxxxxx Xxxxx CIS Legal Services
00 Xxxxxxxxxxxx Xxxxxxxx
000000 Xxxxxx
Russian Federation
Attention: Xxxxxxxx Xxxxxxx
Facsimile No.: x0 000 000 0000
If to VIP, to:
Vimpel-Communications
10 Xxxxxx 0-Xxxxx
000000, Xxxxxx
Xxxxxxx Federation
Facsimile No.: x0000 000-0000
Attn: Xxxxxx Xxxxxxxxxx
66
General Counsel
with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
Xxxxx Xxxxx XX
0 Xxxxxx Xxxxxxx
000000, Xxxxxx
Russian Federation
Facsimile No. x0000-000-0000
Attn: Xxxxxxx X. Xxxxxxxx
If to Telenor, to:
Telenor East Invest AS
Xxxxxxxxxxxxxxxxx 0
X-0000 Xxxx
Xxxxxx
Facsimile No.: x00-00-00-00-00
Attn: Xxxxxx Xxxxxxxxx
with copies to:
Telenor Russia AS
33/7 Ulitsa Usacheva
Moscow
Russian Federation
Facsimile: x0000 000-0000
Attn: General Director
-and-
Advokatene i Telenor
Xxxxxxxxxxxxxxxxx 0
X-0000 Xxxx
Xxxxxx
Facsimile No.: x00-00-00-00-00
Attn: Xxxxx Xxxxxxx
-and-
67
Coudert Brothers
Xxxxx Xxxxx XX
0 Xxxxxx Xxxxxxx
000000, Xxxxxx
Russian Federation
Facsimile: x0000 000-0000
Attn: Xxxxx X. X'Xxxxxxxx
If to the Issuer, to:
VimpelCom-Region
10 Xxxxxx 0-Xxxxx
000000, Xxxxxx
Xxxxxxx Federation
Facsimile No.: x0000 000-0000
Attn: Xxxxxxxx Xxxxxxx, General Counsel
with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
Xxxxx Xxxxx XX
0 Xxxxxx Xxxxxxx
000000, Xxxxxx
Russian Federation
Facsimile No. x0000-000-0000
Attn: Xxxxxxx X. Xxxxxxxx
-and-
Xxxxxxx Xxxxx CIS Legal Services
00 Xxxxxxxxxxxx Xxxxxxxx
000000 Xxxxxx
Russian Federation
Attention: Xxxxxxxx Xxxxxxx
Facsimile No.: x0 000 000 0000
All such notices, requests and other communications will (a) if delivered
personally against receipt to the address as provided in this Section 15.01, be
deemed given upon delivery, (b) if delivered by facsimile transmission to the
facsimile number as provided in this Section 15.01, be deemed given upon
receipt, and (c) if delivered by courier in the manner described
68
above to the address as provided in this Section 15.01, be deemed given upon
confirmed 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 Section 15.01). Any party from time
to time may change its address, facsimile number or other information for the
purpose of notices to that party by giving written notice specifying such change
to the other parties hereto.
15.02 Entire Agreement
----------------
This Agreement and the other Principal Agreements supersede all prior
discussions and agreements between the parties with respect to the subject
matter hereof and thereof, and contain the sole and entire agreement between the
parties hereto and thereto with respect to the subject matter hereof and
thereof.
15.03 Expenses
--------
Except as otherwise expressly provided in this Agreement (including,
without limitation, as provided in Section 14.02), whether or not the
transactions contemplated hereby are consummated, each of the parties will pay
its own costs and expenses, including, without limitation, legal fees, incurred
in connection with the negotiation, execution and closing of this Agreement and
the other Principal Agreements and the transactions contemplated hereby and
thereby; provided that the Issuer shall pay, without limitation, all costs
--------
associated with the registration of the Purchasers' Shares and the Eco Telecom
Preferred Stock as required by all applicable Laws and Russian Federation
securities regulations, including the costs associated with preparing a
prospectus, if any, and each Purchaser shall pay the fee charged by the NRC to
register its ownership of its Purchasers' Shares and the Eco Telecom Preferred
Stock. In the event that any party hereto is required to pay any documentary,
transfer, stamp or other similar Tax (including any Tax on surplus capital) with
respect to any purchase and sale of Preferred Stock effected in connection with
Sections 2.08, 2.09 and 2.10 hereof, the parties to the relevant transaction
will use all commercially reasonable efforts to structure such transaction in a
manner which minimizes any such Taxes which may become payable in connection
therewith.
15.04 Public Announcements
--------------------
At all times at or before any Closing, neither the Issuer nor the
Purchasers will issue or make any reports, statements or releases to the public
or, generally, to the employees, customers, suppliers or other Persons to whom
the Issuer sells goods or provides services or with whom the Issuer otherwise
has significant business relationships with respect to this Agreement or the
transactions contemplated hereby without the consent of the other parties
hereto, which consent shall not be unreasonably withheld. If any party is
unable to obtain the approval of its public report, statement or release from
the other parties and such report, statement or release is, on the advice of
legal counsel to such party, required by Law or rule of any stock exchange in
order to discharge such party's disclosure obligations, then such party may make
or issue the legally required report, statement or release and promptly furnish
the other parties with a copy thereof. The Issuer and the Purchasers will also
obtain each other parties' prior approval of any press
69
release to be issued immediately following the respective Closings announcing
the consummation of the transactions contemplated by this Agreement.
15.05 Confidentiality
---------------
Each party hereto will hold, and will use its best efforts to cause its
Affiliates, and their respective Representatives to hold, in strict confidence
from any Person (other than any such Affiliate or Representative), unless (a)
compelled to disclose by judicial or administrative process (including, without
limitation, in connection with obtaining the necessary approvals of this
Agreement and the transactions contemplated hereby of Governmental or Regulatory
Authorities or as required to be disclosed under the Securities Act, the
Exchange Act or applicable stock exchange rules) or by other requirements of
Law, (b) disclosed in an Action or Proceeding brought by a party hereto in
pursuit of its rights or in the exercise of its remedies hereunder or (c) on the
advice of legal counsel to such party, required by Law or rule of any stock
exchange in order to discharge such party's disclosure obligations, all
documents and information concerning any other party hereto or any of its
Affiliates furnished to it by such other party or such other party's
Representatives in connection with this Agreement or the transactions
contemplated hereby, (including any due diligence review undertaken by VIP or
Telenor pursuant to Sections 2.04(c) and 2.05(d) of this Agreement) except to
the extent that such documents or information can be shown to have been (i)
previously known by the party receiving such documents or information, (ii) in
the public domain (either prior to or after the furnishing of such documents or
information hereunder) through no fault of such receiving party or (iii) later
acquired by the receiving party from another source if the receiving party is
not aware that such source is under an obligation to another party hereto to
keep such documents and information confidential. In the event the transactions
contemplated hereby are not consummated, upon the request of the party which
provided such information or documents, each receiving party hereto will, and
will cause its Affiliates and their respective Representatives to, promptly
redeliver or cause to be redelivered all copies of documents and information
furnished by the other parties in connection with this Agreement or the
transactions contemplated hereby and destroy or cause to be destroyed all notes,
memoranda, summaries, analyses, compilations and other writings related thereto
or based thereon prepared by the party furnished such documents and information
or its Representatives.
15.06 Waiver; Enforcement of Rights
-----------------------------
Any term or condition of this Agreement may be waived at any time by the
party that is entitled to the benefit thereof, but no such waiver shall be
effective unless set forth in a written instrument duly executed by or on behalf
of the party waiving such term or condition. No waiver by any party of any term
or condition of this Agreement, in any one or more instances, shall be deemed to
be or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion.
15.07 Amendment
---------
This Agreement may be amended, supplemented or modified only by a
written instrument duly executed by or on behalf of each party hereto.
70
15.08 Obligations of Purchasers Several; No Third Party Beneficiary
-------------------------------------------------------------
(a) The obligations of each Purchaser hereunder shall be several (and
not joint). A Purchaser shall not be responsible for the failure of any other
Purchaser to perform any obligation required to be performed by it hereunder or
under any other Principal Agreement. The obligations of the Issuer at any time
hereunder to each Purchaser shall be a separate and independent obligations.
Each Purchaser shall be entitled to protect and enforce its rights arising out
of this Agreement and the other Principal Agreements as it shall see fit, and it
shall not be necessary for any other Purchaser to consent to, or be joined as an
additional party in, any proceedings for such purposes.
(b) The terms and provisions of this Agreement are intended solely
for the benefit of each party hereto and their respective successors or
permitted assigns, and it is not the intention of the parties to confer third
party beneficiary rights upon any other Person.
15.09 No Assignment; Binding Effect
-----------------------------
Neither this Agreement nor any right, interest or obligation hereunder
may be assigned by any party hereto without the prior written consent of the
other parties hereto and any attempt to do so will be void. Subject to the
preceding sentence, this Agreement is binding upon, inures to the benefit of and
is enforceable by the parties hereto and their respective successors and
permitted assigns.
15.10 Headings
--------
The headings contained in this Agreement are for convenience of
reference only, and do not form a part hereof and in no way interpret or
construe the provisions hereof.
15.11 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
71
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
hereto 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 to this Agreement.
(vii) The award of the arbitrators may be enforced by any court
of competent jurisdiction and may be executed against the person and assets of
the losing party in any competent jurisdiction.
(b) Except for arbitration proceedings pursuant to Section 15.11(a),
no action, lawsuit or other proceeding (other than the enforcement of an
arbitration decision, an action to compel arbitration or an application for
interim, provisional or conservatory measures in connection with the
arbitration) shall be brought by or between the parties to this Agreement in
connection with any matter arising out of or in connection with this Agreement.
(c) Each party hereto irrevocably appoints CT Corporation System,
located on the date hereof at 000 Xxxxxx Xxxxxx, 13th Floor, New York, New York
10011, USA, as its true and lawful agent and attorney to accept and acknowledge
service of any and all process against it in any judicial action, suit or
proceeding permitted by Section 15.11(b), with the same effect as if such party
were a resident of the State of New York and had been lawfully served with such
process in such jurisdiction, and waives all claims of error by reason of such
service, provided that the party effecting such service shall also deliver a
copy thereof on the date of such service to the other parties by facsimile as
specified in Section 15.01. Each party to this Agreement will enter into such
agreements with such agent as may be necessary to constitute and continue the
appointment of such agent hereunder. In the event that any such agent and
attorney resigns or otherwise becomes incapable of acting, the affected party
will appoint a successor agent and attorney in New York reasonably satisfactory
to each other party, with like powers. Each party
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hereby irrevocably submits to the non-exclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York City, in connection with any such action, suit
or proceeding, and agrees that any such action, suit or proceeding may be
brought in such court, provided, however, that such consent to jurisdiction is
solely for the purpose referred to in this Section 15.11 and shall not be deemed
to be a general submission to the jurisdiction of said courts of or in the State
of New York other than for such purpose. Each party hereby irrevocably waives,
to the fullest extent permitted by Law, any objection that it may now or
hereafter have to the laying of the venue of any such action, suit or proceeding
brought in such a court and any claim that any such action, suit or proceeding
brought in such a court has been brought in an inconvenient forum. Nothing
herein shall affect the right of any party to serve process in any other manner
permitted by Law or to commence legal proceedings or otherwise proceed against
any other party in any other jurisdiction in a manner not inconsistent with
Section 15.11(b).
(d) Each of the Purchasers and the Issuer hereby represents and
acknowledges that it is acting solely in its commercial capacity in executing
and delivering this Agreement and each of the other Principal Agreements to
which it is a party and in performing its obligations hereunder and thereunder,
and each of the Purchasers and the Issuer hereby irrevocably waives with respect
to all disputes, claims, controversies and all other matters of any nature
whatsoever that may arise under or in connection with this Agreement or any of
the other Principal Agreements and any other document or instrument contemplated
hereby or thereby, all immunity it may otherwise have as a sovereign, quasi-
sovereign or state-owned entity (or similar entity) from any and all proceedings
(whether legal, equitable, arbitral, administrative or otherwise), attachment of
assets, and enforceability of judicial or arbitral awards.
15.12 Invalid Provisions
------------------
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.
15.13 Governing Law
-------------
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, United States of America, without giving
effect to the conflicts of Laws principles thereof which would result in the
application of the Laws of another jurisdiction.
15.14 Counterparts
------------
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which constitute one and the
same instrument.
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IN WITNESS WHEREOF, this Primary Agreement has been duly executed and
delivered by each party hereto as of the day and year first above written.
The Purchasers
--------------
ECO TELECOM LIMITED
By /s/ Serge Barychkov
-------------------
Name: Serge Barychkov
Title: Attorney-in-Fact
OPEN JOINT-STOCK COMPANY
"VIMPEL-COMMUNICATIONS"
By /s/ Xxxxxx Xxxxxxxxxx Xxxxx
---------------------------
Name: Xxxxxx Xxxxxxxxxx Xxxxx
Title: President
By /s/ Xxxxxxxx Bychenkov
----------------------
Name: Xxxxxxxx Bychenkov
Title: Chief Accountant
TELENOR EAST INVEST AS
By /s/ Tron Xxxxx
--------------
Name: Tron Xxxxx
Title: Attorney-in-Fact
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The Issuer
----------
CLOSED JOINT-STOCK COMPANY
"VIMPELCOM-REGION"
By /s/ Xxxxxxx Xxxxxxxx
--------------------
Name: Xxxxxxx Xxxxxxxx
Title: Attorney-in-Fact
By /s/ Xxxxxx Xxxxxxxxx
--------------------
Name: Xxxxxx Xxxxxxxxx
Title: Chief Accountant
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