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EXHIBIT 99.5
PLEDGE AGREEMENT
PLEDGE AGREEMENT dated May 11, 2001 made by Alfa Telecom Limited (as the
assignee of Alfa Bank Holdings Limited), a company incorporated in the British
Virgin Islands with an office at X.X. Xxx 0000, Xxxxxx Xxxxx, 0xx Xxxxx, #333
Waterfront Drive, Road Town, Tortola, British Virgin Islands (the "Purchaser"),
to Global TeleSystems Europe Holdings B.V. (as the assignee of Global
TeleSystems Europe B.V., which is the assignee of Global TeleSystems, Inc.), a
company organized and registered under the laws of the Netherlands ("Seller").
PRELIMINARY STATEMENTS:
(1) The Seller has entered into a Share Purchase Agreement dated as of
April 2, 2001 (said Agreement, as it may hereafter be amended or otherwise
modified from time to time, being the "Share Purchase Agreement", the terms
defined therein and not otherwise defined herein being used herein as therein
defined) with the Purchaser, Capital International Global Emerging Markets
Private Equity Fund, L.P, Cavendish Nominees Limited and First NIS Regional
Fund. Pursuant to the Share Purchase Agreement, the Seller will, inter alia,
sell to the Purchaser 10,731,707 shares of common stock, par value $0.01 per
share (the "Company Stock") of Golden Telecom, Inc., a Delaware corporation (the
"Company").
(2) Pursuant to the Share Purchase Agreement, the Purchaser has delivered
(a) $55,000,000 in cash and (b) a promissory note (the "Note") dated the date
hereof of the Purchaser in favor of the Seller in a principal amount of
$55,000,000 in consideration for the shares of Company Stock to be purchased by
the Purchaser (the "Pledged Shares") on the date hereof. The Purchaser has
agreed to pledge the Pledged Shares to secure its obligation under the Note.
(3) It is a condition precedent to the closing of the transactions
contemplated by the Share Purchase Agreement that the Purchaser shall have
agreed to the pledge of the Pledged Shares (as more fully described on Schedule
I hereto) contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce the
Seller to sell shares to the Purchaser as provided in the Share Purchase
Agreement, the Purchaser hereby agrees with the Seller for its benefit as
follows:
SECTION 1. Grant of Security. The Purchaser hereby assigns and pledges to
the Seller for its benefit, and hereby grants to the Seller for its benefit a
security interest in, the following (collectively, the "Collateral"):
(a) all of the following (the "Security Collateral"):
(i) the Pledged Shares and the certificates representing the
Pledged Shares, and all dividends, cash, instruments and other
property from
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time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the Pledged Shares; and
(ii) all additional shares of Company Stock from time to time
acquired by the Purchaser in any manner, and the certificates
representing such additional shares, and all dividends, cash,
instruments and other property from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all
of such shares; and
(b) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of
the types described in clause (a) of this Section 1).
SECTION 2. Security for Obligations.
This Agreement secures the payment of all obligations of the Purchaser now
or hereafter existing under the Note, whether for principal, interest, fees,
expenses or otherwise (all such obligations being the "Secured Obligations").
Without limiting the generality of the foregoing, this Agreement secures the
payment of all amounts that constitute part of the Secured Obligations and would
be owed by the Purchaser to the Seller under the Note but for the fact that they
are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Purchaser.
SECTION 3. Delivery of Security Collateral.
All certificates or instruments representing or evidencing Security
Collateral shall be delivered to and held by or on behalf of the Seller pursuant
hereto and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Seller. In addition, the Seller shall
have the right at any time to exchange certificates or instruments representing
or evidencing Security Collateral for certificates or instruments of smaller or
larger denominations.
SECTION 4. Representations and Warranties. The Purchaser represents and
warrants as follows:
(a) The chief place of business and chief executive office of the
Purchaser and the office where the Purchaser keeps its records concerning
the Collateral are located at address first specified above for the
Purchaser.
(b) The Purchaser is the legal and beneficial owner of the Collateral
free and clear of any lien, security interest, option or other charge or
encumbrance except for the security interest created by this Agreement and
the Shareholders Agreement, as such term is defined in the Share Purchase
Agreement. No effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any
recording office, except such as may have been filed in favor of the Seller
relating to this Agreement.
(c) This Agreement and the pledge of the Security Collateral pursuant
hereto create a valid and perfected first priority security interest in the
Collateral, securing the payment of the Secured Obligations, and all
filings and other
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actions necessary or desirable to perfect and protect such security
interest have been duly taken.
(d) No consent of any other person and no authorization, approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either (i)
for the grant by the Purchaser of the security interest granted hereby, for
the pledge by the Purchaser of the Security Collateral pursuant hereto or
for the execution, delivery or performance of this Agreement by the
Purchaser, (ii) for the perfection or maintenance of the pledge, assignment
and security interest created hereby (including the first priority nature
of such pledge or security interest) or (iii) for the exercise by the
Seller of its voting or other rights provided for in this Agreement or the
remedies in respect of the Collateral pursuant to this Agreement, except as
may be required in connection with the disposition of any portion of the
Security Collateral by laws affecting the offering and sale of securities
generally.
SECTION 5. Further Assurances. (a) The Purchaser agrees that from time to
time, at the expense of the Seller, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Seller may reasonably request, in order to
perfect and protect any pledge, assignment or security interest granted or
purported to be granted hereby or to enable the Seller to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, the Seller will execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Seller may
request, in order to perfect and preserve the pledge, assignment and security
interest granted or purported to be granted hereby.
(b) The Purchaser hereby authorizes the Seller to file one or more
financing or continuation statements, and amendments thereto, relating to all or
any part of the Collateral without the signature of the Purchaser where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) The Purchaser will furnish to the Seller from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Seller may reasonably request,
all in reasonable detail.
SECTION 6. Place of Perfection; Records. The Purchaser shall keep its chief
place of business and chief executive office and the office where it keeps its
records concerning the Collateral, at the location therefor specified in Section
15. The Purchaser shall not establish or open any office or place of business in
the United States of America without providing the Seller with at least 30 days'
prior written notice of such establishment or opening and such additional time
as may be required in order to take all actions and steps required, in the
reasonable judgment of the Seller, to ensure the validity, perfection and first
priority nature of the pledge and security interests in the Collateral created
hereunder.
SECTION 7. Voting Rights; Dividends; Etc. (a) So long as no "Event of
Default" under Section 2.01 of the Note (each such event being an "Event of
Default"), shall have occurred and be continuing:
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(i) The Purchaser shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Security Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement
or the Note; provided, however, that the Purchaser shall not exercise or
refrain from exercising any such right if, in the Seller's judgment, such
action would have a material adverse effect on the value of the Security
Collateral or any part thereof.
(ii) The Seller shall execute and deliver (or cause to be executed and
delivered) to the Purchaser all such proxies and other instruments as the
Purchaser may reasonably request for the purpose of enabling the Purchaser
to exercise the voting and other rights that it is entitled to exercise
pursuant to paragraph (i) above.
(b) Any and all
(i) dividends paid or payable other than in cash in respect of, and
instruments and other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Security Collateral,
(ii) dividends and other distributions paid or payable in cash in
respect of any Security Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus, and
(iii) cash paid, payable or otherwise distributed in redemption of, or
in exchange for, any Security Collateral shall be, and shall be forthwith
delivered to the Seller to hold as, Security Collateral and shall, if
received by the Purchaser, be received in trust for the benefit of the
Seller, be segregated from the other property or funds of the Purchaser and
be forthwith delivered to the Seller as Security Collateral in the same
form as so received (with any necessary indorsement).
(c) Upon notice to the Purchaser by the Seller following the occurrence and
during the continuance of an Event of Default, all rights of the Purchaser to
exercise or refrain from exercising the voting and other consensual rights that
it would otherwise be entitled to exercise pursuant to Section 7(a)(i) shall
cease, and all such rights shall thereupon become vested in the Seller, which
shall thereupon have the sole right to exercise or refrain from exercising such
voting and other consensual rights.
SECTION 8. Transfers and Other Liens; Additional Shares. (a) The Purchaser
shall not (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Collateral, or (ii)
create or suffer to exist any Lien upon or with respect to any of the Collateral
except for the pledge, assignment and security interest created by this
Agreement and the Shareholders Agreement, as such term is defined in the Share
Purchase Agreement.
(b) The Purchaser shall cause the Company not to issue any stock or other
securities in addition to or in substitution for the Pledged Shares, except to
the Purchaser, and (ii) deliver or otherwise transfer to the Seller (or its
seller) as pledgee hereunder, immediately upon its acquisition (directly or
indirectly) thereof, any and all additional shares of Company Stock or other
securities of the Company.
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SECTION 9. Seller Appointed Attorney-in-Fact. The Seller hereby irrevocably
appoints the Seller the Purchaser's attorney-in-fact, with full authority in the
place and stead of the Purchaser and in the name of the Purchaser or otherwise,
from time to time in the Seller's discretion, to take any action and to execute
any instrument that the Seller may deem necessary or advisable following the
occurrence and during the continuance of an Event of Default to accomplish the
purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, xxx for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under or
in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other instruments
and documents in connection with clause (a) above, and
(c) to file any claims or take any action or institute any proceedings
that the Seller may deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce the rights of the Seller with
respect to any of the Collateral.
SECTION 10. Seller May Perform. If the Purchaser fails to perform any
agreement contained herein, the Seller may itself perform, or cause performance
of, such agreement, and the expenses of the Seller incurred in connection
therewith shall be payable by the Purchaser under Section 13(b).
SECTION 11. The Seller's Duties. The powers conferred on the Seller
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody
of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Seller shall have no duty as to any Collateral, as
to ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Security Collateral,
whether or not the Seller has or is deemed to have knowledge of such matters, or
as to the taking of any necessary steps to preserve rights against any parties
or any other rights pertaining to any Collateral. The Seller shall be deemed to
have exercised reasonable care in the custody and preservation of any Collateral
in its possession if such Collateral is accorded treatment substantially equal
to that which the Seller accords its own property.
SECTION 12. Remedies. If any Event of Default shall have occurred and be
continuing:
(a) The Seller may exercise in respect of the Collateral, in addition
to other rights and remedies provided for herein or otherwise available to
it, all the rights and remedies of a secured party upon default under the
Uniform Commercial Code in effect in the State of New York at such time
(the "N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform
Commercial Code applies to the affected Collateral) and also may (i)
require the Purchaser to, and the Purchaser hereby agrees that it will at
its expense and upon request of the Seller forthwith, assemble all or part
of the Collateral as directed by the Seller and make it available to the
Seller at a place to be designated by the Seller that is reasonably
convenient to both parties and (ii) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at
public or private sale, at any of the Seller's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as
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the Seller may deem commercially reasonable. The Purchaser agrees that, to
the extent notice of sale shall be required by law, at least ten days'
notice to the Purchaser of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. The Seller shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Seller may
adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Seller in respect of any sale
of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Seller, be held by the Seller as
collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Seller pursuant to Section 13) in
whole or in part by the Seller for the ratable benefit of the Purchaser
against, all or any part of the Secured Obligations in such order as the
Seller shall elect. Any surplus of such cash or cash proceeds held by the
Seller and remaining after payment in full of all the Secured Obligations
shall be paid over to the Purchaser or to whomsoever may be lawfully
entitled to receive such surplus.
SECTION 13. Indemnity and Expenses. (a) Upon the occurrence and during the
continuance of an Event of Default, the Purchaser agrees to indemnify the Seller
from and against any and all claims, losses and liabilities growing out of or
resulting from this Agreement (including, without limitation, enforcement of
this Agreement), except claims, losses or liabilities resulting from the
Seller's gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction.
(b) The Purchaser will upon demand pay to the Seller the amount of any and
all reasonable expenses, including the reasonable fees and expenses of its
counsel and of any experts and Sellers, that the Seller may incur in connection
with (i) the administration of this Agreement, (ii) the custody, preservation,
use or operation of, or the sale of, collection from or other realization upon,
any of the Collateral, (iii) the exercise or enforcement of any of the rights of
the Seller hereunder or (iv) the failure by the Purchaser to perform or observe
any of the provisions hereof.
SECTION 14. Amendments; Waivers; Etc. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by the Purchaser
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Seller, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. No
failure on the part of the Seller to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.
SECTION 15. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic,
telex or cable communication) and, mailed, telegraphed, telecopied, telexed,
cabled or delivered to the Purchaser or the Seller, as the case may be, in each
case addressed to it at its address specified in the Share Purchase Agreement
or, as to either party, at such other address as shall be designated by such
party in a written notice to each other party complying as to delivery with the
terms of this Section. All such notices and other communications shall, when
mailed, telecopied, telegraphed, telexed or cabled, respectively, be effective
when deposited
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in the mails, telecopied, delivered to the telegraph company, confirmed by telex
answerback or delivered to the cable company, respectively, addressed as
aforesaid.
SECTION 16. Continuing Security Interest; Assignments Under the Note. This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the payment in full in cash of
the Secured Obligations, (b) be binding upon the Purchaser, its successors and
assigns and (c) inure, together with the rights and remedies of the Seller
hereunder, to the benefit of the Seller and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), the Seller
may assign or otherwise transfer all or any portion of its rights and
obligations under the Note held by it to any other person, and such other person
shall thereupon become vested with all the benefits in respect thereof granted
here, but only in accordance with the terms of Section 3.05 of the Note.
SECTION 17. Termination. Upon the payment in full in cash of the Secured
Obligations, the pledge, assignment and security interest granted hereby shall
terminate and all rights to the Collateral shall revert to the Purchaser. Upon
any such termination, the Seller will, at the Purchaser's expense, return the
certificate(s) representing the Pledged Shares to the Purchaser and execute and
deliver to the Purchaser such documents as the Purchaser shall reasonably
request to evidence such termination.
SECTION 18. Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial; Terms. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, except to the extent that the
validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York.
(b) (i) The Purchaser hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement, or for recognition or enforcement of any
judgment, and the Purchaser hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. The Purchaser agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement in the courts
of any jurisdiction. The Purchaser agrees that the process by which any suit,
action or proceeding in the City of New York is begun may be served on it solely
for purposes of disputes arising out of transactions contemplated hereby and
under the Note by being delivered to Akin, Gump, Strauss, Xxxxx & Xxxx L.L.P. at
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, X.X.X.
(ii) The Purchaser irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement in any New York State or federal court. The
Purchaser hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
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(c) The Purchaser hereby irrevocably waives all right to trial by jury in
any action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Agreement or the actions of the
Seller in the negotiation, administration, performance or enforcement thereof.
(d) Unless otherwise defined herein or in the Note, terms used in Article 9
of the N.Y. Uniform Commercial Code are used herein as therein defined.
IN WITNESS WHEREOF, the Purchaser has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
ALFA TELECOM LIMITED
By: /s/ X. Xxxxxxxx
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Name: X. Xxxxxxxx
Title: Director
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SCHEDULE I
PLEDGED SHARES
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CLASS OF
EQUITY PAR CERTIFICATE
GRANTOR ISSUER INTEREST VALUE No(s) NUMBER OF SHARES
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Alfa Telecom Limited Golden Telecom, Inc. Common $0.01 10,731,707
Stock
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