Eco Telecom Limited
Suite 0, 0 Xxxxx Xxxxx
Xxxxxxxxx
May 30, 2001
Open Joint Stock Company "Vimpel-Communications"
10 Ulitsa 8-Xxxxx
Building 14
000000 Xxxxxx
Xxxxxxx Xxxxxxxxxx
Xx. Xxxxxx Xxxxxxxxxx Xxxxx
10 Ulitsa 8-Xxxxx
Building 14
000000 Xxxxxx
Xxxxxxx Xxxxxxxxxx
Overture Limited
Richmond House
00 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx XX 00
Xxxxxxx
Telenor East Invest AS
Xxxxxxxxxxxxxxxxx 0
X-0000 Xxxx
Xxxxxx
Gentlemen:
We refer to the Primary Agreement dated the date hereof among Open Joint
Stock Company "Vimpel-Communications" ("VIP"), Telenor East Invest AS
("Telenor") and Eco Telecom Limited ("Eco Telecom") (the "Primary Agreement")
and the Share Purchase Agreement entered into between Overture Limited
("Overture") and Eco Telecom (the "Share Purchase Agreement") pursuant to which,
Overture has agreed to sell to Eco Telecom, and Eco Telecom has agreed to
purchase from Overture, (i) 6,426,600 issued shares of preferred stock of VIP,
par value 0.005 rubles per share (the "Preferred Stock") and (ii) 16,362 shares
of common stock of VIP. Capitalized terms used by not otherwise defined herein
shall have the meanings ascribed to such terms in the Primary Agreement.
Eco Telecom would like to confirm the rights associated with the Preferred
Stock to be acquired by it pursuant to the Share Purchase Agreement, and VIP,
Telenor, Overture and Xx. Xxxxx would like to confirm the obligations associated
with the Preferred Stock to be acquired by Eco Telecom. Accordingly, for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Eco Telecom, VIP, Telenor, Overture and Xx. Xxxxx (each, a "Party"
and, collectively, the "Parties") agree as follows:
1. Representations and Warranties. Each Party represents and warrants,
------------------------------
severally and not jointly, that on and as of the date hereof, (i) such Party (if
it is a corporate entity) has all necessary corporate power to enter into this
Agreement, and this Agreement has been duly authorized by all necessary
corporate action on the part of such Party, (ii) this Agreement constitutes the
legal, valid and binding obligation of such Party, enforceable against such
Party in accordance with its terms, (iii) such Party's execution, delivery and
performance of this Agreement will not violate or conflict with any agreement to
which such Party is a party or which may be binding on such Party and (iv) such
Party has received all consents and approvals which may be required for such
Party to execute, deliver and perform its obligations under this Agreement.
2. Rights and Obligations Relating to the Shares. Each Party
---------------------------------------------
acknowledges the rights and obligations relating to the Preferred Stock, as set
forth in (a) the Decision on Issuance of Securities, approved by the Board of
Directors of VIP (Protocol No. 12, dated September 2, 1996) and registered by
the Department of Finance of the city of Moscow on September 6, 1996 under No.
73-1-6945, and the Decision on Issuance of Securities, approved by the Board of
Directors of VIP (Protocol No. 15, dated October 7, 1996) and registered by the
Department of Finance of the city of Moscow on October 8, 1996 under No.
73-1-7100, (b) the Charter, and (c) the Supplemental Agreements.
3. Conversion Premium.
------------------
(a) Eco Telecom expressly acknowledges the obligation of any holder of
the Preferred Stock to pay, prior to the conversion of such Preferred
Stock into Common Stock, an amount in cash equal to the fair market
value of the Common Stock into which the Preferred Stock is then
convertible, such fair market value to be determined at the time of
such conversion (the "Conversion Premium") and agrees to be bound by
such obligation upon its acquisition of the Preferred Stock.
(b) Eco Telecom expressly agrees that (a) Eco Telecom shall pay the
Conversion Premium upon the conversion of any or all of the Preferred
Stock, and (b) if for any circumstances irrespective of their nature,
the Conversion Premium cannot be paid as a "conversion premium", then
Eco Telecom shall, on the conversion date, pay to VIP "forgiveness"
money (as defined in Article 409 of the Civil Code of the Russian
Federation) in cash form, the sum being equal to the fair market value
of the Common Stock (determined at the date of conversion) into which
such Preferred Stock is then converted.
4. Validity of Preferred Stock.
---------------------------
(a) Subject to Eco Telecom's compliance with clause (3) hereof and
Section 7.04 of the VIP Primary Agreement, and subject to clause 4(b)
hereof, each of VIP, Telenor, Overture and Xx. Xxxxx covenants and
agrees with Eco Telecom, severally and not jointly, that such Party
and its Controlled Affiliates shall not, at any time, challenge or
question the due authorization or valid issuance of the Preferred
Stock, or the transfer of the Preferred Stock under any of the Zimin
Preferred Stock Agreements (collectively, the "Preferred Stock
Transfers") or the validity of the relevant clauses of the charter of
VIP regarding the Preferred Stock, in each case for any reason,
whether arising under the Laws of the Russian Federation or otherwise,
including but not
limited to any challenge which relates to the payment for the shares
of Preferred Stock in connection with any of the Preferred Stock
Transfers. If any of the Preferred Stock Transfers is deemed invalid
and, as a result thereof, VIP or any of its Controlled Affiliates, or
Xx. Xxxxx or any of his Controlled Affiliates, or Overture or any of
its Controlled Affiliates, acquires any or all of the Preferred Stock
(the "Acquired Preferred Stock"), then VIP, Overture or Xx. Xxxxx,
respectively, shall transfer, or shall cause its or his Controlled
Affiliates, respectively, to transfer, such Acquired Preferred Stock
to Eco Telecom at a price equal to the greater of the aggregate
nominal value of the Acquired Preferred Stock and the price that VIP,
Overture or Zimin or its Controlled Affiliate paid for such Acquired
Preferred Stock.
(b) Notwithstanding clause 4(a), the covenants of VIP, Telenor,
Overture and Xx. Xxxxx hereunder shall be null and void, and be of no
further force or effect, and Eco Telecom shall not have any claim
(whether in law or in equity) for any breach hereunder by any such
Party, if Eco Telecom (i) challenges or raises any questions with any
Governmental or Regulatory Authority or any other Person the
requirement to pay the Conversion Premium upon conversion of any or
all of the Preferred Stock into Common Stock, or (ii) attempts to
convert any or all of the Preferred Stock into Common Stock without
payment of the Conversion Premium or the "forgiveness" money referred
to in clause 3 hereof or Section 4.2 of the Supplemental Agreement, or
(iii) fails to adhere to the terms of Section 4.3 of the Supplemental
Agreement.
5. Assignment. This Agreement shall not be assignable by any Party
----------
hereto, unless the prior written consent of the other Parties is obtained;
provided, however, that Eco Telecom may, with the prior written consent of VIP,
-------- -------
transfer its rights hereunder (subject to the obligations hereunder) to any
Person to which Eco Telecom transfers its rights and obligations with respect to
the Preferred Stock in accordance with the terms of the Share Purchase Agreement
and Section 7.04(d) of the Primary Agreement.
6. Binding Effect. This Agreement is binding upon, inures to the
--------------
benefit of and is enforceable by each of the Parties and each Party's successors
and permitted assigns.
7. 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 any conflicts of laws principles thereof which would
result in the application of the laws of another jurisdiction.
8. Arbitration. The provisions of Section 13.11 of the Primary
-----------
Agreement are incorporated by reference herein, as if set forth in full herein,
mutatis mutandis.
Very truly yours,
ECO TELECOM LIMITED
/s/ Xxxxx Xxxxxxxxx
By________________________
Xxxxx Xxxxxxxxx
Attorney-in-Fact
Agreed to and Accepted:
OPEN JOINT STOCK COMPANY "VIMPEL-COMMUNICATIONS"
/s/ Xx Xxxxxx
By________________________
Xx Xxxxxx
Chief Executive Officer and General Director
/s/ Xxxxxxxx Xxxxxxxxx
By________________________
Xxxxxxxx Xxxxxxxxx
Chief Accountant
TELENOR EAST INVEST AS
/s/ Tron Xxxxx
By________________________
Tron Xxxxx
Attorney-in-Fact
/s/ Xx. Xxxxxx Xxxxxxxxxx Xxxxx
__________________________________
Xx. Xxxxxx Xxxxxxxxxx Xxxxx
OVERTURE LIMITED
/s/ Xx. Xxxxxx Xxxxxxxxxx Xxxxx
By________________________________
Xx. Xxxxxx Xxxxxxxxxx Xxxxx
Attorney-in-Fact
