EXHIBIT 11.1
IRREVOCABLE PROXY AND POWER OF ATTORNEY
IRREVOCABLE PROXY AND POWER OF ATTORNEY (the "Proxy and Power of
Attorney"), dated as of December 1, 2004, among, Columbus Nova Investments VIII
Ltd., a Bahamas company ("CNI"), and each of the persons whose names are set
forth on the signature page hereof (each, a "Stockholder," and together with
CNI, the "Parties"). Capitalized terms used herein shall have the meaning
assigned to them in the Subscription Agreement (as defined below), save as
otherwise provided herein or unless the context otherwise requires.
WHEREAS, each Stockholder is the owner beneficially and of record of
such number of shares of Common Stock, par value $.01 (the "Common Stock") of
Moscow CableCom Corp. (the "Company") as indicated in Schedule A hereto (the
"Covered Shares");
WHEREAS, on August 26, 2004, CNI and the Company entered into a Series
B Convertible Preferred Stock Subscription Agreement (the "Subscription
Agreement"), providing, among other things, for the acquisition by CNI, upon the
terms and subject to the conditions thereof, of 4,500,000 shares of Series B
Convertible Preferred Stock of the Company, par value $.01 per share (the
"Series B Preferred Stock"), having voting and other rights identical to those
of the shares of Common Stock, with the exception of having a liquidation
preference over the shares of Common Stock for a period of four years and being
convertible into shares of Common Stock at the option of the holder thereof;
WHEREAS, in order to comply with the National Association of Securities
Dealers, Inc. Marketplace Rule 4351, the Company and CNI intend to enter into an
amendment to the Subscription Agreement (the "Amendment"), as a result of which
the voting rights of the Series B Preferred Stock may be less than the voting
rights of the shares of Common Stock; and
WHEREAS, as an inducement for CNI to enter into the Amendment, the
Parties have agreed to enter into this Proxy and Power of Attorney;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the Parties agree as follows:
1. Each Stockholder hereby irrevocably constitutes, appoints, authorizes
and empowers CNI, during the term of this Proxy and Power of Attorney,
as its sole and exclusive true and lawful proxy and attorney-in-fact,
with full power of substitution, to vote and exercise all voting and
related rights with respect to all of the Covered Shares (and any and
all securities issued or issuable in respect thereof), for and in the
name, place and stead of such Stockholder, at CNI's sole discretion, at
any annual, special or other meeting of the stockholders of the
Company, and at any adjournment or adjournments thereof, or pursuant to
any consent in lieu of a meeting or otherwise, with respect to any
matter that may be submitted for a vote of stockholders of the Company.
All power and authority hereby conferred is coupled with an interest
and is irrevocable. In the event that CNI is unable to exercise such
power and authority for any reason, each Stockholder agrees that it
will vote all the Covered Shares owned by it in accordance with CNI's
written instructions, at any such meeting or adjournment thereof.
2. Restrictions on Transfer of Covered Shares.
(a) During the period beginning on the Closing Date under the
Subscription Agreement and ending on the first anniversary of the
Closing Date, each Stockholder hereby covenants and agrees that it
will not, and will not agree to, directly or indirectly, sell,
transfer, assign, pledge, hypothecate, cause to be redeemed or
otherwise dispose of any of the Covered Shares or grant any proxy
or interest in or with respect to the Covered Shares ("Transfer")
or deposit any Covered Shares into a voting trust or enter into a
voting agreement or arrangement with respect to such Covered Shares
to any Person, unless (i) such Person agrees to assume the
obligations hereunder of the transferring Stockholder with respect
to such Covered Shares so Transferred, (ii) such Person executes a
written instrument acknowledging that such Person agrees to be
bound by the terms of this Proxy and Power of Attorney and (iii)
the transferring Stockholder provides prompt notice to CNI of such
Transfer.
(b) During the Period beginning on the first anniversary of the Closing
Date under the Subscription Agreement and ending upon the
termination of this Proxy and Power of Attorney pursuant to Section
10 hereof, each Stockholder hereby covenants and agrees that it
will not, and will not agree to, directly or indirectly, Transfer
or deposit any Covered Shares into a voting trust or enter into a
voting agreement or arrangement with respect to such Covered Shares
so Transferred, unless such Stockholder complies with the
procedures set forth in clauses (i) through (iv) of this Subsection
2(b):
(i) If a Stockholder (the "Proposing Stockholder") proposes to
Transfer (a "Proposed Transfer") any of its Covered Shares
(the "Offered Shares"), the Proposing Stockholder shall
submit a written notice (an "Offer Notice") to CNI describing
the material terms and conditions of the Proposed Transfer in
reasonable detail, including, without limitation, the
proposed purchase price (the "Offer Price").
(ii) Upon receipt of an Offer Notice, CNI shall have the right,
but not the obligation, for a period of three (3) Business
Days following receipt of such Offer Notice (the "Option
Period"), to elect to purchase the Offered Shares on the same
terms and conditions as are set forth in the Offer Notice.
(iii) In the event that CNI exercises its right to purchase all but
not less than all of the Offered Shares in accordance with
clause (ii) above, then the Proposing Stockholder must sell
the Offered Shares to CNI and CNI must purchase such Offered
Securities from the Stockholder on the same terms and
conditions as are set forth in the Offer Notice, but not
prior to three (3) Business Days after CNI gives the
Proposing Stockholder notice of its election to purchase the
Offered Shares.
(iv) Upon the earlier to occur of (i) rejection of the Offered
Shares by CNI and (ii) the expiration of the Option Period
without CNI electing to purchase all of the Offered Shares
following the proper delivery of the Offer Notice, the
Proposing Stockholder shall have a sixty (60) day period
during which to effect a Transfer of any or all of the
Offered Shares, on substantially the same or more favorable
(as to the Proposing Stockholder) terms and conditions as
were set forth in the Offer Notice at a price not less than
ninety percent (90%) of the Offer Price. If the Proposing
Stockholder does not consummate the Transfer of the Offered
Shares in accordance with the foregoing time limitations,
then the right of the Proposing Stockholder to effect such
Transfer pursuant to this clause (iv) shall terminate and the
Proposing Holder shall be required to comply with the
procedures set forth in clauses (i) through (iv) of this
Subsection 2(b) with respect to any proposed Transfer of
Covered Shares.
3. Each Stockholder represents and warrants to CNI that, as of the date
hereof such Stockholder (i) owns all of the Covered Shares beneficially
and of record, (ii) owns all of the Covered Shares free and clear of
all liens, charges, claims, encumbrances and security interests of any
nature whatsoever; and except as provided herein, and (iii) has not
granted any proxy to any Person (other than CNI) with respect to any
Covered Shares or deposited such Covered Shares into a voting trust.
4. Any securities of the Company to be issued or issuable to the
Stockholder in respect of Covered Shares during the term of this Proxy
and Power of Attorney shall be deemed Covered Shares for purposes of
this Proxy and Power of Attorney.
5. In the event that, as of the Closing Date, the aggregate number of
votes to which: (i) the 4,500,000 shares of Series B Preferred Stock
acquired by CNI pursuant to the Subscription Agreement are entitled,
(ii) the total number of Covered Shares that are subject to this Proxy
and Power of Attorney are entitled and (iii) the total number of shares
of Common Stock covered by any proxies to be entered into in
satisfaction of Section 6.03(h) of the Subscription Agreement (the
"Additional Proxies") are entitled, shall exceed the number of votes to
which 4,500,000 shares of Common Stock shall be entitled as of the
Closing Date, the aggregate number of Covered Shares that are subject
to this Proxy and Power of Attorney and the shares of Common Stock
covered by any Additional Proxies shall be reduced by the number of
shares of Common Stock equal to such excess number of votes, and such
reduction in the number of Covered Shares (and such other shares of
Common Stock subject to the Additional Proxies) shall be allocated pro
rata among the Stockholders (and any stockholders that are parties to
the Additional Proxies) on the basis of each such stockholder's number
of shares of Common Stock that are subject to this Proxy and Power of
Attorney or the Additional Proxies, as the case may be.
6. In the event that CNI converts any of its the shares of Series B
Preferred Stock into shares of Common Stock, the aggregate number of
Covered Shares that are subject to this Proxy and Power of Attorney
(and the shares of Common Stock covered by any Additional Proxies)
shall be reduced by such number of shares of Common Stock having voting
power equal to the additional voting power acquired by CNI solely as a
result of such conversion and such reduction in the number of Covered
Shares (and such other shares of Common Stock subject to the Additional
Proxies) shall be allocated pro rata among the Stockholders (and any
stockholders that are parties to the Additional Proxies) on the basis
of each such stockholder's number of shares of Common Stock that are
subject to this Proxy and Power of Attorney or the Additional Proxies,
as the case may be ("Total Covered Shares"); provided, however, that
the number of Total Covered Shares shall be reduced pursuant to this
Section 6 only if, and to the extent that, the total number of: (i) the
votes to which the Total Covered Shares (without giving effect to such
reduction pursuant to this Section 6) are entitled, (ii) the votes to
which the 4,500,000 shares of Series B Preferred Stock acquired by CNI
pursuant to the Subscription Agreement are entitled when voting as one
class with the Common Stock and (iii) the additional votes acquired by
CNI solely as a result of the conversion, shall exceed the number of
votes to which 4,500,000 shares of Common Stock are entitled at the
time of the conversion.
7. This Proxy and Power of Attorney shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving
effect to any choice or conflict of law provision or rule (whether of
the State of Delaware or any other jurisdiction) that would cause the
application of the Laws of any jurisdiction other than the State of
Delaware.
8. This Proxy and Power of Attorney shall be binding upon, inure to the
benefit of, and be enforceable by the successors and permitted assigns
of the Parties hereto.
9. This Proxy and Power of Attorney is subject to the following conditions
precedent:
(i) the Closing under the Subscription Agreement having occurred
on or prior to March 31, 2005, or such later date as the
Company and CNI may determine; and
(ii) as of the Closing Date, the shares of Series B Preferred
Stock having less than one (1) vote per share.
10. This Proxy and Power of Attorney shall terminate and have no further
force or effect upon the earlier to occur of: (a) four years from the
Closing Date, (b) CNI having converted all but not less than all of its
shares of Series B Preferred Stock into shares of Common Stock, (c)
such time as CNI's ownership of the issued and outstanding capital
stock of the Company (calculated on an as converted basis) falls below
ten percent (10%) and (d) in the event that the weighted average
closing price for 20 consecutive trading days on the Nasdaq National
Market Systems (or such other principal national securities exchange on
which the shares of Common Stock are then listed or admitted to
trading) of one share of Common Stock exceeds US$15.00.
11. Each Stockholder agrees and represents that this Proxy and Power of
Attorney is coupled with an interest sufficient in law to support an
irrevocable power and shall not be terminated by any act of such
Stockholder, by lack of appropriate power or authority or by the
occurrence of any other event or events.
12. The Parties acknowledge and agree that performance of their respective
obligations hereunder will confer a unique benefit on the other and
that a failure of performance will not be compensable by money damages.
The Parties therefore agree that this Proxy and Power of Attorney shall
be specifically enforceable and that specific enforcement and
injunctive relief shall be available to CNI for any breach of any
agreement, covenant or representation hereunder. This Proxy and Power
of Attorney shall revoke all prior proxies given by the Stockholder at
any time with respect to the Covered Shares.
13. Each Stockholder will, upon request, execute and deliver any additional
documents and take such actions as may reasonably be deemed by CNI to
be necessary or desirable to complete the Proxy and Power of Attorney
granted herein or to carry out the provisions hereof.
14. If any term, provision, covenant, or restriction of this Proxy and
Power of Attorney is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Proxy and Power of Attorney shall
remain in full force and effect and shall not in any way be affected,
impaired or invalidated.
15. All notices and other communications hereunder shall be in writing and
shall be deemed duly given (i) on the date of delivery if delivered
personally, (ii) on the date of confirmation of receipt (or, the first
Business Day following such receipt if the date is not a Business Day
or the receipt is after 5 p.m. New York time) of transmission by
facsimile, or (iii) on the date of confirmation of receipt (or, the
first Business Day following such receipt if the date is not a Business
Day or the receipt is after 5 p.m. New York time) if delivered by
courier. Subject to the foregoing, all notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as
may be designated in writing by the Party to receive such notice:
(a) if to CNI, to:
Columbus Nova Investments VIII Ltd.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxx
Attention: Xxxx Xxxxxx
Facsimile: x0-000-000-0000
with a courtesy copy (which shall not constitute notice to CNI) to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xx xxx Xxxxx 0
00000 Xxxxxxxxx xx Xxxx
Xxxxxxx
Attention: Xxxxxx Xxxxxxx
Facsimile: x00-00-00000000
(b) if to a Stockholder, to the address are set forth next to
such Stockholder's name on the signature page hereof.
16. This Proxy and Power of Attorney may be executed in any number of
counterparts, each of which shall be deemed to be an original but both
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have caused this Proxy and Power of
Attorney to be duly executed on the date first above written.
COLUMBUS NOVA INVESTMENTS VIII LTD.
By:________________________
Name:
Title:
XXXXXX X. XXXXX, XX.
By:________________________
Name:
Title:
Address:
THE ANGLO AMERICAN SECURITY FUND, L.P.
By:________________________
Name:
Title:
Address:
XXXXXXX X. XXXXX
By:________________________
Name:
Title:
Address:
Schedule A - Covered Shares
|------------------------------------------|--------------------------------|
| Name of Stockholder | Number of Covered Shares |
|------------------------------------------|--------------------------------|
|------------------------------------------|--------------------------------|
| Xxxxxx X. Xxxxx, Xx. | 150,000 |
|------------------------------------------|--------------------------------|
|------------------------------------------|--------------------------------|
| The Anglo American Security Fund, L.P. | 25,000 |
|------------------------------------------|--------------------------------|
|------------------------------------------|--------------------------------|
| Xxxxxxx X. Xxxxx | 25,000 |
|------------------------------------------|--------------------------------|
