Page 54 of 96 Pages
EXHIBIT E
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 time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares; and
1
Page 55 of 96 Pages
(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 actions necessary or
desirable to perfect and protect such security interest have been duly
taken.
2
Page 56 of 96 Pages
(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:
----------------
(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
3
Page 57 of 96 Pages
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) ividends 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.
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
4
Page 58 of 96 Pages
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 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
5
Page 59 of 96 Pages
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 in the mails, telecopied, delivered to the telegraph
company, confirmed by telex answerback or delivered to the cable company,
respectively, addressed as aforesaid.
6
Page 60 of 96 Pages
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.
(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
7
Page 61 of 96 Pages
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:
--------------------------------
Name:
Title:
8
Page 62 of 96 Pages
SCHEDULE I
PLEDGED SHARES
--------------------------------------------------------------------------------------------------------
Class of
Equity Par Certificate Number of Shares
Grantor Issuer Interest Value No(s)
--------------------------------------------------------------------------------------------------------
Alfa Telecom Limited Golden Telecom, Inc. Common $0.01 10,731,707
Stock
--------------------------------------------------------------------------------------------------------
9
