Exhibit 4.11.1
SHAREHOLDERS AGREEMENT
Dated as of August 19, 2003
between and among
Golden Telecom, Inc.,
Alfa Telecom Limited,
Xxx Telenor East Invest AS,
OAO Rostelecom,
Capital International Global Emerging Markets Private Equity Fund, L.P.,
Cavendish Nominees Limited
and
First NIS Regional Fund SICAV
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION........................................1
1.1 DEFINITIONS...........................................................1
1.2 INTERPRETATION........................................................7
2. REPRESENTATIONS AND WARRANTIES........................................8
2.1 REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS....................8
2.2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................9
3. CERTAIN CORPORATE MATTERS............................................10
3.1 NOMINATION AND REMOVAL OF DIRECTORS..................................10
3.2 DISCLOSURE OF INTERESTS..............................................14
3.3 SPECIAL TRANSACTION PROCEDURES.......................................14
3.4 PURCHASE RIGHTS OF SHAREHOLDERS......................................15
3.5 TENDER OFFERS........................................................16
3.6 BUSINESS COMBINATION.................................................17
3.7 COMPLIANCE WITH SECURITIES LAWS......................................17
4. TRANSFERS............................................................17
4.1 GENERAL..............................................................17
4.2 TRANSFERS TO PERMITTED TRANSFEREES...................................18
4.3 RIGHT OF FIRST OFFER.................................................18
4.4 TELENOR'S AND ALFA'S TAG ALONG RIGHTS................................19
4.5 OTHER SHAREHOLDERS' TAG ALONG RIGHTS.................................20
4.6 PURCHASES FROM BARINGS OR CIG........................................20
4.7 OTHER TRANSFER-RELATED PROVISIONS....................................21
4.8 PLEDGES..............................................................21
5. OTHER ARRANGEMENTS...................................................23
6. TERM AND TERMINATION.................................................23
7. MISCELLANEOUS........................................................24
7.1 SPECIFIC PERFORMANCE.................................................24
7.2 WAIVERS; REMEDIES....................................................24
7.3 AMENDMENTS...........................................................24
7.4 NO ASSIGNMENT; BINDING EFFECT; NO THIRD PARTY BENEFICIARIES..........24
7.5 SEVERABILITY.........................................................24
7.6 FURTHER ASSURANCES...................................................25
7.7 ENTIRE AGREEMENT.....................................................25
7.8 NOTICES..............................................................25
7.9 GOVERNING LAW........................................................28
7.10 ARBITRATION; WAIVER OF SOVEREIGN IMMUNITY............................29
7.11 COUNTERPARTS; LANGUAGE...............................................30
SCHEDULES AND EXHIBITS
SCHEDULE 1 - SHARES HELD BY SHAREHOLDERS AS OF EFFECTIVE DATE
2.1(d) - CONSENTS AND APPROVALS OF SHAREHOLDERS SCHEDULE
2.1(h) - LIENS
2.1(i) - EXCEPTIONS TO SOLE POWER OF DISPOSITION OF SHAREHOLDERS
2.2(e) - CONSENTS AND APPROVALS OF COMPANY
EXHIBIT A - FORM OF ENDORSEMENT
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SHAREHOLDERS AGREEMENT dated as of August 19, 2003 (this "Agreement") between
and among Golden Telecom, Inc., a corporation organized under the laws of the
State of Delaware, United States of America (the "Company"), Alfa Telecom
Limited, a company organized under the laws of the British Virgin Islands
("Alfa"), Xxx Telenor East Invest AS, a company organized under the laws of
Norway ("Telenor"), OAO Rostelecom, an open joint stock company organized under
the laws of the Russian Federation ("RTK"), Capital International Global
Emerging Markets Private Equity Fund, L.P., a limited partnership organized
under the laws of the State of Delaware, United States of America ("CIG"),
Cavendish Nominees Limited, a limited liability company organized under the laws
of Guernsey ("Cavendish"), and First NIS Regional Fund SICAV, a private
institutional fund organized under the laws of Luxembourg ("First NIS" and
together with Cavendish, collectively, "Barings").
WITNESSETH
WHEREAS, Alfa, RTK, CIG and Barings currently hold shares of Common Stock
(as defined below);
WHEREAS, under the Share Exchange Agreement dated as of the date hereof
between Telenor and the Company (the "Share Exchange Agreement"), Telenor will
acquire shares of Common Stock;
WHEREAS, a condition to the obligations of Telenor and the Company under
the Share Exchange Agreement is that the Company and the Shareholders enter into
this Agreement; and
WHEREAS, Alfa, Telenor, RTK, CIG, Barings and the Company wish to enter
into this Agreement in respect of certain matters of corporate governance,
including the composition of the board of directors of the Company and the
conduct of the affairs of the Company, and the other matters described herein.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
As used in this Agreement, the following terms shall have the following
meanings:
"Action" means any legal, administrative, governmental or regulatory
proceeding or other action, suit, proceeding, claim, arbitration, mediation,
alternative dispute resolution procedure, inquiry or investigation by or before
any Governmental or Regulatory Authority.
"Adjustment Percentage" means (a) in the case of any Shareholder who, as at
the Effective Date, is entitled to designate three (3) Directors, thirty percent
(30%) of all of the issued and outstanding shares of Voting Stock and (b) in the
case of any Shareholder who, as at the Effective Date, is entitled to designate
two (2) Directors, ten percent (10%) of all of the issued and outstanding shares
of Voting Stock.
"Affected Shareholder" has the meaning specified in Section 3.1(d).
"Affiliate" means, with respect to any Person, any other Person who
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 spouse of such
Person,
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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 specified herein, directly or indirectly, has a substantial
beneficial interest, and any Person who is controlled by any such trust or
estate; provided always that, in the case of CIG, an Affiliate of CIG shall
include only those Affiliates in which Capital International, Inc. holds,
directly or indirectly, through one or more intermediaries, more than a majority
of the outstanding economic ownership interests of that Person. As used in this
definition, "control" (including, with its correlative meanings, "controlled by"
and "under common control with") means, 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 a Person.
"Agreement" has the meaning specified in the preamble hereto.
"Alfa" has the meaning specified in the preamble hereto.
"ARCO" means the Agency for Restructuring of Credit Organizations (Agenstvo
po Restruckturizatzii Kreditnykh Organizaziy) of the Russian Federation.
"Assets and Properties" means, 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.
"Authorization" means any consent, permission, waiver, allowance, novation,
authorization, declaration, filing, registration, notification, application,
license, permit, certificate, variance, exemption, franchise or other approval
issued, granted, given or otherwise made available by, or required to be filed
with, any Governmental or Regulatory Authority or pursuant to any law.
"Barings" has the meaning specified in the preamble hereto.
"Board" means the board of directors of the Company.
"Business" means fixed mobile, consumer and business Internet access, CDMA,
data, Internet Protocol and other similar telecommunications businesses, but
excluding mobile, mobile Internet and satellite telecommunications businesses.
"Business Combination" has, in relation to the Company, the meaning
specified in Section 203(c)(3) of the DGCL.
"Business Day" means 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.
"Cavendish" has the meaning specified in the preamble hereto.
"Change of Control" means, with respect to any Shareholder or any
Controlling Person of such Shareholder, (a) the sale or other disposition of all
or substantially all of such Shareholder's or such Controlling Person's Assets
and Properties, in one or a series of related transactions, to any Person or
Persons (other than a Controlling Person of such Shareholder or any Controlled
Affiliate or Controlled Affiliates of such Controlling Person), (b) the sale or
other disposition of more than fifty
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percent (50%) of the securities having ordinary voting power for the election of
directors or other governing body of such Shareholder or Controlling Person, in
one or a series of related transactions, to any Person or Persons (other than a
Controlling Person of such Shareholder or any Controlled Affiliate or Controlled
Affiliates of such Controlling Person), (c) the merger or consolidation of such
Shareholder or Controlling Person with or into another Person or the merger of
another Person into such Shareholder or Controlling Person with the effect that
any Person or Persons other than the existing shareholders of such Shareholder
or Controlling Person prior to such transaction own or control, directly or
indirectly, more than fifty (50%) of the securities having ordinary voting power
for the election of directors or other governing body of the Person surviving
such merger, or the Person resulting from such consolidation or (d) the
liquidation or dissolution of such Shareholder or Controlling Person; provided,
however, that a Change of Control shall not include (i) a bona fide underwritten
public offering of the capital stock of such Shareholder or any Controlling
Person of such Shareholder, or (ii) for purposes of Article 4, any of (A) the
sale of all or substantially all of the assets of Telenor ASA, Telenor
Communication AS or Telenor Business Solutions AS, (B) the sale of more than
fifty percent (50%) of the securities having ordinary voting power for the
election of directors or other governing body of Telenor ASA, Telenor
Communication AS or Telenor Business Solutions AS, (C) the liquidation or
dissolution of Telenor ASA, Telenor Communication AS or Telenor Business
Solutions AS, (D) any merger, consolidation, divestiture or de-merger to which
Telenor ASA, Telenor Communication AS or Telenor Business Solutions AS is a
party, or (E) the transfer of more than fifty percent (50%) of the issued and
outstanding shares of OAO Svyazinvest to any Person other than a Shareholder or
an Affiliate of a Shareholder.
"CIG" has the meaning specified in the preamble hereto.
"Common Stock" means the Company's common stock, par value $0.01 per share,
as the same may be constituted from time to time.
"Company" has the meaning specified in this preamble hereto.
"Controlled Affiliate" means, with respect to any Person, any Affiliate of
such Person 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 thereof or more than fifty percent
(50%) of the partnership or other ownership interests therein (other than as a
limited partner).
"Controlling Person" means, with respect to any Person, any other Person
which 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 first Person or more than fifty percent (50%) of
the partnership or other ownership interests therein (other than as a limited
partner of such first Person).
"Co-Sale Notice" has the meaning specified in Section 4.4(a).
"Designation Table" means the table set out in Section 3.1(i).
"DGCL" means the General Corporation Law of the State of Delaware.
"Director" means a member of the Board.
"Direct or Indirect Financial Interest" means, with respect to any
Director, a financial benefit to (a) such Director, (b) any Affiliate of such
Director, (c) such Director's employer or any of its Controlling Persons or
Affiliates or (d) the Shareholder who has designated such Director as a member
of the Board or any of its Controlling Persons or Affiliates.
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"Disinterested Director" means (a) for purposes of Sections 3.4 and 4.2(b),
any Director who does not have a Direct or Indirect Financial Interest in the
matter subject to consideration by the Board and (b) for purposes of Section
3.6, any Director who is neither an officer nor an employee of the Company, nor
a Person employed, designated as a member of the Board or otherwise controlled
by or under common control with a Shareholder or any of its Controlling Persons
or Affiliates at the time such Shareholder or any of its Controlling Persons or
Affiliates proposes to engage in a Business Combination with the Company.
"Endorsement" means an endorsement to this Agreement in the form of Exhibit
A.
"Effective Date" means the latter to occur of (a) the date on which the
board of directors of RTK has ratified and approved RTK's execution of this
Agreement and the other Principal Agreements to which RTK is a party and (b) the
date on which the Closing under (and as defined in) the Share Exchange Agreement
has occurred.
"Enforcement Action" has the meaning specified in Section 4.8(b)(i).
"Enforcement Notice" has the meaning specified in Section 4.8(b)(i).
"Equity Plan" means the 1999 Equity Plan of the Company, as amended on June
26, 2001, and as otherwise amended from time to time, and any other equity
participation plan approved by the Company's stockholders.
"Existing Shareholders Agreement" means the Shareholders Agreement dated as
of September 5, 2002 between and among GTI, Alfa, RTK, CIG and Barings.
"Fair Market Value" means, as of the date of determination thereof, the
average of the Market Prices for the shares of Voting Stock for the thirty (30)
trading days immediately preceding such date of determination.
"Financial Expert" has the meaning specified in the Marketplace Rules and
the relevant rules of the SEC, in each case, as interpreted by the Board.
"First NIS" has the meaning specified in the preamble hereto.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, arbitral panel or tribunal, legislature, government, ministry,
committee, inspectorate, authority, agency, commission, official or other
competent authority of any country or state, as well as any county, city or
other political subdivision of any of the foregoing.
"Inclusion Notice" has the meaning specified in Section 4.5(b).
"Inclusion Right" has the meaning specified in Section 4.5(c).
"Independent Director" has the meaning specified in the Marketplace Rules
and the relevant rules of the SEC, in each case, as interpreted by the Board.
"Initial Period" means the period commencing on the Effective Date and
ending on the second anniversary thereof.
"Initiating Directors" has the meaning specified in Section 3.3(a).
"Initiation Notification" has the meaning specified in Section 3.3(b).
"Jointly Designated Director" has the meaning specified in Section
3.1(a)(ii).
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"Lien" means 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.
"Market Price" means the price of one share of Voting Stock on the relevant
date, determined (a) on the basis of the last reported sale price regular way on
the Nasdaq National Market or (b) if there is no such reported sale price on
such day, on the basis of the average of the reported closing bid and asked
prices regular way on the Nasdaq National Market.
"Marketplace Rules" means the National Association of Securities Dealers
Marketplace Rules.
"New Securities" has the meaning specified in Section 3.4(a).
"Non-Pledging Shareholder" has the meaning specified in Section 4.8(a).
"Offer" means a bona fide offer (whether or not solicited) to purchase
Shares owned by Alfa or Telenor that Alfa or Telenor, as applicable, desires to
accept.
"Offer Notice" has the meaning specified in Section 4.3(a).
"Offered Shares" has the meaning specified in Section 4.3(a).
"Offering Shareholder" has the meaning specified in Section 4.4(a).
"Parties" means the Company, Alfa, Telenor, RTK, CIG, Cavendish and First
NIS.
"Permitted Transferee" means, with respect to any Shareholder, any
Controlling Person of such Shareholder, or any Controlled Affiliate of any such
Controlling Person or Shareholder; provided that, (a) in the case of Cavendish,
Baring Vostok Private Equity Fund, L.P.1, Baring Vostok Private Equity Fund,
L.P.2, Baring Vostok Private Equity Fund L.P.3, Baring Vostok Fund Co-Investment
L.P., the NIS Restructuring Facility and First NIS Regional Fund SICAV shall
also constitute Permitted Transferees and (b) in the case of RTK, if the
conditions specified in Section 4.2(b) have been satisfied (as determined by a
majority of the Disinterested Directors, in their sole discretion), any RTK
Transferee shall also constitute a Permitted Transferee.
"Person" means any natural person, corporation, partnership, limited
liability company, proprietorship, other business organization, trust, union,
association or Governmental or Regulatory Authority, whether incorporated or
unincorporated.
"Pledged Shares" has the meaning specified in Section 4.8(a).
"Pledgee" has the meaning specified in Section 4.8.
"Pledge Co-Sale Notice" has the meaning specified in Section 4.8(c).
"Pledge Notice" has the meaning specified in Section 4.8(a).
"Pledging Shareholder" has the meaning specified in Section 4.8.
"Principal Agreements" means this Agreement, the Share Exchange Agreement,
the Standstill Agreement and the Registration Rights Agreement.
"Proposed Resolution" has the meaning specified in Section 3.3(a).
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"Public Sale" means a non-directed sale of shares effected through a
secondary offering or other transaction on the Nasdaq National Market or another
stock exchange of recognized international standing, including, without
limitation, any sale pursuant to Rule 144 under the United States Securities Act
of 1933, as amended, or any sale or exchange pursuant to a Tender Offer.
"Purchase Offer" has the meaning specified in Section 4.3(b).
"Purchasing Shareholder" has the meaning specified in Section 4.8(b)(ii).
"Receiving Shareholder" has the meaning specified in Section 4.4(a).
"Reconciliation Procedure" has the meaning specified in Section 3.3(a).
"Reconciliation Termination Date" has the meaning specified in Section
3.3(c).
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of the date hereof between the Company and the Shareholders.
"Right Holders" means, collectively, Alfa, Telenor and RTK, and,
individually, any of them.
"RTK" has the meaning specified in the preamble hereto.
"RTK Transferees" means RTC-Leasing OJSC, RosTeleComLeasing (Cyprus)
Limited, RosTeleComLeasing Ltd., Zurich and Russian Telecommunications
Development Corporation.
"SEC" means the United States Securities and Exchange Commission.
"Share Exchange Agreement" has the meaning specified in the second recital
hereto.
"Shareholders" means Alfa, Telenor, RTK, CIG and Barings and, following a
Transfer to a Permitted Transferee, such Permitted Transferee.
"Shares" means shares of Common Stock or other capital stock of the
Company, whether or not authorized, or any option, right, subscription, warrant,
phantom stock right or other contract right to receive shares of Common Stock or
such other capital stock, or any bonds, notes, debentures or other securities of
any kind whatsoever, that are, or may become, convertible into or exchangeable
or exercisable for, shares of Common Stock or other capital stock of the
Company.
"Significant Selling Shareholder" has the meaning specified in Section
4.3(a).
"Significant Shareholder" means any Shareholder and its Affiliates, (or, if
a group of Shareholders and their respective Affiliates are selling to a single
purchaser or a group of affiliated purchasers in a transaction or series of
transactions, such group of Shareholders and their respective Affiliates), who,
on the date of delivery of an Offer Notice in accordance with Section 4.3 (and
before giving effect to the Transfer referred to in such Offer Notice), own(s)
ten percent (10%) or more of the issued and outstanding shares of Voting Stock;
provided that no Shareholder, group of Shareholders and/or their respective
Affiliates shall be permitted to avoid compliance with Section 4.3 through a
series of sales to the same purchaser or one or more purchasers who are
Affiliates of one another.
"Special Consultant" has the meaning specified in Section 3.3(i).
"Special Meeting" has the meaning specified in Section 3.3(d).
"Special Meeting Notification" has the meaning specified in Section 3.3(d).
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"Special Transaction" has the meaning specified in Section 3.3(h).
"Standstill Agreement" means the Standstill Agreement dated as of the date
hereof between and among the Company and the Shareholders.
"Subsidiary" means, with respect to any Person, any other Person 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 thereof or more than fifty percent (50%) of
the partnership or other ownership interests therein (other than as a limited
partner).
"Tag Along Notice" has the meaning specified in Section 4.4(b).
"Telenor" has the meaning specified in the preamble hereto.
"Tender Offer" means an offer made by a Shareholder or any of its
Affiliates in accordance with Section 14 of the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder, to purchase
any and all of the issued and outstanding shares of the Company, which, subject
to Section 3.5(a)(i) and (ii), is accepted by stockholders holding a simple
majority of the issued and outstanding shares of Voting Stock (excluding any
shares of Voting Stock held by such Shareholder and its Affiliates).
"Third Party Investor" means (a) for purposes of Section 3.5, any Person
who has made a filing with the SEC on Schedule 13D or Form TO with respect to
the acquisition of shares of capital stock of the Company (whether actual or
proposed), other than (i) a Shareholder or any Affiliate of any Shareholder or
(ii) any Person acting for, on behalf of, for the benefit of, or together with,
any Shareholder or any Affiliate of any Shareholder and (b) for purposes of
Section 4.4(b), any Person other than a Shareholder or any Affiliate of any
Shareholder.
"Third Party Offer" has the meaning specified in Section 4.5(a).
"Third Party Pledge Agreement" has the meaning specified in Section 4.8(a).
"Threshold Shareholder" means, as at any date of determination, any
Shareholder who, on such date, owns fifteen percent (15%) or more of the issued
and outstanding shares of Voting Stock.
"Transfer" means any direct or indirect sale, exchange, transfer
(including, without limitation, any transfer by gift or operation of law, or any
transfer of an economic interest in any derivative security of any Share),
assignment, distribution or other disposition, or issuance or creation of any
option or any voting proxy, voting trust or other voting agreement in respect of
any Person or instrument (including, without limitation, any of the Shares),
whether in a single transaction or a series of related transactions, including,
without limitation, (a) the direct or indirect enforcement or foreclosure of any
Lien or (b) any Change of Control.
"UNCITRAL Rules" has the meaning specified in Section 7.10.
"Voting Stock" has, in relation to the Company, the meaning specified in
Section 203(c)(8) of the DGCL, as in effect on the date hereof.
1.2 Interpretation
Unless the context of this Agreement otherwise requires, the following
rules of interpretation shall apply to this Agreement:
(a) the singular shall include the plural, and the plural shall include the
singular;
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(b) words of any gender shall include the 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; and
(g) a reference to any Person shall include such Person's successors and
permitted assigns under any agreement, instrument, contract or other document.
2. REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Shareholders
Each Shareholder party hereto on the date hereof hereby represents and
warrants to the Company and the other Shareholders as of the Effective Date (and
each Person who becomes a party to this Agreement after the Effective Date by
executing an Endorsement shall be deemed to have represented and warranted to
the Company and the other Shareholders as of the date on which such Person
executes such Endorsement) that:
(a) Such Shareholder is duly organized and validly existing as a legal
entity under the laws of its jurisdiction of organization, with full power and
authority to execute, deliver and perform its obligations under the Principal
Agreements to which it is a party and to consummate the transactions
contemplated thereby, and is not required to be qualified as a foreign
corporation or other entity authorized to do business in any other jurisdiction
in which its failure to be so qualified would have a material adverse effect on
its ability to execute and deliver or perform its obligations under such
Principal Agreements.
(b) The Principal Agreements to which such Shareholder is a party have been
duly and validly authorized, executed and delivered by such Shareholder and
constitute the legal, valid and binding obligations of such Shareholder,
enforceable against such Shareholder in accordance with their terms, except as
such 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).
(c) The execution, delivery and performance by such Shareholder of the
Principal Agreements to which it is a party, compliance by such Shareholder with
all of the provisions thereof and the consummation by such Shareholder of the
transactions contemplated thereby will not:
(i) conflict with or constitute a breach of any of the terms or
provisions of, or a default under, such Shareholder's constitutive
documents;
(ii) conflict with or constitute a breach of any covenant, agreement,
understanding or Authorization to which such Shareholder is a party or by
which such Shareholder or any of its Assets and Properties is bound; or
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(iii) violate or conflict with any law applicable to such Shareholder
or any of its Assets and Properties.
(d) Except as specified in Schedule 2.1(d), the execution, delivery and
performance by such Shareholder of the Principal Agreements to which it is a
party, the compliance by such Shareholder with all of the provisions thereof and
the consummation by such Shareholder of the transactions contemplated thereby
will not require any consent, approval, Authorization, other order or action of,
filing with or notice to any Governmental or Regulatory Authority.
(e) (i) There is no Action pending to which such Shareholder is a party or
to which any of the Shares it owns or controls, beneficially or otherwise, is
subject, which will result in, or could reasonably be expected to result in, the
issuance of an order which (A) questions the validity of any of the Principal
Agreements or any action taken or to be taken pursuant thereto, (B) restrains,
enjoins or otherwise prohibits or makes illegal consummation of any of the
transactions contemplated by any of the Principal Agreements, or (C) would, or
would reasonably be expected to, result in the issuance of an order which
materially adversely affects the ability of such Shareholder to perform its
obligations thereunder, (ii) to the knowledge of such Shareholder, no such
Action is threatened, and (iii) there are no facts or circumstances known to
such Shareholder that would be expected to give rise to any such Action.
(f) Such Shareholder is the record holder and beneficial owner of the
Shares described opposite such Shareholder's name on Schedule 1 (or in the
Endorsement executed by such Shareholder).
(g) Such Shares constitute the only shares of capital stock of the Company
owned of record or beneficially by such Shareholder.
(h) Except as specified in the Principal Agreements and Schedule 2.1(h),
such Shareholder has sole power of disposition and sole voting power with
respect to all such Shares, with no restrictions on such rights, other than such
restrictions on Transfers as arise under applicable United States federal
securities laws and the terms and conditions of the Principal Agreements.
(i) Except as specified in the Principal Agreements and Schedule 2.1(i),
such Shares are held free and clear of all Liens, proxies, voting trusts or
agreements, understandings or arrangements whatsoever, except for those arising
under the Principal Agreements.
(j) Except for the Principal Agreements and the agreements terminated
pursuant to the Termination Agreement, neither such Shareholder nor any of its
Affiliates has entered into any agreement, arrangement or understanding with (i)
any one or more of the Shareholders or any of their respective Affiliates with
respect to matters relating to the Company, its management or any Shares or (ii)
the Company, any of its Affiliates or management.
2.2 Representations and Warranties of the Company
The Company hereby represents and warrants to the Shareholders as of the
Effective Date that:
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, with full power and
authority to execute, deliver and perform its obligations under the Principal
Agreements and to consummate the transactions contemplated thereby, and is not
required to be qualified as a foreign corporation or other entity authorized to
do business in any other jurisdiction in which its failure to be so qualified
would have a material adverse effect on its ability to execute and deliver or
perform its obligations under such Principal Agreements.
9
(b) The execution and delivery by the Company of the Principal Agreements
and the consummation of the transactions contemplated thereby have been duly
authorized by all necessary corporate action on the part of the Company, subject
to obtaining the approval of the Company's stockholders. The Principal
Agreements have been duly and validly executed and delivered by the Company and
constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as such
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).
(c) The Board, by resolutions duly adopted by unanimous vote at a meeting
duly called and held and not subsequently rescinded or modified in any way, has
(i) duly determined that the Principal Agreements are advisable and fair to and
in the best interests of the Company and its stockholders and (ii) approved the
Principal Agreements.
(d) The execution, delivery and performance by the Company of the Principal
Agreements, compliance by the Company with all of the provisions thereof and the
consummation by the Company of the transactions contemplated thereby will not:
(i) conflict with, or constitute a breach of, any of the terms or
provisions of the Company's certificate of incorporation or bylaws;
(ii) conflict with, or constitute a breach of, any covenant,
agreement, understanding or Authorization to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any of their respective Assets and Properties is bound; or
(iii) violate or conflict with any order or law applicable to the
Company, any of its Subsidiaries or any of their respective Assets and
Properties.
(e) Except as specified in Schedule 2.2(e), the execution, delivery and
performance by the Company of the Principal Agreements, the compliance by the
Company with all of the provisions thereof and the consummation by the Company
of the transactions contemplated thereby will not require any consent, approval,
Authorization or other order of any Governmental or Regulatory Authority.
(f) (i) There is no Action pending to which the Company is a party, or to
which any of its Assets and Properties is subject, which will result in, or
could reasonably be expected to result in, the issuance of an order which (A)
questions the validity of any of the Principal Agreements or any action taken or
to be taken pursuant thereto, (B) restrains, enjoins or otherwise prohibits or
makes illegal consummation of any of the transactions contemplated by any of the
Principal Agreements, or (C) would, or would reasonably be expected to, result
in the issuance of an order which materially adversely affects the ability of
the Company to perform its obligations thereunder, (ii) to the knowledge of such
the Company, no such Action is threatened, and (iii) there are no facts or
circumstances known to the Company that would be expected to give rise to any
such Action.
3. CERTAIN CORPORATE MATTERS
3.1 Nomination and Removal of Directors
(a) Until such date as the Board shall, in accordance with the certificate
of incorporation and by-laws of the Company, determine otherwise, the Board
shall consist of ten (10) Directors. Subject to Section 3.1(e) and (f), the
Company and each Shareholder agree that each of them shall take all action
necessary from time to time (including, without limitation, the voting of
Shares, the
10
execution of written consents, the calling of special meetings, the removal of
directors, the filling of vacancies on the Board, the waiving of notice of and
attendance at meetings, the amendment of the Company's by-laws and committee
charters and the like) necessary to:
(i) subject to Section 3.1(k), maintain a sufficient number of
Independent Directors and Independent Directors who are Financial Experts
on the Board to satisfy the standards for audit committees and Independent
Directors and other requirements for board composition as are set forth in
the Marketplace Rules and in any other applicable law, rule or regulation;
and
(ii) commencing on the Effective Date and until the earlier of (x) the
end of the Initial Period and (y) with respect to any Shareholder, the date
on which such Shareholder's Board membership is adjusted pursuant to
Section 3.1(e) through (i) (inclusive), maintain the membership on the
Board of:
(A) three Directors designated by Alfa;
(B) two Directors designated by Telenor;
(C) two Directors designated by RTK (one of whom shall be an
Independent Director);
(D) one Director designated by CIG (who shall be an Independent
Director);
(E) one Director designated by Barings (who shall be an Independent
Director); and
(F) one Director (who shall be an Independent Director and, if at such
time there is no other Director who is a Financial Expert, a Financial
Expert) designated by the Directors sitting on the Board on the date
of the Board meeting at which the Board adopts the resolutions
concerning the annual meeting of stockholders of the Company,
including the resolution in which the Board nominates individuals to
stand for election as Directors for the year following the annual
meeting of stockholders, (the "Jointly Designated Director"); and
(iii) to the extent permitted by the Marketplace Rules and at the
election of each Threshold Shareholder, permit a Person designated by such
Threshold Shareholder (who need not be a Director) to attend all meetings
of the audit committee of the Board as an observer (it being understood
that, notwithstanding the foregoing, such observer(s) shall have no right
to attend any audit committee meeting (or any portion thereof) if the audit
committee has, in its sole discretion, declined to permit such attendance);
provided, however, that any such observer shall have entered into a
confidentiality agreement in form and substance satisfactory to the Board.
(b) If any Shareholder gives notice at any time to the Company and the
other Shareholders that any individual then serving as a Director designated by
such Shareholder is no longer such Shareholder's designee, then such
Shareholder, the Company and the other Shareholders shall take all such actions
as are necessary to remove such Director.
(c) If any Independent Director or Financial Expert at any time during his
or her term ceases to meet the criteria for an Independent Director or Financial
Expert, as the case may be, as set forth in the Marketplace Rules, the Company
and the Shareholders shall, to the extent requested by the Board, take all such
actions as are necessary to remove such Director.
11
(d) If a Director designated by a Shareholder (an "Affected Shareholder")
dies, resigns, or is removed as a Director pursuant to Section 3.1(b) or (c),
then the Company, the Affected Shareholder and the other Shareholders shall take
all such actions as are necessary to elect as a Director an individual
designated by the Affected Shareholder, provided that, if any Independent
Director (or a Person who has ceased to meet the definition of Independent
Director) dies, resigns or is removed, as the case may be, such Independent
Director (or such Person who has ceased to meet the definition of Independent
Director) shall be replaced by another Independent Director.
(e) If on any date during the Initial Period (A) Barings or CIG, as the
case may be, owns less than three percent (3%) of all of the issued and
outstanding shares of Voting Stock, the right of Barings or CIG, as the case may
be, to continued Board representation under this Agreement and the obligations
of Barings or CIG, as the case may be, under Section 3.1(a) through (d) and
Section 3.1(k) shall terminate, and, within three (3) Business Days after such
date, Barings or CIG, as the case may be, shall cause its designee to resign as
a Director, or, if such designee does not resign, the Shareholders and the
Company shall take such actions as may be necessary to remove such Director or
(B) the Director designated by Barings or CIG, as the case may be, resigns and
Barings or CIG, as the case may be, shall not have designated a replacement
within ten (10) Business Days following such resignation, the right of Barings
or CIG, as the case may be, to continued Board representation under this
Agreement and obligations of Barings or CIG, as the case may be, under Section
3.1(a) through (d) and Section 3.1(k) shall terminate.
(f) If on any date during the Initial Period (A) RTK owns less than ten
percent (10%) but more than three percent (3%) of all of the issued and
outstanding shares of Voting Stock, RTK shall be entitled to designate one
Director; provided that if RTK owns less than three percent (3%) of all of the
issued and outstanding shares of Voting Stock, the right of RTK to continued
Board representation under this Agreement and the obligations of RTK under
Section 3.1(a) through (d) and Section 3.1(k) shall terminate, and, within three
(3) Business Days after such date, RTK shall cause its designee to resign as a
Director, or, if such designee does not resign, the Shareholders and the Company
shall take such actions as may be necessary to remove such Director or (B) RTK
owns less than ten percent (10%) but more than three percent (3%) of all of the
issued and outstanding shares of Voting Stock and the Director designated by RTK
resigns and RTK shall not have designated a replacement within thirty (30)
Business Days following such resignation, the right of RTK to continued Board
representation under this Agreement and the obligations of RTK under Section
3.1(a) through (d) and Section 3.1(k) shall terminate.
(g) The designation rights of any Shareholder (other than Barings, CIG or
RTK) who, as at the Effective Date is entitled to designate more Directors than
it would otherwise be entitled to designate under the Designation Table (as
defined below) shall continue until the earlier of (i) the end of the Initial
Period and (ii) the date on which the ownership by such Shareholder of shares of
Voting Stock falls below the relevant Adjustment Percentage and the number of
Directors designated by such Shareholder shall then be reduced to the applicable
number indicated in the Designation Table, and each such Shareholder shall
within three (3) Business Days after such date cause such number of Directors
designated by it to resign so that it has the number of designees set forth in
the Designation Table opposite the percentage of issued and outstanding shares
of Voting Stock then owned by it or, if such Director(s) do not resign, the
Shareholders and the Company shall take such actions as may be necessary to
remove such Directors.
(h) Except as may be otherwise permitted by Section 3.1(a) through (g)
(inclusive), from and after such time as the ownership by a Shareholder of
issued and outstanding shares of Voting Stock falls below any of the applicable
thresholds specified in the Designation Table, the number of Directors
designated by any such Shareholder shall be reduced to the applicable number
specified in the Designation Table, and each such Shareholder shall within three
(3) Business Days thereafter cause such number of Directors designated by it to
resign so that it has the number of designees set forth in the Designation Table
opposite the percentage of issued and outstanding shares of Voting
12
Stock then owned by it, or, if such Director(s) do not resign, the Shareholders
and the Company shall take such actions as may be necessary to remove such
Director(s).
(i) Subject to the procedures set forth in Section 3.1(h), following any
change in ownership in the issued and outstanding shares of Voting Stock that
causes one or more Shareholders' ownership of shares of Voting Stock to reach,
exceed or fall below the thresholds specified below, the right to designate
Directors shall be allocated among the Shareholders as follows:
Percent of issued and outstanding Number of Designees
shares of Voting Stock owned by
Shareholder
-------------------------------------------- -------------------------------
Ten percent (10%) or less 0
More than ten percent (10%) but less than
twenty percent (20%) 1
Twenty percent (20%) or more but less than
or equal to thirty percent (30%) 2
More than thirty percent (30%) but less than
forty percent (40%) 3
Forty percent (40%) or more 3; plus the right to designate
an Independent Director (who
shall be a Financial Expertand
qualified and willing to serve
on the audit committee of the
Board);
provided that the size of the Board shall not be increased beyond ten (10)
members, and a Shareholder who would be entitled to designate an additional
Director due to such Shareholder's acquisition of additional shares of Voting
Stock may only exercise such right when another Shareholder loses the right to
designate a Director.
(j) Any vacancies on the Board not addressed by the procedures set forth in
Section 3.1(a) through (i) (inclusive) shall be filled by a vote of a simple
majority of the remaining Directors then in office.
(k) The Parties agree that, if it becomes necessary (as determined by the
Company and Shareholders holding a majority of the issued and outstanding shares
of Voting Stock) to treat the Company as a "controlled company" under the
Marketplace Rules:
(i) the Shareholders shall indicate in their respective filings on
Schedule 13D that they are members of a "group" (as such term is used in
Rule 13d-1 under the Exchange Act) ;
(ii) the Company shall indicate in its annual meeting proxy on
Schedule 14A that it is a "controlled company" (as such term is used in the
Marketplace Rules); and
13
(iii) the Company and the Shareholders shall take any such other
actions as may be required for the Company to qualify for treatment as a
"controlled company" under the Marketplace Rules.
(l) The Shareholders and the Company agree that they will amend this
Agreement, as necessary, in order for the Company to remain in compliance with
the Marketplace Rules and any other applicable law, rule or regulation; provided
that no such amendment shall adversely affect the rights of any Shareholder vis
a vis the Company or the other Shareholders without the prior written consent of
such affected Shareholder.
3.2 Disclosure of Interests
Directors who have a Direct or Indirect Financial Interest in a matter
subject to consideration by the Board shall disclose the material facts relating
to the relationship giving rise to such Direct or Indirect Financial Interest
and the nature of such Interest and, if requested by a simple majority of the
Disinterested Directors, shall not participate in the Board's discussion of such
matter. Any such matter shall be approved by a simple majority of the
Disinterested Directors, even if such Disinterested Directors are less than a
quorum.
3.3 Special Transaction Procedures
(a) Subject to the provisions of applicable law and any applicable
securities exchange listing requirements, any two Directors (the "Initiating
Directors") shall have the right to subject any proposed resolution of the Board
(a "Proposed Resolution") which, if adopted by the Board, would authorize,
direct or instruct management of the Company to negotiate, enter into or
consummate a Special Transaction, to the reconciliation procedure set forth in
this Section 3.3 (the "Reconciliation Procedure").
(b) If the agenda for any meeting of the Board contains any item for review
by the Board the subject matter of which may lead the Board to adopt a Proposed
Resolution, then the Company shall identify such agenda item as a Special
Transaction in the materials accompanying the agenda. To initiate the
Reconciliation Procedure, the Initiating Directors must notify the Company and
each of the other Directors (the "Initiation Notification") within five (5)
Business Days of delivery to the Board of the agenda and materials outlining the
subject matter of the Special Transaction in respect of which the Initiating
Directors are exercising their right to initiate the Reconciliation Procedure.
(c) Upon receipt by the Company and each of the Directors (other than the
Initiating Directors) of the Initiation Notification, the Board shall refrain
from adopting any Proposed Resolution which is the subject of the Reconciliation
Procedure until the date that is at least forty-five (45) calendar days after
the delivery by the Company of the agenda containing the relevant Special
Transaction (the "Reconciliation Terminate Date"), unless the Initiating
Directors have agreed in writing that the Board may adopt such Proposed
Resolution within a period of less than forty-five calendar days.
(d) At any time after the delivery of the Initiation Notification and prior
to the expiration of the Reconciliation Termination Date, the Initiating
Directors may demand that the Company convene a special meeting of the Board (a
"Special Meeting") for further consideration of the Special Transaction by
delivering written notification to the Company requesting that the Company
convene such Special Meeting (the "Special Meeting Notification"). The
Initiating Directors may, in the Special Meeting Notification, request that the
Company retain a Special Consultant to review the Special Transaction in
accordance with Section 3.3(i).
(e) Upon receipt of a Special Meeting Notification, the Company shall
undertake to (i) convene a Special Meeting as soon as practically possible and
in any event prior to the Reconciliation
14
Termination Date, and (ii) if requested by the Initiating Directors, retain a
Special Consultant to review the Special Transaction.
(f) At any time after the Reconciliation Termination Date or at the Special
Meeting, any Director may move for the adoption of the Proposed Resolution that
is the subject matter of the Reconciliation Procedure. Such Proposed Resolution
must be approved and adopted by a majority of the Directors voting in favor of
the Proposed Resolution.
(g) With respect to any single Special Transaction, each Director may
initiate the Reconciliation Procedure only once.
(h) For the purposes of this Section 3.3, "Special Transaction" shall mean
any transaction or series of related transactions involving, directly or
indirectly, a value exceeding five percent (5%) of the total consolidated assets
of the Company and its Subsidiaries.
(i) Upon demand from the Initiating Directors, a special consultant (a
"Special Consultant") shall be selected and engaged by the Company to review any
Special Transaction. Any such Special Consultant shall be independent from and
in no way affiliated with any Shareholder. The Company shall determine the scope
of work to be performed by the Special Consultant and the compensation to be
paid for the services of the Special Consultant. The Shareholders hereby agree
that the Company shall be responsible for any fees charged by the Special
Consultant, provided that prior to being placed on the agenda of the Board, the
Special Transaction:
(i) was not reviewed by an independent professional consultant; or
(ii) was reviewed by an independent professional consultant not
previously approved by the Board.
(j) The Shareholders further agree that in all other instances fifty
percent (50%) of the costs related to the review of the Special Transaction by
the Special Consultant shall be reimbursed by the Shareholder(s) which
designated the Initiating Directors initiating the Reconciliation Procedure and
the review of the Special Transaction Proposal by such Special Consultant.
(k) Notwithstanding the foregoing, the procedures set forth in this Section
3.3 shall be applicable only to extent that the Board shall have concluded in
good faith that such action is consistent with the discharge of its fiduciary
duties to the stockholders of the Company; provided that, if any Initiating
Director(s) purport(s) to exercise his, her or their rights under this Section
3.3 in relation to a Special Transaction in which the Shareholder(s) which
designated such Director(s) is or are interested and are pursuing in competition
with the Company (including, but not limited to, an acquisition of shares or
assets of another Person or the acquisition of a license), any exercise by such
Initiating Director(s) of his, her or their rights under this Section 3.3 in
relation to such Special Transaction automatically will be deemed incompatible
with the Board's fiduciary duties to the stockholders of the Company, and such
Initiating Director(s) shall not be entitled to exercise such rights.
3.4 Purchase Rights of Shareholders
Subject to the limitations specified in Section 2 of the Standstill
Agreement, if then in effect:
(a) The Company shall give each Shareholder at least thirty (30) days (and,
when possible, at least ninety (90) days) prior written notice of the issuance
by the Company of any shares of Voting Stock or any other shares of capital
stock of the Company and any options, warrants, convertible securities, or other
rights to acquire Voting Stock or other capital stock of the Company or
securities exercisable or convertible for Voting Stock or other capital stock of
the Company (collectively, "New Securities") as a result of which a
Shareholder's percentage of beneficial
15
ownership of Voting Stock would be reduced, either immediately upon issuance of
such New Securities or upon the exercise or conversion thereof.
(b) Such notice must set forth (i) the approximate number and type of New
Securities proposed to be issued and sold and the material terms of such New
Securities, (ii) the proposed price or range of prices at which such New
Securities are proposed to be sold and the terms of payment, and (iii) any other
material feature, term or condition relating to such New Securities or the
proposed sale thereof. Upon receipt of such notice from the Company, each
Shareholder will have the right, but not the obligation, to elect, within thirty
(30) days of receipt of the Company Notice, to purchase up to its pro rata share
of such New Securities (calculated on a fully diluted basis). Such pro rata
share, for purposes of this Section 3.4, for any Shareholder, shall be the ratio
of (x) the sum, without duplication, of the total number of shares of Voting
Stock and any other shares of capital stock of the Company held by such
Shareholder prior to the issuance of New Securities (assuming the full exercise
or conversion of any options, warrants, convertible securities exercisable or
convertible for Voting Stock or other capital stock of the Company) to (y) the
sum, without duplication, of the total number of shares of Voting Stock and any
other shares of capital stock of the Company outstanding immediately prior to
the issuance of New Securities held by all stockholders of the Company,
(assuming the full exercise or conversion of any options, warrants, convertible
securities exercisable or convertible for Voting Stock or other capital stock of
the Company).
(c) Each Shareholder's purchase must be on the same terms and conditions as
the balance of such issuance of New Securities; provided, however, if the sale
price at which the Company proposes to issue, deliver or sell any New Securities
is to be paid with consideration other than cash, then the purchase price at
which a Shareholder may acquire its portion of such New Securities will be equal
in value to such consideration (as determined in good faith by the Board) but
payable entirely in cash.
(d) The closing of each Shareholder's purchase of its portion of such New
Securities will occur simultaneously with the closing of the balance of the
issuance of such New Securities; provided, however, that if as of the date of
such closing all the necessary approvals of Governmental or Regulatory Authority
required in connection with the issuance of such New Securities have not been
obtained by the Company and/or any Shareholder, then (i) such Shareholder will
not be required to effect the purchase of its portion of such New Securities
until all the necessary approvals of any Governmental or Regulatory Authority
are obtained, and (ii) the Company may terminate such Shareholder's right to
purchase its portion of such New Securities if such Shareholder fails to obtain
any necessary approvals of any Governmental or Regulatory Authority applicable
only to such Shareholder within one hundred and twenty (120) days of the closing
of the balance of the issuance of such New Securities.
(e) If at any time the terms of a proposed issuance of New Securities are
materially changed, altered or modified from those stated in the Company's
notice to the Shareholders of the proposed issuance thereof, then such proposed
issuance will be treated as a new issuance of New Securities, subject to the
notice obligation of the Company set forth in Section 3.4(a) and any election of
a Shareholder to purchase its portion of such New Securities prior to such
change, alteration or modification may, in the sole discretion of such
Shareholder be withdrawn.
(f) Notwithstanding the foregoing, if shares of Voting Stock are issued or
options granted pursuant to an Equity Plan, such shares shall not be considered
New Securities, and the purchase rights granted pursuant to this Section 3.4
shall not be applicable.
3.5 Tender Offers
(a) No Shareholder shall, individually or together with any of its
Affiliates, directly or indirectly, in any manner, acquire beneficial ownership
of any share or shares of Voting Stock (including, without limitation, through
the acquisition of ownership or control of another Shareholder
16
or a Controlling Person of another Shareholder) if after giving effect thereto,
such Shareholder and its Affiliates would beneficially own, in the aggregate,
fifty percent (50%) or more of the issued and outstanding shares of Voting
Stock, unless such share or shares are acquired by such Shareholder and/or one
of its Affiliates pursuant to a Tender Offer; provided that, if at any time (i)
a Third Party Investor makes a bona fide tender offer to purchase such
percentage of the issued and outstanding shares of Voting Stock that when
aggregated with any of the issued and outstanding shares of Voting Stock then
owned by such Third Party Investor and its Affiliates would equal more than
fifty percent (50%) of the issued and outstanding shares of Voting Stock, and a
Shareholder or any of its Affiliates thereafter makes a Tender Offer during the
period in which the tender offer made by such Third Party Investor is still in
effect, or (ii) a Third Party Investor makes a bona fide tender offer during the
period in which a Tender Offer made by a Shareholder or any of its Affiliates is
still in effect, then the requirement in the definition of "Tender Offer" that
the Tender Offer made by such Shareholder be accepted by stockholders of the
Company holding a simple majority of the issued and outstanding shares of Voting
Stock (excluding any shares of Voting Stock held by such Shareholder and its
Affiliates) shall not apply.
(b) If any Person shall, individually or together with any of its
Affiliates, directly or indirectly, acquire beneficial ownership of any share or
shares of Voting Stock from a Shareholder (other than through a Public Sale)
and, after giving effect thereto, such Person and its Affiliates own ten percent
(10%) or more of the issued and outstanding shares of Voting Stock, then such
Person shall be required to execute an Endorsement pursuant to which such Person
shall be bound by this Section 3.5 as if it were a Shareholder. Each Shareholder
hereby undertakes to cause any such Person to which Shares are so transferred to
execute and deliver such an Endorsement to the Company and each of the other
Shareholders.
3.6 Business Combination
Except with respect to Tender Offers and participation in an auction
pursuant to Section 2(b)(ii) of the Standstill Agreement, each Shareholder
agrees that such Shareholder will not, nor will it permit any of its Affiliates
to, engage in any Business Combination with the Company without the prior
approval of the Board, which approval will be effective only if it includes the
affirmative vote of a majority of the Disinterested Directors. If no
Disinterested Directors are in office, then each Shareholder agrees that such
Shareholder will not, nor will it permit any of its Affiliates to, engage in any
Business Combination with the Company unless such Business Combination is
approved in accordance with Section 203(a)(3) of the DGCL.
3.7 Compliance with Securities Laws
Each Shareholder undertakes and agrees to timely make all such filings with
the SEC in respect of such Shareholder's purchase, ownership and/or Transfer of
any Shares as such Shareholder is required to make under applicable laws and
regulations.
4. TRANSFERS
4.1 General
The provisions of this Article 4 shall be applicable to all shares of
capital stock of the Company owned, directly or indirectly, by a Shareholder or
hereafter Transferred to a Shareholder in any manner whatsoever. No Shareholder
may Transfer any or all of its Shares to, or create or permit any Lien on any of
its Shares in favor of, any Person other than in accordance with this Article 4.
17
4.2 Transfers to Permitted Transferees
(a) Each Shareholder may Transfer any of its Shares (i) to a Permitted
Transferee or (ii) in a Public Sale, in each case, without the need to comply
with Sections 4.3, 4.4, 4.5 or 4.6, as applicable, provided that any such
Permitted Transferee shall execute an Endorsement, in accordance with Section
4.7, at the time of such Transfer.
(b) RTK shall, in connection with any proposed Transfer of any of its
Shares to any RTK Transferee, in addition to complying with the requirements of
Section 4.2(a), prior to the effectiveness of such Transfer, deliver to the
Company, with copies to each of the other Shareholders, (i) any permits required
by applicable Russian law in connection with such Transfer, (ii) an amendment to
RTK's existing license issued by the Central Bank of the Russian Federation or a
new license issued by the Central Bank of the Russian Federation, in each case,
permitting such Transfer, (iii) a certificate executed by a senior officer of
each RTK Transferee to whom any Shares are being transferred, identifying the
shareholders of such RTK Transferee as of the proposed date of effectiveness of
such Transfer and specifying such shareholders' respective percentage ownership
interests in such RTK Transferee, and (iv) if RTK has the ability to elect a
majority of the board of directors of RTC-Leasing OJSC at the time of the
proposed Transfer, a guarantee of RTK in respect of the obligations of such RTK
Transferee under this Agreement, duly executed by an authorized signatory of RTK
and otherwise in form and substance satisfactory to the Company, provided that
such guarantee shall remain in effect only for so long as RTK retains the
ability to elect a majority of the board of directors of RTC-Leasing OJSC.
4.3 Right of First Offer
During the period commencing on the Effective Date and ending on the fifth
anniversary thereof:
(a) A Significant Shareholder wishing to effect a Transfer of any Shares (a
"Significant Selling Shareholder") shall, before effecting such Transfer, first
give written notice of such proposed Transfer (the "Offer Notice") to the Right
Holders. The Offer Notice shall set forth (i) the number and type of Shares that
such Significant Selling Shareholder wishes to Transfer (the "Offered Shares")
and (ii) the purchase price per share in cash of the Offered Shares.
(b) Upon receipt of the Offer Notice, each Right Holder may offer to
purchase, for cash, in the aggregate, all (but not less than all) of the Offered
Shares, such offer to be made by such Right Holder by written notice delivered
to the Significant Selling Shareholder (a "Purchase Offer") within thirty (30)
days from the date of receipt of the Offer Notice. Failure of any Right Holder
to provide a Purchase Offer within such thirty (30) day period shall be deemed
an election by such Right Holder not to purchase any of the Offered Shares. A
Right Holder's Purchase Offer shall contain the purchase price for the proposed
purchase of all (but not less than all) of the Offered Shares by such Right
Holder. All other terms and conditions contained in a Right Holder's Purchase
Offer shall be the same as those set forth in the Offer Notice.
(c) If the purchase price contained in a Right Holder's Purchase Offer is
the same (or higher) than the purchase price contained in the Offer Notice, the
Significant Selling Shareholder shall, in accordance with Section 4.3(d), sell
the Offered Shares to such Right Holder at the purchase price contained in such
Purchase Offer; provided that, if two or more Right Holders deliver Purchase
Offers and the purchase prices for their proposed purchase of the Offered Shares
contained in such Purchase Offers are the same, then the Significant Selling
Shareholder shall sell to each such Right Holder such number of the Offered
Shares (i) as is equal to the total number of Offered Shares multiplied by a
fraction, the numerator of which is the number of shares of Voting Stock owned
by such Right Holder (prior to the giving of the Offer Notice) and the
denominator of which is the total number of shares of Voting Stock owned by the
Right Holders who have delivered such matching
18
Purchase Offers (prior to the giving of the Offer Notice) or (ii) as the Right
Holders who have delivered such matching Purchase Offers may agree among
themselves.
(d) If the Significant Selling Shareholder is obligated to sell the Offered
Shares to one or more Right Holders in accordance with Section 4.3(c), a single
closing for the purchase of the Offered Shares shall be held at the time and
place designated by the Right Holder(s), but in any event no later than thirty
(30) days following receipt of all of the Purchase Offers (or if any approval of
any Governmental or Regulatory Authority is required to be obtained therefor,
within five (5) Business Days after receipt of such approval, if later). At such
closing, the Significant Selling Shareholder shall deliver to the Right
Holder(s), against payment of the purchase price, the Offered Shares, free and
clear of all Liens, and such documents as may be required to cause the Company's
transfer agent to effect the transfer of the Offered Shares to such Right
Holder(s).
(e) If none of the Right Holders submit Purchase Offers or if, under the
terms of Section 4.3(c), the Significant Selling Shareholder is not obliged to
sell the Offered Shares to any Right Holder because the purchase price contained
in the Offer Notice is higher than the purchase price contained in the Right
Holder(s)' Purchase Offer, then the Selling Shareholder (i) shall not be
required to sell any of the Offered Shares to any Right Holder and (ii) may,
within one hundred eighty (180) days following the date of the Offer Notice,
Transfer all (but not less than all) of the Offered Shares to any other Person
for a purchase price payable in cash equal to or greater than the purchase price
specified in the Offer Notice and otherwise on the same terms and conditions
specified in the Offer Notice. If the Significant Selling Shareholder fails to
effect the Transfer of the Offered Shares on such terms and within such time
period, then such proposed Transfer or any other proposed Transfer shall again
become subject to the provisions of this Section 4.3.
4.4 Telenor's and Alfa's Tag Along Rights
During the period commencing on the Effective Date and ending on the third
anniversary thereof:
(a) If after compliance with the terms of Section 4.3 (regardless of
whether any Right Holder has submitted a Purchase Offer) (A) Alfa accepts an
Offer from a Person who, together with its Affiliates, is principally engaged
in, and generates a majority of its gross revenues from, the telecommunications
business, or (B) Telenor accepts an Offer from a financial/industrial investor
(other than an investment fund) whose principal investments are in the Russian
Federation, then, at least forty-five (45) days prior to the closing of such
Transfer, Alfa or Telenor, as the case may be (the "Offering Shareholder"),
shall give written notice (a "Co-Sale Notice") to Alfa or Telenor, as the case
may be (the "Receiving Shareholder"), offering the Receiving Shareholder the
option to participate in such proposed Transfer pro rata with the Offering
Shareholder and to sell to the proposed transferee up to the number of Shares as
are determined pro rata on the basis of the Receiving Shareholder's and the
Offering Shareholder's respective ownership of shares of Voting Stock (prior to
the giving of the Co-Sale Notice). Such Co-Sale Notice shall set forth the
identity of the proposed transferee and the terms and conditions of the proposed
Transfer (including, without limitation, the number of Shares proposed to be
sold by the Offering Shareholder and the purchase price per share offered for
such Shares).
(b) The Receiving Shareholder may, within thirty (30) days after receipt of
a Co-Sale Notice, give written notice (a "Tag Along Notice") to the Offering
Shareholder that the Receiving Shareholder wishes to participate in the proposed
Transfer. Such Tag Along Notice shall also specify the number of Shares that the
Receiving Shareholder desires to include in the proposed Transfer.
(c) If the Receiving Shareholder does not give the Offering Shareholder a
timely Tag Along Notice, the Offering Shareholder may thereafter Transfer the
Shares specified in the Co-Sale Notice to the proposed transferee identified in,
and on the same terms and conditions as are set forth in, the Co-Sale Notice. If
the Receiving Shareholder gives the Offering Shareholder a timely Tag
19
Along Notice, then the Offering Shareholder shall use all reasonable efforts to
cause the proposed transferee to agree to acquire all the Shares identified in
the Co-Sale Notice and the Tag Along Notice, on substantially the same terms and
conditions as are set forth in the Co-Sale Notice. If the proposed transferee is
unwilling or unable to acquire such additional Shares upon such terms, then the
Offering Shareholder may elect either to cancel such proposed Transfer or to
allocate the maximum number of Shares that such transferee is willing to
purchase pro rata between the Offering Shareholder and the Receiving
Shareholder.
4.5 Other Shareholders' Tag Along Rights
(a) Alfa shall not, in any one transaction or series of related
transactions, Transfer Shares to any Third Party Investor, who will own,
directly or through Affiliates, no less than one-third (?) of the Shares (such
number to be appropriately adjusted for Share repurchases, stock splits, stock
dividends, reorganizations, recapitalizations and other similar transactions)
immediately after such purchase (a "Third Party Offer"), unless the terms and
conditions of the Third Party Offer include an offer, at the same price and on
the same terms as the Transfer by Alfa, to include, at the option of CIG, RTK
and/or Barings, in the sale or other disposition to the Third Party Investor, a
number of Shares owned by CIG, RTK and/or Barings determined in accordance with
Section 4.5(c). For the purposes of this Section 4.5(a), a series of
transactions in which Alfa sells any Shares to two or more Persons (whether
related or unrelated) and such Persons subsequently re-sell such Shares to the
same Third Party Investor or two or more affiliated Third Party Investors shall
be deemed as a series of related transactions.
(b) Alfa shall cause the Third Party Offer to be reduced to writing (which
writing shall include an offer to purchase or otherwise acquire Shares from CIG,
RTK and Barings as provided in this Section 4.5) and shall send written notice
of the Third Party Offer together with a copy of the Third Party Offer (the
"Inclusion Notice") to CIG, RTK and Barings in the manner set forth in Section
7.8. At any time within twenty (20) calendar days after delivery of the
Inclusion Notice, CIT, RTK and Barings may accept the offer included in the
Inclusion Notice by furnishing written notice of acceptance to Alfa.
(c) Each of CIG, RTK and Barings shall have the right (an "Inclusion
Right") to sell pursuant to the Third Party Offer such number of its Shares as
is equal to the product of (i) its pro rata ownership of shares of Voting Stock
and (ii) the total number of Shares covered by the Third Party Offer.
(d) Subject to the provisions of Section 4.5(c), the terms and
consideration payable per Share to be Transferred by CIG, RTK and Barings in
such sale or other disposition shall be the same in all respects as the
consideration payable to Alfa per Share so Transferred by Alfa.
(e) This Section 4.5 shall not apply if Alfa Transfers Shares to an
internationally recognized financial institution, a telecommunications company
of the type specified in Section 4.4(a) or an international investment fund with
a majority of capital provided by reputable institutional or governmental
shareholders.
4.6 Purchases from Barings or CIG
If Alfa, Telenor and/or any of their respective Affiliates enters into an
agreement with Barings or CIG, as the case may be, in respect of the purchase of
any Shares from Barings or CIG, as the case may be, then the purchasing
Shareholder and/or its Affiliate(s), as applicable, shall notify the other
Shareholder of such intention and the price at which it has agreed to acquire
such Shares, and the other Shareholder shall have thirty (30) days from the date
of its receipt of such notice to elect to participate in such purchase. If the
other Shareholder elects to participate in such purchase, it shall so notify the
initiating Shareholder of such election in writing within such thirty (30) day
period, and
20
shall be entitled to purchase up to fifty percent (50%) of the Shares then being
sold by Barings or CIG, as applicable, for the same price per share as is paid
by the initiating Shareholder. The consideration for any such acquisition shall
be cash. For the avoidance of doubt, nothing in this Section 4.6 shall create
any obligation on the part of Barings or CIG to offer or Transfer any of their
respective Shares to any Person.
4.7 Other Transfer-Related Provisions
A Shareholder may not Transfer any of its rights and obligations under this
Agreement to any Person other than to a Permitted Transferee. In the event of
any Transfer of Shares by a Shareholder to a Permitted Transferee, such
Permitted Transferee shall receive and hold any and all Shares so transferred
subject to the terms and conditions of this Agreement, the Standstill Agreement
and the Registration Rights Agreement and all of the rights and obligations, if
any, of the transferor hereunder and thereunder, and shall forthwith execute and
deliver to the other Shareholders an Endorsement. Each Shareholder hereby
undertakes to cause each of its Permitted Transferees to which any Shares are so
transferred to execute and deliver an Endorsement to each of the other
Shareholders and the Company.
4.8 Pledges
Any Shareholder (a "Pledging Shareholder") may pledge Shares to any Person
(a "Pledgee") to secure a bona fide obligation; provided that the following
terms and conditions are satisfied:
(a) Within three (3) Business Days of the pledge of any Shares to a
Pledgee or the execution of any agreement with a Pledgee concerning
such a pledge (a "Third Party Pledge Agreement"), the Pledging
Shareholder shall give (i) written notice of the pledge (a "Pledge
Notice") to each of the non-pledging Shareholders (each, a
"Non-Pledging Shareholder" and, collectively, the "Non-Pledging
Shareholders"), which Pledge Notice shall set forth the identity of
the Pledgee, the amount and term of financing being secured by the
pledge, and the number of Shares subject to such pledge (the "Pledged
Shares"), (ii) copies of the relevant pledge agreement and (iii) a
written acknowledgement from the Pledgee (which acknowledgement and
may be included in the Third Party Pledge Agreement) that the Pledgee
agrees to the terms and conditions of this Section 4.8.
(b) Any such pledge shall be governed by a Third Party Pledge Agreement,
which shall be binding on the Pledgee and shall provide that:
(i) The Pledgee, prior to taking any action to enforce its rights in
or to any of the Pledged Shares (including, but not limited to, any
enforcement upon, sale of, or acceptance of title to, any of the Pledged
Shares) (an "Enforcement Action"), shall give at least forty-five (45) days
prior written notice of such intention (an "Enforcement Notice") to each of
the Non-Pledging Shareholders; and
(ii) Upon receipt of such Enforcement Notice, each of the Non-Pledging
Shareholders shall have the right, at the option of such Non-Pledging
Shareholders to be exercised not later than forty-five (45) days after
receipt of such Enforcement Notice, to purchase from the Pledgee (pro rata
according to the respective percentage of Voting Stock owned by each
Non-Pledging Shareholder exercising its purchase rights hereunder (each, a
"Purchasing Shareholder" and, collectively, the "Purchasing Shareholders")
relative to the total number of shares of Voting Stock owned by all other
Purchasing Shareholders, or in such other proportion as such Purchasing
Shareholders may agree among themselves) the underlying obligation (or
portion thereof) at a purchase price equal to the lesser of (a) the Fair
Market Value of the Pledged Shares being purchased by such Purchasing
Shareholder, as
21
determined as of the date two (2) Business Days prior to such purchase or
(b) the principal amount of the relevant underlying obligation being
purchased by such Purchasing Shareholder, plus any interest, penalties and
other similar payments (if any) accrued and owing thereon up to, but
excluding, the purchase date thereof. For the avoidance of doubt, if the
Purchasing Shareholder(s) exercise their right to purchase the underlying
obligation hereunder, the Purchasing Shareholder(s) shall be obligated to
purchase, and the Pledgee shall be obligated to sell, the underlying
obligation in whole and not in part; provided that, if there is more than
one Purchasing Shareholder, the purchase of such underlying obligation
shall be apportioned among the Purchasing Shareholders in accordance with
the immediately preceding sentence. The Purchasing Shareholder(s)' purchase
of the underlying obligation from the Pledgee shall be effective upon
delivery of a purchase notice by the Purchasing Shareholder(s) to the
Pledgee, and such purchase shall not require the Pledgee's consent. The
Transfer of the relevant underlying obligation to each Purchasing
Shareholder shall be effective upon payment of the relevant purchase price
to the Pledgee by each such Purchasing Shareholder, which payment shall be
effected not later than forty-five (45) calendar days after receipt of the
Enforcement Notice. Concurrently with such purchase of the underlying
obligation (or portion thereof), the Third-Party Pledge Agreement shall be
automatically assigned to the Purchasing Shareholder(s). Thereafter, the
Pledging Shareholder shall Transfer the relevant Pledged Shares to each
such Purchasing Shareholder, free and clear of all Liens, in exchange for
cancellation of the underlying obligation with respect to such Pledged
Shares, without any additional purchase price owed or payable with respect
thereto. For the avoidance of doubt, the Pledged Shares shall be
apportioned among each Purchasing Shareholder based on the pro rata amount
of the underlying obligation purchased by each such Purchasing Shareholder.
(c) If any Enforcement Action would result in the Transfer of Shares such
that a Person, together with any of its Affiliates, would acquire more than
fifty percent (50%) of the issued and outstanding shares of Voting Stock, and
the Non-Pledging Shareholders do not elect to purchase in the aggregate all of
the Pledged Shares pursuant to Section 4.8(b)(ii), then the Non-Pledging
Shareholders shall each have the right, exercisable by written notice to the
Pledging Shareholder and the Pledgee (a "Pledge Co-Sale Notice") within
forty-five (45) days from delivery by the Pledgee of the Enforcement Notice, to
elect to sell in the proposed Transfer of Pledged Shares to such Person, all or
any portion of such Non-Pledging Shareholders' Shares, free and clear of any
Liens other than obligations under this Agreement. The Transfer of Shares by the
Non-Pledging Shareholders pursuant to a Pledge Co-Sale Notice shall be at a
price equal to the Fair Market Value thereof determined as of the date two (2)
Business Days prior to the date of such Transfer or, at the election of such
Non-Pledging Shareholders, such other price as may be agreed between the Pledgee
and the Non-Pledging Shareholders electing to Transfer their Shares hereunder
(which shall not be less than the Fair Market Value thereof). Failure of any
Non-Pledging Shareholders to provide a Pledge Co-Sale Notice within such
forty-five (45) day period shall be deemed an election by such Non-Pledging
Shareholder not to participate in the proposed Transfer pursuant to this Section
4.8(c).
(d) Each Non-Pledging Shareholder shall be an express third-party
beneficiary of the Third-Party Pledge Agreement with respect to each such
Non-Pledging Shareholder's rights set forth under this Agreement.
(e) If any Pledged Shares are Transferred, the transferee which acquires
the Shares agrees to be bound by the terms and conditions of this Agreement and
to execute an Endorsement.
(f) The Pledgee shall be either:
(i) A licensed Russian bank with equity capital of at least
US$200,000,000 which is not subject to ARCO administration and in which
ARCO does not possess any controlling or blocking rights; or
22
(ii) A foreign (i.e., non-Russian) bank with an investment grade
rating from Xxxxx'x Corporation (i.e., Baa or higher) or Standard & Poor's
(i.e., BBB or higher), as such ratings are determined at the time of the
pledge; or
(iii) Any other lender or supplier of vendor financing that has a
long-term debt rating of Baa or higher from Xxxxx'x Corporation or a rating
of BBB or higher from Standard & Poor's, as such ratings are determined at
the time of the pledge.
(g) Pledged Shares shall be pledged to the Pledgee under one pledge only,
and the underlying obligation secured by such pledge shall not be secured by any
collateral other than the Pledged Shares.
(h) Any breach by the Pledgee of any provision set forth in this Section
4.8 to be observed by the Pledgee shall be deemed a breach of this Agreement by
the Pledging Shareholder.
5. OTHER ARRANGEMENTS
(a) Except for the Principal Agreements, (i) no Shareholder shall grant any
proxy or enter into or agree to be bound by any understanding or any voting
trust, voting proxy or other agreement with respect to any matters relating to
the Company, its management, or any Shares, (ii) nor shall any Shareholder enter
into any shareholders agreement or other arrangement of any kind (whether
written or oral) with any Person with respect to any matters relating to the
Company, its management or any Shares, including, without limitation, any
agreement, understanding or arrangement with respect to the acquisition,
ownership, registration, Transfer or other disposition or voting of Shares, and
(iii) nor shall any Shareholder act, for any reason, as a member of a group or
in concert with any other Person in connection with the acquisition, Transfer or
other disposition or voting of Shares in any manner which is inconsistent with
any obligation of such Shareholder under this Agreement; provided that each
Shareholder shall be permitted to Transfer its Shares in accordance with the
terms of this Agreement.
(b) The Company shall not enter into any agreement or arrangement of any
kind with any Person that is inconsistent with any of the rights granted to the
Shareholders in the Principal Agreements or otherwise conflicts with any of the
provisions thereof.
(c) Without prejudice to any other rights or remedies hereunder of any
Party, if any representation or warranty made by any Shareholder in Article 2 is
shown to have been false or misleading when made or confirmed, or if any
Shareholder violates any provision of this Article 5, the rights of such
Shareholder under this Agreement and the Registration Rights Agreement shall
terminate forthwith, but such Shareholder shall continue to be bound by all of
its obligations hereunder and under the other Principal Agreements.
6. TERM AND TERMINATION
This Agreement shall become effective on the Effective Date and remain in
effect until the earlier of:
(a) the date on which all of the Parties agree in writing to the
termination of this Agreement; and
(b) the date on which any Person owns, individually or collectively with
its Affiliates, more than fifty percent (50%) of the issued and outstanding
shares of Voting Stock;
provided that (a) any Shareholder who, together with its Affiliates, having once
attained ownership of at least three percent (3%) or more of the issued and
outstanding shares of Voting Stock thereafter ceases to own, together with its
Affiliates, at least three percent (3%) of the issued and outstanding
23
shares of Voting Stock shall cease to be a party to, or have any rights or
obligations under, this Agreement from and after the date of the relevant
Transfer (or dilution); and (b) no such Transfer, dilution or termination shall
be deemed to relieve any Party of any obligations under this Agreement accruing,
or resulting from, any breach, action or omission of such Party occurring prior
to the date of such Transfer, dilution or termination. Promptly following the
date on which its board of directors has ratified and approved RTK's execution
of this Agreement, RTK shall provide each other Party with a certified copy of
an extract from the protocol of the meeting of RTK's board of directors
containing such ratification and approval.
7. MISCELLANEOUS
7.1 Specific Performance
The Parties hereby declare that it is impossible to measure in money the
damages that will accrue to a Party by reason of a failure by another Party to
perform any of the obligations under this Agreement. Therefore, if any Party
shall, in accordance with Section 7.10, institute any proceeding to enforce
specifically the provisions hereof, any Party against whom such proceeding is
brought hereby waives the claim or defense therein that the Party instituting
such proceeding has an adequate remedy at law or in damages, and the Party
against whom such proceeding is brought shall not urge in any such proceeding
the claim or defense that such remedy at law or in damages exists.
7.2 Waivers; Remedies
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 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. All remedies, either under this Agreement or
by law or otherwise afforded, will be cumulative and not alternative.
7.3 Amendments
This Agreement may be amended, supplemented or modified only by a written
instrument duly executed by or on behalf of each Party.
7.4 No Assignment; Binding Effect; No Third Party Beneficiaries
Except as expressly provided in Section 4.2 and Section 4.7, neither this
Agreement nor any right, interest or obligation hereunder may be assigned by any
Party without the prior written consent of the other Parties 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 and their
respective successors and assigns. The terms and provisions of this Agreement
are intended solely for the benefit of each Party 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.
7.5 Severability
If any provision of this Agreement 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 (a) any other provision of
this Agreement or any such other document in such jurisdiction or (b) such
provision or any other provision of this Agreement or any such other document in
any other jurisdiction.
24
7.6 Further Assurances
From time to time, at any Party's reasonable request and without further
consideration, each Party shall execute and deliver such additional documents
and take all such further action as may be reasonably necessary or desirable to
consummate and make effective, in the most expeditious manner practicable, the
transactions contemplated by this Agreement.
7.7 Entire Agreement
This Agreement and the other Principal Agreements will, from and after the
Effective Date, supersede all prior discussions and agreements among the Parties
with respect to the subject matter hereof and thereof and contain the sole and
entire agreement between the Parties with respect to the subject matter hereof
and thereof. For the avoidance of doubt, the Parties acknowledge that the
Existing Shareholders Agreement shall remain in full force and effect until the
Effective Date, whereupon the Existing Shareholders Agreement shall terminate
and be of no further force and effect.
7.8 Notices
All notices, requests, demands and other communications provided for by
this Agreement shall be in writing (including telecopier or similar writing) and
shall be deemed to have been duly given only if delivered personally or by
facsimile transmission or sent by courier, addressed to the address of the
relevant Party stated below or to such changed address as such Party may have
fixed by notice or, if given by telecopier, when such telecopy is transmitted
and the appropriate answerback is received:
(i) If to Alfa:
Alfa Telecom Limited
X.X. Xxx 0000
Xxxxxx Xxxxx
0xx Xxxxx
000 Xxxxxxxxxx Xxxxx
Xxxx Xxxx
Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx
Facsimile No.: x000 00 000
Attention: Xxxxx Xxxxxxxx
with a copy to:
Squire, Xxxxxxx & Xxxxxxx
2/2 Paveletskaya Square
115054 Moscow, Russian Federation
Facsimile No.: x0 (000) 000-0000
Attention: Xxxxx Xxxx
(ii) If to Telenor:
Xxx Telenor East Invest AS
Xxxxxxxxxxx 00
X-0000 Xxxxxxx
Xxxxxx
Facsimile No.: x00 00 00 00 00
Attention: Kjell Xxxxxx Xxxxxxx
25
with a copy to:
Advokatene i Xxxxxxx
Xxxxxxxxxxx 00
X-0000 Xxxxxxx
Xxxxxx
Facsimile No.: x00 00 00 0000
Attention: Xxxxx Xxxxxxx
and to:
Coudert Brothers LLP
00 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Facsimile No.: x00 (00) 0000 0000
Attention: Xxxxx X'Xxxxxxxx
(iii) If to CIG:
c/o Capital International Global Emerging Markets
Private Equity Fund, L.P.
000 Xxxxx Xxxxx Xxxxxxx Xxxxxxxxx
Xxxx, XX 00000-0000
Facsimile No.: x0 (000) 000-0000
Attention: Xxx Xxxxx
with a copy to:
Capital International Limited
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Facsimile No.: x00 (00) 0000-0000
Attention: Xxx Xxxxxx
and to:
Capital Research International Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Facsimile No.: x00 (00) 0000 0000
Attention: Xxxxxx Xxxxxxx
and to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
00 Xxxx Xxxx
Xxxxxx XX0X 0XX
Facsimile No.: x00 (00) 0000 0000
Attention: Xxxxx Xxxxxxxxx
26
(iv) If to Cavendish Nominees Limited:
c/o International Private Equity Services
00-00 Xxxxxxxx Xxxx
XX Xxx 000
Xx. Xxxxx Xxxx XX0 0XX, Guernsey
Facsimile No.: x00 (0) 0000 000 000
Attention: Xxx. Xxxxxx Xxxxxx
with a copy to:
Baring Vostok Capital Partners
0, Xxxxxxx Xxxxxx
Xxxxx Xxxxx XX, Xxxxx 000
000000 Xxxxxx, Xxxxxx
Facsimile No.: x0 (000) 000 0000
Attention: Xxxxxxx Xxxxxx
and to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
00 Xxxx Xxxx
Xxxxxx XX0X 0XX
Facsimile No.: x00 (00) 0000 0000
Attention: Xxxxx Xxxxxxxxx
(v) If to First NIS Regional Fund SICAV:
x/x Xxxx xx Xxxxxxx Xxxxxxxxxx
00 Xxx Xxxxxx X-0000, Xxxxxxxxxx
Facsimile No.: x00 0 00 00 00 000
Attention: Xxxxxxxxx Tourney
with a copy to:
Baring Vostok Capital Partners
0, Xxxxxxx Xxxxxx
Xxxxx Xxxxx XX, Xxxxx 000
000000 Xxxxxx, Xxxxxx
Facsimile No.: x0 (000) 000 0000
Attention: Xxxxxxx Xxxxxx
27
and to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
00 Xxxx Xxxx
Xxxxxx XX0X 0XX
Facsimile No.: x00 (00) 0000 0000
Attention: Xxxxx Xxxxxxxxx
(vi) If to the Company:
Golden Telecom, Inc.
0000 XxxXxxxxx Xxxx. XX
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
X.X.X.
Facsimile No.: x0 (000) 000-0000
Attention: General Counsel
with a copy to:
Representation Office of Golden TeleServices, Inc.
1 Xxxxxxxxxxxxxx Xxxxxx,
0xx Xxxxx
000000 Xxxxxx
Xxxxxx
Facsimile No.: x0 (000) 000-0000
Attention: General Counsel
(vii) If to RTK:
OAO Rostelecom Moscow,
xx. 0xx Xxxxxxxxx-Xxxxxxxx, 00
000000 Xxxxxx
Xxxxxx
Facsimile No.: x0 (000) 000-0000
Attention: Kuznetsov Xxxxxx Xxxxxxxxx
with a copy to:
Xxxxxxxx Chance CIS Limited
Xx. Xxxxxxxx-Xxxxxxxxxxxx 00/00
000000 Xxxxxx
Xxxxxxx Federation
Facsimile No.: x0 (000) 000-0000
Attention: Xxxxxx Xxxxxxx
7.9 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.
28
7.10 Arbitration; 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 New York, New York, United
States of America.
(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 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 Chairman of 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 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.
(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 7.10(a), no
action, lawsuit or other proceeding (other than the enforcement of an
arbitration decision, an action to compel arbitration or an application for
injunctive relief or other interim, provisional or conservatory measures in
connection with the arbitration) shall be brought by or between the Parties in
connection with any matter arising out of or in connection with this Agreement.
(c) Each Party other than CIG irrevocably appoints CT Corporation System,
located on the date hereof at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, XXX, and CIG irrevocably appoints Capital International Research, Inc.,
located on the date hereof at 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
10111, USA, Attn: General Counsel, as its true and lawful agent and attorney to
accept and acknowledge service of any and all process against it in any judicial
29
action, suit or proceeding permitted by this Section 7.10, 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 7.8. Each Party 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 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 7.10 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 this Section 7.10.
(d) Each Party hereby represents and acknowledges that it is acting solely
in its commercial capacity in executing and delivering this Agreement and in
performing its obligations hereunder, and each such Party 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 and any other document or instrument contemplated hereby, 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.
7.11 Counterparts; Language
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. This Agreement is being executed in both an English
language version and a Russian language version. In the event of any discrepancy
between the English language version and the Russian language version of this
Agreement or any disagreement among the Parties as to the meaning or
interpretation of any part of this Agreement, the English language version of
this Agreement shall prevail.
30
IN WITNESS WHEREOF, the Parties have executed this Shareholders
Agreement as of the date first written above.
The Shareholders
ALFA TELECOM LIMITED
By
--------------------------------------
Name:
Title:
XXX TELENOR EAST INVEST AS
By
--------------------------------------
Kjell Xxxxxx Xxxxxxx
Attorney-in-Fact
OAO ROSTELECOM
By
--------------------------------------
Name:
Title:
CAPITAL INTERNATIONAL GLOBAL
EMERGING MARKETS PRIVATE EQUITY
FUND, L.P.
By
--------------------------------------
Name:
Title:
31
FIRST NIS REGIONAL FUND SICAV
By
--------------------------------------
Name:
Title:
By
--------------------------------------
Name:
Title:
CAVENDISH NOMINEES LIMITED
By
--------------------------------------
Name:
Title:
The Company
GOLDEN TELECOM, INC.
By
--------------------------------------
Xxxxxxxxx Xxxxxxxxxx
President and Chief Executive Officer
32
Schedule 1
Shares held by Shareholders as of Effective Date
------------------------------------------------- ---------------------------------- ------------------------
Name of Shareholder Type of Shares No. of Shares
------------------------------------------------- ---------------------------------- ------------------------
Alfa Telecom Limited Common Stock 10,840,647
------------------------------------------------- ---------------------------------- ------------------------
Xxx Telenor East Invest AS Common Stock Such number of Shares as
are delivered to Telenor
under the Share Exchange
Agreement
------------------------------------------------- ---------------------------------- ------------------------
OAO Rostelecom Common Stock 4,024,067
------------------------------------------------- ---------------------------------- ------------------------
Capital International Global Emerging Markets Common Stock 2,166,405
Private Equity Fund, L.P.
------------------------------------------------- ---------------------------------- ------------------------
Cavendish Nominees Limited Common Stock 1,845,769
------------------------------------------------- ---------------------------------- ------------------------
First NIS Regional Fund SICAV Common Stock 723,907
------------------------------------------------- ---------------------------------- ------------------------
33
Schedule 2.1(d)
Consents and Approvals of Shareholders
As a condition to the consummation of the transactions contemplated by the
Principal Agreements, Telenor must satisfy the requirements of the HSR Act (as
defined in the Share Exchange Agreement).
34
Schedule 2.1(h)
Liens
Alfa has entered into a Pledge Agreement dated September 12, 2001 (the "Alfa
Pledge Agreement") between Alfa and OAO "Alfa-Bank", an open joint stock company
organized under the laws of the Russian Federation ("Alfa Bank") in respect of
the Shares owned by Alfa.
35
Schedule 2.1(i)
Exceptions to Sole Power of Disposition of Shareholders
Under the terms of Section 8 of the Alfa Pledge Agreement, Alfa will require the
consent of Alfa Bank in connection with Alfa's execution, delivery and
performance of this Agreement. In addition, pursuant to Section 4.8(a)(iii) of
this Agreement, Alfa must provide to the Shareholders a written acknowledgement
that Alfa Bank agrees to the terms and conditions of Section 4.8.
36
Schedule 2.2(e)
Consents and Approvals of Company
As conditions to the consummation of the transactions contemplated by the
Principal Agreements, the Company must obtain the approval of its stockholders,
satisfy the requirements of the HSR Act (as defined in the Share Exchange
Agreement), obtain the approval of the Ministry for Anti-Monopoly Policy and
Support for Entrepreneurship of the Russian Federation, and notify Nasdaq
concerning the issuance of the GTI Shares (as defined in the Share Exchange
Agreement).
37
Exhibit A
Form of Endorsement
[date]
The undersigned, a transferee of Shares of Golden Telecom, Inc. (the
"Company"), hereby agrees to the terms and conditions of [Section 3.5 (Tender
Offers) of] the Shareholders Agreement dated as of August 19, 2003 (the
"Shareholders Agreement", with terms defined in the Shareholders Agreement used
herein as therein defined) between and among the Company, Alfa Telecom Limited,
Xxx Telenor East Invest AS, OAO Rostelecom, Capital International Global
Emerging Markets Private Equity Fund, L.P., Cavendish Nominees Limited and First
NIS Regional Fund SICAV, and [(a)] agrees to be fully bound by the terms and
conditions of [Section 3.5 (Tender Offers) of] the Shareholders Agreement as if
the undersigned were an original signatory thereto[.][, (b) makes as of the date
hereof for the benefit of each of the other Parties to the Shareholders
Agreement, each of the representations and warranties set forth in Section 2.1
of the Shareholders Agreement, (c) represents that it owns the beneficial
interest in the Shares specified below and (d) agrees to deliver to each other
Party to the Shareholders Agreement, as soon as practicable (and in any event
not later than seven (7) days after the date hereof), an original copy of this
Endorsement.]
[Name of Transferee]
By
---------------------------------------
Name:
Title:
Type and Number of Shares:
[________ shares of ____________ stock]
38
