EXHIBIT E
Conformed Copy
___________________________________________________________________
REGISTRATION RIGHTS AGREEMENT
dated as of December 1, 1998
by and among
TELENOR EAST INVEST AS,
XX. XXXXXX XXXXXXXXXX XXXXX,
GLAVSOTKOM LLC,
THE FUND FOR NON-COMMERCIAL PROGRAMS "BEE LINE"
and
OPEN JOINT STOCK COMPANY "VIMPEL-COMMUNICATIONS"
___________________________________________________________________
REGISTRATION RIGHTS AGREEMENT dated as of December 1, 1998 by and among
TELENOR EAST INVEST AS, a company organized and existing under the laws of
Norway ("Telenor"), XX. XXXXXX XXXXXXXXXX XXXXX, a Russian citizen ("Xx.
Xxxxx"), GLAVSOTKOM LLC, a limited liability company organized and existing
under the laws of the Russian Federation ("Glavsotkom"), THE FUND FOR NON-
COMMERCIAL PROGRAMS "BEE LINE", a non-commercial organization organized and
existing under the laws of the Russian Federation (the "Bee Line Fund"), and
OPEN JOINT STOCK COMPANY "VIMPEL-COMMUNICATIONS", an open joint stock company
organized and existing under the laws of the Russian Federation (the "Company").
WHEREAS, Telenor has agreed to purchase 8,902,201 shares of common stock of
the Company on and subject to the terms and conditions of the Primary Agreement
dated as of December 1, 1998 between Telenor and the Company (the "Primary
Agreement");
WHEREAS, Xx. Xxxxx, Glavsotkom and the Bee Line Fund beneficially own
shares of capital stock of the Company; and
WHEREAS, Telenor, Xx. Xxxxx, Glavsotkom and the Bee Line Fund desire to
enter into this Agreement to provide for, among other things, certain rights and
obligations of the Parties relating to their respective ownership of the Shares
(as hereinafter defined);
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I DEFINITIONS AND INTERPRETATION
1.01 Definitions
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As used herein, the following terms shall have the following meanings:
"Agreement" shall mean this Registration Rights Agreement.
"ADSs" shall mean the Company's American Depositary Shares, each
representing three-quarters (3/4) of one (1) share of Common Stock, which are
currently listed on The New York Stock Exchange. Inc.
"Bee Line Fund" shall have the meaning specified in the preamble hereto.
"Board" shall mean the Board of Directors of the Company.
"Class B Preferred Stock" shall mean Class B cumulative preferred stock
(Priviligirovannye kumulyativnye akstii tipa B) of the Company.
"Common Stock" shall mean common stock of the Company.
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"Company" shall have the meaning specified in the preamble hereto.
"Controlled Affiliate" shall mean, with respect to any Person, any other
Person which directly or indirectly controls, or is under common control with,
or is controlled by, such Person and, if such Person is an individual, any
relative or spouse of such individual, or any relative of such spouse, any one
of whom has the same home as such individual, and any trust or estate for which
such individual serves as a trustee or in a similar capacity or in which such
individual has a substantial beneficial interest and any Person who is
controlled by any such member or trust. As used in this definition, "control"
(including, with its correlative meanings, "controlled by" and "under common
control with") shall mean 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 any other Person, provided that, in any event, any Person which
owns, directly or indirectly, more than 50% of the securities having ordinary
voting power for the election of directors or other governing body of a
corporation or more than 50% of the partnership or other ownership interests of
any other Person (other than as a limited partner of such other Person) will be
deemed to control such corporation or other Person.
"Demand" shall have the meaning specified in Section 3.01(a).
"Depositary" shall mean The Bank of New York, as depositary, under the
Deposit Agreement dated as of November 20, 1996 between and among the Company,
the Depositary and the owners and beneficial owners from time to time of the
Company's American Depositary Receipts.
"Xx. Xxxxx" shall have the meaning specified in the preamble hereto.
"Endorsement" shall mean an endorsement to this Agreement in the form of
Exhibit A hereto.
"Escrow Agreement" shall mean the Escrow Agreement dated December 1, 1998
between and among the Company, Telenor and Den norske Bank ASA, as Escrow Agent.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"First Board Date" shall mean the date of the first meeting of the Board at
which duly appointed designees of Telenor are sitting on the Board.
"Glavsotkom" shall have the meaning specified in the preamble hereto.
"GMS" shall mean the general meeting of the shareholders (obschee sobraniye
aktsionerov) of the Issuer, as defined in Article 9 of the Company's charter.
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"Guarantee Agreement" shall mean the Guarantee Agreement dated as of
December 1, 1998 between Telenor AS and the Company.
"Holder" shall mean the Telenor Shareholders, the Significant Zimin
Shareholders and such of their respective successors, assigns and transferees
that acquire Registrable Securities, directly or indirectly, from them, in each
case, in accordance with Section 3.03(c).
"Indemnified Party" shall have the meaning specified in Section 3.04(c).
"Indemnifying Party" shall have the meaning specified in Section 3.04(c).
"New Securities" shall mean any capital stock of the Company, whether
authorized, and any rights, options or warrants to purchase such capital stock,
and securities of any type whatsoever that are, or may become, convertible into
capital stock.
"Person" shall mean any natural person, corporation, general partnership,
simple partnership, limited partnership, proprietorship, other business
organization, trust, union, association or Governmental or Regulatory Authority,
whether incorporated or unincorporated.
"Primary Agreement" shall have the meaning specified in the first recital
hereto.
"Principal Agreements" shall mean this Agreement, the Primary Agreement,
the Escrow Agreement, the Shareholders Agreement, the Guarantee Agreement and
the Service Obligation Agreements (as defined in the Primary Agreement).
"Purchaser's Shares" shall mean Eight Million Nine Hundred Two Thousand Two
Hundred One (8,902,201) shares of Common Stock, to be purchased by Telenor on
and subject to the terms and conditions of the Primary Agreement.
"Register", "Registered", and "Registration" shall mean a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act and the declaration or ordering of the effectiveness of such
registration statement.
"Registrable Securities" shall mean ADSs or shares of Common Stock
(excluding any warrants or other securities convertible into Common Stock) that
any Holder may own (whether now owned or acquired after the date hereof), other
than ADSs or shares of Common Stock acquired by such Holder under circumstances
where the resale of such ADSs or shares by such Holder would not require
registration under the Securities Act. As to any ADSs or shares of Common Stock
which are Registrable Securities, such ADSs or shares shall cease to be
Registrable Securities when (a) a registration statement with respect to the
sale of such ADSs or shares, as the case may be, shall have become effective
under the Securities Act , (b) such ADSs or shares shall have been distributed
pursuant to Rule 144, Rule 144A, Rule 145 or any similar provision then in
force, under the Securities Act, and the transferee(s) thereof have not become
party to this Agreement in accordance with Section 3.03, (c) such ADSs or
shares shall have been otherwise transferred, new certificates or other
evidences of ownership for them not bearing
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a legend restricting further transfer and not subject to any stop transfer order
or other restrictions on transfer shall have been delivered by the Company and
subsequent disposition of such ADSs or shares shall not require registration or
qualification of such ADSs or shares under the Securities Act or any state
securities laws then in force, (d) the sale of such ADSs or shares by such
Holder shall no longer require registration under the Securities Act or (e) such
ADSs or shares shall cease to be outstanding. So long as the Company maintains
its registration with the SEC of the ADSs, Registrable Securities consisting of
Shares shall be deposited with the Depositary and registration made of ADSs (for
sale thereof in a public offering), and not shares of Common Stock, under this
Agreement.
"Registration Expenses" shall mean all expenses incurred by the Company in
effecting any registration pursuant to this Agreement, including, without
limitation, all registration, qualification and filing fees, depositary fees,
printing expenses, escrow fees, fees and disbursements of counsel for the
Company, blue sky fees and expenses, the expenses of any regular or special
audits incident to or required by any such registration, but excluding (a)
Selling Expenses , (b) the compensation of regular employees of the Company
(which shall be paid in any event by the Company) and (c) the premiums in
respect of the insurance policy described in Section 3.04 (e).
"Rule 144", "Rule 144A" and "Rule 145" shall mean Rules 144, 144A and 145,
and any successor rules thereto, as promulgated by the SEC under the Securities
Act.
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the sale of Registrable
Securities and all fees and disbursements of counsel for any Holder (which
shall, in any event, be paid by such Holder).
"Shareholders Agreement" shall mean the Shareholders Agreement dated as of
December 1, 1998 between and among Telenor, the Significant Zimin Shareholders,
Xxxxx Xxxxxx, XX and Geneva Investment Trust I, L.L.C.
"Shares" shall mean shares of common stock or preferred stock of the
Company, as the case may be.
"Significant Zimin Shareholders" shall mean Xx. Xxxxx, the Bee Line Fund
and Glavsotkom.
"Specified Percentage" shall mean, with respect to Telenor or the Zimin
Shareholders, twenty-five percent (25%) plus one (1) share of the voting capital
stock of the Company.
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"Strategic Investor" shall mean any Person which derives at least fifteen
per cent (15%) of its revenues, on a consolidated basis with its affiliates,
from operations in the telecommunications industry, other than the Purchaser or
its Controlled Affiliates.
"Telenor" shall have the meaning specified in the preamble hereto.
"Telenor Shareholder" shall mean Telenor and any Controlled Affiliate of
Telenor which acquires Registrable Securities in accordance with this Agreement.
"Third Person" shall mean any person who is not a Telenor Shareholder or a
Zimin Shareholder.
"transfer" shall mean any transfer, sale, assignment, conveyance, pledge or
other disposition, as the case may be.
"UNCITRAL Rules" shall have the meaning specified in Section 6.09.
"Zimin Shareholders" shall mean (a) during Xx. Xxxxx'x lifetime, Xx. Xxxxx
and any Controlled Affiliate of Xx. Xxxxx which is or becomes a party to this
Agreement in accordance with Section 3.03(c), and (b) after Xx. Xxxxx'x death or
incapacity, any Person which was, at the time of Xx. Xxxxx'x death or
incapacity, a Controlled Affiliate of Xx. Xxxxx and a party to this Agreement.
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;
(b) words of any gender shall include each 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, amendment and restatement, 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
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(g) a reference to any Person shall include such Person's successors,
permitted assigns and permitted transferees under any agreement, instrument,
Contract or other document.
ARTICLE II
TRANSFER RESTRICTIONS
AND COMPLIANCE WITH THE SECURITIES ACT
2.01 Restrictions on Transfer by the Telenor Shareholders
----------------------------------------------------
(a) Telenor shall not transfer any Shares for a period of one (1) year
after the date of the execution of the Primary Agreement (other than to another
Telenor Shareholder which becomes a Party to this Agreement in accordance with
Section 3.03); and
(b) Following the period specified in Section 2.01(a), neither Telenor nor
any of the Telenor Shareholders shall transfer any Shares other than:
(i) pursuant to a registration statement with respect to a public
offering by Telenor of ADSs (in which case, Telenor shall have the right to
transfer the underlying shares of Common Stock to the Depositary) which has been
declared effective under the Securities Act in accordance with Section 3.01 or
Section 3.02 of this Agreement or under Section 3.04 of the Shareholders
Agreement; or
(ii) in any transaction which is exempt from the registration
requirements of the Securities Act, provided that:
(A) if on the date of any proposed transfer of a number of Shares
equal to or greater than the Specified Percentage of the Shares by the Telenor
Shareholders to any Third Person (1) the Shareholders Agreement is then in
effect and (2) the Zimin Shareholders own, directly or indirectly, at least the
Specified Percentage of Shares, the Telenor Shareholders shall not transfer any
Shares to such Third Person, unless Telenor has given the Zimin Shareholders at
least thirty (30) days' prior written notice of such proposed transfer in
accordance with Section 7.10 of the Shareholders Agreement and Section 2.03 of
this Agreement and obtained the prior written consent of the applicable Zimin
Shareholder thereto in accordance with Section 3.01 of the Shareholders
Agreement; and
(B) Reserved.
(C) the Telenor Shareholders shall not transfer any Shares to any
Third Person (other than the Depositary in connection with the conversion of
Shares to ADSs) if such Third Person is on the date of such transfer, or will
be, after giving effect to such transfer, a holder of ten percent (10%) or more
of the Common Stock, unless Telenor has given the Company at least thirty (30)
days' prior written notice of such proposed transfer in accordance with Section
2.03 of this Agreement and obtained the prior written consent of the Company
thereto, as evidenced by an extract from the Board Protocol.
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2.02 Standstill
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So long as the Zimin Shareholders own at least the Specified Percentage of
Shares, neither Telenor nor any of its Controlled Affiliates shall, without the
prior written consent of (a) during his lifetime, Xx. Xxxxx and (b) after Xx.
Xxxxx'x death or incapacity, the Bee Line Fund, increase its or their holding(s)
of shares of Common Stock, either directly or indirectly, above the Specified
Percentage, as determined in the aggregate for all such Holders.
2.03 Notice of Proposed Transfers
----------------------------
At least 30 days prior to any proposed transfer of any Shares pursuant to
Section 2.01(b)(ii), Telenor shall give written notice to the Company of the
intention of any Telenor Shareholder to effect such transfer. Each such notice
shall identify the proposed transferee and the beneficial owner(s) of such
proposed transferee, describe the shares, if any, of capital stock in any
telecommunications company owned by such transferee (and its affiliates) and
such beneficial owner(s) and describe the manner and circumstances of the
proposed transfer in sufficient detail and, if the Company reasonably so
requests, shall be accompanied, at Telenor's expense, by either (a) an
unqualified opinion of counsel reasonably acceptable to the Company, which
opinion shall be addressed to the Company, to the effect that such proposed
transfer may be effected without registration under the Securities Act or (b) a
"no action" letter from the SEC to the effect that such proposed transfer will
not result in a recommendation by the staff of the SEC that action be taken with
respect thereto, whereupon, subject to Section 2.01(b)(ii), such Telenor
Shareholder shall be entitled to transfer such Shares in accordance with the
terms of the notice delivered by Telenor to the Company.
2.04 Effect of Transfers
-------------------
In the event of any transfer by the Telenor Shareholders of the Specified
Percentage of Shares effected in accordance with Section 2.01(b)(ii)(A) or (B),
the transferee shall receive and hold any and all Shares so transferred subject
to the terms and conditions of this Agreement and all of the obligations, if
any, of the transferor hereunder, and shall forthwith execute and deliver to the
Company an Endorsement. In the event that the Telenor Shareholders shall effect
a transfer of all of their Shares in accordance with Section 2.01(b)(ii)(A) or
(B), the Telenor Shareholders shall, after giving effect to such transfer, cease
to be a party to, or bound by the terms of, this Agreement. In the event of any
transfer of Shares or ADSs in an amount less than the Specified Percentage by
Telenor or any of its Controlled Affiliates, or by any of the Zimin Shareholders
or any of their respective Controlled Affiliates, to any Third Person who is not
a Controlled Affiliate of any of the parties to this Agreement, the transferee
shall not be entitled to any rights, nor subject to any obligations, under this
Agreement.
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ARTICLE III REGISTRATION RIGHTS
3.01 Demand Registration
-------------------
(a) Exercise of Demand. At any time commencing one (1) year after the date
------------------
of execution of the Primary Agreement, or earlier as may be agreed by the
parties hereto, if the Company shall receive from a Holder a written request
sent and delivered in accordance with Section 6.02 (a "Demand") that the Company
effect any registration with respect to the Registrable Securities under the
Securities Act, the anticipated aggregate offering price of which exceeds
US$20,000,000, the Company will, as soon as practicable after receipt of such
Demand, use its best efforts to effect such registration (including, without
limitation, by filing a registration statement (and executing an undertaking to
file any amendments thereto) covering the Registrable Securities so requested to
be registered, qualifying such Registrable Securities under applicable blue sky
or other securities laws of any state of the United States of America to the
extent set forth herein and complying with applicable regulations issued under
the Securities Act and any other governmental requirements or regulations) as
may be so requested and as would permit or facilitate the sale and distribution
in an underwritten offering of all or such portion of such Registrable
Securities as are specified in such request; provided, however, that the Company
shall not be obligated to take any action to effect any such registration,
qualification or compliance pursuant to this Section 3.01:
(i) within six (6) months after the effective date of a prior
registration statement effected in response to a request from any Holder
pursuant to this Section 3.01(a) or within six (6) months after the effective
date of any other registration statement effected by the Company for a public
offering of ADSs or Shares;
(ii) if at such time such Holder and its Controlled Affiliates hold
Shares representing less than ten percent (10%) of the Company's issued and
outstanding voting capital stock; or
(iii) if at such time the Company has, in response to requests from
such Holder and such Holder's predecessors in interest pursuant to this Section
3.01(a), effected the registration of Registrable Securities and has sold such
Registrable Securities on at least three (3) prior occasions; provided that, (A)
for purposes of determining the number of demand registrations effected by a
Holder and its predecessors in interest, the Telenor Shareholders and Persons
acquiring Registrable Securities directly or indirectly from the Telenor
Shareholders shall count as one Holder and the Zimin Shareholders and Persons
acquiring Registrable Securities directly or indirectly from the Significant
Zimin Shareholders shall count as one Holder, and (B) except as set forth in
Section 3.03(a), if the Company withdraws a registration of Registrable
Securities at the request of any Holder originally demanding registration under
this Section 3.01(a) at any time after the filing of a registration statement in
response to such demand that is a matter of public record at the SEC, then such
withdrawn registration statement shall count as a registration by such Holder.
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(b) Limitations on Subsequent Registration Rights. The Company shall not
---------------------------------------------
enter into any agreement with any holder or prospective purchaser of any
securities of the Company that would allow such holder or prospective purchaser
to require the Company to include shares or securities in any registration
initiated under this Section 3.01, nor shall the Company include any shares or
securities for its own account, without the prior written consent of Telenor and
the Zimin Shareholders.
(c) Underwriting. The Company (together with the Holder(s) proposing to
------------
distribute Registrable Securities through such underwriting) shall, upon request
of the lead managing underwriter selected for such underwriting by the Company
(which lead managing underwriter shall be reasonably acceptable to the Holders
of a majority of the Registrable Securities proposed to be sold in such
offering), enter into any reasonable agreement requested by such lead managing
underwriter in connection with the offering, including, but not limited to, an
underwriting agreement in customary form with such lead managing underwriter;
provided, however, that (a) the Holder(s) shall be permitted to select a co-
managing underwriter for such offering which co-managing underwriter shall be
reasonably acceptable to the Company; and (b) in no event shall the Company be
required to include shares for its own account in such offering. If a Holder
disapproves of the terms of the underwriting, such Holder may elect to withdraw
therefrom by written notice to the Company and the lead managing underwriter.
3.02 Piggy-Back Registration
-----------------------
(a) Exercise. Each of the Telenor Shareholders and the Significant Zimin
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Shareholders shall have the piggyback registration rights set forth in this
Section 3.02 provided that (i) as a prerequisite to any Telenor Shareholder
having such rights, the Telenor Shareholders shall, at the time of the exercise
of such rights, hold ADSs or Shares representing not less than ten percent (10%)
of the issued and outstanding voting capital stock of the Company, and (ii) as a
prerequisite to any Significant Zimin Shareholder having such rights, the
Significant Zimin Shareholders shall, at the time of the exercise of such
rights, hold ADSs or Shares representing not less than ten percent (10%) of the
issued and outstanding voting capital stock of the Company. If at any time
after the fourth anniversary of the date of execution of the Primary Agreement
the Company shall propose to register any of its securities in connection with
the underwritten offering and sale thereof for cash, either for its own account
or the account of another Person exercising demand registration rights
(including, without limitation, any other Holder) other than (i) a registration
relating solely to an employee benefit plan, or (ii) a registration relating
solely to a Rule 145 transaction, then, provided that at such time such Holder
is eligible for piggyback registration rights in accordance with the immediately
preceding sentence, the Company shall:
(i) promptly give Telenor and the Significant Zimin Shareholders
written notice thereof; and
(ii) include in such registration (and any related qualification under
blue sky laws or other applicable laws and regulations with which the Company is
required to comply), and in
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any underwriting relating thereto, all of the Registrable Securities specified
in a written request (which in any one request, shall not exceed fifty percent
(50%) of the ADSs or Shares owned in the aggregate by the Telenor Shareholders
or the Significant Zimin Shareholders, as applicable, at such time), made within
thirty (30) calendar days after delivery of such written notice by the Company.
(b) Underwriting. The right of the Telenor Shareholders and the Significant
------------
Zimin Shareholders to registration pursuant to this Section 3.02 shall be
conditioned upon their participation in the underwriting described in Section
3.02(a) and the inclusion of Registrable Securities in such underwriting to the
extent provided herein. The Holders proposing to sell Registrable Securities
shall (together with the Company and any other Person distributing securities
through such underwriting) enter into an underwriting agreement in customary
form with the lead managing underwriter selected for such underwriting by the
Company. Notwithstanding any other provision of this Section 3.02, if the lead
managing underwriter advises the Company in writing that, in the opinion of the
lead managing underwriter, the number of Registrable Securities requested to be
included in such registration exceeds the number of ADSs which can be sold in
such offering, so as to be likely to have an adverse effect on the price, timing
or distribution of ADSs offered in such offering, the lead managing underwriter
may limit the Registrable Securities to be included in such registration to the
number of Registrable Securities requested to be included in such registration
which, in the opinion of the lead managing underwriter, can be sold without
having such adverse effect. In the event the lead managing underwriter so
advises the Company, the Company shall so advise the Holders proposing to sell
Registrable Securities (and any other Person distributing securities through
such underwriting), and the Company will include in such registration to the
extent of the amount of the securities which the lead managing underwriter
advises the Company can be sold in such offering in the following priority: (i)
first, the securities proposed by the Company to be sold for its own account;
and (ii) second, any Registrable Securities and other securities of the Company
requested to be included in such registration by the Holders and any such other
Person, as nearly as practicable, pro rata to the amounts of Registrable
Securities requested by each Holder and each such other Person to be included in
the offering at the time of filing of the registration statement. If any Holder
disapproves of the terms of any such underwriting, it may elect to withdraw
therefrom by written notice to the Company and the lead managing underwriter.
Any securities excluded or withdrawn from such underwriting shall be withdrawn
from such registration.
(c) Right to Terminate Registration. The Company shall have the right to
-------------------------------
terminate or withdraw any registration initiated by the Company under this
Section 3.02 prior to the effectiveness of such registration, whether or not any
eligible Holder has elected to include securities in such registration.
3.03 Expenses of Registration; Transfer
----------------------------------
(a) All Registration Expenses incurred in connection with any registration
pursuant to Section 3.01 shall be borne by the Holder requesting such
registration. All Registration Expenses incurred in connection with any
registration pursuant to Section 3.02 shall be shared
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equally by the Company, on the one hand, and by the Holders and any other Person
participating in such registration, on the other. The Holders and any other
Person participating in such registration shall bear all such Registration
Expenses pro rata to the number of Shares and Registrable Securities which have
been registered. Notwithstanding the foregoing, however, if any Holder withdraws
from a registration because such Holder has learned of a material adverse change
in the financial condition, business or prospects of the Company which was not
known to such Holder at the time of its request and the Company willfully failed
to disclose such material adverse change to such Holder, then such Holder shall
not be required to pay any of said Registration Expenses or to forfeit a right
to demand registration, provided, however, that if a material adverse change in
the financial condition, business or prospects of the Company occurs after a
request for registration has been made by such Holder, such material adverse
change is due to circumstances beyond the Company's and such Holder's control,
is disclosed by the Company to such Holder and results in such Holder
withdrawing from such registration, then all Registration Expenses incurred in
connection with such registration shall be borne by such Holder, in the
proportion it would otherwise have been liable for under this Agreement.
(b) Notwithstanding the provisions of Section 3.03(a), if, as a condition
of registration, qualification or compliance of any offering in any state or
jurisdiction in which the Company (by vote of its Board of Directors) or any
underwriter determines in good faith that it wishes to offer securities
registered in an offering to which this Agreement applies, it is required that
offering expenses be allocated in a manner different from that provided in
Section 3.03(a), the offering expenses shall be allocated in whatever permitted
manner is most nearly in compliance with the provisions of this Agreement.
(c) The rights to cause the Company to register the Registrable Securities
pursuant to Section 3.01 and, in the case of any Holder other than a Significant
Zimin Shareholder or its successors, assigns or transferees, Section 3.02, may
be assigned to a transferee or assignee in connection with any transfer or
assignment of Registrable Securities by a Holder, provided that:
(i) such transfer may only be effected in accordance with applicable
securities laws;
(ii) such Holder and such transferee shall comply with the requirements
of Article II of this Agreement, including the obligation of the transferee to
execute and deliver to the parties hereto an Endorsement; and
(iii) such transferee or assignee:
(A) is a Controlled Affiliate of such Holder; or
(B) acquires from such Holder at least the Specified Percentage of
Shares in accordance with the Shareholders Agreement.
3.04 Indemnification
---------------
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(a) To the extent permitted by law, the Company will indemnify each Holder,
each of its officers and directors and partners, and each Person controlling
such Holder (within the meaning of Section 15 of the Securities Act), with
respect to which registration, qualification or compliance has been effected
pursuant to this Article III, and each underwriter, if any, and each Person who
controls any underwriter (within the meaning of Section 15 of the Securities
Act), against all expenses, claims, Losses, damages or liabilities (or actions
in respect thereof), including any of the foregoing incurred in settlement of
any litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, or any violation (or alleged violation) by the Company of the
Securities Act or any rule or regulation promulgated under the Securities Act
applicable to the Company in connection with any such registration,
qualification or compliance, and the Company will reimburse or pay for the
account of each Holder, each of its officers and directors, each Person
controlling such Holder, each such underwriter and each Person who controls any
such underwriter, for any legal and any other expenses reasonably incurred (as
and when incurred) in connection with investigating, preparing or defending any
such claim, Loss, damage, liability or action, provided that the Company will
not be liable in any such case to the extent that any such claim, Loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder, such controlling person or underwriter and stated
to be specifically for use therein.
(b) To the extent permitted by law, each Holder will, if Registrable
Securities held by such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers, each underwriter, if any, of the
Company's securities covered by such a registration statement, each Person who
controls the Company or such underwriter (within the meaning of Section 15 of
the Securities Act), and any other Person participating in such registration,
each of its officers and directors and each Person controlling (within the
meaning of Section 15 of the Securities Act) such Person participating in such
registration, against all claims, Losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
or pay for the account of the Company, such Persons, such directors, officers,
Persons, underwriters or control Persons for any legal or any other expenses
reasonably incurred (as and when incurred) in connection with investigating or
defending any such claim, Loss, damage, liability or action, in each case to the
extent, but only to the extent that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity
13
with written information furnished to the Company by an instrument duly executed
by such Holder and stated to be specifically for use therein; provided however
that the liability of such Holder for indemnification under this Section 3.04(b)
shall not exceed the gross proceeds from the offering received by such Holder,
unless such liability arises out of or is based on willful misconduct of such
Holder.
(c) Each party entitled to indemnification under this Section 3.04 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (which approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Agreement except to the extent that the failure to
give such notice is materially prejudicial to an Indemnifying Party's ability to
defend such action. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
(d) The obligations of the Company and each Holder under this Section 3.04
shall survive the completion of any offering of Registrable Securities in a
registration statement pursuant to this Agreement.
(e) The Company shall obtain, and each Holder and each other Person
participating in a registration (including, without limitation, if it is
participating in such registration, the Company) shall pay its ratable share of
the cost of, an insurance policy, naming as insureds each of the Indemnified
Parties eligible for indemnification by the Company under Section 3.04(a), which
insurance policy shall provide coverage in an amount of not less than thirty-
five percent (35%) of the aggregate monetary face value of the offering to which
such registration relates, insuring such insureds against any of the expenses,
claims, Losses, damages or liabilities (or actions in respect thereof) for which
the Company is obligated to indemnify any Indemnified Party under Section
3.04(a). Notwithstanding any other provision in this Agreement, the Company
will be obligated to indemnify any Indemnified Party eligible for
indemnification under Section 3.04(a) only to the extent payments under such
insurance policy are insufficient to hold harmless such Indemnified Party in
respect of any such expenses, claims, Losses, damages or liabilities (or actions
in respect thereof).
3.05 Information to be Provided by Holders
-------------------------------------
Each Holder shall furnish to the Company such information regarding such
Holder, the Registrable Securities held by it and the distribution proposed by
such Holder as the Company
14
may request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Agreement.
3.06 Obligations of the Company
--------------------------
Whenever required under this Agreement to effect the registration of any
Registrable Securities, the Company shall, as soon as practicable:
(a) Prepare and file with the SEC a registration statement with respect to
such Registrable Securities and use its best efforts to cause such registration
statement to become effective.
(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act until the earlier of (i) the disposition of all securities
covered by such registration statement and (ii) 120 days after the effective
date thereof.
(c) Furnish to each Holder such numbers of copies as it may reasonably
request, in order to facilitate the disposition of Registrable Securities owned
by it, of any prospectus or preliminary prospectus prepared in conformity with
the Securities Act.
(d) Use its best efforts to register and qualify the securities covered by
such registration statement under such other securities or blue sky laws of such
jurisdictions as shall be reasonably requested by any Holder; provided, however,
that the Company shall not be required to qualify any such securities under the
laws of any jurisdiction where such qualification would require the
qualification of the Company to transact business in such jurisdiction (which
qualification would not otherwise be required).
(e) Notify each Holder at any time when a prospectus relating to a
registration of Registrable Securities is required to be delivered under the
Securities Act of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing.
(f) Furnish, at the request of any Holder, on the date that any Registrable
Securities are delivered to the underwriters for sale in connection with a
registration pursuant to this Agreement, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement, with respect to such
securities, becomes effective, (i) an opinion dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to such Holder and (ii) a
letter dated such date, from independent certified public accountants of the
Company in form and substance as is customarily given to underwriters in an
underwritten
15
public offering, addressed to the underwriters, if any, and to such Holder. Any
opinion or letter given shall be subject to all of the qualifications,
exceptions and conditions appropriate to the then existing circumstances.
(g) Maintain a depositary for the ADSs and a registrar for the Common
Stock.
(h) Otherwise use its best efforts to comply with all applicable rules and
regulations of the SEC.
(i) Use its best efforts to maintain the listing of the ADSs on a national
securities exchange in the United States of America and on each additional
national securities exchange on which similar securities issued by the Company
are then listed, if the listing of the Registrable Securities is then permitted
under the rules of such exchange.
(j) Make available for inspection and copying by each Holder, by any
underwriter participating in any disposition to be effected pursuant to such
registration statement and by any attorney, accountant or other agent retained
by such Holder or any such underwriter, all pertinent financial and other
records and pertinent corporate documents and properties of the Company, and
cause all of the Company's officers, directors and employees to supply all
information reasonably requested by such Holder, underwriter, attorney,
accountant or agent in connection with such registration statement.
(k) Use every reasonable effort to prevent the issuance of any stop order
suspending the effectiveness of such registration statement or of any order
preventing or suspending the use of any preliminary prospectus and, if any such
order is issued, to obtain the lifting thereof at the earliest reasonable time.
(l) Make such representations and warranties to each Holder and the
underwriters as are customarily made by issuers to underwriters and selling
shareholders, as the case may be, in secondary underwritten public offerings.
(m) Furnish to each Holder, upon request by such Holder, a copy of all
documents filed and all correspondence from or to the SEC in connection with the
registration statement and the offering to which it relates.
(n) Use its best efforts to obtain all necessary approvals from the
National Association of Securities Dealers, Inc. in connection with any such
offering.
3.07 Rule 144 Reporting
------------------
With a view to making available the benefits of certain rules and
regulations of the SEC which may at any time permit the sale of the Shares to
the public without registration, at all times at which the Company has had
securities registered pursuant to Section 12 of the Exchange Act for the
preceding ninety (90) days, the Company agrees to use its best efforts to:
16
(a) make and keep public information available, as such terms are
understood and defined in Rule 144 under the Securities Act;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; and
(c) so long as any Holder owns any ADSs or Shares, furnish to such Holder
upon request a written statement by the Company as to its compliance with the
reporting requirements of said Rule 144, a copy of the most recent annual or
quarterly report of the Company and such other reports and documents of the
Company and other information in the possession of or reasonably obtainable by
the Company as such Holder may reasonably request in availing itself of any rule
or regulation of the SEC allowing such Holder to sell any such Shares without
registration.
3.08 Standoff Agreement
------------------
Each Holder agrees in connection with any registration of the Company's
securities, upon request of the Company or the underwriters managing any
underwritten offering of the Company's securities, not to sell, make any short
sale of, loan, grant any option for the purchase of or otherwise dispose of any
Registrable Securities (other than those included in the registration) without
the prior written consent of the Company or such underwriters, as the case may
be, for such period of time (not to exceed one hundred eighty (180) days) from
the effective date of such registration as may be requested by the Company or
such underwriters, provided that each of the Company's officers and directors
shall have agreed to be bound by the same restrictions in connection with such
public offering.
3.09 Currency of Registration and Public Information
-----------------------------------------------
In case any Registrable Securities are registered pursuant to this
Agreement the Company will maintain the currency of all registration and other
public information required by law until all Registrable Securities have been
sold or as may otherwise be specified in any underwriting agreement applicable
to such offering, provided, however, that if, at any time during the
effectiveness of such registration, the Board of Directors determines in good
faith that the public disclosure of any such information would be seriously
detrimental to the Company, then (a) the Company will so inform each Holder and
will be relieved of its obligation to maintain the currency of the registration
and other public information required in connection with sales of the
Registrable Securities during the period in which the determination of the Board
of Directors continues to apply and (b) the period during which the Company is
obligated to maintain the currency of the registration and other public
information will be extended by one day for each day during which it is relieved
of such obligation.
ARTICLE IV COVENANTS OF THE COMPANY
The Company hereby covenants and agrees that, for so long as this
Agreement remains in effect:
17
(a) Without prejudice to any rights of Telenor under the Primary
Agreement, so long as Telenor has not sold or otherwise transferred any of the
Purchaser's Shares, if after the Closing Date any Person makes a bona fide and
otherwise valid claim (as determined by the Board in its reasonable discretion)
to an ownership right, which right arose before the First Board Date, to any
shares of voting capital stock of the Company, as a direct result of the
exercise of which right the Purchaser's Shares subscribed for by Telenor under
the Primary Agreement constitute less than twenty-five percent (25%) plus one
share of the then outstanding voting capital stock of the Company, then, upon
the request of Telenor, the Company shall cause Telenor to be offered the
opportunity to purchase Common Stock or ADSs representing a sufficient number of
shares of voting capital stock of the Company (at the then fair market value
thereof (as defined below)) such that, after giving effect to such purchase,
Telenor shall own in the aggregate twenty-five percent (25%) plus one share of
the then outstanding voting capital stock of the Company. For purposes of this
paragraph, the fair market value of such Common Stock or ADSs shall be
calculated based on the weighted average market value of the ADSs on the New
York Stock Exchange during the thirty (30) trading daYs immediately preceding
the date on which the Board determined that such ownership claim was bona fide
and otherwise valid, calculated on the basis of the closing price per ADS on
each such trading day. Any offer made to Telenor pursuant to this Article IV(a)
must be accepted within five Business Days and, if not accepted within such
period, shall thereafter expire, and payment in full in US Dollars for the
offered Common Stock or ADSs shall be made within five Business Days of such
acceptance against delivery of certificates representing such Common Stock or
ADSs.
(b) Telenor shall have the right, but not the obligation, to request that
the Company instruct the National Registry Company to indicate in the share
register of the Company that the Shares held by the parties to the Shareholders
Agreement are subject to restrictions on transfer and certain other encumbrances
pursuant to this Agreement and the Shareholders Agreement.
ARTICLE V COVENANTS OF TELENOR
Telenor hereby covenants and agrees that:
5.01 Public Offering
---------------
For the period commencing on the first anniversary of the date of
execution of the Primary Agreement and ending on the fourth anniversary thereof,
(a) so long as the Telenor Shareholders own any Shares and (b) provided that any
decision of the Board or the shareholders of the Company to issue New Securities
permits Telenor to purchase such New Securities (i) in an amount sufficient to
maintain the ownership by the Telenor Shareholders of the Specified Percentage
of Shares if at such time the Telenor Shareholders, in the aggregate, own at
least the specified Percentage of Shares and (ii) on the same terms and
conditions as other purchasers of such New Securities, Telenor shall vote (and
shall cause the Telenor Shareholders to vote) such Shares in favor of any
issuance of New Securities which are to be offered to the public (and not to a
Strategic Investor if such Strategic Investor is on the date of such offering or
will be after giving effect to a purchase in such offering a holder of ten
percent (10%) or more of the voting
18
capital stock of the Company) pursuant to a registration statement which has
been declared effective under the Securities Act (regardless of whether the
offering of such New Securities is registered with the Russian Federal
Commission on Securities Markets as an open subscription or a closed
subscription under Russian law).
5.02 Preferred Stock
---------------
So long as the Telenor Shareholders own any Shares, provided that (a) the
Class B Preferred Stock is issued solely to Xx. Xxxxx or the Bee Line Fund, has
substantially the same terms and conditions as are set forth in Schedule 1, and,
by the terms of the applicable subscription agreement, is non-transferable, and
(b) Telenor receives at least thirty (30) days prior to the date of a vote by
the shareholders of the Company on the issuance of the Class B Preferred Stock
an opinion of counsel to the Company, in form and substance reasonably
satisfactory to Telenor, confirming that (i) after giving effect to the issuance
of the Class B Preferred Stock, there will be no material adverse effect on the
veto rights of a holder of the Specified Percentage of Shares on any decision
requiring a shareholder vote under then applicable Russian law and (ii) the
terms and conditions of the Class B Preferred Stock are substantially the same
as those set forth in Schedule 1, Telenor shall vote (and shall cause the
Telenor Shareholders to vote) all Shares owned by the Telenor Shareholders in
favor of the approval of the issuance of the Class B Preferred Stock.
5.03 Compliance with Trading Policy
------------------------------
During the period in which Telenor is an affiliate (as such term is
defined in the Securities Act) of the Company, Telenor shall at all times
comply, and shall cause each of the Telenor Shareholders to comply, with (a) the
Company's policy relating to trading activities involving or affecting the
Company's securities, as in effect from time to time, and (b) applicable law
relating to the holding or transfer of such securities.
ARTICLE VI MISCELLANEOUS
6.01 Term
----
This Agreement shall take effect on the date hereof and remain in effect
until the earliest of:
(a) the date on which parties hereto agree in writing to the termination
of this Agreement;
(b) as to all rights and obligations of the Telenor Shareholders under
this Agreement, the date on or after January 29, 2000 on which the Telenor
Shareholders own, in the aggregate, ADSs or Shares representing less than ten
percent (10%) of the issued and outstanding voting capital stock of the Company;
19
(c) as to all rights and obligations of the significant Zimin Shareholders
under this Agreement, the date on which the Significant Zimin Shareholders, in
the aggregate, own ADSs or Shares representing less than ten percent (10%) of
the issued and outstanding voting capital stock of the Company; and
(d) the date on which a meeting of the shareholders of the Company is held
at which a vote of such shareholders is conducted concerning the transactions
specified in Section 5.04(a) of the Primary Agreement and such shareholders fail
to approve such transactions;
provided, however, that the obligations set forth in Section 5.03(b) hereof
shall survive any such termination of this Agreement described in this Section
6.01.
6.02 Notices
-------
(a) All notices and other communications provided for herein (including,
without limitation, any modifications of, or waivers or consents under, this
Agreement) shall be given or made by facsimile or by hand in writing and
transmitted by facsimile or courier and delivered to the "Address for Notices"
specified below or at such other address as shall be designated by such
Shareholder in a notice to each other Shareholder party hereto:
If to Telenor, to:
Telenor East Invest AS
Keysers Xxxx 00
X-0000 Xxxx
Xxxxxx
Facsimile No.: x00-00-00-00-00
Attn: Xxxxxx Xxxxxxxxx
with a copy to:
Advokatene i Telenor
Xxxxxxxxxxxxxxxxx 0
X-0000 Xxxx
Xxxxxx
Facsimile No.: x00-00-00-00-00
Attn: Xxxxx X. Risung
If to Xx. Xxxxx, Glavsotkom, the Bee Line Fund and/or any other Zimin
Shareholder, to:
00-00, 0xx Xxxxx Xxxxxx
125683, Moscow, Russian Federation
Facsimile No.: x0 000 000-0000
20
Attn: Xx. Xxxxxx X. Xxxxx
If to the Company, to:
Open Joint Stock Company "Vimpel-Communications"
10-12, Xxxxxx 0-Xxxxx
000000, Xxxxxx
Xxxxxxx Federation
Facsimile No.: x0000-000-0000
Attn: Xxxxxx Xxxxxxxxxx
General Counsel
With a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
Xxxxx Place II
7 Ulitsa Gasheka
123056, Moscow
Russian Federation
Facsimile No.: x0000-000-0000
Attn: Xxxxxxx X. Xxxxxxxx
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given and shall be effective when transmitted by
facsimile, personally delivered or, in the case of any notice delivered by
courier, upon receipt, in each case, given or addressed as aforesaid.
(b) Any Demand made by a Telenor Shareholder or a Zimin Shareholder
pursuant to Section 3.01(a) shall be delivered by courier (i) to the Company and
(ii) to Telenor, if such Demand is made by a Zimin Shareholder, or to Xx. Xxxxx
(provided that, after Xx. Xxxxx'x death or incapacity, such Demand shall be sent
to the Bee Line Fund), if such Demand is made by a Telenor Shareholder. A Demand
shall be effective for all purposes (including, without limitation, for purposes
of determining when such Demand was exercised) as of the date and time of the
acceptance by such courier of such Demand (as evidenced by an original receipt
indicating such date and time) for delivery to Xx. Xxxxx or Telenor,
respectively, in accordance with this Section 6.02(b).
6.03 Entire Agreement
----------------
This Agreement supersedes all prior discussions and agreements among the
parties with respect to the subject matter hereof, and contains the sole and
entire agreement among the parties hereto with respect to the subject matter
hereof.
21
6.04 Waiver
------
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 any 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.
6.05 Amendment
---------
This Agreement may be amended, supplemented or modified only by a written
instrument duly executed by or on behalf of each party hereto.
6.06 No Assignment; Binding Effect; No Third Party Beneficiary
---------------------------------------------------------
Neither this Agreement nor any right, interest or obligation hereunder may
be assigned by any party hereto without the prior written consent of the other
parties hereto and any attempt to do so will be void, except for assignments and
transfers in accordance with the terms of this Agreement. Subject to the
preceding sentence, this Agreement is binding upon, inures to the benefit of and
is enforceable by the parties hereto and their respective successors and
assigns. The terms and provisions of this Agreement are intended solely for the
benefit of each party hereto 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 other than any Person entitled to
indemnity under Section 3.04.
6.07 Headings
--------
The headings used in this Agreement have been inserted for convenience of
reference only and do not define or limit the provisions hereof.
6.08 Invalid Provisions
------------------
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future Law, and if the rights or obligations
of any party hereto under this Agreement will not be materially and adversely
affected thereby, (a) such provision will be fully severable, (b) this Agreement
will be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof, (c) the remaining provisions of
this Agreement will remain in full force and effect and will not be affected by
the illegal, invalid or unenforceable provision or by its severance herefrom and
(d) in lieu of such illegal, invalid or unenforceable provision, there will be
added automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.
22
6.09 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 (the "UNICITRAL 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) Any party to this Agreement may refer a matter to arbitration
by written notice to the other parties.
(iii) The place of the arbitration shall be Stockholm, Sweden.
(iv) The claimant party shall appoint one (1) arbitrator and the
respondent party shall appoint one (1) arbitrator, and the two (2) arbitrators
so appointed shall appoint the third arbitrator, in accordance with the UNCITRAL
Rules. In the event of an inability to agree on a third arbitrator, the
appointing authority shall be the Arbitration Institute of the Sweden Chamber of
Commerce, Stockholm.
(v) The English language shall be used as the written and spoken
language for the arbitration and all matters connected with all references to
arbitration.
(vi) The decision of the arbitrators shall be made by majority vote
and shall be in writing.
(vii) The decision of the arbitrators shall be final and binding on
the parties to this Agreement, save in the event of fraud, manifest mistake or
failure by any of the arbitrators to disclose any conflict of interest.
(viii) The decision 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 jurisdiction.
(b) In the event any dispute is submitted to arbitration pursuant to
Section 6.09(a), the panel of arbitrators may, if it deems such award
appropriate, award a party costs and expenses incurred by such party in
enforcing its rights. Except as so awarded, each party shall bear its own costs
and expenses of enforcing its rights to arbitrate under this Section 6.09.
(c) Except for arbitration proceedings pursuant to Section 6.09(a) above,
no action, lawsuit or other proceeding (other than a proceeding to compel
arbitration or to enforce any arbitration decision) shall be brought by or
between the parties to this Agreement and/or any of their Controlled Affiliates
in connection with any matter arising out of or in connection with this
Agreement.
23
(d) Each Shareholder hereby represents and warrants that it is acting
solely in its commercial capacity in executing and delivering this Agreement and
each of the other Principal Agreements to which it is a party and in performing
its obligations hereunder and thereunder, and each Shareholder 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 or any of such other Principal Agreements and any other
document or instrument contemplated hereby or thereby, 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 or enforceability of judicial
or arbitral awards.
6.10 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, applicable to contracts
executed and performed in such jurisdiction, without giving effect to the
conflicts of laws principles thereof which would result in the application of a
different law.
6.11 Counterparts
------------
This Agreement may be executed in any number of counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.
6.12 Consent to Jurisdiction and Service of Process
----------------------------------------------
The Company hereby irrevocably appoints, each Zimin Shareholder hereby
irrevocably appoints, and each Telenor Shareholder hereby irrevocably appoints,
CT Corporation System, located on the date hereof at 0000 Xxxxxxxx, Xxx Xxxx, XX
00000, XXX, as its true and lawful agent and attorney to accept and acknowledge
service of any and all process against it in any action, suit or proceeding
arising out of or relating to this Agreement or any of the other Principal
Agreements or any of the transactions contemplated hereby or thereby and upon
whom such process may be served, 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
to each other party at the address and in the manner specified in Section 6.02.
The Company, each Zimin Shareholder and each Telenor Shareholder 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 any such action, suit or proceeding arising out of or relating to
this Agreement or any of the other Principal Agreements or any of the
transactions contemplated hereby or thereby, and agrees that any such action,
suit or
24
proceeding shall be brought only in such court, provided, however, that such
consent to jurisdiction is solely for the purpose referred to in Section 6.09
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 the other in any other jurisdiction.
25
IN WITNESS WHEREOF, this Registration Rights Agreement has been duly
executed and delivered by each party hereto as of the day and year first above
written.
Telenor
-------
TELENOR EAST INVEST AS
By /s/ Xxxxxx Xxxxxxxxx
--------------------
Name: Xxxxxx Xxxxxxxxx
Title: Attorney-in-Fact
The Zimin Shareholders
----------------------
/s/ Xx. Xxxxxx Xxxxxxxxxx Xxxxx
-------------------------------
XX. XXXXXX XXXXXXXXXX XXXXX
GLAVSOTKOM LLC
By /s/ X. X. Xxxxx
----------------
Name: X. X. Xxxxx
Title: General Director
By /s/ V. M. Bychenkov
--------------------
Name: V. M. Bychenkov
Title: Chief Accountant
THE FUND FOR NON-COMMERCIAL PROGRAMS "BEE LINE"
By /s/ Xxxxxxxxxx X. Ashitkov
--------------------------
Name: Xxxxxxxxxx X. Ashitkov
Title: Executive Director
By /s/ V. M. Bychenkov
---------------------------
Name: V. M. Bychenkov
Title: Chief Accountant
26
The Company
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OPEN JOINT STOCK COMPANY
"VIMPEL-COMMUNICATIONS"
By /s/ X. X. Xxxxx
---------------
Name: X. X. Xxxxx
Title: President and Chief Executive Officer
By /s/ V. M. Bychenkov
-------------------
Name: V. M. Bychenkov
Title: Chief Accountant
EXHIBIT A
Endorsement
The undersigned hereby agrees to the terms and conditions of the
Registration Rights Agreement dated as of December 1, 1998 between Telenor East
Invest AS, Xx. Xxxxxx Xxxxx, Glavsotkom LLC, The Fund for Non-Commercial
Programs "Bee Line" and Open Joint Stock Company "Vimpel-Communications", to
which this Endorsement is attached, and agrees to be fully bound by the terms
and conditions of such Registration Rights Agreement as if the undersigned were
an original signatory thereto.
_______________________________
[Name of Transferee]
By_____________________________
Name:
Title:
SCHEDULE 1
Class B Preferred Stock
1. Class B Preferred Stock shall have a nominal value of 0.1 kopecks.
2. Each holder of the fully paid Class B Preferred Stock shall have the
following rights:
(a) To participate in the GMS with the right to vote on the following
issues: (i) liquidation of the Company; (ii) reorganization of the Company; and
(iii) amendment of the Company's charter restricting the rights of the holders
of Class B Preferred Stock.
(b) To participate in the GMS with the right to vote on all issues, if for
ten consecutive fiscal years, the GMS fails to adopt a decision to pay dividends
on Class B Preferred Stock in full (including the dividends accrued for
preceding fiscal years). The voting rights of the holders of Class B Preferred
Stock described in this clause (b) shall terminate from the moment of payment in
full of all accrued dividends for Class B Preferred Stock.
(c) To receive dividends which shall be determined as the xxxxx equivalent
of US$ .02 (at the exchange rate of the Central Bank of Russia on the date the
GMS adopts a decision to pay dividends for Class B Preferred Stock) plus 15% per
annum, compounded on a quarterly basis on the amount of dividends for Class B
Preferred Stock which were not paid for the previous fiscal year. A dividend
which has not been paid in full or in part based on the result of any fiscal
year shall be accrued and added to the amount of dividends to be paid for the
following fiscal year. Dividends for Class B Preferred Stock may be paid by the
Company only after it pays in full dividends for Class A Preferred Stock.
(d) In a liquidation of the Company, receive a fixed liquidation value in
the amount of 0.1 (zero point one) kopecks per share of Class B Preferred Stock.
Liquidation value in respect of Class B Preferred Stock shall be payable after
full payment of the liquidation value in respect of Class A Preferred Stock.
3. Decisions with respect to issues referred to in Articles 9.2.2 and 9.2.3.
(liquidation of the Company and reorganization of the Company) of the Charter
shall be taken if a majority of 75% of the voting shares of each class of shares
represented at the GMS and eligible to vote thereon has voted in favor of it.
Votes shall be counted separately for each class of voting shares (Common Stock,
Class A Preferred Stock and Class B Preferred Stock).
