EXHIBIT L
Page 16 of 30 Pages
Dated 27 February 2002
ADMINISTRATION AGREEMENT
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THIS AGREEMENT is made on 27 February 2002
Between:
(1) CTF Holdings Limited, a company incorporated in Gibraltar under number
58115 and whose registered office is at Xxxxx 0, 0 Xxxxx Xxxxx, Xxxxxxxxx
("CTF");
(2) Cotesmore Holdings Limited, a company incorporated in the Bahamas under
number 46.8246 and whose registered office is at 0xx Xxxxx, Xxxxx Xxxxx,
Xxx Xxxxxx X-0000, Xxxxxx, Bahamas ("Cotesmore");
(3) Laketown Services Limited, a company incorporated in the Isle of Man and
whose registered office is at 8 Xxxxxxxx Xxxx, Xxxxxxx, Xxxx xx Xxx XX0
0XX ("Laketown");
(4) Xxxxxxxx Investment Corp., a company incorporated in the British Virgin
Islands and whose registered office is at Akara Building, 00 Xx Xxxxxx
Xxxxxx, Xxxxxxxx Cay 1, Road Town, Tortola, British Virgin Islands
("Xxxxxxxx" and, together with Cotesmore and Laketown, the "Continuing
Shareholders"); and
(5) Alfa Finance Holdings S.A., a company incorporated in Luxembourg under
number B70 119 and whose registered office is at 000, Xxxxx x'Xxxx,
X-0000 Xxxxxxxxxx ("XXX").
Whereas
(A) Pursuant to three transfer agreements each between CTF and one of the
Continuing Shareholders, CTF has transferred certain shares in AFH to the
Continuing Shareholders.
(B) Each of the Continuing Shareholders wishes to grant certain rights to CTF
in relation to certain shares in AFH on the terms set out in this
Agreement.
NOW IT IS AGREED as follows:
1 Definitions and interpretation
1.1 In this Agreement (including the recitals) the following words and
expressions have the following meanings: -
"Articles of Association" means the articles of association of AFH
to be adopted pursuant to Clause 5 and thereafter as amended from
time to time in accordance with the New Shareholders Agreement;
"Business Day" means a day, other than a Saturday or Sunday, on
which commercial banks in general are open for business in London,
New York and Luxembourg;
"Xxxxxxxx Administered Shares" means the 105,345 ordinary shares
of AFH transferred by CTF to Xxxxxxxx pursuant to a transfer
agreement dated 21 November 2001;
"Consortium" has the meaning ascribed to it in the "Alfa Group
Consortium Statute" (polozheniye);
"Cotesmore Administered Shares" means the 155,245 ordinary shares
of AFH transferred by CTF to Cotesmore pursuant to a transfer
agreement dated 21 November 2001;
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"Effective Date" means the date upon which the Articles of
Association are adopted;
"Group" means AFH and its subsidiary undertakings (if any) and
"Group Company" means any one of them;
"Laketown Administered Shares" means the 83,169 ordinary shares of
AFH transferred by CTF to Laketown pursuant to a transfer
agreement dated 30 November 2001;
"New Shareholders Agreement" means the shareholders agreement
dated 13 July 2001 relating to AFH which will come into force on
the Effective Date and thereafter such agreement as amended from
time to time;
"Reserved Matters" means the matters included in Schedule 1 hereto
and "Reserved Matter" means any one of them;
"Shareholders" means the shareholders of AFH from time to time who
are party to the New Shareholders Agreement; and
"Shares" means the Xxxxxxxx Shares, the Cotesmore Shares and/or
the Laketown Shares, as the context requires.
2 Voting
2.1 Within 20 Business Days following the date of this Agreement, each
Continuing Shareholder shall execute a power of attorney, in
favour of CTF, in respect of certain voting rights of its Shares,
in the form set out in Schedule 2 hereto (each a "Power of
Attorney" and together the "Powers of Attorney").
2.2 Subject to the provisions of the Powers of Attorney, CTF may take
any action or make any omission in relation to the Shares save
that CTF shall obtain the written consent of the relevant
Continuing Shareholder prior to taking any action or making any
omission (whether by proposing or including in any agenda or
passing or making a resolution, order or other decision of or by
the general meeting of shareholders, the Board of Directors or
other management body or officer of AFH or otherwise) in respect
of any Reserved Matter. If CTF does not obtain such prior written
consent, the relevant Continuing Shareholder may at any time and
in its absolute discretion by notice in writing (a) terminate this
Agreement and retain ownership of its Shares for its own benefit
and/or (b) revoke its Power of Attorney.
3 Administration
3.1 In consideration of the granting of the Power of Attorney, CTF
undertakes to provide to each of the Continuing Shareholders the
administration, management and other services (the "Administration
Services") set out in Schedule 3 hereto.
3.2 To enable CTF to provide the Administration Services, each of the
Continuing Shareholders and AFH shall provide CTF with the
information set out in Schedule 4 hereto.
4 Notices
Notices, demands or other communications required or permitted to
be given or made under or in connection with this Agreement or
with any arbitration or intended arbitration under this Agreement
shall be in writing and delivered personally or sent by legible
telefax addressed to the intended recipient at its address or
telefax number as is set out or referred to below or to such other
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address or telefax number as any party may from time to time duly
notify to the others.
Fax No.
Name Address
For the Attention of
CTF Holdings Limited Suite 2 350-41-988
0 Xxxxx Xxxxx
Xxxxxxxxx For attention of:
Xx X. Xxxx
Xxxxxxxxx Xxxxxxxx Xxxxxxx 0xx Xxxxx 7-095-258-5060
Xxxxx Xxxxx
Xxx Xxxxxx X-0000 For attention of:
Nassau X. Xxxxx
Bahamas
Laketown Services Limited 8 Prospect Hill 7-095-290-0955
Douglas
Isle of Man For attention of:
IM1 1EJ Xx Xxxxxxxxx
British Isles
Xxxxxxxx Investment Corp Akara Building 7-000-000-0000
00 Xx Xxxxxx Xxxxxx
Wickhams Cay 1 For attention of:
Road Town Xx Xxxxxxxxx X
Xxxxxxx Xxxxxxx
British Virgin Islands
Alfa Finance Holdings S.A. Suite 1 350-52065
0 Xxxxx Xxxxx
Xxxxxxxxx For attention of:
Xx. Xxxxx
Xxxxxxxx
To be effective, any such notice or other communication must, if
delivered, be delivered by hand or by a courier service during normal
business hours on a Business Day and, if sent, must be sent by means of a
fax machine which produces a paper record of transmission. Such notice or
other communication shall be deemed to be received, in the case of
delivery by hand or courier service, on the same Business Day as the
notice or other communication is delivered, and in the case of sending by
fax, on the same Business Day the fax is transmitted. If, however, a fax
is transmitted after normal business hours in the place where the
recipient is located, the fax shall be deemed to have been received on
the next Business Day.
5 Time of the Essence
Time shall be of the essence as regards the provisions of this Agreement,
both as regards the times and periods mentioned herein and as regards any
times or periods which may, by agreement between the parties, be
substituted for them.
6 Governing law and Disputes
6.1 Governing law
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This Agreement shall be governed by, and construed in accordance with,
English law.
6.2 Disputes
The parties agree that all disputes arising out of or in connection with
this Agreement should be referred to and finally resolved by arbitration
in London. A single arbitrator shall be appointed under the Rules of the
London Court of Arbitration which are deemed to be incorporated by
reference into this Clause 6.2. The arbitration shall be conducted in the
English language and the Parties agree to use all reasonable endeavours
to ensure that any arbitration shall be expeditiously determined.
7 Duration and termination
7.1 Duration
Subject to Clause 2.2 and to the other provisions of this Agreement, this
Agreement shall continue in full force and effect without limit in point
of time until the earlier of:
7.1.1 the Continuing Shareholders agree in writing to terminate this
Agreement; and
7.1.2 an effective resolution is passed or a binding order is made for
the winding-up of AFH and/or CTF;
provided that this Agreement shall cease to have effect as regards any
Continuing Shareholder who ceases to hold any Shares save for any of its
provisions which are expressed to continue in force after termination.
7.2 Termination
Termination of this Agreement shall be without prejudice to any liability
or obligation in respect of any matters, undertakings or conditions which
shall not have been observed or performed by any of AFH, CTF and/or the
Continuing Shareholders prior to such termination.
8 Further assurance
The parties shall take all such actions and execute all such documents as
are necessary to give full effect to this Agreement and the rights
conferred upon the parties hereunder.
9 Assignment
This Agreement shall be binding on and endure to the benefit of the
parties, their successors and permitted assigns. The parties may only
assign their rights under this Agreement in the following circumstances.
A person who is party to both this Agreement and the Shareholders
Agreement (and, on and after the Effective Date, the New Shareholders
Agreement) may only assign its rights under the one, if at the same time
it assigns its rights to the same person under the other. The
Optionholders may only assign their rights under the Option Deeds if at
the same time they assign their relevant rights under this Agreement to
the same person.
10 Amendment
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Save as otherwise expressly provided, no modification, amendment or
waiver of any of the provisions of this Agreement shall be effective
unless made in writing specifically referring to this Agreement and duly
signed by the parties hereto.
11 Contracts (Right of Third Parties) Xxx 0000
This Agreement does not create any right under the Contracts (Rights of
Third Parties) Xxx 0000 which is enforceable by any person who is not a
party to it.
12 Warranties and representations
The parties warrant and represent that:
(i) they have the corporate power and authority to enter into this Agreement
and perform all actions required under this Agreement and the agreements
to be entered into or amended pursuant to this Agreement;
(ii) they have obtained all necessary consents, authorisations and licences
required in order to perform this Agreement in accordance with its terms;
and
(iii) this Agreement when executed will constitute a binding obligation of the
party enforceable in accordance with its terms.
13 Counterparts
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and such
counterparts together shall constitute and be one and the same
instrument.
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This Agreement has been executed as a deed on the date first stated above:
by CTF HOLDINGS LIMITED
/s/ Xxxxx Xxxx
---------------------------------
(signature of duly authorised representative)
Xxxxx Xxxx
---------------------------------
(print name)
by COTESMORE HOLDINGS LIMITED
/s/ Xxxx Xxxxx
---------------------------------
(signature of duly authorised representative)
Xxxx Xxxxx
---------------------------------
(print name)
by LAKETOWN SERVICES LIMITED
/s/ Gillian Xxxxx Xxxxx
---------------------------------
(signature of duly authorised representative)
Gillian Xxxxx Xxxxx
--------------------------------
(print name)
by XXXXXXXX INVESTMENT CORP.
/s/ Xxxxxxxxx X. Xxxxxxx
--------------------------------
(signature of duly authorised representative)
Xxxxxxxxx X. Xxxxxxx
--------------------------------
(print name)
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by ALFA FINANCE HOLDINGS S.A.
/s/ Xxxxxxx Xxxxxxx
-------------------------------
(signature of duly authorised representative)
Xxxxxxx Xxxxxxx
-------------------------------
(print name)
For the purposes of Article 1 of the Protocol annexed to the Convention on
Jurisdiction and the Enforcement of Judgements in Civil and Commercial Matters
signed at Brussels on 27 September 1968, we hereby expressly, unconditionally
and specifically, without any restriction, accept the assignment of jurisdiction
of competence resulting from Clause 6.2 of this Agreement.
Alfa Finance Holdings S.A.
For special acceptance:
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Schedule 1
Reserved Matters
The Reserved Matters are:
1 any allotment or issue of any shares in the capital of AFH or any other
Group Company or the issue of any financial instrument conferring a right
to acquire, whether by conversion, exchange or otherwise, shares or a
similar interest in the capital of AFH or any other Group Company, where
the Shareholders in the case of an allotment or issue by AFH or the
shareholders in the relevant Group Company in the case of an allotment or
issue by another Group Company do not have a pre-emptive right to acquire
the shares or financial instruments pro rata to their existing
shareholdings;
2 any change to the Memorandum or Articles of AFH;
3 the sale or disposition of an asset or of any interest in an asset by a
Group Company, other than by and to a wholly-owned subsidiary of AFH,
where the fair market value of the asset or interest therein or the
consideration paid is more than US$300,000,000 (this materiality
threshold being referred to as the "Major Transaction Limit");
4 the acquisition of an asset or of any interest in an asset by a Group
Company, other than from and by a wholly-owned subsidiary of AFH, where
the fair market value of the asset or interest therein or consideration
paid exceeds the Major Transaction Limit;
5 the assumption of a liability, whether present, future, actual or
contingent, by any Group Company which exceeds or may exceed the Major
Transaction Limit;
6 the reorganisation, consolidation or amalgamation of a Group Company with
any company other than a wholly owned subsidiary of the Company where
that Group Company has a net asset value in excess of the Major
Transaction Limit;
7 an amendment to the Major Transaction Threshold or the Minor Transaction
Threshold, as such terms are defined in the New Shareholders Agreement;
8 the reduction of AFH's capital and any redemption, purchase or other
acquisition by AFH of any shares or other securities of AFH and, in the
case of any other Group Company which is not a wholly owned subsidiary,
any reduction of its capital and any redemption, purchase or other
acquisition by the Group Company of any shares or other securities of the
Group Company other than on a pro rata basis from all shareholders;
9 the payment of any dividend or the making of any other distribution to
shareholders by a Group Company; and
10 a 75% Vote to determine that a Shareholder must sell his shares in AFH
pursuant to an offer to be made by AFH or another Group Company to
acquire such shares after obtaining all necessary approvals in the event
that a Relevant Individual (as such term is defined in the New
Shareholders Agreement) does not satisfy the test of significant
contribution set out in Clause 5 of the New Shareholders Agreement. For
this purpose a 75% Vote is a determination reached by Shareholders who
hold 75% or more of the votes eligible to be cast at a general meeting by
the Shareholders other than the Shareholder to which the determination
relates.
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For the purpose of determining whether the Major Transaction Threshold has been
exceeded, a transaction which forms part of a series of related transactions
shall be aggregated with the related transactions.
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Schedule 2
Form of Power of Attorney
Power of Attorney
THE REGISTRAR OF THE COMPANY SHOULD NOTE THE RESTRICTIONS TO WHICH THIS POWER OF
ATTORNEY IS SUBJECT. THESE RESTRICTIONS ARE SET OUT IN CLAUSE 2 OF THIS POWER OF
ATTORNEY AND IN THE SCHEDULE HERETO. BEFORE REGISTERING THE VOTE OF ANY
PURPORTED ATTORNEY IN RESPECT OF ANY MATTER SET OUT IN THE SCHEDULE HERETO, THE
REGISTRAR SHALL REQUIRE TO SEE PRIOR WRITTEN CONSENT AND THE WRITTEN DIRECTIONS
OF THE SHAREHOLDER IN ACCORDANCE WITH CLAUSE 2 BELOW.
This Power of Attorney is made this [o] day of [month] [year] by [CONTINUING
SHAREHOLDER] (the "Shareholder") of [o], being a shareholder in Alfa Finance
Holdings S.A., a company incorporated in Luxembourg and whose registered office
is at [o], Luxembourg (the "Company").
1 Subject to Clause 2 below, and in relation only to [o] shares in the
Company registered in the name of the Shareholder or in respect of which
the Shareholder is otherwise able to procure such action, the Shareholder
hereby appoints CTF Holdings Limited, a company incorporated in Gibraltar
and whose registered office is at Xxxxx 0, 0 Xxxxx Xxxxx, Xxxxxxxxx (the
"Attorney") to be its true and lawful attorney with full power and
authority in its name and on his behalf to vote on behalf of the
Shareholder on any resolution at any shareholders meeting of the Company.
2 The Attorney shall not vote in respect of any of the matters set out in
the Schedule to this Power of Attorney, without the prior written consent
of the Continuing Shareholder and, in respect of such matter, on
condition that it has received such written consent, shall vote only in
accordance with the written directions of the Shareholder.
3 The Shareholder hereby declares that the said appointment herein
contained shall, subject to compliance with Clause 2 above, be
irrevocable for a period of 12 months from the date hereof, whereupon
this power of attorney shall terminate.
4 Nothing in this Power of Attorney shall give, or be construed as giving,
the Attorney any right whatsoever to sell, dispose of or alienate in any
manner whatsoever, the shares in the Company registered in the name of
the Shareholder or in respect of which the Shareholder is otherwise able
to procure such action.
5 This Power of Attorney is governed by, and shall be construed in
accordance with, English law.
In witness whereof this Power of Attorney has been executed as a Deed on
the date first stated above.
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EXECUTED by [CONTINUING SHAREHOLDER]
by [Authorised Signatory]:
Authorised signatory
EXECUTED by CTF HOLDINGS LIMITED by
[Authorised Signatory]:
in the presence of:
Witness's signature
Name
Address
Occupation
Schedule
[INSERT COPY OF SCHEDULE 1 TO THIS AGREEMENT]
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Schedule 3
Administration Services
Services to be provided by CTF pursuant to Clause 3.1 shall include:
1 representing the Continuing Shareholders where appropriate, to third
parties;
2 co-ordination and development of internal audit functions for the
Continuing Shareholders and the Group;
3 advice and recommendations regarding the appointment and activities of
AFH's auditors;
4 the following responsibilities, in accordance with the Consortium's
"corporate statute" (polozheniye):
4.1 Audit, Control and Administrative Matters
4.1.1 review and approval of quarterly Group IAS accounts;
4.1.2 liaison with external independent auditors (negotiation of
Group audit fees);
4.1.3 determination of the format and terms of preparation of the
Group Reporting Package of the Group for the Consortium's
consolidated IAS accounts;
4.1.4 setting the Group's accounting policies;
4.1.5 evaluation, monitoring and recommending improvements to
internal controls within the Group;
4.1.6 participation as an observing member of the Sub-holding
executive (top management) board;
4.1.7 control over the development of an efficient Consortium and
Sub-holding ownership structure;
4.1.8 developing western-style audit committees; and
4.1.9 developing an internal audit function within each
Sub-holding;
4.2 Direct Assistance to the Group in relation to:
4.2.1 structuring difficult or complex transactions and
considering the financial reporting and reputational impact
on Sub-holdings and the Consortium;
4.2.2 development and presentation of key operating metrics on
the Group to the Continuing Shareholders;
4.2.3 assisting the Sub-holdings to recruit qualified finance and
accounting personnel;
4.2.4 training the Group in IAS and other pertinent areas such as
proper budgeting techniques;
4.2.5 performing special projects (as requested or agreed with
the Continuing Shareholders); and
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4.2.6 developing management information systems strategy;
4.3 Corporate Governance
4.3.1 assisting Group Companies in creation of their own
statutes, in accordance with the Consortium's "corporate
statute" (polozheniye);
4.3.2 recruiting qualified independent directors for the Board of
Directors and Supervisory Board;
4.3.3 adoption of a formal code of ethics;
4.3.4 developing other corporate governance initiatives;
4.3.5 assisting in determining the Consortium dividend policy;
and
4.3.6 adopting ISO9000 standards;
4.4 Business Strategy and Investment Decision Making Support
4.4.1 evaluation of contemplated Group transactions including
guiding Group due diligence and establishing a common set
of evaluation and measurement criteria; and
4.4.2 critical evaluation of existing Group performance and
strategy.
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Schedule 4
Information to be provided to
CTF pursuant to
Clause 3.2 of this Agreement
1 All materials provided by AFH to its Shareholders, including, but without
limitation:
1.1 documents proving the existing shareholder structure and
information in advance of envisaged changes in the shareholder
structure of the Group Companies;
1.2 the minutes of shareholder meetings and of the management bodies
of any Group Company;
1.3 quarterly financial information for the Group in a format defined
by CTF;
1.4 information required for the preparation of the consolidated
financial statements of the Group in a format specified by CTF;
and
1.5 draft of the annual budget and of the business plan of the Group.
2 Any other documentation and information which CTF may require to inform
its shareholders generally or to give recommendations on the business of
any company in the Group.
