PRIMARY AGREEMENT
dated as of May 30, 2001
between and among
TELENOR EAST INVEST AS,
and
ECO TELECOM LIMITED,
collectively, as the Purchasers,
and
OPEN JOINT STOCK COMPANY "VIMPEL-COMMUNICATIONS",
as the Issuer,
with respect to shares of
common stock of
OPEN JOINT STOCK COMPANY "VIMPEL-COMMUNICATIONS"
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND INTERPRETATION 1
1.01 Definitions 1
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1.02 Interpretations 17
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ARTICLE II SALE OF SHARES AND CLOSING 18
2.01 Purchase and Sale 18
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2.02 Purchase Price 19
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2.03 Pre-Closing; Closing 19
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2.04 Escrow of Purchase Price 22
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2.05 Use of Proceeds 22
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2.06 Liquidated Damages 23
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF ISSUER 23
3.01 Organization of the Issuer 23
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3.02 Authority 23
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3.03 Charter Capital of the Issuer 24
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3.04 Subsidiaries of the Issuer 26
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3.05 No Conflicts, Etc. 26
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3.06 Governmental Approvals and Filings 27
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3.07 Books and Records 27
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3.08 Financial Statements 28
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3.09 Absence of Changes 28
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3.10 No Undisclosed Indebtedness, Liens and Liabilities 30
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3.11 Taxes 30
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3.12 Legal Proceedings; Liability 30
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3.13 Compliance With Laws and Orders 31
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3.14 Benefit Plans 32
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3.15 Real Property 32
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3.16 Intellectual Property Rights 32
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3.17 Contracts; No Default 33
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3.18 Licenses 34
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3.19 Insurance 34
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3.20 Employees; Labor Relations 34
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3.21 Environmental Matters 35
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3.22 Interconnect Providers 35
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3.23 Investments 35
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3.24 Accounts Receivable 35
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3.25 Brokers 35
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3.26 SEC Documents 36
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3.27 NYSE Requirements 36
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3.28 Compliance with US Securities Laws 36
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3.29 Disclosure 37
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3.30 United States Assets 37
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASERS 37
4.01 Organization; Ability to Consummate Transactions 37
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4.02 Authority 37
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4.03 No Conflicts 38
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4.04 Governmental Approvals and Filings 38
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4.05 Legal Proceedings 38
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4.06 Brokers 39
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4.07 Investment Intent 39
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4.08 Status of Purchaser 39
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4.09 Compliance with Securities Laws 39
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4.10 No Knowledge of Breach 40
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i
4.11 Independent Investigation 40
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4.12 Contracts with Xx. Xxxxx 40
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4.13 Non-Group Status 40
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ARTICLE V COVENANTS OF THE ISSUER 41
5.01 No Solicitations 41
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5.02 Financial Statements and Reports; Filings 42
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5.03 Certain Restrictions 43
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5.04 Charter Amendments; Post-Closing Actions 43
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5.05 Amendments to the Procedural Regulations of the Board 44
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5.06 Update of the Management Regulations 44
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5.07 Operating Committee 44
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5.08 Pre-Closing Veto Rights 44
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5.09 Transactions with Affiliates 46
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5.10 KBI 46
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5.11 Fulfillment of Conditions 47
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5.12 Regulatory and Other Approvals 48
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5.13 Delivery of Information 48
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5.14 Transfer and Voting of Callable Preferred Stock 48
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ARTICLE VI NOTICE AND CURE 49
ARTICLE VII COVENANTS OF THE PURCHASERS 49
7.01 Regulatory and Other Approvals 49
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7.02 Compliance with Securities Laws 50
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7.03 Escrow of Purchase Price 50
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7.04 Issuer's Call Option on VIP Preferred Stock Owned by Eco Telecom and Related Matters 50
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7.05 Fulfillment of Conditions 53
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7.06 Contracts with Xx. Xxxxx and Overture 53
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ARTICLE VIII CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASERS 53
8.01 Representations and Warranties 54
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8.02 Performance 54
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8.03 Certificates 54
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8.04 Orders and Laws 54
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8.05 Corporate and Regulatory Consents and Approvals 55
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8.06 Third Party Consents 55
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8.07 Current Charter; Procedural Regulations of Board; Operating Committee; Management Regulations 55
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8.08 Other Principal Agreements 56
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8.09 Wire Instruction 56
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8.10 Receipt 56
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8.11 Zimin Share Purchase Agreements 56
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8.12 Contracts with Xx. Xxxxx 56
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8.13 Election of Directors 56
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8.14 Individual Share Purchase Agreement 57
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8.15 Indemnification of Directors 57
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8.16 Legal Opinion 57
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ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ISSUER 57
9.01 Representations and Warranties 57
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9.02 Performance 57
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9.03 Certificates 57
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9.04 Orders and Laws 58
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9.05 Regulatory Consents and Approvals 58
---------------------------------
9.06 Third Party Consents 58
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9.07 Other Principal Agreements 59
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9.08 Individual Share Purchase Agreement 59
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9.09 Interested Party Questionnaire 59
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9.10 Legal Opinions 59
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ii
ARTICLE X SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS 59
ARTICLE XI INDEMNIFICATION 60
11.01 Indemnification 60
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11.02 Determination of Losses 61
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11.03 Limitations on Liability 61
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11.04 Other Indemnification Provisions 63
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ARTICLE XII EFFECTIVENESS; TERMINATION 63
12.01 Effectiveness; Termination 63
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12.02 Effect of Termination 63
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ARTICLE XIII MISCELLANEOUS 64
13.01 Notice 64
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13.02 Entire Agreement 66
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13.03 Expenses 66
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13.04 Public Announcements 66
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13.05 Confidentiality 66
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13.06 Waiver 67
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13.07 Amendment 67
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13.08 Obligations of Purchasers Several; No Third Party Beneficiary 67
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13.09 No Assignment; Binding Effect 68
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13.10 Headings 68
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13.11 Arbitration; Consent to Jurisdiction; Service of Process; Waiver of Sovereign Immunity 68
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13.12 Invalid Provisions 70
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13.13 Governing Law 70
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13.14 Counterparts 71
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iii
EXHIBIT A - CERTIFICATE OF CEO OF ISSUER
EXHIBIT B - CERTIFICATE OF SECRETARY OF THE BOARD
EXHIBIT C - FORM OF OPINION OF AKIN, GUMP, STRAUSS, XXXXX & XXXX,
L.L.P. AS TO NEW YORK AND RUSSIAN LAW
EXHIBIT D-1 - FORM F-3
EXHIBIT D-2 - FORM 20-F
EXHIBIT E-1 - CERTIFICATE OF PRESIDENT OF TELENOR EAST INVEST AS
EXHIBIT E-2 - CERTIFICATE OF SOLE DIRECTOR OF ECO TELECOM LIMITED
EXHIBIT F-1 - CERTIFICATE OF MEMBER OF THE BOARD OF DIRECTORS OF TELENOR
EAST INVEST AS
EXHIBIT F-2 - CERTIFICATE OF SOLE DIRECTOR OF ECO TELECOM LIMITED
EXHIBIT G - FORM OF OPINION OF COUDERT BROTHERS AS TO NEW YORK LAW
EXHIBIT H - FORM OF OPINION OF COUDERT BROTHERS AS TO RUSSIAN LAW
EXHIBIT I - FORM OF OPINION OF GENERAL COUNSEL OF TELENOR ASA AS TO
NORWEGIAN LAW
EXHIBIT J - FORM OF OPINION OF XXXXXXX XXXXX AS TO NEW YORK LAW
EXHIBIT K - FORM OF OPINION OF XXXXXXX XXXXX CIS LEGAL SERVICES AS TO
RUSSIAN LAW
EXHIBIT L - FORM OF OPINION OF XXXXX & XXXXX AS TO GIBRALTAR LAW
EXHIBIT M - FORM OF INDEMNIFICATION AGREEMENT
EXHIBIT N - FORM OF EXERCISE NOTICE
EXHIBIT O-1 - FORM OF ISSUER'S RECEIPT TO TELENOR EAST INVEST AS
EXHIBIT O-2 - FORM OF ISSUER'S RECEIPT TO ECO TELECOM LIMITED
SCHEDULES
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SCHEDULE 1.01(A) PERSONS WITH ACTUAL KNOWLEDGE
SCHEDULE 1.01(B) PURCHASERS' DESIGNEES FOR ELECTION TO THE BOARD AND THE
BOARD OF VIP-R
SCHEDULE 1.01(C) LIST OF TRADEMARK AGREEMENTS
SCHEDULE 1.01(D) ISSUER'S DOLLAR ACCOUNT AND ISSUER'S XXXXX ACCOUNT
iv
SCHEDULE 2.01 GUIDELINES ON PLACEMENT AND FORM OF INDIVIDUAL SHARE
PURCHASE AGREEMENT
SCHEDULE 2.02 PURCHASE PRICE
SCHEDULE 2.06 TELENOR'S ACCOUNT
SCHEDULE 3.03 OUTSTANDING OPTIONS
SCHEDULE 3.04(A) ISSUER'S SUBSIDIARIES
SCHEDULE 3.05 NO CONFLICTS
SCHEDULE 3.07(A) GMS AND BOARD PROTOCOLS
SCHEDULE 3.07(B) SHAREHOLDERS OF ISSUER AND ITS SUBSIDIARIES
SCHEDULE 3.07(C) LOCATION OF SHARE REGISTERS, ETC.
SCHEDULE 3.08(A) AUDITED CONSOLIDATED FINANCIAL STATEMENTS
SCHEDULE 3.09 MATERIAL CHANGES SINCE DECEMBER 31, 2000
SCHEDULE 3.10 UNDISCLOSED INDEBTEDNESS, LIENS AND LIABILITIES
SCHEDULE 3.11 TAXES
SCHEDULE 3.12 ACTIONS OR PROCEEDINGS
SCHEDULE 3.14 BENEFIT PLANS
SCHEDULE 3.15 REAL PROPERTY
SCHEDULE 3.16 INTELLECTUAL PROPERTY
SCHEDULE 3.16(A) SIGNIFICANT BEE LINE NAMES
SCHEDULE 3.17(A) CONTRACTS OVER US$5 MILLION
SCHEDULE 3.17(C) EXISTING COMMITMENTS OVER US$15 MILLION
SCHEDULE 3.18(A) EXCEPTIONS TO LICENSES
SCHEDULE 3.18(B) UNFULFILLED LICENSE OBLIGATIONS
SCHEDULE 3.18(C) RESTRICTIONS ON LICENSES
SCHEDULE 3.19 INSURANCE
SCHEDULE 3.23 INVESTMENTS
SCHEDULE 3.25 ISSUER'S BROKERS
SCHEDULE 4.03 PURCHASERS' THIRD PARTY CONSENTS
SCHEDULE 4.04 PURCHASERS' REGULATORY CONSENTS AND APPROVALS
v
SCHEDULE 4.06 PURCHASERS' BROKERS
SCHEDULE 5.02 OTHER FINANCIAL STATEMENTS / REPORTS
SCHEDULE 5.04 AMENDMENTS TO THE CHARTER OF THE ISSUER
SCHEDULE 5.05 AMENDMENTS TO THE PROCEDURAL REGULATIONS OF THE BOARD OF
THE ISSUER
SCHEDULE 5.07 PRINCIPLES OF OPERATING COMMITTEE
SCHEDULE 5.08(G) LIMITATIONS ON INCURRENCE OF LIENS
SCHEDULE 7.04(C) ECO TELECOM'S ACCOUNT DETAILS
SCHEDULE 8.05 ISSUER'S CORPORATE AND REGULATORY CONSENTS AND APPROVALS
SCHEDULE 8.06 ISSUER'S THIRD PARTY CONSENTS
vi
PRIMARY AGREEMENT dated as of May 30, 2001 between and among TELENOR EAST
INVEST AS, a company organized and existing under the laws of Norway
("Telenor"), ECO TELECOM LIMITED, a company organized and existing under the
laws of Gibraltar ("Eco Telecom" and, together with Telenor, each, a
"Purchaser", and collectively, the "Purchasers"), and OPEN JOINT STOCK COMPANY
"VIMPEL-COMMUNICATIONS", an open joint stock company organized and existing
under the laws of the Russian Federation (the "Issuer").
WITNESSETH
WHEREAS, the Issuer desires to sell, and Telenor and Eco Telecom desire to
purchase, such number of shares of Common Stock which, after giving effect to
such purchases and certain other purchases of shares of Common Stock and
Preferred Stock by Telenor and Eco Telecom, will result in Eco Telecom holding
at least twenty-five percent (25%) plus one (1) share of the issued and
outstanding voting capital stock of the Issuer and Telenor holding at least
twenty-five percent (25%) plus two (2) shares of the issued and outstanding
voting capital stock of the Issuer, in each case, calculated on a fully diluted
basis, on the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement 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:
"Account Bank" shall mean Citibank T/O (OOO), as the account bank under the
Account Bank and Overdraft Agreement.
"Account Bank and Overdraft Agreement" shall mean the Account Bank and
Overdraft Agreement dated the date hereof between and among Eco Telecom, the
Issuer, VIP-R and the Account Bank.
"Actions or Proceedings" shall mean any action, suit, proceeding or
arbitration commenced, brought, conducted or heard by or before any Governmental
or Regulatory Authority.
"Actually known to such Purchaser" shall mean to the knowledge and belief
of the relevant Purchaser and the Persons specified immediately below the name
of such Purchaser on Schedule 1.01(a).
"ADSs" shall mean the Issuer's American Depositary Shares, each
representing three-quarters (3/4) of one (1) share of the Issuer's Common Stock,
which are currently listed on the NYSE.
"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, including, if such Person is an individual, any
relative or spouse of such Person, or any relative of such spouse of such
Person, any one of whom has the same home as such Person, and also including any
trust or estate for which any such Person or Persons specified herein, directly
or indirectly, serves as a trustee, executor or in a similar capacity
(including, without limitation, any protector or settlor of a trust) or in which
such Person or Persons specified herein, directly or indirectly, has a
substantial beneficial interest and any Person who is controlled by any such
trust or estate. As used in this definition, "control" (including, with its
correlative meanings, "controlled by" and "under common control with") shall
mean, with respect to any Person, the possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
Contract or otherwise) of such Person.
"Agreement" shall mean this Primary Agreement and the Exhibits and the
Schedules hereto and the certificates delivered in accordance with Article VIII
and Article IX.
"Alfa Bank" shall mean OAO "Alfa-Bank", an open joint stock company
organized and existing under the Laws of the Russian Federation.
"Alfa Bank Guarantee" shall mean the Guarantee dated as of the date hereof,
executed and delivered by Alfa Bank, as guarantor, in favor of the Issuer, as
beneficiary.
"amendments to the Charter" shall have the meaning specified in Section
5.04(a).
"Applicable Rate" shall mean the rate of interest from time to time announced
by X.X. Xxxxxx Xxxxx & Co. as its prime commercial lending rate.
"Assets and Properties" shall mean, with respect to any Person, all assets
and properties of every kind, nature, character and description (whether real,
personal or mixed, whether tangible or intangible, whether absolute, accrued,
contingent, fixed or otherwise and wherever situated), including the goodwill
related thereto, used, operated, owned or leased by such Person, including,
without limitation, cash, cash equivalents, Investments, accounts and notes
receivable, chattel paper, documents, instruments, general intangibles, real
estate, equipment, inventory, goods and Intellectual Property.
"Audited Consolidated Financial Statement Date" shall mean December 31,
2000.
2
"Audited Consolidated Financial Statements" shall mean the financial
statements, prepared in accordance with GAAP, for the fiscal year ended December
31, 2000, the most recent fiscal year of the Issuer.
"Bee Line Fund" shall mean "Bee Line" Non-Profit Fund (known in Russian and
formerly known in English as the Fund for Non-Commercial Programs "Bee Line"), a
nonprofit organization organized and existing under the Laws of the Russian
Federation.
"Bee Line Licensee" shall have the meaning specified in Section 3.l6(a).
"Benefit Plan" shall mean any Plan established by the Issuer or any
Significant Subsidiary, to which the Issuer or any Significant Subsidiary
contributes or has contributed, or under which any employee, former employee,
director, consultant or independent contractor of the Issuer or any Significant
Subsidiary or any beneficiary thereof is covered, is eligible for coverage or
has benefit rights.
"Board" shall mean the Board of Directors of the Issuer.
"Business Combination" shall have the meaning specified in Section 5.01.
"Business Day" shall mean a day other than a Saturday, a Sunday or any day
on which banks located in Moscow, Russia, Oslo, Norway, London, England or New
York, New York are authorized or obliged to close.
"Business or Condition of the Issuer" shall mean the business, condition
(financial or otherwise), results of operations and Assets and Properties of the
Issuer and its Subsidiaries taken as a whole.
"Callable Preferred Stock" shall have the meaning specified in Section
7.04(a).
"Call Option Period" shall have the meaning specified in Section 7.04(c).
"Charter" shall mean the charter (ustav) of the Issuer, as registered with
the MRC on August 23, 1996, and as amended on October 3, 1996 (approved by the
Board on September 30, 1996), December 17, 1996 (approved by the Board on
November 20, 1996), December 17, 1996 (approved by the GMS on November 29,
1996), September 3, 1998 (approved by the GMS on June 16, 1998), February 22,
1999 (approved by the GMS on January 29, 1999), July 7, 1999 (approved by the
GMS on June 11, 1999), July 22, 1999 (approved by the Board on July 6, 1999),
July 31, 2000 (approved by the GMS on June 30, 2000) and September 20, 2000
(approved by the Board on August 24, 2000).
"Charter Capital" (ustavniy kapital) shall mean the aggregate value of the
ownership interests of a Person as stated in its charter, provided that, with
respect to a joint stock company, the Charter Capital shall mean the aggregate
nominal value of its issued shares.
3
"Closing" shall mean the purchase of and payment for the Purchasers' Shares
in accordance with Sections 2.01, 2.02, 2.03 and 2.04.
"Closing Date" shall mean the date identified as such in a Preliminary
Closing Notice, being the date (including, without limitation, the Guaranteed
Closing Date) on which the Closing is, in accordance with Section 2.03,
scheduled (or re-scheduled) to occur, which date shall be not later than the
Final Date and at least five (5) Business Days after the Issuer has furnished
written notice to the Escrow Agent and the Account Bank (with a copy to each
Purchaser and VIP-R) of such Closing Date by delivering such Preliminary Closing
Notice.
"Commission" shall mean the Commission of the European Communities.
"Common Stock" shall mean the shares of common stock of the Issuer, as
defined in Section 6.1 of the Charter.
"Consolidated Subsidiaries" shall mean, with respect to the Issuer, the
Significant Subsidiaries, Impuls-KB and RTI Service-Svyaz.
"Contract" shall mean any agreement, letter of intent, lease, license,
evidence of Indebtedness, mortgage, indenture, security agreement or other
contract or understanding (whether written or oral), in each case, to the extent
legally binding.
"Controlled Affiliate" shall mean, with respect to any Person, any
Affiliate of such Person in which such Person owns or controls, directly or
indirectly, more than fifty percent (50%) of the securities having ordinary
voting power for the election of directors or other governing body thereof or
more than fifty percent (50%) of the partnership or other ownership interests
therein (other than as a limited partner).
"Controlling Person" shall mean, with respect to any Person, any other
Person which owns or controls, directly or indirectly, more than fifty percent
(50%) of the securities having ordinary voting power for the election of
directors or other governing body of such first Person or more than fifty
percent (50%) of the partnership or other ownership interests therein (other
than as a limited partner of such first Person).
"Conversion" shall have the meaning specified in the Account Bank and
Overdraft Agreement.
"Convertible Notes" shall mean the 5.5% Senior Convertible Notes due 2005
of VimpelCom B.V., guaranteed by the Issuer and issued under the Indenture.
"CTF Holdings" shall mean CTF Holdings Limited, a company organized and
existing under the Laws of Gibraltar.
"D-AMPS" shall mean Digital Advanced Mobile Phone System, a standard for
digital mobile telephone transmissions at a frequency of 800 MHz.
4
"Director's Indemnification Agreement" shall have the meaning specified in
Section 8.15.
"Xx. Xxxxx" shall mean Xx. Xxxxxx Xxxxxxxxxx Xxxxx, a Russian citizen.
"Eco Holdings" shall mean Eco Holdings Limited, a company organized and
existing under the Laws of Gibraltar.
"Eco Telecom" shall have the meaning specified in the preamble hereto.
"Eco Telecom Contribution Default" shall have the meaning specified in the
VIP-R Primary Agreement.
"Eco Telecom Dollar Account" shall mean the US Dollar denominated account
to be opened by Eco Telecom with the Account Bank in accordance with Clause 3(1)
of the Account Bank and Overdraft Agreement.
"Eco Telecom Guarantee Agreement" shall mean the Guarantee Agreement dated
as of the date hereof between and among CTF Holdings, Eco Holdings, Telenor, the
Issuer and VIP-R.
"Eco Telecom VIP-R Preferred Stock Purchase Agreement" shall mean the Stock
Purchase Agreement substantially in the form attached as Annex A to Schedule
2.07(a) to the VIP-R Primary Agreement, to be entered into at the Preferred
Stock Closing Date by Eco Telecom and VIP-R.
"Eco Telecom Preferred Stock Purchase Agreement" shall the mean the Share
Purchase Agreement dated as of the date hereof between Overture and Eco Telecom
with respect to shares of Preferred Stock and shares of Common Stock.
"Eco Telecom Share Purchase Agreements" shall mean, collectively, the Share
Purchase Agreement dated as of the date hereof between Eco Telecom and Xx. Xxxxx
with respect to shares of Common Stock and the Eco Telecom Preferred Stock
Purchase Agreement.
"Environmental Law" shall mean any Law or Order relating to the regulation
or protection of human health and safety, the environment or hazardous or toxic
substances, wastes, pollutants or contaminants.
"Equity" shall mean, with respect to any Person, the aggregate of its
Charter Capital, any surplus capital (dobavochniy kapital), reserve fund,
retained earnings and any other elements determining the net worth of such
Person.
"Equity Interest" in a Person shall mean any share of capital stock of such
Person, or any partnership interest or other ownership interest in such Person.
5
"Escrow Agent" shall mean Citibank, N.A., London Branch, as escrow agent
under the Escrow Agreement.
"Escrow Agreement" shall mean the Escrow Agreement dated the date hereof
between and among Eco Telecom, the Issuer and the Escrow Agent.
"Exchange Act" shall mean the United States Securities Exchange Act of
1934, as amended, and the rules and regulations of the SEC promulgated
thereunder.
"Exercise Date" shall have the meaning specified in Section 7.04(c).
"Exercise Notice" shall have the meaning specified in Section 7.04(c).
"Exercise Price" shall have the meaning specified in Section 7.04(b).
"Failed Closing Date" shall have the meaning specified in Section 2.03(d).
"FCSM" shall mean the Federal Commission for the Securities Market of the
Russian Federation (Federalnaya komissiya po rynku tsennikh bumag Rossiiskoy
Federatsii or "FKTsB Rossii"), or any successor thereto, including any
applicable territorial agent thereof.
"Final Closing Notice" shall mean a notice to the Escrow Agent from Eco
Telecom and the Issuer, in the form attached as Schedule 6 to the Escrow
Agreement and Schedule 4 to the Account Bank and Overdraft Agreement.
"Final Date" shall mean November 30, 2001, or such later date (but not
later than the date which is six (6) Business Days after November 30, 2001) as
the Issuer may notify the Purchasers (with a copy to VIP-R) in writing in
accordance with Section 2.03(d)(i)(a) and Section 13.01 on or prior to the first
Business Day after November 30, 2001.
"Financial Statements" shall mean the Audited Consolidated Financial
Statements and the financial statements of the Issuer delivered to the
Purchasers pursuant to Section 5.02(a) and (b).
"First Board Date" shall mean the date of the first meeting (or unanimous
written consent in lieu of a meeting) of the Board at which all designees of
both Purchasers listed on Schedule 1.01(b) and then legally capable of serving
on the Board are members of the Board.
"First Closing Indemnity Amount" shall mean the amount specified opposite
Eco Telecom's name in Schedule 2.02.
6
"First VIP-R Board Date" shall mean the date of the first meeting (or
unanimous written consent in lieu of a meeting) of the Board of Directors of
VIP-R at which all designees of both Purchasers listed on Schedule 1.01(b) and
then legally capable of serving on the Board of Directors of VIP-R are members
of the Board of Directors of VIP-R.
"Form F-3" shall mean the Issuer's Final Prospectus filed with the SEC
pursuant to Rule 424(b)(4) promulgated under the Securities Act on July 26, 2000
relating to the Registration Statement on Form F-3 (File No. 333-13310), a copy
of which is attached as Exhibit D-1.
"Form 20-F" shall mean Annual Report of the Issuer on Form 20-F, as filed
with the SEC pursuant to Section 13(a) of the Exchange Act on June 28, 2000, a
copy of which is attached as Exhibit D-2.
"GAAP" shall mean United States generally accepted accounting principles.
"Glavsotkom" shall mean Glavsotkom LLC, a limited liability company
organized and existing under the Laws of the Russian Federation.
"GMS" shall mean the general meeting of the shareholders (obschee sobraniye
aktsionerov) of the Issuer, as defined in Article 9 of the Charter.
"Governmental or Regulatory Authority" shall mean any court, tribunal,
arbitrator, legislature, government, ministry, committee, inspectorate,
authority, agency, commission, official or other competent authority of the
Russian Federation, any other country or any state, as well as any county, city
or other political subdivision of any of the foregoing.
"GSM" shall mean Global System for Mobile Communications.
"GSM 1800" shall mean GSM in the 1800 MHz frequency range.
"GSM 900" shall mean GSM in the 900 MHz frequency range.
"Guaranteed Closing Date" shall mean the Closing Date, if any, falling
after demand on the Alfa Bank Guarantee in accordance with the terms thereof.
"Impuls-KB" shall mean Closed Joint Stock Company "Impuls-KB", a closed
joint stock company organized and existing under the Laws of the Russian
Federation.
"Indebtedness" shall mean, with respect to any Person, all obligations of
such Person (a) for borrowed money, (b) evidenced by notes, bonds, debentures or
similar instruments, (c) for the deferred purchase price of goods or services
(other than trade payables or accruals incurred in the ordinary course of
business), (d) under capital leases
7
or (e) in the nature of a guarantee of any obligation described in clauses (a)
through (d) above of any other Person.
"Indemnified Party" shall have the meaning specified in Section 11.01(d).
"Indemnifying Party" shall have the meaning specified in Section 11.01(d).
"Indenture" shall mean the Indenture dated as of July 28, 2000 among
VimpelCom B.V., as the issuer, the Issuer, as the guarantor, and The Bank of New
York, as trustee.
"Individual Share Purchase Agreement" shall mean a share purchase agreement
substantially in the form attached hereto as Annex A to Schedule 2.01, to be
executed by the Issuer and each Purchaser.
"Intellectual Property" shall mean patents and patent rights, licenses,
inventions, copyrights and copyright rights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks and trademark rights, service
marks and service xxxx rights, trade names and trade name rights, service names
and service name rights, brand names, processes formulae, trade dress, business
and product names, logos, slogans, industrial models, processes, designs,
methodologies, software programs (including all source codes) and related
documentation, technical information, manufacturing, engineering and technical
drawings and all pending applications for and registrations of patents,
trademarks, service marks and copyrights.
"Investments" shall mean all debentures, notes and other evidences of
Indebtedness, stocks, securities (including rights to purchase and securities
convertible into or exchangeable for other securities), interests in joint
ventures, general and limited partnerships, and other Persons, mortgage loans
and other investment or portfolio assets owned of record or beneficially by a
Person (other than (a) any direct or indirect Subsidiaries of the Issuer or any
ownership interests therein and (b) any short-term trade receivables generated
in the ordinary course of business).
"Issuer" shall have the meaning specified in the preamble to this
Agreement.
"Issuer's Dollar Account" shall mean US Dollar denominated account number
40702840400700474054 in the name of and for the benefit of the Issuer with the
Account Bank.
"Issuer's Xxxxx Account" shall mean Russian Xxxxx denominated account number
40702810600700474062 in the name of and for the benefit of the Issuer with the
Account Bank.
"JSC Law" shall mean the Federal Law of the Russian Federation No. 208-FZ
"On Joint Stock Companies", dated December 26, 1995 , as amended.
8
"KBI" shall mean Public Joint Stock Company "KB Impuls", an open joint
stock company organized and existing under the Laws of the Russian Federation.
"KB Impuls-TV" shall mean Closed Joint Stock Company "KB Impuls-TV", a
closed joint stock company organized and existing under the Laws of the Russian
Federation.
"Knowledge of the Issuer" or "Known to the Issuer" shall mean to the best
of the knowledge and belief of the Issuer after having made reasonable
inquiries.
"Knowledge of such Purchaser" shall mean to the best of the knowledge and
belief of the relevant Purchaser after having made reasonable inquiries.
"Laws" shall mean all laws, decrees, resolutions, instructions, statutes,
rules, regulations, acts, ordinances and other pronouncements having the effect
of law or regulation of the Russian Federation, any other country or any state,
as well as any county, city or other political subdivision of any of the
foregoing.
"Liabilities" shall mean all Indebtedness, obligations and other
liabilities of a Person (whether absolute, accrued, contingent, fixed or
otherwise, or whether due or to become due).
"Licenses" shall mean all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority, including,
without limitation, all Telecom Licenses.
"Lien" shall mean any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or
any conditional sale Contract, title retention Contract or other Contract to
give any of the foregoing.
"Loss" shall mean any and all damages, fines, fees, penalties,
deficiencies, losses and expenses (including, without limitation, interest,
court costs, fees of attorneys, accountants and other experts or other expenses
of litigation or other similar proceedings or of any claim, default or
assessment).
"MAMP" shall mean the Ministry for Anti-Monopoly Policy and Support for
Entrepreneurship of the Russian Federation (Ministerstvo Rossiiskoy Federatsii
po Antimonopolnoy politike i podderzhke predprinimatelstva), or any successor
thereto, including any applicable territorial agent thereof.
"Management Regulations" shall mean the Management Regulations on the
Procedures for the Issuer to Conclude Transactions with Interested Parties
(polozhenie rukovodstva o poryadke zaklyuchenya sdelok v sovershenii kotorykh
imeetsya zainteresovannost) adopted by the Board on June 11, 1999, pursuant to
Section 10.5.10
9
of the Charter, as amended, which set forth the procedure for the Issuer to
conclude interested party transactions, including the manner in which
information on interested party transactions is reported to the Board and the
Board's approval process for such transactions.
"Material Adverse Effect" shall mean, with respect to any Person, a
material adverse effect on or with respect to the business, assets, financial
condition or results of operations of such Person and its Subsidiaries taken as
a whole, or upon such Person's ability to perform its obligations under this
Agreement and the other Principal Agreements, if any, to which it is a party.
"MRC" shall mean the Moscow Registration Chamber (Moskovskaya
registratsionnaya palata), or any successor thereto.
"New Shares" shall mean 5,150,000 shares of Common Stock.
"NYSE" shall mean The New York Stock Exchange.
"Option" shall mean, with respect to any Person, any security, right,
subscription, warrant, option, phantom stock right or other Contract that gives
the right to (a) purchase or otherwise receive or be issued any Equity Interest
in such Person or any security of any kind convertible into or exchangeable or
exercisable for any Equity Interest in such Person or (b) receive or exercise
any benefits or rights similar to any rights enjoyed by or accruing to the
holder of any Equity Interest in such Person, including any rights to
participate in the equity or income of such Person or to participate in or
direct the election of any directors or officers of such Person or the manner in
which any Equity Interests in such Person are voted.
"Option Agreement" shall mean the Option Agreement dated as of the date
hereof between Eco Telecom and Telenor.
"Order" shall mean any writ, judgment, decree, injunction or similar order
of any Governmental or Regulatory Authority.
"Other Property" shall have the meaning specified in Section 7.04(e).
"Overture" shall mean Overture Limited, an exempted company limited by
shares organized and existing under the Laws of Bermuda.
"Permitted Lien" shall mean (a) any Lien for Taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP, (b) any
statutory Lien arising in the ordinary course of business by operation of Law
with respect to a Liability that is not yet due or delinquent, and (c) any
mechanic's, materialman's or other similar Lien arising by operation of Law or
any minor imperfection of title or similar Lien, none of which individually or
in the aggregate with other such Liens materially impairs the value of the
10
property subject to such Lien or the use of such property in the conduct of the
business of the Issuer.
"Person" shall mean any natural person, corporation, general partnership,
simple partnership, limited partnership, limited liability partnership, limited
liability company, proprietorship, other business organization, trust, union,
association or Governmental or Regulatory Authority, whether incorporated or
unincorporated.
"Plan" shall mean any pension, profit sharing, stock purchase, stock
option, stock ownership, stock appreciation rights or phantom stock plan,
practice, policy or other arrangement of any kind, whether written or oral and
whether covering current or former employees, officers, directors, consultants
or independent contractors.
"Preferred Stock" shall mean, collectively, the shares of preferred stock
of the Issuer, as defined in the Charter.
"Preferred Stock Call Option" shall have the meaning specified in Section
7.04(a).
"Preferred Stock Closing Date" shall have the meaning specified in the VIP-
R Primary Agreement.
"Preliminary Closing Notice" shall mean a notice from the Issuer to the
Escrow Agent and the Account Bank (with a copy to the Purchasers and VIP-R) in
the form attached as Schedule 2 to the Escrow Agreement and Schedule 1 to the
Account Bank and Overdraft Agreement.
"Principal Agreements" shall mean this Agreement, the Shareholders
Agreement, the Escrow Agreement, the Account Bank and Overdraft Agreement, the
Option Agreement, the Zimin Principal Agreements, the Registration Rights
Agreement, the Eco Telecom VIP-R Preferred Stock Purchase Agreement, the Eco
Telecom Guarantee Agreement, the Alfa Bank Guarantee, the Telenor Guarantee
Agreement, the Undertaking Letters, the VIP/Eco Telecom Share Purchase
Agreement, the VIP-R Primary Agreement, the VIP-R Shareholders Agreement, the
VIP-R Registration Rights Agreement, the Termination Agreement, the Supplemental
Agreements and the Trademark Agreements.
"Procedural Regulations of the Board" shall mean the procedural regulations
(Protsedurnye pravila Soveta directorov) adopted by the Board on April 13, 2000,
as amended, pursuant to Section 10.5.19 of the Charter as a supplement to the
provisions set forth in the Charter which are applicable to the Board.
"Purchase Price" shall mean US$20.00 multiplied by the aggregate number of
the Purchasers' Shares.
"Purchaser" and "Purchasers" shall have the meanings specified in the
preamble hereto.
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"Purchasers' Shares" shall mean, collectively, the New Shares and Telenor's
Repurchased Shares.
"Registrar" shall mean Closed Joint Stock Company "National Registry
Company" (Natsionalnaya Registratsionnaya Kompaniya), a closed joint stock
company organized under the Laws of the Russian Federation and the duly
appointed shareholder registrar of the Issuer, or any successor thereto.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement dated as of the date hereof between and among the Issuer, Telenor and
Eco Telecom.
"Representatives" shall mean, with respect to any Person, its officers,
directors, shareholders, employees, agents, counsel, accountants, financial
advisors, consultants and other representatives.
"Repurchased Shares" shall mean, collectively, the shares of Common Stock,
if any, which the Issuer is required to repurchase from existing shareholders of
the Issuer in accordance with Article 75 of the JSC Law as a result of the
decisions taken by the GMS to approve the transactions contemplated by the
Principal Agreements, the aggregate value of which shall not exceed ten percent
(10%) of the Issuer's net assets on the date of the meeting of the shareholders
of the Issuer at which a vote of such shareholders is conducted concerning the
transactions contemplated by this Agreement and the other Principal Agreements,
calculated in accordance with Russian accounting principles and expressed in US
Dollars, based on the US Dollar/Russian Xxxxx exchange rate of the Central Bank
of the Russian Federation on the date immediately prior to the date of such
meeting.
"RTI Service-Svyaz" shall mean Closed Joint Stock Company "RTI Service-
Svyaz", a closed joint stock company organized and existing under the Laws of
the Russian Federation.
"Russian Rubles" shall mean the lawful currency of the Russian Federation.
"Sberbank" shall mean Sberegatelny Bank of the Russian Federation, a
commercial bank organized as an open joint stock company and existing under the
Laws of the Russian Federation.
"SCCI" shall mean the Ministry of the Russian Federation for Communications
and Informatization (Ministerstvo Rossiiskoy Federatsii po svyazi i
informatizatsii or Minsvyaz Rossii), including any applicable territorial agent
or any successor thereto.
"SEC" shall mean the Securities and Exchange Commission of the United
States of America, or any successor thereto.
"SEC Documents" shall have the meaning specified in Section 3.26(a).
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"Second Closing" shall have the meaning specified in the VIP-R Primary
Agreement.
"Second Closing Indemnity Amount" shall mean the sum of the First Closing
Indemnity Amount plus the amount actually paid by Eco Telecom for shares of
Common Stock of VIP-R at the Second Closing.
"Securities Act" shall mean the United States Securities Act of 1933, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"Shareholders Agreement" shall mean the Shareholders Agreement dated as of
the date hereof between Telenor and Eco Telecom.
"Significant Bee Line Names" shall mean, collectively, the brand names and
trademarks specified in Schedule 3.16(a).
"Significant Subsidiary" shall mean each of KBI and VIP-R.
"Sota-100" shall mean Closed Joint Stock Company "Sota-100", a closed joint
stock company organized and existing under the Laws of the Russian Federation.
"Specified Percentage" shall mean twenty five percent (25%) plus one (1)
share of the issued and outstanding shares of voting capital stock of the
Issuer.
"SRC" shall mean the State Registration Chamber under the Ministry of
Justice of the Russian Federation (Gosudarstvennaya registratsionnaya palata pri
Ministerstve yustitsii Rossiiskoy Federatsii), or any successor thereto.
"Strategic Investor" shall mean any Person which derives at least fifteen
percent (15%) of its revenues, on a consolidated basis with its Affiliates, from
operations in the telecommunications industry, other than the Purchasers or
their respective Affiliates.
"Subsidiary" shall mean, with respect to any Person, (a) any corporation in
which such Person owns or controls, directly or indirectly, more than fifty
percent (50%) of the securities having ordinary voting power for the election of
directors or other governing body of such corporation and/or (b) any
partnership, association, joint venture or other entity in which such Person
owns or controls, directly or indirectly, more than fifty percent (50%) of the
Equity Interest of such partnership, association, joint venture or other entity.
"Supplemental Agreements" shall mean, collectively, the Supplemental
Agreements, each substantially in the forms attached as Exhibit A to the VIP-R
Primary Agreement, to be entered into as of the Closing in respect of the Zimin
Preferred Stock Agreements.
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"Tax Document" shall mean any return, declaration, report, claim for
refund, assessment, demand, act, or information return, statement or other
document relating to Taxes, including any Schedule or attachment thereto, and
including any amendment thereof, whether prepared by the taxpayer, a tax
preparer or a Governmental or Regulatory Authority.
"Taxes" shall mean any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added alternative or add-on minimum, estimated, or other
tax, duty, governmental fee or charge of any kind whatsoever, including any
interest, penalty, or addition thereto.
"Telecom Licenses" shall mean (a) the Issuer's licenses issued by SCCI for
D-AMPS service in Moscow and the Moscow Region (Moskovskaya Oblast), (b) VIP-R's
four (4) licenses issued by SCCI for GSM 900/1800 services in the Central and
the Central Black Earth region, the North Caucasus region, the Siberian region
and the Volga region, (c) the license for GSM 900/1800 services in Moscow and
the Moscow Region (Moskovskaya Oblast) issued to KBI and (d) frequency permits
(razreshenia na ispolzovanie radiochastot dlya expluatatzii RES) relating to the
licenses referred to in clauses (a), (b) and (c) of this definition.
"Telenor" shall have the meaning specified in the preamble hereto.
"Telenor Guarantee Agreement" shall mean the Guarantee Agreement dated as
of the date hereof between and among Telenor ASA, Eco Telecom, the Issuer and
VIP-R.
"Telenor's Repurchased Shares" shall mean, collectively, all Repurchased
Shares less any shares of Common Stock retained by the Issuer as treasury stock
(as such term is defined under GAAP).
"Telenor Xxxxx Purchase Price" shall have the meaning specified in Section
2.03(c)(ii).
"Telenor Share Purchase Agreement" shall mean the Share Purchase Agreement
dated as of the date hereof between Telenor and Overture.
"Termination Agreement" shall mean the Termination Agreement dated as of the
date hereof between and among Telenor, Telenor Communication AS, the Issuer,
VimpelCom Finance B.V., VimpelCom B.V., VC Limited, Xx. Xxxxx, Glavsotkom and
the Bee Line Fund.
"Third Closing" shall have the meaning specified in the VIP-R Primary
Agreement.
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"Total Indemnity Amount" shall mean (a) from the Closing Date to (but
excluding) the date on which the Second Closing occurs, the First Closing
Indemnity Amount, (b) if no Eco Telecom Contribution Default has occurred at the
Second Closing, from (and including) the date on which the Second Closing occurs
to (but excluding) the date on which the Third Closing occurs, the Second
Closing Indemnity Amount and (c) if no Eco Telecom Contribution Default has
occurred at the Third Closing, from (and including) the date on which the Third
Closing occurs to the date on which the representations, warranties, covenants
and agreements of the parties to this Agreement cease to survive as provided in
Article X, the sum of the First Closing Indemnity Amount, the Second Closing
Indemnity Amount and the amount actually paid by Eco Telecom for shares of
Common Stock of VIP-R at the Third Closing.
"Trademark Agreements" shall mean, collectively, the License Agreements
dated the date hereof between the Issuer and VIP-R listed on Schedule 1.01(c)
and relating to the licensing by the Issuer to VIP-R of certain rights to use
the Significant Bee Line Names.
"Transfer" shall have the meaning specified in the Registration Rights
Agreement.
"Transferee" shall have the meaning specified in Section 7.04(d).
"Undertaking Letters" shall mean, collectively, the letter agreement dated
the date hereof between Eco Telecom and the Issuer relating to certain
obligations of Eco Telecom and the letter agreement dated the date hereof
between Telenor and the Issuer relating to certain obligations of Telenor.
"US Dollars" and "US$" shall mean the lawful currency of the United States.
"VIP/Eco Telecom Share Purchase Agreement" shall mean the Share Purchase
Agreement substantially in the form attached as Exhibit F to the VIP-R Primary
Agreement, to be entered into at the Preferred Stock Closing Date by Eco Telecom
and VIP-R.
"VIP-R" shall mean Closed Joint Stock Company "VimpelCom-Region", a closed
joint stock company organized and existing under the Laws of the Russian
Federation, and its legal successors.
"VIP-R Primary Agreement" shall mean the Primary Agreement dated as of the
date hereof between and among Telenor, Eco Telecom, the Issuer and VIP-R.
"VIP-R Registration Rights Agreement" shall mean the Registration Rights
Agreement dated as of the date hereof between and among Eco Telecom, Telenor,
the Issuer and VIP-R.
"VIP-R Shareholders Agreement" shall mean the Shareholders Agreement dated
as of the date hereof between and among Eco Telecom, Telenor, the Issuer and
VIP-R.
15
"Working Capital Bridge Facility" shall mean the Working Capital Bridge
Facility dated as of June 23, 2000 between the Issuer and Telenor.
"Zimin Common Call Option Agreement" shall mean the Call Option Agreement
substantially in the form attached as Exhibit A to the Zimin Preferred Call
Option Agreement, to be entered into following the Closing by Eco Telecom and
Overture with respect to shares of Common Stock.
"Zimin Common Pledge Agreement" shall mean the Pledge Agreement
substantially in the form attached as Exhibit A to the Zimin Preferred Pledge
Agreement, to be entered into following the Closing by Eco Telecom and Overture
with respect to shares of Common Stock.
"Zimin Preferred Call Option Agreement" shall mean the Call Option
Agreement substantially in the form of Exhibit A to the Eco Telecom Preferred
Stock Purchase Agreement, to be entered into at the Closing by Eco Telecom and
Overture with respect to shares of Preferred Stock.
"Zimin Preferred Pledge Agreement" shall mean the Pledge Agreement
substantially in the form attached as Exhibit B to the Eco Telecom Preferred
Stock Purchase Agreement, to be entered into at the Closing by Eco Telecom and
Overture with respect to shares of Preferred Stock.
"Zimin Preferred Stock Agreements" shall mean, collectively, the Share
Purchase Agreement dated the date hereof between Xx. Xxxxx and Overture, the
Share Purchase Agreement No. C-P-1 dated April 13, 1998 between Closed Joint
Stock Company "Sota-100" and Xx. Xxxxx, the Share Purchase Agreement No. C-P-2
dated April 13, 1998 between Closed Joint Stock Company "Sota-100" and Xx.
Xxxxx, the Share Purchase Agreement No. KB-P-1 dated April 13, 1998 between
Closed Joint Stock Company "KB Impuls-TV" and Xx. Xxxxx, the Share Purchase
Agreement No. KB-P-2 dated April 13, 1998 between Closed Joint Stock Company
"KB Impuls-TV" and Xx. Xxxxx, the Share Swap Agreement dated July 26, 1996
between the Issuer and Closed Joint Stock Company "Sota-100" and the Share Swap
Agreement dated July 26, 1996 between the Issuer and Closed Joint Stock Company
"KB Impuls-TV".
"Zimin Principal Agreements" shall mean, collectively, the Telenor Share
Purchase Agreement, the Eco Telecom Share Purchase Agreements, the Zimin Common
Pledge Agreement, the Zimin Preferred Pledge Agreement, the Zimin Common Call
Option Agreement, the Zimin Preferred Call Option Agreement and the Zimin Surety
Agreement.
"Zimin Share Purchase Agreements" shall mean, collectively, the Eco Telecom
Share Purchase Agreements and the Telenor Share Purchase Agreement.
16
"Zimin Shares" shall mean (a) 113,102 shares of Common Stock and 6,426,600
shares of Preferred Stock directly or beneficially owned by Xx. Xxxxx and
Overture and which Xx. Xxxxx and Overture are obligated to sell to Eco Telecom
pursuant to the Eco Telecom Share Purchase Agreements and (b) such number of
shares of Common Stock as Overture is obligated sell to Telenor pursuant to the
Telenor Share Purchase Agreement.
"Zimin Surety Agreement" shall mean the Surety Agreement dated as of the
date hereof between Eco Telecom and Xx. Xxxxx.
1.02 Interpretations
---------------
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 the other gender;
(c) the words "hereof, "herein", "hereby", "hereto" and similar words
refer to this entire Agreement and not to any particular Section or any other
subdivision of this Agreement;
(d) a reference to any "Article", "Section", "Schedule" or "Exhibit" is a
reference to a specific Article or Section of, or Schedule or Exhibit to, this
Agreement;
(e) a reference to any law, statute, regulation, notification or statutory
provision shall include any amendment, modification or re-enactment thereof, any
regulations promulgated thereunder from time to time, and any interpretations
thereof from time to time by any regulatory or administrative authority;
(f) a reference to any agreement, instrument, contract or other document
shall include any amendment, amendment and restatement, supplement or other
modification thereto;
(g) a reference to any Person shall include such Person's successors and
permitted assigns under any agreement, instrument, contract or other document;
(h) the phrases "ordinary course of business" and "ordinary course of
business consistent with past practice" shall refer to the business and practice
of the Issuer;
(i) the word "pending" shall mean, with respect to a particular matter,
the service of process or delivery of written notice to the Person to whom such
manner relates;
(j) whenever this Agreement refers to a number of days, such number shall
refer to calendar days unless Business Days are specified; and
17
(k) all accounting terms used herein and not expressly defined herein shall
have the meanings given to them under GAAP.
ARTICLE II SALE OF SHARES AND CLOSING
2.01 Purchase and Sale
-----------------
(a) Subject to the terms and conditions contained in this Agreement
(including, without limitation, Section 2.01(b)), in accordance with the
procedures set forth in Schedule 2.01 and on the basis of the representations
and warranties contained herein and in the Individual Share Purchase Agreements:
(i) the Issuer agrees to issue and sell to Eco Telecom, and Eco
Telecom agrees to subscribe for and purchase from the Issuer, the New Shares at
the Closing; and
(ii) the Issuer agrees to sell to Telenor, and Telenor agrees to
purchase from the Issuer, Telenor's Repurchased Shares at the Closing.
(b) (i) Subject to the terms and conditions of this Agreement, solely
for the purpose of Russian Law and solely to the extent Russian Law may be
applicable (A) this Agreement, insofar as it relates to the transfer of New
Shares to Eco Telecom, shall be considered a preliminary agreement
(predvaritelnyi dogovor) and not a transaction involving securities (sdelka s
tsennymi bumagami); (B) by virtue of entering into this Agreement, (x) the
Issuer shall not be obligated to transfer any New Shares to Eco Telecom or be
considered to have offered any New Shares to Eco Telecom and (y) Eco Telecom
shall not be obligated to purchase any New Shares from the Issuer or make
payment for any New Shares; (C) the actual transactions contemplated by Section
2.01(a)(i) shall not constitute transactions involving securities (sdelki s
tsennymi bumagami); and (D) in no event shall such transactions take place
before the registration of the issuance of the New Shares and payment in full
for the New Shares by Eco Telecom, if and to the extent such registration and
payment are required under Russian Law.
(ii) The placement of the New Shares shall occur on the date on
which the New Shares are disposed of (otchuzdeny) by the Issuer in favor of Eco
Telecom, by transferring the title to the New Shares to Eco Telecom at the
Closing.
(iii) Clauses (i) and (ii) of this Section 2.01(b) shall have no
effect on interpretation of this Agreement under the laws of the State of New
York, by which this Agreement is expressed to be governed.
(c) Subject to the terms and conditions contained in this Agreement,
immediately upon the registration of the issuance of the New Shares with the
FCSM and in any event prior to the Issuer's execution of any other agreement
with respect to any of
18
the New Shares, the Issuer and each Purchaser shall execute an Individual Share
Purchase Agreement (osnovnoi dogovor) which shall incorporate by reference the
terms and conditions of this Agreement applicable to such Purchaser, except that
Section 2.01(b) shall be excluded.
2.02 Purchase Price
--------------
(a) Upon determining the total number of Repurchased Shares following the
meeting of shareholders of the Issuer at which a vote of such shareholders is
conducted concerning the transactions contemplated by this Agreement and the
other Principal Agreements, the Issuer shall promptly, but no later than fifty-
five (55) days after the date of such meeting, notify Telenor of such total
number and the number of Repurchased Shares, if any, which the Issuer wishes to
retain as treasury stock (as such term is defined under GAAP) and deliver to
Telenor and Eco Telecom a new Schedule 2.02 reflecting such figures, and upon
such delivery to Telenor and Eco Telecom, Schedule 2.02 shall be deemed to have
been amended and restated in its entirety without the need for any further
action by the parties.
(b) Subject to the terms and conditions hereof and in consideration of the
sale and transfer to the Purchasers by the Issuer of the Purchasers' Shares,
each Purchaser shall pay to the Issuer such portion of the Purchase Price as is
specified opposite such Purchaser's name in Schedule 2.02, in the manner
provided in Section 2.03 and Section 2.04, as applicable, and the Purchase Price
shall be allocable entirely to, and deemed to be in consideration of, the
Purchasers' Shares being purchased hereunder by such Purchaser.
(c) Eco Telecom shall, no later than the second Business Day prior to the
Closing Date, transfer or cause to be transferred to the Eco Telecom Dollar
Account, by wire transfer of immediately available funds, US$53,000,000, for
further transfer in accordance with the Account Bank and Overdraft Agreement as
payment of part of that portion of the Purchase Price payable by Eco Telecom.
2.03 Pre-Closing; Closing
--------------------
(a) Subject to Section 2.03(b) and (d), at least fifteen (15) Business
Days prior to the proposed date of the Closing, the Issuer shall notify the
Purchasers of such proposed date. On the date which is ten (10) Business Days
prior to such proposed date, the Issuer and the Purchasers shall (i) attend a
pre-closing meeting at the offices of the Issuer's counsel, located at Xxxxx
Place II, Xxxxxx Xxxxxxx 0, Xxxxxx 000000, Xxxxxx (or at such other place as the
Purchasers and the Issuer mutually agree) at 10:00 am (Moscow time), and (ii)
review the documents to be delivered at the Closing to determine whether the
conditions precedent specified in Article VIII and Article IX have been, or will
on the Closing Date, be capable of being, fulfilled. If, after such pre-closing
meeting, the Issuer determines, in its sole discretion, that it is appropriate
to do so, then the Issuer may deliver a Preliminary Closing Notice to the Escrow
Agent and the Account Bank (with a copy to each Purchaser and VIP-R) in
accordance with the Escrow Agreement and the Account Bank and Overdraft
Agreement.
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(b) If the Closing does not occur on the Closing Date set forth in
the Preliminary Closing Notice delivered in accordance with Section 2.03(a) (or
in a subsequent Preliminary Closing Notice delivered in accordance with this
Section 2.03(b)), the Issuer may, in its sole discretion, reschedule the
proposed Closing Date by delivering a new Preliminary Closing Notice to the
Escrow Agent and the Account Bank (with a copy to each Purchaser and VIP-R) at
least five (5) Business Days prior to the new Closing Date.
(c) In connection with any Closing on any Closing Date other than a
Guaranteed Closing Date, if the conditions precedent specified in Article VIII
(other than delivery of the Purchasers' Shares) and Article IX (other than
payment of the Purchase Price) have been (or are capable of being) fulfilled (or
waived in writing, as applicable), then:
(i) (A) the Issuer and Eco Telecom shall execute and deliver
to the Escrow Agent and the Account Bank a Final Closing Notice, (1)
instructing the Escrow Agent to pay to the Issuer US$50,000,000 of the
Purchase Price (consisting of funds paid into the Escrow Account (as
defined in the Escrow Agreement) by or on behalf of Eco Telecom in
accordance with the Escrow Agreement) on the Closing Date, by wire
transfer of immediately available funds to the Issuer's Dollar Account
with details of payment as set forth in the Escrow Agreement, and (2)
instructing the Account Bank to pay to the Issuer (on behalf of Eco
Telecom) US$53,000,000 of the Purchase Price on the Closing Date, by
transfer of such sum from the Eco Telecom Dollar Account to the
Issuer's Dollar Account, and (3) instructing the Account Bank to
complete the Conversion, and to make the other transfers and exchanges
contemplated by the Account Bank and Overdraft Agreement, and (B) Eco
Telecom shall transfer or cause to be transferred to the Eco Telecom
Dollar Account, by wire transfer of immediately available funds, so
much of the US$53,000,000 required to be transferred by it to such
account pursuant to Section 2.02(c) as it may have failed to transfer
to such account in accordance with such Section;
(ii) Telenor shall instruct its bank to pay to the Issuer (on
behalf of Telenor) the Russian Xxxxx equivalent (based upon the
exchange rate of the Central Bank of the Russian Federation on the day
prior to payment) of that portion of the Purchase Price as is
specified opposite Telenor's name in Schedule 2.02 on the Closing Date
(the "Telenor Xxxxx Purchase Price"), by wire transfer of immediately
available funds to the Issuer's Xxxxx Account; and
(iii) upon receipt by the Issuer of (A) written confirmation
from the Account Bank that the Account Bank has credited the proceeds
of the Conversion to the Issuer's Xxxxx Account in accordance with the
Account Bank and Overdraft Agreement and (B) written confirmation from
Telenor's bank that Telenor's bank has irrevocably issued wire
transfer instructions for the Telenor Xxxxx Purchase Price to be paid
to the Issuer's Xxxxx Account on the Closing Date, the Issuer shall
20
deliver to Telenor an extract from the share register of the Issuer issued
by the Registrar and showing Telenor as the owner of Telenor's Repurchased
Shares, and to Eco Telecom, an extract from the share register of the
Issuer issued by the Registrar and showing Eco Telecom as the owner of the
New Shares.
(d) If the Closing fails to occur on any Closing Date other than a
Guaranteed Closing Date due to Eco Telecom having failed to transfer or cause to
be transferred US$53,000,000 to the Eco Telecom Dollar Account, as contemplated
by Section 2.03(c)(i) (the date of such failed Closing being the "Failed Closing
Date"), then:
(i) on the first Business Day immediately following the Failed
Closing Date, the Issuer may, (A) if it so elects in its sole discretion
and in accordance with Section 2.03(b), schedule a new Closing Date by
delivering a new Preliminary Closing Notice to the Escrow Agent and the
Account Bank (with a copy to each Purchaser and VIP-R) and (B) execute and
deliver to Alfa Bank in accordance with the terms of the Alfa Bank
Guarantee a Notice of Demand (as defined in the Alfa Bank Guarantee) to pay
to the Issuer US$53,000,000 of the Purchase Price, by wire transfer of
immediately available funds to the Issuer's Dollar Account;
(ii) if the Issuer in its sole discretion elects to schedule a new
Closing Date in accordance with Section 2.03(d)(i), then on the first
Business Day immediately following the Failed Closing Date, the Issuer and
Eco Telecom shall execute and deliver to the Escrow Agent and the Account
Bank a Final Closing Notice, instructing the Escrow Agent to pay to the
Issuer US$50,000,000 of the Purchase Price (consisting of funds paid into
the Escrow Account (as defined in the Escrow Agreement) by or on behalf of
Eco Telecom in accordance with the Escrow Agreement) on the Closing Date,
by wire transfer of immediately available funds to the Issuer's Dollar
Account with details of payment as set forth in the Escrow Agreement; and
(iii) on the Closing Date, if the conditions precedent specified in
Article VIII (other than delivery of the Purchasers' Shares) and Article IX
(other than payment of the Purchase Price) have been (or are capable of
being) fulfilled (or waived in writing, as applicable), then:
(A) Telenor shall instruct its bank to pay to the Issuer (on
behalf of Telenor) the Telenor Xxxxx Purchase Price by wire transfer
of immediately available funds to the Issuer's Xxxxx Account; and
(B) upon receipt by the Issuer of (1) written confirmation from
Telenor's bank that Telenor's bank has irrevocably issued wire
transfer instructions for the Telenor Xxxxx Purchase Price to be paid
to the Issuer's Xxxxx Account on the Closing Date and (2) written
confirmation from the Account Bank that it has credited US$53,000,000
to the Issuer's Dollar Account and has credited the proceeds of the
Conversion to the Issuer's
21
Xxxxx Account, the Issuer shall deliver to Telenor an extract from the
share register of the Issuer issued by the Registrar and showing
Telenor as the owner of Telenor's Repurchased Shares, and to Eco
Telenor, an extract from the share register of the Issuer issued by
the Registrar and showing Eco Telecom as the owner of the New Shares.
(e) The Closing shall take place at the offices of the Issuer's counsel,
located at Xxxxx Place II, Xxxxxx Xxxxxxx 0, Xxxxxx 000000, Xxxxxx, or at such
other place as the Purchasers and the Issuer mutually agree, at 10:00 am (Moscow
time) on the Closing Date.
2.04 Escrow of Purchase Price
------------------------
(a) In accordance with the Escrow Agreement, but in any event no later
than simultaneously with the execution and delivery of this Agreement and the
other Principal Agreements required to be executed on the date hereof by the
parties hereto and thereto, Eco Telecom shall deposit with the Escrow Agent by
wire transfer of immediately available funds that portion of the Purchase Price
as is specified opposite Eco Telecom's name in Schedule 2.02. Thereafter, such
portion of the Purchase Price shall be held in escrow, shall accrue interest as
set forth in the Escrow Agreement, and shall be returned to Eco Telecom or paid
over to the Issuer, in each case, in accordance with this Agreement and the
Escrow Agreement.
(b) If a meeting of shareholders of the Issuer approves such transactions
contemplated by this Agreement and the other Principal Agreements as are
required to be approved by such shareholders on or prior to July 27, 2001, the
Issuer shall promptly execute and deliver to the Escrow Agent pursuant to Clause
5(2)(ii) of the Escrow Agreement the certificate and payment instruction
referred to therein.
(c) When all of the conditions precedent to the Closing specified in
Article VIII (other than delivery of the Purchasers' Shares) and Article IX
(other than the payment of the Purchase Price) have been (or are capable of
being) fulfilled (or waived in writing, as applicable), the Issuer and Eco
Telecom shall execute and deliver to the Escrow Agent and the Account Bank a
Final Closing Notice.
2.05 Use of Proceeds
---------------
(a) That portion of the Purchase Price specified opposite Eco Telecom's
name in Schedule 2.02 shall be invested by the Issuer in VIP-R in accordance
with Section 2.01 of the VIP-R Primary Agreement.
(b) That portion of the Purchase Price specified opposite Telenor's name
in Schedule 2.02 shall be applied by the Issuer in accordance with its current
business plan or as the Board may otherwise direct.
22
2.06 Liquidated Damages
------------------
The parties agree that, in the event Eco Telecom fails to purchase the New
Shares from the Issuer in breach of Eco Telecom's obligations under this
Agreement, the Issuer and Telenor will suffer substantial damages, which damages
are not readily ascertainable. Because such damages would be difficult to
calculate, the parties hereto agree that in the event of such breach by Eco
Telecom, Eco Telecom shall pay, as liquidated damages for loss of a bargain and
not as a penalty, (a) to the Issuer, an amount equal to US$45,000,000 and (b) to
Telenor, an amount equal to US$5,000,000. Such payments shall be made in US
Dollars by wire transfer of immediately available funds to the Issuer's Dollar
Account and the account of Telenor specified in Schedule 2.06, respectively.
ARTICLE III REPRESENTATIONS AND WARRANTIES OF ISSUER
Subject to the information contained in the Issuer's Form 20-F, Form F-3
and Form 6-Ks filed with the SEC since the date of such Form F-3 (including the
Issuer's Form 6-K filed on the date hereof) and the schedules hereto, the Issuer
hereby represents and warrants to each Purchaser that, on and as of the date of
this Agreement and, solely with respect to those representations and warranties
specified in Section 8.01, on and as of the Closing:
3.01 Organization of the Issuer
--------------------------
The Issuer is an open joint stock company and has been duly organized, is
validly existing as a legal entity properly organized, registered and existing
under the laws of the Russian Federation, with corporate power and authority to
carry on its business as it is currently being conducted and to own, lease and
operate its Assets and Properties, and is not required to be qualified as a
foreign corporation or other entity authorized to do business in any other
jurisdiction.
3.02 Authority
---------
(a) Subject only to the consents, actions, proceedings and approvals
identified in Schedules 8.05 and 8.06, the Issuer has full power and authority
to execute and deliver this Agreement and the other Principal Agreements to
which the Issuer is a party and to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby,
including, without limitation, (i) to issue and sell the New Shares to Eco
Telecom and (ii) to sell Telenor's Repurchased Shares to Telenor.
(b) This Agreement and the other Principal Agreements required to be
executed on the date hereof and to which the Issuer is a party have been duly
and validly executed and delivered by the Issuer and constitute the legal, valid
and binding obligations of the Issuer, enforceable against the Issuer in
accordance with their terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights and remedies generally and by
23
general equitable principles (whether applied by a court of law or equity),
except as rights to indemnity and contribution may be limited by applicable law
or public policy and except to the extent any clause hereof provides for the
payment of a penalty.
3.03 Charter Capital of the Issuer
-----------------------------
(a) As of the date of this Agreement, the Charter Capital of the Issuer
consists solely of Thirty Five Million One Hundred Eighty-Two Thousand Two
Hundred and One (35,182,201) issued shares of Common Stock and Six Million Four
Hundred Twenty-Six Thousand Six Hundred (6,426,600) issued shares of Preferred
Stock. After giving effect to the issuance of all of the New Shares and the sale
of Telenor's Repurchased Shares, the Issuer's Charter Capital (including any
Repurchased Shares retained by the Issuer as treasury stock (as such term is
defined under GAAP)) shall consist of Forty Million Three Hundred Thirty-Two
Thousand Two Hundred and One (40,332,201) shares of Common Stock and Six Million
Four Hundred Twenty-Six Thousand Six Hundred (6,426,600) shares of Preferred
Stock.
(b) All of the outstanding Equity Interests of the Issuer (i) have been
duly authorized and validly issued, (ii) are fully paid, and non-assessable,
(iii) are not subject to any preemptive or similar rights with respect to the
Issuer, and (iv) were properly registered with the appropriate authorities
competent for registration of the issue of such shares. All of the shares of the
Issuer, including the Purchasers' Shares, are uncertificated.
(c) As of the Closing Date, the New Shares (i) will have been duly
authorized, (ii) when issued and delivered to, and paid for by, Eco Telecom as
provided herein and in accordance with the documents to be filed with the FCSM,
will be validly issued, fully paid and non-assessable, (iii) upon registration
of a report on the issuance thereof with the FCSM, compliance with the
disclosure requirements of the Russian Federation Federal Law on the Securities
Markets and regulations of the FCSM, and approval of the amendments to the
Charter by the Board and their registration with the MRC and SRC, the issuance
of such New Shares shall have been properly registered with the appropriate
authorities competent therefor, and (iv) upon registration of a report on the
issuance of the New Shares with the FCSM and full payment for the New Shares by
Eco Telecom, Eco Telecom shall have acquired the New Shares, free and clear of
all Liens other than Liens arising under the Principal Agreements. As of the
Closing Date, upon full payment therefor by Eco Telecom, the New Shares shall
have been transferred from the Issuer to Eco Telecom, and Eco Telecom's
shareholding with respect to the New Shares shall have been entered into the
shareholder register of the Issuer.
(d) Immediately after giving effect to the issuance of and sale to Eco
Telecom pursuant to this Agreement of all of the New Shares and the purchase by
Eco Telecom pursuant to the Eco Telecom Share Purchase Agreements of the shares
of Common Stock and the shares of Preferred Stock referred to therein, (i) the
shares of Common Stock and the shares of Preferred Stock held by Eco Telecom
shall represent not less than twenty-five percent (25%) plus one (1) share of
all of the voting capital stock of the Issuer, inclusive of all issued shares of
Common Stock and all issued shares of Preferred Stock,
24
and (ii) Eco Telecom shall have sufficient voting power to block any decision of
the GMS requiring an affirmative vote of three-quarters (3/4) of the
shareholders eligible to vote at the GMS.
(e) Immediately after giving effect to the issuance of and sale to Telenor
pursuant to this Agreement of all of Telenor's Repurchased Shares and the
purchase by Telenor pursuant to the Telenor Share Purchase Agreement of the
shares of Common Stock referred to therein, (i) the shares of Common Stock held
by Telenor shall represent not less than twenty-five percent (25%) plus two (2)
shares of all of the voting capital stock of the Issuer, inclusive of all issued
shares of Common Stock and all issued shares of Preferred Stock, and (ii)
Telenor shall have sufficient voting power to block any decision of the GMS
requiring an affirmative vote of three-quarters (3/4) of the shareholders
eligible to vote at the GMS.
(f) As of the Closing Date, the Issuer (i) shall have repurchased the
Repurchased Shares from shareholders of the Issuer upon their demand in
accordance with the JSC Law, and (ii) will own the Repurchased Shares, as
reflected in the shareholder register of the Issuer, free and clear of all Liens
(other than such Liens as exist under Russian Law or are created by the
Principal Agreements). As of the Closing Date, upon full payment therefor by
Telenor, Telenor's Repurchased Shares shall have been transferred from the
Issuer to Telenor, free and clear of all Liens (other than Liens created by the
Principal Agreements), and Telenor's shareholding with respect to Telenor's
Repurchased Shares shall have been entered into the shareholder register of the
Issuer.
(g) Neither the Issuer nor, to the Knowledge of the Issuer, any Person
affiliated (as defined in Rule 405 of the Securities Act) with the Issuer, has
taken, directly or indirectly, any action designed to or which has constituted
or which might reasonably be expected to cause or result in, under the Exchange
Act or otherwise, stabilization or manipulation of the price of any security of
the Issuer; provided that neither Purchaser shall be deemed a Person affiliated
(as defined in Rule 405 of the Securities Act) with the Issuer for purposes of
this Section 3.03(g).
(h) After giving effect to Article IV of the Termination Agreement, no
holder of any security of the Issuer, other than the Purchasers, shall have any
right to require registration of any shares of Common Stock or any other
security of the Issuer under the Securities Act.
(i) Except as otherwise set forth in Schedule 3.03 or as provided in the
Principal Agreements, there are no outstanding Options related to or entitling
any Person to purchase or otherwise acquire from the Issuer or any of its
Significant Subsidiaries any Equity Interest in the Issuer or any such
Significant Subsidiary, as the case may be.
25
3.04 Subsidiaries of the Issuer
--------------------------
(a) The direct and indirect Subsidiaries of the Issuer consist entirely of
the entities set forth in Schedule 3.04(a).
(b) Each of the Consolidated Subsidiaries of the Issuer has been duly
organized, is validly existing as a legal entity properly organized, registered
and existing under the laws of the Russian Federation, with corporate power and
authority to carry on its business as it is currently being conducted and to
own, lease and operate its Assets and Properties, and is not required to be
qualified as a foreign corporation or other entity authorized to do business in
any other jurisdiction.
(c) Except as set forth in Schedule 3.04(a), all of the outstanding Equity
Interests of each of the Consolidated Subsidiaries of the Issuer have been duly
authorized and validly issued and are fully paid and non-assessable, and the
issuance of such Equity Interests was properly registered with the appropriate
authorities competent therefor, and, to the extent owned by the Issuer, are
owned by the Issuer free and clear of any Liens (other than Permitted Liens).
The Issuer owns directly or indirectly such percentage of the Equity Interests
of the Consolidated Subsidiaries of the Issuer as is specified in Schedule
3.04(a), as being owned by the Issuer, and, except as specified in Schedule
8.05, all approvals of Governmental or Regulatory Authorities required therefor
have been obtained.
3.05 No Conflicts, Etc.
------------------
Except as set forth in Schedule 3.05, the execution, delivery and
performance by the Issuer of this Agreement and the other Principal Agreements
to which it is a party, compliance by the Issuer with all of the provisions
hereof and thereof and the consummation by the Issuer of the transactions
contemplated hereby and thereby:
(a) will not conflict with or constitute a breach of any of the terms or
provisions of the Charter (after giving effect to the amendments to the
Charter), or the charter of any Significant Subsidiary (in the case of VIP-R,
after giving effect to the amendments to the charter of VIP-R contemplated by
the VIP-R Primary Agreement);
(b) subject to obtaining the third party consents referred to in Schedule
8.06, will not conflict with or constitute a breach of any Contract or License
to which the Issuer or any Significant Subsidiary is a party as of the date of
this Agreement or by which the Issuer or any Significant Subsidiary or any of
their respective Assets and Properties is bound;
(c) subject to obtaining the consents, approvals and actions, making the
filings and giving the notices disclosed in Schedule 8.05, will not violate or
conflict with any Orders or Laws applicable to the Issuer, any Significant
Subsidiary or any of their respective Assets and Properties; or
26
(d) will not (i) result in a Change of Control (as such term is defined in
the Indenture), (ii) require VimpelCom B.V. to offer to repurchase any of the
Convertible Notes pursuant to the terms of the Indenture, (iii) require an
adjustment to the Conversion Price (as such term is defined in the Indenture),
(iv) constitute a Default or Event of Default under (and as defined in) the
Indenture, (v) constitute a default in respect of, or require the mandatory
prepayment prior to the scheduled due date of, any other Indebtedness of the
Issuer or any of its Subsidiaries having an aggregate principal amount of
US$5,000,000 or more, or (vi) result in the imposition of any Lien on any of the
Issuer's or any of its Subsidiaries' Assets and Properties (other than a Lien
arising under the Principal Agreements or Russian Law),
except, in the case of clauses (b), (c) and (d)(vi), any conflict, breach,
violation, failure to obtain consent or approval or make any filing or give any
notice, or any incurrence of any Lien, in each case, which would not have a
Material Adverse Effect on the Issuer.
3.06 Governmental Approvals and Filings
----------------------------------
Except as set forth in Schedule 8.05, the execution, delivery and
performance by the Issuer of this Agreement and the other Principal Agreements
to which it is a party, the compliance by the Issuer with all of the provisions
hereof and thereof and the consummation by the Issuer of the transactions
contemplated hereby and thereby will not require any consent, approval,
authorization or other Order of any Governmental or Regulatory Authority.
3.07 Books and Records
-----------------
(a) Schedule 3.07(a) is a true and complete list of all written protocols
of GMSs and meetings of shareholders of Significant Subsidiaries, all written
consents in lieu of GMSs and meetings of shareholders of Significant
Subsidiaries, all written protocols of meetings of the Board and of the board of
directors of each Significant Subsidiary and all written consents in lieu of
meetings of the Board and of the board of directors of each Significant
Subsidiary, in each case, from January 1, 2001 up to and including the date of
this Agreement. A true and complete copy of each such written protocol and
consent has been made available for review by the Purchasers.
(b) True and complete copies of the share registers of the Issuer and each
Significant Subsidiary (as provided by the share registrars of the Issuer and
each Significant Subsidiary), and a complete list of shareholders of each other
Subsidiary of the Issuer, are attached hereto as Schedule 3.07(b).
(c) Neither the Issuer nor any Significant Subsidiary holds its share
register, Telecoms Licenses or accounting records at any location other than one
of the locations specified in Schedule 3.07(c).
(d) Each of the Significant Subsidiaries and the Issuer makes and keeps
accurate books and records and maintains a system of internal accounting
controls
27
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of the Financial
Statements in conformity with GAAP and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
3.08 Financial Statements
--------------------
(a) Attached hereto as Schedule 3.08(a) are true and complete copies of the
Audited Consolidated Financial Statements, together with in each case, a true
and correct copy of the report on such audited information by Ernst & Young
(CIS) Limited.
(b) Except as disclosed therein, the Audited Consolidated Financial
Statements:
(i) were prepared in accordance with GAAP;
(ii) present fairly the consolidated financial position, and results
of operations and changes in financial position, of the Issuer and its
Consolidated Subsidiaries at December 31, 2000 and for the fiscal year ended on
such date; and
(iii) comply in all material respects with the requirements of the
Securities Act applicable to annual financial statements of foreign private
issuers.
(c) Ernst & Young (CIS) Limited are independent public accountants with
respect to the Issuer as required by the Securities Act.
3.09 Absence of Changes
------------------
Except as set forth in Schedule 3.09 and except for the execution and
delivery of this Agreement and the other Principal Agreements and the
transactions contemplated hereby and thereby, since the Audited Consolidated
Financial Statement Date:
(a) there has been no material adverse change in the condition (financial
or otherwise) or prospects of the Issuer or any Significant Subsidiary, taken as
a whole, whether or not arising from transactions in the ordinary course of
business;
(b) there has been no transaction entered into by the Issuer or any
Significant Subsidiary material to the Issuer, on a consolidated basis, other
than in the ordinary course of business;
(c) there has been no dividend or distribution of any kind declared, paid
or made, or any direct or indirect redemption, by the Issuer or any Significant
Subsidiary on any class of its capital stock;
28
(d) there has been no bankruptcy or administrative proceeding (nablyudenie)
declared or commenced by a Governmental or Regulatory Authority of competent
jurisdiction with respect to the Issuer or any Significant Subsidiary;
(e) without limiting the generality of the foregoing, except as set forth
in Schedule 3.09, there has not occurred between the Audited Consolidated
Financial Statement Date and the date hereof, any of the following with respect
to the Issuer or any Significant Subsidiary:
(i) any authorization, issuance, sale or other disposition of any
Equity Interest or Option (other than pursuant to the Issuer's 2000 stock option
program or phantom stock program), or any modification or amendment of any right
of any holder of any Equity Interest or Option of the Issuer on a consolidated
basis (except as set forth in Schedule 3.03);
(ii) any granting by the Issuer or any Significant Subsidiary to any
director, officer or employee of the Issuer or any such Significant Subsidiary
of any increase in compensation, bonus or other benefits, except for normal
increases in the ordinary course of business, consistent with past practice or
in accordance with the terms of an employment agreement entered into by the
Issuer or any such Significant Subsidiary prior to the Audited Consolidated
Financial Statement Date;
(iii) any entry by the Issuer or any Significant Subsidiary into, or
any amendment of, any employment, deferred compensation, consulting, services,
termination or indemnification agreement with any current (as of the date
hereof) or former director, executive officer or employee, other than in the
ordinary course of business consistent with past practice;
(iv) any physical damage, destruction or other casualty loss
(whether or not covered by insurance) affecting any movable or immovable
property or equipment (whether owned, leased or used) in an aggregate amount
which would have a Material Adverse Effect on the Issuer;
(v) any material change in any method of calculating bad debt or
accounting, financial reporting or Tax practice or policy or any change in the
fiscal year;
(vi) any write off or write down of or any determination to write
off or write down any Assets and Properties in an aggregate amount exceeding
US$1,000,000 (without taking into account normal year-end audit adjustments);
(vii) any (A) amendment to its charter, (B) any recapitalization,
reorganization, liquidation or dissolution, in each case, as such terms are
defined under the Laws of the Russian Federation; or (C) any merger or
consolidation with, or acquisition of any Equity Interest in, any Person in
which the Issuer or any Significant Subsidiary has paid or received more than
US$10,000,000;
29
(viii) any entering into any amendment, modification, termination
(partial or complete) or granting of a waiver under or giving any consent with
respect to any Telecom License;
(ix) any (A) expenditures or commitments in respect of real estate
in an aggregate amount exceeding US$1,000,000, (B) expenditures or commitments
in respect of capital improvements in an aggregate amount exceeding US$2,500,000
or (C) expenditures or commitments in respect of equipment or other capital
assets in an aggregate amount exceeding US$5,000,000;
(x) any commencement or termination of any material line of
business; or
(xi) any transaction with any Affiliate (A) outside the ordinary
course of business consistent with past practice, or (B) other than on an arm's
length basis or (C) other than pursuant to a Contract disclosed pursuant to
Section 3.17, in each case, which is material to the Issuer and the Significant
Subsidiaries, taken as a whole.
3.10 No Undisclosed Indebtedness, Liens and Liabilities
--------------------------------------------------
Except as disclosed in Schedule 3.10, (a) there is no Indebtedness of the
Issuer or any of its Consolidated Subsidiaries the value of which exceeds
US$5,000,000, (b) there are no Liens (other than Permitted Liens) on any of the
Assets and Properties of the Issuer, and (c) there are no Liabilities against,
relating to or affecting the Issuer or any Consolidated Subsidiary or any of
their respective Assets and Properties, other than Indebtedness, Liens and
Liabilities incurred in the ordinary course of business consistent with past
practice which in the aggregate are not material to their Business or Condition.
3.11 Taxes
-----
Except as set forth in Schedule 3.11, to the Knowledge of the Issuer, the
Issuer and each Significant Subsidiary has duly filed with the appropriate
taxing authorities (or has received an extension for filing with respect to) all
Tax Documents required to be filed by it, and each such Tax Document was, when
filed, accurate and complete in all material respects; and, to the Knowledge of
the Issuer, the Issuer and each Significant Subsidiary has duly paid, on time,
or has made adequate reserves for, or has contested in good faith, all Taxes
required to be paid or remitted by it or levied against it, and, to the
Knowledge of the Issuer, no material Tax deficiency is currently asserted
against the Issuer or any Significant Subsidiary.
3.12 Legal Proceedings; Liability
----------------------------
Except as set forth in Schedule 3.12:
(a) there is no Action or Proceeding pending or, to the Knowledge of the
Issuer, threatened which will result in, or would reasonably be expected to
result in, the
30
issuance of an Order which (i) questions the validity of this Agreement or any
of the other Principal Agreements to which the Issuer or any of its Subsidiaries
is a party or any action taken or to be taken pursuant hereto or thereto, (ii)
restrains, enjoins or otherwise prohibits or makes illegal consummation of any
of the transactions contemplated by this Agreement or any of the other Principal
Agreements to which the Issuer or any of its Subsidiaries is a party, (iii)
otherwise results in a material impairment of a Purchaser's rights under this
Agreement or any of the other Principal Agreements to which such Purchaser and
the Issuer or any of the Issuer's Subsidiaries is a party, or (iv) if determined
adversely to the Issuer or a Consolidated Subsidiary of the Issuer, could
reasonably be expected to result in (A) any injunction or other equitable relief
against such Person that would interfere in any material respect with its
business or operations or (B) Losses by such Person, individually or in the
aggregate, in excess of US$10,000,000;
(b) there are no facts or circumstances Known to the Issuer that could
reasonably be expected to give rise to any Action or Proceeding that would be
required to be disclosed pursuant to clause (a) above;
(c) there are no material Orders outstanding against the Issuer or any
Consolidated Subsidiaries of the Issuer; and
(d) neither the Issuer nor any Subsidiary of the Issuer has any material
Liability (and, to the Knowledge of the Issuer, there is no basis for any
present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand against any of them giving rise to any Liability)
arising out of any injury to individuals or property as a result of (i) any
service rendered by the Issuer or any Subsidiary or (ii) the ownership,
possession or use of any product manufactured, sold, leased or delivered by the
Issuer or any of its Subsidiaries.
3.13 Compliance With Laws and Orders
-------------------------------
(a) Except for any violation or alleged violation of, or default or
alleged default under, any Law or Order applicable to the Issuer or any of its
Assets and Properties which has been settled or otherwise resolved, neither the
Issuer nor any Significant Subsidiary is, or has at any time since November 15,
1996, received any written notice that it is, or has at any time since November
15, 1996 been, in violation of or in default under any Law or Order applicable
to it or any of its Assets and Properties, in each case, which could have a
Material Adverse Effect on the Issuer.
(b) Neither the Issuer nor any Significant Subsidiary, nor any director,
officer, agent, employee or other person associated with or acting on behalf of
the Issuer or such Significant Subsidiary, (i) has used any corporate funds for
any unlawful contributions, gift, entertainment or other unlawful expense
relating to political activity; (ii) made any direct or indirect unlawful
payment to any governmental official or employee from corporate funds; (iii)
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or (iv) made any bribe, unlawful rebate, payoff, influence
31
payment, kickback or other unlawful payment in connection with the business of
the Issuer.
3.14 Benefit Plans
-------------
Except as disclosed in the Issuer's Form 20-F and Form F-3 and in Schedule
3.03 and Schedule 3.14, neither the Issuer nor any of its Significant
Subsidiaries has any Benefit Plans.
3.15 Real Property
-------------
(a) Schedule 3.15 contains a true and correct list of the administrative
office buildings, key sales offices and locations of switches owned or leased by
the Issuer or any of its Consolidated Subsidiaries or used by the Issuer and/or
its Consolidated Subsidiaries. Each of the Issuer and its Consolidated
Subsidiaries, as applicable, has good and valid title, free and clear of all
Liens, except Permitted Liens, to the property which Schedule 3.15 indicates is
owned by it.
(b) No default has occurred or is continuing in respect of any lease of
any property or any portion thereof to which the Issuer or any of its
Consolidated Subsidiaries is a party as lessee and which is listed in Schedule
3.15, and the Issuer and its Consolidated Subsidiaries enjoy peaceful and
undisturbed possession under all such leases to which any of them is a party as
lessee with such exceptions as do not materially interfere with the use of such
property made by the Issuer or such Consolidated Subsidiary.
3.16 Intellectual Property Rights
----------------------------
Except as set forth in Schedule 3.l6, the Issuer and the Significant
Subsidiaries own or have the right to use the Intellectual Property employed by
them in connection with their business as it is currently being conducted and as
it is proposed to be conducted, as described in the Issuer's Form 20-F and Form
F-3, and, to the Knowledge of the Issuer, neither the Issuer's nor any
Significant Subsidiary's ownership of or right to use any such Intellectual
Property infringes or conflicts with asserted rights of others with respect to
such Intellectual Property, nor has the Issuer or any Significant Subsidiary
received any notice of infringement of or conflict with asserted rights of
others with respect to such Intellectual Property which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect on the Issuer. Without limitation to the
generality of the foregoing:
(a) The Issuer has the exclusive right to use the Significant Bee Line
Names, except to the extent the Issuer has, directly or indirectly, licensed any
Significant Bee Line Name to, or authorized the use of such Significant Bee Line
Name by, a third party (each, a "Bee Line Licensee"), including, without
limitation, under the terms of the Trademark Agreements.
32
(b) The Issuer has registered title to the Significant Bee Line Names as
trademarks, free and clear of any Liens except for Permitted Liens and the
rights of Bee Line Licensees under Contracts in respect of the use of the
Significant Bee Line Names.
(c) All registrations with and applications to any Governmental or
Regulatory Authorities required to protect the rights of the Issuer and any Bee
Line Licensee to the Significant Bee Line Names are valid and in full force and
effect and are not subject to the payment of any Taxes or maintenance fees or
the taking of any other actions by the Issuer to maintain their validity or
effectiveness, except for (i) such payments which will be made prior to Closing
and (ii) any payments for actions which if they were not made or taken would not
have a material adverse effect on the Issuer's rights to the Significant Bee
Line Names.
(d) The Issuer and, to the Knowledge of the Issuer, each Bee Line
Licensee, have taken reasonable security and enforcement measures to protect the
value of the Significant Bee Line Names and to prevent their use by unauthorized
Persons.
(e) Neither the Issuer nor, to the Knowledge of the Issuer, any Bee Line
Licensee is, nor has the Issuer or, to the Knowledge of the Issuer, any Bee Line
Licensee, received any written notice that the Issuer or any Bee Line Licensee
is, in default (or with the giving of notice or lapse of time or both, would be
in default) in any material respect under any Contract to use any Significant
Bee Line Name.
(f) To the Knowledge of the Issuer, none of the Significant Bee Line
Names is being infringed by any Person.
3.17 Contracts; No Default
---------------------
(a) Schedule 3.17(a) contains a true and complete list of all Contracts
(true and complete copies or, if none, reasonably complete and accurate written
descriptions of which, together with all amendments and supplements thereto and
all waivers of any terms thereof, have been delivered to each Purchaser prior to
the execution of this Agreement), dated on or after January 1, 2001, to which
the Issuer or any Significant Subsidiary is a party or by which any of their
Assets and Properties is bound which involve an obligation of the Issuer or any
Significant Subsidiary to make payments in any year, other than with respect to
salary or incentive compensation payments in the ordinary course of business, to
any Person exceeding US$2,000,000 in the aggregate (other than Contracts
referred to in Sections 3.10 or 3.15).
(b) Neither the Issuer nor any Significant Subsidiary has received any
notice of default in connection with the performance of any obligation,
agreement or condition contained in any bond, debenture, note or any other
evidence of Indebtedness or in any other agreement, indenture or instrument to
which the Issuer or any Significant Subsidiary is a party or by which the Issuer
or any Significant Subsidiary or their respective Assets and Properties are
bound.
33
(c) Schedule 3.17(c) contains a true and complete list of the Issuer's
existing commitments and obligations to purchase any goods (including equipment
and handsets) from, and to retain any services (including leases of interconnect
lines) of, any Person, in each case, exceeding US$5,000,000 in the aggregate in
any fiscal year.
3.18 Licenses
--------
(a) Except as otherwise set forth in Schedule 3.18(a), the Issuer and
each of its Consolidated Subsidiaries have such Licenses as are used or
necessary to own, lease, and operate its respective Assets and Properties and to
conduct its business, except where the failure to have such Licenses would not
have a Material Adverse Effect on the Issuer or VIP-R.
(b) Except as otherwise set forth in Schedule 3.18(b), the Issuer and
each of its Consolidated Subsidiaries have fulfilled and performed all of their
material obligations with respect to such Licenses and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or result in any other material impairment of the rights of
the holder or any such License, except such events as would not have a Material
Adverse Effect on the Issuer or VIP-R.
(c) Except as otherwise set forth in Schedule 3.l8(c), no such License
contains any restrictions that have or that the Issuer could reasonably expect
to have a Material Adverse Effect on the Issuer or VIP-R.
(d) Except as set forth in Schedule 3.18(b), no event has occurred which
allows, or after notice or lapse of time would allow, revocation or termination
thereof or result in any other material impairment of the rights of the Issuer
or any Significant Subsidiary in respect of, any Telecom License.
3.19 Insurance
---------
The Issuer and its Consolidated Subsidiaries have insured their respective
Assets and Properties as set forth in Schedule 3.19.
3.20 Employees; Labor Relations
--------------------------
(a) Neither the Issuer nor any Significant Subsidiary has violated any
applicable Russian or foreign, including in each instance federal, state or
local, Law or regulation relating to discrimination in the hiring, promotion or
pay of employees, which might reasonably be expected to result in any Material
Adverse Effect.
(b) No labor strike, dispute, disturbance, lockout, slowdown or stoppage
of employees of the Issuer or any Significant Subsidiary exists and, to the
Knowledge of the Issuer, no such action is imminent.
34
3.21 Environmental Matters
---------------------
Neither the Issuer nor any Significant Subsidiary has violated any
Environmental Law, which might reasonably be expected to have a Material Adverse
Effect on the Issuer.
3.22 Interconnect Providers
----------------------
No gateway operator or other provider of interconnect services to the
Issuer or any Significant Subsidiary has ceased or materially reduced its
provision of services to the Issuer or any Significant Subsidiary since the
Audited Consolidated Financial Statement Date or threatened to cease or
materially reduce such provision of services after the date hereof.
3.23 Investments
-----------
Schedule 3.23 sets forth a list of each equity Investment of the Issuer
(other than in respect of its Subsidiaries). Except as set forth in Schedule
3.23, all such equity Investments are free and clear of all Liens other than
Permitted Liens.
3.24 Accounts Receivable
-------------------
The accounts and notes receivable of the Issuer and each Significant
Subsidiary reflected on the balance sheet included in the Audited Consolidated
Financial Statements, and all accounts and notes receivable arising subsequent
to the Audited Consolidated Financial Statement Date, (a) arose from bona fide
sales transactions in the ordinary course of business and are payable on
ordinary trade terms, (b) to the Knowledge of the Issuer, are legal, valid and
binding obligations of the respective debtors generally enforceable in
accordance with their terms, (c) are collectible in the ordinary course of
business consistent with past practice in the aggregate recorded amounts
thereof, net of any applicable reserve reflected in the balance sheet included
in the Audited Consolidated Financial Statements, and (d) are not the subject of
any Actions or Proceedings brought by or on behalf of the Issuer or any
Significant Subsidiary (except Actions or Proceedings against subscribers
brought by the Issuer or any such Significant Subsidiary in the ordinary course
of business).
3.25 Brokers
-------
Except as described in Schedule 3.25, all negotiations relating to this
Agreement and the transactions contemplated hereby have been carried out by the
Issuer directly with the Purchasers without the intervention of any Person on
behalf of the Issuer in such manner as to give rise to any valid claim by any
Person against any Purchaser or the Issuer or any Significant Subsidiary for any
finder's fee, brokerage commission or similar payment.
35
3.26 SEC Documents
-------------
(a) The Issuer has filed all registration statements, reports, schedules,
forms, statements and other documents with the SEC required to be filed by it
prior to giving effect to the transactions contemplated by this Agreement and
the other Principal Agreements (collectively, and in each case including all
Exhibits and Schedules thereto and documents incorporated by reference therein,
the "SEC Documents").
(b) Each part of the SEC Documents, when such part was filed or became
effective, (i) did not contain and each part as amended or supplemented, if
applicable, does not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and (ii) complied in all material respects with the Securities
Act, as amended or supplemented, if applicable; provided, however, that the
representations and warranties set forth in this Section 3.26(b) do not apply to
statements or omissions in the SEC Documents that are based on information
relating to any underwriter or shareholder furnished to the Issuer in writing by
such underwriter or shareholder, respectively.
3.27 NYSE Requirements
-----------------
The Issuer has not received written notice from the NYSE to the effect that
the Issuer is not in compliance with the listing or maintenance requirements of
the NYSE. To the Knowledge of the Issuer, there are no facts which would
reasonably lead to delisting or suspension of the ADSs by the NYSE.
3.28 Compliance with US Securities Laws
----------------------------------
(a) Neither the Company nor any Affiliate of the Company has directly, or
through any agent, sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the Securities Act) which
is or will be integrated with the sale of the Purchasers' Shares in a manner
that would require the registration of the Purchasers' Shares under the
Securities Act; provided that neither Purchaser shall be deemed an Affiliate of
the Issuer for purposes of this Section 3.28(a).
(b) The Company is not, and after giving effect to the receipt and
application of the Purchase Price will not be, an "investment company", as such
term is defined in the United States Investment Company Act of 1940, as amended.
(c) None of the Company, its Affiliates or any Person acting on its or
their behalf has engaged in any directed selling efforts (as that term is
defined in Regulation S under the Securities Act) with respect to any of the
Purchasers' Shares; provided that neither Purchaser shall be deemed an Affiliate
of the Issuer for purposes of this Section 3.28(c).
36
(d) Assuming the accuracy of the representations and warranties of the
Purchasers contained in Article IV, the offer, sale and issuance of the New
Shares and Telenor's Repurchased Shares by the Issuer as contemplated by this
Agreement are exempt from the registration requirements of the Securities Act,
and the sale of the Purchasers' Shares has been made in an "Offshore
Transaction", as such term is defined in Regulation S under the Securities Act.
3.29 Disclosure
----------
To the Knowledge of the Issuer, the Issuer has disclosed all material facts
relating to the Business or Condition of the Issuer and each Significant
Subsidiary to the Purchasers in or in connection with this Agreement. No
representation or warranty contained in this Agreement, and no statement
contained in the attached Schedules (including, without limitation, the Audited
Consolidated Financial Statements), or in the Certificate of the CEO delivered
to each Purchaser in connection with the execution of this Agreement on the date
thereof, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements herein or therein, in
the light of the circumstances under which they were made, not misleading.
3.30 United States Assets
--------------------
The Issuer, together with all entities controlled by it, does not hold
assets located in the United States (other than investment assets or securities
of another Person) having an aggregate book value of US$15,000,000 or more, and
the Issuer does not control (directly or indirectly) any U.S. issuer with annual
net sales or total assets of US$25,000,000 or more. Terms used in this Section
3.30 shall have the meanings assigned to them for purposes of 16 C.F.R. Section
802.51.
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Each Purchaser hereby represents and warrants, severally (and not jointly),
as follows:
4.01 Organization; Ability to Consummate Transactions
------------------------------------------------
Such Purchaser is a corporation duly organized and validly existing as a
legal entity under the Laws of its jurisdiction of organization.
4.02 Authority
---------
(a) Subject only to the consents, actions, proceedings and approvals
identified in Schedules 4.03 and 4.04, such Purchaser has full power and
authority to execute and deliver this Agreement and the other Principal
Agreements to which it is a party, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
37
(b) This Agreement and the other Principal Agreements required to be
executed on the date hereof and to which such Purchaser is a party have been
duly and validly executed and delivered by such Purchaser and constitute the
legal, valid and binding obligations of such Purchaser, enforceable against such
Purchaser in accordance with their terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights and remedies generally and by general equitable
principles (whether applied by a court of law or equity), except as rights to
indemnity and contribution may be limited by applicable law or public policy and
except to the extent any clause hereof provides for the payment of a penalty.
4.03 No Conflicts
------------
The execution, delivery and performance by such Purchaser of this Agreement
and the other Principal Agreements to which it is a party and the consummation
by such Purchaser of the transactions contemplated hereby and thereby:
(a) will not conflict with or result in a violation or breach of any of
the terms or provisions of such Purchaser's constitutive documents;
(b) subject to obtaining the third party consents referred to opposite
such Purchaser's name in Schedule 4.03, will not conflict with or constitute a
breach of any Contract or License to which such Purchaser is a party or by which
any of its Assets and Properties is bound; and
(c) subject to obtaining the consents, approvals and actions, making the
filings and giving the notices disclosed opposite such Purchaser's name in
Schedule 4.04, will not violate or conflict with any Order or Law applicable to
such Purchaser or any of its Assets and Properties.
4.04 Governmental Approvals and Filings
----------------------------------
Except as disclosed opposite such Purchaser's name in Schedule 4.04, the
execution, delivery and performance of this Agreement and the other Principal
Agreements to which such Purchaser is a party and the consummation by such
Purchaser of the transactions contemplated hereby and thereby will not require
any consent, approval, authorization or other Order of any Governmental or
Regulatory Authority.
4.05 Legal Proceedings
-----------------
There are no Actions or Proceedings pending or, to the Knowledge of such
Purchaser, threatened against, such Purchaser or any of its Assets and
Properties which will result in, or would reasonably be expected to result in,
the issuance of an Order restraining, enjoining or otherwise prohibiting or
making illegal the consummation of any
38
of the transactions contemplated by this Agreement or any of the other Principal
Agreements to which such Purchaser is a party.
4.06 Brokers
-------
Except as described opposite such Purchaser's name in Schedule 4.06, all
negotiations relating to this Agreement and the transactions contemplated hereby
have been carried out by such Purchaser directly with the Issuer without the
intervention of any Person on behalf of such Purchaser in such manner as to give
rise to any valid claim by any Person against the Issuer for any finder's fee,
brokerage commission or similar payment.
4.07 Investment Intent
-----------------
Such Purchaser is acquiring its portion of the Purchasers' Shares for its
own account for investment purposes only and not with a view to, or for sale or
resale in connection with, any public distribution thereof or with any present
intention of selling, distributing or otherwise disposing of such shares, except
in compliance with the Securities Act and all other applicable securities Laws.
4.08 Status of Purchaser
-------------------
Such Purchaser (a) possesses such knowledge and experience in financial and
business matters as to enable it to evaluate the merits and risks of its
investment in the Purchasers' Shares, (b) understands and is able to bear the
economic risk involved in acquiring the Purchasers' Shares, including any loss
relating to or arising out of such investment, (c) understands that, as of the
date of this Agreement, the Purchasers' Shares that are to be acquired by it
under this Agreement are not registered under the Securities Act and may not be
offered or sold within the United States or to, or for the account or benefit
of, any "U.S. person", as such term is defined in Rule 902 of Regulation S under
the Securities Act, unless such Shares are registered under the Securities Act
or an exemption from the registration requirements of the Securities Act is
available, (d) is not a "U.S. person" (as so defined), and is not acquiring any
Purchasers' Shares for the account or benefit of any U.S. person (as so
defined), (e) acknowledges and agrees that the offer and sale of the Purchasers'
Shares to such Purchaser has taken place outside of the United States of America
or any of its territories and possessions, and such Purchaser has executed this
Agreement outside of the United States or any of its territories or possessions
and (f) has not, nor have any of its Affiliates or any Person acting on its or
their behalf, engaged in any directed selling efforts (as defined in Rule 902 of
Regulation S) with respect to any of the Purchasers' Shares.
4.09 Compliance with Securities Laws
-------------------------------
Neither such Purchaser nor, to the Knowledge of such Purchaser, any Person
affiliated (as defined in Rule 405 of the Securities Act) with such Purchaser,
has taken, directly or indirectly, any action designed to or which has
constituted or which might
39
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security of the
Issuer.
4.10 No Knowledge of Breach
----------------------
There is no breach by the Issuer Actually known to such Purchaser of any
representation or warranty made by the Issuer in this Agreement.
4.11 Independent Investigation
-------------------------
Such Purchaser has (a) conducted its own investigation with respect to its
portion of the Purchasers' Shares, the Issuer and its Subsidiaries and
Affiliates and Russia in connection with its acquisition of its portion of the
Purchasers' Shares, and has had the opportunity to ask executive officers of the
Issuer such questions as it has considered necessary, relevant or appropriate
with respect to the Purchasers' Shares, the Issuer and its Subsidiaries and
Affiliates, and Russia; (b) consulted its own legal advisors with respect to its
investment in the Purchasers' Shares and the risks associated with such
investment to the extent such Purchaser deems necessary or appropriate; and (c)
received all information that it believes is necessary, relevant or appropriate
in connection with its acquisition of its portion of the Purchasers' Shares.
4.12 Contracts with Xx. Xxxxx
------------------------
Such Purchaser has delivered to the other Purchaser and the Issuer, on or
prior to the execution of this Agreement, true and complete copies of all
Contracts, all amendments and supplements thereto, all waivers of any terms
thereof and any agreement to terminate any such Contracts, to which such
Purchaser or any of its Subsidiaries or Affiliates and Xx. Xxxxx, Glavsotkom,
the Bee Line Fund and Overture or any their respective Affiliates are party and
which involve, directly or indirectly, the voting rights of, or the transfer,
disposal, purchase, pledge or any other conveyance of, any of the Zimin Shares
or other shares of Common Stock owned by any of Xx. Xxxxx, Glavsotkom, the Bee
Line Fund or Overture or any rights in respect of the nomination of any members
of the Board.
4.13 Non-Group Status
----------------
(a) The Purchasers, together, do not constitute a "group" (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act) with respect to the
Purchasers' Shares.
(b) Eco Telecom, together with Xx. Xxxxx and his Affiliates, do not
constitute a "group" (as such term is used in Section 13(d) and 14(d) of the
Exchange Act) with respect to the shares of Common Stock.
40
ARTICLE V COVENANTS OF THE ISSUER
The Issuer covenants and agrees with each Purchaser that the Issuer shall
comply with the covenants and provisions of this Article V (and such covenants
and provisions shall be enforceable by such Purchaser) during the periods
specified opposite the relevant Section references below:
(a) Sections 5.01, 5.03, 5.04(a), 5.05, 5.06, 5.07, 5.11, 5.12 and 5.13 -
from and after the date hereof until the Closing;
(b) Sections 5.04(b) and (c) - from and after the date hereof until
performed in full;
(c) Section 5.08 - from and after the date hereof until the earlier of
the First Board Date and the Closing;
(d) Sections 5.02, 5.09 and 5.10(a) - from and after the date hereof
until the date on which such Purchaser, having once attained ten percent (10%)
or more of the issued and outstanding voting capital stock of the Issuer, holds
less than ten percent (10%) of the issued and outstanding voting capital stock
of the Issuer;
(e) Section 5.14 - from and after the date hereof until the date on which
such Purchaser, having once attained five percent (5%) or more of the issued and
outstanding voting capital stock of the Issuer, holds less than five percent
(5%) of the issued and outstanding voting capital stock of the Issuer; and
(f) Section 5.10(b) - from and after the date hereof until the date on
which such Purchaser, having once attained the Specified Percentage, holds less
than the Specified Percentage.
5.01 No Solicitations
----------------
During the period commencing on the date of execution of this Agreement and
ending on the earlier of (a) the Closing, (b) the date of termination of this
Agreement pursuant to Section 12.01 and (c) the date on which any Governmental
or Regulatory Authority or any third party whose approval or consent is required
for the Issuer or any Purchaser to consummate the transactions contemplated by
this Agreement or any other Principal Agreement gives written notice that such
approval or consent will not be granted, the Issuer will not take, nor will it
permit VIP-R (or authorize or permit any investment banker, financial adviser,
attorney, accountant or other Person retained by or acting for or on behalf of
the Issuer or VIP-R) to take, directly or indirectly, any action to accept any
offer from any Strategic Investor (or any Person known by the Issuer to be
acting on behalf of any Strategic Investor) to engage in, or reach any agreement
or understanding (whether or not such agreement or understanding is absolute,
revocable, contingent or conditional) for, or otherwise attempt to consummate,
any issuance of shares of VIP-R to such Strategic Investor or any merger or
consolidation of VIP-R with such Strategic Investor, or any sale of all or
substantially all of the assets of VIP-R to
41
such Strategic Investor (each, a "Business Combination"). If the Issuer or VIP-R
(or any Person acting on their behalf) receives from any Strategic Investor (or
any Person acting on behalf of any Strategic Investor) any offer, inquiry or
information request with respect to a Business Combination with VIP-R, the
Issuer shall promptly notify each Purchaser of such offer, inquiry or request
and shall deliver a copy of such offer, inquiry or request to each Purchaser,
provided that this Section 5.01 shall not apply to normal investor relations
activities of the Issuer. Neither Purchaser shall, without the prior written
consent of the Issuer, negotiate or discuss any such offer, inquiry or
information request with any such Strategic Investor or any third party.
5.02 Financial Statements and Reports; Filings
-----------------------------------------
Commencing on the date of this Agreement, the Issuer shall deliver to each
Purchaser:
(a) As promptly as practicable and in any event no later than ninety (90)
days after the end of each of the first, second and third fiscal quarters ending
after the date hereof and before the Closing, true and complete copies of the
unaudited consolidated balance sheet of the Issuer and its Consolidated
Subsidiaries, and the related unaudited consolidated statement of income of the
Issuer and its Consolidated Subsidiaries, as of and for such period, prepared on
a basis consistent with the Audited Consolidated Financial Statements, subject
to normal year-end audit adjustments, except as otherwise stated therein.
(b) As promptly as practicable and in any event no later than one hundred
eighty (180) days after the end of each of the Issuer's fiscal years ending
after the date hereof, true and complete copies of a consolidated balance sheet
of the Issuer and its Consolidated Subsidiaries as at the end of such fiscal
year, and consolidated statements of income and cash flows of the Issuer and its
Consolidated Subsidiaries for such fiscal year, prepared in accordance with GAAP
and setting forth in each case in comparative form these figures for the
previous fiscal year, all in reasonable detail and certified by independent
public accountants of recognized international standing, and a comparison to the
Issuer's budget for such years prepared by the Issuer.
(c) As promptly as practicable, true and complete copies of such other
financial statements and reports as are specified in Schedule 5.02.
(d) Promptly upon their becoming available, copies of all registration
statements, annual reports on Form 20-F, any reports on Form 6-K and such proxy
statements and other information as shall be filed by the Issuer with the SEC or
any national or regional securities exchange or otherwise generally distributed
to shareholders of the Issuer.
(e) Promptly upon their becoming available, upon the request of any
Purchaser, copies of all Telecom Licenses and Telecom License revocations, if
any, received after the date hereof and all roaming and interconnect
applications and other
42
material filings relating to the Telecom Licenses made by the Issuer or any
Significant Subsidiary after the date hereof with any Governmental or Regulatory
Authority (other than routine, recurring filings made in the ordinary course of
business consistent with past practice).
5.03 Certain Restrictions
--------------------
Except as contemplated by the Principal Agreements, without the prior
written consent of each Purchaser, the Issuer shall refrain from (and shall
cause, to the extent of its voting power or control, each Significant Subsidiary
to refrain from):
(a) amending its charter, delisting the ADSs from the NYSE or taking any
action with respect to any such amendment or delisting or any recapitalization,
reorganization, liquidation or dissolution of the Issuer or any Significant
Subsidiary;
(b) declaring, setting aside or paying any dividend or other distribution
in respect of the Equity of the Issuer or any Significant Subsidiary (other than
any dividend payable on the Class A Preferred Stock of the Issuer), or directly
or indirectly redeeming, purchasing or otherwise acquiring any Equity Interest
in or any Option with respect to the Issuer;
(c) engaging with any Person in any Business Combination; or
(d) entering into any Contract to do or engage in any of the foregoing.
5.04 Charter Amendments; Post-Closing Actions
----------------------------------------
(a) Prior to the Closing, the Issuer shall have effected the amendments
to its Charter described in Schedule 5.04 (the "amendments to the Charter") and
shall have registered such amendments with the MRC and the SRC.
(b) The Issuer shall, as promptly as practicable following the Closing,
take all necessary action in connection with registering the report on the
results of issuance of the New Shares and complying with any requirements of
applicable Law in connection with the sale of the New Shares, including (i)
publishing an announcement of the completion of the placement of the New Shares,
(ii) submitting the report on the result of the issuance of the New Shares to
the Board for its approval and (iii) filing the report on the result of the
issuance of the New Shares with the FCSM.
(c) Within five (5) Business Days of the Issuer's receipt thereof from
the FCSM, the Issuer shall provide to each Purchaser a certified copy of the
report on the issuance of the New Shares.
(d) As soon as practicable after registration of the report on the
issuance of the New Shares, the Issuer shall:
43
(i) amend the Charter to show an increase in the Charter Capital
equal to the number of the New Shares sold to Eco Telecom;
(ii) cause the amendment referred to in clause (i) above to be
registered with the MRC and the SRC;
(iii) deliver to each Purchaser registration certificates evidencing
the registrations referred to in clause (ii) above; and
(iv) deliver to Eco Telecom evidence of payment of the securities
Tax.
5.05 Amendments to the Procedural Regulations of the Board
-----------------------------------------------------
Prior to the Closing, the Issuer shall have effected the amendments to the
Procedural Regulations of the Board described in Schedule 5.05.
5.06 Update of the Management Regulations
------------------------------------
Prior to the Closing, the Issuer shall have updated Appendix 2 to the
Management Regulations to include information provided by Eco Telecom, its
officers and directors pursuant to Section 9.09.
5.07 Operating Committee
-------------------
Prior to the Closing, the Board shall have adopted resolutions establishing
the role of the Operating Committee in accordance with the principles set forth
in Schedule 5.07.
5.08 Pre-Closing Veto Rights
-----------------------
During the period commencing on the date of this Agreement and ending on
the earlier of the First Board Date and the Closing, each Purchaser shall have
the right to veto the following actions by the Issuer and KBI (except (a) the
Issuer shall only be bound with respect to actions to be taken by VIP-R to the
extent of the Issuer's voting power and control over VIP-R, (b) to the extent
expenditures relating to the following actions are contemplated by (i) the
Issuer's 2001 budget, as amended, adopted by the Board or (ii) the Principal
Agreements and (c) Telenor shall not have the right to veto the actions referred
to in clause (I)):
(A) the issuance of any new shares of capital stock of the Issuer (except
as contemplated or referred to in the Principal Agreements) or of any of its
Consolidated Subsidiaries;
(B) the creation of any new Subsidiary or the making of any Investment in
any new Subsidiary in an amount exceeding US$1,000,000 in the aggregate during
such period;
44
(C) the entry into any Contract or series of Contracts (other than in
respect of Indebtedness), including in respect of the sale of assets having a
value per Contract greater than US$2,500,000;
(D) (1) any transaction between the Issuer, on the one hand, and any
Subsidiary of the Issuer, other than a Significant Subsidiary, on the other
hand, having an aggregate value in excess of US$1,000,000; (2) any transaction
between any direct or indirect Subsidiary of the Issuer, on the one hand, and
any other direct or indirect Subsidiary of the Issuer, on the other hand, having
an aggregate value in excess of US$1,000,000; and (3) any transaction between
the Issuer or any Significant Subsidiary, on the one hand, and any officer,
director or shareholder of the Issuer or any such Significant Subsidiary (other
than the Issuer) or direct or indirect Subsidiary of any such officer, director
or shareholder (other than the Issuer), on the other hand, having an aggregate
value in excess of US$100,000;
(E) the incurrence of any Indebtedness (including under any guarantee but
excluding Indebtedness consisting of re-financing of existing Indebtedness or
the deferred purchase price of goods and services in the ordinary course of
business) by the Issuer and its Subsidiaries in an amount exceeding
US$2,000,000, calculated on a consolidated basis in accordance with GAAP;
provided, however, this clause (E) shall not apply to the incurrence by the
Issuer of any additional Indebtedness to Alcatel SEL AG in an aggregate amount
not exceeding US$25,000,000;
(F) the creation or adoption of any Benefit Plan;
(G) the incurrence of any Lien over any Assets and Properties of the
Issuer or any Subsidiary of the Issuer securing Indebtedness of the Issuer or
any Subsidiary of the Issuer in an amount exceeding US$2,000,000; provided,
however, this clause (G) shall not apply to (1) any Lien securing Indebtedness
of the Issuer or KBI from Alcatel SEL, (2) any Lien securing Indebtedness of the
Issuer owing to Sberbank within the limits specified in Schedule 5.08(g) or (3)
any Permitted Liens;
(H) the termination or waiver of any obligation owed to the Issuer or any
Significant Subsidiary by any party in the amount exceeding US$100,000; or
(I) any write off or write down of or any determination to write off or
write down any of the Assets and Properties of the Issuer or any Significant
Subsidiary in an amount exceeding US$500,000.
The Issuer shall request approval from the Purchasers for any of the foregoing
transactions by sending written notice to the Purchasers in accordance with
Section 13.01. If a Purchaser does not object in writing to the Issuer's request
within the shorter of (a) seven (7) Business Days and (b) fourteen (14) calendar
days after receiving such notice, such Purchaser shall be deemed to have
approved such transaction.
45
5.09 Transactions with Affiliates
----------------------------
(a) Except as expressly permitted by this Agreement (including, without
limitation, Section 5.09(b)) and the other Principal Agreements, the Issuer will
not, and, to the extent of its voting power and control, will not permit any of
its Subsidiaries to, directly or indirectly: (i) make any Investment in an
Affiliate; (ii) transfer, sell, lease, assign or otherwise dispose of any assets
to an Affiliate; (iii) merge into or consolidate with or purchase or acquire
assets from an Affiliate; or (iv) enter into any other transaction directly or
indirectly with or for the benefit of an Affiliate (including, without
limitation, guarantees and assumptions of obligations of an Affiliate).
(b) (i) Any Affiliate who is an individual may serve as a director,
officer or employee of the Issuer or any of its Subsidiaries and receive
reasonable compensation for his or her services in such capacity and (ii)
subject to the provisions of Section 5.03 of the Registration Rights Agreement
and Section 5.03 of the VIP-R Shareholders Agreement, the Issuer and its
Subsidiaries may enter into (x) transactions (other than extensions of credit by
the Issuer or any of its Subsidiaries to an Affiliate) providing for the leasing
of property, the rendering or receipt of services or the purchase or sale of
inventory and other assets in the ordinary course of business if the monetary or
business consideration arising therefrom would be substantially as advantageous
to the Issuer and its Subsidiaries as the monetary or business consideration
which would obtain in a comparable transaction with a Person who is not an
Affiliate or (y) any other transaction (including any Business Combination
between the Issuer and any of its Subsidiaries or between the Issuer or any of
its Subsidiaries, on the one hand, and any Affiliate, on the other) which is
approved by the Board or the shareholders of the Issuer in accordance with the
Charter or in accordance with the internal documents (vnutrennie dokumenti) of
the Issuer approved by the Board in accordance with Section 10.5.10 of the
Charter.
5.10 KBI
---
The Issuer shall exercise its voting rights in respect of the shares of
capital stock of KBI owned by it and take such other steps as are necessary (to
the extent of its voting power or control) from time to time to procure that:
(a) there are five (5) members of the board of directors of KBI, one (1)
of whom has been designated by Telenor and one (1) of whom has been designated
by Eco Telecom, nominated for election and elected to such board of directors;
and
(b) except to the extent that any such action has been approved by the
shareholders of KBI in accordance with the Procedural Regulations of the Board
or as contemplated by the Principal Agreements, none of the following actions
are taken by KBI, the members of the Board of Directors of KBI or the
shareholders of KBI, as the case may be, without the prior written consent of
the Purchasers:
46
(i) the adoption or approval of any amendment to the charter of
KBI;
(ii) any merger, reorganization, consolidation, dissolution,
liquidation, or sale of all or substantially all of the Assets and Properties of
KBI to or with any Person other than the Issuer;
(iii) the incurrence of any Indebtedness (including under any
guarantee but excluding the re-financing of existing Indebtedness, incurrence of
Indebtedness in respect of the deferred purchase price of goods and services in
the ordinary course of business and incurrence of Indebtedness to the Issuer) by
KBI in an amount exceeding US$10,000,000;
(iv) the incurrence of any Lien (other than Permitted Liens) over
the Assets and Properties of KBI securing Indebtedness of KBI in an amount
exceeding US$5,000,000; provided, however, this clause (iv) shall not apply to
any Lien in favor of the Issuer or securing Indebtedness of KBI to Alcatel SEL
AG;
(v) the creation of any new Subsidiary of KBI;
(vi) any transaction between KBI or any direct or indirect
Subsidiary of KBI, on the one hand, and VIP-R or any direct or indirect
Subsidiary of VIP-R, any officer, director or shareholder of KBI or any direct
or indirect Subsidiary of any such officer, director or shareholder, on the
other hand, having an aggregate value in excess of US$1,000,000;
(vii) any authorization, issuance, sale or other disposition of any
Equity Interest or Option of KBI by the Issuer; provided, however, that this
clause (vii) shall not restrict any issuance, sale or other disposition by KBI
to the Issuer; or
(viii) any dividend or distribution of any kind, or any direct or
indirect redemption by KBI on any class of its capital stock.
5.11 Fulfillment of Conditions
-------------------------
The Issuer will execute and deliver at or prior to the Closing each other
Principal Agreement to which it is a party and is hereby required to execute and
deliver as a condition to the Closing, will take all commercially reasonable
steps necessary and proceed diligently and in good faith to satisfy each other
condition to the obligations of the Purchasers contained in this Agreement or to
the obligations of any party to any of the other Principal Agreements to which
the Issuer is a party, and take such other actions as any Purchaser may
reasonably request for the purpose of carrying out the intent of this Agreement
and the other Principal Agreements.
47
5.12 Regulatory and Other Approvals
------------------------------
The Issuer will (a) take all commercially reasonable steps necessary or
desirable, and proceed diligently and in good faith and use all commercially
reasonable efforts, as promptly as practicable, to obtain all consents,
approvals or actions of, to make all filings with and to give all notices to
Governmental or Regulatory Authorities or any other Person required of the
Issuer or any Purchaser to consummate the transactions contemplated hereby and
by the other Principal Agreements, including, without limitation those described
in Schedule 8.05, (b) provide such other information and communications to each
Purchaser, such Governmental or Regulatory Authorities or other Persons as such
Purchaser or such Governmental or Regulatory Authorities or other Persons may
request in connection therewith and execute all documents as may be reasonably
requested by such Purchaser in connection therewith, and (c) cooperate with the
Purchasers as promptly as practicable in obtaining all consents, approvals or
actions of, making all filings with, and giving all notices to, Governmental or
Regulatory Authorities or other Persons required of each Purchaser to consummate
the transactions contemplated hereby and by the other Principal Agreements.
5.13 Delivery of Information
-----------------------
The Issuer will (a) provide prompt notification to each Purchaser when any
consent, approval, action, filing or notice referred to in Section 5.13 is
obtained, taken, made or given, as applicable, (b) deliver to each Purchaser
from time to time as soon as practicable after they become available, copies of
public filings relating to any actions related to the New Shares, agreements
entered into between the Issuer and each Purchaser, publications required to be
made in accordance with Russian securities laws and evidence of payment for any
New Shares, and (c) advise each Purchaser in writing of any communications (and,
unless precluded by Law, provide copies of any such communications that are in
writing) with any Governmental or Regulatory Authority of other Person regarding
any of the transactions contemplated by this Agreement or any of the other
Principal Agreements.
5.14 Transfer and Voting of Callable Preferred Stock
-----------------------------------------------
Following the exercise by the Issuer of the Preferred Stock Call Option
pursuant to Section 7.04 and the transfer of the shares of Callable Preferred
Stock to the Issuer and/or any of its Controlled Affiliates in accordance with
Section 7.04, (a) neither the Issuer nor any of its Controlled Affiliates shall
Transfer any of the shares of Callable Preferred Stock to any Person (except
that such Controlled Affiliate may Transfer such shares to the Issuer, provided
the Issuer cancels such shares as soon as practicable following such Transfer),
(b) neither the Issuer nor any of its Controlled Affiliates shall use any of the
shares of Callable Preferred Stock for the purpose of nominating any Person for
election to the Board, calling a meeting of the shareholders of the Issuer or
adding an item to the agenda of any GMS or any other meeting of the shareholders
of the Issuer, and (c) at any GMS or any other meeting of the shareholders of
the Issuer, the Issuer shall, to the extent permitted by Russian Law, vote,
and/or shall cause any of its
48
Controlled Affiliates which holds any of the shares of Callable Preferred Stock
to vote, the shares of Callable Preferred Stock held by the Issuer and/or any
such Controlled Affiliate, as the case may be, pro rata in accordance with the
votes submitted by all other shareholders of the Issuer.
ARTICLE VI NOTICE AND CURE
Each party will notify the other parties in writing of, and will use all
commercially reasonable efforts to cure, before the Closing, any violation or
breach, as soon as practicable after such party becomes aware of such violation
or breach of any representation, warranty, covenant or agreement made by such
party in this Agreement, whether occurring or arising before, on or after the
date of this Agreement, provided that no notice given pursuant to this Article
VI shall have any effect on the representations, warranties, covenants or
agreements contained in this Agreement for purposes of determining satisfaction
of any condition contained herein or shall in any way limit any Purchaser's
right to seek indemnity under Article XI.
ARTICLE VII COVENANTS OF THE PURCHASERS
Each Purchaser covenants and agrees, severally (and not jointly), with the
Issuer that, except to the extent the Issuer may otherwise consent in writing,
such Purchaser shall, to the extent applicable to such Purchaser, comply with
the covenants and provisions of this Article VII (and such covenants and
provisions shall be enforceable by the Issuer) during the periods specified
opposite the relevant Section references below:
(a) Sections 7.01, 7.03, 7.05 and 7.06 - from and after the date hereof
until the Closing;
(b) Sections 7.02 - from and after the date hereof until the date on
which such Purchaser, having once attained ten percent (10%) or more of the
issued and outstanding voting capital stock of the Issuer, holds less than ten
percent (10%) of the issued and outstanding voting capital stock of the Issuer;
and
(c) Section 7.04 - with respect to Eco Telecom, from and after the date
hereof until the earlier of (i) if no Eco Telecom Contribution Default has
occurred, the occurrence of the Third Closing and (ii) the expiration of the
Call Option Period.
7.01 Regulatory and Other Approvals
------------------------------
Each Purchaser will (a) take all commercially reasonable steps necessary or
desirable, and proceed diligently and in good faith and use all commercially
reasonable efforts, as promptly as practicable to obtain all consents, approvals
or actions of, to make all filings with and to give all notices to Governmental
or Regulatory Authorities or any other Person required of such Purchaser or the
Issuer to consummate the transactions contemplated hereby and by the other
Principal Agreements, including, without limitation, those described in Schedule
4.04 (and shall in any event make all necessary
49
applications to and file all notices and other filings with the MAMP and the
Commission when required by applicable Law, but in any event no later than
thirty (30) calendar days after the date of execution of this Agreement), (b)
provide such other information and communications to the Issuer, such
Governmental or Regulatory Authorities or other Persons as the Issuer or such
Governmental or Regulatory Authorities or other Persons may request in
connection therewith and execute all documents as may be reasonably requested by
the Issuer in connection therewith and (c) cooperate with the Issuer as promptly
as practicable in obtaining all consents, approvals or actions of, making all
filings with, and giving all notices to, Governmental or Regulatory Authorities
or other Persons required of the Issuer to consummate the transactions
contemplated hereby and by the other Principal Agreements. Each Purchaser will
(i) provide prompt notification to the Issuer and the other Purchaser when any
such consent, approval, action, filing or notice referred to in clause (a) above
is obtained, taken, made or given, as applicable, (ii) deliver to the Issuer and
the other Purchaser from time to time as soon as practicable after they become
available, copies of public filings relating to any actions related to the
Purchasers' Shares, agreements entered into between or among the Purchasers and
publications required to be made in accordance with Russian securities laws, and
(iii) advise the Issuer in writing of any written communications (and, unless
precluded by Law, provide copies of any such communications) with any
Governmental or Regulatory Authority or other Person regarding any of the
transactions contemplated by this Agreement or any of the other Principal
Agreements.
7.02 Compliance with Securities Laws
-------------------------------
From and after the date of this Agreement, no Purchaser will take, or
permit any Person subject to such Purchaser's direct or indirect control to
take, directly or indirectly, any action (a) designed to or which might
reasonably be expected to cause or result in manipulation of the price of any
security of the Issuer in violation of the Exchange Act or (b) in violation of
the Issuer's policies relating to xxxxxxx xxxxxxx, as in effect on the date
hereof and as such policies may from time to time be amended and approved by the
Board in accordance with Section 10.5.10 of the Charter.
7.03 Escrow of Purchase Price
------------------------
With respect to Eco Telecom, from and after the date on which US$50,000,000
of the Purchase Price specified opposite Eco Telecom's name in Schedule 2.02 has
been deposited with the Escrow Agent and until such portion of the Purchase
Price has been repaid to Eco Telecom or paid to the Issuer, in each case, in
accordance with the terms of the Escrow Agreement, shall ensure and hereby
covenants and agrees that no Liens securing Indebtedness of Eco Telecom shall
attach to such portion of the Purchase Price.
7.04 Issuer's Call Option on VIP Preferred Stock Owned by Eco Telecom and
--------------------------------------------------------------------
Related Matters
---------------
(a) Subject to the transfer to Eco Telecom of 6,426,600 shares of
Preferred Stock (the "Callable Preferred Stock") and 16,362 shares of Common
Stock by Overture
50
pursuant to the Eco Telecom Preferred Stock Purchase Agreement, Eco Telecom
hereby grants to the Issuer, and the Issuer hereby accepts, an option to
purchase (the "Preferred Stock Call Option") all of the shares of Callable
Preferred Stock pursuant to the terms and conditions set out in this Section
7.04; provided, however, that the provisions of this Section 7.04 shall not
apply if (i) all of the Callable Preferred Stock is purchased by Telenor
pursuant to the Option Agreement prior to the Exercise Date or (ii) all of the
Callable Preferred Stock is purchased by Overture pursuant to the Zimin
Preferred Call Option Agreement or the Zimin Preferred Pledge Agreement prior to
the Exercise Date.
(b) The aggregate exercise price required to be paid by the Issuer to
acquire the shares of Callable Preferred Stock shall be equal to two (2) times
the aggregate nominal value of the shares of Callable Preferred Stock (the
"Exercise Price").
(c) The Issuer shall have the right to exercise the Preferred Stock Call
Option on any date (the "Exercise Date") during the ninety (90) day period
immediately following the date of an Eco Telecom Contribution Default (the "Call
Option Period") by (i) delivering to Eco Telecom (with a copy to Overture) a
written notice in substantially the form attached hereto as Exhibit N (the
"Exercise Notice") and (ii) paying (or causing its designee to pay) the Exercise
Price by wire transfer of immediately available funds to the account of Eco
Telecom set forth in Schedule 7.04(c), or such other account as Eco Telecom
shall notify to the Issuer in accordance with Section 13.01 prior to the
Exercise Date. If Eco Telecom's bank account referred to in Section 7.04(c)(ii)
is not operational on the date on which the Issuer elects to purchase the
Callable Preferred Stock, and the Issuer's reasonable attempt to transfer the
Exercise Price thereto has failed, the Issuer shall have fulfilled its
obligation to pay the Exercise Price by depositing the Exercise Price with such
escrow agent as the Issuer may reasonably appoint (including, without
limitation, its legal counsel) providing written notice to Eco Telecom to the
effect that the Exercise Price is available for delivery or transfer to Eco
Telecom upon its request to such escrow agent.
(d) Upon receipt of the Exercise Notice, Eco Telecom shall, as promptly
as practicable and in any event within three (3) Business Days following the
Exercise Date, transfer the shares of Callable Preferred Stock to the Issuer or
the Issuer's designee (which designee shall be a Controlled Affiliate of the
Issuer) (the "Transferee"), in each case, as specified in the Exercise Notice
and free and clear of all Liens, and cause the shares of Callable Preferred
Stock to be registered in accordance with the instructions set forth in the
Exercise Notice. Upon the registration of the transfer of the shares of Callable
Preferred Stock from Eco Telecom to the Transferee in accordance with this
Section 7.04(d), Eco Telecom shall assign to the Transferee all of its rights,
and Transferee shall assume all of Eco Telecom's obligations under the Eco
Telecom Preferred Stock Purchase Agreement, including, without limitation, all
payment obligations thereunder; provided that the Transferee shall not assume
any liabilities or obligations of Eco Telecom arising from any breach by Eco
Telecom of the Eco Telecom Preferred Stock Purchase Agreement existing at the
time of such assignment; provided, further, that if the Transferee is a designee
of the Issuer, the Issuer shall, simultaneously with the registration of the
transfer of such shares of Callable Preferred Stock, execute
51
and deliver to Overture a guarantee of the obligations of the Transferee in the
form attached as Schedule 5 to the Zimin Preferred Stock Purchase Agreement; and
provided, further, that to the extent Eco Telecom has paid to Overture prior to
the date of assignment to the Transferee of the Eco Telecom Preferred Stock
Purchase Agreement all or any of part of the US$25,000,000 owed by Eco Telecom
to Overture under the Eco Telecom Preferred Stock Purchase Agreement, then the
Issuer shall pay, or cause to be paid, to Eco Telecom within five (5) Business
Days of such assignment the amount so paid by Eco Telecom to Overture. As
between Eco Telecom and the Transferee, the Preferred Stock Call Option shall be
deemed to have been exercised, and the Transferee shall be deemed to have become
the holder of record of the shares of Callable Preferred Stock for all purposes
(including, without limitation, the right to vote the shares of Callable
Preferred Stock), upon delivery to Overture of the Endorsement in the form
attached as Schedule 4 to the Zimin Preferred Stock Purchase Agreement and (if
required) upon delivery to Overture of such guarantee of the obligations of the
Transferee. Eco Telecom shall not amend or waive any provision of, or assign or
otherwise transfer any of its obligations under, the Eco Telecom Preferred Stock
Purchase Agreement, the Zimin Common Pledge Agreement, the Zimin Preferred
Pledge Agreement, the Zimin Common Call Option Agreement or the Zimin Preferred
Call Option Agreement, in each case, without the prior written consent of the
Issuer, which consent shall not be unreasonably withheld.
(e) If the Issuer reorganizes its capital, reclassifies its capital
stock, consolidates or merges with or into another corporation (where the Issuer
is not the surviving corporation or where there is a change in or distribution
with respect to the shares of Preferred Stock), or sells, transfers or otherwise
disposes of all or substantially all its property, assets or business to another
corporation and, pursuant to the terms of such reorganization, reclassification,
merger, consolidation or disposition of assets, shares of Common Stock and/or
Preferred Stock (in the case of a reorganization of its capital or
reclassification of its capital stock) or common stock and/or preferred stock of
the successor or acquiring corporation (in any other instance referred to
above), or any cash, shares of stock or other securities or property of any
nature whatsoever (including warrants or other subscription or purchase rights)
in addition to or in lieu of shares of Common Stock and/or Preferred Stock of
the Issuer or common stock and/or preferred stock of the successor or acquiring
corporation, as the case may be (the "Other Property"), are to be received by or
distributed to the holders of shares of Preferred Stock, then the Transferee
shall have the right thereafter to receive, upon exercise of the Preferred Stock
Call Option, the number of shares of Common Stock and/or Preferred Stock of the
Issuer or the common stock and/or preferred stock of the successor or acquiring
corporation, as the case may be, and Other Property that is received or is
entitled to be received by Eco Telecom as a holder of shares of Callable
Preferred Stock upon or as a result of such reorganization, reclassification,
merger, consolidation or disposition of assets.
(f) Until the earlier of (i) if no Eco Telecom Contribution Default has
occurred, the occurrence of the Third Closing and (ii) the expiration of the
Call Option Period, Eco Telecom shall not Transfer, or incur, create or permit
to exist any Liens on,
52
any of the shares of Callable Preferred Stock, other than (A) a Transfer to any
Permitted Transferee of Eco Telecom in accordance with Article II of the
Registration Rights Agreement and Article III of the Shareholders Agreement or
(B) any Liens arising under the Zimin Preferred Call Option Agreement, the Zimin
Preferred Pledge Agreement or the Option Agreement, and Eco Telecom shall use
its best efforts to assist the Issuer in causing the Registrar to ensure that
the Transfer of the shares of Callable Preferred Stock shall be blocked in the
register of shareholders of the Issuer pursuant to a block order. The execution
and delivery by any such Permitted Transferee of an Endorsement under (and as
defined in) either the Registration Rights Agreement or the Shareholders
Agreement shall constitute the agreement by such Permitted Transferee to be
bound by the provisions of this Section 7.04 as if such Permitted Transferee
were an original signatory hereto, without the need for any further action by
any Person.
7.05 Fulfillment of Conditions
-------------------------
Each Purchaser will execute and deliver at or prior to the Closing each
other Principal Agreement to which such Purchaser is a party and is hereby
required to execute and deliver as a condition to the Closing, will take all
commercially reasonable steps necessary or desirable and proceed diligently and
in good faith to satisfy each other condition to the obligations of the Issuer
contained in this Agreement or to the obligations of any party to any of the
other Principal Agreements to which such Purchaser is a party, including,
without limitation, the Zimin Principal Agreements (other than the Zimin Common
Call Option Agreement and the Zimin Common Pledge Agreement), and take such
other actions as the Issuer may reasonably request for the purpose of carrying
out the intent of this Agreement and the other Principal Agreements.
7.06 Contracts with Xx. Xxxxx and Overture
-------------------------------------
From the date hereof until the Closing, each Purchaser shall promptly (but
in any event prior to the Closing) deliver to the other Purchaser and the Issuer
a copy of all Contracts (other than the Principal Agreements) between such
Purchaser or any of its Affiliates and any other Person entered into between the
date hereof and the Closing which involve voting rights, rights to nominate any
member of the Board, or any transfer, disposal, pledge, purchase or any other
conveyance of any of the Zimin Shares or any other shares of Common Stock owned
by any of Xx. Xxxxx, Glavsotkom, the Bee Line Fund or Overture.
ARTICLE VIII CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASERS
The obligation of each Purchaser to deliver (or to instruct the Escrow
Agent to deliver) to the Issuer that portion of the Purchase Price specified
opposite such Purchaser's name in Schedule 2.02 is subject to the fulfillment,
on or before the Closing, of each of the following conditions precedent (any or
all of which may be waived in whole or in part by such Purchaser in writing in
its sole discretion and the fulfillment of which by the Issuer shall, in the
case of Sections 8.01, 8.02, 8.04, 8.05 and 8.06, be
53
confirmed by an officer's certificate of the Issuer); provided that (a) no
Purchaser shall be obligated to deliver, or to instruct the Escrow Agent to
deliver, to the Issuer such Purchaser's portion of the Purchase Price unless the
other Purchaser actually delivers, or instructs the Escrow Agent to deliver,
such other Purchaser's portion of the Purchase Price and (b) a Purchaser shall
not have the benefit of a condition precedent specified in this Article VIII if
the failure of such condition precedent to be satisfied results from such
Purchaser's breach of Sections 7.01 and/or 7.05.
8.01 Representations and Warranties
------------------------------
The representations and warranties made by the Issuer in Article III shall
have been true and correct in all material respects on and as of the date of
this Agreement. In addition, the representations and warranties made by the
Issuer in Section 3.01, Section 3.02, Section 3.03, Section 3.04(b) (but solely
with respect to the Significant Subsidiaries), Section 3.05, Section 3.06,
Section 3.09(d), Section 3.12(a)(i)-(iii) (other than in respect of any Order
which is threatened or any Action or Proceeding initiated by or at the request
of a Purchaser or any of its Affiliates) and the representation in Section
3.18(d) that none of the licenses referred to in clauses (a) or (c) of the
definition of Telecom Licenses and no more than one of the licenses referred to
in clause (b) of the definition of Telecom Licenses has been terminated or
revoked and no notice of termination or revocation with respect to any of such
licenses has been received, shall, in each case, be true and correct in all
material respects on and as of the Closing Date as though each such
representation and warranty were made on and as of the Closing Date, provided
that the occurrence or consummation of any transaction or event contemplated by
this Agreement and the other Principal Agreements shall not result in a breach
of any such representation or warranty.
8.02 Performance
-----------
The Issuer shall have performed and complied in all material respects with
each of its obligations under Article V.
8.03 Certificates
------------
The Issuer shall have delivered to each Purchaser (a) a certificate dated
the Closing Date and executed by the CEO of the Issuer, substantially in the
form of Exhibit A, and (b) a certificate dated the Closing Date and executed by
the Secretary of the Board, substantially in the form of Exhibit B.
8.04 Orders and Laws
---------------
There shall not be in effect on the Closing Date any Order or Law
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any of
the other Principal Agreements or which could reasonably be expected to
otherwise result in a material impairment of any Purchaser's rights under this
Agreement or any of the other Principal Agreements to which such Purchaser is a
party, and there shall not be pending on the Closing Date any Action or
Proceeding or any other action in, before or by any Governmental or Regulatory
Authority (other than any Action or Proceeding initiated by or at the request
54
of any Purchaser or any of its Affiliates) which could reasonably be expected to
result in the issuance of any such Order or the enactment, promulgation or
deemed applicability to any Purchaser or the Issuer or the transactions
contemplated by this Agreement or any of the other Principal Agreements of any
such Law.
8.05 Corporate and Regulatory Consents and Approvals
-----------------------------------------------
All consents, approvals and actions of, filings with and notices to any
Governmental or Regulatory Authority or shareholders described in Schedule 4.04
(for each Purchaser in respect of itself only) or Schedule 8.05 which are
required to have been obtained, made or given (as applicable) by such Purchaser
or the Issuer, as the case may be, pursuant to applicable Law and necessary for
the performance of the obligations of the Issuer or such Purchaser under this
Agreement and the other Principal Agreements required to be performed on or
before the Closing Date (i) shall have been duly obtained, made or given, (ii)
shall not be subject to the satisfaction of any condition that has not been
satisfied or waived (unless any such condition relates to reporting or other
requirements which by the terms of such consents, approvals, actions, filings or
notices can only be effected on or after the Closing) and (iii) shall be in full
force and effect, and all terminations or expirations of waiting periods imposed
by any Governmental or Regulatory Authority shall have occurred.
8.06 Third Party Consents
--------------------
All consents (or in lieu thereof waivers) and agreements described in
Schedule 4.03 or Schedule 8.06 (a) shall have been obtained, (b) shall not be
subject to the satisfaction of any condition that has not been satisfied or
waived (unless any such condition relates to reporting or other requirements
which by the terms of such consents can only be effected on or after the
Closing) and (c) shall be in full force and effect.
8.07 Current Charter; Procedural Regulations of Board; Operating
-----------------------------------------------------------
Committee; Management Regulations
---------------------------------
The Issuer shall have delivered to each Purchaser:
(a) a notary certified copy of the Charter, including all amendments
thereto (including, without limitation, the amendments to the Charter
contemplated by Section 5.04(a)), properly approved by the GMS or the Board, as
applicable;
(b) a copy of the Procedural Regulations of the Board (including, without
limitation, the amendments to the Procedural Regulations of the Board
contemplated by Section 5.05), properly approved by the Board;
(c) resolutions of the Board establishing the role of the Operating
Committee as contemplated by Section 5.07; and
55
(d) a copy of the Management Regulations (including, without limitation,
the amendments to the Management Regulations contemplated by Section 5.06),
properly approved by the Board.
8.08 Other Principal Agreements
--------------------------
Each of the other Principal Agreements (other than the Eco Telecom VIP-R
Preferred Stock Purchase Agreement and the VIP/Eco Telecom Share Purchase
Agreement) to which the Issuer or any of its Subsidiaries is a party shall have
been executed and delivered by the Issuer and each such Subsidiary.
8.09 Wire Instruction
----------------
The Issuer shall have delivered to each Purchaser the Issuer's instruction
for the wire transfer to the Issuer's Dollar Account or the Issuer's Xxxxx
Account, as applicable, of that portion of the Purchase Price as is specified
opposite such Purchaser's name in Schedule 2.02.
8.10 Receipt
-------
The Issuer shall have delivered to each Purchaser a receipt, signed by the
Issuer's Chief Accountant, in substantially the form of Exhibit O-1 or Exhibit
O-2, as applicable.
8.11 Zimin Share Purchase Agreements
-------------------------------
All conditions precedent to the obligations of each Purchaser under the
Zimin Share Purchase Agreements to which it is a party (other than the condition
that the conditions precedent to the obligations of such Purchaser hereunder
shall have been fulfilled (or waived by such Purchaser)) shall have been
fulfilled (or waived by such Purchaser).
8.12 Contracts with Xx. Xxxxx
------------------------
Each Purchaser shall have received a copy of all Contracts (other than the
Principal Agreements) between the other Purchaser or any of its Affiliates and
any other Person which involve voting rights, rights to nominate any member of
the Board, or any transfer, disposal, pledge, purchase or any other conveyance
of any of the Zimin Shares or any other shares of Common Stock owned by any of
Xx. Xxxxx, Glavsotkom, the Bee Line Fund or Overture.
8.13 Election of Directors
---------------------
All individuals designated by each Purchaser for election to the Board and
whose names are listed in Schedule 1.01(b) and all individuals designated by Eco
Telecom and Telenor for election to VIP-R's Board of Directors and whose names
are listed in Schedule 1.01(b) shall have been nominated to, and, if they are
then legally capable, elected as members of, the Board and VIP-R's Board of
Directors, respectively.
56
8.14 Individual Share Purchase Agreement
-----------------------------------
The Issuer shall have executed an Individual Share Purchase Agreement for
the sale of each Purchaser's portion of the Purchasers' Shares.
8.15 Indemnification of Directors
----------------------------
The Issuer shall have executed and delivered to each member of the Board
elected at the most recent annual GMS a director's indemnification agreement in
the form attached as Exhibit M.
8.16 Legal Opinion
-------------
Each Purchaser shall have received an opinion of Akin, Gump, Strauss, Xxxxx
& Xxxx, L.L.P., special New York and Russian counsel to the Issuer, in
substantially the form of Exhibit C.
ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ISSUER
The obligations of the Issuer hereunder are subject to the fulfillment, at
or before the Closing, of each of the following conditions precedent (any or all
of which may be waived in whole or in part by the Issuer in writing in its sole
discretion); provided that (a) the Issuer shall not be obligated to transfer to
either Purchaser such Purchaser's portion of the Purchasers' Shares hereunder
unless each of the following conditions precedent have been fulfilled (or waived
in writing by the Issuer) with respect to both Purchasers and (b) the Issuer
shall not have the benefit of a condition precedent specified in this Article IX
if the failure of such condition precedent to be satisfied results from the
Issuer's breach of Sections 5.11 and/or 5.12:
9.01 Representations and Warranties
------------------------------
Each of the representations and warranties made by each Purchaser in this
Agreement shall be true and correct in all material respects on and as of the
Closing Date as though such representation or warranty were made on and as of
the Closing Date.
9.02 Performance
-----------
Each Purchaser shall have performed and complied with, in all material
respects, each agreement, covenant and obligation required by this Agreement to
be so performed or complied with by such Purchaser at or before the Closing,
unless such agreement, covenant or obligation has been waived in writing by the
Issuer.
9.03 Certificates
------------
Each Purchaser shall have delivered to the Issuer (a) a certificate dated
the Closing Date and executed by the President or a director of such Purchaser,
substantially
57
in the form of Exhibit E-1 or E-2 , as applicable, and (b) a certificate dated
the Closing Date and executed by a director of such Purchaser, substantially in
the form of Exhibit F-1 or F-2, as applicable.
9.04 Orders and Laws
---------------
There shall not be in effect on the Closing Date any Order or Law
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any of
the other Principal Agreements or which could reasonably be expected to
otherwise result in a material impairment of the Issuer's rights under this
Agreement or any of the other Principal Agreements to which the Issuer is a
party, and there shall not be pending or threatened on the Closing Date any
Action or Proceeding or any other action in, before or by any Governmental or
Regulatory Authority which could reasonably be expected to result in the
issuance of any such Order or the enactment, promulgation or deemed
applicability to any Purchaser or the Issuer or the transactions contemplated by
this Agreement or any of the other Principal Agreements of any such Law.
9.05 Regulatory Consents and Approvals
---------------------------------
All consents, approvals and actions of, filings with and notices to any
Governmental or Regulatory Authority reasonably necessary to permit the Issuer
and each Purchaser to perform their respective obligations under this Agreement
and the other Principal Agreements and to consummate the transactions
contemplated hereby and thereby (a) shall have been duly obtained, made or
given, (b) shall not be subject to the satisfaction of any condition that has
not been satisfied or waived and (c) shall be in full force and effect, and all
terminations or expirations of waiting periods imposed by any Governmental or
Regulatory Authority necessary for the consummation of the transactions
contemplated by this Agreement and the other Principal Agreements shall have
occurred.
9.06 Third Party Consents
--------------------
Certified copies (except as noted) of all confirmations of compliance and
absence of default, consents (or in lieu thereof waivers) and agreements listed
in Schedule 4.03, and all other confirmations of compliance and absence of
default, consents (or in lieu thereof waivers) and agreements to the performance
by each Purchaser of its obligations under this Agreement and the other
Principal Agreements or to the consummation of the transactions contemplated
hereby and thereby as are required under (or are necessary to avoid or prevent
conflict with or breach or default of) any material Contract to which such
Purchaser is a party or by which any of its Assets or Properties are bound (a)
shall have been obtained, (b) shall be in form and substance reasonably
satisfactory to the Issuer, (c) shall not be subject to the satisfaction of any
condition that has not been satisfied or waived and (d) shall be in full force
and effect.
58
9.07 Other Principal Agreements
--------------------------
Each of the other Principal Agreements (other than the Zimin Common Call
Option Agreement, the Zimin Common Pledge Agreement, the Eco Telecom VIP-R
Preferred Stock Purchase Agreement and the VIP/Eco Telecom Share Purchase
Agreement) shall have been executed and delivered by the parties thereto.
9.08 Individual Share Purchase Agreement
-----------------------------------
Each Purchaser shall have executed and delivered to the Issuer an
Individual Share Purchaser Agreement.
9.09 Interested Party Questionnaire
------------------------------
The Issuer shall have received from each Purchaser and the President of the
Issuer a completed questionnaire in the form of Appendix 1 to the the Management
Regulations for the purpose of including the necessary information concerning
Eco Telecom and updating information concerning the members of the Board elected
at the most recent annual GMS and the President of the Issuer.
9.10 Legal Opinions
--------------
(a) The Issuer shall have received opinions of Coudert Brothers, special
New York and Russian counsel to Telenor, Telenor Communication AS and Telenor
ASA, in substantially the form of Exhibit G and Exhibit H, respectively.
(b) The Issuer shall have received an opinion of the General Counsel of
Telenor ASA, in substantially the form of Exhibit I.
(c) The Issuer shall have received an opinion of Xxxxxxx Xxxxx, special New
York counsel to Eco Telecom, CTF Holdings and Eco Holdings, in substantially the
form of Exhibit J, and an opinion of Xxxxxxx Xxxxx CIS Legal Services, special
Russian counsel to Eco Telecom, CTF Holdings and Eco Holdings, in substantially
the form of Exhibit K.
(d) The Issuer shall have received an opinion of Triay & Triay, special
Gibraltar counsel to Eco Telecom, CTF Holdings and Eco Holdings, in
substantially the form of Exhibit L.
ARTICLE X SURVIVAL OF REPRESENTATIONS,WARRANTIES, COVENANTS AND AGREEMENTS
(a) The Issuer and each Purchaser has the right to rely fully upon the
representations, warranties, covenants and agreements of the other contained in
this Agreement. Unless otherwise noted herein, all representations, warranties,
covenants and agreements of the Issuer and the Purchasers contained in this
Agreement shall survive the Closing and remain in effect until three (3) months
from the publication date of the
59
audited, consolidated financial statements for the Issuer's fiscal year ending
December 31, 2002, provided that any such representation, warranty, covenant or
agreement that would otherwise terminate will continue to survive if a written
claim for indemnity shall have been made under Section 11.01 on or prior to such
termination date, until such claim has been satisfied or otherwise resolved.
(b) The obligations of the Issuer to Telenor under the last proviso of
Section 8.01 and Section 8.06 of the Working Capital Bridge Facility shall
survive the Closing and remain in effect until three (3) months from the
publication date of the audited consolidated financial statements for the
Issuer's fiscal year ending December 31, 2002, provided that any such obligation
that would otherwise terminate shall continue to survive if a written claim for
indemnity shall have been made under Section 8.06 of the Working Capital Bridge
Facility on or prior to such termination date, until such claim has been
satisfied or otherwise resolved.
ARTICLE XI INDEMNIFICATION
11.01 Indemnification
---------------
Subject to Section 11.03, in the event the Closing occurs:
(a) The Issuer shall indemnify each Purchaser in respect of, and hold each
Purchaser harmless from and against, any and all Losses suffered, incurred or
sustained by such Purchaser resulting from, arising out of or relating to (i)
any misrepresentation, breach of warranty or non-fulfillment of or failure to
perform any covenant or agreement on the part of the Issuer contained in this
Agreement (to the extent not waived in writing by such Purchaser), (ii) any
misrepresentation or breach of warranty on the part of VIP-R contained in
Article III of the VIP-R Primary Agreement (to the extent not waived in writing
by such Purchaser) and (iii) any non-fulfillment of or failure to perform any
covenant or agreement contained in the VIP-R Primary Agreement (to the extent
not waived in writing by such Purchaser) on the part of VIP-R prior to the First
VIP-R Board Date.
(b) Each Purchaser shall indemnify the Issuer in respect of, and hold the
Issuer harmless from and against, any and all Losses suffered, incurred or
sustained by the Issuer resulting from, arising out of or relating to any
misrepresentation, breach of warranty or non-fulfillment of or failure to
perform any covenant or agreement on the part of such Purchaser contained in
this Agreement (to the extent not waived in writing by the Issuer).
(c) The Issuer has indemnified Telenor pursuant to Section 8.06 of the
Working Capital Bridge Facility, and the rights and obligations of the Issuer
and Telenor under Section 8.01 and Section 8.06 of the Working Capital Bridge
Facility shall be wholly subject to this Article XI.
60
(d) In the event that any claim is asserted against any party hereto, or
any party hereto is made a party defendant in any Action or Proceeding, and such
claim, Action or Proceeding involves a matter which is the subject of a claim
for indemnification under Section 11.01(a), (b) or (c), then such party (an
"Indemnified Party") shall (i) promptly give written notice pursuant to Section
13.01 to each Purchaser or the Issuer, as the case may be (the "Indemnifying
Party"), of such claim, Action or Proceeding, and (ii) not make any admission of
liability, agreement or compromise with any Person in relation to such claim
without prior written notice to the Indemnifying Party; and such Indemnifying
Party shall have the right to join in the defense of said claim, Action or
Proceeding at such Indemnifying Party's own cost and expense and, if the
Indemnifying Party agrees in writing to be bound by and to promptly pay the full
amount of any final judgment from which no further appeal may be taken to the
extent such judgment involves an indemnifiable claim under this Section 11.01
and subject to the limitations in Section 11.03, and if the Indemnified Party is
reasonably assured of the Indemnifying Party's ability to satisfy such
agreement, then, at the option of the Indemnifying Party, such Indemnifying
Party may take over the defense of such claim, Action or Proceeding, except
that, in such case, the Indemnified Party shall have the right to join in the
defense of said claim, Action or Proceeding at its own cost and expense, and the
Indemnifying Party shall not make any admission of liability, agreement or
compromise with respect to such claim without the prior written consent of the
Indemnified Party.
11.02 Determination of Losses
-----------------------
The parties shall take into account the time value of money (using the
Applicable Rate as the discount rate) in determining Losses for purposes of this
Article XI.
11.03 Limitations on Liability
------------------------
Notwithstanding any other provision of this Agreement to the contrary:
(a) (i) the aggregate liability of the Issuer in respect of all claims of
Eco Telecom shall be limited to the Total Indemnity Amount; provided that the
aggregate liability of the Issuer and VIP-R in respect of all claims of Eco
Telecom under this Agreement and the VIP-R Primary Agreement shall not exceed
the Total Indemnity Amount; and (ii) the aggregate liability of Eco Telecom in
respect of all claims of the Issuer shall be limited to the amount of that
portion of the Purchase Price as is specified opposite Eco Telecom's name in
Schedule 2.02;
(b) the aggregate liability of the Issuer in respect of all claims of
Telenor, and the aggregate liability of Telenor in respect of all claims of the
Issuer, shall be limited to US$160,000,000;
(c) a party shall have no liability in respect of any claim unless such
claim is made in good faith and unless written particulars of such claim (giving
such details of the specific matter in respect of which such claim is made as
are then in the possession the
61
claimant party) shall have been given to such party pursuant to Section 13.01
within the survival period specified in Article X (or in the case of any claim
relating to the VIP-R Primary Agreement, within the time period specified
therein);
(d) no party shall have any liability in respect of any claim:
(i) to the extent that it arose or is increased as a result of an
increase in rates of Tax on or after the date immediately prior to the Closing
Date or the passing of any legislation (or making of any subordinate legislation
or any change in any published practice of any Tax authority) with retrospective
effect;
(ii) to the extent such claim:
(A) relates to any matter provided for, or included as a
liability in, the Audited Consolidated Financial Statements; or
(B) relates to any liability for Tax arising out of the ordinary
course of business of the Issuer after the Closing Date;
(e) no party shall have any liability in respect of any claim:
(i) if the amount of such claim does not exceed US$250,000;
(ii) if, as of the date such claim is made, the aggregate amount of
all claims made against such party under this Article XI does not exceed
US$2,000,000; or
(iii) to the extent that such claim relates to any Loss for which the
claimant party actually recovers under the terms of any insurance policy in
effect at the Closing Date;
(f) no party shall be entitled to be paid more than once in respect of any
claim arising out of the same subject matter (including, without limitation,
with respect to any claim arising in relation to the VIP-R Primary Agreement);
(g) if any potential claim shall arise by reason of a liability of a party
which is contingent only, then such party shall have no obligation to make any
payment in respect of such claim until such time as the contingent liability
ceases to be contingent and becomes actual;
(h) without prejudice to the generality of Section 13.08(a), any liability
of any Purchaser under Section 11.01 shall be several (and not joint); and
(i) as used in this Article XI, "claim" shall mean any claim under Section
11.01 or under Section 8.06 of the Working Capital Bridge Facility.
62
11.04 Other Indemnification Provisions
--------------------------------
The foregoing indemnification provisions are in addition to, and not in
derogation of, any statutory, equitable, or common law remedy any party may have
for any misrepresentation made in connection with the transactions contemplated
by this Agreement, or any breach of warranty or non-fulfillment of or failure to
perform any covenant or agreement.
ARTICLE XII EFFECTIVENESS; TERMINATION
12.01 Effectiveness; Termination
--------------------------
This Agreement shall take effect on the date hereof and shall terminate and
the transactions contemplated hereby shall be abandoned:
(a) at any time prior to the Closing, by mutual written agreement of the
Issuer and the Purchasers;
(b) at midnight (Moscow time) on the Final Date if the Closing has not
occurred by such time;
(c) on the date on which a meeting of the shareholders of the Issuer is
held at which a vote of such shareholders is conducted concerning the
transactions contemplated by this Agreement and the other Principal Agreements
and such shareholders fail to approve such transactions as are required to be
approved by such shareholders; or
(d) upon payment in full by Eco Telecom of the amounts specified in Section
2.06.
12.02 Effect of Termination
---------------------
(a) If this Agreement is validly terminated pursuant to Section 12.01(a),
(c) or (d), this Agreement will forthwith become null and void, and there will
be no liability or obligation on the part of the Issuer or the Purchasers (or
any of their respective officers, directors, employees, agents or other
representatives or Affiliates), except that the provisions with respect to
expenses in Section 13.03 and confidentiality in Section 13.05 will continue to
apply following any such termination.
(b) Notwithstanding any other provision in this Agreement to the contrary,
upon termination of this Agreement pursuant to Section 12.01(b), the Issuer will
remain liable to the Purchasers for any breach of this Agreement by the Issuer
existing at the time of such termination, and each Purchaser will remain liable
to the Issuer and the other Purchaser for any breach of this Agreement by such
Purchaser existing at the time of such termination, and the Issuer or any
Purchaser may seek such remedies, including damages and fees of attorneys,
against the other parties with respect to any such breach as are provided in
this Agreement or as are otherwise available at law or in equity.
63
ARTICLE XIII MISCELLANEOUS
13.01 Notices
-------
All notices, requests and other communications hereunder must be in writing
and will be deemed to have been duly given only if delivered personally or by
facsimile transmission or sent by courier to the parties at the following
addresses or facsimile numbers (except that any notice required to be delivered
to VIP-R shall be delivered in accordance with Section 15.01 of the VIP-R
Primary Agreement):
If to Telenor, to:
Telenor East Invest AS
Xxxxxxxxxxxxxxxxx 0
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 Xxxxxxx
If to Eco Telecom, to:
Eco Telecom Limited
Xxxxx 0, 0 Xxxxx Xxxxx
Xxxxxxxxx
Xxxxxxxxx No.: + 350-41988
Attn: Xxxxx Xxxx
with a copy to:
OOO Alfa-Eco
21, Novy Arbat
121019 Moscow
Russian Federation
64
Facsimile No.: x0000-000-0000
Attn: Stanislav Shekshnya
and a copy to:
Xxxxxxx Xxxxx CIS Legal Services
00, Xxxxxxxxxxxx Xxxxxxxx
000000 Xxxxxx
Russian Federation
Facsimile No.: + 0000-000-0000
Attn: Xxxxxxxx Xxxxxxx
If to the Issuer, to:
Vimpel-Communications
10 Xxxxxx 0-Xxxxx
Xxxxxxxx 00
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.
Dukat Place II
7, Ulitsa Gasheka
123056, Moscow
Russian Federation
Facsimile No. x0000-000-0000
Attn: Xxxxxxx X. Xxxxxxxx
All such notices, requests and other communications will (a) if delivered
personally to the address as provided in this Section 13.01, be deemed given
upon delivery, (b) if delivered by facsimile transmission to the facsimile
number as provided in this Section 13.01, be deemed given upon receipt, and (c)
if delivered by courier in the manner described above to the address as provided
in this Section 13.01, be deemed given upon confirmed receipt (in each case
regardless of whether such notice, request or other communication is received by
any other Person to whom a copy of such notice is to be delivered pursuant to
this Section 13.01). Any party from time to time may change its
65
address, facsimile number or other information for the purpose of notices to
that party by giving written notice specifying such change to the other parties
hereto.
13.02 Entire Agreement
----------------
This Agreement and the other Principal Agreements supersede all prior
discussions and agreements between the parties with respect to the subject
matter hereof and thereof, and contain the sole and entire agreement between the
parties hereto and thereto with respect to the subject matter hereof and
thereof.
13.03 Expenses
--------
Except as otherwise expressly provided in this Agreement (including,
without limitation, as provided in Section 12.02), whether or not the
transactions contemplated hereby are consummated, each of the parties will pay
its own costs and expenses, including, without limitation, legal fees, incurred
in connection with the negotiation, execution and closing of this Agreement and
the other Principal Agreements and the transactions contemplated hereby and
thereby; provided that the Issuer shall pay, without limitation, all costs
associated with the registration of the New Shares as required by all applicable
Laws and Russian Federation securities regulations, including the costs
associated with preparing a prospectus, if any, and each Purchaser shall pay the
fee charged by the Registrar to register such Purchaser's ownership of its
portion of the Purchasers' Shares.
13.04 Public Announcements
--------------------
At all times at or before the Closing, neither the Issuer nor any Purchaser
will issue or make any reports, statements or releases to the public or,
generally, to the employees, customers, suppliers or other Persons to whom the
Issuer sells goods or provides services or with whom the Issuer otherwise has
significant business relationships with respect to this Agreement or the
transactions contemplated hereby without the consent of the other, which consent
shall not be unreasonably withheld. If any party is unable to obtain the
approval of its public report, statement or release from the other parties and
such report, statement or release is, in the opinion of legal counsel to such
party, required by Law or rule of any stock exchange in order to discharge such
party's disclosure obligations, then such party may make or issue the legally
required report, statement or release and promptly furnish the other parties
with a copy thereof. The Issuer and each Purchaser will also obtain each other
party's prior approval of any press release to be issued immediately following
the Closing announcing the consummation of the transactions contemplated by this
Agreement.
13.05 Confidentiality
---------------
Each party hereto will hold, and will use its best efforts to cause its
Affiliates, and their respective Representatives to hold, in strict confidence
from any Person (other than any such Affiliate or Representative), unless (a)
compelled to disclose by judicial or
66
administrative process (including, without limitation, in connection with
obtaining the necessary approvals of this Agreement and the transactions
contemplated hereby of Governmental or Regulatory Authorities) or by other
requirements of Law or (b) disclosed in an Action or Proceeding brought by a
party hereto in pursuit of its rights or in the exercise of its remedies
hereunder, all documents and information concerning another party hereto or any
of its Affiliates furnished to it by such other party or such other party's
Representatives in connection with this Agreement or the transactions
contemplated hereby, except to the extent that such documents or information can
be shown to have been (i) previously known by the party receiving such documents
or information, (ii) in the public domain (either prior to or after the
furnishing of such documents or information hereunder) through no fault of such
receiving party or (iii) later acquired by the receiving party from another
source if the receiving party is not aware that such source is under an
obligation to another party hereto to keep such documents and information
confidential. In the event the transactions contemplated hereby are not
consummated, upon the request of another party, each party hereto will, and will
cause its Affiliates and their respective Representatives to, promptly redeliver
or cause to be redelivered all copies of documents and information furnished by
the other parties in connection with this Agreement or the transactions
contemplated hereby and destroy or cause to be destroyed all notes, memoranda,
summaries, analyses, compilations and other writings related thereto or based
thereon prepared by the party furnished such documents and information or its
Representatives.
13.06 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.
13.07 Amendment
---------
Except as specified in Section 2.02(a), this Agreement may be amended,
supplemented or modified only by a written instrument duly executed by or on
behalf of each party hereto.
13.08 Obligations of Purchasers Several; No Third Party Beneficiary
-------------------------------------------------------------
(a) The obligations of the Purchasers hereunder shall be several (and
not joint). A Purchaser shall not be responsible for the failure of the other
Purchaser to perform any obligation required to be performed by it hereunder or
under any other Principal Agreement. The obligations of the Issuer at any time
hereunder to each Purchaser shall be a separate and independent obligations.
Each Purchaser shall be
67
entitled to protect and enforce its rights arising out of this Agreement and the
other Principal Agreements as it shall see fit, and it shall not be necessary
for the other Purchaser to consent to, or be joined as an additional party in,
any proceedings for such purposes.
(b) The terms and provisions of this Agreement are intended solely for the
benefit of each party hereto and its successors or permitted assigns, and it is
not the intention of the parties to confer third party beneficiary rights upon
any other Person.
13.09 No Assignment; Binding Effect
-----------------------------
Except as set forth in Section 7.04(g), 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. 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.
13.10 Headings
---------
The headings used in this Agreement have been inserted for convenience of
reference only and do not define or limit the provisions hereof.
13.11 Arbitration; Consent to Jurisdiction; Service of Process; Waiver of
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Sovereign Immunity
------------------
(a) Any and all disputes and controversies arising under, relating to or in
connection with this Agreement shall be settled by arbitration by a panel of
three (3) arbitrators under the United Nations Commission on International Trade
Law (UNCITRAL) Arbitration Rules then in force (the "UNCITRAL Rules") in
accordance with the following terms and conditions:
(i) In the event of any conflict between the UNCITRAL Rules and the
provisions of this Agreement, the provisions of this Agreement shall prevail.
(ii) The place of the arbitration shall be Geneva, Switzerland.
(iii) Where there is only one claimant party and one respondent
party, each shall appoint one arbitrator in accordance with the UNCITRAL Rules,
and the two arbitrators so appointed shall appoint the third (and presiding)
arbitrator in accordance with the UNCITRAL Rules within thirty (30) days from
the appointment of the second arbitrator. In the event of an inability to agree
on a third arbitrator, the appointing authority shall be the International Court
of Arbitration of the International Chamber of Commerce, acting in accordance
with such rules as it may adopt for this purpose. Where there is more than one
claimant party, or more than one respondent party, all claimants and/or all
respondents shall attempt to agree on their respective
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appointment(s). In the event that all claimants and all respondents cannot agree
upon their respective appointment(s) within thirty (30) Business Days of the
date of the notice of arbitration, all appointments shall be made by the
International Court of Arbitration of the International Chamber of Commerce.
(iv) The English language shall be used as the written and spoken
language for the arbitration and all matters connected to the arbitration.
(v) The arbitrators shall have the power to grant any remedy or relief
that they deem just and equitable and that is in accordance with the terms of
this Agreement, including specific performance, and including, but not limited
to, injunctive relief, whether interim or final, and any such relief and any
interim, provisional or conservatory measure ordered by the arbitrators may be
specifically enforced by any court of competent jurisdiction. Each party hereto
retains the right to seek interim, provisional or conservatory measures from
judicial authorities and any such request shall not be deemed incompatible with
the agreement to arbitrate or a waiver of the right to arbitrate.
(vi) The award of the arbitrators shall be final and binding on the
parties to this Agreement.
(vii) The award of the arbitrators may be enforced by any court of
competent jurisdiction and may be executed against the person and assets of the
losing party in any competent jurisdiction.
(b) Except for arbitration proceedings pursuant to Section 13.11(a), no
action, lawsuit or other proceeding (other than the enforcement of an
arbitration decision, an action to compel arbitration or an application for
interim, provisional or conservatory measures in connection with the
arbitration) shall be brought by or between the parties to this Agreement in
connection with any matter arising out of or in connection with this Agreement.
(c) Each party hereto irrevocably appoints CT Corporation System, located
on the date hereof at 000 Xxxxxx Xxxxxx, 13th Floor, New York, New York 10011,
USA, as its true and lawful agent and attorney to accept and acknowledge service
of any and all process against it in any judicial action, suit or proceeding
permitted by Section 13.11(b), with the same effect as if such party were a
resident of the State of New York and had been lawfully served with such process
in such jurisdiction, and waives all claims of error by reason of such service,
provided that the party effecting such service shall also deliver a copy thereof
on the date of such service to the other parties by facsimile as specified in
Section 13.01. Each party to this Agreement 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
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York City, in connection with any such action, suit or proceeding, and
agrees that any such action, suit or proceeding may be brought in such court,
provided, however, that such consent to jurisdiction is solely for the purpose
referred to in this Section 13.11 and shall not be deemed to be a general
submission to the jurisdiction of said courts of or in the State of New York
other than for such purpose. Each party hereby irrevocably waives, to the
fullest extent permitted by Law, any objection that it may now or hereafter have
to the laying of the venue of any such action, suit or proceeding brought in
such a court and any claim that any such action, suit or proceeding brought in
such a court has been brought in an inconvenient forum. Nothing herein shall
affect the right of any party to serve process in any other manner permitted by
Law or to commence legal proceedings or otherwise proceed against any other
party in any other jurisdiction in a manner not inconsistent with Section
13.11(b).
(d) Each of the Purchasers and the Issuer hereby represents and
acknowledges 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 of the Purchasers and the Issuer 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
the 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, and enforceability of judicial or arbitral awards.
13.12 Invalid Provisions
------------------
If any provision contained in this Agreement or any other document executed
in connection herewith is or shall become invalid, illegal or unenforceable in
any jurisdiction, the invalidity, illegality or unenforceability of such
provision in such jurisdiction shall not affect or impair the validity, legality
or enforceability of (a) any other provision of this Agreement or any such other
document in such jurisdiction or (b) such provision or any other provision of
this Agreement or any such other document in any other jurisdiction.
13.13 Governing Law
-------------
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York, United States of America, without giving effect
to any conflicts of laws principles thereof which would result in the
application of the laws of another jurisdiction.
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13.14 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.
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IN WITNESS WHEREOF, this Primary Agreement has been duly executed and
delivered by each party hereto as of the day and year first above written.
The Purchasers
--------------
TELENOR EAST INVEST AS
By /s/ Tron Xxxxx
--------------
Tron Xxxxx
Attorney-in-Fact
ECO TELECOM LIMITED
By /s/ Serge Barychkov
-------------------
Serge Barychkov
Attorney-in-Fact
The Issuer
----------
OPEN JOINT-STOCK COMPANY
"VIMPEL-COMMUNICATIONS"
By /s/ Xxxxxx Xxxxxxxxxx Xxxxx
---------------------------
Xxxxxx Xxxxxxxxxx Xxxxx
President
By /s/ Xxxxxxxx Bychenkov
----------------------
Xxxxxxxx Bychenkov
Chief Accountant
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