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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 6)
OPEN JOINT STOCK COMPANY "VIMPEL-COMMUNICATIONS"
------------------------------------------------
(Name of Issuer)
Common Stock, 0.005 rubles nominal value
----------------------------------------
(Title of Class of Securities)
683770R 10 9
------------
(CUSIP Number)
Halvor Mansaker, Esq.
Telenor AS
Universitetsgatan 2
N-0164 Oslo, Norway
47-22-779-160
-------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 23, 2000
_____________
(Date of Event which Requires Filing
of this Statement)
Copy to:
Peter S. O'Driscoll, Esq.
Coudert Brothers
60 Cannon Street
London EC4N 6JP
England
44-207-248-3000
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1 (b)(3) or (4), check the following box. [_]
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13D-1(a) for other parties to whom copies are to
be sent.
* The remainder of this cover page will be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosure provided in a prior cover page.
The information required on the remainder of this cover page will not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but will be subject to all other provisions of the Act (however, see the Notes).
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SCHEDULE 13D
CUSIP No. 68370R 10 9
-----------------
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NAME OF REPORTING PERSON
1. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Telenor East Invest AS
000-00-0000
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2. (a) [_]
(b) [_]
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SEC USE ONLY
3.
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SOURCE OF FUNDS*
4.
WC
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5.
N/A
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CITIZENSHIP OR PLACE OF ORGANIZATION
6.
Norway
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SOLE VOTING POWER
7.
NUMBER OF
11,548,067/1/
SHARES ------------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8.
OWNED BY -0-
------------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9.
REPORTING
11,548,067/1/
PERSON ------------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10.
-0-
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,548,067/1/
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
The aggregate amount reported as beneficially owned in row (11) does not
include shares which the Reporting Person discloses in the report but as
to which beneficial ownership is disclaimed pursuant to Rule 13d-4 [17 CFR
240.13d-4] under the Securities Exchange Act of 1934.
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
32.92% of the outstanding Common Stock (27.82% of the outstanding voting
capital stock)/2/
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14. TYPE OF REPORTING PERSON*
CO
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* See Instructions before Filling Out!
/1./ Represents 8,902,201 shares held directly by the Reporting Person,
1,800,400 shares subject to the option discussed in Item 4 herein and 845,466
shares subject to the pledge discussed in Item 4 herein.
/2./ For the purposes of this Amendment No. 6, these percentages have been
calculated assuming (i) the issuance of 7,000,000 shares by the Issuer, (ii) the
full exercise by the Reporting Person of its option to purchase up to 1,800,400
shares, in each case, as discussed in Item 4 herein and (iii) the enforcement of
the Reporting Person's security interest in all 845,466 shares subject to a
pledge, as discussed in Item 4 herein.
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SCHEDULE 13D
CUSIP No. 68370R 10 9
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Telenor AS
000-00-0000
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS*
AF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
N/A
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Norway
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7. SOLE VOTING POWER
NUMBER OF
11,548,067/3/
SHARES -----------------------------------------------------------
8. SHARED VOTING POWER
BENEFICIALLY
OWNED BY -0-
-----------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING
11,548,067/3/
PERSON -----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
WITH
-0-
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,548,067/3/
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
The aggregate amount reported as beneficially owned in row (11) does not
include shares which the Reporting Person discloses in the report but as
to which beneficial ownership is disclaimed pursuant to Rule 13d-4 [17 CFR
240.13d-4] under the Securities Exchange Act of 1934.
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
32.92% of the outstanding Common Stock (27.82% of the outstanding voting
capital stock)/4/
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14. TYPE OF REPORTING PERSON*
CO
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* See Instructions before Filling Out!
/3./ The Reporting Person disclaims beneficial ownership of all shares.
/4./ See footnote 2.
---
3
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SCHEDULE 13D
Item 1. Security and Issuer
-------------------
The statement on Schedule 13D relating to the common stock, 0.005 rubles
nominal value (the "Common Stock"), of Open Joint Stock Company "Vimpel-
Communications," a Russian open joint stock company ("VimpelCom"), as previously
filed by Telenor East Invest AS and Telenor AS, is hereby amended and
supplemented with respect to the items set forth below.
Item 2. Identity and Background
-----------------------
This amendment to the statement on Schedule 13D is being filed jointly by
Telenor East Invest AS and Telenor AS, with respect to the loans by Telenor East
Invest AS to VimpelCom in an aggregate principal amount of up to US$50,000,000
(the "Loans") and the grant of an option by VimpelCom to Telenor East Invest AS
to purchase, subject to the prior repayment in full of the Loans, all interest
accrued thereon and all fees owing in connection therewith by VimpelCom, (a)
shares of Common Stock, (b) American Depositary Shares ("ADSs"), each
representing 3/4 of one share of Common Stock and/or (c) notes, bonds,
debentures or similar instruments convertible or exchangeable into Common Stock
or ADSs ("Notes").
TELENOR EAST INVEST AS
(a) Telenor East Invest AS, a corporation formed under the laws of Norway.
(b) Keysers Gate 13/15
N-0130 Oslo
Norway
(c) Telenor East Invest AS is engaged principally in the business of
investing in the telecommunications industry outside of Norway.
(d) During the last five years, Telenor East Invest AS has not been
convicted in a criminal proceeding.
(e) During the last five years, Telenor East Invest AS was not a party to
a civil proceeding of a judicial or administrative body as a result of which
Telenor East Invest AS was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
EXECUTIVE OFFICERS AND DIRECTORS OF TELENOR EAST INVEST AS
(a), (b), (c) and (f) The following information sets forth the name,
citizenship, business address and present principal occupation of each of the
directors and executive officers of Telenor East Invest AS. Each of the
directors and executive officers of Telenor East Invest AS is a citizen of
Norway. Except as otherwise indicated, the business address of each of such
persons is Keysers Gate 13/15, N-0130 Oslo, Norway.
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DIRECTORS OF TELENOR EAST INVEST AS
-----------------------------------
Name and Business Address Present Principal Occupation
------------------------- ----------------------------
Terje Thon Senior Executive Vice President,
Universitetsgatan 2 Telenor AS
N-0164 Oslo, Norway
Torstein Moland Executive Vice President and Chief
Universitetsgatan 2 Financial Officer, Telenor AS
N-0164 Oslo, Norway
Ole Johan Haga Project Manager, Telenor International
Center
EXECUTIVE OFFICERS OF TELENOR EAST INVEST AS
--------------------------------------------
Name and Business Address Present Principal Occupation
------------------------- ----------------------------
Henrik Torgersen President and Executive Vice President
of Telenor AS
(d) During the last five years, none of the above executive officers and
directors of Telenor East Invest AS has been convicted in a criminal proceeding.
(e) During the last five years, none of the above executive officers and
directors of Telenor East Invest AS was a party to a civil proceeding of a
judicial or administrative body as a result of which Telenor East Invest AS was
or is subject to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
TELENOR AS
(a) Telenor AS, a corporation formed under the laws of Norway.
(b) Universitetsgatan 2
N-0164 Oslo
Norway
(c) Telenor AS is engaged principally in the business of production and
supply of services in the fields of telecommunications, data services and media
distribution.
(d) During the last five years, Telenor AS has not been convicted in a
criminal proceeding.
(e) During the last five years, Telenor AS was not a party to a civil
proceeding of a judicial or administrative body as a result of which Telenor AS
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating
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activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
EXECUTIVE OFFICERS AND DIRECTORS OF TELENOR AS
(a), (b), (c) and (f) The following information sets forth the name,
citizenship, business address and present principal occupation of each of the
directors and executive officers of Telenor AS. Except as otherwise indicated,
the business address of each of such persons is Universitetsgatan 2, N- 0164
Oslo, Norway.
DIRECTORS OF TELENOR AS
-----------------------
Name and Business Address Citizenship Present Principal Occupation
------------------------- ----------- ----------------------------
Eivind Reiten Norway Executive Vice President
Norsk Hydro ASA
Bygdoy Alle 2
N-0240 Oslo
Norway
Kari Broberg Norway Chief Executive Officer
Hoffsveien 21/23
N-0275 Oslo
Norway
Inge K. Hansen Norway Chief Financial Officer and
Den norske stats oljeselskap AS Executive Vice President
N-4035 Stavanger
Norway
Ashild Bendiktsen Norway Chief Financial Officer
Entrepenor Bendiktsen & Aasen A
Salangsverket
N-9350 Sjovegan
Norway
Bente Neegard Halvorsen Norway Head Treasurer
LO
Youngs gate 11
N-0181 Oslo
Mai Buch Denmark Corporate Adviser
Competence House AS
Symbion, Frubjergvej 3
2100 Kobenhavn O
Denmark
Svein Eivind Solheim Norway Employee Representative
Telenor AS
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P.O. Box 6701 St. Olavs plass
N-0130 Oslo
Norway
Irma Tystad Norway Employee Representative
Telenor AS
P.O. Box 6701 St. Olavs plass
N-0130 Oslo
Norway
Harald Stavn Norway Employee Representative
Telenor AS
P.O. Box 6701 St. Olavs plass
N-0130 Oslo
Norway
EXECUTIVE OFFICERS OF TELENOR AS
--------------------------------
Name and Business Address Citizenship Present Principal Occupation
------------------------- ----------- ----------------------------
Tormod Hermansen Norway President and Chief Executive
Officer
Ole Petter Hakonsen Norway Executive Vice President
Terje Thon Norway Executive Vice President
Arve Johansen Norway Senior Vice President
Jon Fredrik Baksaas Norway Executive Vice President
Torstein Moland Norway Executive Vice President and
Chief Financial Officer
Gun Bente Johansen Norway Executive Vice President
Jan Edvard Thygesen Norway Senior Vice President
Morten Lundal Norway Senior Vice President
Stig Eide Sivertsen Norway Senior Vice President
Jan Kare Pedersen Norway Senior Vice President
Peter Darpo Sweden Senior Vice President
(d) During the last five years, none of the above executive officers and
directors of Telenor AS has been convicted in a criminal proceeding.
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(e) During the last five years, none of the above executive officers and
directors of Telenor AS has been a party to a civil proceeding of a judicial or
administrative body as a result of which such executive officer or director was
or is subject to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
-------------------------------------------------
The amount and source of funds used in connection with the Loans and
Telenor East Invest AS's potential purchase of shares of Common Stock, ADSs
and/or Notes is US$50,000,000, interest thereon under, and fees payable in
connection with, the Loan Agreement (as herein after defined), and such amount
as Telenor East Invest AS may spend in excess of US$50,000,000 to acquire such
number of New Shares and/or New ADSs (as herein after defined) and/or such
amount of Notes as, in the aggregate and after giving effect to the conversion
of any Notes, would permit Telenor East Invest AS to maintain a 25.72% interest
in the voting capital stock of VimpelCom, in each case, contributed from Telenor
East Invest AS's working capital.
Item 4. Purpose of Transaction
----------------------
Under the Working Capital Bridge Facility dated as of June 23, 2000,
(the "Loan Agreement") between VimpelCom, as the borrower, and Telenor East
Invest AS ("Telenor"), as the lender, Telenor has agreed to lend, and VimpelCom
has agreed to borrow, an aggregate principal amount of up to but not exceeding
US$50,000,000 to finance certain of VimpelCom's ongoing operations, as described
in the sixth paragraph of this section. The Loans will mature on (a) the date
that is 150 calendar days after June 23, 2000 (which date will be November 20,
2000) (the "Initial Maturity Date") or (b) if the Loan is extended, January 27,
2001. However, if Telenor exercises its option under the Primary Agreement (as
defined and described herein), the Loans, all interest accrued thereon and fees
owing under the Loan Agreement will become due and payable on the date that is
at least one (1) business day prior to the date of closing of any purchase of
Common Stock, ADSs and/or Notes by Telenor under the Primary Agreement. Interest
on the outstanding principal amount of the Loans will accrue as described under
"Description of Loan Agreement - Interest."
On June 29, 2000, Telenor made its first disbursement of the Loans to
VimpelCom, in the principal amount of US$15,000,000, upon VimpelCom's submission
of a request for this disbursement and fulfillment of the conditions precedent
to this disbursement, as described under "Description of Loan Agreement -Amount;
Disbursements" and " - Conditions precedent to disbursement." On July 6, 2000,
Telenor made its second disbursement of the Loans to VimpelCom, in the principal
amount of US$35,000,000, upon VimpelCom's submission of a request for this
disbursement and the waiver of certain of the conditions precedent to this
disbursement, as described under "Description of Loan Agreement - Amount;
Disbursements" and "- Conditions precedent to disbursement."
On April 13, 2000, the shareholders of VimpelCom approved the issuance of
up to 7,000,000 shares of Common Stock (the "New Shares") to VimpelCom Finance
B.V., a Dutch private company with limited liability which is a wholly-owned
subsidiary of VimpelCom, and/or other special purpose financing vehicles
designated by VimpelCom Finance B.V. for the purpose of raising additional
financing through public and/or private offerings of debt and/or equity
securities in the international capital markets. VimpelCom Finance B.V. and the
special purpose financing vehicles designated by VimpelCom Finance B.V. are
referred to collectively, herein, as the "Sellers." The issuance of these New
Shares will result in the dilution of Telenor's current 25.72% interest in the
voting capital stock of VimpelCom.
To induce Telenor to enter into the Loan Agreement, VimpelCom has caused
the Sellers to enter into the Primary Agreement (Financing Vehicles) dated as of
June 23, 2000 (the "Primary Agreement"), pursuant to which the Sellers have
granted Telenor an option to purchase (subject to mandatory exercise as
described below) (a) New Shares, (b) new ADSs, each representing 3/4 of
8
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one New Share (the "New ADSs"), and/or (c) Notes. The Sellers' right to
undertake a Public Offering (as defined in the Primary Agreement and described
herein) of New Shares, New ADSs and/or Notes, and Telenor's obligation to
exercise its option, is subject to VimpelCom's prior repayment in full of the
outstanding principal amount of the Loans, all interest accrued thereon and all
fees owing under the Loan Agreement. The amount of New Shares, New ADSs and/or
Notes in respect of which Telenor is obligated to exercise its option will be
equal to the aggregate outstanding principal of the Loans, all interest accrued
thereon and all fees owing under the Loan Agreement. However, a portion of the
New Shares or New ADSs (but not the Notes) may also be subject to an option
proposed to be granted, by VimpelCom or a Seller, to a third party lender (the
"Third Party Lender"). In such case, the number of New Shares and/or New ADSs
Telenor would be obligated to purchase would be reduced. In no event may
Telenor's purchase of New ADSs, New Shares and/or Notes cause Telenor's equity
interest in VimpelCom's outstanding voting capital stock to exceed 25.72% of
such voting capital stock (determined on the basis that all Notes are treated as
having been fully converted into or exchanged for Common Stock). If Telenor
exercises its options under the Primary Agreement, it will purchase the New
Shares, New ADS and/or Notes for investment purposes.
Under Russian law, VimpelCom must file and register a placement report
regarding the issuance of the New Shares with the Federal Commission on the
Securities Markets (the "FCSM") of the Russian Federation no earlier than two
weeks after disclosure in the FCSM's bulletin of the completion of the placement
of the New Shares with the Sellers. The FCSM may refuse to register the report
in the event that VimpelCom violated Russian law in the issuance process or the
report contains false information. The FCSM must notify VimpelCom of such
refusal, and give VimpelCom the opportunity to correct any defects. If VimpelCom
fails to correct such defects within a certain period of time, the FCSM may
declare the issuance invalid, and VimpelCom will be obligated to cancel the New
Shares and return the purchase price to the Sellers. In such event, Telenor
would be unable to exercise its option as contemplated in the Primary Agreement.
To provide VimpelCom with access to additional financing in such circumstances,
the Loan Agreement contemplates that KB Citibank T/O (a bank established under
the laws of the Russian Federation and an affiliate of Citibank, N.A.), will
issue a guarantee in favor of Telenor in an amount equal to or exceeding the
aggregate amount of the Loan plus estimated accrued interest, fees and other
amounts payable under the Loan Agreement (the "Citibank Guarantee"). If the FCSM
shall have failed to register the placement report regarding the issuance of the
New Shares to the Sellers within thirty-five (35) days of VimpelCom's filing of
such report, then Telenor may make a demand under the Citibank Guarantee in an
amount equal to the sum of the amounts Telenor has paid the Sellers for the New
Shares, New ADSs and/or Notes under the Primary Agreement. Upon Telenor's
receipt of the proceeds of such demand, Telenor is, except in certain limited
circumstances, obligated to disburse an equivalent amount to VimpelCom under the
Loan Agreement.
Under the terms of the Loan Agreement, VimpelCom was obligated to use
the proceeds of the Loans to develop and operate its D-AMPS and GSM 900/1800
Cellular Network in the City of Moscow and the Moscow Region, implement its new
billing and IT systems, develop its distribution system, invest in the
development of its regional licenses, invest in its Internet-related businesses,
refinance any of its debt and/or redeem shares of VimpelCom tendered by certain
of its shareholders following its extraordinary meeting of shareholders on April
13, 2000. Under the terms of the Waiver Letter (as hereinafter defined),
VimpelCom is obligated to use the proceeds of the second Disbursement to (i) pay
amounts owing under the Lease Agreements (as hereinafter defined) and (ii) pay
taxes and interest rate breakage costs owing as a consequence of such payments.
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In connection with the Loans and the option, in addition to the Loan
Agreement and the Primary Agreement, Telenor entered into the following
agreements:
(a) a Contract of Pledge of Shares dated June 23, 2000 (the "Share
Pledge") between the "Bee Line" Non-Profit Fund (the "Bee Line Fund")
and Telenor;
(b) a Guarantee Agreement dated as of June 23, 2000 (the "Guarantee")
between VimpelCom and Telenor; and
(c) a Letter Agreement (the "Letter Agreement") dated June 23, 2000 by and
among VimpelCom, Telenor, Dr. Dmitri Borisovich Zimin ("Dr. Zimin"),
Glavsotkom LLC and the Bee Line Fund.
Description of Loan Agreement
-----------------------------
Amount; Disbursements
The Loan Agreement contemplated that the Loans would be disbursed (a) in
two (2) disbursements at the request of VimpelCom, and (b) in the circumstance
described above in relation to the Citibank Guarantee, in a third, automatic
disbursement by Telenor (the "Mandatory Disbursement"). In the case of the first
two (2) disbursements, VimpelCom was entitled to request a disbursement by
submitting to Telenor an original application for disbursement (a "Disbursement
Application"). On June 29, 2000, Telenor made the first disbursement to
VimpelCom in the aggregate principal amount of US$15,000,000, upon VimpelCom's
submission of a Disbursement Application and fulfillment of conditions precedent
to this disbursement.
Under the terms of the Loan Agreement, VimpelCom was entitled to request at
any time from July 1, 2000 through August 31, 2000, the second disbursement in
the amount of US$35,000,000. However, under the terms of the Loan Agreement,
VimpelCom did not have the right to request the second disbursement unless (x)
VimpelCom had entered into a loan agreement with the Third Party Lender (the
"Third Party Lender Loan Agreement") and, prior to or simultaneously with its
request, VimpelCom had requested a loan from the Third Party Lender in an amount
not less than US$30,000,000 pursuant to such Third Party Lender Loan Agreement
and (y) VimpelCom had not made an offering or other disposition of New Shares,
New ADSs and/or Notes. Pursuant to a letter agreement dated July 5, 2000 (the
"Waiver Letter") between Telenor and VimpelCom, Telenor waived the condition
precedent to the second disbursement which would have required VimpelCom to have
borrowed US$30,000,000 from the Third Party Lender and certain other conditions
precedent. On July 6, 2000, Telenor made the second disbursement to VimpelCom in
the aggregate principal amount of US$35,000,000, upon VimpelCom's submission of
a Disbursement Application and fullfillment of the conditions precedent to the
second disbursement specified in the Waiver Letter and in the Loan Agreement
(other than those which were waived).
Mandatory Disbursement
The Loan Agreement provides that if the FSCM shall have failed to register
the report on the results of the issuance of New Shares to the Sellers within
thirty-five (35) days of VimpelCom's filing of such report, then Telenor shall
make a demand under the Citibank Guarantee. Telenor's demand shall be in an
amount equal to the sum of the amounts Telenor has agreed to pay the Sellers for
the New Shares, New ADSs and/or Notes under the Primary Agreement. Under the
terms of the Citibank Guarantee, Citibank will not be obligated to honor such
demand unless it has received irrevocable instructions from Telenor to disburse
an equivalent amount to VimpelCom under the Loan Agreement.
Suspension and Cancellation
10
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Telenor may suspend or cancel VimpelCom's right to the Mandatory
Disbursement only if (x) an Event of Default described in Section 7.01(d)
(Nationalization) or Section 7.01(e) (Bankruptcy) of the Loan Agreement has
occurred and is continuing or (y) the Mandatory Disbursement is to be made after
the Initial Maturity Date and the Loan has not been extended, as described under
"Description of Loan Agreement - Repayment."
Charges, Commissions and Fees
The Loan Agreement requires VimpelCom to pay to Telenor, on the Initial
Maturity Date, or if the term of the Loan is extended, January 27, 2001, (a) a
structuring fee of US$200,000, (b) a facility fee of US$600,000 and (c) if
Telenor makes the Mandatory Disbursement, a Further Advance Fee equal to the sum
of the Margin (as defined in the Loan Agreement and discussed herein) plus the
Interbank Rate (as defined in the Loan Agreement and discussed herein) for the
period from (and including) the closing of Telenor's purchase of New Shares, New
ADSs and/or Notes pursuant to the Primary Agreement to (but excluding) the date
on which Telenor made the Mandatory Disbursement to VimpelCom.
Interest
VimpelCom is obligated to pay interest on the principal amount of the Loans
from time to time outstanding during each Interest Period (as defined in the
Loan Agreement and discussed herein) at a rate equal to the sum of the Margin
plus the Interbank Rate for such Interest Period. The "Margin" is defined as
(a) 3.00% per annum until the Initial Maturity Date, or, if the Loan is
extended, until December 27, 2000, and (b) 5.00% per annum thereafter. The
"Interbank Rate" is defined as, for a particular Interest Period, the British
Bankers Association's offered rate for deposits in US dollars having a duration
of six (6) months which appears on page 3750 on Telerate (or such other page as
may replace page 3750) as of 11:00am London time, on the date that is two (2)
business days prior to the first day of such Interest Period. "Interest Period"
is defined as (a) a period commencing on the date of a disbursement and ending
on (i) the Initial Maturity Date, or if the Loan is extended, January 27, 2001,
and each anniversary thereof and (ii) each date falling six (6) months after
such date or (b) as the case may be, commencing on the last day of the previous
Interest Period and ending six (6) months thereafter.
Interest on the Loans shall be due and payable on (a) the Initial Maturity
Date, or if the Loan is extended, January 27, 2001, and each anniversary thereof
and (b) each date falling six (6) months after such date (each an "Interest
Payment Date"). Interest shall accrue from and including the first day of an
Interest Period to but excluding the last day of such Interest Period, be
calculated on the basis of the actual number of days elapsed and a 360-day year,
and be compounded at the end of each Interest Period unless paid on the relevant
Interest Payment Date.
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Telenor shall determine the interest rate applicable to the relevant
Interest Period on the date that is two (2) business days prior to the first day
of such Interest Period, and give notice thereof to VimpelCom.
Default Interest
If VimpelCom fails to pay when due any amount under the Loan Agreement, the
overdue amount shall bear interest at a rate equal to the sum of 7.00% per annum
plus the interest rate per annum offered in the London interbank market on the
date that is two (2) business days prior to the first day of the relevant
Default Interest Period (as defined in the Loan Agreement and discussed herein)
(or at Telenor's option, on the first day of the Default Interest Period) for a
deposit in US dollars of an amount comparable to the overdue amount for a period
equal to the relevant Default Interest Period, or, if Telenor determines that
deposits in US dollars are not being offered in the London interbank market in
such amounts or for such period, the cost to Telenor (expressed as a rate per
annum) of funding the overdue amount from whatever sources it selects. As used
in the Loan Agreement, "Default Interest Period" means, with respect to any
amount not paid when due under the Loan Agreement, the period commencing on the
day on which such payment becomes due, or as the case may be, the last day of
the previous such period with respect to such overdue amount, and ending on a
business day selected by Telenor.
Default interest shall be due and payable upon demand. Default interest
shall accrue from day to day from the due date to the date of actual payment,
after as well as before any arbitral award, judgment and/or court ruling, shall
be calculated on the basis of the actual number of days elapsed and a 360-day
year, and shall be compounded at the end of each Default Interest Period.
Repayment
VimpelCom is obligated to repay the Loans in full in a single installment
on the Initial Maturity Date. However, if VimpelCom receives a license from the
Central Bank of the Russian Federation authorizing payments under the Loan
Agreement to be made until January 27, 2001 or a later date (the "Central Bank
License"), VimpelCom's obligation to repay the Loans in full in a single
installment will be extended automatically to January 27, 2001.
Mandatory Prepayments
VimpelCom is obligated to repay the Loans in full, together with the fees
and all accrued interest and other amounts payable under the Loan Agreement at
least one (1) business day prior to the date of the closing of Telenor's
purchase of New Shares, New ADSs and/or Notes pursuant to the Primary Agreement.
Voluntary Prepayments
VimpelCom may prepay all or any part of the principal amount of the Loans
then outstanding on ten (10) days' notice to Telenor, provided that VimpelCom
pays Telenor at the same time all accrued interest, fees and other amounts
payable under the Loan Agreement, and, if VimpelCom makes a partial prepayment,
the partial prepayment is in an amount not less than US$5,000,000 and in
integral multiples of US$1,000,000.
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Conditions Precedent to Disbursement
Telenor's obligation to make the first disbursement of the Loans was
subject to the fulfillment of certain customary conditions precedent. As
discussed above, on June 29, 2000, VimpelCom fulfilled these conditions
precedent and borrowed the first disbursement of the Loans.
Telenor's obligation to make the second disbursement of the Loans was
subject to additional conditions precedent, including, among others (a) the
delivery of (i) executed originals of the Citibank Guarantee and (ii) an
agreement between Citibank, N.A. and VimpelCom (or an affiliate of VimpelCom)
pursuant to which Citibank will agree to lend VimpelCom or its affiliate at
least one (1) business day prior to the closing of Telenor's purchase of New
Shares, New ADSs and/or Notes pursuant to the Primary Agreement for a period
extending through such closing, an amount equal to the outstanding principal
amount of the Loans, fees, all accrued interest and other amounts payable under
the Loan Agreement (the "Citibank Agreement"), (b) the delivery of (i) certified
copies of the approval of the matters submitted for approval by the shareholders
at VimpelCom's annual general shareholders' meeting and the approval by the
Board of Directors of VimpelCom of the Third Party Lender Loan Agreement and
(ii) an agreement to be entered into between VimpelCom or an affiliate and the
Third Party Lender pursuant to which the Third Party Lender shall have the
option to purchase New Shares or New ADSs (the "Third Party Lender Agreement")
and (c) the Third Party Lender's disbursement to VimpelCom of not less than
US$30,000,000 under the Third Party Lender Loan Agreement. Pursuant to the
Waiver Letter, Telenor waived the conditions precedent to the second
disbursement referred to in clauses (a) (requiring delivery of the Citibank
Guarantee and the Citibank Agreement), (b) (requiring delivery of certain
approvals of VimpelCom's board of directors and shareholders) and (c) (requiring
VimpelCom to have borrowed US$30,000,000 from the Third Party Lender) above.
Under the terms of the Waiver Letter, Telenor required VimpelCom to provide
Telenor with the following additional items as conditions precedent to the
second disbursement: (a) a copy of the Third Party Lender Loan Agreement, duly
executed and delivered by the Third Party Lender and VimpelCom, (b) evidence
satisfactory to Telenor that VimpelCom had borrowed approximately US$50,000,000
under its credit facility with Sbergatelniy Bank, (c) a letter from Citibank
addressed to VimpelCom and Telenor confirming Citibank's intention to enter into
the Citibank Agreement and to provide the Citibank Guarantee and (d) a letter
from Ericsson Project Finans AB or AB Ericsson Finans (collectively, the
"Lessors") addressed to VimpelCom confirming that the Lessors would immediately
apply all amounts paid to them by VimpelCom under the lease agreements to which
they and VimpelCom are party (the "Lease Agreements") to the payment in full of
all amounts owed under a loan agreement to which the Lessors, ING Bank N.V. and
certain other lenders are party. These conditions precedent were fulfilled by
VimpelCom, and on July 6, 2000, Vimpelcom borrowed the second disbursement of
the Loans.
Affirmative Covenants
In the Loan Agreement, VimpelCom has undertaken to Telenor to perform and
comply with certain covenants, including the use of proceeds covenant described
above. VimpelCom has also undertaken to obtain the Central Bank License by the
date that is 120 calendar days after June 23, 2000 (which date will be October
21, 2000). VimpelCom has undertaken to take any and all action required to cause
the pledge order in respect of the shares of Common Stock to be pledged by the
Bee Line Fund as security for the Loans to be registered by Russian closed joint
stock company National Registry Company (the "NRC"), the shareholder registrar
of VimpelCom, on the earlier of (x) the date of any Event of Default and (y)
January 27, 2001, if the Loans have not been repaid in full by such date.
VimpelCom has undertaken to use its best efforts to issue or cause to be issued,
as the case may be, New Shares or New ADSs to the relevant Seller(s) and/or
Notes by a Seller on or before a date agreed on by VimpelCom and Telenor in an
amount sufficient for Telenor to exercise its rights in full under the Primary
Agreement.
To induce Telenor to waive certain of the conditions precedent to the
second disbursement of the Loans, VimpelCom made certain additional undertakings
to Telenor in the Waiver Letter, including undertaking to apply all of the
proceeds of the second disbursement to the payment of amounts owing under the
Lease Agreements and documents related thereto, together with taxes and interest
rate breakage costs payable as a consequence of the making of such payments.
VimpelCom undertook to provide Telenor with copies of the Citibank Agreement and
the Citibank Guarantee, copies of certain approvals of VimpelCom's shareholders
and board of directors and schedules of VimpelCom's assets which are and are not
subject to liens, each within a specified time period, and on an ongoing basis,
copies of correspondence and any new agreements with the Lessors or ING Bank
N.V. to which VimpelCom is also a party. VimpelCom also undertook to use its
best efforts to ensure that, as soon as possible and, in any event, no later
than July 31, 2000, a disbursement is made under the Third Party Lender Loan
Agreement in an amount not less than US$30,000,000. If such disbursement has not
been made on or prior to July 31, 2000, VimpelCom has agreed to provide Telenor
with additional security for the Loans in the form of domestic accounts
receivable of VimpelCom having a value at all times equal to one-half of the
unpaid principal amount of the Loans and all other amounts owing under the Loan
Agreement and to obtain the approval of the grant of such security interest from
the disinterested shareholders of VimpelCom.
Negative Covenants
In addition to its affirmative undertakings described above, in the Loan
Agreement, VimpelCom has undertaken to Telenor to refrain from taking certain
actions, including (a) declaring or paying dividends on its share capital
(subject to certain exceptions), (b) guaranteeing or becoming obligated for the
financial obligations of another person, except in connection with the debt of
any of VimpelCom's subsidiaries, (c) entering into any agreement whereby
VimpelCom's income or profits might be shared with another person
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(subject to certain exceptions), or entering into any management contracts
whereby VimpelCom's business or operations are managed by another person, (d)
making certain kinds of investments, including forming any new subsidiaries
(subject to certain exceptions) and making loans to other persons, except for
loans to subsidiaries and investments in short-term investment grade marketable
securities, (e) amending its charter (except for amendments required to comply
with applicable law), (f) issuing any shares other than the New Shares, (g)
prepaying any long-term debt (i.e., debt that has a repayment term of more than
one (1) year) (subject to certain exceptions), (h) selling or otherwise
disposing of all or a substantial part of its or its subsidiaries' assets
(provided that VimpelCom may sell less than 50% of its assets outside of the
City of Moscow and the Moscow Region) or (i) undertaking any merger,
consolidation or reorganization of VimpelCom or its subsidiaries, except for
mergers between VimpelCom and any subsidiary or between any of VimpelCom's
subsidiaries.
Events of Default
The Loan Agreement provides that each of the following events and
occurrences shall constitute an Event of Default:
(a) VimpelCom failing to pay when due any principal of, or interest on,
the Loans;
(b) VimpelCom or any other party (other than Telenor) failing to perform
in a timely manner any of its obligations under the Loan Agreement, the Primary
Agreement, the Purchase Agreement (as defined in the Primary Agreement and
discussed herein), the Citibank Agreement, the Citibank Guarantee, the
Guarantee, the Letter Agreement, the Third Party Lender Loan Agreement, the
Third Party Lender Agreement, the Share Pledge, or any Disbursement Application
(collectively, the "Financing Agreements") or any other agreement between
VimpelCom and Telenor, and, if capable of remedy, such failure to perform is
continuing for a period of thirty (30) days after Telenor has given VimpelCom
notice thereof;
(c) Any representation or warranty made or confirmed by VimpelCom, any
Seller or any of Dr. Zimin, the Bee Line Fund, and Glavsotkom L.L.C. in any
Financing Agreement being false or misleading when made or confirmed;
(d) The nationalization of all or any substantial part of the property or
other assets of VimpelCom or of its share capital;
(e) The occurrence of certain events relating to the bankruptcy,
liquidation or reorganization of VimpelCom, KB Impuls (a subsidiary of VimpelCom
through which VimpelCom holds its GSM-1800 licenses for the City of Moscow and
the Moscow Region) or any Seller;
(f) Any debt (subject to certain exceptions) of VimpelCom in an amount
exceeding US$5,000,000 (or such lesser amount, if any, as is specified in the
corresponding event of default provision in the Third Party Lender Loan
Agreement) is not paid when due, or a default of any material nature occurs
under any agreement pursuant to which there is outstanding any debt in an amount
exceeding US$5,000,000 (or such lesser amount, if any, as is specified in the
corresponding event of default provision in the Third Party Lender Loan
Agreement) and such default continues beyond any applicable period of grace, or
any such debt becomes due and payable prior to its maturity or is placed on
demand;
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(g) VimpelCom failing to obtain the Central Bank License by October 14,
2000 and such failure continuing for two (2) business days after October 21,
2000;
(h) VimpelCom failing to uphold its covenants to refrain from selling or
otherwise disposing of all or a substantial part of its or its subsidiaries'
assets (provided that VimpelCom may sell less than 50% of its assets outside of
the City of Moscow and the Moscow Region) or undertaking any merger
consolidation or reorganization of VimpelCom or its subsidiaries, except for
mergers between VimpelCom and any subsidiary or between any of VimpelCom's
subsidiaries; or
(i) Subject to certain exceptions, any circumstance or event occurring
after the date of the Loan Agreement, which, in the reasonable opinion of
Telenor, is likely to have a material adverse effect on the business, assets,
financial condition or results of operations of VimpelCom and its subsidiaries
taken as a whole, or upon VimpelCom's ability to perform its obligations under
the Loan Agreement or the Financing Agreements.
In addition, in the Waiver Letter, VimpelCom agreed that any breach of its
undertaking concerning the application of proceeds of the second disbursement,
its undertaking to use best efforts to ensure the disbursement of US$30,000,000
under the Third Party Lender Loan Agreement or its undertaking to provide
additional security for the Loans would constitute an Event of Default of the
type described in clause (b) above, unless VimpelCom had used its best efforts
to perform such undertakings and its breach was not due to its own action or
failure to act.
If any of the Events of Default described above occurs and is continuing,
then Telenor, at its option, may declare all or any portion of the principal of,
and interest accrued on the Loans (together with any other amounts accrued or
payable under the Loan Agreement) to be either (a) due and payable on demand or
(b) immediately due and payable without any further notice and without any
presentment, demand or protest of any kind. However, upon the occurrence of
certain events relating to the bankruptcy, liquidation or reorganization of
VimpelCom, KB Impuls or any Seller, then all principal of, and accrued interest
on, the Loans (together with the fees and any other amounts accrued or payable
under the Loan Agreement) shall automatically become due and payable without any
presentment, demand, protest or notice of any kind.
Termination
The Loan Agreement will continue in force until the date that Telenor's
obligation to make disbursements of Loans has terminated in accordance with the
terms of the Loan Agreement, or, if later, until all moneys payable under the
Loan Agreement have been paid in full.
Description of Primary Agreement
--------------------------------
Grant of Options
Under the Primary Agreement, the Sellers have granted Telenor (a) an
irrevocable option (the "Share Option") to purchase such number of New Shares or
New ADSs (the "Option Shares") as can be purchased at the Applicable Price (as
defined in the Primary Agreement and discussed herein) for an aggregate amount
equal to US$50,000,000 (or, if the aggregate amount of the disbursements under
the Loan Agreement is less than US$50,000,000 then the aggregate amount of the
disbursements) plus accrued interest and fees under the Loan Agreement and (b)
an irrevocable option (the "Note Option") to purchase such aggregate principal
amount of Notes (the "Option Notes") as can be purchased at the Applicable Price
for an aggregate amount equal to US$50,000,000 (or, if the aggregate amount of
the disbursements under the Loan Agreement is less than US$50,000,000, then the
aggregate amount of the disbursements), plus accrued interest and fees under the
Loan Agreement; provided, however, that Telenor will not be obligated to
exercise the Share Option and the Note Option together in an amount which
exceeds US$50,000,000 (or, if the aggregate amount of the disbursements under
the Loan Agreement is less than US$50,000,000, then the aggregate amount of the
disbursements) plus accrued interest and fees under the Loan Agreement.
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The Option Shares and the Option Notes are referred to herein,
collectively, as the "Option Securities." The Note Option and the Share Option
are referred to, herein, collectively as the "Securities Options."
The Share Option and the Note Option are subject to the following
conditions:
(i) if (A) the Loans plus accrued interest and fees are repaid in full
prior to the earlier of (1) any disposition by any Seller of any New Shares or
New ADSs and (2) a date agreed on by VimpelCom and Telenor, (B) one or more of
the Sellers undertakes a public offering in accordance with procedures customary
in underwritten securities offerings in the United States by issuers organized
under the laws of the Russian Federation (a "Public Offering") and (C) the Third
Party Lender has exercised its option under the Third Party Lender Agreement,
then (x) Telenor shall, subject to Telenor's obligation to refrain from owning
in excess of 25.72% of the shares of voting capital stock of VimpelCom (as
described herein under "Description of Primary Agreement - Limitation on
Telenor's ownership of voting capital stock of VimpelCom"), be entitled to
exercise the Share Option in respect of such number of Option Shares as can be
purchased at the Applicable Price for an aggregate amount equal to US$10,000,000
(or if the aggregate amount of the disbursements is less than US$10,000,000,
then such amount) plus accrued interest and fees under the Loan Agreement, (y)
if such Public Offering is a Public Offering of Notes, Telenor shall be entitled
to exercise the Note Option in respect of such aggregate principal amount of
Option Notes as can be purchased at the Applicable Price for an aggregate amount
equal to US$40,000,000 (or if the aggregate amount of disbursements under the
Loan Agreement is less than US$50,000,000, then the aggregate amount of such
disbursements minus US$10,000,000) and (z) if such Public Offering is a Public
Offering of New Shares or New ADSs, Telenor shall, subject to Telenor's
obligation to refrain from owning in excess of 25.72% of the shares of voting
capital stock of VimpelCom, be entitled to exercise the Share Option in respect
of such number of Option Shares as can be purchased at the Applicable Price for
an aggregate amount equal to US$40,000,000 (or if the aggregate amount of
disbursements under the Loan Agreement is less than US$50,000,000, then the
aggregate amount of such disbursements minus US$10,000,000);
(ii) if (A) the Loans plus accrued interest and fees are repaid in full
prior to the earlier of (1) any disposition by any Seller of any New Shares or
New ADSs and (2) a date agreed on by VimpelCom and Telenor, (B) one or more of
the Sellers undertakes a Public Offering and (C) the Third Party Lender has not
exercised its option under the Third Party Lender Agreement, then (x) if such
Public Offering is a Public Offering of Notes and New Shares or of Notes and New
ADSs Telenor shall be entitled to exercise the Note Option in respect of such
aggregate principal amount of Option Notes as can be purchased at the Applicable
Price for an aggregate amount equal to US$50,000,000 (or if the aggregate amount
of the disbursements under the Loan Agreement is less than US$50,000,000, then
the amount of such disbursements) plus accrued interest and fees under the Loan
Agreement, minus the aggregate amount, if any, of the Applicable Price of any
Option Shares for which Telenor is obligated to pay pursuant to clause (y) of
this paragraph, and (y) if such Public Offering is a Public Offering of New
Shares or New ADSs, Telenor shall, subject to Telenor's obligation to refrain
from owning in excess of 25.72% of the shares of voting capital stock of
VimpelCom, be entitled to exercise the Share Option in respect of such number of
Option Shares as can be purchased at the Applicable Price for an aggregate
amount equal to US$50,000,000 (or if the aggregate amount of the disbursements
under the Loan Agreement
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is less than US$50,000,000, then the amount of such disbursements) plus accrued
interest and fees, minus the aggregate amount, if any, of the Applicable Price
of any Option Notes for which Telenor is obligated to pay pursuant to clause (x)
of this paragraph; or
(iii) if (A) the Loans plus accrued interest and fees are repaid in full
prior to the earlier of (1) any disposition by any Seller of any New Shares or
New ADSs and (2) a date agreed on by VimpelCom and Telenor, (B) one or more of
the Sellers undertakes a Public Offering of Notes and (C) the Third Party Lender
has not exercised its option under the Third Party Lender Agreement, then
Telenor shall be entitled to exercise the Note Option in respect of such
aggregate principal amount of Option Notes as can be purchased at the Applicable
Price for an aggregate amount equal to US$50,000,000 (or if the aggregate amount
of the disbursements under the Loan Agreement is less than US$50,000,000, then
the amount of such disbursements) plus accrued interest and fees.
Russian law requires the Ministry for Anti-Monopoly Policy and Support for
Entrepreneurship of the Russian Federation (the "MAMP") to approve Telenor's
purchases of the New Shares, New ADSs and/or Notes. If the MAMP has not given
such approval on the date that is three (3) business days prior to the closing
of Telenor's purchase, then (i) Telenor shall have no obligation to purchase any
Option Securities, (ii) no Seller shall have any obligation to sell any Option
Securities, (iii) neither Telenor nor any Seller shall be in breach of the
Primary Agreement and (iv) the Sellers may proceed with a Public Offering of New
Shares, New ADSs and/or Notes(collectively, "Disposed Securities"). In addition,
if the Securities Options cannot be exercised because neither any New Shares,
any New ADSs nor any Notes have been issued to any Seller or any other person
prior to the termination of the Primary Agreement, no Seller shall be in breach
of the Primary Agreement as a result.
General Terms for Exercise of Securities Options
Section 2.03 of the Primary Agreement sets forth the general procedures for
exercising the Share Option and the Note Option. Procedures relating to the
exercise of the Share Option and the Note Option in special circumstances are
set out in other sections of the Primary Agreement, and discussed herein.
Subject to Telenor's obligation to refrain from owning in excess of 25.72%
of the shares of voting capital stock of VimpelCom, Telenor shall exercise the
Securities Options, if at all, in whole and not in part, provided, however, that
if the aggregate amount of Disposed Securities is less than the aggregate amount
of Option Notes and/or number of Option Shares which Telenor is entitled to
purchase under the Primary Agreement, then Telenor shall have the right to
exercise the Securities Options in part, in respect of all of the Option Notes
and/or Option Shares constituting Disposed Securities, and shall retain all of
its rights under the Securities Options with respect to such aggregate amount of
Option Notes and/or number of Option Shares as is equal to the difference
between the aggregate amount of Option Notes and/or number of Option Shares
which Telenor is entitled to purchase and the aggregate amount of Option Notes
and/or number of Option Shares constituting Disposed Securities. Telenor shall
notify the relevant Seller no later than the fourth business day following the
receipt of the Offer of Telenor's election (if applicable) to purchase the
Option Shares and/or the Option Notes, as the case may be (such notice, an
"Exercise Notice").
Other than as specifically required in the preceding paragraph, Telenor
shall not be under any obligation to send an Exercise Notice and may allow the
relevant Securities Option
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to expire without purchasing any Option Securities, provided, however, that once
Telenor has delivered to a Seller an Exercise Notice, Telenor shall be bound to
effect the purchase described in such Exercise Notice. However, under Russian
law, VimpelCom must file a placement report regarding the issuance of the New
Shares with the FCSM no earlier than two weeks after disclosure in the FCSM's
bulletin of the completion of the placement of the Option Securities. If within
thirty-five (35) days after the date of filing by VimpelCom of such placement
report with the FCSM the FCSM shall have failed to register such placement
report, (a) Telenor's Exercise Notice shall be rescinded and automatically
cancelled without the need for any further action by the parties, (b) Telenor
shall have no obligation to effect the purchase described in such Exercise
Notice and (c) any Securities Option purported to have been exercised pursuant
to such Exercise Notice shall be reinstated in full force and effect with
respect to all of the Option Securities referred to therein as if neither such
Exercise Notice nor the Offer related thereto have ever been executed and
delivered.
If Telenor is entitled to elect to exercise the Securities Options and does
not elect to exercise the Securities Options after having received a written
offer from a Seller, the relevant Seller shall have the right (subject to the
requirements for disposition of securities set forth in Section 5.02 of the
Primary Agreement and discussed herein) to sell the relevant Disposed Securities
not purchased by Telenor at a price not below the Applicable Price offered to
Telenor, within twenty-five (25) business days after the date of the written
offer. If the disposition of such Disposed Securities does not take place on
the conditions set forth in this paragraph, such Seller shall not sell or
otherwise transfer any such Disposed Securities without first offering them to
Telenor.
Limitation on Telenor's Ownership of Voting Capital Stock of VimpelCom
Telenor's right to exercise its Securities Options in respect of any Option
Shares shall be subject to Telenor's obligations under the Registration Rights
Agreement dated as of December 1, 1998 by and among VimpelCom, Telenor, Dr.
Zimin, Glavsotkom LLC and the Bee Line Fund, and the Letter Agreement. If by
exercising its Securities Options in whole in respect of any Option Shares
constituting Disposed Securities, Telenor's ownership of shares of voting
capital stock of VimpelCom would exceed 25.72% of the shares of voting capital
stock of VimpelCom, Telenor shall have the right to exercise the Securities
Option in part and shall retain all of its rights under the Securities Options
with respect to such number of Option Shares as is equal to the difference
between the aggregate number of Option Shares which Telenor is entitled to
purchase and the aggregate number of Option Shares purchased by Telenor pursuant
to such exercise of its Securities Options; provided that the exercise of such
rights shall in all cases remain subject to the obligations of Telenor under the
Registration Rights Agreement and Letter Agreement.
Mandatory Exercise of Securities Options
Section 2.04 of the Primary Agreement sets forth the conditions to, and
procedures for, the mandatory exercise of the Securities Options by Telenor.
If any Seller disposes of any Disposed Securities in a Public Offering on
or before a date agreed on by VimpelCom and Telenor, and if the conditions
precedent described in the next paragraph have been satisfied, Telenor shall be
required to exercise the Share Option and/or the Note Option, as the case may be
(a "Mandatory Exercise"), in accordance with the procedures set forth in Section
2.04 of the Primary Agreement.
The conditions precedent to Telenor's Mandatory Exercise are:
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(i) At least ten (10) business days prior to any disposition in relation
to such Public Offering, Telenor shall have received: (x) from VimpelCom, a
notice stating that VimpelCom expects, in good faith, to repay the Loans and the
Third Party Lender Loan, if any, at least one (1) business day prior to the date
of such Public Offering, and attaching a copy of a letter from Citibank, N.A.,
addressed to VimpelCom, the Sellers and Telenor, confirming that the Citibank
Agreement is in effect and that Citibank is not aware of any circumstances that
would prevent disbursement under the Citibank Agreement at least one (1)
business day prior to the Public Offering scheduled to take place as specified
in the Offer; and (y) from the relevant Seller(s), a notice entitled "Mandatory
Exercise of Option Requirement," which shall provide Telenor with all material
information with respect to the proposed disposition, state that each such
Seller requires the Mandatory Exercise of the relevant Securities Option and be
accompanied by (1) a copy of the notice of payment referred to in clause (x)
above and (2) copies of all of applicable regulatory consents and approvals;
(ii) At least six (6) business days prior to any disposition in
relation to such Public Offering, the relevant Seller(s) shall have satisfied
the conditions precedent described in Section 2.08(c), (e), (f), (g), (h), (j)
and (l) of the Primary Agreement, or such Seller shall have shown to Telenor's
satisfaction that such conditions precedent are capable of being satisfied on
the date of closing of Telenor's purchase; and
(iii) At least one (1) business day prior to any disposition in
relation to such Public Offering, all of the conditions precedent specified in
Section 2.08 of the Primary Agreement (to the extent not previously satisfied)
(other than the condition precedent specified in Section 2.08(n)) shall have
been satisfied or shall have been shown by such Seller (to the satisfaction of
Telenor) to be capable of being satisfied on the date of closing of Telenor's
purchase.
With respect to any Securities Option exercisable as part of or in
conjunction with a Public Offering (other than a purchase of New Shares
simultaneously with a Public Offering of Notes), the price per New Share, New
ADS or Note, as the case may be (the "Public Offering Price"), shall be, in the
case of any New ADSs and/or Notes, the price per New ADS or Note, respectively,
specified on the cover of the relevant prospectus for such New ADSs and/or
Notes, as applicable, and, in the case of any New Shares, the price per New ADS
specified on the cover of the relevant prospectus for such New ADSs, divided by
zero point seven five (0.75).
The closing of Telenor's purchase under the relevant Securities Option
shall take place on the date of the settlement of the Public Offering.
If Telenor has received a notice from VimpelCom stating that VimpelCom
expects, in good faith, to repay the Loans and the Third Party Lender Loan, if
any, at least one (1) business day prior to the date of the Public Offering, but
the repayment of the Loans under the Loan Agreement does not take place at least
one (1) business day prior to the Public Offering, no Seller shall proceed with
the proposed Public Offering or any subsequent Public Offering unless the
Sellers again comply with all the requirements for the Mandatory Exercise or the
requirements for the voluntary exercise of Securities Options in a Public
Offering (as described in the next section).
Voluntary Exercise of Securities Options in a Public Offering
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Section 2.05 of the Primary Agreement sets forth the conditions to and
procedures for the voluntary exercise by Telenor of the Securities Options in a
Public Offering.
If any Seller proposes to dispose of any Disposed Securities in a Public
Offering on or before a date agreed on by VimpelCom and Telenor but does not
send a notice of Mandatory Exercise, then such Seller shall nevertheless offer
the Option Securities to Telenor in accordance with Section 2.03(a) of the
Primary Agreement (General Terms for the Exercise of Securities Options) and
Section 2.04(c) and (e) of the Primary Agreement, (Mandatory Exercise of
Securities Offerings) at the Public Offering Price.
Exercise of Securities Options Other than in a Public Offering
Section 2.06 of the Primary Agreement sets forth the conditions to and
procedures for the mandatory exercise by Telenor of the Securities Options other
than in a Public Offering.
If any Seller proposes to dispose of any New Shares or New ADSs other than
in a Public Offering (and no Notes are being simultaneously disposed of in a
Public Offering), the Share Option shall be exercisable as follows:
(i) With respect to the Securities Option to be exercised in accordance
with this paragraph, the price per New Share or New ADS shall be the lower of
(A) the lowest price offered to any other purchaser and (B) the ADS-Based Price.
"ADS-Based Price" is defined as the lower of (a) the average quoted closing
price for ADSs of VimpelCom on the New York Stock Exchange ("NYSE") during the
last three (3) trading days prior to the third trading day prior to the payment
for the New Shares or New ADSs, and (b) the average quoted closing price for
ADSs of VimpelCom on the NYSE during the last thirty (30) trading days prior to
the third trading day prior to the purchase of the New Shares or New ADSs, and,
if such ADS-Based Price is being applied to a payment for New Shares, such ADS-
Based Price shall, in each case, be divided by zero point seven five (0.75).
(ii) The closing under the relevant Share Option shall take place on the
date specified in the relevant Exercise Notice, which date shall be no later
than ten (10) business days after the Exercise Notice.
If any Seller proposes to dispose of any New Shares or New ADSs other than
in a Public Offering (and Notes are being simultaneously disposed of in a Public
Offering), the Share Option shall be exercisable as follows:
(i) With respect to the Securities Option to be exercised in
accordance with this paragraph, the price per New Share or New ADS shall be the
lower of (A) the lowest price offered to any other purchaser and (B) the "base
price" per New Share or New ADS determined by the underwriter in connection with
its determination of the conversion rate for such Notes.
(ii) At least ten (10) business days prior to the date of the
disposition in such Public Offering of the Notes, the relevant Seller shall
notify Telenor in writing of such proposed disposition, provide Telenor with all
material information with respect to such proposed disposition, and offer in
writing to sell to Telenor the Option Shares at the Applicable Price.
Thereafter, Telenor and such Seller shall comply with their respective
obligations for a Mandatory Exercise.
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Exercise of Securities Option Other than in Connection with Disposition by
a Seller
Section 2.07 of the Primary Agreement sets forth the conditions to and
procedures for the exercise of the Securities Options by Telenor other than in
connection with a disposition by a Seller.
If (i) any Seller becomes the owner of any New Shares and, within one (1)
month following the registration of the report on the results of the issuance of
such New Shares with the FCSM, no disposition of such New Shares, New ADSs
and/or Notes occurs or (ii) the aggregate outstanding principal amount of the
Loans and all accrued interest and fees owing under the Loan Agreement have not
been repaid in full by VimpelCom and no disposition of the Option Securities has
occurred by January 27, 2001, the Share Option shall be exercisable as follows:
(i) Telenor shall, if, and to the extent any New Shares have been
issued to any Seller on or prior to such date, have the right to exercise the
Share Option, in whole or in part, at any time and/or from time to time, by
sending to such Seller a notice specifying that Telenor wishes to purchase the
Option Shares or any part thereof, the number of New Shares or New ADSs to be
purchased and the date, time and place of the closing of such purchase.
(ii) With respect to the Securities Option to be exercised in
accordance with Section 2.07, the price per New Share or New ADSs shall be the
ADS-Based Price.
Applicable Price
The Primary Agreement defines "Applicable Price" as (a) for a Securities
Option to be exercised in accordance with Section 2.04 or 2.05 of the Primary
Agreement, the Public Offering Price, (b) for a Securities Option to be
exercised in accordance with Section 2.06 of the Primary Agreement, the price
described in Section 2.06 and (c) for a Securities Option to be exercised in
accordance with Section 2.07 of the Primary Agreement, the ADS-Based Price.
Conditions to the Closing
Section 2.08 of the Primary Agreement sets out the conditions precedent to
the closing of Telenor's purchase of New Shares, New ADSs and/or Notes.
Telenor's obligation to send an Exercise Notice in respect of the Mandatory
Exercise under Section 2.04 of the Primary Agreement, or to purchase the Option
Securities at the closing upon Telenor's exercise of the relevant Securities
Option under Section 2.06 (Exercise of Securities Option Other than in a Public
Offering) or Section 2.07 (Exercise of Securities Option Other than in
Connection with a Disposition by a Seller) of the Primary Agreement, is subject
to the satisfaction of certain conditions by each Seller selling such Option
Securities, in addition to any other conditions that may be applicable in
accordance with Section 2.03 through Section 2.07 (inclusive) of the Primary
Agreement. These conditions precedent include, among others:
(a) The Loans and, if the Third Party Lender has exercised its option
under the Third Party Lender Agreement, the Third Party Lender Loan shall have
been repaid in full at least one (1) business day prior to the closing;
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(b) Each Seller shall have performed and complied with each of its
obligations under Article V of the Primary Agreement (discussed herein), and
VimpelCom shall have performed and complied with each of its obligations under
the Guarantee, the Primary Agreeement, the Loan Agreement and the other
Financing Agreements to which it is a party;
(c) Each of the other Principal Agreements (defined as the Primary
Agreement, the Loan Agreement, the Guarantee and the other Financing Agreements)
shall have been executed and delivered by the parties thereto other than
Telenor, and shall be in full force and effect;
(d) Telenor shall have received the MAMP Approval; and
(e) In the case of any Public Offering in which Telenor is purchasing
Option Securities, such Seller shall have delivered to Telenor (i) copies of all
legal opinions rendered by the general, special, in-house and any other legal
counsel of VimpelCom and/or such Seller in connection with such Public Offering,
(ii) copies of any documents delivered to the Underwriters of and/or investors
in such Public Offering by VimpelCom and/or such Seller and (iii) upon request
of Telenor, letters from such legal counsel and/or such Seller addressed to
Telenor, entitling Telenor to rely on such opinions and/or other documents, as
the case may be.
Covenants of the Sellers
In Article V of the Primary Agreement, the Sellers have undertaken to
Telenor to perform and comply with certain covenants. These covenants include,
among others:
(a) Designation of Sellers. No Seller shall designate any person as a
purchaser of any New Shares unless (i) such person is owned or controlled
directly or indirectly by VimpelCom, (ii) with certain exceptions, Telenor has
given its consent to such designation and (iii) such person becomes a party to
the Primary Agreement by executing an endorsement.
(b) Disposition of Securities. (i) No Seller shall dispose of any
Disposed Securities to any person other than Telenor for a price which is less
than the Applicable Price required to be offered to Telenor, unless (x) if
Telenor has not yet exercised the relevant Securities Option, such Seller first
offers the Option Securities to Telenor at such lower price in accordance with
the procedures set forth in the Primary Agreement or (y) if Telenor has already
purchased the Option Securities, Telenor shall have received, with respect to
each Option Security, the difference between the Applicable Price therefor paid
by Telenor and such lower price.
(ii) If the Third Party Lender shall have exercised its option under
the Third Party Lender Agreement, no Seller shall dispose of any Notes without
simultaneously disposing of the number of New Shares or New ADSs as equals or
exceeds the number of the Option Shares and offering Telenor an opportunity to
exercise the Note Option and the Share Option.
(iii) No Seller shall dispose of any New Shares or New ADSs or any
securities convertible into New Shares or New ADSs or any interests in or
affecting any New Shares or New ADSs, except in accordance with the terms and
conditions of the Primary Agreement.
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(iv) No Seller shall create any lien on or otherwise encumber any New
Shares or New ADSs, provided that a Seller may create liens on New Shares or New
ADSs for the benefit of an indenture trustee, issuing and paying agent or like
person appointed in relation to Notes exchangeable for such New Shares or New
ADSs and/or for the benefit of an affiliate of VimpelCom which is an issuer of
Notes and/or an affiliate of VimpelCom which is involved in the structuring of
the issuance of any New Shares, New ADSs and/or Notes exchangeable for New
Shares or New ADSs.
(v) No Seller shall grant any options to any person with respect to
any New Shares, New ADSs or the Notes, except for the options granted to
Telenor, and subject to certain other exceptions.
(c) Registration of Ownership; Reimbursement. (i) If the FCSM shall have
failed to register the issuance of any Option Securities purchased by Telenor
from any Seller, such Seller shall use its best efforts to cure any defect in
its report on issuance of such Option Securities within the time allotted for
such cure under applicable law.
(ii) If (A) any Seller has attempted to cure a defect in its report on
issuance in accordance with the preceding paragraph but has failed to cure such
defect (or such defect is not capable of cure), and (B) Telenor has made a
demand under the Citibank Guarantee and has not received all of the proceeds of
such demand or the Citibank Guarantee has been cancelled prior to the making of
such demand, then on or prior to the earlier of (x) two (2) business days after
the last day of any period provided under applicable law for the cure of such
defect and (y) thirty-five (35) days from the date of filing of such report on
issuance with the FCSM, such Seller shall reimburse to an account of Telenor the
aggregate amount paid by Telenor to such Seller for the Option Securities the
issuance of which the FCSM has failed to register.
Covenants of Telenor
In Article VI of the Primary Agreement, Telenor has undertaken to the
Sellers to perform and comply with certain covenants. These covenants include,
among others, to submit the application for approval to the MAMP for the
purchases contemplated in the Primary Agreement no later than thirty (30)
calendar days after June 23, 2000 (which date will be July 23, 2000). Telenor
has submitted such application to the MAMP.
Termination
The Primary Agreement shall terminate on the earlier of (a) the agreement
of the parties to terminate the Primary Agreement, (b) Telenor sending notice of
termination to VimpelCom, in its sole discretion, provided the conditions for
the Mandatory Exercise have not been satisfied on or before a date agreed on by
VimpelCom and Telenor and the Loans have not been repaid on or prior to such
date, and (c) June 30, 2001.
Effect of Primary Agreement for Purposes of Russian Law
Current Russian securities regulations prohibit issuers from concluding
agreements to place shares with a specific purchaser prior to the time the
shares have been registered with the FCSM. For this reason, the provisions of
the Primary Agreement are, solely for the
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purposes of compliance with Russian law, considered a preliminary agreement and
not a transaction involving securities. To satisfy the requirements of Russian
securities regulations, by virtue of entering into the Primary Agreement, (i) no
Seller shall be obligated to transfer any securities to Telenor or shall be
considered to have offered any securities to Telenor and (ii) Telenor shall not
be obligated to purchase any securities from any Seller or to make payment for
any securities. However, the actual transactions contemplated by the Primary
Agreement shall, for Russian law purposes, constitute transactions involving
securities, provided that in no event shall such transactions take place before
the registration of the issuance of such securities and the registration of the
placement report regarding such issuance with the FCSM and payment in full for
such securities by the Sellers.
Description of Share Pledge
---------------------------
Pledge
Under the Share Pledge, the Bee Line Fund has pledged 845,466 shares of
Common Stock (the "Pledged Shares"), and all rights in, to and under the Pledged
Shares as security for the prompt payment in full when due of the Secured
Obligations (the "Pledge"). The "Secured Obligations" are defined as (a) the
Loans made to VimpelCom in an aggregate amount of up to US$50,000,000, (b) the
Loan made to VimpelCom pursuant to the Mandatory Disbursement, (c) the
structuring fee of US$200,000 and the facility fee of US$600,000, (d) interest,
including default interest, (e) any other fees, charges penalties and damages
under, or incurred by Telenor in connection with the enforcement of, the Loan
Agreement, (f) any losses, penalties, fees, costs and damages incurred by
Telenor in connection with (i) any failure by any Seller to perform any of its
obligations under the Primary Agreement and the enforcement by Telenor of any of
its rights thereunder or (ii) any failure by VimpelCom to perform any of its
obligations under the Guarantee and the enforcement by Telenor of any of its
rights thereunder, and (g) the obligations of the Bee Line Fund to Telenor under
the Share Pledge.
Effectiveness of Pledge
The Pledge shall be (i) registrable by Telenor delivering to the NRC a
pledge order duly executed by the Bee Line Fund on the earlier of: (A) the
January 27, 2001 and (B) the date of the occurrence of an Event of Default
described in the Loan Agreement and (ii) fully enforceable by Telenor in
accordance with the terms of the Share Pledge from and after the earlier of such
dates.
Rights of Telenor
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Upon the occurrence of an Event of Default described in the Loan Agreement,
Telenor shall be entitled to exercise certain rights with respect to that
portion of the Pledged Shares which constitutes the Relevant Pledged Shares. The
"Relevant Pledged Shares" are defined as, as of the date of any payment of
dividends, the date of any vote of VimpelCom shareholders or the date of any
sale of Pledged Shares upon the occurrence of an Event of Default, such number
of Pledged Shares as is equal to the product of (a) the aggregate number of the
Pledged Shares on such date multiplied by (b) a fraction, the numerator of which
is the aggregate amount of the Secured Obligations on such date and the
denominator of which is US$50,000,000.
Upon the occurrence of an Event of Default:
(a) any and all dividends and other distributions accruing on or deriving
from the Relevant Pledged Shares which are thereafter paid or distributed
(notwithstanding that they may have accrued in respect of an earlier period)
shall:
(i) if received by the Bee Line Fund (or any nominee of the Bee Line Fund)
be held in trust and forthwith paid and transferred to Telenor; and
(ii) when and if received by Telenor (or its nominee), form part of the
Pledged Shares and be held by Telenor on the terms of the pledge as additional
security.
(b) Telenor may from time to time exercise all voting and other rights and
powers attached to the Relevant Pledged Shares in such manner as Telenor thinks
fit and the Bee Line Fund shall, and shall procure that any nominee of the Bee
Line Fund shall, comply with any such directions of Telenor; and
(c) Telenor shall be entitled to sell in accordance with applicable
Russian law the Relevant Pledged Shares.
Proceeds
All cash proceeds Telenor receives as result of the exercising its rights
under the Share Pledge shall be applied to make payments in the following order:
(a) the amount of all expenses, costs, demands for payment, obligations,
and the like paid, incurred, or presented for payment to Telenor in connection
with the exercise of its rights hereunder;
(b) all other obligations comprising Secured Obligations, in the order
determined by Telenor; and
(c) payments for the benefit of the Bee Line Fund if Telenor is not
required to make any payments in favor of any other person in accordance with
applicable law.
Actions Required to be Taken in Respect of Pledge
Prior to the first disbursement under the Loan Agreement, the Bee Line Fund is
required to:
(a) deliver to Telenor's counsel a fully completed and duly executed
pledge order;
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(b) execute and deliver to Telenor a description of the Pledged Shares;
(c) make a record in the Bee Line Fund's book of pledges with respect
to the existence of the Share Pledge (and deliver a certified copy of such
record to Telenor); and
(d) comply with any applicable notice requirements set forth in the Law of
the Russian Federation on Pledge.
Termination
The Share Pledge shall remain in effect until the earlier of (a) the date
on which all of the Secured Obligations have been repaid in full to the
satisfaction Telenor and (b) if no disbursements under the Loan Agreement are
made, the date of the suspension or cancellation by Telenor of VimpelCom's right
to any disbursement and the repayment in full of all accrued interest and fees
and other amounts owing under the Loan Agreement.
Description of the Guarantee
----------------------------
Guarantee
Under the Guarantee between VimpelCom and Telenor, VimpelCom has guaranteed
to Telenor the performance by each and all of the Sellers of each of their
respective obligations under the Primary Agreement (the "Guaranteed
Obligations"), and has agreed that if any Seller defaults in the performance of
any Guaranteed Obligations, VimpelCom shall pay to Telenor all damages, costs
and expenses that Telenor is entitled to recover from such Seller by reason of
such default.
No Limitation on Guarantee
The annual shareholders' meeting of VimpelCom which took place on June 30,
2000 approved the terms of the Guarantee and VimpelCom's execution of the
Guarantee by the number of votes required under Russian law for the adoption of
such resolution. Therefore, in accordance with Section 2.07 of the Guarantee,
the aggregate amount which VimpelCom may be required to pay under the Guarantee
is not limited to an amount equal to 1.9% of the book value of the assets of
VimpelCom calculated in accordance with Russian accounting principles.
Currency of Payment
Payments under the Guarantee shall be made in US dollars or, if VimpelCom
shall have failed to obtain a license from the Russian Federation Central Bank
authorizing VimpelCom to make payments to Telenor in US dollars under the
Guarantee (the "Guarantee Central Bank License"), in Rubles or in such other
currency as Telenor may choose.
VimpelCom shall apply for the Guarantee Central Bank License no later than
thirty (30) business days after June 23, 2000 (which date will be July 23,
2000), and VimpelCom
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shall use its best efforts to obtain the Guarantee Central Bank License within
one hundred and twenty (120) calendar days after June 23, 2000 (which date will
be October 21, 2000).
Description of the Letter Agreement
-----------------------------------
Under the Letter Agreement, VimpelCom, and each of Dr Zimin, Glavosotkom
LLC and the Bee Line Fund (each a "Significant Zimin Shareholder") have provided
certain waivers and consents with respect to the transaction documents (the
"Transaction Documents") executed in connection with Telenor's original purchase
of 25.72% of the voting capital stock of VimpelCom, as described in the
statement on Schedule 13D filed by Telenor and Telenor AS on December 10, 1998.
Among others things, VimpelCom and the Significant Zimin Shareholders have:
(a) consented to the acquisition by Telenor, at any time after Telenor's
shareholding in VimpelCom has decreased below its current shareholding, of
additional shares in VimpelCom such that Telenor's aggregate shareholding in
VimpelCom does not exceed 25.72% of the voting shares of VimpelCom;
(b) (i) waived any and all provisions in the Transaction Documents
conditioning any of Telenor's rights, obligations or remedies thereunder upon
its holding of at least 25% plus one (1) voting share in VimpelCom; and (ii)
agreed that any decrease of Telenor's shareholding below 25% plus one (1) voting
share shall not limit or otherwise impair any of Telenor's rights, obligations
and remedies under the Transaction Documents; provided that, in certain cases,
(x) Telenor continues to hold at least 20% of the voting shares in VimpelCom and
(y) any decrease of Telenor's shareholding below 25% plus one (1) voting share
is not the result of a transfer by Telenor of the shares of VimpelCom to a
person other than an affiliate of Telenor;
(c) consented to Telenor entering into the Primary Agreement and the
agreements and transactions contemplated thereby; and
(d) (i) agreed that nothing in the Transaction Documents shall prohibit
any purchase by Telenor (the "Note Purchase") of Notes; (ii) consented to such
Note Purchase and to the conversion of the Notes so acquired into the shares of
VimpelCom; (iii) agreed that neither such Note Purchase nor the conversion by
Telenor of such Notes shall affect, impair or otherwise limit any of Telenor's
rights, obligations or remedies under any of the Transaction Documents; and (iv)
agreed that Telenor shall have the right to dispose of such Notes without any
restriction whatsoever, except such restrictions as are mandated by applicable
law or as are applicable to all holders of Notes; provided that, in each case,
Telenor shall not (A) voluntarily convert Notes into shares of VimpelCom if,
after giving effect to such conversion, it would own more than 25.72% of the
voting shares of VimpelCom or (B) on the date of redemption or conversion of the
last Note, hold any Notes in excess of the amount of Notes which, after giving
effect to conversion of such Notes, would result in Telenor owning more than
25.72% of the voting shares of VimpelCom.
In addition, each of VimpelCom and the Significant Zimin Shareholders has
undertaken to Telenor to take certain actions.
VimpelCom has undertaken to Telenor:
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(a) (subject to the exercise of the fiduciary duties of its Board of
Directors in accordance with applicable law) to use its best efforts to effect
the offering of shares contemplated by the April 13, 2000 extraordinary
shareholders' meeting of VimpelCom, and to ensure that if and when VimpelCom
and/or any Seller proposes to offer securities and file a registration
statement with the United States Securities and Exchange Commission, in
consideration of the making of Loans by Telenor under the Loan Agreement and to
ensure repayment thereof, Telenor is offered an opportunity to purchase, in
accordance with the Primary Agreement, such number of shares of VimpelCom, ADSs
and/or Notes as to enable Telenor to retain Telenor's holding of at least 25.72%
of the voting shares of VimpelCom; and
(b) that (i) any New ADSs or any Notes purchased by Telenor in a Public
Offering shall be the subject of a registration statement which has been
declared effective under the Act on or prior to the date of their acquisition by
Telenor and (ii) any New ADSs, New Shares and/or Notes purchased by Telenor
pursuant to the Primary Agreement in an offering which is exempt from the
registration requirements of the Act shall constitute Registrable Securities (as
defined in the Registration Rights Agreement dated as of December 1, 1998 by and
among VimpelCom, Telenor, and the Significant Zimin Shareholders) and shall be
entitled to all benefits accruing to Registrable Securities under the
Registration Rights Agreement.
The Significant Zimin Shareholders have undertaken to Telenor that, during
the period from the date hereof until the date of termination of the
Shareholders Agreement dated as of December 1, 1998, and effective as to
Telenor, Dr. Zimin, and the Significant Zimin Shareholders, such Significant
Zimin Shareholder shall take any reasonable action necessary or required to
cause VimpelCom to comply with its undertakings in the Letter Agreement.
Disclaimer
----------
The preceding summary of certain provisions of the Loan Agreement, the
Primary Agreement, the Share Pledge, the Guarantee, and the Letter Agreement is
not intended to be complete and is qualified in its entirety by reference to the
full text of such agreements, copies of which are filed as Exhibits A, B, C, D
and E hereto, respectively, and which are incorporated herein by reference.
Item 5. Interest in Securities of the Issuer
------------------------------------
(a) and (b) If Telenor were to exercise in full the Securities
Options described in Item 4, and if VimpelCom were to complete a Public Offering
or private placement of the 5,199,600 New Shares that would remain after Telenor
exercised the Securities Options in full, Telenor would be the direct beneficial
owner of 10,702,601 shares of Common Stock of VimpelCom (comprising 8,902,201
shares of Common Stock Telenor currently holds directly, plus 1,800,400 shares
of Common Stock that would be acquired by Telenor upon full exercise of the
Securities Options), which would constitute 25.78% of the issued and outstanding
voting capital stock (30.51% of the issued and outstanding shares of Common
Stock) of VimpelCom.
In addition, if Telenor were to enforce its rights under the Share Pledge
following the occurrence of an Event of Default under the Loan Agreement,
Telenor would be the direct beneficial owner of the 845,466 shares of Common
Stock of VimpelCom subject to the
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Pledge. In such event, until Telenor sold the Pledged Shares at question in
accordance with Russian law and the terms of the Share Pledge, Telenor would be
the direct beneficial owner of an aggregate of 11,548,067 shares of Common Stock
of VimpelCom (comprising 8,902,201 shares of Common Stock Telenor currently
holds directly, plus 1,800,400 shares of Common Stock that would be acquired by
Telenor upon full exercise of the Securities Options, plus 845,466 shares of
Common Stock that would be acquired by Telenor upon enforcement of the Pledge),
which would constitute 27.82% of the outstanding voting capital stock (32.92% of
the outstanding Common Stock ) of VimpelCom.
If VimpelCom were to exercise its call option under Section 2.07 of the
Primary Agreement dated as of December 1, 1998 between VimpelCom and Telenor
(the "Initial Primary Agreement") in respect of all of the 275,809 shares of
Common Stock currently subject to such option, then Telenor's ownership interest
would be reduced to 25% plus one share of VimpelCom's total issued and
outstanding voting capital stock (assuming no enforcement of Telenor's rights
under the Share Pledge), or 27.15% of VimpelCom's total issued and outstanding
voting capital stock (assuming enforcement of Telenor's rights under the Share
Pledge).
Upon the exercise of the Securities Options, Telenor would have the sole
power to vote or direct the vote of, and the sole power to dispose or direct the
disposition of, the 10,702,601 shares of Common Stock, in the aggregate, that
would be retained by it upon such exercise, and upon the exercise of the
Securities Options and the enforcement of the Pledge, the sole power to vote or
direct the vote of, and the sole power to dispose or direct the disposition of,
the 11,548,067 shares of Common Stock, in the aggregate, that would be retained
by it upon such enforcement.
Augie K. Fabela ("Mr. Fabela") and Geneva Investment Trust I, L.L.C.
("Geneva") have ceased to be parties to the Shareholders Agreement dated as of
December 1, 1998 (the "Shareholders Agreement") by and among Telenor, Dr. Zimin,
Glavsotkom LLC, the Bee Line Fund, Mr. Fabela and Geneva, pursuant to Article VI
thereof. Accordingly, if Telenor were to exercise the Securities Options, a
total of 23,170,937 shares of Common Stock of VimpelCom would be subject to the
Shareholders Agreement, constituting in the aggregate approximately 55.68% of
VimpelCom's total issued and outstanding voting capital stock, after giving
effect to the issuance of all 7,000,000 New Shares. Because the Bee Line Fund is
a party to the Shareholders Agreement, the total number of shares of Common
Stock subject to the Shareholders Agreement would not change if Telenor were to
enforce its security interest under the Share Pledge, unless Telenor were to
sell such shares to a third party who is not a party to the Shareholders
Agreement. If Telenor were to sell all shares subject to the Share Pledge to
such a third party, then only 22,325,471 shares of Common Stock would be subject
to the Shareholders Agreement, constituting in the aggregate approximately
53.65% of VimpelCom's total issued and outstanding voting capital stock, after
giving effect to the issuance of all 7,000,000 New Shares. If VimpelCom were to
exercise its call option under the Initial Primary Agreement in respect of all
of the 250,000 shares of Common Stock currently subject to such option, then
only 22,920,937 shares of Common Stock would be subject to the Shareholders
Agreement, constituting in the aggregate approximately 55.08% of VimpelCom's
total issued and outstanding voting capital stock, after giving effect to the
issuance of all 7,000,000 New Shares. Neither the filing of this Amendment No. 6
nor any of its contents shall be deemed to constitute an admission that Telenor
or Telenor AS is the beneficial owner of any shares of voting capital stock of
VimpelCom (other than, solely in the case of Telenor, after the completion of
the transactions described in Item 4 above, 10,702,601 shares of Common Stock or
11,548,067 shares of Common Stock, as the case may be) for the purposes of
Section 13(d) of the Securities Exchange Act of 1934, as amended, or for any
other purpose, and such beneficial ownership is expressly disclaimed.
Telenor is a wholly owned subsidiary of Telenor AS, and, as a result,
Telenor AS may be deemed to be the indirect beneficial owner of the shares of
Common Stock of VimpelCom owned by Telenor. Neither the filing of this Amendment
No. 6 nor any of its contents shall be deemed to constitute an admission that
Telenor AS is the beneficial owner of the shares of VimpelCom held by Telenor
for the purposes of Section 13(d) of the Securities Exchange Act
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of 1934, as amended, or for any other purpose, and such beneficial ownership is
expressly disclaimed.
(c) Neither Telenor nor Telenor AS has effected any transactions in the
Common Stock of VimpelCom during the past sixty (60) days or since the filing of
the most recent amendment to this Statement on Schedule 13D, other than the
transactions described herein.
(d) Neither Telenor nor Telenor AS knows of any other person who has the
right to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the Common Stock of VimpelCom.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
------------------------------------------
Respect to Securities of the Issuer
-----------------------------------
Except as provided in the Loan Agreement, the Primary Agreement, the Share
Pledge, the Guarantee and the Letter Agreement, or as set forth herein, neither
Telenor nor Telenor AS, nor, to the best of Telenor's and Telenor AS's
knowledge, none of the individuals named in Item 2 hereof has entered into any
contracts, arrangements, understandings or relationships (legal or otherwise)
with any person with respect to any securities of VimpelCom, including, but not
limited to, transfer or voting of any securities, finder's fees, joint ventures,
loan or option arrangements, puts or calls, guarantees of profits, division of
profits or losses, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits
--------------------------------
1. Attached hereto as Exhibit "A" is a conformed copy of the Loan
Agreement dated as of June 23, 2000 between VimpelCom, as the
Borrower, and Telenor, as the Lender, with respect to the Loans.
2. Attached hereto as Exhibit "B" is a conformed copy of the Primary
Agreement dated as of June 23, 2000 between Telenor, as the
Purchaser, and the Sellers, with respect to the Securities
Options.
3. Attached hereto as Exhibit "C" is a conformed copy of the Share
Pledge dated June 23, 2000 between the Bee Line Fund, as the
Pledgor, and Telenor, as the Lender.
4. Attached hereto as Exhibit "D" is a conformed copy of the
Guarantee dated as of June 23, 2000 between VimpelCom, as the
Guarantor, and Telenor, as the Beneficiary.
5. Attached hereto as Exhibit "E" is a conformed copy of the Letter
Agreement dated June 23, 2000 by and among VimpelCom, Dr. Zimin,
Glavsotkom LLC, the Bee Line Fund and Telenor, with respect to
certain waivers and consents under the Transaction Documents.
6. Attached hereto as Exhibit "F" is a conformed copy of the Waiver
Letter dated July 5, 2000 between Telenor and VimpelCom with
respect to certain waivers and undertakings relating to the Loan
Agreement.
7. Attached hereto as Exhibit "G" is a conformed copy of the Power
of Attorney of Telenor in favor of Henrik Torgersen, dated June
13, 2000,
30
<PAGE>
authorizing Henrik Torgersen to execute on behalf of Telenor the
Loan Agreement, the Primary Agreement and other agreements
relating to the Loans and the Securities Options, and to take
other necessary actions with respect thereto.
31
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this amendment to the statement on
Schedule 13D is true, complete and correct and that such statement, as amended
hereby, is true, complete and correct.
Dated: July 6, 2000 TELENOR EAST INVEST AS
By /s/ Henrik Torgersen
-------------------------------
Henrik Torgersen
Attorney-in-Fact
TELENOR AS
By /s/ Tormod Hermansen
-------------------------------
Tormod Hermansen
President and
Chief Executive Officer
32
<PAGE>
Index to Exhibits
Exhibit A A conformed copy of the Loan Agreement dated as of June 23, 2000
between VimpelCom, as the Borrower, and Telenor, as the Lender,
with respect to the Loan.
Exhibit B A conformed copy of the Primary Agreement dated as of June 23,
2000 between Telenor, as the Purchaser, and the Sellers, with
respect to the Securities Options.
Exhibit C A conformed copy of the Share Pledge dated June 23, 2000 between
the Bee Line Fund as the Pledgor and Telenor as the Lender.
Exhibit D A conformed copy of the Guarantee dated as of June 23, 2000
between VimpelCom as the Guarantor and Telenor as the
Beneficiary.
Exhibit E A conformed copy of the Letter Agreement dated June 23, 2000 by
and among VimpelCom, Dr. Zimin, Glavsotkom LLC, the Bee Line Fund
and Telenor, with respect to certain waivers and consents under
the Transaction Documents.
Exhibit F A conformed copy of the Waiver Letter dated July 5, 2000 between
Telenor and VimpelCom with respect to certain waivers and
undertakings relating to the Loan Agreement.
Exhibit G A conformed copy of the Power of Attorney of Telenor in favor of
Henrik Torgersen, dated June 13, 2000, authorizing Henrik
Torgersen to execute on behalf of Telenor the Loan Agreement, the
Primary Agreement and other agreements relating to the Loans and
the Securities Options, and to take other necessary actions with
respect thereto.
