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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Netia Holdings S.A.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Shares, nominal value 6.00 PLN per share,
represented by American Depositary Shares
- --------------------------------------------------------------------------------
(Title of Class of Securities)
64114B 10 4
--------------------
(CUSIP Number)
Stephen Distler
E.M. Warburg, Pincus & Co., LLC
466 Lexington Avenue
New York, New York 10017
(212) 878-0600
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copies to:
Peter H. Jakes, Esq.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019-6099
(212) 728-8000
March 13, 2000
- --------------------------------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
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: [X]
- --------------------------------------------------------------------------------
<PAGE>
- --------------------- ------------------
CUSIP No. 64114B 10 4 13D Page 2 of 26 Pages
- --------------------- ------------------
- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Warburg, Pincus Equity Partners, L.P. I.D.# 13-3986317
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------- ------ ----------------------------------------------------
5 SOLE VOTING POWER
-0-
------ ----------------------------------------------------
NUMBER OF 6 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,381,442
OWNED BY
EACH ------ ----------------------------------------------------
REPORTING 7 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
------ ----------------------------------------------------
8 SHARED DISPOSITIVE POWER
1,381,442
- ---------- ---------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,381,442
- ---------- ---------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN
SHARES* [ ]
- ---------- ---------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
5.21%
- ---------- ---------------------------------------------------------------------
12 TYPE OF REPORTING PERSON*
PN
- ---------- ---------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
- --------------------- ------------------
CUSIP No. 64114B 10 4 13D Page 3 of 26 Pages
- --------------------- ------------------
- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Warburg, Pincus Ventures International, L.P. I.D.# NA
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Bermuda
- -------------------- ------ ----------------------------------------------------
5 SOLE VOTING POWER
-0-
------ ----------------------------------------------------
NUMBER OF 6 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,461,842
OWNED BY
EACH ------ ----------------------------------------------------
REPORTING 7 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
------ ----------------------------------------------------
8 SHARED DISPOSITIVE POWER
1,461,842
- ---------- ---------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,461,842
- ---------- ---------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN
SHARES* [ ]
- ---------- ---------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
5.51%
- ---------- ---------------------------------------------------------------------
12 TYPE OF REPORTING PERSON*
PN
- ---------- ---------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
- --------------------- ------------------
CUSIP No. 64114B 10 4 13D Page 4 of 26 Pages
- --------------------- ------------------
- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Warburg, Pincus & Co. I.D.# 13-6358475
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- -------------------- ------ ----------------------------------------------------
5 SOLE VOTING POWER
-0-
------ ----------------------------------------------------
NUMBER OF 6 SHARED VOTING POWER
SHARES
BENEFICIALLY 2,923,685
OWNED BY
EACH ------ ----------------------------------------------------
REPORTING 7 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
------ ----------------------------------------------------
8 SHARED DISPOSITIVE POWER
2,923,685
- ---------- ---------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,923,685
- ---------- ---------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN
SHARES* [ ]
- ---------- ---------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
11.03%
- ---------- ---------------------------------------------------------------------
12 TYPE OF REPORTING PERSON*
PN
- ---------- ---------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
- --------------------- ------------------
CUSIP No. 64114B 10 4 13D Page 5 of 26 Pages
- --------------------- ------------------
- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
E.M. Warburg, Pincus & Co., LLC I.D.# 13-3536050
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- -------------------- ------ ----------------------------------------------------
5 SOLE VOTING POWER
-0-
------ ----------------------------------------------------
NUMBER OF 6 SHARED VOTING POWER
SHARES
BENEFICIALLY 2,923,685
OWNED BY
EACH ------ ----------------------------------------------------
REPORTING 7 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
------ ----------------------------------------------------
8 SHARED DISPOSITIVE POWER
2,923,685
- ---------- ---------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,923,685
- ---------- ---------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN
SHARES* [ ]
- ---------- ---------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
11.03%
- ---------- ---------------------------------------------------------------------
12 TYPE OF REPORTING PERSON*
OO
- ---------- ---------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
This Schedule 13D is being filed on behalf of Warburg, Pincus Equity
Partners, L.P., a Delaware limited partnership ("WPEP"), Warburg, Pincus
Ventures International, L.P., a Bermuda limited partnership ("WPVI"), Warburg,
Pincus & Co., a New York general partnership ("WP"), and E.M. Warburg, Pincus &
Co., LLC, a New York limited liability company ("EMW" and, together with WPEP,
WPVI and WP, the "Reporting Entities"). This Schedule 13D relates to the common
shares, nominal value 6.00 PLN per share, of Netia Holdings S.A., a corporation
organized in Poland (the "Company"). Unless the context otherwise requires,
references herein to the "Common Stock" are to the common shares of Netia
Holdings S.A., nominal value 6.00 PLN per share. The holdings of Common Stock of
WP and EMW in this Schedule 13D include certain shares of Common Stock which may
be deemed to be beneficially owned by Warburg, Pincus Netherlands Equity
Partners I, C.V. ("WPNEPI"), Warburg, Pincus Netherlands Equity Partners II,
C.V. ("WPNEPII") and Warburg, Pincus Netherlands Equity Partners III, C.V.
("WPNEPIII" and, together with WPNEPI, WPNEPII, WPVI and WPEP, the "Investors").
WP, EMW and the Investors are referred to herein as the "Group Members."
The initial acquisition of the Common Stock by the Reporting Entities
occurred in May, 1999 prior to the time the Company had securities registered
under the Securities Exchange Act of 1934, as amended (the "Securities Exchange
Act") and was therefore reported on Schedule 13G, filed on February 11, 2000.
<PAGE>
Item 1. Security and Issuer.
This statement on Schedule 13D relates to the Common Stock of the Company,
and is being filed pursuant to Rule 13d-1 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The address of the principal executive
offices of the Company is ul. Poleczki 13, 02-822 Warsaw, Poland.
Item 2. Identity and Background.
(a) This statement is filed by the Reporting Entities. The Group Members
are deemed to be a group within the meaning of Rule 13d-5. The sole general
partner of each of the Investors is WP. EMW manages each of the Investors.
Lionel I. Pincus is the managing partner of WP and the managing member of EMW
and may be deemed to control both WP and EMW. The general partners of WP and the
members of EMW are described in Schedule I hereto.
(b) The address of the principal business and principal office of each of
the Reporting Entities is 466 Lexington Avenue, New York, New York 10017.
(c) The principal business of each of the Investors is that of a
partnership engaged in making venture capital and related investments. The
principal business of WP is acting as general
<PAGE>
partner of each of the Investors, Warburg, Pincus Ventures, L.P., Warburg Pincus
Investors, L.P. and Warburg, Pincus Capital Company, L.P. The principal business
of EMW is acting as manager of each of the Investors, Warburg, Pincus Ventures,
L.P., Warburg, Pincus Investors, L.P. and Warburg, Pincus Capital Company, L.P.
(d) None of the Reporting Entities, nor, to the best of their knowledge,
any of the directors, executive officers, general partners or members referred
to in paragraph (a) has, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) None of the Reporting Entities nor, to the best of their knowledge, any
of the directors, executive officers, general partners or members referred to in
paragraph (a) above has, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding 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.
(f) Except for WPNEPI, WPNEPII, WPNEPIII, which are organized under the
laws of The Netherlands, WPVI which is a Bermuda limited partnership, and except
as otherwise indicated on
<PAGE>
Schedule I hereto, each of the individuals referred to in paragraph (a) above is
a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration:
- ------- --------------------------------------------------
The total amount of funds required by the Investors to purchase the
securities of the Company as described herein was US$57,178,211.75 and was
furnished from the working capital of the Investors.
Item 4. Purpose of Transaction:
- ------- ----------------------
The purchases by the Investors of the securities of the Company as
described herein were effected because of the Reporting Entities' belief that
the Company represents an attractive investment based on the Company's business
prospects and strategy. Depending on prevailing market, economic and other
conditions, the Reporting Entities may from time to time acquire additional
shares of the Company or engage in discussions with the Company concerning
further acquisitions of shares of the Company or further investments by them in
the Company. The Reporting Entities intend to review their investment in the
Company on a continuing basis and, depending upon the price and availability of
shares of Common Stock, subsequent developments affecting the Company, the
Company's business and prospects, other investment and business opportunities
available to the Reporting Entities, general stock market and economic
conditions, tax considerations and other factors
<PAGE>
considered relevant, and may decide at any time to increase or to decrease the
size of their investment in the Company.
Except as set forth above, none of the Reporting Entities nor, to the best
of their knowledge, any person listed in Schedule I hereto, has any plans or
proposals which relate to or would result in: (a) the acquisition by any person
of additional securities of the Company, or the disposition of securities of the
Company; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the Company or any of
its subsidiaries; (d) any change in the present Board of Directors or management
of the Company, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board; (e) any material
change in the present capitalization or dividend policy of the Company; (f) any
other material change in the Company's business or corporate structure; (g)
changes in the Company's charter, By-laws or instruments corresponding thereto
or other actions which may impede the acquisition of control of the Company by
any person; (h) causing a class of securities of the Company to be delisted from
a national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) a class of equity securities of the Company becoming eligible for
termination of registration
<PAGE>
pursuant to Section 12(g)(4) of the Exchange Act; or (j) any action similar to
any of those enumerated above.
Item 5. Interest in Securities of the Issuer:
- ------ ------------------------------------
(a) WPEP - 1,381,442 (5.21%)
WPVI - 1,461,842 (5.51%)
WP - 2,923,685 (11.03%)
EMW - 2,923,685 (11.03%)
(b) WPEP:
----
Sole Voting Power - 0
Shared Voting Power - 1,381,442
Sole Dispositive Power - 0
Shared Dispositive Power - 1,381,442
WPVI:
----
Sole Voting Power - 0
Shared Voting Power - 1,461,842
Sole Dispositive Power - 0
Shared Dispositive Power - 1,461,842
WP:
--
Sole Voting Power - 0
Shared Voting Power - 2,923,685
Sole Dispositive Power - 0
Shared Dispositive Power - 2,923,685
EMW:
---
Sole Voting Power - 0
Shared Voting Power - 2,923,685
Sole Dispositive Power - 0
Shared Dispositive Power - 2,923,685
(c) On May 19, 1999, the Investors entered into a subscription agreement
(the "Subscription Agreement") with the Company for the purchase of 2,597,403
shares of Common Stock at a price of US$19.25 per share.
On February 29, 2000, WP entered into a Share Purchase Agreement with CIBC
World Markets for the purchase of 47,773 shares of Common Stock of the Company.
On that same date, Centralny Dom
<PAGE>
Maklerski (the "Brokerage House") entered into another Share Purchase Agreement
with and CIBC-Oppenheimer Corp. for the purchase of 278,509 shares of Common
Stock of the Company. These shares were purchased for the account of WP,
pursuant to a Service Agreement (the "Service Agreement") between the Brokerage
House and WP. The aggregate purchase price paid by WP for the shares was
US$7,178,204.
(d) Not Applicable
(e) Not Applicable
Item 6. Contracts, Arrangements, Understandings or
- ------- ------------------------------------------
Relationships with Respect to Securities of the
-----------------------------------------------
Issuer:
-------
Joint Filing Agreement:
----------------------
Pursuant to Rule 13d-1(k) promulgated under the Exchange Act, the Reporting
Entities have entered into an agreement with respect to the joint filing of this
statement, and any amendment or amendments hereto.
Post-IPO Shareholders' Agreement #1
-----------------------------------
The Investors entered into a Post-IPO Shareholders' Agreement #1 (the
"Shareholders' Agreement #1"), dated as of August 3, 1999, with certain
shareholders of the Company. The Shareholders' Agreement #1 grants certain
shareholders the right to appoint members to the supervisory board of the
Company. The Investors have the right (i) to appoint one member to the
supervisory board of the Company and (ii) to approve the nominee for chairman
and vice chairman of the supervisory board, provided that the Investors
<PAGE>
continue to own an aggregate amount of 5% of the outstanding voting securities.
The Investors have agreed to vote their shares in accordance with the terms of
the Shareholders' Agreement #1.
Post-IPO Shareholders' Agreement #1
-----------------------------------
The Investors have entered into a Post-IPO Shareholders' Agreement (the
"Shareholders' Agreement #2", and together with Shareholders' Agreement #1, the
"Shareholders' Agreements"), dated as of August 3, 1999, with certain
shareholders and the Company. The Shareholders' Agreement #2 contains a right of
first offer provision, which provides that any shareholder who is a party to the
Shareholder Agreement must notify all other parties if it intends to sell shares
of the Company. Upon such notification, each non-selling shareholder may elect
to purchase the shares on the terms offered to the selling shareholder. If none
of the parties makes an offer to purchase the shares, the selling shareholder
may sell the shares to a third party.
The parties to the Shareholders' Agreement agreed to cause the Company to
sell, transfer, spin-off or otherwise dispose of its non-telecommunications
businesses as soon as practicable after the IPO. The Shareholders' Agreement
also contains a non-competition provision whereby the parties agreed, subject to
certain exceptions, to refrain from investing, operating or managing any
telecommunications entity in the territory of the Republic of Poland.
<PAGE>
The foregoing summaries of the Shareholders' Agreements are qualified in
their entirety by reference to the Shareholders' Agreements, copies of which are
set forth as Exhibits 4 and 5.
Registration Rights Agreement
-----------------------------
The Investors have entered into a Registration Rights Agreement (the
"Registration Rights Agreement"), dated as of August 3, 1999, by and between the
Company, the Investors and the shareholders listed therein, granting the
Investors a total of seven demand registrations and unlimited "piggyback"
registrations of their shares under the Securities Act. The Registration Rights
Agreement contains procedures for initiating such registrations, as well as
exceptions to the Company's obligations. Subject to certain limitations
specified in the Registration Rights Agreement, the Company will pay all
expenses incidental to the registration.
The foregoing summary of the Registration Rights Agreement is qualified in
its entirety by reference to the Registration Rights Agreement, a copy of which
is set forth as Exhibit 6.
<PAGE>
The Share Purchase Agreement between WP and CIBC World Markets and the
Share Purchase Agreement among Centralny Dom Maklerski and CIBC-Oppenheimer
Corp., both dated as of February 29, 2000, and the Service Agreement are
described in Item 5(c), supra.
By virtue of the relationships among the Reporting Entities as described in
Item 2, the Reporting Entities may be deemed to be a "group" under the Federal
securities laws. Lionel I. Pincus disclaims any beneficial ownership of the
shares of Common Stock reported herein as being beneficially owned by the
Reporting Entities.
Item 7. Material to Be Filed as Exhibits:
- ------ --------------------------------
1. Joint Filing Agreement, dated as of March 17, 2000, by and among the
Reporting Entities.
2. Share Purchase Agreement, dated as of February 29, 2000, between WP and
CIBC World Markets.
3. Share Purchase Agreement, dated as of February 29, 2000, between
Centralny Dom Maklerski and CIBC-Oppenheimer Corp.
4. Shareholders' Agreement #1, dated as of August 3, 1999, by and between
the Company, the Reporting Entities and the shareholders listed therein.
5. Shareholders' Agreement #2, dated as of August 3, 1999, by and between
the Company, the Reporting Entities and the shareholders listed therein.
<PAGE>
6. Registration Rights Agreement, dated as of August 3, 1999, by and
between the Company, the Reporting Entities and the shareholders listed therein.
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 17, 2000
WARBURG, PINCUS EQUITY PARTNERS, L.P.
By: Warburg, Pincus & Co., General Partner
By: /S/ Stephen Distler
------------------------------
Stephen Distler, Partner
WARBURG, PINCUS VENTURES INTERNATIONAL, L.P.
By: Warburg, Pincus & Co., General Partner
By: /S/ Stephen Distler
------------------------------
Stephen Distler, Partner
WARBURG, PINCUS NETHERLANDS EQUITY
PARTNERS I, C.V.
By: Warburg, Pincus & Co., General Partner
By: /S/ Stephen Distler
------------------------------
Stephen Distler, Partner
WARBURG, PINCUS NETHERLANDS EQUITY
PARTNERS II, C.V.
By: Warburg, Pincus & Co., General Partner
By: /S/ Stephen Distler
------------------------------
Stephen Distler, Partner
<PAGE>
WARBURG, PINCUS NETHERLANDS EQUITY
PARTNERS III, C.V.
By: Warburg, Pincus & Co., General Partner
By: /S/ Stephen Distler
------------------------------
Stephen Distler, Partner
WARBURG, PINCUS & CO.
By: /S/ Stephen Distler
------------------------------
Stephen Distler, Partner
E.M. WARBURG, PINCUS & CO., LLC
By: /S/ Stephen Distler
------------------------------
Stephen Distler, Member
<PAGE>
SCHEDULE I
----------
Set forth below is the name, position and present principal occupation of
each of the general partners of WP and members of EMW. WP is the sole general
partner of WPEP, WPVI, WPNEPI, WPNEPII and WPNEPIII. Except as otherwise
indicated, the business address of each of such persons is 466 Lexington Avenue,
New York, New York 10017, and each of such persons is a citizen of the United
States.
GENERAL PARTNERS OF WP
----------------------
- ----------------------------- --------------------------------------------------
PRESENT PRINCIPAL OCCUPATION IN ADDITION
TO POSITION WITH WP, AND POSITIONS
NAME WITH THE REPORTING ENTITIES
- ----------------------------- --------------------------------------------------
Joel Ackerman Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Harold Brown Partner of WP; Member and Senior Managing
Director of EMW LLC
- ----------------------------- --------------------------------------------------
W. Bowman Cutter Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Cary J. Davis Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Stephen Distler Partner of WP; Member, Managing Director and
Treasurer of EMW LLC
- ----------------------------- --------------------------------------------------
Stewart K. P. Gross Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Patrick T. Hackett Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Jeffrey A. Harris Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
William H. Janeway Partner of WP; Member and Senior Managing
Director of EMW LLC
- ----------------------------- --------------------------------------------------
Douglas M. Karp Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Charles R. Kaye Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Henry Kressel Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Joseph P. Landy Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Sidney Lapidus Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Kewsong Lee Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Jonathan S. Leff Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Reuben S. Leibowitz Partner of WP; Member and Managing Director
of EMW LLC
<PAGE>
- ----------------------------- --------------------------------------------------
David E. Libowitz Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Nancy Martin Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Edward J. McKinley Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Rodman W. Moorhead III Partner of WP; Member and Senior Managing
Director of EMW LLC
- ----------------------------- --------------------------------------------------
Howard H. Newman Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Gary D. Nusbaum Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Dalip Pathak Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Lionel I. Pincus Managing Partner of WP; Managing Member,
Chairman of the Board and Chief Executive
Officer of EMW LLC
- ----------------------------- --------------------------------------------------
John D. Santoleri Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Henry B. Schact Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Steven G. Schneider Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
James E. Thomas Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
John L. Vogelstein Partner of WP; Member and Vice Chairman of
EMW LLC
- ----------------------------- --------------------------------------------------
Elizabeth H. Weatherman Partner of WP; Member and Managing Director
of EMW LLC
- ----------------------------- --------------------------------------------------
Pincus & Co.*
- ----------------------------- --------------------------------------------------
NL & Co.**
- ----------------------------- --------------------------------------------------
- ---------------------
* New York limited partnership; primary activity is ownership interest in WP
and EMW LLC.
** New York limited partnership; primary activity is ownership interest in WP.
As of 12/14/99
<PAGE>
MEMBERS OF EMW LLC
------------------
- ----------------------------- --------------------------------------------------
PRESENT PRINCIPAL OCCUPATION IN ADDITION
TO POSITION WITH EMW LLC, AND POSITIONS
WITH THE REPORTING ENTITIES
NAME
- ----------------------------- --------------------------------------------------
Joel Ackerman Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Frank M. Brochin (1) Member and Managing Director of EMW LLC
- ----------------------------- --------------------------------------------------
Harold Brown Member and Senior Managing Director of EMW
LLC; Partner of WP
- ----------------------------- --------------------------------------------------
W. Bowman Cutter Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Cary J. Davis Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Stephen Distler Member, Managing Director, and Treasurer of
EMW LLC; Partner of WP
- ----------------------------- --------------------------------------------------
Tetsuya Fukagawa (2) Member and Managing Director of EMW LLC
- ----------------------------- --------------------------------------------------
Stewart K. P. Gross Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Patrick T. Hackett Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Jeffrey A. Harris Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Roberto Italia (3) Member and Managing Director of EMW LLC
- ----------------------------- --------------------------------------------------
William H. Janeway Member and Senior Managing Director of EMW
LLC; Partner of WP
- ----------------------------- --------------------------------------------------
Douglas M. Karp Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Charles R. Kaye Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Henry Kressel Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Rajiv B. Lall (4) Member and Managing Director of EMW LLC
- ----------------------------- --------------------------------------------------
Joseph P. Landy Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Sidney Lapidus Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Jonathan S. Leff Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Kewsong Lee Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Reuben S. Leibowitz Member and Managing Director of EMW LLC;
Partner of WP
<PAGE>
- ----------------------------- --------------------------------------------------
David E. Libowitz Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Nicholas J. Lowcock (1) Member and Managing Director of EMW LLC
- ----------------------------- --------------------------------------------------
John W. MacIntosh (5) Member and Managing Director of EMW LLC
- ----------------------------- --------------------------------------------------
Nancy Martin Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Edward J. McKinley Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
James McNaught-Davis (1) Member and Managing Director of EMW LLC
- ----------------------------- --------------------------------------------------
Rodman W. Moorhead III Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Howard H. Newman Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Gary D. Nusbaum Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Dalip Pathak Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Lionel I. Pincus Managing Member, Chairman of the Board and
Chief Executive of EMW LLC; Managing
Partner of WP
- ----------------------------- --------------------------------------------------
John D. Santoleri Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Henry B. Schact Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Steven G. Schneider Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Dominic H. Shorthouse (1) Member and Managing Director of EMW LLC
- ----------------------------- --------------------------------------------------
Chang Q. Sun (6) Member and Managing Director of EMW LLC
- ----------------------------- --------------------------------------------------
James E. Thomas Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
John L. Vogelstein Member and Vice Chairman of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Elizabeth H. Weatherman Member and Managing Director of EMW LLC;
Partner of WP
- ----------------------------- --------------------------------------------------
Jeremy S. Young (1) Member and Managing Director of EMW LLC
- ----------------------------- --------------------------------------------------
Pincus & Co.*
- ----------------------------- --------------------------------------------------
- ---------------------
(1) - Citizen of United Kingdom
(2) - Citizen of Japan
(3) - Citizen of Italy
(4) - Citizen of India
(5) - Citizen of Canada
(6) - Citizen of China
<PAGE>
* New York limited partnership; primary activity is ownership interest in WP and
EMW LLC
As of 12/14/99
<PAGE>
Exhibit 1
JOINT FILING AGREEMENT
PURSUANT TO RULE 13d-1(k)(1)
The undersigned acknowledge and agree that the foregoing statement on
Schedule 13D is filed on behalf of each of the undersigned and that all
subsequent amendments to this statement on Schedule 13D shall be filed on behalf
of each of the undersigned without the necessity of filing additional joint
filing agreements. The undersigned acknowledge that each shall be responsible
for the timely filing of such amendments, and for the completeness and accuracy
of the information concerning it contained therein, but shall not be responsible
for the completeness and accuracy of the information concerning the others,
except to the extent that it knows or has reason to believe that such
information is inaccurate. This Agreement may be executed in any number of
counterparts and all of such counterparts taken together shall constitute one
and the same instrument.
Dated: March 17, 2000
WARBURG, PINCUS EQUITY PARTNERS, L.P.
By: Warburg, Pincus & Co., General Partner
By: /S/ Stephen Distler
------------------------------
Stephen Distler, Partner
WARBURG, PINCUS VENTURES INTERNATIONAL, L.P.
By: Warburg, Pincus & Co., General Partner
By: /S/ Stephen Distler
------------------------------
Stephen Distler, Partner
WARBURG, PINCUS NETHERLANDS EQUITY
PARTNERS I, C.V.
By: Warburg, Pincus & Co., General Partner
By: /S/ Stephen Distler
------------------------------
Stephen Distler, Partner
<PAGE>
WARBURG, PINCUS NETHERLANDS EQUITY
PARTNERS II, C.V.
By: Warburg, Pincus & Co., General Partner
By: /S/ Stephen Distler
------------------------------
Stephen Distler, Partner
WARBURG, PINCUS NETHERLANDS EQUITY
PARTNERS III, C.V.
By: Warburg, Pincus & Co., General Partner
By: /S/ Stephen Distler
------------------------------
Stephen Distler, Partner
WARBURG, PINCUS & CO.
By: /S/ Stephen Distler
------------------------------
Stephen Distler, Partner
E.M. WARBURG, PINCUS & CO., LLC
By: /S/ Stephen Distler
------------------------------
Stephen Distler, Member
<PAGE>
SHARE PURCHASE AGREEMENT
SHARE PURCHASE AGREEMENT, dated as of February 29, 2000, by and between CIBC
World Markets, a corporation with its seat of business in New York City, New
York, for itself and as agent for certain affiliated entities listed on Schedule
A hereto, represented by Mr. Howard Singer pursuant to a power of attorney dated
February 17, 2000, (the "Seller"), and
Warburg, Pincus & Co., a New York general partnership with its seat of business
in New York City, New York, represented by Mr. Stephen Distler, as nominee, (the
"Purchaser").
W I T N E S S E T H
-------------------
WHEREAS, the Purchaser wishes to purchase from the Seller the aggregate of
47,773 (Forty-seven Thousand Seven Hundred and Seventy-three) non-listed
Ordinary Shares, nominal value PLN 6.00 per share (the "Shares"), of Netia
Holdings S.A., a company organized under the laws of Poland (the "Company") for
the aggregate purchase price of US$1,051,006 (One Million Fifty-one Thousand and
Six U.S. Dollars)(the "Purchase Price");
WHEREAS, the Seller has deposited the Shares with Centralny Dom Maklerski PEKAO
S.A., a joint-stock company organized under the laws of Poland (the "Brokerage
House") and has resolved to effect the sale thereof to the Purchaser;
NOW, THEREFORE, in consideration of the following premises and the covenants
hereinafter contained, the Parties hereto, intending to be legally bound, hereby
agree as follows:
Section 1
The Share Purchase
------------------
1.1 Subject to the terms and conditions hereof, the Seller hereby sells and the
Purchaser hereby purchases (the "Purchase"), 47,773 (Forty-seven Thousand
Seven Hundred and Seventy-three) Shares.
1.2 The Seller hereby confirms that all Shares are deposited with the Brokerage
House.
1.3 The Purchase shall be effected by (i) the Purchaser's delivery to the
Seller by wire transfer of the Purchase Price and (ii) the execution by the
Seller of a transfer request addressed to the Brokerage House (the
"Transfer Request") in the form attached hereto as Exhibit 1.
Section 2
The Purchase Price
------------------
1
<PAGE>
2.1 The Purchase Price for the Shares shall be US$1,051,006 (One Million
Fifty-one Thousand and Six U.S. Dollars).
2.2 The Purchase Price shall be transferred to the Seller's account in:
Bank: Bank of New York
ABA#: 021-000-018
For credit to: CIBC-Oppenheimer Corp.
Account No.: 854-0904-1-4
Reference: Emerging Market Portfolio Group
Section 3
Transfer of Ownership Title
---------------------------
3.1. The transfer to the Purchaser of the ownership title to the Shares shall be
effected promptly upon the execution of this Agreement and receipt of the
Purchase Price by delivery by the Seller to the Brokerage House of (i) the
Transfer Request and (ii) an executed copy of this Agreement, with such
additional documents, powers of attorney, affidavits and other supporting
documents as the Brokerage House may reasonably request.
3.2 The Seller hereby transfers to, and for the benefit of, the Purchaser, any
and all rights that it has in connection with the ownership of the Shares.
Section 4
Termination
-----------
In the event that the Seller does not receive the Purchase Price when due
pursuant to Section 2.3 above, the Seller shall be authorized to terminate the
Agreement by delivering to the Purchaser a termination notice ("Notice") not
later than on the third business day immediately following the date of the
execution of this Agreement.
Section 5
Representations and Warranties of the Seller
--------------------------------------------
5.1. The Seller hereby represents and warrants to the Purchaser that
(i) the Seller is the sole beneficial owner of the Shares;
(ii) the Seller has full power and authority to enter into this Agreement
and to effect the Purchase hereunder;
(iii) the performance by the Seller of its obligations under this
Agreement does not contravene any laws or other obligations binding
on the Seller and, in particular, does not negatively affect the
rights of any third parties.
2
<PAGE>
5.2. The Seller represents and warrants that the sale of the Securities by the
Seller is not part of a plan or scheme to evade the registration
requirements of the U.S. Securities Act of 1933, as amended (the
"Securities Act")
Section 6
Representations of the Purchaser
--------------------------------
6.1. The Purchaser understands that the Shares are being offered and sold
pursuant to an exemption from registration under the Securities Act.
6.2. The Purchaser is acquiring the Shares solely for investment and not with a
view toward the resale, transfer or distribution thereof, nor with any
present intention of distributing the Shares.
6.3. The Purchaser is familiar with the business and operations of the Company
and has been given the opportunity to obtain from the Company all
information that it has requested regarding its business plans and
prospects.
Section 7
No Shared Expenses
------------------
The Seller shall not be responsible for any costs, expenses, Polish
government stamp duty taxes ("Stamp Duty Taxes") and other costs (including
legal expenses) or any other payments (collectively, "Transaction Costs")
arising as a result of the preparation, execution and performance of this
Agreement. The Purchaser shall pay, and save the Seller harmless from any and
all liabilities (including interest and penalties) with respect to, or resulting
from any delay or failure in paying, Stamp Duty Taxes, if any, which may be
payable or determined to be payable on the execution and delivery of this
Agreement.
Section 8
Notices
-------
All notices, requests, consents and other communications hereunder to any
Party shall be deemed sufficient if contained in a written instrument delivered
in person or send by registered mail, addressed to such Party at the respective
addresses set forth below:
CIBC World Markets
200 Liberty Street, 31st floor
New York, New York 10281
Attn.: Mr. Kevin Sesny
telecopy: (212) 667-6199
3
<PAGE>
Warburg, Pincus & Co. as nominee
466 Lexington Avenue
New York, New York 10017
Attn: General Counsel
telecopy (212) 878-9351
Section 9
Changes
-------
The terms and provisions of this Agreement may not be modified or amended,
and shall not be valid if so modified or amended, except pursuant to a written
instrument executed by the Parties.
Section 10
Further Assurances
------------------
From and after the date of the execution of this Agreement, the Seller
shall execute all certificates, instruments, documents or agreements and shall
take any other action which it is reasonably requested to execute or take to
further effectuate the transactions contemplated hereby.
Section 11
Confidential Information
------------------------
Each Party shall maintain in strict confidence any and all non-public
information that such Party may have received in the course of its performance
under this Agreement.
Section 12
Governing Law
-------------
This Agreement shall be governed by and construed in accordance with the
laws of Poland.
Section 13
Counterparts
------------
This Agreement was executed in two counterparts in the English language,
one for each of the Parties.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
4
<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Share Purchase Agreement as
of the day and year first above written.
CIBC WORLD MARKETS AS AGENT
By: _______________________
Name: Howard Singer
Title: Managing Director
WARBURG, PINCUS & CO. AS NOMINEE
By: _______________________
Name: Stephen Distler
Title: Partner
5
<PAGE>
SCHEDULE A
In performing its obligations pursuant to this Agreement, CIBC World Markets
shall act as an agent for the following affiliated entities:
1. Oppenheimer & Emerging Markets LP 21,515 Shares
2. Oppenheimer Emerging Markets Int. 18,663 Shares
3. Emerging Markets Partners LP 7,595 Shares
6
<PAGE>
EXHIBIT 1
TRANSFER REQUEST
February 29, 2000
Centralny Dom Maklerski Pekao S.A.
ul. Woloska 18
Warsaw, Poland
Attn.: Zespol Rejestru Emisji
Ladies and Gentlemen:
Reference is made hereby to that certain Share Purchase Agreement by and
between CIBC World Markets as agent for certain of its affiliated entities (the
"Seller") and Warburg, Pincus & Co. as nominee (the "Purchaser"), dated as of
February 29, 2000 (the "Purchase Agreement"), an executed copy of which is
attached hereto. All capitalized terms used herein but not defined are used as
defined in the Purchase Agreement.
1. CIBC World Markets (the "Seller") hereby confirms that it has directed
you, on its own account and on behalf of certain of its affiliated entities
listed on Schedule A to the Purchase Agreement (the "Affiliates"), to hold in
deposit 47,773 Ordinary Shares, nominal value of PLN 6.00 per share, of Netia
Holdings S.A (the "Shares").
2. The Seller hereby acknowledges that it has received the Purchase Price
from the Purchaser.
3. The Seller hereby irrevocably authorizes and directs you, for itself and
on behalf of the Affiliates, to transfer the ownership title or titles to the
Shares, as of the date of the execution of the Purchase Agreement, to the
account and for the benefit of the Purchaser.
Very truly yours,
CIBC WORLD MARKETS
By: ____________________
Name: Howard Singer
Title: Managing Director
7
<PAGE>
SHARE PURCHASE AGREEMENT
SHARE PURCHASE AGREEMENT, dated as of February 29, 2000, by and between
Centralny Dom Maklerski PEKAO S.A., a joint-stock company organized under the
laws of Poland with its business seat in Warsaw, Poland, ul. Woloska 18,
registered in the Commercial Register kept by the District Court for the Capital
City of Warsaw under number RHB 51152, the share capital of which amounts to PLN
181,715,800, represented by (i) Mr. Maciej Trybuchowski and (ii) Ms. Agnieszka
Bujalska, (the "Brokerage House"), and
CIBC-Oppenheimer Corp., a corporation organized and existing under the laws of
the State of New York, represented by Mr. Howard Singer as attorney-in-fact
acting on the basis of a power of attorney dated February 17, 2000, (the
"Seller").
W I T N E S S E T H
-------------------
WHEREAS, the Brokerage House, acting pursuant to the permit of the Securities
and Exchanges Commission dated as of June 25, 1999 is authorized to conduct
legal and business activities in connection with the sale by the Seller of
certain unlisted securities in the amount representing not less than 1% of all
votes at the general meeting of shareholders of the issuer of such securities;
WHEREAS, the Brokerage House has entered into that certain Service Agreement
with Warburg, Pincus & Co. as nominee (the "Mandator") with respect to
acquisition for the account of the Mandator non-listed 278,509 shares of Series
C common stock of Netia Holdings S.A., a company organized under the laws of
Poland with its seat in Warsaw, ul. Poleczki 13 ("Netia"), nominal value of PLN
6.00 per share; and
WHEREAS, the Seller deposited such shares with the Brokerage House and has
resolved to effect the sale thereof.
NOW, THEREFORE, in consideration of the following premises and the covenants
hereinafter contained, the Parties hereto, intending to be legally bound, hereby
agree as follows:
Section 1
The Share Purchase
------------------
1.1 The Seller hereby sells and the Brokerage House hereby purchases (the
"Purchase"), in its own name but for the account of the Mandator, 278,509
(Three Hundred Twenty-six Thousand Two Hundred and Eighty-two) shares of
Series C common stock of Netia Holdings S.A., a company organized under the
laws of Poland with its seat in Warsaw, ul. Poleczki 13 ("Netia"), nominal
value of PLN 6.00 per share (the "Shares").
1.2 Each of the Seller and the Brokerage House hereby confirms that all Shares
are deposited with the Brokerage House.
1
<PAGE>
Section 2
The Purchase Price
------------------
2.1 The aggregate purchase price (the "Purchase Price") for the 278,509 (Three
Hundred Twenty-six Thousand Two Hundred and Eighty-two) Shares shall be
US$6,127,198 (Seven Million One Hundred Seventy-eight Thousand Two Hundred
and Four U.S. Dollars).
2.2 The Purchase Price shall be transferred to the Seller's account in:
Bank: Bank of New York
ABA#: 021-000-018
For credit to: CIBC-Oppenheimer Corp.
Account No.: 854-0904-104
Reference: Emerging Market Portfolio Group
2.3. As set forth in the Service Agreement, the payment of the Purchase Price
shall be at the order of the Brokerage House made directly by the Mandator
on the date of this Agreement by 5:00 p.m. New York City time on February
29, 2000 or as soon as practicable thereafter ("Payment Date"), by wire
transfer.
Section 3
Transfer of Ownership Title
---------------------------
3.1. The transfer to the Brokerage House of the ownership title to the Shares
shall be effected as of the date of the execution of this Agreement.
3.2 The Seller hereby transfers to, and for the benefit of, the Brokerage
House, any and all rights that it has in connection with the ownership of
the Shares.
Section 4
Termination
-----------
If the Seller does not receive the Purchase Price when due pursuant to
Section 2.3 above, the Seller shall be authorized to terminate the Agreement in
accordance with Article 492 of the Civil Code by delivering to the Brokerage
House a termination notice ("Notice") not later than within three business days
after the date of the execution of this Agreement. Upon receipt of the Notice,
the Brokerage House shall immediately transfer back the ownership title to the
Shares to the Seller.
2
<PAGE>
Section 5
Representations and Warranties of the Seller; Brokerage House's Disclaimers
---------------------------------------------------------------------------
5.1. The Seller hereby represents and warrants to the Brokerage House that (i)
the Seller is the sole beneficial owner of the Shares, and (ii) the Seller
has full power and authority to enter into this Agreement and to effect the
Purchase hereunder.
5.2. The Seller hereby represents and warrants to the Brokerage House that the
Purchase does not contravene any laws or other obligations binding on the
Seller and, in particular, does not negatively affect the rights of any
third parties.
5.3 The Brokerage House hereby disclaims any and all responsibility for any
legal defects of the Shares being sold pursuant to this Agreement.
5.4. The Brokerage House hereby disclaims any responsibility for any tax
consequences that may affect for the Seller or any other party as a result
of the execution and performance of this Agreement.
Section 6
No Shared Expenses
------------------
The Brokerage House shall not be responsible for any costs, expenses (including
legal expenses) or any other payments (collectively, "Transaction Costs")
arising as a result of the preparation, execution and performance of this
Agreement.
Section 7
Notices
-------
All notices, requests, consents and other communications hereunder to any
Party shall be deemed sufficient if contained in a written instrument delivered
in person or send by registered mail, addressed to such Party at the respective
addresses set forth below:
Centralny Dom Maklerski PEKAO S.A.
ul. Woloska 18
02-675 Warsaw, Poland
Attn.: Zespol Rejestru Emisji
telecopy: (48 22) 640-2819
CIBC-Oppenheimer Corp.
200 Liberty Street, 31st Floor
New York, New York 10281
Attn.: Mr. Kevin Sesny
telecopy: (1 212) 667-6199
3
<PAGE>
Section 8
Changes
-------
The terms and provisions of this Agreement may not be modified or amended,
and shall not be valid if so modified or amended, except pursuant to a written
instrument executed by the Parties.
Section 9
Confidential Information
------------------------
Each Party shall maintain in strict confidence any and all non-public
information that such Party may have received in the course of its performance
under this Agreement.
Section 10
Governing Law; Dispute Resolution
---------------------------------
10.1. This Agreement shall be governed by and construed in accordance with the
laws of Poland.
10.2. Any and all disputes with regard to this Agreement shall be submitted by
the Parties for settlement by the Court of Arbitration at the National
Chamber of Commerce in Warsaw, Poland, in accordance with the rules of such
Court.
Section 11
Counterparts
------------
This Agreement was executed in two counterparts in the English language,
each with an attached certified English translation, one for each of the
Parties.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
4
<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Share Purchase Agreement as
of the day and year first above written.
CIBC OPPENHEIMER
By: _______________________
Name: Howard Singer
Title: Managing Director
CENTRALNY DOM MAKLERSKI PEKAO S.A.
By: _______________________
Name:
Title:
5
<PAGE>
POST-IPO SHAREHOLDERS' AGREEMENT # 1
THIS POST-IPO SHAREHOLDERS' AGREEMENT # 1 (this "Agreement") is made and
entered into on and as of -, 1999 by and among (i) NETIA HOLDINGS S.A.,
(formerly R.P. Telekom S.A.), a company organized and existing under the laws of
the Republic of Poland with its headquarters at ul. Poleczki 13, 02-822 Warsaw.
Poland (the "Company"), (ii) DANKNER INVESTMENTS LIMITED, a public company
incorporated under the laws of Israel ("Dankner"), (iii) TREFOIL CAPITAL
INVESTORS L.P., a limited partnership organized under the laws of Delaware
("Trefoil"), (iv) SHAMROCK HOLDINGS, INC., a corporation organized under the
laws of Texas ("Shamrock"), (v) TELIA AB (publ.), a company organized under the
laws of the Kingdom of Sweden ("Telia") and (vi) (a) WARBURG, PINCUS EQUITY
PARTNERS, L.P., a Delaware limited partnership ("WPEP"), (b) WARBURG, PINCUS
VENTURES INTERNATIONAL, L.P., a Bermuda limited partnership ("WPVI"), (c)
WARBURG PINCUS NETHERLANDS EQUITY PARTNERS 1, C.V., a Dutch limited partnership
("WPNE I"), (d) WARBURG PINCUS NETHERLANDS EQUITY PARTNERS 11, C.V., a Dutch
limited partnership ("WPNE II") and (e) WARBURG PINCUS NETHERLANDS EQUITY
PARTNERS 111, C.V., a Dutch Limited partnership ("WPNE III" and, together with
WPEP, WPVI, WPNE I and WPNE 11, the "WP Entities" and each individually a "WP
Entity"). Dankner, Trefoil, Shamrock, Telia and the WP Entities are collectively
referred to as the "Shareholders" and each individually a "Shareholder", and the
Company and the Shareholders are collectively referred to as the "Parties" and
each individually a "Party".
WITNESSETH
WHEREAS, the Company, Dankner, Trefoil, Shamrock, GS Capital Partners L.P.,
Stone Street Fund 1994, L.P., Bridge Street Fund 1994, L.P. (the latter three
parties collectively referred to as the "GS Entities"), Telia and the WP
Entities are parties to a Pre-IPO Shareholders' Agreement, dated as of .., 1999
(the "Pre-IPO Shareholders' Agreement"), pursuant to which the Parties have
agreed, among other things, to enter into a Post-IPO Shareholders' Agreement # I
and a Post-IPO Shareholders' Agreement # 2 upon the occurrence of the Initial
Public Offering, as defined therein, to set forth herein their mutual
understandings regarding the relations among them, and their respective rights
and obligations, with respect to the Company;
WHEREAS, the Initial Public Offering, as defined in the Pre-IPO
Shareholders' Agreement, has been completed;
NOW, THEREFORE, in consideration of the promises and mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
<PAGE>
1. MANAGEMENT OF THE COMPANY AND ITS SUBSIDIARIES
1.1 Management of the Company. The statutes of the Company shall be amended
and restated in substantially the form attached hereto as Exhibit A (the
"Post-IPO Statute"), and shall provide for both a management board and a
supervisory board, the composition of which shall be established according to
the Post-IPO Statute and representation on which shall be established in
accordance with this Section 1.1 and the Polish Commercial Code.
1.1.1. Supervisory Board. The supervisory board of the Company (the
"Supervisory Board") shall consist of eleven (11) members, subject to
adjustment as provided below, and shall be organized, have responsibilities
and be designated in accordance with the following:
(a) Representation on the Supervisory Board.
(i) The DTG Supervisory Board Members.
(A) As long as any one or all of Dankner, Trefoil,
Shamrock and the GS Entities (collectively, the "DT
Shareholders") and their Permitted Controlled Affiliate
Transferees (as defined herein), in the aggregate, own
Shares of the Company ("Shares") constituting ten percent
(10%) or more of the outstanding voting securities, then
Dankner, Trefoil and Shamrock, acting together, shall have
the right to appoint three (3) members of the Supervisory
Board (the "Dankner/Shamrock Supervisory Board Members").
(B) As long as the DT Shareholders and their Permitted
Controlled Affiliate Transferees, in the aggregate, own
Shares constituting five percent (5%) or more, but less than
ten percent (10%), of the outstanding voting securities of
the Company, then the Dankner, Trefoil and Shamrock, acting
together, shall have the right to appoint two (2)
Dankner/Shamrock Supervisory Board Members.
(ii) The Telia Supervisory Board Members.
(A) As long as Telia and its Permitted Controlled
Affiliate Transferees own Shares constituting ten percent
(10%) or more of the outstanding voting securities of the
Company, then Telia shall have the right to appoint three
(3) members of the Supervisory Board (the "Telia Supervisory
Board Members").
(B) As long as Telia and its Permitted Controlled
Affiliate Transferees own Shares constituting five percent
(5%) or more, but less than ten percent (I 0%), of the
outstanding voting
-2-
<PAGE>
securities of the Company, then Telia shall have the right
to appoint two (2) Telia Supervisory Board Members.
(iii) The WP Supervisory Board Members.
As long as the WP Entities and their Permitted
Controlled Affiliate Transferees, in the aggregate, own
Shares constituting five percent (5%) or more of the
outstanding voting securities of the Company, then the WP
Entities shall have the right to appoint one (1) member of
the Supervisory Board (the "WP Supervisory Board Member").
(iv) If at any time the Shares owned by (A) the DT
Shareholders and their Permitted Controlled Affiliate
Transferees, (13) Telia and its Permitted Controlled Affiliate
Transferees, or (C) the WP Entities and their Permitted
Controlled Affiliate Transferees, respectively, decreases for any
reason to less than five percent (5%) of the outstanding voting
securities of the Company, then from such time, the DT
Shareholders, Telia or the WP Entities, as the case may be, shall
cease to have the right to appoint, respectively, any
Dankner/Shamrock Supervisory Board Members, Telia Supervisory
Board Members or WP Supervisory Board Member or to participate in
the appointment of the Jointly-Agreed Supervisory Board Member
referred to in Clause (v) below.
(v) The remaining four (4) members of the Supervisory Board
shall be elected by the General Assembly of the Company's
shareholders (the "General Assembly"), provided, that, as long as
the WP Entities and their Permitted Controlled Affiliate
Transferees, in the aggregate, respectively, own Shares
constituting five percent (5%) of the outstanding voting
securities of the Company, then the DT Shareholders, Telia and
the WP Entities shall each be entitled to put forth potential
candidates and shall jointly have the right to appoint one (1)
such Supervisory Board Member (the "Jointly-Agreed Supervisory
Board Member"), it being their intention to appoint a person with
experience and expertise in international telecommunications
activities and it being agreed that the initial Jointly-Agreed
Supervisory Board Member shall be Mr. David Oertle and all
remaining members (except for one (1) member who may be appointed
by certain holders of Series A shares pursuant to the Company's
existing statutes) shall be "independent" (the "Independent
Directors"), a member of the Supervisory Board shall not be
deemed to be "independent" if he or she (A) is an executive
officer of the Company or any of its subsidiaries or of any
Affiliate (as defined below) of the Company or is a member of the
immediate family (or has a similar relationship) with any such
person, (13) has a business or professional relationship with the
Company or any of its subsidiaries that is material to the
Company or such person, or (C) has an ongoing business or
professional relationship with the Company or any of its
subsidiaries, whether or not material in an economic sense, that
involves continued dealings with management of the Company such
as the relationship between the Company and its investment
bankers or legal counsel.
-3-
<PAGE>
(vi) If the number of supervisory board members which the
relevant Shareholders have the right to appoint is reduced by
operation of clauses (i)(B), (ii)(B), (iii) or (iv) above, then
(A) the Shareholder(s) having the right to appoint such directors
shall promptly take all action necessary to remove the number of
their Supervisory Board appointees so as to comply with this
Section 1. 1. 1, and (B) any vacancies created by such removals
shall be filled by the General Assembly.
(vii) If at any meeting of the Company's shareholders at
which members of the Supervisory Board are to be elected, "block
voting" procedures provided under the Polish Commercial Code are
required to be implemented, the Shareholders will vote all Shares
held by them in favor of their respective nominees so as to
preserve as closely as possible the proportionate representation
provided in this Section 1. 1. 1.
(b) Chairman; Vice-Chairman
(i) As long as Telia and its Permitted Controlled Affiliate
Transferees own Shares constituting twenty percent (20%) or more
of the outstanding voting securities of the Company, the Chairman
of the Supervisory Board shall be appointed by Telia; provided
that such selection is approved by Dankner, Trefoil and Shamrock,
acting together, on the one hand, and the WP Entities, acting
together, on the other hand, such approval not to be unreasonably
withheld. The Chairman shall have the power to cast the deciding
vote in the event of a deadlock among the members of the
Supervisory Board. In addition, the Chairman shall have the right
to call or preside over meetings of the Supervisory Board and
other procedural rights normally associated with such office.
Approval by the DT Shareholders of the selection of the Chairman
will be required only for so long as they and their Permitted
Controlled Affiliates Transferees, in the aggregate, hold Shares
constituting five percent (5%) or more of the outstanding voting
securities of the Company, and approval by the WP Entities of the
selection of the Chairman will be required only for so long as
the WP Entities and their Permitted Controlled Affiliates, in the
aggregate, own Shares constituting five percent (5%) or more of
the outstanding voting securities of the Company.
(ii) As long as the DT Shareholders and their Permitted
Controlled Affiliate Transferees own Shares constituting twenty
percent (20%) or more of the outstanding voting securities of the
Company, the Vice Chairman of the Supervisory Board shall be
appointed by Dankner, Trefoil and Shamrock, acting together;
provided that such selection is approved by Telia, on the one
hand, and the WP Entities, acting together, on the other hand,
such approval not to be unreasonably withheld. The Vice Chairman
shall not have the power to cast any "deciding votes" or
otherwise exercise any other extraordinary powers, other than the
right to call or preside over meetings of the Supervisory Board
when the Chairman is not present and other procedural rights
normally associated with such
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<PAGE>
office. Approval by Telia of the selection of the Vice Chairman
will be required only for so long as Telia and its Permitted
Controlled Affiliates own Shares constituting five percent (5%)
or more of the outstanding voting securities of the Company, and
approval by the WP Entities of the selection of the Vice Chairman
will be required only for so long as the WP Entities and their
Permitted Controlled Affiliates, in the aggregate, own Shares
constituting five percent (5%) or more of the outstanding voting
securities of the Company.
(c) Intentionally omitted
(d) Powers and Responsibilities.
(i) The powers and responsibilities of the Supervisory Board
shall be as set forth in this Section 1. 1. I (d) of this Section
1. 1. I and the Polish Commercial Code, and also shall be set
forth in the Post-IPO Statute.
(ii) The following matters shall require the approval of a
majority of the members of the Supervisory Board: (A)
presentation to the General Assembly of a written report on the
results of the Supervisory Board's examination of the Company's
balance sheet and the profit and loss account; (B) presentation
to the General Assembly of a written report on the results of the
Supervisory Board's examination of the report and the
recommendations of the Management Board with respect to the
division of profits or coverage of losses; (C) the appointment
and removal of the members of the Management Board (except for
any members with respect to whom the Amended Statute reserves the
right of appointment to one or more shareholders), and the
issuance of by-laws for the Management Board; (D) setting or
changing the compensation of the Management Board, or approving
their employment contracts, and the setting and changing of any
incentive plan for the Management Board and other key Company
employees; (E) approval of business plans and budgets for the
Company; (F) unless otherwise provided in the most recent
business plan or budget of the Company approved by the
Supervisory Board, consent to incurring or making loans or other
indebtedness in excess of US$100,000 in a single or series of
related transactions or the equivalent amount in Polish zlotys or
any other currencies; (G) unless otherwise provided in the most
recent business plan or budget of the Company approved by the
Supervisory Board, the authorization of capital expenditures,
obligations or commitments in excess of US$100,000 in a single or
series of related transactions or the equivalent amount in Polish
zlotys or any other currencies; (H) unless otherwise provided in
the most recent business plan or budget of the Company approved
by the Supervisory Board, the giving of any guarantee or
indemnity with respect to the obligations or liability of any
other entity, which guaranty or indemnity shall be in excess of
US$100,000 in a single or series of related transactions or the
equivalent amount in Polish zlotys or any other currencies; (1)
unless otherwise provided in the most recent business plan or
budget of the Company approved by the Supervisory Board, the
acquisition of real estate for a purchase price exceeding
US$100,000 in a single or series of related transactions
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<PAGE>
or the equivalent amount in Polish zlotys or any other
currencies; (J) unless otherwise provided in the most recent
business plan or budget of the Company approved by the
Supervisory Board. consent to the sale, lease, pledge,
hypothecation, encumbering or transferring of any of the
Company's assets having a value in excess of US$100,000 in a
single or series of related transactions or the equivalent amount
in Polish zlotys or any other currencies, provided, however, that
sales of products and obsolete equipment in the ordinary course
of business will be subject to no restriction; (K) unless
otherwise provided in the most recent business plan or budget of
the Company approved by the Supervisory Board, the making of any
investment or funding of any amounts in or with respect to any
nontelecommunications related businesses or operations of the
Company (including, for this purpose, Uni-Net Sp. z o.o.),
whether under existing contractual arrangements or otherwise; (L)
consent to the commencement, settlement, assignment, compromise
or release of any claim, of or against the Company in excess of
US$100,000 in a single or series of related transactions or the
equivalent amount in Polish zlotys or any other currencies; (M)
bidding for any license or concession, or agreeing to the
material modification of any existing license of the Company or
any subsidiary; (N) consent to acquiring shares of or investing
in other entities other than in existing subsidiaries of the
Company; and (0) any matter concerning which the Management Board
has reached a voting deadlock and which has been certified to the
Supervisory Board in accordance with Section 1.1.2 below.
(iii) In addition to any approval required pursuant to
Section 1.1.1 (d)(ii), the approval of the Independent Directors
shall be required for (A) any transactions entered into by the
Company with an affiliate (as defined in Section 16, Paragraph 4
of the Post-IPO Statute) and (13) setting or changing the
compensation of the Management Board, or approving their
employment contracts.
In this Agreement: "Affiliate" shall mean any firm, company or
corporation which a Party shall directly or indirectly control, is
controlled by or is under common control with; "Permitted Controlled
Affiliate Transferee" shall mean any firm, company or corporation which a
Shareholder shall directly or indirectly control (and, in the case of
Dankner, shall include Matav Cable Systems Media Ltd. for as long as that
entity is directly or indirectly controlled by Dankner) and which, upon
acquiring any Shares from a Shareholder, agrees to be bound by the
provisions of this Agreement; and "subsidiary" means an entity in which the
Company holds more than fifty percent (50%) of the voting stock or has the
right to appoint at least fifty percent (50%) of the members of the
management board or supervisory board (or similar governing or supervisory
authority) of such entity. As used in the preceding sentence, 46 control"
means the right to exercise, directly or indirectly, more than fifty
percent (50%) of the voting rights attributable to the shares of the
controlled entity or the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of the
controlled entity.
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<PAGE>
1.1.2. Management Board. The Management Board shall consist of four
(4) members, each of whom shall be appointed by the Supervisory Board,
plus, to the extent applicable, one (1) additional member appointed by a
shareholder having the right to make such appointment pursuant to the
Post-IPO Statute. Any matter concerning which the Chairman of the
Management Board certifies has reached a voting deadlock shall be decided
by the Supervisory Board.
1.1.3. Reimbursement of Expenses. Reasonable out-of-pocket expenses
incurred by members of the Supervisory Board and the Management Board in
connection with attending board meetings or fulfilling other obligations as
requested by the Supervisory Board shall be reimbursed by the Company.
1.1.4. [intentionally deleted]
1.1.5. Conduct of Company Business. The Parties acknowledge that the
Company, Netia Telekorn S.A. ("Netia Telekom") and Netia South Sp. z o.o.
("Netia South") (Netia Telekom and Netia South together referred to as the
"Netia Entities") and their respective supervisory and management boards
(i) shall focus their attention and the Company's resources on the further
development of the telecommunications operations of the Netia Entities and
their respective subsidiaries and such other businesses or operations
falling within the scope of a business plan approved by the Company's
Supervisory Board, and (ii) shall attempt to limit their attention to the
Non-Core Assets (as defined herein) to those matters deemed reasonably
necessary to effect the sale or other disposition of those operations;
provided, however, that the foregoing shall not be deemed to prohibit or
restrict the ability of the members of such supervisory and management
boards from exercising their reasonable business judgment and satisfying
their fiduciary obligations, if any, under applicable law.
1.2. Management of Netia South and Netia Telekom. The provisions set forth
in Sections 1.1.1 and 1.1.2 above regarding the Supervisory Board and the
Management Board, respectively, including but not limited to provisions
regarding the composition, appointment, powers and responsibilities and veto
rights of the Supervisory Board and the composition of the Management Board,
shall apply also to the supervisory boards and management boards of the Netia
Entities. In addition, the individuals appointed to the management boards and
the supervisory boards of each of the Netia Entities shall be the same
individuals as those appointed to the Supervisory Board and the Management Board
of the Company. The statutes of each of the Netia Entities shall be amended and
restated so as to be identical in all material respects to the Post-IPO Statute.
1.3. Strategic Combination. The Parties acknowledge that the Polish
telecommunications industry is in the process of consolidation and that the
Company should participate in this process with the aim of maintaining its
position as a substantial competitor to Telekomunikacja Polska S.A. In
furtherance of this goal, the Parties agree that they shall use all reasonable
efforts to cause the Company to seek out and, if commercially and strategically
appropriate, complete a merger or other - combination (a "Strategic
Combination") with one or more strategic participants in the Polish
telecommunications market as soon as practicable. It
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<PAGE>
would be the Parties' goal that any such Strategic Combination augment the value
of the Parties' investment in the Company and would treat all shareholders of
the Company in a non-discriminatory manner. It is acknowledged that the
discussions with any strategic telecommunications entities with respect to a
Strategic Combination shall be coordinated by Telia's representatives on the
Supervisory Board.
2. ACCOUNTS, REPORTS AND RIGHT OF INSPECTION
2.1. The Company shall maintain proper books and accounts on an accrual
basis and in accordance with the provisions of this Agreement, Polish law and
International Accounting Standards as promulgated by the International
Accounting Standards Committee ("IAS"). All financial reports referred to below
shall be prepared in accordance with Polish law and IAS, and shall also be
adjusted to other accounting standards (such as Swedish, U.S. or Israeli GAAP)
in order to enable any of the Shareholders to comply with their respective local
or stock exchange rules (with reasonable costs and expenses of such adjustments
to be paid for by the Company). Annually upon the close of the fiscal year (or
as otherwise approved by the Management Board), all such books and accounts
shall be audited by the auditors of the Company.
2.2. The Company shall prepare the following financial reports on a
consolidated basis for the Company and its subsidiaries and shall provide the
same to the Supervisory Board in the English language: (i) a monthly income and
cash flow statement; (ii) quarterly and annual balance sheets and such other
financial information as may be reasonably requested by the Supervisory Board;
and (iii) profit and loss statements.
3. DISPOSAL OF CERTAIN ASSETS AND OTHER ACTIONS
To the extent not already accomplished as of the date hereof, the Parties
agree to cause the Company to sell, transfer, spin-off or otherwise dispose of
all of its Non-Core Assets and satisfy all of its Non-Core Obligations (each as
defined herein) as soon as practicable and to use all commercially reasonable
efforts to cause such sale, transfer, spin-off or disposition (i) to be effected
by December 18, 1999 and (ii) to be effected in such a manner so as to avoid the
Company assuming or retaining any liabilities or obligations relating to such
operations. In this Agreement, "Non-Core Assets" and "Non-Core Obligations"
shall have the definitions set forth in the Amended and Restated Option Exercise
Agreement entered into among Dankner, Trefoil, Shamrock, the GS Entities, Telia
and the Company dated as of December 18, 1998 (the "Amended and Restated Option
Exercise Agreement").
4. CONFIDENTIALITY
Each Party hereby undertakes to keep and procure that its directors,
employees, agents and advisors shall keep in strict confidence all information,
knowledge, data, drawings, designs and other material of a confidential nature
("Information") communicated to it by or acquired from the Company or any other
Party prior to the effective date of this Agreement, it being understood that
this Agreement shall not be deemed to provide any Shareholder with the right to
obtain any information from the Company beyond what is required by applicable
law. Included in the definition of Information is information relating to the
business of the Company as
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<PAGE>
well as information relating to the business of each of the Shareholders
(whether or not such information relates to the territory in which the Company
does business). No Party shall disclose any such Information to any person
whatsoever other than its directors or employees, agents, affiliates and
advisors directly concerned in the performance of this Agreement and the affairs
of the Company and each Party shall inform all such persons of the confidential
nature of the Information and shall accept responsibility for compliance by such
persons with this Section 4.
4.2. The provisions of this Section 4 shall not apply to Information which
the Party concerned can prove was lawfully in its possession at the date of
receipt or which becomes public knowledge (except by reason or default of such
Party) or which such Party obtains from some other person with good legal title
thereto, or is independently developed by such Party.
4.3. Notwithstanding the provisions of this Section, each Party shall (on a
"need to know" basis) be at liberty to disclose Information where, and to the
extent that, such disclosure is properly made pursuant to and in accordance with
a relevant statutory obligation or as otherwise may be required by the Company
in its business and regulatory activities with government agencies, vendors,
bankers or potential investors or as otherwise may be required by applicable
law; Provided however, that the disclosing Party shall take reasonable steps to
obtain, if possible, a written confidentiality undertaking from such person to
whom it wishes to disclose such Information, that is consistent with the terms
of this Agreement and that the Party from whom the disclosing Party obtained the
relevant Information is given prior written notice of such disclosure.
4.4. The provisions of this Section 4 shall remain in force for a period
commencing on the date of this Agreement and, in respect of any one Shareholder,
end on the second anniversary of that Shareholder ceasing to be a Shareholder in
the Company.
5. ARBITRATION AND DISPUTE RESOLUTION
5.1. The Parties desire that this Agreement operate between them fairly and
reasonably. If during the term of this Agreement, a dispute arises between the
Parties, or one Party perceives the other as acting unfairly or unreasonably, or
a question of interpretation arises under this Agreement, then the Parties shall
promptly confer and exert their best efforts in good faith to reach a reasonable
and equitable resolution of the issue. If the disputing Parties are unable to
resolve the issue within twenty (20) business days, the matter shall be resolved
in accordance with Section 5.2. For the avoidance of doubt, voting deadlocks
referred to in Sections 1.1.2 shall not be resolved pursuant to this Section 5,
but shall be resolved in accordance with the procedures set forth in such
Sections 1.1.1 (d)(ii)and 1.1.2.
5.2. In the event the disputing Parties are unable to resolve any dispute
hereunder by the procedures set forth in Section 5.1, such dispute shall be
finally settled by arbitration in accordance with the Rules of Arbitration of
the United Nations Commission on International Trade Law (the "UNCITRAL
Arbitration Rules") in effect on the date of this Agreement. The number of
arbitrators shall be three (3). Each of the disputing Parties shall appoint one
(1) arbitrator and they shall jointly appoint the third arbitrator. The third
arbitrator shall be chairman of the arbitral tribunal. The President (Prezes) of
the Polish Chamber of Commerce (Krajowa Izba Gospodarcza) in Warsaw shall act as
the "appointing authority" under the UNCITRAL
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<PAGE>
Arbitration Rules if either disputing Party fails to appoint an arbitrator or if
they both fail to appoint jointly the third arbitrator within the limits
specified in the UNCITRAL Arbitration Rules. The place of arbitration shall be
Warsaw, Poland. The language to be used in the arbitral proceeding shall be
English. The disputing Parties shall equally share the expenses of the
arbitrator(s) and the administrative costs of the arbitration proceedings, but
each disputing Party shall bear its own costs and expenses, including fees and
expenses of its own legal counsel. The pending of the arbitration proceeding
shall not in and of itself relieve either disputing Party from its duty to
perform under this Agreement.
6. REPRESENTATIONS AND WARRANTIES
6.1. Representations and Warranties of the Company. The Company represents
and warrants to each of the Shareholders as follows:
6.1.1. The Company is duly organized, validly existing and in good
standing under the laws of the Republic of Poland, and has all requisite
corporate power and authority to enter into this Agreement and perform each
and every obligation required to be performed by it hereunder.
6.1.2. The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions
contemplated under this Agreement have been duly and validly authorized by
all necessary corporate actions on the part of the Company.
6.1.3. This Agreement has been duly executed and delivered by the
Company and, assuming this Agreement constitutes a valid and binding
obligation of the other parties hereto, constitutes a valid and binding
obligation of the Company enforceable in accordance with its terms except
as enforcement may be limited by bankruptcy, insolvency or other similar
laws and by equitable principles.
6.1.4. The execution and delivery of this Agreement by the Company
does not, and performance of this Agreement by the Company will not (i)
require the consent, approval or authorization of any person, entity or
public authority, (ii) conflict with the statutes of the Company or give
rise to a right to accelerate or terminate any agreement, loan agreement,
security instrument, deed of trust or other regulation or other provision
of law or, to the knowledge of the Company, any order, judgment or other
direction of any court or tribunal of competent jurisdiction or (iii) give
rise to any lien, claim, encumbrance or restriction on any of the licenses
or other assets of the Company.
6.2 Representations and Warranties of the Shareholders. Each Shareholder,
severally and not jointly, represents and warrants to the Company and to each of
the other Shareholders as follows:
6.2.1. Such Shareholder is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, and
has all requisite corporate or
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<PAGE>
other power and authority to enter into this Agreement and perform each and
every obligation required to be performed by it hereunder.
6.2.2. The execution, delivery and performance of this Agreement by
such Shareholder and the consummation by such Shareholder of the
transactions contemplated under this Agreement have been duly and validly
authorized by all necessary corporate or other actions on the part of such
Shareholder.
6.2.3. This Agreement has been duly executed and delivered by such
Shareholder and, assuming the Agreement constitutes a valid and binding
obligation of the other parties hereto, constitutes a valid and binding
obligation of such Shareholder enforceable in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency or other
similar laws and by equitable principles.
6.2.4. Except as set forth in Schedule 6.2.4, the execution and
delivery of this Agreement by such Shareholder does not, and the
performance of this Agreement by such Shareholder will not (i) require the
consent, approval or authorization of any person, entity or public
authority (except, in the case of Dankner, the approval of the Bank of
Israel to the extent required by law), (ii) conflict with such
Shareholder's statutes, articles of association or other governing
documents or give rise to a right to accelerate or terminate any agreement,
loan agreement, security instrument, deed of trust or other regulation or
other provision of law or, to the knowledge of such Shareholder, any order,
judgment or other direction of any court or tribunal of competent
jurisdiction or (iii) give rise to any lien, claim, encumbrance or
restriction on any of the assets of such Shareholder.
7. MISCELLANEOUS
7.1. Notices. All notices or other communications required or permitted to
be given hereunder shall be (as elected by the person giving such notice) (i)
personally delivered with written confirmation of receipt, (ii) transmitted by
postage prepaid registered mail (airmail if international) or (iii) transmitted
by facsimile transmission and with postage prepaid mail confirmation (airmail if
international) to the Parties as follows:
Except as otherwise specified herein, all notices and other communications
shall be deemed to have been given on the date of receipt if delivered
personally or by mail or on the date of transmission with confirmed answer back
if transmitted by telecopy or telex, whichever shall first occur. Any Party
hereto may change its address for purposes hereof by written notice to the other
Parties in accordance with this Section 7. 1.
Netia Holdings S.A.
Netia Holdings S.A.
ul. Poleczki 13
02-822 Warsaw
Poland
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<PAGE>
Attn: Meir Srebemik
Facsimile: 48 22 496435
Telephone: 48 22 492328
With a copy to:
Weil, Gotshal & Manges
One South Place
London EC2M 2WG
England
Attn: William Sievers
Facsimile: 44 171 903 0990
Telephone: 44 171 903 1 000
and to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10 1 5 3
U.S.A.
Attn: Matthew Bloch
Facsimile: 1 212 310 8007
Telephone: 1 212 310 8000
The Shareholders:
Telia AB
Business Area International
S-123 86 Farsta
Sweden
Attn: Clas Hygrell, Vice President, Business Development
Facsimile: 46 8 713 3152
Telephone: 46 8 713 6053
With a copy to:
Telia AB, Legal Affairs
Attn: Jan-Henrik Ahmell, Director, Legal Affairs
S-123 86 Farsta
Sweden
Facsimile: 46 8 94 64 70
Telephone: 46 8 713 6283
Dankner Investments Limited
5, Hashla Street
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<PAGE>
Tel Aviv
Israel 62283
Fax: 972-3-544 0999
Attn: Moshe Arnoyel
Shamrock Holdings, Inc.
4444 Lakeside Drive
Burbank, CA 91505
U.S.A.
Facsimile: 1 818 845 4675
Attn: George J. Buchler
Trefoil Capital Investors L.P.
444 Lakeside Drive
P.O. Box 7774
Burbank, CA 91510-7774
U.S.A.
Facsimile: 1 818 842 3142
Attn: Robert G. Moskowitz
Managing Director of Trefoil Investors, Inc.
The WP Entities
E.M. Warburg, Pincus & Co., LLC
466 Lexington Avenue
New York, New York 100 1 7
U.S.A.
Facsimile: 1 212 878 9351
Telephone: 1 212 878 0600
Attn: Stephen Distler
With a copy to:
E.M. Warburg, Pincus & Co. International Ltd.
Almack House
28 King Street, St. James's
London SWIY 6QW
England
Facsimile: 44 171 321 0881
Telephone: 44 171 306 0306
Attn: Roberto Italia
Willkie Farr & Gallagher
787 Seventh Avenue
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<PAGE>
New York, New York 100 1 9-6099
U.S.A.
Facsimile: 1 212 728 81 11
Telephone: 1 212 728 8230
Attn: Peter H. Jakes
7.2. Effective Date; Entire Agreement; Amendments. This Agreement shall
become effective upon signing. Upon such effectiveness, this Agreement, together
with (i) the Exhibit attached hereto, which is incorporated in and is deemed to
be a part of the Agreement, and (ii) the Post-IPO Shareholders' Agreement # 2
between the Company, the Parties hereto and the GS Entities, regarding, among
things, sale and assignment of the Shares and dated the date hereof, shall
constitute the entire agreement between the Parties, and supersede all prior
agreements or understandings between them with respect to the matters referred
to herein (including, without limitation, the Amended and Restated Pre-IPO
Shareholders' Agreement among the Parties). This Agreement may be modified or
amended only by an instrument in writing signed by all Parties.
7.3. Shares Subject to this Agreement. Each of the Shareholders agrees that
all Shares owned by them, whether now owned or hereafter acquired by them, shall
be subject to this Agreement.
7.4. No Agency. Nothing in or arising out of this Agreement is to be taken
as constituting a partnership or agency relationship between the Parties, and no
Party shall have the right or authority to bind or commit the other in any
manner or for any purposes whatsoever, other than as expressly provided for
herein with respect to the Company.
7.5. Further Action. Each Party agrees to perform any further acts, give
further assurances and execute and deliver any further documents as may be
necessary or convenient to carry out the provisions and intent of this
Agreement. Each Party shall use and exercise its rights and powers (as to voting
or otherwise) in and in relation to the Company in order to give full effect to
the provisions of this Agreement. The Parties will do all acts required,
including but not limited to, passing appropriate resolutions of the Company. to
cause the Company to undertake to perform the obligations imposed upon it by the
terms of the Agreement.
7.6. No Waiver. No relaxation, forbearance, delay or indulgence by any
Party in enforcing any of the terms and conditions of this Agreement or the
granting of time by any Party to any other Party shall prejudice, affect or
restrict the rights and powers of such Party hereunder nor shall any waiver by
any Party or any breach hereof operate as a waiver of or in relation to any
subsequent or continuing breach hereof.
7.7. Governing Law; Construction. This Agreement and the rights of the
Parties hereunder shall be governed by and interpreted in accordance with the
laws of the Republic of Poland.
7.8. Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original but both of which shall
constitute one and the same document.
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<PAGE>
7.9. Costs and Reimbursements. Unless otherwise stated in this Agreement,
all expenses involved in the negotiation, preparation and consummation of this
Agreement shall be borne by the Party incurring such expenses.
7.10. Termination. This Agreement and the transactions contemplated
hereunder shall terminate in any of the following ways:
7.10.1. Automatically with respect to any Shareholder if such
Shareholder ceases to own Shares representing at least 2.5% of the
outstanding voting securities of the Company (it being agreed that for
purposes of the foregoing, (i) Trefoil and Shamrock shall be treated as one
Shareholder and (ii) a Shareholder and its Permitted Controlled Affiliate
Transferees shall be treated as one Shareholder); or
7.10.2. Automatically, when the only remaining parties to this
Agreement are the Company and any one Shareholder; or
7.10.3. Upon the dissolution or liquidation (voluntary or in
bankruptcy) of the Company; or
7.10.4. By the unanimous written agreement of the Parties.
If this Agreement is terminated without a breach or default by any of
the Parties, then all of the Parties shall be released from any and all
liabilities hereunder except those obligations in Section 4 for the period
set forth in Section 4.4.
7.11. Binding on Successors; Non-Assignability. This Agreement shall be
binding upon and inure to the benefit of each of the Parties and their
respective legal representatives, successors and permitted assigns; Provided
that no Party may assign any rights or delegate any duties under this Agreement,
in whole or in part, without the prior written consent of the other Parties,
except that a Shareholder may assign its rights or delegate its duties under
this Agreement, in whole or in part, without the prior consent of the other
Parties, to a Permitted Controlled Affiliate Transferee.
7.12. Severability. If any provision of this Agreement shall be determined
by any court of competent jurisdiction to be invalid or unenforceable, the
remainder of the Agreement other than the portion determined to be invalid or
unenforceable shall not be affected thereby, and each valid provision thereof
shall be enforced to the fullest extent permitted by law. The Parties will, to
the extent possible, modify such term or provision so that such provision is no
longer invalid or unenforceable.
7.13. Nature of Liability. The liability of each of the WP Entities is
several and not joint and no one of the WP Entities shall be liable in any way
for the acts or omissions of any other of the WP Entities.
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<PAGE>
IN WITNESS WHEREOF, the Parties hereto have duly executed and delivered
this Agreement as an instrument under seal as of the day and year first above
written.
NETIA HOLDINGS S.A.
By: ______________________________
Printed Name: ____________________
Title: ___________________________
THE SHAREHOLDERS:
TELIA AB (publ.)
By: ______________________________
Printed Name: ____________________
Title: ___________________________
DANKNER INVESTMENTS LIMITED
By: ______________________________
Printed Name: ____________________
Title: ___________________________
SHAMROCK HOLDINGS, INC.
By: ______________________________
Printed Name: ____________________
Title: ___________________________
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TREFOIL CAPITAL INVESTORS L.P.
By: ______________________________
Printed Name: ____________________
Title: ___________________________
WARBURG, PINCUS EQUITY PARTNERS, L.P.
By Warburg, Pincus & Co.,
its General Partner
By: ______________________________
Printed Name: ____________________
Title: Partner
WARBURG, PINCUS VENTURES
INTERNATIONAL, L.P.
By Warburg, Pincus & Co.,
its General Partner
By: ______________________________
Printed Name: ____________________
Title: Partner
WARBURG, PINCUS NETHERLANDS EQUITY
PARTNERS I, C.V.
By Warburg, Pincus & Co.,
its General Partner
By: ______________________________
Printed Name: ____________________
Title: Partner
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<PAGE>
WARBURG, PINCUS NETHERLANDS
EQUITY PARTNERS II, C.V.
By Warburg, Pincus & Co.,
its General Partner
By: ______________________________
Printed Name: ____________________
Title: Partner
WARBURG, PINCUS NETHERLANDS
EQUITY PARTNERS III, C.V.
By Warburg, Pincus & Co.,
its General Partner
By: ______________________________
Printed Name: ____________________
Title: Partner
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<PAGE>
POST-IPO SHAREHOLDERS' AGREEMENT # 2
THIS POST-IPO SHAREHOLDERS' AGREEMENT # 2 (this "Agreement") is made and
entered into on and as of - -, 1999 by and among (i) NETIA HOLDINGS S.A.,
(formerly R.P. Telekom S.A.), a company organized and existing under the laws of
the Republic of Poland with its headquarters at ul. Poleczki 13, 02-822 Warsaw,
Poland (the "Company"), (ii) DANKNER INVESTMENTS LIMITED, a public company
incorporated under the laws of Israel ("Dankner"), (iii) TREFOIL CAPITAL
INVESTORS L.P., a limited partnership organized under the laws of Delaware
("Trefoil"), (iv) SHAMROCK HOLDINGS, INC., a corporation organized under the
laws of Texas ("Shamrock"), (v) GS CAPITAL PARTNERS L.P., a limited partnership
organized under the laws of Delaware ("GSCP"), (vi) STONE STREET FUND 1994,
L.P., a limited partnership organized under the laws of Delaware ("Stone
Street"), (vii) BRIDGE STREET FUND 1994, L.P., a limited partnership organized
under the laws of Delaware ("Bridge Street" and, together with GSCP and Stone
Street, the "GSCP Entities"), (viii) TELIA AB (publ.), a company organized under
the laws of the Kingdom of Sweden ("Telia") and (ix) (a) WARBURG, PINCUS EQUITY
PARTNERS, L.P., a Delaware limited partnership ("WPEP"), (b) WARBURG, PINCUS
VENTURES INTERNATIONAL, L.P., a Bermuda limited partnership ("WPVI"), (c)
WARBURG, PINCUS NETHERLANDS EQUITY PARTNERS 1, C.V., a Dutch limited partnership
("WPNE I"), (d) WARBURG, PINCUS NETHERLANDS EQUITY PARTNERS II, C.V., a Dutch
limited partnership ("WPNE 11") and (e) WARBURG, PINCUS NETHERLANDS EQUITY
PARTNERS III, C.V., a Dutch Limited partnership ("WPNE III" and, together with
WPEP, WPVI, WPNE I and WPNE 11, the "WP Entities" and each individually the "WP
Entity"). Dankner, Trefoil, Shamrock, the GSCP Entities, Telia and the WP
entities are collectively referred to as the "Shareholders" and each
individually a "Shareholder", and the Company and the Shareholders are
collectively referred to as the "Parties" and each individually a "Party"-
WITNESSETH
WHEREAS, the Company, Dankner, Trefoil, Shamrock, the GSCP Entities, Telia
and the WP Entities are parties to a Pre-IPO Shareholders' Agreement, dated as
of May _, 1999 (the "Pre-IPO Shareholders' Agreement"), pursuant to which the
Parties have agreed, among other things, to enter into a Post-IPO Shareholders'
Agreement 4 1 and a Post-IPO Shareholders' Agreement # 2 upon the occurrence of
the Initial Public Offering, as defined therein, to set forth herein their
mutual understandings regarding the relations among them, and their respective
rights and obligations, with respect to the Company;
WHEREAS, the Initial Public Offering, as defined in the Pre-IPO
Shareholders' Agreement, has been completed;
NOW, THEREFORE, in consideration of the promises and mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
<PAGE>
1. SALE AND ASSIGNMENT OF OWNERSHIP
Each Shareholder hereby agrees that it will not sell, assign, give, pledge,
encumber or otherwise transfer ("Transfer") any of the Shares owned by it,
whether voluntarily or by operation of law, unless it complies with the
following provisions:
1.1. Right of First Notice. If any Shareholder (the "Transferor") wishes to
Transfer all or any portion of the Shares held by it (the "Transfer Shares"),
the Transferor shall provide notice of the proposed Transfer to the other
Shareholders (the "Transfer Notice"). without the necessity of having first
entered into an agreement to sell to any third party. The Transfer Notice shall
be in writing, shall be delivered in accordance with Section 6.1 herein and
shall state the number of Shares offered, the proposed per Share transfer price
and, if one or more third party purchaser(s) is then known by the Transferor,
the identity of such purchaser(s). Each Shareholder shall have the right to give
up to one (1) Transfer Notice in any calendar month.
1.2. Right of First Offer. Each of the Shareholders other than the
Transferor (the "Participating Shareholder") shall have a right of first offer
upon receiving a Transfer Notice. Whichever among the Participating Shareholders
wishes to make an offer shall submit to the Transferor a written offer to
purchase all of the Transfer Shares at the price and upon the terms set forth in
the Transfer Notice, conditional only upon receiving the required Polish or
other governmental approvals (the "Offer to Purchase"), and such offer shall
provide that the Participating Shareholder will pay the purchase price within
thirty (30) days of the date of such Offer to Purchase. The Participating
Shareholders shall have the right to offer to purchase unconditionally, for cash
only, all, but not less than all, of the Transfer Shares. All Offers to Purchase
must be submitted in accordance with Section 6.1 herein.
1.3. The Offer to Purchase must be submitted by the Participating
Shareholders within the applicable time period as specified below (the "Offer
Period"):
1.3.1. If Telia or a WP Entity is the Transferor, the Offer to
Purchase must be submitted within thirty (30) days from the date of the
Transfer Notice; and
1.3.2. If any of the Shareholders other than Telia or a WP Entity is
the Transferor, whichever among Dankner, Trefoil, Shamrock and the GSCP
Entities are the Participating Shareholders shall have the right to submit
the Offer to Purchase and purchase the subject Shares prior in time to
Telia and the WP Entities submitting such offer. Therefore, (i) whichever
among Dankner, Trefoil, Shamrock and the GSCP Entities are the
Participating Shareholders must submit the Offer to Purchase within twenty
(20) days from the date of the Transfer Notice (and provide a copy of the
same to Telia and the WP Entities) and, (ii) if none of Dankner, Trefoil,
Shamrock and the GSCP Entities submits an offer during such twenty-day
period, then Telia and the WP Entities shall have the right to submit an
Offer to Purchase within a period of not less than twenty-one (21) days and
not more than thirty (30) days from the date of such Transfer Notice.
1.4. If the Transferor receives one or more Offers to Purchase, the
Transferor must accept all, but not less than all, of such Offers to Purchase,
whereupon each Participating
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<PAGE>
Shareholder shall have thirty (30) days from the date of its Offer to Purchase
to pay for the offered Shares, within which period each such Participating
Shareholder must obtain any requisite Polish or other governmental approvals;
provided, however that, if such Participating Shareholder has made all necessary
filings and taken all other actions reasonably required to obtain such approval
but nevertheless fails to obtain such approvals within such thirty-day period,
the Participating Shareholder shall be required to obtain such approvals and pay
for such offered shares as soon as practicable, but not to exceed an additional
thirty (30) days thereafter, during which additional period interest on the
purchase price to be paid by the Participating Shareholder shall accrue and be
payable by the Participating Shareholder upon the payment thereof at the rate of
seven percent (7%) per annum. If, pursuant to Section 1.3.1 or 1.3.2(i) above,
more than one among the Participating Shareholders submits an Offer to Purchase,
the Transfer Shares shall be sold by the Transferor to such Participating
Shareholders pro rata based upon their then relative (as among themselves)
current ownership of Shares.
1.5. In the event that any transfer of shares pursuant to this Section I
requires a Polish or other governmental approval and such approval requires a
filing, provision of information or some other action to be taken by the
Company, the Company undertakes to use all reasonable efforts to make such
filing, provide such information and take such action so as to enable such
approval to be obtained within the time limits provided for the sale and
purchase of the Transfer Shares pursuant to Section 1.4 above. In the event that
such approvals are not obtained by a Participating Shareholder within the time
limits specified in Section 1.4 above, then such Participating Shareholder will
have no obligation to purchase any of the Transfer Shares, shall not be deemed a
Defaulting Shareholder (as defined in Section 1.6 below) and shall not be deemed
to have submitted an Offer to Purchase for purposes of Section 1.7 below.
Transfer of the Transfer Shares to any Participating Shareholder will take place
simultaneously with payment by that Participating Shareholder for those Transfer
Shares, but otherwise in all respects on the same terms as set out in the
Transfer Notice.
1.6. If any Participating Shareholder who makes an Offer to Purchase
defaults on its obligation to pay for the Transfer Shares in accordance with
Section 1.4 (a "Defaulting Shareholder"), then, in addition to any other rights
that the Transferor may have under applicable law or otherwise, the Defaulting
Shareholder shall no longer have the right to receive Transfer Notices or make
Offers to Purchase with respect to any future proposed Transfers by other
Shareholders. In the case of such a default (or in the case of a Participating
Shareholder who has not obtained the necessary consents and approvals within the
time frame set forth in Section 1.4 above), (i) if one or more Participating
Shareholders other than the Defaulting Shareholder (or the Participating
Shareholder who failed to obtain the necessary consents and approvals) have made
an Offer to Purchase, then the Transfer Shares shall be sold to such other
Participating Shareholder(s) on a pro rata basis based upon their relative (as
among themselves) ownership of Shares as at the commencement of the Offer Period
and (ii) if no Participating Shareholders other than the Defaulting Shareholder
(or the Participating Shareholder who failed to obtain the necessary consents
and approvals) have made an Offer to Purchase, then the Transfer Shares as to
which such Offer to Purchase was made can be sold to a third party as provided
in Section 1.7.
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<PAGE>
1.7. If none of the Participating Shareholders submit an Offer to Purchase
or if the circumstances contemplated by clause (ii) of the last sentence of
Section 1.6 above apply, then the Transferor shall have the right, exercisable
not later than one-hundred and twenty (I 20) days following the expiration of
all relevant Offer Periods, or such longer period as may be necessary to effect
a demand registration pursuant to a registration rights agreement to be entered
into in connection with this Agreement, the form of which is attached hereto as
Exhibit A (the "Registration Rights Agreement"), and upon written notice to the
other Parties (which notice shall include the identity of the party to which the
Transfer Shares are being transferred), to consummate the Transfer of all or any
portion of the Transfer Shares to any other persons at a price not lower than
the price, and upon the terms (other than the identity of the possible
purchaser), set forth in the Transfer Notice. If the Transferor does not
consummate such Transfer within such one-hundred and twenty (120) -day period,
or such longer period as may be necessary to effect a demand registration
pursuant to the Registration Rights Agreement, such Transfer Shares shall again
be subject in all respects to the terms, conditions and restrictions provided in
this Section 1.
1.8. The right of first offer provided in this Section I shall not apply
to:
1.8.1. any sale of Shares by any of the Shareholders under Rule 144 of
the U.S. Securities Act of 1933;
1.8.2. any Transfers among each other by any of Dankner, Trefoil,
Shamrock and the GSCP Entities; provided that in such case the Transferor
shall notify each of the other Shareholders of the number of Shares
transferred and the identity of the Transferee;
1.8.3. any Transfers among each other by any of the WP Entities;
provided that in such case the Transferor shall notify each of the other
Shareholders of the number of Shares transferred and the identity of the
Transferee;
1.8.4. any sale of Shares by any of the Shareholders for which such
Shareholder(s) has exercised piggyback rights pursuant to the Registration
Rights Agreement; and
1.8.5. any Transfer by any Participating Shareholder to any of its
Affiliates (an "Affiliate Transferee") which, solely for this purpose, (A)
in the case of Telia, shall include the Unisource venture or one or more of
the Unisource shareholders, (B) in the case of Dankner, shall also include
Matav Cable Systems Media Ltd. ("Matav") for as long as that entity is
directly or indirectly controlled by Dankner and (C) in the case of
Trefoil, shall include its partners in connection with the dissolution of
Trefoil, provided that such partners shall appoint Stanley P. Gold or
Robert Moskowitz (or such other person or entity as shall be reasonably
satisfactory to the Shareholders) to act as sole representative for such
partners with respect to all of the Shares (and related rights) so
transferred to them, and such person or entity shall remain the sole
representative for as long as such partners own such Shares; and provided
further that in each case contained in this Section 1.8.3, the Affiliate
Transferee complies with Section 1.9 below.
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<PAGE>
1.9. In each case referred to in Section 1.8.5, the Affiliate Transferee
agrees to be bound by the provisions of this Agreement, and if the Affiliate
Transferee ceases to be an Affiliate of such Shareholder (except if the
transferring Shareholder is Dankner, the Affiliate Transferee is Matav and Matav
has held such Shares for at least two (2) years), such Affiliate Transferee
shall be required to offer to sell the Shares transferred to such transferee to
the other Shareholders in accordance with Section 1.1 above, within fifteen (I
5) days of the date upon which the Affiliate Transferee ceases to be an
Affiliate of such Shareholder, at the Market Price for such Shares. For purposes
of the foregoing, "Market Price" shall be deemed to be the average closing price
for the Shares on the Nasdaq National Market or, if the Shares are not listed on
the Nasdaq National Market, such other principal securities exchange on which
the Shares are traded during the ten (10) days prior to the date of the
applicable Transfer Notice.
1.10. The provisions set forth in this Section I shall not apply to: (i)
sales by the WP Entities of Shares in unsolicited open market transactions to
buyers in respect of whom there had been no pre-arrangements made by the WP
Entities regarding such sales; (ii) bona fide underwritten public offerings; or
(iii) distributions by the WP Entities of Shares to the partners in its
partnerships, provided that such distributions are not part of a plan or
arrangement to transfer all or a substantial portion of the shares held by the
WP Entities to any particular person or entity.
1.11. A transfer of Shares to a depository shall not be deemed a Transfer
under this Agreement; provided that the depository receipts issued upon such
deposit shall be deemed to be Shares for purposes of this Agreement.
1.12. For purposes of this Section I only, (i) the GSCP Entities and their
Permitted Controlled Affiliate Transferees shall be treated as one Shareholder,
(ii) Shamrock and Trefoil and their Permitted Controlled Affiliate Transferees
shall be treated as one Shareholder, (iii) Dankner and its Permitted Controlled
Affiliate Transferees shall be treated as one Shareholder, (iv) Telia and its
Permitted Controlled Affiliate Transferees shall be treated as one Shareholder
and (v) the WP Entities and their Permitted Controlled Affiliate Transferees
shall be treated as one Shareholder. In this Agreement, "Affiliate" shall mean
any firm, company or corporation which a Party shall directly or indirectly
control, is controlled by or is under common control with. As used in the
preceding sentence, "control" means the right to exercise, directly or
indirectly, more than fifty percent (50%) of the voting rights attributable to
the shares of the controlled entity, or the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
the controlled entity.
2. NON-COMPETITION
Each of the Shareholders agrees that, for so long as such Shareholder owns
five percent (5%) or more of the outstanding voting securities of the Company
or, if sooner, upon the termination of this Agreement with respect to such
Shareholder, and in each case for a period of one (1) year thereafter, such
Shareholder and its respective subsidiaries, officers and directors shall not
directly or indirectly own, manage, operate, join, control or participate in, be
compensated by or invest in or be connected with any telecommunication entity,
or otherwise engage in any telecommunications activities (such as fixed-line,
cellular, value-added, CPE, and content provisions such as for CATV), in any
such case, in the territory of the Republic of Poland,
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<PAGE>
other than the Company and its subsidiaries; provided, however, that this
Section 2 shall not apply to the following:
2.1. the wireless public trunked radio activities of Uninet Sp. z o.o., an
Affiliate of the Company;
2.2. (a) the activities conducted by Unisource N.V., a Dutch company of
which Telia is a shareholder, and any entity which is an Affiliate thereof;
provided, however, that Telia shall not provide any advice or support in
connection with the activities conducted by Unisource N.V. in the Republic of
Poland and (b) the conduct by Telia of its ordinary course of business
activities as a provider of telecommunications services in Sweden and other
countries which, in certain cases, may involve interaction and exchange of
services with providers of telecommunications services in Poland (but not the
expansion by Telia into any other telecommunications activities in Poland, and
without limiting the provisions of Section 2.4 below);
2.3. investment banking activities by Goldman Sachs International and/or
its Affiliates; provided that such Shareholder implements and maintains
appropriate "Chinese Wall" safeguards;
2.4. investment or other engagement by a Shareholder in an entity that is
not engaged in local, domestic long distance, international fixed-line telephony
and/or voice-over internet services in Poland, but rather is engaged in other
telecommunications activities such as cellular or other wireless mobile services
or cable television in Poland if, prior to making such an investment or
otherwise engaging in such entity, (A) such Shareholder offers the Company the
opportunity to make such investment or otherwise engage in such entity on the
same terms offered to such Shareholder or offered by such Shareholder to a third
party, and (B) the Supervisory Board, within thirty (30) days of receiving
notification of such opportunity, elects not to pursue the opportunity, it being
agreed that in voting on such matter, the approval of one or more of the
Supervisory Board representatives of the Shareholder making such proposal which
would otherwise be required pursuant to Section 1.1.1(xiii) of the Post-IPO
Shareholders' Agreement # I among Telia, Dankner, Trefoil, Shamrock and the
Company, dated the date hereof, shall not be required; provided that, if the
Company elects not to pursue such opportunity, the Shareholders other than the
Shareholder making the proposal shall be permitted (but shall not have the
right) to participate in the same opportunity with the Shareholder making the
proposal without offering such opportunity to the Company;
2.5. an investment by a Shareholder of up to one percent (M) of the
securities of any publicly traded enterprise, provided that the Shareholder is
not entitled to any board representation, veto rights or other special rights
relating thereto;
2.6. any investment by one or more of the WP Entities in a company that is
neither (i) organized under the laws of Poland, nor (ii) whose principal place
of business is in Poland and is engaged in one or more aspects of the
telecommunications business and that at the time of the WP Entities' investment
does not have as its principal objective the provision of telecommunications
services (such as fixed line, cellular, IP, data, value-added, CPE or content
provisions such as CATV) in Poland; provided, that, if in the course of such
investment such company comes to
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<PAGE>
derive more than 15% of its annual consolidated revenues from such services in
Poland, then: (x) the WP Entities shall give prompt notice to the Company and
the other Shareholders of such investment; (y) no representative of the WP
Entities who is then serving, or within the immediately preceding twelve months
has served, as a member of the Supervisory Board, shall hold any position as a
director, officer or consultant to the company in which the WP Entities have
made such investment; and (z) the representatives of the WP Entities on the
Supervisory Board shall exclude themselves from any discussions involving
matters related to direct competition between the Company and such other WP
Entity investment; and
2.7. any investment by the WP Entities in a company engaged in direct
competition with the Company in Poland from and after the later of (i) December
31, 2001 or (H) the completion of the second consecutive fiscal year of the
Company in which the Company has failed to meet any one of the following
parameters: at least 90% of the revenue target (in PLN); at least 90% of the
EBITDA target (in PLN); or at least 90% of the network build-out target, in each
case as set forth in the Company's ten-year business plan as approved by the
Supervisory Board and the WP Entities; provided that, (x) the WP Entities give
prompt notice to the Company and the other Shareholders of such investment, (y)
no representative of the WP Entities who is then serving, or within the
immediately preceding twelve months has served, as a member of the Supervisory
Board, shall hold any position as a director, officer or consultant to the
company in which the WP Entities have made such investment, and (z) the
representatives of the WP Entities on the Supervisory Board shall exclude
themselves from any discussions involving matters related to direct competition
between the Company and such other WP Entity investment.
3. CONFIDENTIALITY
3.1. Each Party hereby undertakes to keep and procure that its directors,
employees, agents and advisors shall keep in strict confidence all information,
knowledge, data, drawings, designs and other material of a confidential nature
("Information") communicated to it by or acquired from the Company or any other
Party prior to the effective date of this Agreement, it being understood that
this Agreement shall not be deemed to provide any Shareholder with the right to
obtain any information from the Company beyond what is required by applicable
law. Included in the definition of Information is information relating to the
business of the Company as well as information relating to the business of each
of the Shareholders (whether or not such information relates to the territory in
which the Company does business). No Party shall disclose any such Information
to any person whatsoever other than its directors or employees, agents,
affiliates and advisers directly concerned in the performance of this Agreement
and the affairs of the Company and each Party shall inform all such persons of
the confidential nature of the Information and shall accept responsibility for
compliance by such persons with this Section 3.
3.2. The provisions of this Section 3 shall not apply to Information which
the Party concerned can prove was lawfully in its possession at the date of
receipt or which becomes public knowledge (except by reason or default of such
Party) or which such Party obtains from some other person with good legal title
thereto, or is independently developed by such Party.
3.3. Notwithstanding the provisions of this Section, each Party shall (on a
"need to know" basis) be at liberty to disclose Information where, and to the
extent that, such disclosure is
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<PAGE>
properly made pursuant to and in accordance with a relevant statutory obligation
or as otherwise may be required by the Company in its business and regulatory
activities with government agencies, vendors, bankers or potential investors or
as otherwise may be required by applicable law; provided however, that the
disclosing Party shall take reasonable steps to obtain, if possible, a written
confidentiality undertaking from such person to whom it wishes to disclose such
Information, that is consistent with the terms of this Agreement and that the
Party from whom the disclosing Party obtained the relevant Information is given
prior written notice of such disclosure.
3.4. The provisions of this Section 3 shall remain in force for a period
commencing on the date of this Agreement and, in respect of any one Shareholder,
end on the second anniversary of that Shareholder ceasing to be a Shareholder in
the Company.
4. ARBITRATION AND DISPUTE RESOLUTION
4.1. The Parties desire that this Agreement operate between them fairly and
reasonably. If during the term of this Agreement, a dispute arises between the
Parties, or one Party perceives the other as acting unfairly or unreasonably, or
a question of interpretation arises under this Agreement, then the Parties shall
promptly confer and exert their best efforts in good faith to reach a reasonable
and equitable resolution of the issue. If the disputing Parties are unable to
resolve the issue within twenty (20) business days, the matter shall be resolved
in accordance with Section 4.2.
4.2. In the event the disputing Parties are unable to resolve any dispute
hereunder by the procedures set forth in Section 4.1, such dispute shall be
finally settled by arbitration in accordance with the Rules of Arbitration of
the United Nations Commission on International Trade Law (the "UNCITRAL
Arbitration Rules") in effect on the date of this Agreement. The number of
arbitrators shall be three (3). Each of the disputing Parties shall appoint one
(1) arbitrator and they shall jointly appoint the third arbitrator. The third
arbitrator shall be chairman of the arbitral tribunal. The President (Prezes) of
the Polish Chamber of Commerce (Krajowa Izba Gospodarcza) in Warsaw shall act as
the "appointing authority" under the UNCITRAL Arbitration Rules if either
disputing Party fails to appoint an arbitrator or if they both fail to appoint
jointly the third arbitrator within the limits specified in the UNCITRAL
Arbitration Rules. The place of arbitration shall be Warsaw, Poland. The
language to be used in the arbitral proceeding shall be English. The disputing
Parties shall equally share the expenses of the arbitrator(s) and the
administrative costs of the arbitration proceedings, but each disputing Party
shall bear its own costs and expenses, including fees and expenses of its own
legal counsel. The pending of the arbitration proceeding shall not in and of
itself relieve either disputing Party from its duty to perform under this
Agreement.
5. REPRESENTATIONS AND WARRANTIES
5.1. Representations and Warranties of the Company. The Company represents
and warrants to each of the Shareholders as follows:
5.1.1. The Company is duly organized, validly existing and in good
standing under the laws of the Republic of Poland, and has all requisite
corporate power and
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<PAGE>
authority to enter into this Agreement and perform each and every
obligation required to be performed by it hereunder.
5.1.2. The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions
contemplated under this Agreement have been duly and validly authorized by
all necessary corporate actions on the part of the Company.
5.1.3. This Agreement has been duly executed and delivered by the
Company and, assuming this Agreement constitutes a valid and binding
obligation of the other parties hereto, constitutes a valid and binding
obligation of the Company enforceable in accordance with its terms except
as enforcement may be limited by bankruptcy, insolvency or other similar
laws and by equitable principles.
5.1.4. The execution and delivery of this Agreement by the Company
does not, and performance of this Agreement by the Company will not (i)
require the consent, approval or authorization of any person, entity or
public authority, (ii) conflict with the statutes of the Company or give
rise to a right to accelerate or terminate any agreement, loan agreement,
security instrument, deed of trust or other regulation or other provision
of law or, to the knowledge of the Company, any order, judgment or other
direction of any court or tribunal of competent jurisdiction or (iii) give
rise to any lien, claim, encumbrance or restriction on any of the licenses
or other assets of the Company.
5.2. Representations and Warranties of the Shareholders. Each Shareholder,
severally and not jointly, represents and warrants to the Company and to each of
the other Shareholders as follows:
5.2.1. Such Shareholder is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, and
has all requisite corporate or other power and authority to enter into this
Agreement and perform each and every obligation required to be performed by
it hereunder.
5.2.2. The execution, delivery and performance of this Agreement by
such Shareholder and the consummation by such Shareholder of the
transactions contemplated under this Agreement have been duly and validly
authorized by all necessary corporate or other actions on the part of such
Shareholder.
5.2.3. This Agreement has been duly executed and delivered by such
Shareholder and, assuming the Agreement constitutes a valid and binding
obligation of the other parties hereto, constitutes a valid and binding
obligation of such Shareholder enforceable in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency or other
similar laws and by equitable principles.
5.2.4. Except as set forth in Schedule 5.2.4, the execution and
delivery of this Agreement by such Shareholder does not, and the
performance of this Agreement by such Shareholder will not (i) require the
consent, approval or authorization of any person,
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<PAGE>
entity or public authority (except, in the case of Dankner, the approval of
the Bank of Israel to the extent required by law), (ii) conflict with such
Shareholder's statutes, articles of association or other governing
documents or give rise to a right to accelerate or terminate any agreement,
loan agreement, security instrument, deed of trust or other regulation or
other provision of law or, to the knowledge of such Shareholder, any order,
judgment or other direction of any court or tribunal of competent
jurisdiction or (iii) give rise to any lien, claim, encumbrance or
restriction on any of the assets of such Shareholder.
6. MISCELLANEOUS
Notices. All notices or other communications required or permitted to be given
hereunder shall be (as elected by the person giving such notice) (i) personally
delivered with written confirmation of receipt, (ii) transmitted by postage
prepaid registered mail (airmail if international) or (iii) transmitted by
facsimile transmission and with postage prepaid mail confirmation (airmail if
international) to the Parties as follows:
Netia Holdings S.A.
Netia Holdings S.A.
ul. Poleczki 13
02-822 Warsaw
Poland
Attn: Meir Srebernik
Facsimile: 48 22 496435
Telephone: 48 22 492328
with a copy to:
Weil, Gotshal & Manges
One South Place
London EC2M 2WG
England
Attn: William Sievers
Facsimile: 44 171 903 0990
Telephone: 44 171 903 1000
and to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10 1 5 3
U.S.A.
Attn: Matthew Bloch
Facsimile: 1 212 310 8007
Telephone: 1 212 310 8000
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<PAGE>
The Shareholders:
Telia AB
Business Area International
S-123 86 Farsta
Sweden
Attn: Clas Hygrell, Vice President, Business Development
Facsimile: 46 8 713 3152
Telephone: 46 8 713 6053
With a copy to:
Telia AB, Legal Affairs
Attn: Jan-Henrik Ahmell, Director, Legal Affairs
S-123 86 Farsta
Sweden
Facsimile: 46 8 94 64 70
Telephone: 46 8 713 6283
Dankner Investments Limited
5, Hashla Street
Tel Aviv
Israel 62283
Fascimile: 972 3 544 0999
Attn: Moshe Amoyel
G S Capital Partners, L.P.
85 Broad Street
New York, New York 10004
U.S.A.
Facsimile: 1 212 902 3000
Attn: Eve Gerriets
With a copy to:
Goldman Sachs International Limited
Peterborough Court
133 Fleet Street
London EC4A 2BB
Facsimile: 44 171 774 4123
Telephone: 44 171 774 7900
Attn: Hughes Lepic
Shamrock Holdings, Inc.
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<PAGE>
4444 Lakeside Drive
Burbank, CA 91505
U.S.A.
Facsimile: 1 818 845 4675
Attn: George J. Buchler
Trefoil Capital Investors L.P.
444 Lakeside Drive
P.O. Box 7774
Burbank, CA 91510-7774
U.S.A.
Facsimile: 1 818 842 3142
Attn: Robert G. Moskowitz
Managing Director of Trefoil Investors, Inc.
Stone Street Fund 1994, L.P.
85 Broad Street
New York, New York 10004
Facsimile: 1 212 902 3000
Attn: Eve Gerriets
Bridge Street Fund 1994, L.P.
85 Broad Street
New York, New York 10004
U.S.A.
Facsimile: 1 212 902 3000
Attn: Eve Gerriets
The WP Entities
E.M. Warburg, Pincus & Co., LLC
466 Lexington Avenue
New York, New York 100 1 7
U.S.A.
Facsimile: 1 212 878 9351
Telephone: 1 212 878 0600
Attn: Stephen Distler
With a copy to:
E.M. Warburg, Pincus & Co. International Ltd.
Almack House
28 King Street, St. James's
London SWlY 6QW
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<PAGE>
England
Facsimile: 44 171 321 0881
Telephone: 44 171 306 0306
Attn: Roberto Italia
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 100 1 9-6099
U.S.A.
Facsimile: 1 212 728 81 11
Telephone: 1 212 728 8230
Attn: Peter H. Jakes
Except as otherwise specified herein, all notices and other communications shall
be deemed to have been given on the date of receipt if delivered personally or
by mail or on the date of transmission with confirmed answer back if transmitted
by telecopy or telex, whichever shall first occur. Any Party hereto may change
its address for purposes hereof by written notice to the other Parties in
accordance with this Section 6. 1.
6.1. Effective Date; Entire Agreement; Amendments. This Agreement shall
become effective upon signing. Upon such effectiveness, this Agreement, together
with (i) the Exhibit attached hereto, which is incorporated in and is deemed to
be a part of the Agreement, and (ii) the Post-IPO Shareholders' Agreement # I
among Telia, Dankner, Trefoil, Shamrock, the WP Entities and the Company dated
the date hereof, shall constitute the entire agreement between the Parties and
supersede all prior agreements or understandings between them with respect to
the matters referred to herein (including, without limitation, the Amended and
Restated Pre-IPO Shareholders' Agreement among the Parties). This Agreement may
be modified or amended only by an instrument in writing signed by all Parties.
6.2. Shares Subject to this Agreement. Each of the Shareholders agrees that
all Shares owned by them, whether now owned or hereafter acquired by them, shall
be subject to this Agreement.
6.3. No Agency. Nothing in or arising out of this Agreement is to be taken
as constituting a partnership or agency relationship between the Parties, and no
Party shall have the right or authority to bind or commit the other in any
manner or for any purposes whatsoever, other than as expressly provided for
herein with respect to the Company.
6.4. Further Action. Each Party agrees to perform any further acts, give
further assurances and execute and deliver any further documents as may be
necessary or convenient to carry out the provisions and intent of this
Agreement. Each Party shall use and exercise its rights and powers (as to voting
or otherwise) in and in relation to the Company in order to give full effect to
the provisions of this Agreement. The Parties will do all acts required,
including but not limited to, passing appropriate resolutions of the Company, to
cause the Company to undertake to perform the obligations imposed upon it by the
terms of the Agreement.
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<PAGE>
6.5. No Waiver. No relaxation, forbearance, delay or indulgence by any
Party in enforcing any of the terms and conditions of this Agreement or the
granting of time by any Party to any other Party shall prejudice, affect or
restrict the rights and powers of such Party hereunder nor shall any waiver by
any Party or any breach hereof operate as a waiver of or in relation to any
subsequent or continuing breach hereof.
6.6. Governing Law; Construction. This Agreement and the rights of the
Parties hereunder shall be governed by and interpreted in accordance with the
laws of the Republic of Poland.
6.7. Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original but both of which shall
constitute one and the same document.
6.8. Costs and Reimbursements. Unless otherwise stated in this Agreement,
all expenses involved in the negotiation, preparation and consummation of this
Agreement shall be borne by the Party incurring such expenses.
6.9. Termination. This Agreement and the transactions contemplated
hereunder shall terminate in any of the following ways:
6.9.1. Automatically with respect to any Shareholder and its Affiliate
Transferees if such Shareholder ceases to own Shares representing at least
2.5% of the outstanding voting securities of the Company; or
6.9.2. Automatically, when the only remaining parties to this
Agreement are the Company and any one Shareholder; or
6.9.3. Upon the dissolution or liquidation (voluntary or in
bankruptcy) of the Company; or
6.9.4. By the unanimous written agreement of the Parties.
If this Agreement is terminated without a breach or default by any of
the Parties, then all of the Parties shall be released from any and all
liabilities hereunder except those obligations in Section 2 for the period
set forth therein and Section 3 for the period set forth in Section 3.4.
6.10. Binding on Successors; Non-Assignability. This Agreement shall be
binding upon and inure to the benefit of each of the Parties and their
respective legal representatives, successors and permitted assigns; provided
that, except as specified in Sections 1.8.5 and 1.9, no Party may assign any
rights or delegate any duties under this Agreement, in whole or in part, without
the prior written consent of the other Parties.
6.11. Severability. If any provision of this Agreement shall be determined
by any court of competent jurisdiction to be invalid or unenforceable, the
remainder of the Agreement other than the portion determined to be invalid or
unenforceable shall not be affected thereby, and each
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<PAGE>
valid provision thereof shall be enforced to the fullest extent permitted by
law. The Parties will, to the extent possible, modify such term or provision so
that such provision is no longer invalid or unenforceable.
6.12. Treatment of Certain Parties. For purposes of Section 2 and Section
6.10.1 of this Agreement, (i) the GSCP Entities shall be treated as one
Shareholder, (ii) Shamrock and Trefoil shall be treated as one Shareholder,
(iii) the WP Entities shall be treated as one Shareholder and (iv) a Shareholder
and its Affiliate Transferees shall be treated as one Shareholder.
6.13. Nature of Liability. The liability of each of the WP Entities is
several and not joint and no one of the WP Entities shall be liable in any way
for the acts or omissions of any other of the WP Entities
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<PAGE>
IN WITNESS WHEREOF, the Parties hereto have duly executed and delivered
this Agreement as an instrument under sea] as of the day and year first above
written.
NETIA HOLDINGS S.A.
By: ______________________________
Printed Name: ____________________
Title: ___________________________
THE SHAREHOLDERS:
TELIA AB (publ.)
By: ______________________________
Printed Name: ____________________
Title: ___________________________
DANKNER INVESTMENTS LIMITED
By: ______________________________
Printed Name: ____________________
Title: ___________________________
SHAMROCK HOLDINGS, INC.
By: ______________________________
Printed Name: ____________________
Title: ___________________________
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<PAGE>
TREFOIL CAPITAL INVESTORS L.P.
By: ______________________________
Printed Name: ____________________
Title: ___________________________
GS CAPITAL PARTNERS L.P.
By: ______________________________
Printed Name: ____________________
Title: ___________________________
STONE STREET FUND 1994, L.P.
By: ______________________________
Printed Name: ____________________
Title: ___________________________
BRIDGE STREET FUND 1994, L.P.
By: ______________________________
Printed Name: ____________________
Title: ___________________________
WARBURG, PINCUS EQUITY PARTNERS, L.P.
By Warburg, Pincus & Co.,
its General Partner
By: ______________________________
Printed Name: ____________________
Title: Partner
<PAGE>
WARBURG, PINCUS VENTURES
INTERNATIONAL, L.P.
By Warburg, Pincus & Co.,
its General Partner
By: ______________________________
Printed Name: ____________________
Title: Partner
WARBURG, PINCUS NETHERLANDS
EQUITY PARTNERS 1, C.V.
By Warburg, Pincus & Co.,
its General Partner
By: ______________________________
Printed Name: ____________________
Title: Partner
WARBURG, PINCUS NETHERLANDS
EQUITY PARTNERS 11, C.V.
By Warburg, Pincus & Co.,
its General Partner
By: ______________________________
Printed Name: ____________________
Title: Partner
WARBURG, PINCUS NETHERLANDS
EQUITY PARTNERS 111, C.V.
By Warburg, Pincus & Co.,
its General Partner
By: ______________________________
Printed Name: ____________________
Title: Partner
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into on and as of , 1999 by and among (i) NETIA HOLDINGS S.A., (formerly R.P.
Telekom S.A.), a company organized and existing under the laws of the Republic
of Poland with its headquarters at ul. Poleczki 13, 02-822 Warsaw, Poland (the
"Company"), (ii) DANKNER INVESTMENTS LIMITED, a public company incorporated
under the laws of Israel ("Dankner"), (iii) TREFOIL CAPITAL INVESTORS L.P., a
Delaware limited partnership ("Trefoil, (iv) SHAMROCK HOLDINGS, INC., a
corporation organized under the laws of Texas ("Shamrock'), (v) GS CAPITAL
PARTNERS L.P., a limited partnership organized under the laws of Delaware
("GSCP"), (vi) STONE STREET FUND 1994, L.P., a limited partnership organized
under the laws of Delaware ("Stone Street"), (vii) BRIDGE STREET FUND 1994,
L.P., a limited partnership organized under the laws of Delaware ("Bridge
Street" and, together with GSCP and Stone Street, the "GSCP Entities"), (viii)
TELIA AB (publ.), a company organized under the laws of the Kingdom of Sweden
("Telia") and (ix) (a) WARBURG, PINCUS EQUITY PARTNERS, L.P., a Delaware limited
partnership ("WPEP"), (b) WARBURG, PINCUS VENTURES INTERNATIONAL, L.P., a
Bermuda limited partnership ("WPVI"), (c) WARBURG, PINCUS NETHERLANDS EQUITY
PARTNERS 1, C.V., a Dutch limited partnership ("WPNE I"), (d) WARBURG, PINCUS
NETHERLANDS EQUITY PARTNERS II, C.V., a Dutch limited partnership ("WPNE II")
and (e) WARBURG, PINCUS NETHERLANDS EQUITY PARTNERS III, C.V., a Dutch Limited
partnership ("WPNE 111" and, together with WPEP, WPVl, WPNE I and WPNE II, the
"WP Entities" and each individually a "WP Entity"). Dankner, Trefoil, Shamrock,
the GSCP Entities, Telia and the WP Entities (and their Permitted Assignees (as
defined herein)) are collectively referred to as the "Holders" and each
individually, a "Holder", and the Company and the Holders are collectively
referred to as the "Parties" and each individually, a "Party."
AGREEMENT
1. DEFINITIONS
"Commission" means the U.S. Securities and Exchange Commission or any other
U.S. federal agency at the time administering the Securities Act.
"Common Stock" means any and all common stock of the Company, of whatever
series.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Initiating Holders" means any Holder or Holders of no less than five
percent (5%) of the Common Stock (Shamrock and Trefoil to be treated as one
Holder for such purposes, the GSCP Entities to be treated as one holder for such
purposes and the WP Entities to be treated as one Holder for such purposes).
<PAGE>
"Person" means any individual, company, trust, partnership, association, or
other entity.
"Registrable Securities" means (i) all shares of Common Stock and/or
American Depositary Shares representing shares of Common Stock ("ADSs") now or
hereafter held by the Holders (such common stock and ADSs collectively referred
to herein as the "Stock"), (ii) any Common Stock issued as a dividend or other
distribution with respect to or in replacement of the Stock and (iii) any Common
Stock issued in any combination or subdivision of the Stock. In determining the
amount of Common Stock held by any Holder, the sum of (i), (ii) and (iii) shall
be used.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar U.S. federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
2. REGISTRATION RIGHTS
2.1. Demand Registration.
Upon the written request from any Initiating Holder ("Requesting Initiating
Holder") that the Company effect any registration with respect to all or any
portion of the Registrable Securities (other than a registration on Form F-3 or
any related form of registration statement), the Company will:
2.1.1. Promptly give written notice of the proposed registration to
all other Holders holding Registrable Securities; and
2.1.2. As soon as practicable, use its best efforts to effect such
registration (including, without limitation, the execution of an
undertaking to file posteffective amendments, appropriate qualifications
under foreign, blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act), as
may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the
Registrable Securities of any Holder(s) joining in such request as are
specified in a written request given within twenty (20) days after receipt
of such written notice from the Company in accordance with the provisions
of Section 2.2 hereof (such Holder(s) being referred to as "Participating
Holders"); provided that the Company shall not be obligated to take any
action to effect any such registration, qualification or compliance
pursuant to this Section 2. 1:
(i) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless the
Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act;
(ii) Prior to two hundred and seventy (270) days after the date
hereof,
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<PAGE>
(iii) If the Initiating Holders propose to sell a number of
shares of Registrable Securities at an aggregate offering price (after
deduction for underwriter commissions and expenses) to the public of
less than Five Million Dollars ($5,000,000);
(iv) After the Company has effected two (2) such registrations
pursuant to this Section 2.1 at the request of Telia, and one such
registration pursuant to this Section 2.1 at the request of Dankner,
and one (1) such registration pursuant to this Section 2.1 at the
request of Shamrock and Trefoil, taken together, and one (1) such
registration pursuant to this Section 2.1 at the request of the WP
Entities, and each such registration has been declared or ordered
effective; or
(v) If the request is received by the Company less than one
hundred and twenty (120) days following the effective date of any
previous registration statement filed pursuant to a request made
pursuant to this Section 2. L
Subject to the foregoing clauses (i) through (v) and to Section
2.1.5 (below), the Company shall file a registration statement
covering the Registrable Securities so requested to be registered as
soon as practicable after receipt of the request from the Requesting
Initiating Holders.
2.1.3. Underwriting. If the Requesting Initiating Holder(s) intend to
distribute the Registrable Securities covered by their request by means of
an underwriting, they shall so advise the Company as part of their request
made pursuant to Section 2.1 and the Company shall include such information
in the written notice referred to in Section 2.1.1. The right of any Holder
to registration pursuant to Section 2.1 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such
Registrable Securities in the underwriting to the extent requested (unless
otherwise mutually agreed by a majority in interest of the Requesting
Initiating Holders and such Holder to the extent provided herein).
2.1.4. Underwriting Agreement/Withdrawals. The Company shall (together
with all Holders proposing to distribute their securities through such
underwriting) enter into an underwriting agreement (an "Underwriting
Agreement") in such form and containing such provisions as are customary in
the securities business for such an arrangement between such underwriter
and companies of the Company's size and investment status (it being
understood that the Company will not require any Requesting Initiating
Holder or Participating Holder to make any representation, warranty or
agreement in such Underwriting Agreement other than with respect to such
Requesting Initiating Holder's or Participating Holder's ownership of the
shares being registered and such Requesting Initiating Holder's or
Participating Holder's intended method of disposition) with the underwriter
or underwriters selected for such underwriting by a majority in interest of
the Registrable Securities held by those Participating Holders
participating in such registration and approved by the Company (such
approval not to be
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<PAGE>
unreasonably withheld). The rights of the Requesting Initiating Holders and
Participating Holders and the Company to participate in such registration
shall be subject to the cutback provisions of Section 2.2-2. No Registrable
Securities excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in such registration.
If any Holder owning Registrable Securities disapproves of the terms
of the underwriting, such Holder may elect to withdraw therefrom by written
notice to the Company, the underwriter and the Requesting Initiating
Holders. The Registrable Securities and/or other securities so withdrawn
from such underwriting shall also be withdrawn from such registration;
provided, however, that if by the withdrawal of such Registrable Securities
a greater number of Registrable Securities held by other Holders may be
included in such registration (up to the maximum of any limitation imposed
by the underwriters), then the Company shall offer to all Participating
Holders the right to include additional Registrable Securities in the same
proportion used in determining the underwriter limitation in this Section.
2.1.5. Right to Delay a Demand Registration. If at the time of any
request to register Registrable Securities pursuant to this Section, (i)
the Company is preparing a registration statement for a public offering
(other than a registration effected solely to implement an employee benefit
plan or a transaction to which Rule 145 of the Commission is applicable)
which in fact is filed and becomes effective within ninety (90) days after
the request, or (ii) the Company's supervisory board determines, in good
faith, that effecting such a registration would require the Company to make
public disclosure of information, the public disclosure of which would have
a material adverse effect upon the Company, then the Company may at its
option direct that such request be delayed, in the case of clause (i), for
a period not in excess of one hundred and twenty (120) days from the
effective date of such registration, such right to delay a request pursuant
to clause (i) of this Section 2.1.5 to be exercised by the Company not more
than once during the term of this Agreement or in the case of clause (ii),
for a period not in excess of one hundred and twenty (120) days from the
date of the request, such right to delay a request pursuant to clause (ii)
of this Section 2.1.5 to be exercised by the Company not more than once in
any twelve month period. Nothing in this section shall preclude a Holder of
Registrable Securities from enjoying registration rights which it might
otherwise possess under this Agreement.
2.1.6. Certain Registrations not to be Counted. In the event that the
transactions contemplated by the Underwriting Agreement executed in
connection with a requested registration pursuant to Section 2.1 are not
consummated due to a breach by the Company of any of its representations
and warranties or obligations thereunder (it being understood that a
failure to close due to changes in market conditions shall not constitute
such a breach), such request for registration shall not be counted for
purposes of Section 2.1.2.(iv). In addition, in the event that as a result
of the application of limitations on the number of shares of Registrable
Securities held by a Requesting Initiating Holder to be included in a
registration, less than 50% of the shares of Registrable Securities that
such Requesting Initiating Holder originally requested to be registered are
actually registered, the Requesting Initiating Holder may elect to either
(i) proceed with such registration, in
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<PAGE>
which case such registration shall count for purposes of Section
2.1.2.(iv), or (ii) withdraw from such registration, in which case such
registration shall not count for purposes of Section 2.1.2.(iv) but only if
such Requesting Initiating Holder reimburses the Company for all
Registration Expenses (as defined herein) incurred by the Company in
connection with such registration.
2.2. Piggyback Registration.
2.2.1. The Company's Obligation to Register. If the Company at any
time proposes to initiate a registration of its securities under the
Securities Act on its own or upon request of any other persons (including
any Requesting Initiating Holders) and thereafter registers any of its
securities under the Securities Act (other than a registration effected
solely to implement an employee benefit plan, a transaction to which Rule
145 of the Commission is applicable or any other form or type of
registration in which Registrable Securities cannot be included pursuant to
Commission rule or practice), it will give written notice to all Holders of
the outstanding Registrable Securities of its intention to do so (stating
the intended method and terms of disposition of such securities, including
a list of the jurisdictions in which the Company intends to qualify such
securities). If such registration is proposed to be on a form which permits
inclusion of the Registrable Securities, upon the written request from any
Holder within twenty (20) days after transmittal by the Company to the
Holders of such notice, the Company will, subject to the limits contained
in this Section, use its best efforts to cause all such Registrable
Securities of said Holders to be registered under the Securities Act and
qualified for sale under any state blue sky law, all to the extent
requisite to permit such sale or other disposition by such Holders of the
Registrable Securities so registered. The Holders' registration rights
under this Section 2.2.1 shall be in addition to their rights under Section
2. 1.
2.2.2. Cutbacks. Notwithstanding any other provision of Section 2.1 or
this Section 2.2, if the underwriter(s) managing the applicable
registration determines that marketing factors require a limitation of the
number of shares of Common Stock and Registrable Securities that may be
included in such registration and so advises the Company and the Requesting
Initiating Holders (if any) in writing, then the Company shall so advise
all Participating Holders exercising their piggyback rights pursuant to
Section and the number of shares of Common Stock and Registrable Securities
that may be included in the registration and underwriting shall be
allocated as follows: (i) in the case of a registration initiated by the
Company on its own, first to the Company and thereafter to the
Participating Holders of such Registrable Securities pro rata based on the
number of shares of Registrable Securities that such Participating Holders
have requested to be included in such registration; and (h) in the case of
a registration initiated by a Requesting Initiating Holder(s) pursuant to
Section 2.1 or by another person having the right to demand such a
registration, first to such Requesting Initiating Holder(s) (in the event
there are more than one Requesting Initiating Holder, pro rata based on the
number of shares of Registrable Securities that such Requesting Initiating
Holders have demanded to be included in such registration) or to such other
person as the case may be (but subject, in the event that such Requesting
Holder is Dankner or Shamrock and Trefoil or any of the
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<PAGE>
GSCP Entities, to the provisions of Section 2.2.3 below), and thereafter to
the Company (if the Company wishes to include any shares of Common Stock in
such registration) and to the Participating Holders of such Registrable
Securities pro rata based, in the case of the Company, on the number of
shares of Common Stock that the Company wishes to include in such
registration (but not more than the largest number of shares of Registrable
Securities requested to be included in such registration by any
Participating Holder), and in the case of Participating Holders, on the
number of shares of Registrable Securities that such Participating Holders
have requested to be included in such registration, respectively.
2.2.3. The Parties acknowledge and agree that if either (i) Dankner or
(ii) Shamrock and Trefoil (as one Holder) or (iii) any of the GSCP
Entities, is the Requesting Initiating Holder of a registration under
Section 2.1, then any of Dankner, Shamrock, Trefoil and the GSCP Entities
shall also be treated as Requesting Initiating Holders (except for purposes
of Section 2.1.2.(iv)) as to any shares they propose to include in such
registration pursuant to this Section 2.2. In that event, the total number
of shares includable in any such registration by Dankner, Shamrock, Trefoil
and the GSCP Entities (and their respective assignees), determined as
provided in clause 2.2.2 above, shall be allocated among such parties on
the basis agreed to in writing by Dankner, Shamrock, Trefoil and the GSCP
Entities.
2.3. Form S-3.
2.3.1. Obligation to Register. The Company shall use its best efforts
to qualify for registration on Form S-3 (or comparable form for a foreign
issuer). After the Company has qualified for the use of Form S-3, the
Initiating Holders of Registrable Securities shall have the right to
request registrations on Form S-3 thereafter, as the case may be (but the
Holders, as a group, may not make more than three (3) such requests in any
twelve (12) month period and no more than six (6) such request(s) in the
aggregate) under this Section (such requests shall be in writing and shall
state the number of shares of Registrable Securities to be disposed of and
the intended method of disposition of such shares by such Holder or
Holders), provided that the Company shall not be required to effect a
registration pursuant to this Section unless (i) the Holder or Holders
requesting registration propose to dispose of Registrable Securities which
they reasonably anticipate will have an aggregate offering price (before
deduction of underwriting discounts and expenses of sale) of at least One
Million Dollars ($1,000,000), or (ii) the Company has initiated a proposed
registration as described in Section 2. 1.
2.3.2. Notice. The Company shall give written notice to all Holders of
Registrable Securities of the receipt of a request for registration
pursuant to this Section 2.3 and shall permit such other holders to
participate in the registration upon their request thereto given within
twenty (20) days after receipt of such notice. Subject to the foregoing,
the Company will use its best efforts to effect promptly the registration
of all shares of Registrable Securities on Form S-3, to the extent
requested by the Holders thereof for purposes of disposition. The Company
need not register shares on Form S-3 (or comparable form) in any
jurisdiction in which the Company does not qualify to do business. If at
the time of any request to register Registrable Securities pursuant to this
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<PAGE>
Section 2.3, (i) the Company is preparing a registration statement for a
public offering (other than a registration effected solely to implement an
employee benefit plan or a transaction to which Rule 145 of the Commission
is applicable) which in fact is filed and becomes effective within ninety
(90) days after the request, or (ii) the Company's supervisory board
determines, in good faith, that effecting such a registration would require
the Company to make public disclosure of information, the public disclosure
of which would have a material adverse effect upon the Company, then the
Company may at its option direct that such request be delayed, in the case
of clause (i), for a period not in excess of one hundred and twenty (120)
days from the effective date of such registration, such right to delay a
request pursuant to clause (i) of this Section 2.3.2 to be exercised by the
Company not more than once during the term of this Agreement or in the case
of clause (H), for a period not in excess of one hundred and twenty (120)
days from the date of the request, such right to delay a request pursuant
to clause (ii) of this Section 2.3.2 to be exercised by the Company not
more than once in any twelve month period.
2.4. Registration Procedures.
If and whenever the Company is required by the provisions of this Agreement
to use its best efforts to effect the registration of any Registrable Securities
under the Securities Act, the Company will, as expeditiously as possible:
2.4.1. Prepare and file with the Commission a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for the period
provided in this Section;
2.4.2. Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the sale or other disposition of all securities covered by
such registration statement whenever the seller or sellers of such
securities shall desire to sell or otherwise dispose of the same, but only
to the extent provided in this Section;
2.4.3. Furnish to each seller of Registered Securities and to each
underwriter such number of copies of the registration statement and the
prospectus included therein (including each preliminary prospectus), in
conformity with the requirements of the Securities Act, and such other
documents, as such persons may reasonably request in order to facilitate
the public sale or other disposition of the securities owned by such seller
and covered by such registration statement;
2.4.4. Use its reasonable best efforts to register or qualify the
securities covered by such registration statement under such other United
States, foreign or state blue sky laws of such jurisdictions as each seller
or, in the case of an underwritten public offering, the managing
underwriter, shall reasonably request, and do any and all other acts and
things which may be necessary under such securities or blue sky laws to
enable such seller to consummate the public sale or other disposition in
such jurisdictions of the
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securities owned by such seller, except that the Company shall not for any
such purpose be required to qualify to do business as a foreign company in
any jurisdiction wherein it is not so qualified or intends to be so
qualified prior to the effective date of the applicable registration
statement;
2.4.5. Use its reasonable best efforts to list the Registrable
Securities covered by such registration statement with any securities
exchange or market on which the Common Stock of the Company, if applicable,
is then listed or quoted;
2.4.6. Notify each seller of Registrable Securities and each
underwriter under such registration statement as promptly as practicable at
any time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event of which the
Company has knowledge as result of which, in the Company's reasonable
judgment, the prospectus contained in such registration statement, as then
in effect, would include an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements, therein not misleading in light of the circumstances then
existing;
2.4.7. Before filing the registration statement or prospectus or
amendments or supplements thereto, furnish to one counsel selected by a
majority of the voting interests of the participating holders of
Registrable Securities copies of such documents proposed to be filed which
shall be subject to the reasonable approval of such counsel;
2.4.8. Furnish on the date the Registrable Securities are delivered to
the underwriters for sale pursuant to such registration to each prospective
seller a signed counterpart, addressed to the prospective seller, of (i) an
opinion of counsel for the Company, dated such date stating that such
registration statement has become effective under the Securities Act and
that (A) to the best knowledge of such counsel, no stop order suspending
the effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the
Securities Act, (B) the registration statement, the related prospectus and
each amendment or supplement thereof comply as to form in all material
respects with the requirements of the Securities Act (except that such
counsel need not express any opinion as to financial statements contained
therein) and (C) to such other effects as reasonably may be requested by
counsel for the underwriters or by such seller or its counsel, and (ii) a
"comfort" letter signed by the independent public accountants who have
certified the Company's financial statements included in the registration
statement, stating that they are independent public accountants within the
meaning of the Securities Act and that, in the opinion of such accountants,
the financial statements of the Company included in the registration
statement or the prospectus, or any amendment or supplement thereof, comply
as to form in all material respects with the applicable accounting
requirements of the Securities Act, and such letter shall additionally
cover such other financial matters with respect to such registration as
such underwriters reasonably may request; provided, however, that
notwithstanding any other provision of this Section, the Company shall not
in any event be required to use its best efforts to maintain the
effectiveness of any such registration statement for a period in excess of
one hundred eighty (I 80) days;
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2.4.9. (i) Make available for inspection by each seller of Registrable
Securities, any underwriter participating in any distribution pursuant to
such registration statement, and any attorney, accountant or other agent
retained by such seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, (ii) cause the
Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant
or agent in connection with such registration statement and (iii) provide
each seller and its counsel with the opportunity to participate in the
preparation of such registration statement; and
2.4.10. Enter into such agreements and take such other actions as the
sellers of Registrable Securities and the underwriters reasonably request
in order to expedite or facilitate the disposition of such Registrable
Securities, including but not limited to participating in road shows and
other customary selling efforts.
2.5. Registration Expenses.
As used herein, "Registration Expenses" shall mean all expenses incurred by
the Company in complying with Sections 2.1, 2.2, 2.3 and 2.4 hereof, including,
without limitation, all registration and filing fees; printing expenses; fees
and disbursements of counsel for the Company; fees and disbursements of one
counsel for all the selling shareholders of the Registrable Securities; blue sky
fees and expenses; foreign securities laws fees and expenses; and the expense of
any special audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company which shall be
paid in any event by the Company); and "Selling Expenses" shall mean all
underwriting discounts and selling commissions applicable to the sales
thereunder. Except as specifically provided in Section 2.1.6, the Company will
pay all Registration Expenses in connection with the registrations pursuant to
Sections 2.1, 2.2 and 2.3, regardless of which Initiating Holders have requested
registration pursuant to Sections 2.1 or 2.2. All Selling Expenses in connection
with each registration pursuant to Sections 2.1, 2.2 and 2.3 shall be borne by
the Company and the selling Holders pro rata in proportion to the Registrable
Securities covered thereby being sold by them.
2.6. Indemnification.
2.6.1. Indemnification by the Company. In the event of any
registration of any of its securities under the Securities Act pursuant to
this Agreement, the Company shall indemnify and hold harmless each of the
following parties: each seller of such securities; (ii) each underwriter
(as defined in the Securities Act); (iii) each other Person who is an
officer, director or partner of such seller or who participates in the
offering of such securities; and (iv)each other Person, if any, who
controls (within the meaning of the Securities Act) such seller,
underwriter or participating Person against any losses, claims, damages or
liabilities, as incurred (collectively the "liability"), joint or several,
to which such seller, underwriter, participating Person or controlling
Person may become subject under the Securities Act or any other statute or
at common law, insofar as such liability (or action in respect thereof)
arises out of or is based upon (x) any untrue statement or alleged untrue
statement of any material fact contained in any registration statement
under
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which such securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, (y) any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or (z) any violation by the
Company of the Securities Act or any rule or regulation promulgated
thereunder or any foreign securities rules or regulations applicable to the
Company in connection with any such registration, qualification or
compliance, except as otherwise provided in Section 2.6.2 below. Except as
otherwise provided in Section 2.6.4 below, the Company shall reimburse each
such seller, underwriter, participating Person or such controlling Person
in connection with investigating or defending any such liability, as such
expenses are incurred; provided, however, that the Company shall not be
liable to any seller, underwriters, participating Persons, or controlling
Persons in any such case to the extent that any such liability arises out
of or is based upon any statement or alleged omission made in such
registration statement, preliminary or final prospectus, or amendment or
supplement thereto in reliance upon and in conformity with written
information furnished to the Company by such Person to be specifically
stated for use therein; the Company shall not be required to indemnify any
Person against any liability arising from any untrue or alleged untrue or
misleading statement or omission or alleged omission contained in any
preliminary prospectus if such deficiency is corrected in the final
prospectus and liability arises out of the failure of any Person to deliver
a prospectus as required by the Securities Act. The indemnity provided for
in this Section shall remain in full force and effect regardless of any
investigation made by or on behalf of such seller, underwriter,
participating Person or controlling Person and shall survive transfer of
such securities by such seller.
2.6.2. Indemnification by Holders of Registrable Securities. Each
Holder of any Registrable Securities shall, in the event of a Registration
of any of its Registrable Securities under the Securities Act pursuant to
Sections 2.1, 2.2 or 2.3, severally and not jointly, indemnify and hold
harmless the Company, its directors and officers, each underwriter and each
other Person, if any, who controls the Company or such underwriter, against
any liability, joint or several, as incurred, to which the Company,
underwriter or any such director or officer or controlling person may
become subject under the Securities Act or any other statute or at common
law, in so far as such liability (or actions in respect thereof) arises out
of or is based upon (i) any untrue statement or alleged untrue statement of
any material fact contained in the registration statement under which such
Registrable Securities were registered under the Securities Act at the
request of such Holder pursuant to this Agreement, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereto, or (ii) any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided however, that no Holder of
Registrable Securities shall be required to indemnify any Person against
any liability arising from any untrue or alleged untrue or misleading
statement or omission or alleged omission contained in any preliminary
prospectus if such deficiency is corrected in the final prospectus and
liability arises out of the failure of any Person to deliver a prospectus
as required by the Securities Act. Notwithstanding the above, the
indemnification set forth in this Section 2.6.2 shall be
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given to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in such
registration statement, preliminary or final prospectus, amendment or
supplement thereto in reliance upon and in conformity with written
information furnished to the Company by such Holder and expressly stated
for use therein. Such Holder shall reimburse the Company, such underwriter
or such director, officer, or controlling person for any legal fees
incurred in investigating or defending any such liability, as incurred;
provided, that the obligations of such Holder of Registrable Securities for
the indemnity hereunder shall be limited to the net proceeds received by
such Holder of Registrable Securities from the sale of Registrable
Securities covered by such registration statement and shall not extend to
any settlement of claims related thereto without the express written
consent of such Holder of Registrable Securities.
2.6.3. Further Indemnity. Indemnification similar to that specified in
Sections 2.6.1 and 2.6.2 shall be given by the Company and each Holder of
any Registrable Securities (with such modifications as may be appropriate)
with respect to any required registration or other qualification of the
Common Stock under any federal, foreign or state law or regulation of
governmental authority other than the Securities Act.
2.6.4. Procedures, Rights to Separate Counsel. (i) Each party entitled
to indemnification under this Section 2.6 (the "Indemnified Party") shall
give notice to the party required to provide indemnification (the
"Indemnifying Party") promptly after such Indemnified Party has received
written notice of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom, unless there shall be a conflict of
interest; provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld), and
the Indemnified Party may participate in such defense at such Indemnified
Party's expense; and provided further that the failure of any Indemnified
Party to give notice as provided herein shall not relieve the Indemnifying
Party of its obligations under this Section 2.6 unless such failure to give
notice shall materially adversely affect the Indemnifying Party in the
defense of any such claim or any such litigation. The Indemnified Party
shall also have the right to employ separate counsel in any such action and
to participate in the defense thereof but the fees and expenses of such
counsel shall not be at the expense of the Indemnifying Party unless either
(A) in the reasonable opinion of counsel to the Indemnified Party, there
are defenses available to the Indemnified Party that are not available to
the Indemnifying Party or representation of the Indemnified Party by
counsel for the Indemnifying Party would present a conflict of interest for
such counsel, or (B) the Indemnifying Party fails to promptly defend, in
which case the fees and expenses of such counsel for the Indemnified Party
shall be borne by the Indemnifying Party. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party a release
from all liability in respect to such claim or litigation.
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<PAGE>
(ii) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which either
(A) any Indemnified Party exercising rights under this Agreement, or
any controlling Person of any such Holder, makes a claim for
indemnification pursuant to this Section but is judicially determined
(by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in
such case notwithstanding the fact that this Section provides for
indemnification in such cases, (B) contribution under the Securities
Act may be required on the part of any such selling Holder or any such
controlling Person in circumstances for which indemnification is
provided under this Section or (C) the indemnification provided for by
this Section is insufficient to hold harmless an Indemnified Party,
other than by reason of the exceptions provided therein; then, and in
each such case, the Company and such Holder will contribute to the
aggregate losses, claims, damages or liability to which they may be
subject (after contribution from others) (X) in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on
the one hand and the Indemnified Party on the other or (Y) if the
allocation provided by clause (X) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the
relevant fault referred to in clause (X) above but also the relative
benefits received by the Indemnifying Party and the Indemnified Party
from the offering of the securities (taking into account the portion
of the proceeds of the offering received by each such party) as well
as the statements or omissions or alleged statements or omissions
which resulted in such losses, claims, damages or liabilities and any
other relevant equitable considerations. No Person will be required to
contribute any amount in excess of the proceeds received by such
Person in respect of all such Registrable Securities offered and sold
by it pursuant to such registration statement and no Person or entity
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) will be entitled to contribution from any
Person or entity who was not guilty of such fraudulent
misrepresentation.
2.7. Termination of Registration Rights.
The rights to registration and the designation of Common Stock as
Registrable Securities shall terminate as to any particular securities when such
securities shall have been lawfully sold by the Holder thereof to the public
pursuant to a registration statement or after a sale thereof pursuant to Rule
144.
2.8. Compliance with Rule 144.
With a view to making available the benefits of certain rules and
regulations of the Commission which may at any time permit the sale of
Registrable Securities to the public without registration, at all times ninety
(90) days after any registration statement covering a public offering of
securities of the Company under the Securities Act shall have become effective,
the Company agrees to:
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2.8.1. Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
2.8.2. Use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
2.8.3. Furnish to each Holder of Registrable Securities forthwith upon
request a written statement by the Company as to its compliance with the
reporting requirements of such Rule 144 and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company as
such Holder may reasonably request availing itself of any rule or
regulation of the Commission allowing such Holder to sell any Registrable
Securities without registration.
2.9. Assignability of Registration Rights.
The registration rights set forth in this Agreement are assignable by any
Holder to each assignee (a "Permitted Assignee") of at least 33.3% of the
Registrable Securities owned by such Holder on the date of this Agreement
(appropriately adjusted for recapitalizations) who agrees in writing to be bound
by the terms and conditions of this Agreement within ten (10) days of such
assignment. The term "seller" as used in this Agreement refers to a Holder of
the Registrable Securities selling such shares.
2.10. Rights Which May not be Granted to Subsequent Investors.
The Company shall not grant registration rights or enter into any
registration rights agreement or similar agreement with any Person after the
date hereof which are superior to the rights granted hereunder.
2.11. Information by Holder.
The Holder or Holders of Registrable Securities included in any
registration shall furnish to the Company such information regarding such Holder
or Holders, the Registrable Securities held by them, and the distribution
proposed by such Holder or Holders, as the Company may reasonably request in
writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Section.
3. MISCELLANEOUS.
3.1. Consent to Amendments.
Except as otherwise expressly provided herein, the provisions of this
Agreement may be amended and the Company may take any action herein prohibited,
or omit to perform any act herein required to be performed by them, only if it
has obtained the written consent of each of the Holders. No course of dealing
between the Company and any Holder or any delay in
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<PAGE>
exercising any rights hereunder or under the Company's Articles of Incorporation
will operate as a waiver of any rights of any such Holders.
3.2. Successors and Assigns.
Except as otherwise expressly provided herein, all covenants and agreements
contained in this Agreement by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors and assigns of the
parties hereto whether so expressed or not.
3.3. Severability.
Each provision of this Agreement shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
3.4. Counterparts.
This Agreement may be executed in two or more counterparts, any one of
which need not contain the signatures of more than one party, but all such
counterparts when taken together shall constitute one and the same Agreement.
3.5. Descriptive Headings.
The descriptive headings of this Agreement are inserted for convenience
only and do not constitute a part of this Agreement.
3.6. Notices.
All notices, demands, consents or other communications required or
permitted hereunder shall be in writing and shall be deemed to have been given
when personally delivered or three (3) business days (including Saturday) if
sent by first class certified mail, return receipt requested or the next
business day if sent by facsimile, Express Mail, Federal Express or similar
service, addressed as follows:
The Company:
Netia Holdings S.A.
Netia Holdings S.A.
ul. Poleczki 13
02-822 Warsaw
Poland
Attn: Meir Srebernik
Facsimile: 48 22 496435
Telephone: 48 22 492328
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<PAGE>
with a copy to:
Weil, Gotshal & Manges
One South Place
London EC2M 2WG
England
Attn: William Sievers
Facsimile: 44 171 903 0990
Telephone: 44 171 903 1000
and to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10 1 53
U.S.A.
Attn: Matthew Bloch
Facsimile: 1 212 310 8007
Telephone: 1 212 310 8000
The Holders:
Telia AB
Business Area International
S-123 86 Farsta
Sweden
Attn: Clas Hygrell, Vice President, Business Development
Facsimile: 46 8 713 3152
Telephone: 46 8 713 6053
With a copy to:
Telia AB, Legal Affairs
Attn: Jan-Henrik Ahmell, Director, Legal Affairs
S-123 86 Farsta
Sweden
Facsimile: 46 8 94 64 70
Telephone: 46 8 713 6283
Dankner Investments Limited
5, Hashla Street
Tel Aviv
Israel 62283
Fax: 972-3-544 0999
Attn: Moshe Amoyel
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<PAGE>
GS Capital Partners, L.P.
85 Broad Street
New York, New York 10004
U.S.A.
Facsimile: 1 212 902 3000
Attn: Eve Gerriets
With a copy to:
Goldman Sachs International Limited
Peterborough Court
133 Fleet Street
London EC4A 2BB
Facsimile: 44 171 774 4123
Telephone: 44 171 774 7900
Attn: Hughes Lepic
Shamrock Holdings, Inc.
4444 Lakeside Drive
Burbank, CA 91505
U.S.A.
Facsimile: 1 818 845 4675
Attn: George J. Buchler
Trefoil Capital Investors L.P.
444 Lakeside Drive
P.O. Box 7774
Burbank, CA 91510-7774
U.S.A.
Facsimile: 1 818 842 3142
Attn: Robert G. Moskowitz
Managing Director of Trefoil Investors, Inc.
Stone Street Fund 1994, L.P.
85 Broad Street
New York, New York 10004
Facsimile: 1 212 902 3000
Attn: Eve Gerriets
Bridge Street Fund 1994, L.P.
85 Broad Street
New York, New York 10004
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<PAGE>
U.S.A.
Facsimile: 1 212 902 3000
Attn: Eve Gerriets
The WP Entities
E.M. Warburg, Pincus & Co., LLC
466 Lexington Avenue
New York, New York 100 1 7
U.S.A.
Attention: Stephen Distler
Facsimile: 1 212 878 9351
Telephone: 1 212 878 0600
with a copy to:
E.M. Warburg, Pincus & Co. International Ltd.
Almack House
28 King Street, St. James's
London SWIY 6QW
England
Attention: Roberto Italia
Facsimile: 44 171 321 0881
Telephone: 44 171 306 0306
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
U.S.A.
Attention: Peter H. Jakes
Facsimile: 1 212 728 8111
Telephone: 1 212 728 8230
3.7. Governing Law, Consent to Service of Process.
The validity, meaning and effect of this Agreement shall be determined in
accordance with the laws of the State of New York, applicable to contracts made
and to be performed entirely within the State of New York.
3.8. Schedules and Exhibits.
All schedules and exhibits are an integral part of this Agreement.
3.9. Litigation Costs.
Subject to Section 2.6, if any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of a
dispute, breach, default, or
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misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party or parties shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be entitled.
3.10. Specific Performance.
Each Party's obligation under this Agreement is unique. If any Party should
default in its obligations under this Agreement, the Parties each acknowledge
that it would be extremely impracticable to measure the resulting damages;
accordingly, the non-defaulting Party, in addition to any other available rights
or remedies, may sue in equity for specific performance and the parties each
expressly waive the defense that a remedy in damages will be adequate.
3.11. Final Agreement.
This Agreement constitutes the entire agreement between the Parties
pertaining to the subject matter hereof and supersedes and terminates all prior
and contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written.
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<PAGE>
IN WITNESS WHEREOF, the Parties hereto have duly executed and delivered
this Agreement as an instrument under seal as of the day and year first above
written.
NETIA HOLDINGS S.A.
By: ______________________________
Name: ____________________________
Title: ___________________________
THE HOLDERS:
TELIA AB (publ.)
By: ______________________________
Name: ____________________________
Title: ___________________________
DANKNER INVESTMENTS LIMITED
By: ______________________________
Name: ____________________________
Title: ___________________________
SHAMROCK HOLDINGS, INC.
By: ______________________________
Name: ____________________________
Title: ___________________________
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<PAGE>
TREFOIL CAPITAL INVESTORS L.P.
By: ______________________________
Name: ____________________________
Title: ___________________________
G.S. CAPITAL PARTNERS L.P.
By: ______________________________
Name: ____________________________
Title: ___________________________
STONE STREET FUND 1994, L.P.
By: ______________________________
Name: ____________________________
Title: ___________________________
BRIDGE STREET FUND 1994, L.P.
By: ______________________________
Name: ____________________________
Title: ___________________________
WARBURG, PINCUS EQUITY PARTNERS, L.P.
By Warburg, Pincus & Co.,
its General Partner
By: ______________________________
Name: ____________________________
Title: Partner
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WARBURG, PINCUS VENTURES
INTERNATIONAL, L.P.
By Warburg, Pincus & Co.,
its General Partner
By: ______________________________
Name: ____________________________
Title: Partner
WARBURG, PINCUS NETHERLANDS
EQUITY PARTNERS 1, C.V.
By Warburg, Pincus & Co.,
its General Partner
By: ______________________________
Name: ____________________________
Title: Partner
WARBURG, PINCUS NETHERLANDS EQUITY
PARTNERS II, C.V.
By Warburg, Pincus & Co.,
its General Partner
By: ______________________________
Name: ____________________________
Title: Partner
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