0000950172-05-000166.txt : 20120703
0000950172-05-000166.hdr.sgml : 20120703
20050118123038
ACCESSION NUMBER: 0000950172-05-000166
CONFORMED SUBMISSION TYPE: SC 13D/A
PUBLIC DOCUMENT COUNT: 11
FILED AS OF DATE: 20050118
DATE AS OF CHANGE: 20050118
GROUP MEMBERS: VICTOR VEKSELBERG
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: MOSCOW CABLECOM CORP
CENTRAL INDEX KEY: 0000006383
STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841]
IRS NUMBER: 060659863
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0228
FILING VALUES:
FORM TYPE: SC 13D/A
SEC ACT: 1934 Act
SEC FILE NUMBER: 005-19685
FILM NUMBER: 05532944
BUSINESS ADDRESS:
STREET 1: 405 PARK AVENUE
CITY: NEW YORK
STATE: NY
ZIP: 10022
BUSINESS PHONE: 2128268942
MAIL ADDRESS:
STREET 1: 5 WATERSIDE CROSSING
CITY: WINDSOR
STATE: CT
ZIP: 06095
FORMER COMPANY:
FORMER CONFORMED NAME: ANDERSEN GROUP INC
DATE OF NAME CHANGE: 19920703
FORMER COMPANY:
FORMER CONFORMED NAME: ANDERSEN LABORATORIES INC
DATE OF NAME CHANGE: 19790828
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: Columbus Nova Investments VIII Ltd
CENTRAL INDEX KEY: 0001303199
IRS NUMBER: 000000000
STATE OF INCORPORATION: C5
FILING VALUES:
FORM TYPE: SC 13D/A
BUSINESS ADDRESS:
STREET 1: P.O. BOX N-7755
CITY: NASSAU
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 326-5528
MAIL ADDRESS:
STREET 1: P.O. BOX N-7755
CITY: NASSAU
STATE: C5
ZIP: 00000
SC 13D/A
1
lon388479.txt
SC 13D/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_____________
SCHEDULE 13D
(Amendment No. 1)*
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
Moscow CableCom Corp.
---------------------------
(Name of Issuer)
Common Stock, par value $0.01 per share
-------------------------------------------
(Title of Class of Securities)
033 501 107
----------------------
(CUSIP Number)
Ivan Isakov
C/o Columbus Nova Investments VIII Ltd.
590 Madison Avenue
38th Floor
New York, NY 10022
(212) 838-3330
--------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 13, 2005
-----------------------------
(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 that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 (the "Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
-------------------------------------------------------------------------------
CUSIP No. 033 501 107 13D Page 2 of 16 Pages
-------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE
PERSONS (ENTITIES ONLY)
Columbus Nova Investments VIII Ltd.
-------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [x]
-------------------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
-------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ]
-------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
-------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY None
OWNED BY ---------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 17,003,879
WITH ---------------------------------------------------------
9 SOLE DISPOSITIVE POWER
None
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
12,783,000
-------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,003,879(1)
-------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[x]
-------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
78.77% (2)
-------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
-------------------------------------------------------------------------------
----------------------
1 Includes: (i) Shares issuable upon conversion of 4,500,000
shares of Series B Convertible Preferred Stock ("Preferred
Stock"), (ii) Shares issuable upon conversion of 8,283,000
shares of Preferred Stock that Columbus Nova Investments VIII
Ltd. is entitled to acquire upon exercise of Warrants and
(iii) 4,220,879 Shares that the Reporting Person may be deemed
to beneficially own by reason of a Shareholders Agreement
between Columbus Nova Investments VIII Ltd. and Moskovskaya
Telecommunikatsionnaya Corporatsiya dated August 26, 2004, as
amended, with respect to which the Reporting Person disclaims
beneficial ownership. Excludes 1,000,403 Shares that the
Reporting Person may be deemed to beneficially own by reason
of irrevocable proxy and power of attorney arrangements
between Columbus Nova Investments VIII Ltd. and certain
stockholders of the Company, with respect to which the
Reporting Person disclaims beneficial ownership.
2 Based upon a total of 21,585,541 Shares of Common Stock
outstanding, which figure is based on the number of Shares
outstanding as of January 14, 2005, as disclosed by the issuer
to the Reporting
-------------------------------------------------------------------------------
CUSIP No. 033 501 107 13D Page 4 of 16 Pages
-------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE
PERSONS (ENTITIES ONLY)
Victor Vekselberg
-------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [x]
-------------------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------------------
4 SOURCE OF FUNDS
NOT APPLICABLE
-------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ]
-------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Russian
-------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY None
OWNED BY ------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 17,003,879
WITH ------------------------------------------------------
9 SOLE DISPOSITIVE POWER
None
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
12,783,000
-------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,003,879(3)
-------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[x]
-------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
78.77%(4)
-------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
-------------------------------------------------------------------------------
------------------------
Person (8,802,541 Shares) and assuming (i) the conversion of
all of the 4,500,000 shares of Preferred Stock outstanding and
(ii) the exercise in full of all of the warrants to purchase
8,283,000 shares of Preferred Stock and conversion of all of
the shares of Preferred Stock acquired pursuant to the exercise
of these warrants.
3 Includes: (i) Shares issuable upon conversion of 4,500,000
shares of Preferred Stock, (ii) Shares issuable upon conversion
of 8,283,000 shares of Preferred Stock that Columbus Nova
Investments VIII Ltd. is entitled to acquire upon exercise of
Warrants and (iii) 4,220,879 Shares that the Reporting Person
may be deemed to beneficially own by reason of a Shareholders
Agreement between Columbus Nova Investments VIII Ltd. and
Moskovskaya Telecommunikatsionnaya Corporatsiya dated August
26, 2004, as amended, with respect to which the Reporting
Person disclaims beneficial ownership. Excludes 1,000,403
Shares that the Reporting Person may be deemed to beneficially
own by reason of irrevocable proxy and power of attorney
arrangements between Columbus Nova Investments VIII Ltd. and
certain stockholders of the Company, with respect to which the
Reporting Person disclaims beneficial ownership.
4 Based upon a total of 21,585,541 Shares of Common Stock
outstanding, which figure is based on the number of Shares
outstanding as of January 14, 2005, as disclosed by the issuer
to the Reporting Person (8,802,541 Shares) and assuming (i)
the conversion of all of the 4,500,000 shares of Preferred
Stock outstanding and (ii) the exercise in full of all of the
warrants to purchase 8,283,000 shares of Preferred Stock and
conversion of all of the shares of Preferred Stock acquired
pursuant to the exercise of these warrants.
Item 1. Security and Issuer.
This statement relates to shares of common stock, par value
$0.01 per share (the "Shares"), of Moscow CableCom Corp., a Delaware
corporation formerly known as Andersen Group, Inc. (the "Company"). The
principal executive offices of the Company are located at 405 Park Avenue,
Suite 1202, New York, NY 10022.
Item 2. Identity and Background.
(a)-(c) and (f). This statement is being filed jointly by Columbus
Nova Investments VIII Ltd., a Bahamas corporation ("CNI"), and Mr. Victor
Vekselberg, who is a Russian citizen ("Mr. Vekselberg," and, together with CNI,
the "Reporting Persons"). Mr. Vekselberg and entities related to him
beneficially own a majority of the share capital of CNI.
This statement amends the initial statement on Schedule 13D filed by
the Reporting Persons with the Securities and Exchange Commission on September
23, 2004 (the "Initial Schedule"). All capitalized terms used in this statement
and otherwise undefined shall have the meanings ascribed in the Initial
Schedule.
The principal business address of CNI is P.O. Box N-7755, Nassau,
Bahamas. The residential address of Mr. Vekselberg is 19
Bakhrushina Street, Bld. 2, Apt. 15, 113054 Moscow, Russia.
CNI is a company that has been formed for the principal purpose of
investing the Russian communications and media sector.
The present principal occupation of Mr. Vekselberg is as an investor
and businessman.
Certain information pertaining to each executive officer and director
of CNI is set forth in Annex A hereto and incorporated herein by reference.
(d) During the last five years, neither of the Reporting Persons nor,
to the best of CNI's knowledge, any of the executive officers or directors of
CNI, has been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors).
(e) During the last five years, neither of the Reporting Persons nor,
to the best of CNI's knowledge, any of the executive officers or directors of
CNI, has 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.
Item 3. Source and Amount of Funds or Other Consideration.
CNI purchased the 4,500,000 shares of Preferred Stock (as defined in
Item 4 below) for an aggregate purchase price of $22,500,000 in cash. CNI has
borrowed the entire purchase price (the "Loan") from its affiliate Renova
Industries Ltd., a company incorporated in The Commonwealth of the Bahamas. No
cash consideration was paid in connection with the issuance of the Warrants
(as defined in Item 4 below). Copies of the agreements relating to the Loan
are attached as Exhibits 9 and 10 to this statement.
Item 4. Purpose of Transaction.
On August 26, 2004, CNI entered into a Series B Convertible Preferred
Stock Subscription Agreement (the "Subscription Agreement") with the Company,
relating to the purchase by CNI of shares of a new class of Series B
Convertible Preferred Stock, par value $.01 per share of the Company (the
"Preferred Stock"), which are convertible into Shares at the option of the
holder. Effective December 1, 2004, CNI and the Company entered into Amendment
No. 1 to the Subscription Agreement, primarily, in order to amend the terms of
the Preferred Stock to comply with the National Association of Securities
Dealers' Marketplace Rule 4351. The closing under the Subscription Agreement
occurred on January 13, 2005 (the "Closing Date"). Pursuant to the Subscription
Agreement, as amended, on the Closing Date:
(a) the Company issued to CNI 4,500,000 shares of Preferred Stock, which
are entitled to 0.81833 votes per share, have dividend and other
rights identical to those of the Shares (with the exception of having
a liquidation preference over the Shares for a period of four years)
and are convertible into Shares at the option of the holder thereof;
(b) the Company issued to CNI warrants (the "Warrants") to purchase an
additional 8,283,000 shares of Preferred Stock pursuant to a Warrant
Agreement entered into by the Company and CNI on the Closing Date; and
(c) the Company granted options to purchase an aggregate of 1,161,050
Shares under its 2003 Stock Option Plan to new executive officers
and consultants.
In accordance with the Subscription Agreement, (i) the board of
directors of the Company (the "Board") has been expanded from nine members to
eleven members, (ii) certain members of the Board have resigned and five new
members designated by CNI, including Mr. Intrater, Ivan Isakov, Jay Haft,
Warren Mobley and David R. Van Valkenburg, have been appointed to the Board
(with Mr. Van Valkenburg being an independent director, as this term is defined
under the listing standards of the National Association of Securities Dealers,
Inc. and the Sarbanes Oxley Act of 2002), with one board position remaining
vacant. In accordance with the Subscription Agreement and the Shareholders
Agreement (as defined below), CNI intends to designate an additional director
to the Board to fill that vacancy.
In connection with the Subscription Agreement, CNI also entered into a
Shareholders Agreement (the "Shareholders Agreement") with COMCOR, a principal
stockholder of the Company. The Shareholders Agreement is described in the
Initial Schedule.
The above summary of certain provisions of the Subscription Agreement
and the Warrant Agreement is not intended to be complete and is qualified by
its entirety by reference to the full text of such agreements. Copies of the
Subscription Agreement and the Warrant Agreement are attached as Exhibit 2 to
the Initial Schedule and Exhibit 3 to this filing, respectively, and are
incorporated by reference herein.
Item 5. Interest in Securities of the Issuer.
(a) and (b). As of the date hereof, each of the Reporting Persons
beneficially owns 17,003,879 Shares, including (i) the Shares issuable upon
conversion of 4,500,000 shares of Preferred Stock currently held by CNI; (ii)
the Shares issuable upon conversion of the 8,283,000 shares of Preferred Stock
CNI is entitled to acquire pursuant to the Warrant Agreement; and (iii) the
4,220,879 Shares held by COMCOR, which the Reporting Persons may be deemed to
beneficially own by reason of the Shareholders Agreement and with respect to
which the Reporting Persons disclaim beneficial ownership. This amount does not
include the 1,000,403 Shares subject to the Irrevocable Proxy Arrangements (as
defined and described in Item 6 below), which the Reporting Persons may be
deemed to beneficially own and with respect to which the Reporting Persons
disclaim beneficial ownership, as these Irrevocable Proxy Arrangements will
expire upon conversion of CNI's shares of Preferred Stock into Shares. This
amount constitutes approximately 78.77% of the outstanding Shares, based upon a
total of 21,585,541 Shares outstanding (assuming the conversion of all of the
4,500,000 shares of Preferred Stock currently issued to CNI, exercise in full
of all of the Warrants and conversion of all of the shares of Preferred Stock
acquired pursuant to the exercise of the Warrants). The number of Shares
outstanding is based on the number of Shares outstanding as of January 14,
2005, (8,802,541 Shares) as disclosed by the Company to the Reporting Persons.
As of the date hereof, as to the election of directors and other
corporate matters covered by the Shareholders Agreement, each of the Reporting
Persons shares the power to vote or to direct the vote of 17,003,879 Shares
(including: (i) the Shares issuable upon conversion of 4,500,000 shares of
Preferred Stock currently held by CNI; (ii) the Shares issuable upon conversion
of the 8,283,000 shares of Preferred Stock CNI is entitled to acquire pursuant
to the Warrant Agreement; and (iii) the 4,220,879 Shares held by COMCOR that
are subject to the Shareholders Agreement). This amount does not include the
1,000,403 Shares subject to the Irrevocable Proxy Arrangements, which the
Reporting Persons may be deemed to beneficially own and with respect to which
the Reporting Persons disclaim beneficial ownership. With respect to all
matters other than those described in the preceding sentence, each of the
Reporting Persons shares the power to vote or to direct the vote of 12,783,000
Shares (including (i) the Shares issuable upon conversion of 4,500,000 shares
of Preferred Stock currently held by CNI; (ii) the Shares issuable upon
conversion of the 8,283,000 shares of Preferred Stock CNI is entitled to
acquire pursuant to the Warrant Agreement.
As of the date hereof, each of the Reporting Persons shares the power
to dispose of or direct the disposition of 12,783,000 Shares (including (i) the
Shares issuable upon conversion of 4,500,000 shares of Preferred Stock
currently held by CNI and (ii) the Shares issuable upon conversion of the
8,283,000 shares of Preferred Stock CNI is entitled to acquire pursuant to the
Warrant Agreement).
To the best knowledge of CNI, none of the executive officers or
directors of CNI beneficially owns any Shares.
(c) Other than as described herein, neither of the Reporting Persons
nor, to the best of CNI's knowledge, any of the executive officers or directors
of CNI have engaged in any transaction in Shares during the past 60 days.
(d) Other than as described herein, no other person is known to have
the right to receive or the power to direct the receipt of dividends from, or
the proceeds from the sale of, Shares.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Termination of Voting Agreements
In order to facilitate the consummation of the transactions
contemplated in the Subscription Agreement, CNI has entered into voting
agreements on August 26, 2004 (the "Voting Agreements") with COMCOR, Oliver R.
Grace, Jr., Francis E. Baker, Andrew O'Shea, James J. Pinto and Thomas
McPartland. The Voting Agreements have each terminated in accordance with their
respective terms upon the consummation of the transactions contemplated in the
Subscription Agreement on the Closing Date.
Termination of Pre-Existing Shareholders Agreement
In connection with the Subscription Agreement, CNI has procured the
termination of the voting agreement dated February 23, 2004, by and among the
Company, COMCOR, Oliver R. Grace and Francis E. Baker.
Registration Rights
On the Closing Date, the Company and CNI have entered into a
Registration Rights Agreement pursuant to which CNI may require that the
Company register under the Securities Act of 1933 future resales of Shares held
by CNI.
Other Agreements
In connection with the Subscription Agreement, CNI also entered into
the Shareholders Agreement, a Co-Sale Agreement and Letter Agreements, which
are defined and described in, and filed as exhibits to, the Initial Schedule.
Irrevocable Proxy Arrangements
In connection with Amendment No. 1 to the Subscription Agreement,
prior to the Closing Date CNI entered into several irrevocable proxy and power
of attorney arrangements (collectively, the "Irrevocable Proxy Arrangements")
with certain stockholders of the Company, pursuant to which CNI received
irrevocable proxies and powers of attorney with respect to an aggregate of
1,000,403 Shares (the "Proxy Shares").
Pursuant to the Irrevocable Proxy Arrangements, during the term
thereof, CNI shall have the ability to vote the Proxy Shares at any meeting of
stockholders or consent action in lieu of a meeting at its sole discretion.
In addition, stockholders that are parties to the an Irrevocable Proxy
Arrangement covering 200,000 Shares agreed that: (i) during the initial period
of one year after the Closing Date, they will not to sell, transfer or
otherwise dispose of any of the 200,000 Proxy Shares, unless the transferee
also agrees to be bound by the conditions of that Irrevocable Proxy
Arrangement, and (ii) after this initial period and until the termination of
that Irrevocable Proxy Arrangement, the 200,000 Proxy Shares may only be
transferred subject to the right of CNI to exercise a right to acquire all such
Proxy Shares proposed to be transferred on substantially the same terms as they
are proposed to be transferred.
Similarly, stockholders that are parties to Irrevocable Proxy
Arrangements covering an aggregate of 800,403 Shares agreed that during the
term of the respective arrangements these 800,403 Proxy Shares may only be
transferred subject to the right of CNI to exercise a right to acquire all such
Proxy Shares proposed to be transferred on substantially the same terms as they
are proposed to be transferred.
The Irrevocable Proxy Arrangements will terminate upon the earlier of
(i) January 13, 2009, (ii) the conversion by CNI of all its shares of Preferred
Stock into Shares, (iii) CNI's ownership of the capital stock of the Company on
an as converted basis falling below 10% or (iv) the weighted average closing
price of the Shares for 20 consecutive trading days on NASDAQ exceeding $15.00.
The Irrevocable Proxy Arrangements provide for a proportional
reduction in the number of Proxy Shares subject thereto in case that CNI
converts any of its shares of Preferred Stock into Shares.
The preceding summary of certain provisions of the Irrevocable Proxy
Arrangements is not intended to be complete and is qualified by its entirety by
reference to the full text of such agreements, copies of which are attached to
this statement as Exhibits 11.1 through 11.3 and which are incorporated by
reference herein.
CNI Shareholders Agreement
On December 27, 2004, CNI, Renova Industries (an entity related to Mr.
Vekselberg) and the other shareholder of CNI entered into a shareholders
agreement (the "CNI Shareholders Agreement"). Pursuant to the CNI Shareholders
Agreement, in the event of a sale of all or substantially all of the assets or
the dissolution and liquidation of CNI, proceeds attributable to the investment
in the Company shall be distributed first to Renova Industries until payment in
full of the Loan (as defined in Item 3 above) and then to the shareholders of
CNI.
Material to be Filed as Exhibits.
Item 7.
Exhibit 1 Joint Filing Agreement dated September 23, 2004,
between Columbus Nova Investments VIII Ltd. and
Victor Vekselberg.*
Exhibit 2.1 Subscription Agreement dated August 26, 2004, between
Columbus Nova Investments VIII Ltd. and Moscow
CableCom Corp.*
Exhibit 2.2 Amendment No. 1 to the Subscription Agreement, dated
as of December 1, 2004.
Exhibit 3 Warrant Agreement dated January 13, 2005, between
Columbus Nova Investments VIII Ltd. and Moscow
CableCom Corp.
Exhibit 4.1 Shareholders Agreement dated August 26, 2004, between
Columbus Nova Investments VIII Ltd. and Moskovskaya
Telecommunikatsionnaya Corporatsiya.*
Exhibit 4.2 Amendment No. 1 to the Shareholders Agreement dated
as of December 1, 2004.
Exhibit 4.3 Amendment No. 2 to Shareholders Agreement dated
December 30, 2004.
Exhibit 5 Agreement dated August 26, 2004, between Columbus
Nova Investments VIII Ltd. and each of Warren Mobley,
Donald Miller-Jones, Charles Roberts and Dr. Ali
Mohamed Ahmed.*
Exhibit 6 Registration Rights Agreement dated December 13,
2004, between Columbus Nova Investments VIII Ltd. and
Moscow CableCom Corp.
Exhibit 7.1 Letter Agreement between Columbus Nova Investments
VIII Ltd. and Oliver R. Grace. Jr.*
Exhibit 7.2 Letter Agreement between Columbus Nova Investments
VIII Ltd. and James J. Pinto.*
Exhibit 8 Power of Attorney dated September 23, 2004.*
Exhibit 9 Equity Loan Agreement dated January 4, 2005, by and
between Columbus Nova Investments VIII Ltd. and
Renova Industries Ltd.
Exhibit 10 Promissory Note dated January 4, 2005, made by
Columbus Nova Investments VIII Ltd. to the order of
Renova Industries Ltd.
Exhibit 11.1 Irrevocable Proxy and Power of Attorney dated as of
December 1, 2004, by and among Columbus Nova
Investments VIII Ltd., Oliver R. Grace, The Anglo
American Security Fund, L.P. and Francis E. Baker.
Exhibit 11.2 Irrevocable Proxy and Power of Attorney between
Columbus Nova Investments VIII Ltd. and Field
Nominees Limited
Exhibit 11.3 Form of Irrevocable Proxy and Power of Attorney
between Columbus Nova Investments VIII Ltd. and each
of the stockholders of Moscow CableCom Corp. set
forth in Annex A to Exhibit 11.2.
* Previously filed as an exhibit to the Initial Schedule, filed with the
Commission on September 23, 2004.
SIGNATURES
After reasonable inquiry and to the best of our knowledge and
belief, we certify that the information in this statement is true, complete and
correct.
Dated: January 18, 2005
COLUMBUS NOVA INVESTMENTS VIII LTD.
By: /s/ Andrew Intrater
-------------------------------
Name: Andrew Intrater
Title: Attorney-in-Fact
VICTOR VEKSELBERG
By: /s/ Andrew Intrater
-------------------------------
Name: Andrew Intrater
Title: Attorney-in-Fact
Annex A
Information Concerning the Directors and Executive Officers
of Columbus Nova Investments VIII Ltd.
Set forth below are the name, the present principal
occupation or employment and citizenship of each director and executive officer
of Columbus Nova Investments VIII Ltd. The current business address for each of
the persons named below is P.O. Box N-7755, Nassau, Bahamas.
-------------------------- ----------------------------------- --------------
Name and Current Present Principal
Business Address Occupation or Employment Citizenship
-------------------------- ----------------------------------- --------------
Marco Montanari Businessman Swiss
-------------------------- ----------------------------------- --------------
Shakira Burrows Secretary Bahamian
-------------------------- ----------------------------------- --------------
Olivier Chaponnier Businessman Swiss
-------------------------- ----------------------------------- --------------
EXHIBIT INDEX
Exhibit 1 Joint Filing Agreement dated September 23, 2004,
between Columbus Nova Investments VIII Ltd. and
Victor Vekselberg.*
Exhibit 2.1 Subscription Agreement dated August 26, 2004, between
Columbus Nova Investments VIII Ltd. and Moscow
CableCom Corp.*
Exhibit 2.2 Amendment No. 1 to the Subscription Agreement, dated
as of December 1, 2004.
Exhibit 3 Warrant Agreement dated January 13, 2005, between
Columbus Nova Investments VIII Ltd. and Moscow
CableCom Corp.
Exhibit 4.1 Shareholders Agreement dated August 26, 2004, between
Columbus Nova Investments VIII Ltd. and Moskovskaya
Telecommunikatsionnaya Corporatsiya.*
Exhibit 4.2 Amendment No. 1 to the Shareholders Agreement dated
as of December 1, 2004.
Exhibit 4.3 Amendment No. 2 to Shareholders Agreement dated
December 30, 2004.
Exhibit 5 Agreement dated August 26, 2004, between Columbus
Nova Investments VIII Ltd. and each of Warren Mobley,
Donald Miller-Jones, Charles Roberts and Dr. Ali
Mohamed Ahmed.*
Exhibit 6 Registration Rights Agreement dated December 13,
2004, between Columbus Nova Investments VIII Ltd. and
Moscow CableCom Corp.
Exhibit 7.1 Letter Agreement between Columbus Nova Investments
VIII Ltd. and Oliver R. Grace. Jr.*
Exhibit 7.2 Letter Agreement between Columbus Nova Investments
VIII Ltd. and James J. Pinto.*
Exhibit 8 Power of Attorney dated September 23, 2004.*
Exhibit 9 Equity Loan Agreement dated January 4, 2005, by and
between Columbus Nova Investments VIII Ltd. and
Renova Industries Ltd.
Exhibit 10 Promissory Note dated January 4, 2005, made by
Columbus Nova Investments VIII Ltd. to the order of
Renova Industries Ltd.
Exhibit 11.1 Irrevocable Proxy and Power of Attorney dated as of
December 1, 2004, by and among Columbus Nova
Investments VIII Ltd., Oliver R. Grace, The Anglo
American Security Fund, L.P. and Francis E. Baker.
Exhibit 11.2 Irrevocable Proxy and Power of Attorney between
Columbus Nova Investments VIII Ltd. and Field
Nominees Limited
Exhibit 11.3 Form of Irrevocable Proxy and Power of Attorney
between Columbus Nova Investments VIII Ltd. and each
of the stockholders of Moscow CableCom Corp. set
forth in Annex A to Exhibit 11.2.
* Previously filed as an exhibit to the Initial Schedule, filed with the
Commission on September 23, 2004.
EX-2
2
lon392239.txt
EXHIBIT 2.2 - AMDT. NO. 1 TO SUBSCRIPTION AGMT.
EXHIBIT 2.2
EXECUTION COPY
AMENDMENT NO. 1 TO
SERIES B CONVERTIBLE PREFERRED STOCK
SUBSCRIPTION AGREEMENT
This AMENDMENT NO. 1 (this "Amendment") with respect to the Series B
Convertible Preferred Stock Subscription Agreement (the "Agreement") dated
August 26, 2004, between Moscow CableCom Corp. (formerly known as Andersen
Group Inc.), a Delaware corporation (the "Company"), and Columbus Nova
Investments VIII Ltd., a Bahamas company ("CN" and together with the Company,
the "Parties" and each individually a "Party"), is made and entered into by
the Parties as of December 1, 2004. Capitalized terms used but not defined
herein shall have the meanings ascribed to such terms in the Agreement.
WHEREAS, as a result of the application of the National Association
of Securities Dealers, Inc. Rule 4351, the voting rights of the Series B
Preferred Stock may be less than one (1) vote per share, and
WHEREAS, the Parties would like to amend the Agreement to reflect
this change in the voting rights of the Series B Preferred Stock, in
accordance with the terms and conditions of this Amendment;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and intending to be legally bound hereby, the Parties agree as
follows:
1. Amendment to the Certificate of Amendment
The Parties hereby agree to amend the Agreement to provide that each
share of Series B Stock shall have such number of votes equal to the
quotient (rounded to the nearest five decimal places) of $5.00
divided by the closing bid price of one share of Common Stock
reported in The Nasdaq Stock Market for the last complete trading
session prior to the Closing Date; provided, however, that a share of
Series B Stock shall not be entitled to a greater number of votes
than the number of votes to which a share of Common Stock shall be
entitled, and, provided further, that, if the holders of shares of
Series B Stock are entitled to vote as a separate class with respect
to any matter, each share of Series B Stock shall, for purpose of
such vote, be entitled to one vote on such matter. The form of the
Certificate of Amendment is hereby amended and restated in its
entirety to reflect the foregoing and is attached hereto as
Attachment I.
2. Amendment to the Purchaser's Conditions to Closing
Section 6.03 of the Agreement shall be amended by adding condition
6.03(h), which shall state as follows:
"(h) The Purchaser shall have received irrevocable proxies,
substantially in the form of Attachment III to this Agreement, from
stockholders of the Company with respect to 800,000 shares of Common
Stock (or such lesser number of shares that, together with (i) the
200,000 shares of Common Stock that are subject to the Irrevocable
Proxy and Power of Attorney dated December 1, 2004, among the
Purchaser, Oliver Grace, Jr., Francis E. Baker and The Anglo American
Security Fund, L.P., and (ii) the votes to which the New Securities
are entitled when voting as one class with the Common Stock, shall
have such number of votes equal to the number of votes to which
4,500,000 shares of Common Stock are entitled as of the Closing
Date)."
Attachment III to the Agreement shall be in the form of Attachment II
to this Amendment.
3. Release
Subject to satisfaction or waiver of condition 6.03(h) of the
Subscription Agreement (or the deemed satisfaction or waiver of such
condition in the event of the Closing of the Transactions), each of
the Parties confirms that it shall have no claim outstanding against
the other Party or any of its Affiliates for breach of the provisions
of the Agreement that are amended pursuant to this Amendment and each
Party waives all and any rights it has to bring a claim for breach by
the other Party of the provisions of the Agreement that are amended
pursuant to this Amendment.
4. Governing law
This Amendment shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to any choice
or conflict of law provision or rule (whether of the State of New
York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York.
5. Counterparts
This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date
first written above.
COLUMBUS NOVA INVESTMENTS VIII LTD.
By /s/ Andrew Intrater
----------------------------
Name: Andrew Intrater
Title: Attorney-in-Fact
MOSCOW CABLECOM CORP.
By /s/ Oliver R. Grace, Jr.
-----------------------------
Name: Oliver R. Grace, Jr.
Title: Chief Executive Officer
EX-3
3
lon368551.txt
EX. 3 - WARRANT AGREEMENT
EXHIBIT 3
WARRANT AGREEMENT
by and between
MOSCOW CABLECOM CORP.
and
COLUMBUS NOVA INVESTMENTS VIII LTD.
Dated January 13, 2005
TABLE OF CONTENTS
Page
SECTION 1. Warrant Certificates.......................................1
SECTION 2. Execution of Warrant Certificates..........................1
SECTION 3. Registration...............................................2
SECTION 4. Registration of Transfers and Exchanges....................2
SECTION 5. Exercisability and Cancellation of Warrants; Exercise
of Warrants; HSR Compliance................................3
SECTION 6. Payment of Taxes...........................................4
SECTION 7. Delivery of Warrant Shares.................................4
SECTION 8. Mutilated or Missing Warrant Certificates..................5
SECTION 9. Reservation of Warrant Shares..............................5
SECTION 10. Adjustment of Exercise Price and Number of Warrant
Shares Issuable............................................5
(a) Adjustment for Change in Capital Stock............6
(b) Adjustment for Rights Issue.......................6
(c) Adjustment for Other Distributions................7
(d) Adjustment for Common Stock Issue.................8
(e) Adjustment for Convertible Securities Issue.......9
(f) Market Price.....................................10
(g) Consideration Received...........................11
(h) When De Minimis Adjustment May Be Deferred.......11
(i) Notice of Adjustment.............................11
(j) Voluntary Reduction..............................11
(k) Reorganization of Company........................12
(l) Adjustment in Number of Shares...................12
(m) Form of Warrants................................13
SECTION 11. No Dilution or Impairment.................................13
SECTION 12. Fractional Interests......................................14
SECTION 13. Notices to Warrantholder..................................14
SECTION 14. Notices to Company and Warrantholder......................15
SECTION 15. Amendments and Waivers....................................16
SECTION 16. Representations and Warranties of the Warrantholder.......17
SECTION 17. Successors................................................17
SECTION 18. Termination...............................................17
SECTION 19. Governing Law; Jurisdiction; Venue........................17
SECTION 20. Equitable Remedies........................................18
SECTION 21. Benefits of this Warrant Agreement........................18
SECTION 22. Headings..................................................18
SECTION 23. Interpretation............................................18
SECTION 24. Entire Agreement..........................................19
SECTION 25. Joint Drafting............................................19
SECTION 26. Severability..............................................19
SECTION 27. Counterparts..............................................19
EXHIBIT A: FORM OF WARRANT CERTIFICATE
This WARRANT AGREEMENT (this "Warrant Agreement") dated as of January
13, 2005, by and between Moscow CableCom Corp., a Delaware corporation
(including any successor, the "Company"), and Columbus Nova Investments VIII
Ltd., a Bahamas company or its registered assigns (the "Warrantholder").
WHEREAS, the parties hereto have entered into a Series B Convertible
Preferred Stock Subscription Agreement dated August 26, 2004, as amended on
December 1, 2004 (the "Subscription Agreement"), pursuant to which the
Warrantholder has acquired 4,500,000 shares of Series B Convertible Preferred
Stock, par value $.01 per share of the Company ("Series B Preferred Stock"),
which are currently convertible into 4,500,000 shares of Common Stock (as
defined herein) of the Company;
WHEREAS, the Warrantholder and ZAO COMCOR TV, a closed joint stock
company organized under the laws of the Russian Federation and a wholly owned
subsidiary of the Company ("COMCOR-TV"), entered into a Term Loan Facility
dated August 26, 2004, pursuant to which COMCOR-TV has drawn down $18,500,000;
and
WHEREAS, the Company has authorized a series of warrants to purchase
shares of the Series B Preferred Stock known as the Series B Convertible
Preferred Stock Warrants (the "Warrants"), and approved the issuance and grant
to the Warrantholder of 8,283,000 Warrants, with each Warrant entitling the
Warrantholder to purchase one share of Series B Preferred Stock (the "Warrant
Shares") at the Exercise Price (as defined herein);
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
SECTION 1. Warrant Certificates. The Company shall promptly cause to
be executed and delivered to the Warrantholder certificate(s) evidencing the
Warrants ("Warrant Certificate(s)") to be issued to the Warrantholder. The
Warrant Certificate(s) shall be issued in registered form only, shall be
substantially in the form set forth in Exhibit A attached hereto, and may have
such letters, numbers or other identification marks and legends, summaries or
endorsements printed thereon as the Company may deem appropriate and that are
not inconsistent with the terms of this Warrant Agreement or as may be
required by applicable law, rule or regulation. The Warrant Certificate(s)
shall be dated the date hereof.
SECTION 2. Execution of Warrant Certificates. The Warrant
Certificate(s) shall be signed on behalf of the Company by its Chief Executive
Officer, President or a Director of the Company. Each such signature upon the
Warrant Certificate(s) may be in the form of a facsimile signature and may be
imprinted or otherwise reproduced on the Warrant Certificate(s) and for the
purpose the Company may adopt and use the facsimile signature of any person
who shall have been Chief Executive Officer, President or director of the
Company, notwithstanding the fact that at the time the Warrant Certificate(s)
shall be delivered or disposed of he or she shall have ceased to hold such
office.
In case any officer or director of the Company who shall have signed
the Warrant Certificate(s) shall cease to be such officer before the Warrant
Certificate(s) so signed shall have been disposed of by the Company, such
Warrant Certificate(s) nevertheless may be delivered or disposed of as though
such person had not ceased to be such officer of the Company; and any Warrant
Certificate(s) may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Warrant Certificate(s), shall be a
proper officer of the Company to sign such Warrant Certificate(s), although at
the date of the execution of this Warrant Agreement any such person was not
such officer.
SECTION 3. Registration. The Company will keep or cause to be kept
books for registration of ownership and transfer of the Warrant Certificate(s)
issued pursuant to this Warrant Agreement. The Warrant Certificate(s) issued
pursuant to this Warrant Agreement shall be numbered by the Company and
initially shall be registered by the Company in the name of the Warrantholder.
The Company may deem and treat the registered holder of the Warrant
Certificate(s) as the absolute owner thereof (notwithstanding any notation of
ownership or other writing thereon made by anyone), for the purpose of any
exercise thereof and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
SECTION 4. Registration of Transfers and Exchanges.
(a) Transfers. Subject to the following provisions of this Section 4,
the Warrants are transferable, in whole or in part, upon surrender of the
Warrant Certificate(s) evidencing such Warrants at the office of the Company
referred to in Section 14, together with a written assignment in the form of
the Assignment appearing at the end of the form of Warrant Certificate
attached hereto, duly executed by the Warrantholder or its agent or attorney.
Upon such surrender, the Company shall, subject to this Section 4, register or
cause the registration of the transfer upon the books maintained by or on
behalf of the Company for such purpose. If the Warrants evidenced by the
Warrant Certificate(s) are to be transferred in whole, the Company shall
execute and deliver new Warrant Certificate(s) in the name of the assignee or
assignees in the denominations specified in the instrument of assignment. If
the Warrants evidenced by the Warrant Certificate(s) are to be transferred in
part, the Company shall execute and deliver new Warrant Certificate(s) to and
in the name of the assignee or assignees in the denominations specified in the
instrument of assignment and new Warrant Certificate(s) to and in the name of
the Warrantholder in an amount equal to the number of Warrants evidenced by
the surrendered Warrant Certificate(s) that were not transferred.
(b) Restrictions on Transfer. The Warrants may not be sold, pledged,
hypothecated, assigned, conveyed, transferred or otherwise disposed of (each a
"transfer") unless the transfer complies with all applicable securities laws
and the provisions of this Warrant Agreement.
(c) Exchanges. The Warrant Certificate(s) may be exchanged, at the
option of the Warrantholder, upon surrender of such Warrant Certificate(s) at
the office of the Company referred to in Section 14, for one or more other
Warrant Certificate(s) representing in the aggregate the same number of
Warrants as was represented by the surrendered Warrant Certificate(s).
(d) Legend on Warrant Shares. If required under applicable law, rule
or regulation, the Warrant Shares to be issued upon exercise of any Warrant
shall be stamped or imprinted with a legend substantially in the following
form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH, OR PURSUANT TO
AN EXEMPTION FROM, THE REQUIREMENTS OF SUCH ACT AND LAWS.
If the Warrant Shares are issued with the aforementioned legend, upon the
occurrence of any event permitting the removal of such legend, the Company,
upon the surrender of certificates containing such legend, shall, at its own
expense, deliver to the holder one or more new certificates evidencing Warrant
Shares not bearing such legend.
SECTION 5. Exercisability and Cancellation of Warrants; Exercise of
Warrants; HSR Compliance.
(a) Exercise. Subject to the terms and conditions set forth in this
Section 5, the Warrants may be exercised, in whole or in part (but not as to
any fractional part of a Warrant), at any time or from time to time on and
from the date hereof until 5:00 p.m., New York City time, on the fifth
anniversary of the date hereof (the "Expiration Date"). To exercise any
Warrant, the Warrantholder shall deliver to the Company at its office referred
to in Section 14 the following: (i) a written notice in the form of the
Election to Purchase appearing at the end of the form of Warrant Certificate
attached hereto of the Warrantholder's election to exercise Warrants, which
notice shall specify the number of Warrants being exercised; (ii) the Warrant
Certificate(s) evidencing the Warrants being exercised; and (iii) payment of
the aggregate Exercise Price. All rights of the Warrantholder with respect to
any Warrant that has not been exercised on or prior to 5:00 p.m., New York
City time, on the Expiration Date shall immediately cease and such Warrants
shall be automatically cancelled without any further action on the part of the
Company or the Warrantholder.
All Warrant Certificates surrendered upon exercise of Warrants shall
be cancelled and disposed of by the Company. The Company shall keep copies of
this Warrant Agreement and any notices given or received hereunder available
for inspection by the holders during normal business hours at its office.
(b) Payment of Exercise Price. The exercise price shall be $5.00 per
Warrant, subject to adjustment pursuant to Section 10 (the "Exercise Price").
Payment of the aggregate Exercise Price with respect to Warrants being
exercised hereunder shall be made by the payment to the Company, in cash, by
check or wire transfer, of an amount equal to the Exercise Price multiplied by
the number of Warrants then being exercised.
(c) HSR Compliance.
If the Warrantholder determines that a notification under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder (the "HSR Act"),
is required in connection with the exercise of any Warrants, the
Company together with the Warrantholder shall (i) file as soon as
practicable after the date of such determination notifications under
the HSR Act, (ii) respond as promptly as practicable to all inquiries
or requests received from the United States Federal Trade Commission
or the Antitrust Division of the Department of Justice for additional
information or documentation and (iii) respond as promptly as
practicable to all inquiries and requests received from any State
Attorney General or other governmental authority in connection with
antitrust matters. The Company shall take such action as may be
necessary to ensure that any necessary notifications or filings are
made and that all inquiries and requests received from the relevant
governmental authorities are responded to as promptly as practicable.
SECTION 6. Payment of Taxes. The Company shall be responsible for
paying any and all issue, documentary, stamp or other taxes that may be
payable in respect of any issuance or delivery of Warrant Shares on the
exercise of a Warrant.
SECTION 7. Delivery of Warrant Shares. The Company shall, as promptly
as practicable, and in any event within three (3) business days, execute and
deliver or cause to be executed and delivered, to or upon the written order of
the Warrantholder, and in the name of the Warrantholder or such
Warrantholder's designee, a stock certificate or stock certificates
representing the number of Warrant Shares to be issued on exercise of the
Warrant(s). Such certificates may bear any restrictive legend required under
applicable law, rule or regulation. The stock certificate or certificates so
delivered shall be registered in the name of the Warrantholder or such other
name as shall be designated in said notice. A Warrant shall be deemed to have
been exercised and such stock certificate or stock certificates shall be
deemed to have been issued, and such holder or any other Person so designated
to be named therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the date that such notice, together with
payment of the aggregate Exercise Price and the Warrant Certificate or Warrant
Certificates evidencing the Warrants to be exercised, is received by the
Company as aforesaid. If the Warrants evidenced by any Warrant Certificate are
exercised in part, the Company shall, at the time of delivery of the
certificates representing the Warrant Shares, deliver to the Warrantholder a
new Warrant Certificate evidencing the Warrants that were not exercised or
surrendered, which shall in all respects (other than as to the number of
Warrants evidenced thereby) be identical to the Warrant Certificate being
exercised. Any Warrant Certificates surrendered upon exercise of Warrants
shall be canceled by the Company.
SECTION 8. Mutilated or Missing Warrant Certificates. In case any
Warrant Certificate shall be mutilated, lost, stolen or destroyed, the Company
shall issue, in exchange and substitution for and upon cancellation of the
mutilated Warrant Certificate, or in lieu of and substitution for the Warrant
Certificate lost, stolen or destroyed, a new Warrant Certificate representing
an equivalent number of Warrants, but only upon surrender of the mutilated
certificate or upon receipt of evidence reasonably satisfactory to the Company
of such loss, theft or destruction of such Warrant Certificate as applicable.
In the case of a lost, stolen or destroyed Warrant Certificate, a new Warrant
Certificate shall be issued by the Company only upon the Company's receipt of
reasonably satisfactory evidence of such loss, theft or destruction.
SECTION 9. Reservation of Warrant Shares. The Company will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Series B Preferred Stock and Common
Stock into which such Series B Preferred Stock is convertible or its
authorized and issued Series B Preferred Stock and Common Stock held in its
treasury, for the purpose of enabling it to satisfy any obligation to issue
Warrant Shares upon exercise of Warrants, the maximum number of shares of
Series B Preferred Stock that may then be deliverable upon the exercise of all
outstanding Warrants and the maximum number of shares of Common Stock in which
such Series B Preferred Stock is convertible.
The Company will be irrevocably authorized and directed at all time
to reserve such number of authorized shares as shall be required for the
purpose described above. The Company will keep a copy of this Warrant
Agreement on file for any shares of the Company's capital stock issuable upon
the exercise of the rights of purchase represented by the Warrants.
Before taking any action that would cause an adjustment pursuant to
Section 10 hereof to reduce the Exercise Price below the then par value (if
any) of the Warrant Shares, the Company will take any corporate action that
may, in the opinion of its counsel (that may be counsel employed by the
Company), be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares at the Exercise Price as so
adjusted.
The Company covenants that all Warrant Shares that may be issued upon
exercise of Warrants will, upon issue, be fully paid, nonassessable, free of
preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issue thereof.
SECTION 10. Adjustment of Exercise Price and Number of Warrant Shares
Issuable.The Exercise Price and the number of the Warrant Shares issuable upon
the exercise of each Warrant are subject to adjustment from time to time upon
the occurrence of the events enumerated in this Section. "Common Stock" means
shares now or hereafter authorized of any class of common stock of the Company
and any other stock of the Company, however designated, that has the right
(subject to any prior rights of any class or series of preferred stock) to
participate in any distribution of the assets or earnings of the Company
without limit as to percentage or per share amount.
(a) Adjustment for Change in Capital Stock.
If the Company:
(i) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(ii) subdivides its outstanding shares of Common Stock into a greater
number of shares;
(iii) combines its outstanding shares of Common Stock into a smaller
number of shares;
(iv) makes a distribution on its Common Stock in shares of its
capital stock other than Common Stock or preferred stock; or
(v) issues by reclassification of its Common Stock any shares of its
capital stock;
then the Exercise Price and the number and kind of shares of capital stock of
the Company issuable upon the exercise of each Warrant as in effect
immediately prior to such action shall be proportionately adjusted so that the
holder of any Warrant thereafter exercised may receive the aggregate number
and kind of shares of capital stock of the Company that he or she would have
owned immediately following such action if such Warrant had been exercised
immediately prior to such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If after an adjustment the Warrantholder, upon exercise of the
Warrants, shall be entitled to receive shares of more than one class of
capital stock of the Company, the board of Directors of the Company (the
"Board of Directors") shall determine the allocation of the adjusted Exercise
Price between the classes of capital stock in good faith. After such
allocation, the exercise rights and the Exercise Price with respect to each
such class of capital stock shall thereafter be subject to adjustment on terms
comparable to those applicable to Common Stock in this Section 10.
Such adjustment shall be made successively whenever any event set
forth above shall occur.
(b) Adjustment for Rights Issue.
If the Company distributes any rights, options or warrants to all
holders of its Common Stock entitling them for a period expiring within 60
days after the record date for such distribution to purchase shares of Common
Stock at a price per share less then the market price per share on that record
date, the Exercise Price shall be adjusted in accordance with the formula:
O + (N x P)
-----
E' = E x M
----------
O + N
where:
E' = the adjusted Exercise Price.
E = the Exercise Price immediately prior to the
adjustment.
O = the number of shares of Common Stock outstanding
on the record date for such rights issuance.
N = the number of additional shares of Common Stock
offered pursuant to such rights issuance.
P = the offering price per share of the additional
shares.
M = the market price per share of Common Stock on
the record date for such rights issuance.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after
the record date for the determination of stockholders entitled to receive the
rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or
warrants shall have been exercised, the Exercise Price shall be immediately
readjusted to what it would have been if "N" in the above formula had been the
number of shares actually issued.
(c) Adjustment for Other Distributions.
If the Company distributes to all holders of its Common Stock any of
its assets (including but not limited to cash), debt securities, preferred
stock, or any rights or warrants to purchase debt securities, preferred stock,
assets or other securities of the Company, the Exercise Price shall be
adjusted in accordance with the formula:
E' = E x (M - F)
-------
M
where:
E' = the adjusted Exercise Price.
E = the Exercise Price immediately prior to the
adjustment.
M = the market price per share of Common Stock on
the record date mentioned below.
F = the fair market value on the record date for such
distribution of the assets, securities, rights or
warrants applicable to one share of Common Stock.
The Board of Directors shall determine the fair
market value in good faith.
The adjustment shall be made successively whenever any such
distribution is made and shall become effectively immediately after the record
date for such distribution.
This subsection (c) does not apply to rights, options or warrants
referred to in subsection (b) of this Section 10.
(d) Adjustment for Common Stock Issue.
If the Company issues shares of Common Stock for a consideration per
share less than the market price per share on the date the Company fixes the
offering price of such additional shares, the Exercise Price shall be adjusted
in accordance with the formula:
E' = E x O + (P)
-
M
----------
A
where:
E' = the adjusted Exercise Price.
E = the Exercise Price immediately prior to the
adjustment.
O = the number of shares outstanding immediately
prior to the issuance of such additional shares.
P = the aggregate consideration received for the
issuance of such additional shares.
M = the market price per share on the date of
issuance of such additional shares.
A = the number of shares outstanding immediately
after the issuance of such additional shares.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
(i) any of the transactions described in subsections (b) and (c) of
this Section 10,
(ii) the exercise of Warrants, or the conversion or exchange of other
securities convertible or exchangeable for Common Stock and that are
outstanding on the date hereof,
(iii) shares of Common Stock issued to the Company's directors,
employees and consultants under bona fide employee benefit plans adopted by
the Board of Directors and approved by the stockholders of the Company when
required by law, if such Common Stock would otherwise be covered by this
subsection (d) (but only to the extent that the aggregate number of shares
excluded hereby and issued after the date hereof shall not exceed 5% of the
Common Stock outstanding on a fully diluted basis at the time of the adoption
of any such plan, exclusive of anti-dilution adjustments thereunder),
(iv) Common Stock issued to the Company's management pursuant to the
Option Grant (as defined in the Subscription Agreement), or
(v) Common Stock issued in a bona fide public offering pursuant to a
firm commitment underwriting.
(e) Adjustment for Convertible Securities Issue.
If the Company issues any securities convertible into or exchangeable
for Common Stock (other than securities issued in transactions described in
subsections (b) and (c) and the exceptions set forth in paragraphs (i) to (v)
of subsection (d) of this Section 10) for a consideration per share of Common
Stock initially deliverable upon conversion or exchange of such securities
less than the market price per share on the date of issuance of such
securities, the Exercise Price shall be adjusted in accordance with this
formula:
E' = Ex O + P
-
M
---------
(O + D)
where:
E' = the adjusted Exercise Price.
E = the Exercise Price immediately prior to the
adjustment.
O = the number of shares outstanding immediately prior
to the issuance of such securities.
P = the aggregate consideration received for the
issuance of such securities.
M = the market price per share on the date of
issuance of such convertible securities.
D = the maximum number of shares deliverable upon
conversion or in exchange for such securities at
the initial conversion or exchange rate.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
If all of the shares of Common Stock deliverable upon conversion or
exchange of such securities have not been issued when such securities are no
longer outstanding or the ability to convert or exchange terminates, then the
Exercise Price shall promptly be readjusted to the Exercise Price that would
then be in effect had the adjustment upon the issuance of such securities been
made on the basis of the actual number of shares of Common Stock issued upon
conversion or exchange of such securities.
This subsection (e) does not apply to convertible securities issued
in a bona fide public offering pursuant to a firm commitment underwriting.
(f) Market Price.
In this Agreement, the market price per share of Common Stock on any
date shall equal the average of the Quoted Prices of the Common Stock for 30
consecutive trading days commencing 45 trading days before the date in
question. The "Quoted Price" of the Common Stock is the last reported sales
price of the Common Stock as reported by Nasdaq, National Market System, or if
the Common Stock is listed on a securities exchange, the last reported sales
price of the Common Stock on such exchange, which shall be for consolidated
trading if applicable to such exchange, or if neither so reported or listed,
the last reported bid price of the Common Stock. In the absence of one or more
such quotations, the Board of Directors of the Company shall determine the
market price on the basis of such quotations and evaluations as it in
reasonable good faith considers appropriate; provided, however, that if the
Warrantholder objects in writing to such determination within 20 business days
after receiving notice of any adjustment based in part on such determination,
the market price shall be determined by a nationally recognized investment
banking firm jointly selected within 20 business days of such objection by the
Company and Warrantholder or, if no such joint selection can be agreed upon,
by an investment banking firm, selected by the American Arbitration
Association (at the Company's expense if the investment banker's determination
is less than the Company's determination, and at the expense of the objecting
Warrantholder if the investment banker's determination is equal to or greater
than the Company's determination).
(g) Consideration Received.
For purposes of any computation respecting consideration received
pursuant to subsections (d) and (e) of this Section 10, the following shall
apply:
(i) in the case of the issuance of shares of Common Stock for cash,
the consideration shall be the amount of such cash;
(ii) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair market value thereof as determined in
good faith by the Board of Directors (irrespective of the accounting treatment
thereof), whose determination shall be conclusive, and described in a Board
resolution, subject to the rights of a majority in interest of the outstanding
Warrants to object as provided in clause (f) above, in which case fair market
value shall be determined pursuant to the procedure specified therein; and
(iii) in the case of the issuance of securities convertible into or
exchangeable for shares, the aggregate consideration received therefor shall
be deemed to be the consideration received by the Company for the issuance of
such securities plus the additional minimum consideration, if any, to be
received by the Company upon the conversion or exchange thereof (the
consideration in each case to be determined in the same manner as provided in
clauses (i) and (ii) of this subsection).
(h) When De Minimis Adjustment May Be Deferred.
No adjustment in the Exercise Price need be made unless the
adjustment would require an increase or decrease of at least 1% in the
Exercise Price. Any adjustments that are not made shall be carried forward and
taken into account in any subsequent adjustment.
All calculations under this Section 10 shall be made to the nearest
one cent (or, for purposes of subsection (l) of this Section 10, 1/1000th of a
cent) or to the nearest 1/100th of a share, as the case may be.
(i) Notice of Adjustment.
Whenever the Exercise Price is adjusted, the Company shall provide
the notices required by Section 13 hereof.
(j) Voluntary Reduction.
The Company from time to time may reduce the Exercise Price by any
amount for any period of time of at least 20 days and the reduction shall be
irrevocable during such period; provided, however, that in no event may the
Exercise Price be less than the par value of a share of Common Stock.
Whenever the Exercise Price is reduced, the Company shall mail to the
Warrantholder a notice of the reduction. The Company shall mail the notice at
least 15 days before the date the reduced Exercise Price takes effect. The
notice shall state the reduced Exercise Price and the period it will be in
effect.
A reduction of the Exercise Price shall not change or adjust the
Exercise Price otherwise in effect for purposes of subsections (a), (b), (c),
(d) and (e) of this Section 10. (k) Reorganization of Company.
If the Company consolidates or merges with or into, or transfers or
leases all or substantially all its assets to, any person, upon consummation
of such transaction the Warrants shall automatically become exercisable for
the kind and amount of securities, cash or other assets that the holder of a
Warrant would have owned immediately after the consolidation, merger, transfer
or lease if the holder had exercised the Warrant immediately before the
effective date of the transaction. Concurrently with the consummation of such
transaction, the corporation formed by or surviving any such consolidation or
merger if other than the Company, or the person to which such sale or
conveyance shall have been made, shall execute a written supplemental
undertaking so providing and further providing for adjustments that shall be
as nearly equivalent as may be practical to the adjustments provided for in
this Section. The successor Company shall mail to the Warrantholder a notice
describing the undertaking in accordance with Section 13 hereof.
If the issuer of securities deliverable upon exercise of Warrants
under the supplemental referred to in the preceding paragraph is an affiliate
of the formed, surviving, transferee or lessee corporation, that issuer shall
join in the supplemental undertaking.
(l) Adjustment in Number of Shares.
Upon each adjustment of the Exercise Price pursuant to this Section
10, each Warrant outstanding prior to the making of the adjustment in the
Exercise Price shall thereafter evidence the right to receive upon payment of
the adjusted Exercise Price that number of Warrant Shares (calculated to the
nearest hundredth) obtained from the following formula:
N' = N x E
-----
E'
where:
N' = the adjusted number of Warrant Shares issuable
upon exercise of a Warrant by payment of the
adjusted Exercise Price.
N = the number of Warrant Shares previously issuable
upon exercise of a Warrant by payment of the
Exercise Price prior to adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price immediately prior to the
adjustment.
(m) Form of Warrants.
Irrespective of any adjustments in the Exercise Price or the number
or kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Warrant Agreement.
SECTION 11. No Dilution or Impairment.
(a) If any event shall occur as to which the provisions of Section 10
are not strictly applicable but the failure to adjust the Exercise Price would
adversely affect the purchase rights represented by the Warrants in accordance
with the essential intent and principles of such Section, then, in each such
case, the Company shall appoint an investment banking firm of recognized
national standing, or any other financial expert that does not (or whose
directors, officers, employees, affiliates or stockholders do not) have a
direct or material indirect financial interest in the Company or any of its
Subsidiaries, who has not been, and, at the time it is called upon to give
independent financial advice to the Company, is not (and none of its
directors, officers, employees, affiliates or stockholders are) a promoter,
director or officer of the Company or any of its Subsidiaries, which shall
give their opinion upon the adjustment, if any, on a basis consistent with the
essential intent and principles established in Section 10, necessary to
preserve, without dilution, the purchase rights, represented by the Warrants.
Upon receipt of such opinion, the Company will promptly mail a copy thereof to
the holders of the Warrants and shall make the adjustments described therein.
(b) The Company will not, by amendment of its certificate of
incorporation or through any consolidation, merger, reorganization, transfer
of assets, dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms of the Warrants, but will at all times in reasonable good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the holders
of the Warrants against dilution or other impairment. Without limiting the
generality of the foregoing, the Company (1) will take all such action as may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Series B Preferred Stock upon the
exercise of the Warrants from time to time outstanding and (2) will not take
any action that results in any adjustment of the Exercise Price if the total
number of Warrant Shares issuable after the action upon the exercise of all of
the Warrants would exceed the total number of shares of Series B Preferred
Stock or shares of Common Stock into which the Series B Preferred Stock shall
be convertible then authorized by the Company's certificate of incorporation
and available for the purposes of issue upon such exercise. A consolidation,
merger, reorganization or transfer of assets involving the Company covered by
Section 10 shall not be prohibited by or require any adjustment under this
Section 11.
SECTION 12. Fractional Interests. The Company shall not be required
to issue fractional Warrant Shares on the exercise of Warrants. If more than
one Warrant shall be presented for exercise in full at the same time by the
same holder, the number of full Warrant Shares that shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If,
notwithstanding the aggregation pursuant to the preceding sentence, any
fraction of a Warrant Share would be issuable on the exercise of any Warrants
(or specified portion thereof), the Company shall pay an amount in cash equal
to the Exercise Price on the day immediately preceding the date the Warrant is
presented for exercise, multiplied by such fraction.
SECTION 13. Notices to Warrantholder. Upon any adjustment of the
Exercise Price pursuant to Section 10 or Section 11, the Company shall
promptly thereafter (i) cause to be filed with the Company a certificate that
includes the report of a firm of independent public accountants of recognized
standing selected by the Board of Directors (who may be the regular auditors
of the Company) setting forth the Exercise Price after such adjustment and
setting forth in reasonable detail the method of calculation and the facts
upon which such calculations are based and setting forth the number of Warrant
Shares (or portion thereof) issuable after such adjustment in the Exercise
Price, upon exercise of a Warrant and payment of the adjusted Exercise Price,
and (ii) cause to be given to the Warrantholder written notice of such
adjustments (including a copy of such certificate). Where appropriate, such
notice may be given in advance and included as a part of the notice required
to be mailed under the other provisions of this Section 13.
In case:
(a) the Company shall authorize the issuance to all holders of shares
of Common Stock, rights, options or warrants to subscribe for or purchase
shares of Common Stock or of any other subscription rights or warrants;
(b) the Company shall authorize the distribution to all holders of
shares of Common Stock of its indebtedness or assets;
(c) of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is required, or of
the conveyance or transfer of the properties and assets of the Company
substantially as an entirety, or of any reclassification or change of Series B
Preferred Stock issuable upon exercise of the Warrants or Common Stock (other
than a change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination), or a
tender offer or exchange offer for shares of Common Stock;
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company proposes to take any action (other than actions of
the character described in Section 10(a)) that would require an adjustment of
the Exercise Price or that would require a supplemental undertaking pursuant
to Section 10;
then the Company shall cause to be given to the Warrantholder at his address
appearing on the Warrant register, at least 20 days (or 10 days in any case
specified in clauses (a) or (b) above) prior to the applicable record date
hereinafter specified, or promptly in the case of events for which there is no
record date, a written notice stating (i) the date as of which the holders of
record of shares of Common Stock to be entitled to receive any such rights,
options, warrants or distribution are to be determined, (ii) the initial
expiration date set forth in any tender offer or exchange offer for shares of
Common Stock, or (iii) the date on which any such reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding up is expected to become effective or consummated, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange such shares for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up. The failure to give the
notice required by this Section 13 or any defect therein shall not affect the
legality or validity of any distribution, right, option, warrant,
consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding up, or the vote upon any action.
Nothing contained in this Warrant Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders thereof the
right to vote or to consent or to receive notice as stockholders in respect of
the meetings of stockholders or the election of Directors of the Company or
any other matter, or any rights whatsoever as stockholders of the Company.
SECTION 14. Notices to Company and Warrantholder. All notices and
other communications hereunder shall be in writing and shall be deemed duly
given (i) on the date of delivery if delivered personally, (ii) on the date of
confirmation of receipt (or, the first business day following such receipt if
the date is not a business day or the receipt is after 5 p.m.) of transmission
by facsimile, or (iii) on the date of confirmation of receipt (or, the first
business day following such receipt if the date is not a business day or the
receipt is after 5 p.m.) if delivered by courier. Subject to the foregoing,
all notices hereunder shall be delivered as set forth below, or pursuant to
such other instructions as may be designated in writing by the party to
receive such notice:
To the Company:
Moscow CableCom Corp.
405 Park Avenue
Suite 1203
New York, NY 10022
Attention: Oliver Grace
Facsimile: +1-212-888-5620
With a courtesy copy (which shall not constitute notice to
the Company):
Oliver R. Grace, Jr.
55 Brookville Road
Glen Head, NY 11545
Facsimile: +1-516-626-1204
To the Warrantholder:
Columbus Nova Investments VIII Ltd.
590 Madison Avenue
38th Floor
New York, NY 10022
United States
Attention: Ivan Isakov
Facsimile: +1-212-308-6623
with a courtesy copy (which shall not constitute notice to
the Warrantholder) to:
Skadden, Arps, Slate, Meagher & Flom LLP
An der Welle 5
60322 Frankfurt am Main
Germany
Attention: Hilary Foulkes
Facsimile: +49-69-74220300
SECTION 15. Amendments and Waivers. No amendment of any provision of
this Warrant Agreement shall be valid unless the same (x) shall be in writing
and signed by the parties and (y) shall be approved by the Audit Committee of
the Board of Directors of the Company. Either party to this Warrant Agreement
may (i) extend the time for the performance of any of the obligations or other
acts of the other party, (ii) waive any inaccuracies in the representations
and warranties of the other party contained herein or in any document
delivered by the other party pursuant hereto or (iii) waive compliance with
any of the agreements or conditions of the other party contained herein. Any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed by the party to be bound thereby. Any waiver of any term or
condition shall not be construed as a waiver of any subsequent breach or a
subsequent waiver of the same term or condition, or a waiver of any other term
or condition, of this Warrant Agreement. The failure of any party to assert
any of its rights hereunder shall not constitute a waiver of any of such
rights.
SECTION 16. Representations and Warranties of the Warrantholder.
The Warrantholder, by its acceptance of the Warrants to be issued
herewith represents and warrants to the Company that (a) it is an "accredited
investor" as such term is defined in Rule 501(a) of Regulation D promulgated
under the Securities Act, and (b) it is acquiring the Warrants and the Warrant
Shares to be issued upon exercise of such Warrants for investment, for its own
account, and not with a view to, or for sale in connection with, any
distribution.
SECTION 17. Successors. All the covenants and provisions of this
Warrant Agreement by or for the benefit of the Company shall bind and inure to
the benefit of its respective successors and assigns hereunder.
SECTION 18. Termination. This Warrant Agreement shall terminate on
the earlier of (i) the Expiration Date and (ii) the date on which all Warrants
have been exercised or canceled in accordance with Section 5.
SECTION 19. Governing Law; Jurisdiction; Venue.
(a) Governing Law. This Warrant Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without
giving effect to any choice or conflict of law provision or rule (whether of
the State of New York or any other jurisdiction) that would cause the
application of the Laws of any jurisdiction other than the State of New York.
(b) Jurisdiction. The Company and the Warrantholder by its acceptance
of the Warrants each hereby irrevocably and unconditionally submits, for
itself and its property, to the jurisdiction of the Supreme Court of the State
of New York sitting in New York County and of the United States District Court
for the Southern District of New York, and any appellate court from any
thereof, in respect of actions brought against it as a defendant, in any
action, suit or proceeding arising out of or relating to this Warrant
Agreement or the Warrant Certificates and Warrants to be issued pursuant
hereto, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action, suit or proceeding may be heard and determined
in such courts. Each of the parties hereto agrees that a final judgment in any
such action, suit or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.
(c) Venue. Each of the Company and the Warrantholder irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively
do so, any objection that it may now or hereafter have to the laying of venue
of any action, suit or proceeding arising out of or relating to this Warrant
Agreement, or the Warrant Certificate(s) and Warrants to be issued pursuant
hereto, in any court referred to in clause (b). Each of the Company and the
Warrantholder hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action,
suit proceeding in any such court.
SECTION 20. Equitable Remedies.
The parties agree that irreparable harm would occur in the event that
any of the agreements and provisions of this Warrant Agreement were not
performed fully by the parties in accordance with their specific terms or
conditions or were otherwise breached, and that money damages are an
inadequate remedy for breach of this Warrant Agreement because of the
difficulty of ascertaining and quantifying the amount of damage that would be
suffered by the parties in the event that this Warrant Agreement were not
performed in accordance with its terms or conditions or were otherwise
breached. It is accordingly hereby agreed that the parties shall be entitled
to an injunction or injunctions to restrain, enjoin and prevent breaches of
this Warrant Agreement by the other party and to enforce specifically such
terms and conditions of this Warrant Agreement, such remedy being in addition
to and not in lieu of any other rights and remedies to which the other party
is entitled to at law or in equity.
SECTION 21. Benefits of this Warrant Agreement. Nothing in this
Warrant Agreement shall be construed to give to any person or corporation
other than the Company and the registered holders of the Warrant Certificates
any legal or equitable right, remedy or claim under this Warrant Agreement;
but this Warrant Agreement shall be for the sole and exclusive benefit of the
Company and the registered holders of the Warrant Certificates.
SECTION 22. Headings. The descriptive headings contained in this
Warrant Agreement are for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Warrant Agreement
SECTION 23. Interpretation.
References in this Warrant Agreement to articles, sections,
paragraphs, clauses and exhibits are to articles, sections, paragraphs,
clauses and exhibits in or to this Warrant Agreement unless otherwise
indicated. Whenever the context may require, any pronoun includes the
corresponding masculine, feminine and neuter forms. Any term defined by
reference to any agreement, instrument or document has the meaning assigned to
it whether or not such agreement, instrument or document is in effect. Any
reference to any federal, state, local or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder,
unless the context requires otherwise. The words "include", "includes" and
"including" are deemed to be followed by the phrase "without limitation".
Unless the context otherwise requires, any agreement, instrument or other
document defined or referred to herein refers to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise
modified from time to time. Unless the context otherwise requires, references
herein to any Person include its successors and assigns
SECTION 24. Entire Agreement. This Warrant Agreement, together with
the Warrant Certificates and Exhibits, constitute the entire agreement between
the Company and the Warrantholder with respect to the subject matter hereof
and thereof and supersede all prior agreements and undertakings, both written
and oral, between the Company and the Warrantholder with respect to the
subject matter hereof and thereof.
SECTION 25. Joint Drafting. The parties have participated jointly in
the negotiation and drafting of this Warrant Agreement. In the event that an
ambiguity or question of intent or interpretation arises, this Warrant
Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party
by virtue of the authorship of any of the provisions of this Warrant
Agreement.
SECTION 26. Severability.
If any provision of this Warrant Agreement is invalid, illegal or
incapable of being enforced by any law or public policy, all other provisions
of this Warrant Agreement shall nevertheless remain in full force and effect
and the application of such provision to other Persons or circumstances will
be interpreted so as reasonably to effect the intent of the parties hereto so
long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon
such determination that any provision is invalid, illegal or incapable of
being enforced, the parties hereto shall negotiate in good faith to modify
this Warrant Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated to the greatest
extent possible.
SECTION 27. Counterparts. This Warrant Agreement may be executed in
any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
[Signature on Following Page]
IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be duly executed as of the day and year first above written.
MOSCOW CABLECOM CORP.
By: /s/ Andrew O'Shea
-----------------------------
Name: Andrew O'Shea
Title: Chief Financial Officer
COLUMBUS NOVA INVESTMENTS VIII LTD.
By: /s/ Andrew Intrater
-----------------------------
Name: Andrew Intrater
Title: Attorney-in-Fact
EXHIBIT A
FORM OF WARRANT CERTIFICATE
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH, OR PURSUANT TO
AN EXEMPTION FROM, THE REQUIREMENTS OF SUCH ACT AND LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF, AND MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH, A SERIES B
CONVERTIBLE PREFERRED STOCK WARRANT AGREEMENT BY AND BETWEEN MOSCOW CABLECOM
CORP. AND COLUMBUS NOVA INVESTMENTS VIII LTD. THE HOLDER OF THIS CERTIFICATE
BY THE ACCEPTANCE HEREOF AGREES TO BE BOUND BY THE TERMS OF THE WARRANT
AGREEMENT. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO
MOSCOW CABLECOM CORP.
NO.
WARRANTS
--
FORM OF
Warrant Certificate
MOSCOW CABLECOM CORP.
This Warrant Certificate certifies that Columbus Nova Investments
VIII Ltd., a Bahamas corporation, or its registered assigns (the
"Warrantholder"), is the registered holder of Warrants to purchase up to
8,283,000 shares (the "Warrant Shares") of Series B Convertible Preferred
Stock, par value $.01 per share (the "Series B Preferred Stock"), of Moscow
CableCom Corp. (the "Company"). Each Warrant entitles the holder, subject to
the conditions relating to exercisability, cancellation and exercise set forth
in Section 5 of the Warrant Agreement referred to below, to purchase from the
Company at any time on or after the Exercise Date prior to 5:00 p.m., New York
City time, on the Expiration Date one fully paid and nonassessable Warrant
Share at the Exercise Price. The number of Warrant Shares for which each
Warrant is exercisable and the Exercise Price are subject to adjustment as
provided in the Warrant Agreement.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants to purchase Warrant Shares and are issued
pursuant to the Warrant Agreement, dated as of [ ] (the "Warrant Agreement"),
by and between the Company and the Warrantholder for the benefit of the
holders from time to time of the Warrants, and the Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights,
obligations, duties and immunities thereunder of the Company and the
Warrantholder. Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Warrant Agreement.
The Warrantholder may exercise the Warrants represented by this
Warrant Certificate by surrendering this Warrant Certificate, with the
Election to Purchase attached hereto properly completed and executed, together
with payment of the aggregate Exercise Price, at the offices of the Company
specified in Section 14 of the Warrant Agreement. If upon any exercise of
Warrants evidenced hereby the number of Warrants exercised shall be less than
the total number of Warrants evidenced hereby, there shall be issued to the
Warrantholder or its assignee a new Warrant Certificate evidencing the number
of Warrants not exercised.
This Warrant Certificate, when surrendered at the offices of the
Company specified in Section 14 of the Warrant Agreement, by the registered
holder thereof in person, by legal representative or by attorney duly
authorized in writing, may be exchanged, in the manner and subject to the
limitations provided in the Warrant Agreement, for one or more other Warrant
Certificates evidencing in the aggregate a like number of Warrants.
The Warrantholder may transfer the Warrants evidenced by this Warrant
Certificate, in whole or in part, only in accordance with Section 4 of the
Warrant Agreement.
The Company may deem and treat the registered holder hereof as the
absolute owner of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
The Warrant Agreement and each Warrant Certificate, including this
Warrant Certificate, shall be governed by and construed in accordance with the
laws of the State of New York.
WITNESS the signature of the duly authorized officer of the Company.
Dated: [ ]
MOSCOW CABLECOM CORP.
By:
------------------------------
Name:
Title:
FORM OF
ELECTION TO PURCHASE
(To be executed and delivered to the Company upon exercise of a
Warrant after the Exercise Date and prior to the Expiration Date)
The undersigned hereby irrevocably elects to exercise _____ of the
________ Warrants evidenced by the attached Warrant Certificate to purchase
Warrant Shares, and herewith tenders payment for such Warrant Shares in an
amount determined in accordance with the terms of the Warrant Agreement.
The undersigned requests that a certificate representing such Warrant
Shares be registered in the name of ________________, whose address is
________________, and that such certificate be delivered to ________________,
whose address is ____________. If said number of Warrants is less than the
number of Warrants evidenced by the Warrant Certificate, the undersigned
requests that a new Warrant Certificate evidencing the number of Warrants
evidenced by this Warrant Certificate that are not being exercised be
registered in the name of ________________, whose address is ________________
and that such Warrant Certificate be delivered to ________________, whose
address is ________________.
Dated ,
Name of holder of Warrant Certificate:
________________
________________
(Please Print)
Address:
________________
________________
Federal Tax ID No.:
________________
Signature:
________________
Note: The above signature must correspond with the name as written in
the first sentence of the attached Warrant Certificate in every particular,
without alteration or enlargement or any change whatever, and if the
certificate evidencing the Warrant Shares or any Warrant Certificate
representing Warrants not exercised is to be registered in a name other than
that in which this Warrant Certificate is registered, the signature above must
be guaranteed.
Signature Guaranteed:
Dated:
________________
FORM OF
ASSIGNMENT
For value received, ________________hereby sells, assigns and
transfers unto ________________ , ________________of the Warrants evidenced by
the attached Warrant Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint ________________
as its due and lawful attorney, to register the transfer of said Warrants on
the books of Moscow CableCom Corp., and to execute a new Warrant Certificate
in the name of ________________ whose address is ________________ evidencing
the number of Warrants so sold, assigned and transferred hereby. If the number
of Warrants sold, assigned or transferred hereunder is less than the number of
Warrants evidenced by the attached Warrant Certificate, then the undersigned
requests that a new Warrant Certificate for an amount of Warrants equal to the
number of Warrants evidenced by the attached Warrant Certificate that were not
sold, transferred or assigned be registered in the name of the undersigned.
_____________ hereby consents to be bound by the covenants and
provisions of the Warrant Agreement, dated as of [ ], by and between Moscow
CableCom Corp. and Columbus Nova Investments VIII Ltd.
Dated ________________,
Name of holder of Warrant Certificate:
________________
________________
(Please Print)
Address:
________________
________________
Federal Tax ID No.:
________________
Signature:
________________
Note: The above signature must correspond with the name as written in
the first sentence of the attached Warrant Certificate in every particular,
without alteration or enlargement or any change whatever, and such signature
must be guaranteed.
Signature Guaranteed:
Dated:
________________
EX-4
4
lon392290.txt
EXHIBIT 4.2 - AMDT. NO. 1 TO SHAREHOLDERS AGMT.
EXHIBIT 4.2
EXECUTION COPY
AMENDMENT NO. 1 TO
SHAREHOLDERS AGREEMENT
This AMENDMENT NO. 1 (this "Amendment") with respect to the
Shareholders Agreement (the "Agreement") dated August 26, 2004, between
Moskovskaya Telecommunikatsionnaya Corporatsiya, an open joint stock company
organized under the laws of the Russian Federation ("COMCOR"), and Columbus Nova
Investments VIII Ltd., a Bahamas company ("CNI" and together with COMCOR, the
"Parties" and each individually, a "Party"), is made and entered into by the
Parties as of December 1, 2004. Capitalized terms used but not defined herein
shall have the meanings ascribed to such terms in the Agreement.
WHEREAS, as a result of the application of the National Association of
Securities Dealers, Inc. Rule 4351 and the related amendment to the Subscription
Agreement, the voting rights of the Series B Preferred Stock may be less than
one (1) vote per share; and
WHEREAS, the Parties would like to amend the Agreement to express their
mutual understanding as to effect of this change in the voting rights of the
Series B Preferred Stock on the interpretation and implementation of the
Agreement, in accordance with the terms and conditions of this Amendment;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and intending to be legally bound hereby, the Parties agree as
follows:
1. Amendment
For the avoidance of doubt, any reduction in the voting rights of the
Series B Preferred Stock pursuant to the application of Rule 4351 shall
not be deemed a reduction in the number of corresponding Voting Shares
for purposes of Sections 2 and 6 of the Agreement, it being understood
that this sentence will no longer be relevant once CNI has converted
all of its shares of Series B Preferred Stock. Furthermore, any shares
that CNI may be deemed to beneficially own as a result of the proxies
it is being given by other shareholders in the Company to make up the
shortfall in votes caused by the application of Rule 4351 shall not be
considered as owned by CNI for purposes of the percentage ownership
calculations set forth in Sections 2 and 6 of the Agreement, it being
understood that this sentence will no longer be relevant once all of
such proxies have terminated. Finally, the definition of "beneficial
ownership" for purposes of the Agreement shall not be deemed to include
shares that are beneficially owned by a Party pursuant to Rule 13d-3
under the Exchange Act solely by reason of being party to the
Agreement..
2. Governing Law and Language
This Amendment shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to any choice
or conflict of law provision or rule (whether of the State of New York
or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of New York. This Amendment is
written in English, and the notarized Russian language translation is
provided only for the convenience of the parties. In the case of
inconsistency or issues of interpretation between the English and
Russian texts, the English text shall control.
3. Counterparts
This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date
first written above.
MOSKOVSKAYA TELECOMMUNIKATSIONNAYA CORPORATSIYA
By ________________________
Name:
Title:
COLUMBUS NOVA INVESTMENTS VIII LTD.
By ________________________
Name:
Title:
EX-4
5
lon399431.txt
EXHIBIT 4.3 - AMDT. NO. 2 TO SHAREHOLDERS AGMT.
EXHIBIT 4.3
EXECUTION COPY
AMENDMENT NO. 2 TO
SHAREHOLDERS AGREEMENT
This AMENDMENT NO. 2 (this "Amendment") with respect to the
Shareholders Agreement (the "Agreement") dated August 26, 2004, between
Moskovskaya Telecommunikatsionnaya Corporatsiya, an open joint stock company
organized under the laws of the Russian Federation ("COMCOR"), and Columbus Nova
Investments VIII Ltd., a Bahamas company ("CNI" and together with COMCOR, the
"Parties" and each individually, a "Party"), is made and entered into by the
Parties as of December 30, 2004. Capitalized terms used but not defined herein
shall have the meanings ascribed to such terms in the Agreement.
WHEREAS, the Parties would like to amend the Agreement to memorialize
their additional agreements with respect to the management structure of MOCC and
CCTV.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and intending to be legally bound hereby, the Parties agree as
follows:
1. Amendment
Following the closing of the Columbus Nova financing transactions, the
Parties will instruct the management team of MOCC/CCTV to prepare for
the first meeting of the new Board of Directors of MOCC a detailed
180-day operating plan for MOCC/CCTV, which will contain specific
operating and financial targets that will be used to monitor operations
and evaluate the performance of individual top managers. After 6
months, the MOCC Board of Directors will compare actual results to the
180-day plan targets and conduct an extensive performance review of
individual top managers.
The consulting contracts of Charles Roberts and Ali Mohamed will be
amended prior to the closing of the Columbus Nova financing
transactions to provide for the 6-month initial term. The Parties agree
that the performance of Charles Roberts and Ali Mohamed under their
consulting engagements will be monitored and reviewed. Any extension of
the initial 6-month period must be approved unanimously by the MOCC
Board of Directors.
2. Governing Law and Language
This Amendment shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to any choice
or conflict of law provision or rule (whether of the State of New York
or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of New York. This Amendment is
written in English, and the notarized Russian language translation is
provided only for the convenience of the parties. In the case of
inconsistency or issues of interpretation between the English and
Russian texts, the English text shall control.
3. Counterparts
This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date
first written above.
MOSKOVSKAYA TELECOMMUNIKATSIONNAYA CORPORATSIYA
By ________________________
Name:
Title:
COLUMBUS NOVA INVESTMENTS VIII LTD.
By ________________________
Name:
Title:
EX-99
6
lon368552.txt
EXHIBIT 6 - REGISTRATION RIGHTS AGREEMENT
EXHIBIT 6
REGISTRATION RIGHTS AGREEMENT
by and between
MOSCOW CABLECOM CORP.
and
COLUMBUS NOVA INVESTMENTS VIII LTD.
Dated January 13, 2005
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................................1
ARTICLE II REGISTRATION......................................................3
SECTION 2.1 Requested Registration........................................3
SECTION 2.2 Incidental Registrations......................................5
SECTION 2.3 Expenses......................................................5
SECTION 2.4 Effective Registration Statement..............................5
SECTION 2.5 Jurisdictional Limitations....................................6
SECTION 2.6 Conversion of Other Securities................................6
SECTION 2.7 Adjustments Affecting Registrable Securities..................6
ARTICLE III REGISTRATION PROCEDURES..........................................6
SECTION 3.1 Company Obligations...........................................6
SECTION 3.2 Holder Obligations............................................8
ARTICLE IV UNDERWRITTEN OFFERINGS............................................9
SECTION 4.1 Underwritten Offerings........................................9
SECTION 4.2 Holdback Agreements..........................................12
ARTICLE V INDEMNIFICATION AND CONTRIBUTION..................................12
SECTION 5.1 Indemnification..............................................12
SECTION 5.2 Contribution.................................................14
ARTICLE VI COMPANY COVENANTS................................................15
SECTION 6.1 Covenants Relating to Rule 144; Reports Under Exchange Act...15
SECTION 6.2 Other Registration Rights....................................15
ARTICLE VII MISCELLANEOUS...................................................15
SECTION 7.1 Amendments and Waivers.......................................15
SECTION 7.2 Successors and Assigns.......................................16
SECTION 7.3 Entire Agreement.............................................16
SECTION 7.4 Notices......................................................16
SECTION 7.5 Governing Law................................................16
SECTION 7.6 Arbitration..................................................17
SECTION 7.7 Equitable Remedies...........................................17
SECTION 7.8 Parties in Interest..........................................17
SECTION 7.9 Severability.................................................17
SECTION 7.10 No Inconsistent Agreements..................................17
SECTION 7.11 Headings....................................................17
SECTION 7.12 Construction; Adequate Counsel..............................18
SECTION 7.13 Counterparts................................................18
SECTION 7.14 Interpretation..............................................18
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of January 13, 2005, by and between Moscow CableCom Corp., a
Delaware corporation (the "Company"), and Columbus Nova Investments VIII Ltd.,
a Bahamas company ("CNI").
WHEREAS, the parties hereto have entered into a Series B Convertible
Preferred Stock Subscription Agreement dated August 26, 2004, as amended
December 1, 2004 (the "Subscription Agreement"), and a Series B Convertible
Preferred Stock Warrant Agreement dated as of the date hereof (the "Warrant
Agreement");
WHEREAS, pursuant to the Subscription Agreement, CNI has acquired
4,500,000 shares of Series B Convertible Preferred Stock, par value $.01 per
share of the Company ("Series B Preferred Stock"), which are currently
convertible into 4,500,000 shares of Common Stock (as defined herein) of the
Company; and
WHEREAS, pursuant to the Warrant Agreement, CNI has acquired warrants
that are currently exercisable for 8,283,000 shares of Series B Preferred
Stock of the Company (the "Warrants");
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
The following terms shall have the meanings set forth in this Article I:
"Agreement" has the meaning specified in the preface.
"Commission" means the United States Securities and Exchange Commission or any
successor governmental agency that administers the Securities Act and the
Exchange Act.
"Commission Registration Form" means a registration statement complying with
the rules and regulations of the Commission.
"Common Stock" means the Common Stock, par value $.01 per share of the
Company, as constituted on the date hereof, any shares of the Company's
capital stock into which such Common Stock shall be changed, and any shares of
the Company's capital stock resulting from any reclassification of such Common
Stock or any recapitalization of the Company.
"Company" has the meaning specified in the preface.
"CNI" has the meaning specified in the preface.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or any
successor statute thereto, and the rules and regulations of the Commission
promulgated from time to time thereunder, all as the same shall be in effect
at the time.
"Holders" means CNI and any other Person who holds or may hold Registrable
Securities in the future under this Agreement or under any other agreement
with the Company granting rights to register Registrable Securities.
"Incidental Registration" has the meaning specified in Section 2.2(a).
"Indemnified Parties" has the meaning specified in Section 5.1(a).
"Indemnifying Party" has the meaning specified in Section 5.1(c).
"Person" means any individual, partnership, corporation, limited liability
company, association, trust, joint venture, unincorporated organization and
any government, governmental department or agency or political subdivision
thereof.
"Registrable Securities" means, in each case as adjusted for stock splits,
recapitalizations and other similar events, (i) shares of Common Stock and
(ii) securities issued in replacement or exchange of any shares of Common
Stock; provided, however, that any and all shares described in clauses (i) and
(ii) above shall cease to be Registrable Securities upon any sale pursuant to
a registration statement declared effective under the Securities Act, or any
sale exempt from registration under the Securities Act pursuant to section
4(1) of the Securities Act or Rule 144 promulgated under the Securities Act.
"Registration Expenses" means all expenses incurred by the Company incident to
the Company's performance of or compliance with this Agreement in connection
with each Registration, regardless of whether such registration statement is
declared effective, including without limitation (i) all registration, filing,
listing and National Association of Securities Dealers, Inc. fees, (ii) all
fees and expenses of complying with securities or blue sky laws, (iii) all
word processing, duplicating and printing expenses, (iv) all messenger and
delivery expenses, (v) any transfer taxes, (vi) the fees and expenses of the
Company's legal counsel and independent public accountants, including the
expenses of any "comfort" letters, (vii) all expenses incurred in connection
with making "roadshow" presentations and holding meetings with potential
investors to facilitate the distribution and sale of Registrable Shares,
(viii) the reasonable fees and disbursements of counsel and accountants
retained by CNI, (ix) any fees and disbursements of underwriters customarily
paid by issuers or sellers of securities, but excluding underwriting discounts
and commissions as described below, and (x) all of the internal expenses
incurred by the Company, including, without limitation, salaries and expenses
of officers and employees performing legal and accounting duties, expenses of
conducting the annual audit of the Company's financial statements by its
independent public accountants, and costs in obtaining liability insurance on
behalf of the Company, its officers and directors; provided, however, that
each Holder shall be responsible for the underwriting discounts and
commissions with respect to the Registrable Shares being sold by such Holder.
"Registration" means any of a Requested Registration or an Incidental
Registration.
"Registration Request" has the meaning set forth in Section 2.1(a).
"Requested Registration" has the meaning specified in Section 2.1(a).
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute thereto, and the rules and regulations of the Commission
promulgated from time to time thereunder, all as the same shall be in effect
at the time.
"Underwriter's Maximum Number" means a specified maximum number of securities
that could be successfully included in a Registration pursuant to an
underwritten offering within a price range acceptable to Holders and the
Company as determined in writing by the representative of the underwriters.
ARTICLE II
REGISTRATION
SECTION 2.1 Requested Registration.
(a) Request for Registration. Subject to Section 2.1(b), if at any
time following the first anniversary of this Agreement the Company shall
receive a written request from CNI (a "Registration Request") that the Company
effect a registration under the Securities Act of all or any part of the
Registrable Securities held by CNI (a "Requested Registration") in accordance
with the terms of this Section 2.1, then the Company shall use its best
efforts to effect the registration under the Securities Act (and any related
qualification under blue sky laws or other compliance) of the offering and
sale of such Registrable Securities within 90 days after receipt of the
Registration Request. The Company may also include in any Requested
Registration other securities of the Company offered for the account of the
Company or any other Person, including Registrable Securities held by other
Holders entitled to include such securities in such Requested Registration
pursuant to Section 2.2. A Requested Registration may be accomplished on Form
S-3 under the Securities Act, if available, at the option of the Company;
provided, however, that if, in connection with any Requested Registration that
is proposed by the Company to be on Form S-3 or any similar short form
registration statement that is a successor to Form S-3, the managing
underwriters, if any, shall advise the Company in writing that in their
opinion the use of another permitted form is of material importance to the
success of the offering, then such registration shall be on such other
permitted form. CNI shall have the right to terminate or withdraw any
Requested Registration requested by it under this Section 2.1 prior to the
effectiveness of such registration, whether or not the Company or any Holder
has elected to include Registrable Securities in such Requested Registration.
The Registration Expenses of such terminated or withdrawn registration shall
be borne by the Company in accordance with Section 2.3 if CNI shall have
terminated or withdrawn such registration (i) following a breach by the
Company of any of its covenants or obligations under this Agreement or (ii) as
a result of disagreement between CNI and the Company on the offering price per
share and underwriting discounts, if applicable, in connection with such
registration; provided, however, that if CNI terminates or withdraws such
registration other than pursuant to (i) or (ii) above, the Registration
Expenses of such terminated or withdrawn registration shall be borne by CNI.
(b) Limitation on Requested Registrations.
(i) Share Limitation. The Company shall not be obligated
to effect a Requested Registration unless such
registration involves the greater of (i) an aggregate
offering price of $1,000,000 or (ii) one percent of
the Common Stock issued or outstanding as of the date
of such Registration Request.
(ii) Limitation on the Number of Requested Registrations.
The Company shall only be obligated to effect one
Requested Registration hereunder in any six month
(calendar) period.
(iii) Prior Registration Limitation. If a registration
statement related to another Registration has been
declared effective under the Securities Act within the
preceding six calendar months and the participating
Holders have not sold all Registrable Securities
included in such registration statement, then the
Company shall have the right to defer a Requested
Registration for a period of not more than 90 days.
(iv) Delay Limitation. If the Company shall furnish to CNI
a certificate signed by the chief executive officer or
chairman of the board of directors of the Company
stating that, in the good faith judgment of the board
of directors, the effecting of the Requested
Registration at the time requested would be
detrimental to the Company or its stockholders, then
the Company shall have the right to defer such
Requested Registration for a period of not more than
180 days; provided, however, that the Company may only
assert such delay once during any 12-month period.
(v) Simultaneous Company Registration Limitation. From the
date of filing of any registration statement under the
Securities Act by the Company until the date 180 days
following the effective date of such registration
statement, the Company shall not be obligated to
effect a Requested Registration without the consent of
the representative of the underwriters of the offering
as to which such registration statement is filed, so
long as the Company is actively employing in good
faith all reasonable efforts to cause such
registration statement to become or remain effective.
(vi) Termination. The right to request a Requested
Registration shall terminate on the tenth anniversary
of this Agreement.
(vii) Allocation. The inclusion of Registrable Securities in
a Requested Registration, in addition to the
Registrable Securities to be included by CNI, shall be
made on a pro rata basis among all other Holders. In
the event that any Holder withdraws his Registrable
Securities from a Requested Registration, then the
Company shall promptly notify other Holders of such
withdrawal. In such event, other Holders shall be
entitled to increase the number of Registrable
Securities to be included in such Requested
Registration on a pro rata basis based on the number
of Registrable Securities that each such Holder
desires to include in such Requested Registration.
(viii) Price Determination. If CNI requests the Registration,
it shall have the sole right to determine the offering
price per share and underwriting discounts, if
applicable, in connection with any resales of
Registrable Securities pursuant to this Section 2.1,
after consultation with the Company and with due
regard for the Company's views relating thereto.
SECTION 2.2 Incidental Registrations.
(a) Incidental Registration. If the Company, for itself or any of its
security holders other than pursuant to a Requested Registration, at any time
after the date hereof and through the tenth anniversary hereof, undertakes to
effect a registration under the Securities Act of the offering and sale of any
shares of its capital stock or other securities (other than (i) the
registration of an offer, sale or other disposition of securities solely to
employees of, or other Persons providing services to, the Company or any
subsidiary of the Company pursuant to an employee or similar benefit plan or
(ii) in connection with a merger, acquisition or other transaction of the type
described in Rule 145 under the Securities Act or a comparable or successor
rule, registered on Form S-4 or similar or successor forms promulgated by the
Commission), then on each such occasion the Company shall notify Holders of
such undertaking at least 30 days prior to the filing of a registration
statement relating thereto. In such event, upon the written request of any
Holder within 20 days after the receipt of such notice, subject to Section
4.1(d), the Company shall use its best efforts as soon as practicable
thereafter to cause any Registrable Securities specified by such Holder to be
included in such registration statement (an "Incidental Registration"). If a
Holder desires to include less than all Registrable Securities held by it in
any Incidental Registration, then such Holder shall nevertheless continue to
have the right to include any remaining Registrable Securities in any
subsequent Incidental Registration upon the terms and conditions set forth
herein. The Company shall have the right to terminate or withdraw any
Incidental Registration initiated by it under this Section 2.2 prior to the
effectiveness of such registration, whether or not any Holder has elected to
include Registrable Securities in such Incidental Registration. The
Registration Expenses of such terminated or withdrawn registration shall be
borne by the Company in accordance with Section 2.3.
(b) Price Determination. The Company shall have the sole right to
determine the offering price per share and underwriting discounts in
connection with any resale by Holders of Registrable Shares pursuant to an
underwriting offering in connection with an Incidental Registration, after
consultation with the Holders and due regard for Holders' views relating
thereto. If CNI disagrees with the Company's determination of the offering
price per share, CNI shall have the right to withdraw its Registrable
Securities from the Incidental Registration.
(c) Effect of Incidental Registration. No Incidental Registration
effected by the Company shall relieve the Company from its obligations to
effect any Requested Registration.
SECTION 2.3 Expenses. The Company shall pay all Registration Expenses incurred
in connection with any Registration, including if a Registration is not deemed
to have been effected pursuant to Section 2.4 hereof.
SECTION 2.4 Effective Registration Statement. No Registration shall be deemed
to have been effected unless the registration statement filed with respect
thereto in accordance with the Securities Act has been declared effective by
the Commission with respect to the disposition of all Registrable Securities
covered by such Registration and remains effective in accordance with Section
3.1. Notwithstanding the foregoing, no Registration shall be deemed to have
been effected if (a) after the related registration statement has been
declared effective by the Commission, such Registration is made subject to any
stop order, injunction or other order or requirement of the Commission or
other governmental agency or any court proceeding for any reason, other than
solely by reason of a misrepresentation or omission by CNI, or (b) the
conditions to closing specified in the underwriting agreement entered into in
connection with such Registration are not satisfied, other than solely by
reason of an act or omission by CNI.
SECTION 2.5 Jurisdictional Limitations. Notwithstanding anything in this
Agreement to the contrary, the Company shall not be obligated to take any
action to effect registration, qualification or compliance with respect to
Registrable Securities: (a) in any particular jurisdiction in which the
Company would be required to execute a general consent to service of process,
unless the Company is already subject to service in such jurisdiction and
except as required by the Securities Act; (b) that would require it to qualify
generally to do business in any jurisdiction in which it is not already so
qualified or obligated to qualify; or (c) that would subject it to taxation in
a jurisdiction in which it is not already subject generally to taxation.
SECTION 2.6 Conversion of Other Securities. If CNI holds any options, rights,
warrants or other securities that are directly or indirectly convertible into
or exercisable or exchangeable for any Registrable Shares, the Registrable
Shares underlying such options, rights, warrants or other securities shall be
eligible for registration pursuant to this Article II. This includes, without
limitation, the Series B Preferred Stock and the Warrants.
SECTION 2.7 Adjustments Affecting Registrable Securities. The Company will not
effect or permit to occur any combination or subdivision of securities that
would adversely affect the ability of Holders to include any Registrable
Securities in any registration of the Company's securities contemplated by
this Article II or the marketability of such Registrable Securities under any
such Registration.
ARTICLE III
REGISTRATION PROCEDURES
SECTION 3.1 Company Obligations. If and whenever the Company is required to
use its efforts to effect a Registration as provided in Article II, then as
expeditiously as possible and subject to the terms and conditions of Article
II, the Company shall:
(a) Prepare and file with the Commission the appropriate registration
statement to effect such Registration and use its best efforts to cause such
registration statement to become and remain effective for the period set forth
in Section 3.1(c);
(b) Permit any Holder that, in the reasonable judgment of the
Company's counsel, might be deemed to be an underwriter or a controlling
person of the Company, to participate in the preparation of such registration
statement (including by making available for inspection by any such Person and
any attorney, accountant or other agent retained by such Person, all financial
and other records, pertinent corporate documents and all other information
reasonably requested in connection therewith), furnish to all Holders, the
underwriters, if any, and their respective counsel and accountants advance
draft copies of such registration statement and each prospectus included
therein or filed with the Commission at least five business days prior to the
filing thereof with the Commission, and any amendments and supplements thereto
promptly as they become available, and provide each such Person such access to
the books and records of the Company and such opportunities to discuss the
business of the Company with its officers and the independent public
accountants that have certified the financial statements of the Company as is
necessary, in the opinion of such Person, to conduct a reasonable
investigation within the meaning of the Securities Act;
(c) Promptly 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 disposition of all securities covered by such registration statement,
until the earlier of such time as all of such securities have been disposed of
in accordance with the intended methods of disposition by the seller or
sellers thereof set forth in such registration statement or the expiration of
180 days after such registration statement becomes effective (such period of
180 days to be extended one day for each day or portion thereof during such
period that such registration statement is subject to any stop order
suspending the effectiveness of the registration statement, any order
suspending or preventing the use of any related prospectus or any order
suspending the qualification of any Registrable Securities included in such
registration statement for sale in any jurisdiction);
(d) Promptly furnish to CNI, in the case of a Requested Registration
or an Incidental Registration in which it participates, copies of drafts and a
final conformed version of such registration statement as proposed to be filed
and a copy of any amendment or supplement to such registration statement or
prospectus (after initial filing of the registration statement), prior to the
filing of any such registration statement, amendment, supplement or
prospectus, and make the Company's representatives available for discussion of
such document and in good faith consider such changes in such document prior
to the filing thereof as CNI or its counsel may reasonably request;
(e) If requested by the underwriter or underwriters or CNI in
connection with an underwritten offering of Registrable Shares, immediately
incorporate in a prospectus supplement or post-effective amendment such
information as the underwriters and CNI agree should be included therein
relating to the plan of distribution with respect to such Registrable Shares,
including, without limitation, information with respect to the principal
amount of Registrable Shares being sold to such underwriters, the purchase
price being paid therefor by such underwriters and with respect to any other
terms of such underwritten offering of Registrable Shares, and the Company
shall make all required filings of the prospectus supplement or post-effective
amendment promptly upon being notified of the matters to be incorporated in
such prospectus supplement or post-effective amendment;
(f) Immediately notify when or if any registration statement,
amendment, supplement or prospectus has been filed and furnish to Holders that
participate in such Registration, without charge to such Holders, such number
of conformed copies of such registration statement and each such amendment and
supplement thereto (in each case including all exhibits), such number of
copies of the prospectus contained in such registration statement (including
each preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity with
the requirements of the Securities Act, and such other documents as the
purchaser or any such Holder may reasonably request;
(g) Use its best efforts to register or qualify all Registrable
Securities covered by such registration statement under the United States
state securities or blue sky laws of such jurisdictions as any Holder that
participates in such Registration reasonably requests, keep such registration
or qualification in effect for the time period set forth in Section 3.1(c) and
take such other action as may be reasonably necessary or advisable to enable
such Holders to sell the Registrable Securities covered by such Registration
in such jurisdictions;
(h) Use its commercially reasonable efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other United States state governmental agencies or
authorities as may be necessary to enable any Holder that participates in such
Registration to sell the Registrable Securities covered by such Registration
as intended by such registration statement;
(i) Use its best efforts to obtain the withdrawal of any stop order
suspending the effectiveness of such registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any Registrable Securities included in such registration
statement for sale in any jurisdiction;
(j) Immediately notify Holders that participate in such Registration,
at any time during which a prospectus relating to such registration statement
is required to be delivered under the Securities Act, if the Company becomes
aware of any event as a result of which such prospectus, as then in effect,
would include an untrue statement of material fact or would omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made, and at the request of such Holders promptly prepare and
furnish to such Holders a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
would not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made;
(k) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least 12 months but not more than 18 months, beginning with the
first full calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder;
(l) Provide a transfer agent and registrar for all Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement; and
(m) Use its best efforts to list all Registrable Securities covered
by such registration statement on any securities exchange on which the same
class of securities issued by the Company are then listed or to secure
designation and quotation of all Registrable Securities covered by such
Registration on the Nasdaq National Market System and, without limiting the
generality of the foregoing, to arrange for at least two market makers to
register with the National Association of Securities Dealers, Inc. as such
with respect to such Registrable Securities and pay all fees and expenses in
connection with the satisfaction of the obligations set forth in this Section
3.1(m).
SECTION 3.2 Holder Obligations.
(a) Each Holder that participates in a Registration shall furnish to
the Company, upon its written request, such information as it may reasonably
request in writing (i) regarding the proposed distribution by such Holder of
the Registrable Securities held by such Holder and (ii) as required in
connection with any registration (including an amendment to a registration
statement or prospectus), qualification or compliance referred to in this
Article III.
(b) Upon receipt of any notice from the Company, or upon a Holder's
otherwise becoming aware, of the happening of any event of the kind described
in Section 3.1(j), such Holder shall discontinue its disposition of
Registrable Securities pursuant to the registration statement relating to the
offering and sale of such Registrable Securities until the receipt by such
Holder of the supplemented or amended prospectus contemplated by Section
3.1(j). If so directed by the Company, such Holder shall deliver to the
Company all copies other than permanent file copies then in possession of such
Holder of the prospectus relating to the offering and sale of such Registrable
Securities current at the time of receipt of such notice. In addition, each
Holder shall immediately notify the Company, at any time during which a
prospectus relating to the registration of such Registrable Securities is
required to be delivered under the Securities Act, of the happening of any
event as a result of which information previously furnished in writing by such
Holder to the Company specifically for inclusion in such prospectus contains
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made. In
the event that the Company or any such Holder shall give any such notice, the
period referred to in Section 3.1(c) shall be extended by a number of days
equal to the number of days during the period from and including the giving of
notice pursuant to Section 3.1(c) to and including the date on which such
Holder receives copies of the supplemented or amended prospectus contemplated
by Section 3.1(c).
ARTICLE IV
UNDERWRITTEN OFFERINGS
SECTION 4.1 Underwritten Offerings.
(a) In connection with any (i) Requested Registration with respect to
which CNI proposes to dispose of the Registrable Shares in an underwritten
offering or (ii) Incidental Registration the Company undertakes to effect as
an underwritten offering, the Company shall enter into an underwriting
agreement (and any other customary agreements) with the underwriters for such
offering, such agreement to be in form and substance reasonably satisfactory
to such underwriters in their reasonable judgment and to contain such
representations and warranties by the Company and such other terms as are
customarily contained in agreements of that type, including without limitation
indemnities to the effect and to the extent provided in Section 5.1.
(b) In connection with any underwritten offering in which CNI
participates, the Company shall furnish CNI with (i) an opinion (and updates
thereto) of the Company's counsel to the effect that the registration
statement complies as to form with the Securities Act and any other securities
or blue sky laws and that such counsel has no knowledge or reason to know of
any material misstatement or omission in the registration statement and (ii) a
"comfort" letter (and updates thereof) signed by the independent public
accountants that have certified the Company's financial statements included or
incorporated by reference in such registration statement covering
substantially the same matters with respect to such registration statement
(and the prospectus included therein) and with respect to events subsequent to
the date of such financial statements, as are customarily covered in
accountants' letters delivered to underwriters in underwritten public
offerings of securities.
(c) Each Holder that participates in the Registration shall be a
party to such underwriting agreement and may, at such Holder's option, require
that any or all representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such underwriters be made
to and for the benefit of such Holder and that any or all conditions precedent
to the obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of such Holder. No such Holder
participating in any such underwritten offering shall be required by the
provisions hereof to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements regarding such Holder and its intended method of distribution and
any other representation required by law.
(d) Participation in Underwritten Offerings.
(i) If a Requested Registration is an underwritten
offering, and the representative of the underwriters
gives written advice to the Holder(s) requesting the
Registration and the Company that, in its opinion,
market conditions dictate that no more than an
Underwriter's Maximum Number could successfully be
included in such Requested Registration, then the
Company shall be required by this Section 4.1(d)(i) to
include in such Requested Registration only such
number of securities as equals the Underwriter's
Maximum Number. In such event, the Holder(s)
requesting the Registration, the Company and any other
Person participating in such Requested Registration
shall participate in such Requested Registration as
follows:
(1) First, there shall be included in such
Requested Registration that number of
securities that the Holder(s) requesting the
Registration requested to be included in such
registration to the full extent of the
Underwriter's Maximum Number;
(2) Second, if the Underwriter's Maximum Number
has not yet been reached, there shall be
included in such Requested Registration that
number of Registrable Securities that the
Company proposes to offer and sell for its own
account in such registration to the full
extent of the Underwriter's Maximum Number;
and
(3) Third, if the Underwriter's Maximum Number has
not yet been reached, there shall be included
in the Requested Registration that number of
Registrable Securities that any Holders other
than the Holder(s) requesting the Registration
and the Company have requested to be included
in the Requested Registration to the full
extent of the remaining portion of the
Underwriter's Maximum Number, allocated pro
rata among such other Holders based on the
number of Registrable Securities that each
such Holder desires to offer.
(ii) If an Incidental Registration is an underwritten
offering, and the representative of the underwriters
gives written advice to the Holders participating in
the Incidental Registration and the Company that, in
its opinion, market conditions dictate that no more
than an Underwriter's Maximum Number could
successfully be included in such Incidental
Registration, then the Company shall be required by
this Section 4.1(d)(ii) to include in such Incidental
Registration only such number of securities as equals
the Underwriter's Maximum Number. In such event, the
Holders, the Company and any other Person
participating in such Incidental Registration shall
participate in such Incidental Registration as
follows:
(1) First, there shall be included in such
Incidental Registration that number of
securities that the Company proposes to offer
and sell for its own account in such
registration to the full extent of the
Underwriter's Maximum Number;
(2) Second, if the Underwriter's Maximum Number
has not yet been reached, there shall be
included in such Incidental Registration that
number of Registrable Securities that Holders
have requested to be included in such
Incidental Registration to the full extent of
the remaining portion of the Underwriter's
Maximum Number, allocated pro rata among such
Holders based on the number of Registrable
Securities that each such Holder desires to
offer; and
(3) Third, if the Underwriter's Maximum Number has
not yet been reached, there shall be included
in the Incidental Registration that number of
Registrable Securities that any Persons other
than Holders and the Company have requested to
be included in the Incidental Registration to
the full extent of the remaining portion of
the Underwriter's Maximum Number, allocated
pro rata among such other Persons based on the
number of Registrable Securities that each
such Person desires to offer.
(e) The Company shall promptly notify each Holder if any of its
Registrable Securities will not be included in a Registration pursuant to
Section 4.1(d). If any securities are withdrawn from a Registration and if the
number of Registrable Securities to be included in such Registration was
previously reduced pursuant to Section 4.1(d), then the Company shall then
offer to all Holders the right to include additional Registrable Securities in
such Registration equal to the number of securities so withdrawn, with such
Registrable Securities to be allocated among the Holders requesting additional
inclusion on a pro rata basis.
(f) Selection of Underwriters. In a Requested Registration, the
Holder(s) requesting the Registration shall notify the Company that it
proposes to dispose of the Registrable Shares in an underwritten offering and
the Company and such Holder(s) shall agree, with each party acting in good
faith, to jointly select the representative of the underwriters from
underwriting firms of national reputation in the United States. In an
Incidental Registration, the Company shall select the representative of the
underwriters from underwriting firms of national reputation in the United
States that are reasonably acceptable to Holders participating in the
Incidental Registration.
SECTION 4.2 Holdback Agreements.
(a) In connection with any underwritten public offering of
Registrable Securities by the Company under the Securities Act, no Holder
shall effect directly or indirectly (except as part of such underwritten
Registration in accordance with the provisions hereof or pursuant to a
transaction exempt from registration other than pursuant to Rule 144 or Rule
145 of the Securities Act) any sale, distribution, short sale, loan, grant of
options for the purchase of or other disposition of any Registrable Securities
for such period as the representative of the underwriters requests, which
period shall in no event commence earlier than seven days prior to, or end
more than 180 days after, the date on which the registration statement related
to such offering is declared effective. The Company shall be entitled to
instruct its transfer agent to place stop transfer notations in its records to
enforce this Section 4.2(a).
(b) The Company agrees (i) not to effect any public sale or
distribution of any Common Stock (other than pursuant to a registration
statement on Form S-8 or any successor form), during the seven days prior to,
and during the 180 days after, the date on which the registration statement
related to a Registration is declared effective (except as part of such
registration statement); and (ii) that any agreement entered into after the
date of this Agreement pursuant to which the Company issues or agrees to issue
any privately placed securities shall contain a provision under which the
holders of such securities agree not to effect any public sale or distribution
of any such securities during the periods described in (i) above, in each case
including a sale pursuant to Rule 144; provided, however, that the provisions
of this paragraph 4.2(b) shall not prevent the conversion or exchange of any
securities pursuant to their terms into or for other securities.
ARTICLE V
INDEMNIFICATION AND CONTRIBUTION
SECTION 5.1 Indemnification.
(a) Indemnification by the Company. In connection with any
Registration, to the extent permitted by law, the Company shall and hereby
does indemnify and hold harmless each Holder that participates in such
Registration, each such Holder's legal counsel and independent accountants,
each other Person who participates as an underwriter in the offering or sale
of securities (if so required by such underwriter as a condition to including
the Registrable Securities of such Holders in such registration) and each
other Person, if any, who controls any such Holder or any such underwriter
within the meaning of the Securities Act (collectively, the "Indemnified
Parties"), against any losses, claims, damages, liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) or expenses,
joint or several, to which such Holder, underwriter or other Person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages, liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) or expenses arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which the offering and sale of such
securities were registered under the Securities Act, any registration
statement or prospectus, or any document incorporated therein by reference, or
any amendment or supplement thereto, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein in light of the circumstances in which they were
made not misleading, or arise out of any violation by the Company of any rule
or regulation promulgated under the Securities Act or state securities law
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration. The Company shall reimburse
the Indemnified Parties for any legal or any other expenses reasonably
incurred by them in connection with investigating or defending any such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof); provided, however, that the
indemnity agreement contained in this Section 5.1(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability (or
action or proceeding, whether commenced or threatened, in respect thereof) or
expense if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld); and provided, further,
that the Company shall not be liable to any Indemnified Party in any such case
to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises solely out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, prospectus, or any document
incorporated therein by reference, or any such amendment or supplement
thereto, in reliance upon and in conformity with information furnished to the
Company in writing by any Indemnified Party specifically for use therein.
(b) Indemnification by Holders. As a condition to including any
Registrable Securities in any Registration, to the extent permitted by law,
each Holder shall and does hereby indemnify and hold harmless (in the same
manner and to the same extent as set forth in Section 5.1(a)) the Company,
each director of the Company, each officer of the Company and each other
Person, if any, who controls the Company within the meaning of the Securities
Act, with respect to any statement or alleged statement in or omission or
alleged omission from any registration statement under which the offering and
sale of such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, if and only if and to the
extent that such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with information
furnished in writing to the Company directly by such Person for use in
connection with the registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto; provided, however, that the obligation of any such Holder
under this Section 5.1(b) shall be limited to an amount equal to the gross
proceeds received by such Holder upon the sale of Registrable Securities sold
in such Registration, unless such liability arises out of or is based upon
such Holder's willful misconduct.
(c) Notices of Claims, etc. Promptly after receipt by an Indemnified
Party of notice of the commencement of any action, proceeding, claim,
investigation or other similar event involving a claim referred to in this
Section 5.1, if a claim in respect thereof is to be made against a party
required to provide indemnification (an "Indemnifying Party"), the Indemnified
Party shall give written notice to the latter of the commencement of such
action; provided, however, that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of its
obligation under this Section 5.1, except to the extent that the Indemnifying
Party is actually prejudiced by such failure to give notice. In case any such
action is brought against an Indemnified Party, unless in the reasonable
judgment of such Indemnified Party a conflict of interest between such
Indemnified Party and the Indemnifying Party may exist in respect of such
claim, then each Indemnifying Party shall be entitled to participate in and to
assume the defense thereof, jointly with any other Indemnifying Party
similarly notified to the extent that it may wish, with counsel reasonably
satisfactory to such Indemnified Party. After notice from the Indemnifying
Party to such Indemnified Party of its election so to assume the defense
thereof, the Indemnifying Party shall not be liable to such Indemnified Party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No Indemnifying Party shall consent to entry of any judgment or
enter into any settlement without the consent of the Indemnified Party if such
judgment or settlement does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect to such claim or litigation.
(d) Other Indemnification. Indemnification similar to that specified
in this Section 5.1 (with appropriate modifications) shall be given by the
Company and each Holder that participates in a Registration to each other and
to any underwriter, as applicable, with respect to any required registration
or other qualification of securities under any United States federal or state
law or regulation, other than the Securities Act, of any United States
governmental authority.
(e) Indemnification Payment. The indemnification required by this
Section 5.1 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received and
as a loss, claim, damage, liability or expense is incurred.
(f) Survival of Obligations. The obligations of the Company and
Holders under this Section 5.1 and Section 5.2 shall survive the completion of
any offering of Registrable Securities.
SECTION 5.2 Contribution. If the indemnification provided for in Section 5.1
is unavailable or insufficient to hold harmless an Indemnified Party, then
each Indemnifying Party shall contribute to the amount paid or payable to such
Indemnified Party as a result of the losses, claims, damages or liabilities
referred to in Section 5.1 an amount or additional amount, as the case may be,
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party or Indemnifying Parties, on the one hand, and the
Indemnified Party, on the other, in connection with the statements or
omissions that resulted in such losses, claims, demands or liabilities as well
as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Indemnifying
Party or Indemnifying Parties, on the one hand, or the Indemnified Party, on
the other, and the relative intent, knowledge, access to information and
opportunity of the parties to correct or prevent such untrue statement or
omission. The Company and CNI agree that it would not be just and equitable if
contribution pursuant to this Section 5.2 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
sentence. The amount paid to an Indemnified Party pursuant to this Section 5.2
shall be deemed to include any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any
action or claim subject to this Article V. No Person guilty of fraudulent
misrepresentation within the meaning of Section 11(f) of the Securities Act
shall be entitled to contribution from any Person that was not guilty of such
fraudulent misrepresentation.
ARTICLE VI
COMPANY COVENANTS
SECTION 6.1 Covenants Relating to Rule 144; Reports Under Exchange Act. With a
view to (a) making available the benefits of certain rules and regulations of
the Commission that may at any time permit the sale of securities of the
Company to the public without registration after such time as a public market
exists for the Common Stock and (b) causing the Company to be and remain
eligible to use Form S-3 under the Securities Act, the Company shall:
(i) Make and keep public information available in accordance with
Rule 144 under the Securities Act at all times after the
effective date of the first registration under the Securities
Act filed by the Company for an offering of its securities to
the general public;
(ii) Take such action, including the voluntary registration of the
Common Stock under Section 12 of the Exchange Act, as
necessary to enable the Company to utilize Form S-3 for the
sale of Registrable Securities;
(iii) 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
(iv) Furnish to each Holder forthwith upon request, so long as such
Holder owns any Registrable Securities, a written statement by
the Company as to its compliance with the reporting
requirements of Rule 144 under the Securities Act, 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 of the Company as such Holder may
reasonably request in availing itself of any rule or
regulation of the Commission that may allow such Holder to
sell any Registrable Securities without registration.
SECTION 6.2 Other Registration Rights. The Company may from time to time grant
additional registration rights to other holders of Common Stock, provided that
no such registration rights shall be senior to the rights granted under this
Agreement with respect to registration and cutback (but that such rights may
at all times be pari passu).
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
parties. Either party to this Agreement may (i) extend the time for the
performance of any of the obligations or other acts of the other party, or
(ii) waive compliance with any of the agreements or conditions of the other
party contained herein. Any such extension or waiver shall be valid only if
set forth in an instrument in writing signed by the party to be bound thereby.
Any waiver of any term or condition shall not be construed as a waiver of any
subsequent breach or a subsequent waiver of the same term or condition, or a
waiver of any other term or condition, of this Agreement. The failure of any
party to assert any of its rights hereunder shall not constitute a waiver of
any of such rights.
SECTION 7.2 Successors and Assigns. All covenants and agreements contained in
this Agreement by or on behalf of either party hereto shall bind and inure to
the benefit of the respective successors and assigns of such party hereto,
whether so expressed or not, including subsequent Holders of Registrable
Securities.
SECTION 7.3 Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof and supersede
all prior agreements and undertakings, both written and oral, among the
parties with respect to the subject matter hereof.
SECTION 7.4 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed duly given (i) on the date of delivery if
delivered personally, (ii) on the date of confirmation of receipt (or, the
first business day following such receipt if the date is not a business day or
the receipt is after 5 p.m.) of transmission by facsimile, or (iii) on the
date of confirmation of receipt (or, the first business day following such
receipt if the date is not a business day or the receipt is after 5 p.m.) if
delivered by courier. Subject to the foregoing, all notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
If to CNI: With a courtesy copy (which shall not
Columbus Nova Investments VIII Ltd. constitute notice to CNI) to:
590 Madison Avenue Skadden, Arps, Slate, Meagher & Flom LLP
38th Floor An der Welle 5
New York, NY 10022 60322 Frankfurt am Main
United States Germany
Attention: Ivan Isakov Attention: Hilary Foulkes
Facsimile: +1-212-308-6623 Facsimile: +49-69-74220300
If to Company: With a courtesy copy (which shall not
Moscow CableCom Corp. constitute notice to the Company) to:
405 Park Avenue
Suite 1203 Oliver R. Grace, Jr.
New York, NY 10022 55 Brookville Road
Attention: Oliver Grace Glen Head, NY 11545
Facsimile: +1-212-888-5620 Facsimile: +1-516-626-1204
Any party may change the address to which notices, requests, demands and other
communications hereunder are to be delivered by giving the other party notice
in the manner herein set forth.
SECTION 7.5 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without giving effect
to any choice or conflict of law provision or rule (whether of the State of
New York or any other jurisdiction) that would cause the application of the
Laws of any jurisdiction other than the State of New York.
SECTION 7.6 Arbitration. Any dispute, controversy or claim between the parties
arising out of or relating to this Agreement or the breach, termination or
validity hereof shall be referred to and finally resolved by arbitration in
New York, New York, to the exclusion of all other procedures, in accordance
with the rules then in force of the American Arbitration Association, which
are deemed to be incorporated by reference into this Section 7.6. In any such
arbitration, three arbitrators shall be appointed in accordance with the such
rules. Where the rules of the American Arbitration Association do not provide
for a particular situation, the arbitrators shall determine the course of
action to be followed. To the maximum extent permitted by applicable law, the
parties agree not to assert any rights to have any court rule on a question of
law affecting the arbitration or to hear any appeal from or entertain any
judicial review of the arbitral award.
SECTION 7.7 Equitable Remedies. The parties agree that irreparable harm would
occur in the event that any of the agreements and provisions of this Agreement
were not performed fully by the parties in accordance with their specific
terms or conditions or were otherwise breached, and that money damages are an
inadequate remedy for breach of this Agreement because of the difficulty of
ascertaining and quantifying the amount of damage that would be suffered by
the parties in the event that this Agreement were not performed in accordance
with its terms or conditions or were otherwise breached. It is accordingly
hereby agreed that the parties shall be entitled to an injunction or
injunctions to restrain, enjoin and prevent breaches of this Agreement by the
other party and to enforce specifically such terms and conditions of this
Agreement, such remedy being in addition to and not in lieu of any other
rights and remedies to which the other party is entitled to at law or in
equity.
SECTION 7.8 Parties in Interest. This Agreement is for the benefit of any
Holder irrespective of whether such Holder is a signatory to this Agreement,
subject to (a) the provisions respecting the minimum numbers or percentages of
shares of Registrable Securities required in order to entitle Holders to
certain rights, or take certain actions, contained herein and (b) the
limitations set forth in the agreement with the Company granting rights to
register Registrable Securities to which any such Holder is a party.
SECTION 7.9 Severability. If any provision of this Agreement is invalid,
illegal or incapable of being enforced by any law or public policy, all other
provisions of this Agreement shall nevertheless remain in full force and
effect and the application of such provision to other Persons or circumstances
will be interpreted so as reasonably to effect the intent of the parties
hereto so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated to the greatest
extent possible.
SECTION 7.10 No Inconsistent Agreements. The Company shall not enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to CNI in this Agreement.
SECTION 7.11 Headings.
The descriptive headings contained in this Agreement are for convenience of
reference only and shall not affect in any way the meaning or interpretation
of this Agreement.
SECTION 7.12 Construction; Adequate Counsel.
(a) Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event that an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties, and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any of the provisions of this Agreement.
(b) Adequate Counsel. Each of the Company and CNI hereby represents
and warrants that it and its legal counsel have adequate information regarding
the terms of this Agreement, the scope and effect of the transactions
contemplated hereby and all other matters encompassed by this Agreement to
make an informed and knowledgeable decision with regard to entering into this
Agreement.
SECTION 7.13 Counterparts.
This Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.
SECTION 7.14 Interpretation.
References in this Agreement to articles, sections, paragraphs, clauses and
exhibits are to articles, sections, paragraphs, clauses and exhibits in or to
this Agreement unless otherwise indicated. Whenever the context may require,
any pronoun includes the corresponding masculine, feminine and neuter forms.
Any term defined by reference to any agreement, instrument or document has the
meaning assigned to it whether or not such agreement, instrument or document
is in effect. Any reference to any federal, state, local or foreign statute or
law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The words "include",
"includes" and "including" are deemed to be followed by the phrase "without
limitation". Unless the context otherwise requires, any agreement, instrument
or other document defined or referred to herein refers to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified from time to time. Unless the context otherwise requires,
references herein to any Person include its successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
MOSCOW CABLECOM CORP.
By: /s/ Andrew O'Shea
--------------------------
Name: /s/ Andrew O'Shea
Title: Chief Financial Officer
COLUMBUS NOVA INVESTMENTS VIII LTD.
By: /s/ Andrew Intrater
--------------------------
Name: Andrew Intrater
Title: Attorney-in-Fact
EX-99
7
eqloan_ex9.txt
EXHIBIT 9 - EQUITY LOAN AGREEMENT
EXHIBIT 9
THIS OBLIGATION HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE IS SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
Amount of US $22,500,000.00
EQUITY LOAN AGREEMENT
This Loan Agreement (hereinafter referred to as the "Agreement") is effective
this 4th day of January, 2005, by and between COLUMBUS NOVA INVESTMENTS VIII
LTD., a company organized and existing under the laws of the Commonwealth of
the Bahamas, with its principal address at Shirley House, 50 Shirley Street,
P.O. Box N-7755, Nassau, Bahamas (hereinafter referred to as the "Borrower"),
and RENOVA INDUSTRIES, a Bahamas company, with its principal address at 50
Shirley Street, Shirley House, Nassau, Bahamas (hereinafter referred to as the
"Lender").
WHEREAS, the Borrower wishes to borrow the amounts described below on the
terms set forth below; and
WHEREAS, the Lender wishes to lend the amount set forth below on the terms set
forth below and acknowledges that the Borrower is relying to its detriment on
the Lender's agreement to do so; and
WHEREAS, the Lender and the Borrower will, on the date hereof, enter into a
loan agreement in a maximum amount of $28,500,000 (the "Debt Loan Agreement")
for the purposes of making available to the Borrower, from time to time,
sufficient funds to allow the Borrower to make advances to ZAO Comcor-TV
pursuant to a term loan agreement dated 26 August 2004 between the Borrower,
as lender, ZAO Comcor-TV, as borrower, and Moscow Cablecom Corp. and certain
of its subsidiaries, as guarantors.
NOW, THEREFORE, in consideration of the aforementioned reliance and other good
and valuable consideration, the parties hereto, intending to be legally bound,
agree as follows:
1. Upon and subject to the terms and conditions hereof, the Lender agrees to
make available, from time to time, in the form of a credit advance (the
"Credit Advance"), until ten (10) years from the date hereof, the principal
amount of up to TWENTY-TWO MILLION AND FIVE HUNDRED THOUSAND DOLLARS
($22,500,000.00) (the "Principal" or "Loan Amount" or "Maximum Amount").
Notwithstanding the foregoing, from time to time, the Lender may agree, at its
sole discretion and upon request from the Borrower in accordance with Section
2 below, to make available to the Borrower a Credit Advance in excess of the
Maximum Amount on the same terms and conditions as the Credit Advance(s) made
up to the Maximum Amount. Such Credit Advance shall only be used for the sole
purpose of financing the subscription of warrants in Moscow CableCom Corp and
to pay expenses including, but limited to, management fees and related
expenses owed to the Lender by the Borrower.
2. The Borrower may request a Credit Advance by providing the Lender with a
written request in accordance with Section 23 herein for such an advance at
least three (3) business days prior to the date on which the funds are to be
disbursed to the Borrower. Each Advance made by the Lender to the Borrower,
and all payments made on account of principal thereof, shall be recorded by
the Lender and, prior to any permitted transfer hereof, endorsed on Schedule
A, attached hereto, which is part of this Agreement; provided, however, that
the failure to make any such recordation or endorsement shall not affect or in
any way discharge or release the obligations of the Borrower under the
Promissory Note, dated of even date herewith. Thereafter, the Lender shall
deliver the amount of such Credit Advance by wire transfer of immediately
available funds to an account designated by the Borrower. The total amount of
the outstanding, unpaid Credit Advances may not exceed the Maximum Amount,
unless the Lender agrees otherwise in writing pursuant to Section 1 or
otherwise.
3. As a condition to the Lender executing this Agreement, the Borrower shall
execute and deliver to the Lender a promissory note, substantially similar in
form and content to that annexed hereto as Exhibit A (the "Promissory Note")
and made a part hereof. Further, as a condition to the Lender making each
Credit Advance, the Borrower shall execute and deliver to the Lender an
allonge to the Promissory Note, substantially similar in form and content to
Exhibit B, attached hereto (the "Allonge").
4. The Promissory Note and the Allonge(s) shall be governed by the terms of
this Agreement, to the extent there are any inconsistent terms.
5. The Credit Advances do not bear interest.
6. Any portion of the total outstanding principal shall be due and payable to
the Lender in full on January 4, 2015. All payments of the Principal shall be
paid to the Lender by wire transfer to a dollar account specified by the
Lender.
7. The Borrower may, at any time and with the Lender's consent, prepay any
part of the Principal then outstanding.
8. The Borrower shall cause to be kept full and proper books of records and
accounts, in which full, true, and proper entries will be made of all
dealings, business and affairs of the Borrower which in any way affect or
pertain to the operation of the Borrower. The Borrower shall keep its books
and records in the manner conforming to federal income tax principles.
9. Upon five (5) business days notice, the Borrower shall provide the Lender
or any of its duly authorized representatives access, during normal working
hours, to any books, documents, papers and records for the purposes of audit,
examination or evaluation, except to the extent that such materials contain
confidential information. The Borrower further agrees to furnish copies of
such papers and documents to the Lender as it may reasonably require from time
to time.
10. Immediately upon becoming aware of the existence of any Event of Default
as defined in Section 12 herein, or event which with notice, lapse of time, or
both, would become an Event of Default, the Borrower shall provide to the
Lender a notice describing its nature and any action the Borrower is taking
(or proposes to take) in connection therewith.
11. Within forty five (45) days after the last day of the months of March,
June, September and December, the Borrower shall submit to the Lender a
statement of profits and losses and such other information as the Lender shall
reasonably request, for such period. The Borrower shall also submit with such
report a certificate of the President of the Borrower certifying, to the
knowledge of such person, to the absence of any Event of Default or event
which, with notice, the passage of time, or both, would constitute an Event of
Default.
12. An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
12.1 The Borrower defaults in the payment of the Principal or any
portion thereof within three (3) Business Days of the same
becoming due and payable; or
12.2 The Borrower defaults in the performance of or compliance with any
term contained herein, and such default is not remedied within ten
(10) Business Days of notice thereof to the Borrower; or
12.3 Any representation or warranty of the Borrower set forth in
Section 17 herein is breached in any material respect on the date
as of which made and such breach is not remedied within ten (10)
Business Days of notice thereof to the Borrower; or
12.4 The Borrower (a) admits in writing its inability to pay its debts
as they become due; (b) files, or consents by answer or otherwise
to the filing against it, of a petition for relief or
reorganization or arrangement or any other petition in bankruptcy,
for liquidation or to take advantage of any bankruptcy,
insolvency, reorganization, moratorium or other similar law of any
jurisdiction; (c) makes an assignment for the benefit of its
creditors; (d) consents to the appointment of a custodian,
receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its
property; or (e) is adjudicated as insolvent or to be liquidated.
13. Upon the happening of an Event of Default, then, unless later waived in
writing by the Lender, the Lender may accelerate the maturity of this Loan,
making the Principal and accrued interest immediately due and payable upon
written notice or demand to or upon the Borrower and may exercise any and all
enforcement remedies authorized at law or equity.
14. If payment hereunder becomes due and payable on a Saturday, Sunday or
legal holiday under the laws of the State of New York, the Commonwealth of the
Bahamas or Switzerland the due date hereof shall be the following business
day. Checks, drafts or similar items of payment received by the Lender shall
not constitute payment to the Lender unless and until such item of payment has
actually been collected by the Lender's depository bank and credited to the
Lender's account, but credit therefor shall be given on the date the same is
actually received by the Lender.
15. Subject to Section 16 herein, the Borrower undertakes that, prior to the
date on which all amounts outstanding hereunder and under the Debt Loan
Agreement have been repaid and all commitments hereunder and under the Debt
Loan Agreement have been cancelled, it will not:
15.1 declare, make or pay any dividend, charge, fee or other
distribution (or interest on any unpaid dividend, charge, fee or
other distribution) (whether in cash or in kind) on or in respect
of its share capital (or any class of its share capital);
15.2 repay or distribute any dividend or share premium reserve; or
15.3 redeem, repurchase, defease, retire or repay any of its share
capital or resolve to do so,
where the proceeds of such payment, repayment, distribution, redemption,
repurchase, defeasance or retirement consists, or is proposed to consist, of
proceeds of a payment, repayment, distribution, redemption, repurchase,
defeasance or retirement on or in respect of the share capital of ZAO
Comcor-TV (or any class of its share capital) (in each case, other than in
favour of the Lender, in its capacity as holder of shares in the Borrower).
16. Nothing in Section 15 herein shall prohibit the Borrower from making any
payment, including (but without limitation) by way of distribution, dividend,
fee charge or otherwise, to any of its shareholders for the purpose of
discharging any liability to tax incurred by such shareholders in connection
with the taxable interest income (net of any deductible expenses) if any
deemed received by or accruing to the Borrower under applicable U.S. Federal
income tax law and the terms of the term loan agreement dated 26 August 2004
between Columbus Nova DF Limited, ZAO Comcor-TV and certain of its
subsidiaries.
17. The Borrower represents and warrants to the Lender as follows:
17.1 The Borrower is a Bahamian company duly organized, validly
existing, in good standing and possessing all powers and authority
to own its property and to conduct the business in which it is
engaged as well as all other rights and privileges generally
granted by its organizational documents and applicable law.
17.2 Upon execution and delivery of this Agreement, the Borrower is not
in violation of, or in default (nor has any event occurred which
with notice, lapse of time, or both, would constitute a violation
or default) in the performance of any obligation, agreement or
condition contained in the organizational documents of the
Borrower or in violation or default of any agreement or instrument
to which the Borrower is a party or by which it may be bound or to
which any of its property or assets are subject, or any law,
order, rule, regulation, writ, authorization, injunction or decree
of any government, governmental instrumentality or court, domestic
or foreign.
17.3 There is not now pending or, to its knowledge, threatened, any
action, suit or proceeding against the Borrower before or by any
court or governmental agency or body, which might result in any
material adverse change in the condition (financial or otherwise),
business, or properties of the Borrower or in its ability to
fulfill its obligations under this Agreement; nor does the
Borrower know of any circumstances which would give rise to any
such action, suit or proceeding.
17.4 There are no consents or approvals required under the laws of the
Bahamas to effect the transactions contemplated by this Agreement.
No other authorization, approval, order, exemption or other action
of any court or governmental body of the Bahamas, or of any state,
country or other jurisdiction thereof is required to effect the
transactions contemplated by this Agreement.
17.5 This Agreement has been duly authorized, executed and delivered by
the Borrower and, upon due acceptance by the Lender, will
constitute the valid and legally binding obligation of the
Borrower enforceable in accordance with its terms against the
Borrower, subject as to enforcement remedies applicable to
bankruptcy, insolvency, moratorium and other laws affecting the
rights of creditors generally and to equitable principles.
17.6 The execution and delivery of this Agreement by the Borrower and
the fulfillment of the terms set forth herein do not violate any
statute, regulation or other law of the Bahamas, the United
States, the State of New York or any other state or jurisdiction
of the United States or any other country, or any valid and
enforceable order, judgment or decree of any court or governmental
body of the United States, or of any country, state or other
jurisdiction thereof.
17.7 The information heretofore furnished by the Borrower to the Lender
in writing does not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements made, in the light of the circumstances under which
they are made, not misleading in any material respect. Any
projections, forecasts or similar information, furnished by the
Borrower to the Lender were based on reasonable assumptions and
were prepared in good faith.
18. If payment for any portion of the Principal shall not be made when due,
and any action is brought to enforce collection, the defaulting Borrower
agrees to pay the Lender's reasonable attorneys' fees, in an amount not to
exceed two percent (2%) of the Principal.
19. Whenever in this Agreement reference is made to the Borrower, such
reference shall be deemed to include, as applicable, a reference to the
respective successors and assigns of the Borrower. The provisions of this
Agreement shall be binding upon and shall inure to the benefit of said
successors and assigns. The Borrower's successors and assigns shall include,
without limitation, the Borrower as debtor in possession or a receiver or
trustee of or for the Borrower.
20. This Agreement shall be governed by and construed in accordance with the
laws of England.
21. All disputes arising out of or in connection with the present contract
shall be finally settled under the Rules of Arbitration of the International
Chamber of Commerce by one or more arbitrators appointed in accordance with
the said Rules.
22. Whenever possible, 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 shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
23. All notices, requests, demands and other communications provided for by
this Agreement shall be in writing and sent to address herein above stated or
to such other address as furnished by any party to all other parties hereto in
accordance with this notice provision. All such notices and communications
hereunder shall be effective and deemed given, (a) if sent via facsimile, when
transmitted, as evidenced by a transmission report containing a remote
statement identification and confirmation of the time of such transmission
report containing a remote statement identification and confirmation of the
time of such transmission and the pages sent; (b) if mailed, when received, as
evidenced by the acknowledgment of receipt issued with respect thereto by the
applicable postal authorities; (c) if sent via electronic mail in a manner
consistent with Chapter 96 of Title 15 of the United States Code (the
Electronic Signatures in Global and National Commerce Act); and, (d) if
delivered by hand, when received, as evidenced by the signed acknowledgment of
receipt of the person to whom such notice or communication shall have been
addressed.
24. No provision of this Agreement may be changed or waived orally, but only
by an instrument in writing signed by the party to be charged by such change
or waiver.
25. This Agreement may be executed in more than one separate counterpart, each
of which shall, collectively and separately, constitute one agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
Borrower: Lender:
COLUMBUS NOVA INVESTMENTS RENOVA INDUSTRIES LTD.
VIII LTD.
By: /s/ Olivier Chaponnier By: /s/ Shakira Burrows
------------------------ ------------------------
Name: Olivier Chaponnier Name: Shakira Burrows
Title: Director Title: Director
SCHEDULE A
Unpaid
Principal Name of
Amount of Balance of Person Making
Date Loan Principal Payments Note Notation Reason
---- --------- --------- -------- ----------- -------------- ------
EX-99
8
pronote_ex10.txt
EXHIBIT 10 - PROMISSORY NOTE
EXHIBIT 10
PROMISSORY NOTE
Amount of U.S. $22,500,000.00 Dated: January 4, 2005
FOR VALUE RECEIVED, the undersigned, COLUMBUS NOVA INVESTMENTS VIII LTD., a
company organized and existing under the laws of the Commonwealth of the
Bahamas, with its principal address at Shirley House, 50 Shirley Street, P.O.
Box N-7755, Nassau, Bahamas (hereinafter referred to as the "Borrower"),
hereby promises to pay to the order of RENOVA INDUSTRIES, a Bahamian company,
with its principal address at 50 Shirley Street, Shirley House, Nassau,
Bahamas (hereinafter referred to as the "Lender"), the unpaid principal amount
at any time outstanding (hereinafte referred to as the "Credit Advance") on
the Maturity Date, as defined below, or otherwise at the times and in the
manner set forth in the Loan Agreement between the Borrower and the Lender,
dated as of January 4, 2005 (hereinafte referred to as the "Loan Agreement").
Each Credit Advance shall be evidenced by an allonge (the "Allonge") to this
Promissory Note (hereinafte referred to as the "Note"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings given to such
terms in the Loan Agreement.
1. Principal Payment. All principal outstanding under this Note, and
all other amounts owing hereunder, shall be due and payable in full on January
4, 2015 (the "Maturity Date").
2. Maturity. This Note shall mature, and the outstanding principal
balance hereunder, together with all other outstanding amounts due hereunder
and under the Loan Agreement, shall become due and payable in full, if not
earlier due and payable in accordance with the Loan Agreement, on the earlier
of (a) the occurrence of an Event of Default if so required pursuant to the
Loan Agreement or Lender's demand upon an Event of Default, or (b) the
Maturity Date.
3. Loan Agreement and Security Documents.
(a) This Note is referred to in, made pursuant to and entitled to
the benefits of the Loan Agreement and certain other agreements
and instruments executed and delivered in connection therewith
(collectively, with the Loan Agreement and this Promissory Note
the "Loan Documents"). The Loan Agreement, among other things,
(i) provides for the making of Credit Advances by the Lender to
the Borrower in the dollar amount specified on the Allonges to
this Note, (ii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events upon
the terms and conditions therein specified, and (iii) contains
provisions defining an Event of Default and the rights and
remedies of the Lender upon the occurrence of an Event of
Default.
4. Prepayments. This Note may be prepaid in whole or in part without
notice to the Lender and shall be prepaid in whole, in each case as provided
or required in the Loan Agreement and upon payment of all fees and other
obligations set forth therein. No payment or prepayment of any amount shall
entitle any Person to be subrogated to the rights of the Lender hereunder or
under the Loan Agreement unless and until the obligations have been performed
in full and paid irrevocably in full in cash and the Loan Agreement has been
terminated. Any amounts prepaid may be re-borrowed upon the Borrower's
request, up to the Maximum Amount, and such new amounts shall be due upon the
Maturity Date or such earlier date as provided herein.
5. Method of Payment; Payments Due on a Day Other Than a Business
Day.
(a) Principal and any fees or other amounts owed hereunder shall be
paid to the Lender, by wire transfer, in lawful money of the
United States of America on the date when due without offset or
counterclaim in immediately available funds.
(b) If any payment to be made on or under this Note is stated to be
due or becomes due and payable on a day other than a business
day, the due date thereof shall be extended to, and such payment
shall be made on, the next succeeding business day.
6. Waivers. The Borrower hereby waives presentment, protest, demand,
notice of dishonor or non-payments, as well as all defenses with respect to
this Note, the Loan Agreement and/or any obligation, notice of acceptance
hereof, notice of loans or Credit Advances made, credit extended, collateral
received or delivered, or any other action taken in reliance hereon, and all
other demands and notices of any description. No renewal or extension of this
Note, the Loan Agreement or any rights hereunder or thereunder, no release of
the Borrower, or delay or omission on the Lender's part in enforcing this Note
or any other Loan Document or in exercising or enforcing any right, remedy,
option or power hereunder or under any other Loan Document, shall affect the
liability of the Borrower or operate as a waiver of such or any other right,
remedy, power or option or of any default. The claim of any statute of
limitations as a defense to any demand against the Borrower is expressly
waived by the Borrower.
7. Exercise of Rights.
(a) The Lender shall have the right, in its sole discretion, to
determine which rights, powers, liens, security interests or
remedies Lender may at any time pursue, relinquish, subordinate
or modify, or to take any other action with respect thereto, and
such determination will not in any way modify or affect any of
Lender's rights, powers, liens, security interests or remedies
hereunder or under any of the Loan Documents or under applicable
law or otherwise.
(b) The enumeration of the foregoing rights and remedies is not
intended to be exhaustive. The rights and remedies of the Lender
described herein are cumulative and are not alternative to or
exclusive of any other rights or remedies which the Lender
otherwise may have by contract or at law or in equity, and the
partial or complete exercise of any right or remedy shall not
preclude any other further exercise of such or any other right
or remedy.
8. Lawful Limits. This Note is hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of acceleration or
otherwise, shall the interest, if any, and other charges paid or agreed to be
paid to the Lender for the use, forbearance or detention of money hereunder,
exceed the maximum rate permissible under applicable law, which a court of
competent jurisdiction shall, in a final determination, deem applicable
hereto. If due to any circumstance whatsoever, fulfillment of any provision
hereof, at the time that performance of such provision shall be due, shall
exceed any such limit, then the obligation to be so fulfilled shall be reduced
to such lawful limit, and if the Lender shall have received interest, or any
other payment of any kind which might be deemed to be interest under
applicable law in excess of the highest maximum lawful rate, then such excess
amount shall be applied first to any unpaid fees and charges hereunder, then
to unpaid principal balance owed by the Borrower hereunder, and if the then
remaining excess interest is greater than the previously unpaid principal
balance hereunder, the Lender shall promptly refund such excess amount to the
Borrower and the provisions hereof shall be deemed amended to provide for such
permissible rate. The terms and provisions of this Section 8 shall control to
the extent that any other provision of this Note or any Loan Document is
inconsistent herewith.
9. Governing Law. This Note shall be governed by and construed in
accordance with the laws of England.
10. Arbitration. All disputes arising out of or in connection with
the present contract shall be finally settled under the Rules of Arbitration
of the International Chamber of Commerce by one or more arbitrators appointed
in accordance with the said Rules.
COLUMBUS NOVA INVESTMENTS VIII LTD.,
a Bahamas company
By: /s/ Olivier Chaponnier
---------------------------------
Name: Olivier Chaponnier
Title: Director
EX-99
9
lon400941.txt
EXHIBIT 11.1 - IRREVOCABLE PROXY
EXHIBIT 11.1
IRREVOCABLE PROXY AND POWER OF ATTORNEY
IRREVOCABLE PROXY AND POWER OF ATTORNEY (the "Proxy and Power of
Attorney"), dated as of December 1, 2004, among, Columbus Nova Investments VIII
Ltd., a Bahamas company ("CNI"), and each of the persons whose names are set
forth on the signature page hereof (each, a "Stockholder," and together with
CNI, the "Parties"). Capitalized terms used herein shall have the meaning
assigned to them in the Subscription Agreement (as defined below), save as
otherwise provided herein or unless the context otherwise requires.
WHEREAS, each Stockholder is the owner beneficially and of record of
such number of shares of Common Stock, par value $.01 (the "Common Stock") of
Moscow CableCom Corp. (the "Company") as indicated in Schedule A hereto (the
"Covered Shares");
WHEREAS, on August 26, 2004, CNI and the Company entered into a Series
B Convertible Preferred Stock Subscription Agreement (the "Subscription
Agreement"), providing, among other things, for the acquisition by CNI, upon the
terms and subject to the conditions thereof, of 4,500,000 shares of Series B
Convertible Preferred Stock of the Company, par value $.01 per share (the
"Series B Preferred Stock"), having voting and other rights identical to those
of the shares of Common Stock, with the exception of having a liquidation
preference over the shares of Common Stock for a period of four years and being
convertible into shares of Common Stock at the option of the holder thereof;
WHEREAS, in order to comply with the National Association of Securities
Dealers, Inc. Marketplace Rule 4351, the Company and CNI intend to enter into an
amendment to the Subscription Agreement (the "Amendment"), as a result of which
the voting rights of the Series B Preferred Stock may be less than the voting
rights of the shares of Common Stock; and
WHEREAS, as an inducement for CNI to enter into the Amendment, the
Parties have agreed to enter into this Proxy and Power of Attorney;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the Parties agree as follows:
1. Each Stockholder hereby irrevocably constitutes, appoints, authorizes
and empowers CNI, during the term of this Proxy and Power of Attorney,
as its sole and exclusive true and lawful proxy and attorney-in-fact,
with full power of substitution, to vote and exercise all voting and
related rights with respect to all of the Covered Shares (and any and
all securities issued or issuable in respect thereof), for and in the
name, place and stead of such Stockholder, at CNI's sole discretion, at
any annual, special or other meeting of the stockholders of the
Company, and at any adjournment or adjournments thereof, or pursuant to
any consent in lieu of a meeting or otherwise, with respect to any
matter that may be submitted for a vote of stockholders of the Company.
All power and authority hereby conferred is coupled with an interest
and is irrevocable. In the event that CNI is unable to exercise such
power and authority for any reason, each Stockholder agrees that it
will vote all the Covered Shares owned by it in accordance with CNI's
written instructions, at any such meeting or adjournment thereof.
2. Restrictions on Transfer of Covered Shares.
(a) During the period beginning on the Closing Date under the
Subscription Agreement and ending on the first anniversary of the
Closing Date, each Stockholder hereby covenants and agrees that it
will not, and will not agree to, directly or indirectly, sell,
transfer, assign, pledge, hypothecate, cause to be redeemed or
otherwise dispose of any of the Covered Shares or grant any proxy
or interest in or with respect to the Covered Shares ("Transfer")
or deposit any Covered Shares into a voting trust or enter into a
voting agreement or arrangement with respect to such Covered Shares
to any Person, unless (i) such Person agrees to assume the
obligations hereunder of the transferring Stockholder with respect
to such Covered Shares so Transferred, (ii) such Person executes a
written instrument acknowledging that such Person agrees to be
bound by the terms of this Proxy and Power of Attorney and (iii)
the transferring Stockholder provides prompt notice to CNI of such
Transfer.
(b) During the Period beginning on the first anniversary of the Closing
Date under the Subscription Agreement and ending upon the
termination of this Proxy and Power of Attorney pursuant to Section
10 hereof, each Stockholder hereby covenants and agrees that it
will not, and will not agree to, directly or indirectly, Transfer
or deposit any Covered Shares into a voting trust or enter into a
voting agreement or arrangement with respect to such Covered Shares
so Transferred, unless such Stockholder complies with the
procedures set forth in clauses (i) through (iv) of this Subsection
2(b):
(i) If a Stockholder (the "Proposing Stockholder") proposes to
Transfer (a "Proposed Transfer") any of its Covered Shares
(the "Offered Shares"), the Proposing Stockholder shall
submit a written notice (an "Offer Notice") to CNI describing
the material terms and conditions of the Proposed Transfer in
reasonable detail, including, without limitation, the
proposed purchase price (the "Offer Price").
(ii) Upon receipt of an Offer Notice, CNI shall have the right,
but not the obligation, for a period of three (3) Business
Days following receipt of such Offer Notice (the "Option
Period"), to elect to purchase the Offered Shares on the same
terms and conditions as are set forth in the Offer Notice.
(iii) In the event that CNI exercises its right to purchase all but
not less than all of the Offered Shares in accordance with
clause (ii) above, then the Proposing Stockholder must sell
the Offered Shares to CNI and CNI must purchase such Offered
Securities from the Stockholder on the same terms and
conditions as are set forth in the Offer Notice, but not
prior to three (3) Business Days after CNI gives the
Proposing Stockholder notice of its election to purchase the
Offered Shares.
(iv) Upon the earlier to occur of (i) rejection of the Offered
Shares by CNI and (ii) the expiration of the Option Period
without CNI electing to purchase all of the Offered Shares
following the proper delivery of the Offer Notice, the
Proposing Stockholder shall have a sixty (60) day period
during which to effect a Transfer of any or all of the
Offered Shares, on substantially the same or more favorable
(as to the Proposing Stockholder) terms and conditions as
were set forth in the Offer Notice at a price not less than
ninety percent (90%) of the Offer Price. If the Proposing
Stockholder does not consummate the Transfer of the Offered
Shares in accordance with the foregoing time limitations,
then the right of the Proposing Stockholder to effect such
Transfer pursuant to this clause (iv) shall terminate and the
Proposing Holder shall be required to comply with the
procedures set forth in clauses (i) through (iv) of this
Subsection 2(b) with respect to any proposed Transfer of
Covered Shares.
3. Each Stockholder represents and warrants to CNI that, as of the date
hereof such Stockholder (i) owns all of the Covered Shares beneficially
and of record, (ii) owns all of the Covered Shares free and clear of
all liens, charges, claims, encumbrances and security interests of any
nature whatsoever; and except as provided herein, and (iii) has not
granted any proxy to any Person (other than CNI) with respect to any
Covered Shares or deposited such Covered Shares into a voting trust.
4. Any securities of the Company to be issued or issuable to the
Stockholder in respect of Covered Shares during the term of this Proxy
and Power of Attorney shall be deemed Covered Shares for purposes of
this Proxy and Power of Attorney.
5. In the event that, as of the Closing Date, the aggregate number of
votes to which: (i) the 4,500,000 shares of Series B Preferred Stock
acquired by CNI pursuant to the Subscription Agreement are entitled,
(ii) the total number of Covered Shares that are subject to this Proxy
and Power of Attorney are entitled and (iii) the total number of shares
of Common Stock covered by any proxies to be entered into in
satisfaction of Section 6.03(h) of the Subscription Agreement (the
"Additional Proxies") are entitled, shall exceed the number of votes to
which 4,500,000 shares of Common Stock shall be entitled as of the
Closing Date, the aggregate number of Covered Shares that are subject
to this Proxy and Power of Attorney and the shares of Common Stock
covered by any Additional Proxies shall be reduced by the number of
shares of Common Stock equal to such excess number of votes, and such
reduction in the number of Covered Shares (and such other shares of
Common Stock subject to the Additional Proxies) shall be allocated pro
rata among the Stockholders (and any stockholders that are parties to
the Additional Proxies) on the basis of each such stockholder's number
of shares of Common Stock that are subject to this Proxy and Power of
Attorney or the Additional Proxies, as the case may be.
6. In the event that CNI converts any of its the shares of Series B
Preferred Stock into shares of Common Stock, the aggregate number of
Covered Shares that are subject to this Proxy and Power of Attorney
(and the shares of Common Stock covered by any Additional Proxies)
shall be reduced by such number of shares of Common Stock having voting
power equal to the additional voting power acquired by CNI solely as a
result of such conversion and such reduction in the number of Covered
Shares (and such other shares of Common Stock subject to the Additional
Proxies) shall be allocated pro rata among the Stockholders (and any
stockholders that are parties to the Additional Proxies) on the basis
of each such stockholder's number of shares of Common Stock that are
subject to this Proxy and Power of Attorney or the Additional Proxies,
as the case may be ("Total Covered Shares"); provided, however, that
the number of Total Covered Shares shall be reduced pursuant to this
Section 6 only if, and to the extent that, the total number of: (i) the
votes to which the Total Covered Shares (without giving effect to such
reduction pursuant to this Section 6) are entitled, (ii) the votes to
which the 4,500,000 shares of Series B Preferred Stock acquired by CNI
pursuant to the Subscription Agreement are entitled when voting as one
class with the Common Stock and (iii) the additional votes acquired by
CNI solely as a result of the conversion, shall exceed the number of
votes to which 4,500,000 shares of Common Stock are entitled at the
time of the conversion.
7. This Proxy and Power of Attorney shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving
effect to any choice or conflict of law provision or rule (whether of
the State of Delaware or any other jurisdiction) that would cause the
application of the Laws of any jurisdiction other than the State of
Delaware.
8. This Proxy and Power of Attorney shall be binding upon, inure to the
benefit of, and be enforceable by the successors and permitted assigns
of the Parties hereto.
9. This Proxy and Power of Attorney is subject to the following conditions
precedent:
(i) the Closing under the Subscription Agreement having occurred
on or prior to March 31, 2005, or such later date as the
Company and CNI may determine; and
(ii) as of the Closing Date, the shares of Series B Preferred
Stock having less than one (1) vote per share.
10. This Proxy and Power of Attorney shall terminate and have no further
force or effect upon the earlier to occur of: (a) four years from the
Closing Date, (b) CNI having converted all but not less than all of its
shares of Series B Preferred Stock into shares of Common Stock, (c)
such time as CNI's ownership of the issued and outstanding capital
stock of the Company (calculated on an as converted basis) falls below
ten percent (10%) and (d) in the event that the weighted average
closing price for 20 consecutive trading days on the Nasdaq National
Market Systems (or such other principal national securities exchange on
which the shares of Common Stock are then listed or admitted to
trading) of one share of Common Stock exceeds US$15.00.
11. Each Stockholder agrees and represents that this Proxy and Power of
Attorney is coupled with an interest sufficient in law to support an
irrevocable power and shall not be terminated by any act of such
Stockholder, by lack of appropriate power or authority or by the
occurrence of any other event or events.
12. The Parties acknowledge and agree that performance of their respective
obligations hereunder will confer a unique benefit on the other and
that a failure of performance will not be compensable by money damages.
The Parties therefore agree that this Proxy and Power of Attorney shall
be specifically enforceable and that specific enforcement and
injunctive relief shall be available to CNI for any breach of any
agreement, covenant or representation hereunder. This Proxy and Power
of Attorney shall revoke all prior proxies given by the Stockholder at
any time with respect to the Covered Shares.
13. Each Stockholder will, upon request, execute and deliver any additional
documents and take such actions as may reasonably be deemed by CNI to
be necessary or desirable to complete the Proxy and Power of Attorney
granted herein or to carry out the provisions hereof.
14. If any term, provision, covenant, or restriction of this Proxy and
Power of Attorney is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Proxy and Power of Attorney shall
remain in full force and effect and shall not in any way be affected,
impaired or invalidated.
15. All notices and other communications hereunder shall be in writing and
shall be deemed duly given (i) on the date of delivery if delivered
personally, (ii) on the date of confirmation of receipt (or, the first
Business Day following such receipt if the date is not a Business Day
or the receipt is after 5 p.m. New York time) of transmission by
facsimile, or (iii) on the date of confirmation of receipt (or, the
first Business Day following such receipt if the date is not a Business
Day or the receipt is after 5 p.m. New York time) if delivered by
courier. Subject to the foregoing, all notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as
may be designated in writing by the Party to receive such notice:
(a) if to CNI, to:
Columbus Nova Investments VIII Ltd.
590 Madison Avenue
38th Floor
New York, NY 10022
United States
Attention: Ivan Isakov
Facsimile: +1-212-308-6623
with a courtesy copy (which shall not constitute notice to CNI) to:
Skadden, Arps, Slate, Meagher & Flom LLP
An der Welle 5
60322 Frankfurt am Main
Germany
Attention: Hilary Foulkes
Facsimile: +49-69-74220300
(b) if to a Stockholder, to the address are set forth next to
such Stockholder's name on the signature page hereof.
16. This Proxy and Power of Attorney may be executed in any number of
counterparts, each of which shall be deemed to be an original but both
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have caused this Proxy and Power of
Attorney to be duly executed on the date first above written.
COLUMBUS NOVA INVESTMENTS VIII LTD.
By:________________________
Name:
Title:
OLIVER R. GRACE, JR.
By:________________________
Name:
Title:
Address:
THE ANGLO AMERICAN SECURITY FUND, L.P.
By:________________________
Name:
Title:
Address:
FRANCIS E. BAKER
By:________________________
Name:
Title:
Address:
Schedule A - Covered Shares
|------------------------------------------|--------------------------------|
| Name of Stockholder | Number of Covered Shares |
|------------------------------------------|--------------------------------|
|------------------------------------------|--------------------------------|
| Oliver R. Grace, Jr. | 150,000 |
|------------------------------------------|--------------------------------|
|------------------------------------------|--------------------------------|
| The Anglo American Security Fund, L.P. | 25,000 |
|------------------------------------------|--------------------------------|
|------------------------------------------|--------------------------------|
| Francis E. Baker | 25,000 |
|------------------------------------------|--------------------------------|
EX-99
10
lon400239.txt
EXHIBIT 11.2 - IRREVOCABLE PROXY
EXHIBIT 11.2
IRREVOCABLE PROXY AND POWER OF ATTORNEY
IRREVOCABLE PROXY AND POWER OF ATTORNEY (the "Proxy and Power of
Attorney"), dated as of December 1, 2004, among, Columbus Nova Investments
VIII Ltd., a Bahamas company ("CNI"), and the person whose name is set forth
on the signature page hereof (the "Stockholder," and together with CNI, the
"Parties"). Capitalized terms used herein shall have the meaning assigned to
them in the Subscription Agreement (as defined below), save as otherwise
provided herein or unless the context otherwise requires.
WHEREAS, the Stockholder is the owner beneficially and of record of
such number of shares of Common Stock, par value $.01 (the "Common Stock") of
Moscow CableCom Corp. (the "Company") as indicated in Schedule A hereto (the
"Covered Shares");
WHEREAS, on August 26, 2004, CNI and the Company entered into a
Series B Convertible Preferred Stock Subscription Agreement (the "Subscription
Agreement"), providing, among other things, for the acquisition by CNI, upon
the terms and subject to the conditions thereof, of 4,500,000 shares of Series
B Convertible Preferred Stock of the Company, par value $.01 per share (the
"Series B Preferred Stock"), having voting and other rights identical to those
of the shares of Common Stock, with the exception of having a liquidation
preference over the shares of Common Stock for a period of four years and
being convertible into shares of Common Stock at the option of the holder
thereof;
WHEREAS, in order to comply with the National Association of
Securities Dealers, Inc. Marketplace Rule 4351, the Company and CNI intend to
enter into an amendment to the Subscription Agreement (the "Amendment"), as a
result of which the voting rights of the Series B Preferred Stock may be less
than the voting rights of the shares of Common Stock;
WHEREAS, in order to address the reduction in CNI's voting power
resulting from the application of Marketplace Rule 4351 and the Amendment, on
or about December 1, 2004, CNI entered into an Irrevocable Proxy and Power of
Attorney with Oliver Grace, Jr., The Anglo American Security Fund, L.P. and
Francis E. Baker, with respect to an aggregate of 200,000 shares of Common
Stock (the "Existing Proxies");
WHEREAS, pursuant to Section 6.03(h) of the Subscription Agreement,
as amended, the receipt by CNI of irrevocable proxies (in addition to the
Existing Proxies) is a condition precedent to CNI's obligations under the
Subscription Agreement; and
WHEREAS, in partial satisfaction of Section 6.03(h) of the
Subscription Agreement, the Parties have agreed to enter into this Proxy and
Power of Attorney;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the Parties agree as follows:
1. The Stockholder hereby irrevocably constitutes, appoints, authorizes
and empowers CNI, during the term of this Proxy and Power of
Attorney, as its sole and exclusive true and lawful proxy and
attorney-in-fact, with full power of substitution, to vote and
exercise all voting and related rights with respect to all of the
Covered Shares (and any and all securities issued or issuable in
respect thereof), for and in the name, place and stead of the
Stockholder, at CNI's sole discretion, at any annual, special or
other meeting of the stockholders of the Company, and at any
adjournment or adjournments thereof, or pursuant to any consent in
lieu of a meeting or otherwise, with respect to any matter that may
be submitted for a vote of stockholders of the Company. All power and
authority hereby conferred is coupled with an interest and is
irrevocable. In the event that CNI is unable to exercise such power
and authority for any reason, the Stockholder agrees that it will
vote all the Covered Shares owned by it in accordance with CNI's
written instructions, at any such meeting or adjournment thereof.
2. During the term of this Proxy and Power of Attorney, the Stockholder
hereby covenants and agrees that, subject to the following proviso,
it will not, and will not agree to, directly or indirectly, sell,
transfer, assign, cause to be redeemed or otherwise dispose of any of
the Covered Shares or grant any proxy or interest in or with respect
to the Covered Shares ("Transfer") or deposit any Covered Shares into
a voting trust or enter into a voting agreement or arrangement with
respect to such Covered Shares so Transferred, unless the Stockholder
complies with the procedures set forth in Subsections (a) through (d)
of this Section 2 provided however, the Stockholder shall have the
right to pledge and/or hypothecate the Covered Shares while this
Proxy is in effect or to otherwise use the Covered Shares as
collateral to secure obligations and such pledge or hypothecation
shall not be considered to be a "Transfer," and in the event that
such shares are, in fact, pledged or hypothecated by the Stockholder,
then in that event, if the person to whom such shares are pledged or
hypothecated (the "Pledgee") is required, due to a default by the
Stockholder, to effectuate its rights pursuant tot such pledge or
such hypothecation, the Pledgee shall be able to sell or otherwise
dispose of the Covered Shares free and clear of the obligations of
this Proxy pursuant to the terms and subject to the conditions of the
pledge agreement or hypothecation agreement that was executed by the
Stockholder in favor of the Pledgee:
(a) If the Stockholder proposes to Transfer (a "Proposed
Transfer") any of its Covered Shares (the "Offered Shares"),
the Stockholder shall submit a written notice (an "Offer
Notice") to CNI describing the material terms and conditions
of the Proposed Transfer in reasonable detail, including,
without limitation, the proposed purchase price (the "Offer
Price").
(b) Upon receipt of an Offer Notice, CNI shall have the right,
but not the obligation, for a period of three (3) Business
Days following receipt of such Offer Notice (the "Option
Period"), to elect to purchase the Offered Shares on the
same terms and conditions as are set forth in the Offer
Notice.
(c) In the event that CNI exercises its right to purchase all
but not less than all of the Offered Shares in accordance
with Subsection (b) above, then the Stockholder must sell
the Offered Shares to CNI and CNI must purchase such Offered
Securities from the Stockholder on the same terms and
conditions as are set forth in the Offer Notice, but not
prior to three (3) Business Days after CNI gives the
Stockholder notice of its election to purchase the Offered
Shares.
(d) Upon the earlier to occur of (i) rejection of the Offered
Shares by CNI and (ii) the expiration of the Option Period
without CNI electing to purchase all of the Offered Shares
following the proper delivery of the Offer Notice, the
Stockholder shall have a sixty (60) day period during which
to effect a Transfer of any or all of the Offered Shares, on
substantially the same or more favorable (as to the
Stockholder) terms and conditions as were set forth in the
Offer Notice at a price not less than ninety five percent
(95%) of the Offer Price. If the Stockholder does not
consummate the Transfer of the Offered Shares in accordance
with the foregoing time limitations, then the right of the
Stockholder to effect such Transfer pursuant to this
Subsection (d) shall terminate and the Stockholder shall be
required to comply with the procedures set forth in
Subsections (a) through (d) of this Section 2 with respect
to any proposed Transfer of Covered Shares.
3. The Stockholder represents and warrants to CNI that, as of the date
hereof, the Stockholder (i) owns all of the Covered Shares
beneficially and of record, (ii) owns all of the Covered Shares free
and clear of all liens, charges, claims, encumbrances and security
interests of any nature whatsoever; and except as provided herein,
and (iii) has not granted any proxy to any Person (other than CNI)
with respect to any Covered Shares or deposited such Covered Shares
into a voting trust.
4. Any securities of the Company to be issued or issuable to the
Stockholder in respect of Covered Shares during the term of this
Proxy and Power of Attorney shall be deemed Covered Shares for
purposes of this Proxy and Power of Attorney.
5. In the event that, as of the Closing Date, the aggregate number of
votes to which: (i) the 4,500,000 shares of Series B Preferred Stock
acquired by CNI pursuant to the Subscription Agreement are entitled,
(ii) the number of Covered Shares that are subject to this Proxy and
Power of Attorney are entitled, (iii) the total number of shares of
Common Stock subject to Existing Proxies are entitled and (iv) the
total number of shares of Common Stock subject to any proxies (other
than this Proxy and Power of Attorney) entered into in satisfaction
of Section 6.03(h) of the Subscription Agreement ("Additional
Proxies") are entitled, shall exceed the number of votes to which
4,500,000 shares of Common Stock shall be entitled as of the Closing
Date, the aggregate number of: (i) Covered Shares that are subject to
this Proxy and Power of Attorney, (ii) shares of Common Stock subject
to Existing Proxies, and (iii) shares of Common Stock subject to
Additional Proxies, shall be reduced by the number of shares of
Common Stock equal to such excess number of votes, and such reduction
in the number of Covered Shares (and such other shares of Common
Stock subject to Existing Proxies and Additional Proxies) shall be
allocated pro rata among the Stockholder, the stockholders that are
parties to Existing Proxies and the stockholders that are parties to
Additional Proxies on the basis of each such stockholder's number of
shares of Common Stock that are subject to this Proxy and Power of
Attorney, Existing Proxies or Additional Proxies, as the case may be.
6. In the event that CNI converts any of its the shares of Series B
Preferred Stock into shares of Common Stock, the aggregate number of:
(i) Covered Shares that are subject to this Proxy and Power of
Attorney, (ii) shares of Common Stock subject to Existing Proxies and
(iii) shares of Common Stock subject to Additional Proxies, shall be
reduced by such number of shares of Common Stock having voting power
equal to the additional voting power acquired by CNI solely as a
result of such conversion and such reduction in the number of Covered
Shares (and such other shares of Common Stock subject to Existing
Proxies and Additional Proxies) shall be allocated pro rata among the
Stockholder, the stockholders that are parties to Existing Proxies
and the stockholders that are parties to Additional Proxies on the
basis of each such stockholder's number of shares of Common Stock
that are subject to this Proxy and Power of Attorney, Existing
Proxies, or Additional Proxies, as the case may be ("Total Covered
Shares"); provided, however, that the number of Total Covered Shares
shall be reduced pursuant to this Section 6 only if, and to the
extent that, the total number of: (i) the votes to which the Total
Covered Shares (without giving effect to such reduction pursuant to
this Section 6) are entitled, (ii) the votes to which the 4,500,000
shares of Series B Preferred Stock acquired by CNI pursuant to the
Subscription Agreement are entitled when voting as one class with the
Common Stock and (iii) the additional votes acquired by CNI solely as
a result of the conversion, shall exceed the number of votes to which
4,500,000 shares of Common Stock are entitled at the time of the
conversion.
7. This Proxy and Power of Attorney shall be governed by and construed
in accordance with the laws of the State of Delaware, without giving
effect to any choice or conflict of law provision or rule (whether of
the State of Delaware or any other jurisdiction) that would cause the
application of the Laws of any jurisdiction other than the State of
Delaware.
8. This Proxy and Power of Attorney shall be binding upon, inure to the
benefit of, and be enforceable by the successors and permitted
assigns of the Parties hereto.
9. This Proxy and Power of Attorney is subject to the following
conditions precedent:
(i) the Closing under the Subscription Agreement having occurred
on or prior to March 31, 2005, or such later date as the
Company and CNI may determine; and
(ii) as of the Closing Date, the shares of Series B Preferred
Stock having less than one (1) vote per share.
10. This Proxy and Power of Attorney shall terminate and have no further
force or effect upon the earlier to occur of: (a) four years from the
Closing Date, (b) CNI having converted all but not less than all of
its shares of Series B Preferred Stock into shares of Common Stock,
(c) such time as CNI's ownership of the issued and outstanding
capital stock of the Company (calculated on an as converted basis)
falls below ten percent (10%) and (d) in the event that the weighted
average closing price for 20 consecutive trading days on the Nasdaq
National Market Systems (or such other principal national securities
exchange on which the shares of Common Stock are then listed or
admitted to trading) of one share of Common Stock exceeds US$15.00.
11. The Stockholder agrees and represents that this Proxy and Power of
Attorney is coupled with an interest sufficient in law to support an
irrevocable power and shall not be terminated by any act of the
Stockholder, by lack of appropriate power or authority or by the
occurrence of any other event or events.
12. The Parties acknowledge and agree that performance of their
respective obligations hereunder will confer a unique benefit on the
other and that a failure of performance will not be compensable by
money damages. The Parties therefore agree that this Proxy and Power
of Attorney shall be specifically enforceable and that specific
enforcement and injunctive relief shall be available to CNI for any
breach of any agreement, covenant or representation hereunder. This
Proxy and Power of Attorney shall revoke all prior proxies given by
the Stockholder at any time with respect to the Covered Shares.
13. The Stockholder will, upon request, execute and deliver any
additional documents and take such actions as may reasonably be
deemed by CNI to be necessary or desirable to complete the Proxy and
Power of Attorney granted herein or to carry out the provisions
hereof.
14. If any term, provision, covenant, or restriction of this Proxy and
Power of Attorney is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Proxy and Power of
Attorney shall remain in full force and effect and shall not in any
way be affected, impaired or invalidated.
15. All notices and other communications hereunder shall be in writing
and shall be deemed duly given (i) on the date of delivery if
delivered personally, (ii) on the date of confirmation of receipt
(or, the first Business Day following such receipt if the date is not
a Business Day or the receipt is after 5 p.m. New York time) of
transmission by facsimile, or (iii) on the date of confirmation of
receipt (or, the first Business Day following such receipt if the
date is not a Business Day or the receipt is after 5 p.m. New York
time) if delivered by courier. Subject to the foregoing, all notices
hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the Party to
receive such notice:
(a) if to CNI, to:
Columbus Nova Investments VIII Ltd.
590 Madison Avenue
38th Floor
New York, NY 10022
United States
Attention: Ivan Isakov
Facsimile: +1-212-308-6623
with a courtesy copy (which shall not constitute notice to CNI) to:
Skadden, Arps, Slate, Meagher & Flom LLP
An der Welle 5
60322 Frankfurt am Main
Germany
Attention: Hilary Foulkes
Facsimile: +49-69-74220300
(b) if to the Stockholder, to the address are set forth next to
the Stockholder's name on the signature page hereof.
16. This Proxy and Power of Attorney may be executed in any number of
counterparts, each of which shall be deemed to be an original but
both of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have caused this Proxy and Power of
Attorney to be duly executed on the date first above written.
COLUMBUS NOVA INVESTMENTS VIII LTD.
By:
----------------------------------
Name:
Title:
STOCKHOLDER
Field Nominees Limited
By:
-----------------------------------
Name: Graham M. Jack, CFA
Title: Vice President and Deputy Managing
Director, Butterfield Trust
(Bermuda) Limited
Address: 65 Front Street, Hamilton, Bermuda
Schedule A - Covered Shares
-------------------------------------------------------------------------------
Name of Stockholder Number of Covered Shares
-------------------------------------------------------------------------------
Field Nominees Limited 276,500
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
EX-99
11
lon400236.txt
EXHIBIT 11.3 - FORM OF IRREVOCABLE PROXY
EXHIBIT 11.3
FORM OF IRREVOCABLE PROXY AND POWER OF ATTORNEY
IRREVOCABLE PROXY AND POWER OF ATTORNEY (the "Proxy and Power of
Attorney"), dated as of December , 2004, between, Columbus Nova Investments VIII
Ltd., a Bahamas company ("CNI"), and the person whose name is set forth on the
signature page hereof (the "Stockholder," and together with CNI, the "Parties").
Capitalized terms used herein shall have the meaning assigned to them in the
Subscription Agreement (as defined below), save as otherwise provided herein or
unless the context otherwise requires.
WHEREAS, the Stockholder is the owner beneficially and of record of
such number of shares of Common Stock, par value $.01 (the "Common Stock") of
Moscow CableCom Corp. (the "Company") as indicated in Schedule A hereto (the
"Covered Shares");
WHEREAS, on August 26, 2004, CNI and the Company entered into a Series
B Convertible Preferred Stock Subscription Agreement (the "Subscription
Agreement"), providing, among other things, for the acquisition by CNI, upon the
terms and subject to the conditions thereof, of 4,500,000 shares of Series B
Convertible Preferred Stock of the Company, par value $.01 per share (the
"Series B Preferred Stock"), having voting and other rights identical to those
of the shares of Common Stock, with the exception of having a liquidation
preference over the shares of Common Stock for a period of four years and being
convertible into shares of Common Stock at the option of the holder thereof;
WHEREAS, in order to comply with the National Association of Securities
Dealers, Inc. Marketplace Rule 4351, the Company and CNI intend to enter into an
amendment to the Subscription Agreement (the "Amendment"), as a result of which
the voting rights of the Series B Preferred Stock may be less than the voting
rights of the shares of Common Stock;
WHEREAS, in order to address the reduction in CNI's voting power
resulting from the application of Marketplace Rule 4351 and the Amendment, on or
about December 1, 2004, CNI entered into an Irrevocable Proxy and Power of
Attorney with Oliver Grace, Jr., The Anglo American Security Fund, L.P. and
Francis E. Baker, with respect to an aggregate of 200,000 shares of Common Stock
(the "Existing Proxies");
WHEREAS, pursuant to Section 6.03(h) of the Subscription Agreement, as
amended, the receipt by CNI of irrevocable proxies (in addition to the Existing
Proxies) is a condition precedent to CNI's obligations under the Subscription
Agreement; and
WHEREAS, in partial satisfaction of Section 6.03(h) of the Subscription
Agreement, the Parties have agreed to enter into this Proxy and Power of
Attorney;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the Parties agree as follows:
1. The Stockholder hereby irrevocably constitutes, appoints, authorizes
and empowers CNI, during the term of this Proxy and Power of Attorney,
as its sole and exclusive true and lawful proxy and attorney-in-fact,
with full power of substitution, to vote and exercise all voting and
related rights with respect to all of the Covered Shares (and any and
all securities issued or issuable in respect thereof), for and in the
name, place and stead of the Stockholder, at CNI's sole discretion, at
any annual, special or other meeting of the stockholders of the
Company, and at any adjournment or adjournments thereof, or pursuant to
any consent in lieu of a meeting or otherwise, with respect to any
matter that may be submitted for a vote of stockholders of the Company.
All power and authority hereby conferred is coupled with an interest
and is irrevocable. In the event that CNI is unable to exercise such
power and authority for any reason, the Stockholder agrees that it will
vote all the Covered Shares owned by it in accordance with CNI's
written instructions, at any such meeting or adjournment thereof.
2. During the term of this Proxy and Power of Attorney, the Stockholder
hereby covenants and agrees that it will not, and will not agree to,
directly or indirectly, sell, transfer, assign, pledge, hypothecate,
cause to be redeemed or otherwise dispose of any of the Covered Shares
or grant any proxy or interest in or with respect to the Covered Shares
("Transfer") or deposit any Covered Shares into a voting trust or enter
into a voting agreement or arrangement with respect to such Covered
Shares so Transferred, unless the Stockholder complies with the
procedures set forth in Subsections (a) through (d) of this Section 2:
(a) If the Stockholder proposes to Transfer (a "Proposed Transfer")
any of its Covered Shares (the "Offered Shares"), the Stockholder
shall submit a written notice (an "Offer Notice") to CNI
describing the material terms and conditions of the Proposed
Transfer in reasonable detail, including, without limitation, the
proposed purchase price (the "Offer Price").
(b) Upon receipt of an Offer Notice, CNI shall have the right, but
not the obligation, for a period of three (3) Business Days
following receipt of such Offer Notice (the "Option Period"), to
elect to purchase the Offered Shares on the same terms and
conditions as are set forth in the Offer Notice.
(c) In the event that CNI exercises its right to purchase all but not
less than all of the Offered Shares in accordance with Subsection
(b) above, then the Stockholder must sell the Offered Shares to
CNI and CNI must purchase such Offered Securities from the
Stockholder on the same terms and conditions as are set forth in
the Offer Notice, but not prior to three (3) Business Days after
CNI gives the Stockholder notice of its election to purchase the
Offered Shares.
(d) Upon the earlier to occur of (i) rejection of the Offered Shares
by CNI and (ii) the expiration of the Option Period without CNI
electing to purchase all of the Offered Shares following the
proper delivery of the Offer Notice, the Stockholder shall have a
sixty (60) day period during which to effect a Transfer of any or
all of the Offered Shares, on substantially the same or more
favorable (as to the Stockholder) terms and conditions as were
set forth in the Offer Notice at a price not less than ninety
five percent (95%) of the Offer Price. If the Stockholder does
not consummate the Transfer of the Offered Shares in accordance
with the foregoing time limitations, then the right of the
Stockholder to effect such Transfer pursuant to this Subsection
(d) shall terminate and the Stockholder shall be required to
comply with the procedures set forth in Subsections (a) through
(d) of this Section 2 with respect to any proposed Transfer of
Covered Shares.
3. The Stockholder represents and warrants to CNI that, as of the date
hereof, the Stockholder (i) owns all of the Covered Shares beneficially
and of record, (ii) owns all of the Covered Shares free and clear of
all liens, charges, claims, encumbrances and security interests of any
nature whatsoever; and except as provided herein, and (iii) has not
granted any proxy to any Person (other than CNI) with respect to any
Covered Shares or deposited such Covered Shares into a voting trust.
4. Any securities of the Company to be issued or issuable to the
Stockholder in respect of Covered Shares during the term of this Proxy
and Power of Attorney shall be deemed Covered Shares for purposes of
this Proxy and Power of Attorney.
5. In the event that, as of the Closing Date, the aggregate number of
votes to which: (i) the 4,500,000 shares of Series B Preferred Stock
acquired by CNI pursuant to the Subscription Agreement are entitled,
(ii) the number of Covered Shares that are subject to this Proxy and
Power of Attorney are entitled, (iii) the total number of shares of
Common Stock subject to Existing Proxies are entitled and (iv) the
total number of shares of Common Stock subject to any proxies (other
than this Proxy and Power of Attorney) entered into in satisfaction of
Section 6.03(h) of the Subscription Agreement ("Additional Proxies")
are entitled, shall exceed the number of votes to which 4,500,000
shares of Common Stock shall be entitled as of the Closing Date, the
aggregate number of: (i) Covered Shares that are subject to this Proxy
and Power of Attorney, (ii) shares of Common Stock subject to Existing
Proxies, and (iii) shares of Common Stock subject to Additional
Proxies, shall be reduced by the number of shares of Common Stock equal
to such excess number of votes, and such reduction in the number of
Covered Shares (and such other shares of Common Stock subject to
Existing Proxies and Additional Proxies) shall be allocated pro rata
among the Stockholder, the stockholders that are parties to Existing
Proxies and the stockholders that are parties to Additional Proxies on
the basis of each such stockholder's number of shares of Common Stock
that are subject to this Proxy and Power of Attorney, Existing Proxies
or Additional Proxies, as the case may be.
6. In the event that CNI converts any of its the shares of Series B
Preferred Stock into shares of Common Stock, the aggregate number of:
(i) Covered Shares that are subject to this Proxy and Power of
Attorney, (ii) shares of Common Stock subject to Existing Proxies and
(iii) shares of Common Stock subject to Additional Proxies, shall be
reduced by such number of shares of Common Stock having voting power
equal to the additional voting power acquired by CNI solely as a result
of such conversion and such reduction in the number of Covered Shares
(and such other shares of Common Stock subject to Existing Proxies and
Additional Proxies) shall be allocated pro rata among the Stockholder,
the stockholders that are parties to Existing Proxies and the
stockholders that are parties to Additional Proxies on the basis of
each such stockholder's number of shares of Common Stock that are
subject to this Proxy and Power of Attorney, Existing Proxies, or
Additional Proxies, as the case may be ("Total Covered Shares");
provided, however, that the number of Total Covered Shares shall be
reduced pursuant to this Section 6 only if, and to the extent that, the
total number of: (i) the votes to which the Total Covered Shares
(without giving effect to such reduction pursuant to this Section 6)
are entitled, (ii) the votes to which the 4,500,000 shares of Series B
Preferred Stock acquired by CNI pursuant to the Subscription Agreement
are entitled when voting as one class with the Common Stock and (iii)
the additional votes acquired by CNI solely as a result of the
conversion, shall exceed the number of votes to which 4,500,000 shares
of Common Stock are entitled at the time of the conversion.
7. This Proxy and Power of Attorney shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving
effect to any choice or conflict of law provision or rule (whether of
the State of Delaware or any other jurisdiction) that would cause the
application of the Laws of any jurisdiction other than the State of
Delaware.
8. This Proxy and Power of Attorney shall be binding upon, inure to the
benefit of, and be enforceable by the successors and permitted assigns
of the Parties hereto.
9. This Proxy and Power of Attorney is subject to the following conditions
precedent:
(i) the Closing under the Subscription Agreement having
occurred on or prior to March 31, 2005, or such later date
as the Company and CNI may determine; and
(ii) as of the Closing Date, the shares of Series B Preferred
Stock having less than one (1) vote per share.
10. This Proxy and Power of Attorney shall terminate and have no further
force or effect upon the earlier to occur of: (a) four years from the
Closing Date, (b) CNI having converted all but not less than all of its
shares of Series B Preferred Stock into shares of Common Stock, (c)
such time as CNI's ownership of the issued and outstanding capital
stock of the Company (calculated on an as converted basis) falls below
ten percent (10%) and (d) in the event that the weighted average
closing price for 20 consecutive trading days on the Nasdaq National
Market Systems (or such other principal national securities exchange on
which the shares of Common Stock are then listed or admitted to
trading) of one share of Common Stock exceeds US$15.00.
11. The Stockholder agrees and represents that this Proxy and Power of
Attorney is coupled with an interest sufficient in law to support an
irrevocable power and shall not be terminated by any act of the
Stockholder, by lack of appropriate power or authority or by the
occurrence of any other event or events.
12. The Parties acknowledge and agree that performance of their respective
obligations hereunder will confer a unique benefit on the other and
that a failure of performance will not be compensable by money damages.
The Parties therefore agree that this Proxy and Power of Attorney shall
be specifically enforceable and that specific enforcement and
injunctive relief shall be available to CNI for any breach of any
agreement, covenant or representation hereunder. This Proxy and Power
of Attorney shall revoke all prior proxies given by the Stockholder at
any time with respect to the Covered Shares.
13. The Stockholder will, upon request, execute and deliver any additional
documents and take such actions as may reasonably be deemed by CNI to
be necessary or desirable to complete the Proxy and Power of Attorney
granted herein or to carry out the provisions hereof.
14. If any term, provision, covenant, or restriction of this Proxy and
Power of Attorney is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Proxy and Power of Attorney shall
remain in full force and effect and shall not in any way be affected,
impaired or invalidated.
15. All notices and other communications hereunder shall be in writing and
shall be deemed duly given (i) on the date of delivery if delivered
personally, (ii) on the date of confirmation of receipt (or, the first
Business Day following such receipt if the date is not a Business Day
or the receipt is after 5 p.m. New York time) of transmission by
facsimile, or (iii) on the date of confirmation of receipt (or, the
first Business Day following such receipt if the date is not a Business
Day or the receipt is after 5 p.m. New York time) if delivered by
courier. Subject to the foregoing, all notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as
may be designated in writing by the Party to receive such notice:
(a) if to CNI, to:
Columbus Nova Investments VIII Ltd.
590 Madison Avenue
38th Floor
New York, NY 10022
United States
Attention: Ivan Isakov
Facsimile: +1-212-308-6623
with a courtesy copy (which shall not constitute notice to CNI) to:
Skadden, Arps, Slate, Meagher & Flom LLP
An der Welle 5
60322 Frankfurt am Main
Germany
Attention: Hilary Foulkes
Facsimile: +49-69-74220300
(b) if to the Stockholder, to the address are set forth next to
the Stockholder's name on the signature page hereof.
16. This Proxy and Power of Attorney may be executed in any number of
counterparts, each of which shall be deemed to be an original but both
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have caused this Proxy and Power of
Attorney to be duly executed on the date first above written.
COLUMBUS NOVA INVESTMENTS VIII LTD.
By:________________________
Name:
Title:
STOCKHOLDER
By:________________________
Name:
Title:
Address:
Annex A
List of Stockholders Parties to Irrevocable Proxy Arrangements executed
pursuant to this Form
|-------------------------------------------|---------------------------------|
|Name of Stockholder |No. of Covered Shares |
|-------------------------------------------|---------------------------------|
|1. Lorraine QTIP Trust |101,596 |
|-------------------------------------------|---------------------------------|
|2. Lorraine Appointed Trust |57,807 |
|-------------------------------------------|---------------------------------|
|3. Andrew M. O'Shea |22,500 |
|-------------------------------------------|---------------------------------|
|4. Francis E. Baker |25,000 |
|-------------------------------------------|---------------------------------|
|5. Peter Ney Bennett |16,250 |
|-------------------------------------------|---------------------------------|
|6. Tom McPartland |50,000 |
|-------------------------------------------|---------------------------------|
|7. Arthur C. Merrill, Jr. |20,000 |
|-------------------------------------------|---------------------------------|
|8. Hillside capital Incorporated |75,000 |
|-------------------------------------------|---------------------------------|
|9. Hildegarde E. Mahoney |15,000 |
|-------------------------------------------|---------------------------------|
|10. Drake Associates, L.P. |89,250 |
|-------------------------------------------|---------------------------------|
|11. Diversified Long Term Growth |31,500 |
| Fund, L.P. | |
|-------------------------------------------|---------------------------------|
|12. The Anglo American Security |20,000 |
| Fund | |
|-------------------------------------------|---------------------------------|