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EXECUTION COPY
EXHIBIT 99.9
Modification Agreement ("Elite Option Modification Agreement")
dated as of May 18, 1999 by and among PLD Telekom, Inc., a Delaware corporation
(the "Company"), Metromedia International Group, Inc., a Delaware corporation
("Parent"), Technocom Limited, a company incorporated under the Irish Companies
Acts 1963 to 1990 with registered number 183622 ("Technocom"), Elite
International Limited, a company incorporated under the Irish Companies Acts
1963 to 1990 with registered number 178152 ("Elite") and Xxxxx Xxxxxxxx.
WHEREAS, pursuant to the Agreement and Plan of Merger, dated
as the date hereof (the "Merger Agreement"), by and among the Company, Parent
and Moscow Communications, Inc., a Delaware corporation and wholly owned
subsidiary of the Parent ("Merger Sub"), Merger Sub will merge with and into the
Company (the "Merger"), and following such Merger, the Company will become a
wholly-owned subsidiary of the Parent;
WHEREAS, the parties hereto desire to modify and then
terminate (i) the Put and Call Option Agreement, dated December 28, 1994, as
amended, between the Company and Elite (the "Put Agreement"), and (ii) the Share
Purchase Agreement, dated as of November 26, 1997, between Elite, Technocom and
the Company (collectively, the "Agreements");
WHEREAS, in connection with and as a condition precedent to
the obligations of the Parent and the Merger Sub to effect the Merger and
consummate the other transactions contemplated by the Merger Agreement, the
parties are entering into this Elite Option Modification Agreement in order to
modify and then terminate the Agreements; and
WHEREAS, capitalized terms used but not defined herein shall
have the meanings set forth in the Merger Agreement.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Purchase and Sale. Notwithstanding anything to the
contrary contained in any of the Agreements, on the Closing Date (as defined in
the Merger Agreement), in reliance on the representations and warranties and
subject to the terms and conditions set forth herein:
(a) the Company shall, and the Parent shall
procure that the Company shall, pay to Elite the sum of US $3,844,500 by wire
transfer to an account designated in advance by Elite and Elite shall sell,
transfer and assign to the Company its remaining 10 Ordinary Shares of Technocom
(the "Shares") free and clear of all security interests, pledges, rights of
first refusal, agreements, claims, charges, liens, encumbrances, options or
rights of pre-emption ("Liens");
(b) Elite shall deliver to the Company a
transfer in respect of the Shares duly executed by it in favor of the Company
and a certificate for the
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Shares and any other documents which may be required to give good title to the
Shares and to enable the Company to procure registration of the same in its name
or as it may direct; and
(c) All of the Agreements shall terminate, be
void and of no further force and effect.
2. Registration. The Company shall, following the
Closing Date, promptly deliver to the Revenue Commissioners of Ireland the share
transfer referred to in Section 1(b) above for assessment of stamp duty and
shall promptly pay the duty thus assessed. Prior to the registration of such
duly stamped stock transfer form in the register of shareholders of Technocom,
Elite shall, in respect of the Shares, cooperate in any manner required by the
Company for the convening, holding at short notice and conduct of general
meetings of Technocom, execute on a timely basis all proxy forms, appointments
of representatives, documents of consent to short notice and such others that
the Company may reasonably require and shall generally act in all respects as
the nominee and at the direction of the Company in respect of the Shares and all
rights and interests attached thereto.
3. Representations and Warranties. In order to induce
the Company to purchase the Shares, Elite hereby represents and warrants to the
Company as follows:
(a) Organization. Elite is a corporation duly
organized, validly existing and in good standing under the laws of Ireland.
(b) Due Authorization and Execution. Elite has
all necessary corporate power and authority to enter into this agreement and to
consummate the transactions contemplated herein. No additional corporate
proceeding or action on the part of Elite is necessary to authorize and approve
the execution and delivery of this agreement or the performance by Elite of its
obligations under this agreement other than actions already taken. This
agreement has been duly executed and delivered by Elite and, assuming due
execution and delivery by the Company, constitutes the legal, valid and binding
obligation of Elite enforceable against Elite in accordance with its terms.
(c) Conflicts. Neither the execution and
delivery of, nor the consummation of the transactions contemplated in, this
agreement will result in any of the following: (a) a violation of the charter,
bylaws or other governing instruments of Elite; (b) a default or an event that,
with notice or lapse of time, or both, would constitute a default, breach or
violation of any contract, agreement, license or instrument to which Elite is a
party or by which it is bound; (c) an event that would permit any person or
entity to terminate any contract, agreement, license or instrument to which
Elite is a party relating to the Shares or to accelerate the maturity of any
obligation of Elite; (d) the creation or imposition of any Lien (as defined
below) upon the Shares of Elite; (e) a violation or breach of any statute,
ordinance, rule or regulation applicable to Elite or the Company or any writ,
injunction or decree of any court or governmental instrumentality to which Elite
or the Company is a party
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or by which any of its properties is bound; or (f) the necessity to obtain the
consent or approval of, or give notice to or register with any government or
nongovernment third party.
(d) Ownership. Except for the Shares, Elite does
not own or have any right to acquire any Ordinary Shares of Technocom or any
other shares of capital stock or equity of Technocom.
(e) No Liens. Each of the Shares to be delivered
by Elite to the Company pursuant to this agreement is duly authorized, validly
issued, fully paid, nonassessable and not subject to preemptive rights and each
such share is owned by Elite free and clear of all Liens except for those rights
held by the Company under any of the Agreements.
(f) Good Title. The transfer of the Shares from
Elite to the Company pursuant to Section 1(a) of this Agreement will convey good
and valid title to the Company in and to the Shares, free and clear of all
Liens, except for those rights held by the Company under any of the Agreements.
4. Revenue Matters. Elite hereby declares for purposes
of the Financial Transfers Act of 1992 of the Republic of Ireland that it is not
resident in any jurisdiction to which financial transfers within the meaning of
such Act are restricted by order of the Minister of Finance in accordance with
the provisions of that Act and does not hold the Shares and will not receive any
part of the consideration hereunder as nominee for any persons that so reside,
and the Company declares for the purpose of such Act that it is not so resident,
it is not acquiring the Shares as nominee for any persons so resident and it is
not to its knowledge controlled directly or indirectly with a person so
resident.
5. Covenants.
(a) Elite hereby covenants with and undertakes
to the Company that it shall not at any time prior to the Closing Date dispose
or attempt to dispose, transfer or assign any interest in the Shares or grant
any option over or mortgage, charge or otherwise encumber or dispose of the
Shares; provided, that, Elite may transfer the Shares to any entity owned and
controlled by Elite as long as prior to such transaction such entity agrees to
be bound by the terms and provisions of this agreement and enters into an
assumption agreement with Parent in a form reasonably satisfactory to Parent
evidencing such agreement to be so bound. The parties agree that if Elite
transfers the Shares as aforesaid, such transferee shall be deemed to have
assumed all rights and obligations under the Agreements. From the date hereof
until the earlier of (x) the Closing Date or (y) the termination of this
agreement pursuant to Section 6, Elite agrees that it will not take any action
under the Put Agreement to require either the Parent or the Company to purchase
the Shares or make any other payments.
(b) Elite hereby covenants with and undertakes
to the Company that it will as soon as reasonably practicable notify to the
Company in
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writing any matter or thing which may arise or become known to it after the date
hereof and prior to the Closing Date which constitutes (or would with the
passage of time constitute) a breach of the representations and warranties or
breach of any of the covenants or undertakings or obligations of Elite under
this agreement.
(c) Elite hereby undertakes with the Company at
the request and at the expense of the Company to do or to procure to be done all
such further acts of things and execute or procure to be executed all such
further deeds and documents as may be necessary or desirable to (i) fully and
effectively vest in the Company the legal and beneficial ownership of the Shares
and the benefits of this Agreement and pending such vesting, Elite shall hold
such Shares and benefits in trust for the Company and shall receive all monies
in connection therewith as trustee of the Company and shall account to the
Company forthwith upon receipt thereof and (ii) acknowledge that the Agreements
have been terminated.
6. Termination.
(a) This agreement shall be effective so long as
the Merger Agreement is effective and shall terminate in the event that the
Merger Agreement is terminated or expires. The obligations of the parties hereto
under Sections 1 and 2 of this agreement are expressly conditioned upon the
completion of the transactions contemplated by the Merger Agreement. This
agreement shall in any event terminate at the option of Elite if the
transactions contemplated in Sections 1 and 2 have not taken place by October
31, 1999.
(b) If any material breach of the
representations, warranties or covenants contained herein shall come to the
attention of either the Company or Elite before the Closing Date or if any act
or event shall occur which, had it occurred on or before the date hereof, would
have constituted a material breach of the representations, warranties or
covenants set forth herein, then the Company shall at its own election terminate
this agreement and its obligations to purchase the Shares without any liability
to Elite.
7. Consent. Each of Elite, Technocom and Xxxxx Xxxxxxxx
hereby consent, pursuant to the Shareholder Agreement (as defined in the Put
Agreement), to (i) the pledge, pursuant to the Pledge Agreement dated as of the
date hereof (the "Pledge Agreement"), made by the Company in favor of the
Parent, by the Company of 115 Ordinary Shares of Technocom to the Parent to
secure certain loans being made by the Parent to the Company pursuant to a
Bridge Loan Agreement dated the date hereof, (ii) the transfer of such 115
Ordinary Shares to the Parent in the event the Parent forecloses on such shares
in accordance with the terms of the Pledge Agreement and (iii) hold a meeting of
shareholders of Technocom and vote to amend Technocom's Articles of Association
as promptly as practicable to permit the pledge of shares of Technocom and the
transfer of such shares as contemplated by the Pledge Agreement. The Parent
acknowledges and agrees that prior to the occurrence of an Event of Default (as
defined in the Bridge Loan Agreement, dated as of the date hereof between the
Company and Parent) it shall have no rights to control the management and
operations of Technocom by virtue of the Pledge Agreement. Parent
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further agrees that, in the event it forecloses on the shares of Technocom and
takes possession of such shares (i) neither Parent nor any of Parent's
subsidiaries or affiliates will enter into any transaction with Technocom
(including, without limitation, the issuance or subscription for additional
shares of Technocom) that is not consummated on an arm's length basis, (ii)
Parent will not cause Technocom to cease or propose to cease to carry on its
business or be wound up unless Technocom is insolvent, and (iii) to use its best
commercial efforts to ensure that any assignee or transferee of the Technocom
shares foreclosed upon by Parent is bound by the restrictions set forth in
clauses (i) and (ii) of this sentence.
8. Survival; Indemnification. (a) The representations,
warranties and covenants set forth in this Elite Option Modification Agreement
shall survive the consummation of the purchase of the Shares hereunder. Elite
hereby indemnifies and holds harmless, the Parent, the Company and their
respective officers, directors and affiliates from any claims, losses, damages,
costs, expenses (including attorney's fees and expenses) arising in connection
with the transfer by Elite of the Shares pursuant to this agreement that they
suffer or incur as a result of any breach or default of any representation,
warranty or covenant set forth herein.
(b) The total aggregate liability of Elite and
Xxxxx Xxxxxxxx to all other parties hereto arising out of or in connection with
this agreement shall be limited to the amount of consideration received by Elite
from the Company pursuant to Section 1(a).
9. Expenses. Each of the parties hereto shall pay its
own fees, expenses and other costs incurred in connection with the negotiation,
execution and delivery of this Agreement.
10. Governing Law. This agreement shall be governed in
all respects by the laws of the State of New York without reference to the
choice of laws principles thereof.
11. Counterparts. This agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one and the same instrument.
12. No Amendment. No amendment, modification, termination
or waiver or any provision of this agreement shall be effective unless it shall
be in writing and signed by each of the parties to this agreement.
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IN WITNESS WHEREOF, this Elite Option Modification Agreement
has been duly executed and delivered by the parties hereto as of the date first
written above.
METROMEDIA INTERNATIONAL GROUP, INC.
By: /s/ XXXXXX XXXXXX
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Name: Xxxxxx Xxxxxx
Title: Chief Financial Officer,
Executive Vice President,
Treasurer and Director
PLD TELEKOM INC.
By: /s/ XXXXX X. X. XXXX
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Name: Xxxxx X. X. Xxxx
Title: Chairman, President and
Chief Executive Officer
ELITE INTERNATIONAL LIMITED
By: /s/ XXXXX XXXXXXXX
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Name: Xxxxx Xxxxxxxx
Title: Director
TECHNOCOM LIMITED
By: /s/ XXXXX X. X. XXXX
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Name: Xxxxx X. X. Xxxx
Title: Director
/s/ XXXXX XXXXXXXX
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XXXXX XXXXXXXX
