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EXTRACT FROM THE SHAREHOLDERS AGREEMENT RELATING TO
AS TALLINK GRUPP
THIS AGREEMENT (hereinafter referred to as the „Agreement”) is made on August 23, 2006
BETWEEN:
(1) AS INFORTAR, a company registered in Estonia and having its registered address at Tartu mnt 13, 10145 Tallinn ("Infortar");
(2) CITIGROUP VENTURE CAPITAL INTERNATIONAL JERSEY LIMITED, a company registered in Jersey, Channel Islands and having its registered address at 26 New Street, St Helier, Jersey, Channel Islands JE4 8PP (together with Citicorp International Finance Corporation and its other Affiliates "CVCI");
(3) AMBER TRUST II SCA, an investment trust registered in Luxembourg with its registered address at 52, route d’Esch, L-1470 Luxembourg ("Amber");
(4) ENN PANT, an Estonian citizen, Chairman of the Supervisory Council of Infortar;
(5) AIN HANSCHMIDT, an Estonian citizen, the Chairman of the Management Board of Infortar;
(6) KEIJO ERKKI MEHTONEN, a citizen of Finland, member of the Supervisory Council of Infortar;
(7) KALEV JÄRVELILL, an Estonian citizen, member of the Supervisory Council of Infortar;
(Infortar, CVCI, Amber, Enn Pant, Ain Hanschmidt, Keijo Erkki Mehtonen and Kalev Järvelill each being a "Party" and together the "Parties".)
BACKGROUND:
(A) The Parties hold directly and indirectly through an Affiliate shares (hereinafter also referred to as the „Shares”) in AS TALLINK GRUPP, a company registered in Estonia and having its registered address at Tartu mnt 13, 10145 Tallinn (hereinafter referred to as the „Company”);
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IT IS AGREED as follows:
In this Agreement:
1. DEFINITIONS AND INTERPRETATIONS
Affiliate in relation to any Party, (a) any Subsidiary or parent company of that Party, or (b) any other Subsidiary of that parent company, (c) any Subsidiary of any of the Subsidiaries referred to in (b), (d) any company jointly (50/50) owned by that Party with another Party, (e) in the case of CVCI, any partnership in which an Affiliate acts as general partner, and (f) any other company or person who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the Party ;
Closing The completion of the Rights Issue. For the sake of clarity, the Rights Issue shall be deemed to have been completed as from the date of registering the increase in the share capital of the Company with the Estonian Commercial Registry (äriregister).
Investors CVCI and Amber, and the “Investor” means each of the Investors separately.
Rights Issue A rights issue being carried out by the Company to raise €60 - €100 million of new equity pursuant to the resolutions of the extraordinary General Meeting of the Company of 2 August 2006. The rights issue will provide existing shareholders of the Company the right to subscribe to new shares in the Company at a price of EEK 55 per share.
Supervisory Council Supervisory council (nõukogu) of the Company as described in the Articles or, as the case may be, the supervisory council of the Target.
The Promoters Collectively Enn Pant, Ain Hanschmidt, Keijo Erkki Mehtonen, and Kalev Järvelill.
The Target Silja OY AB, a company registered in Finland and having its registered address at Keilaranta 9, Espoo 02060.
2. EFFECTIVE TERM
2.1. This Agreement shall come into force and take effect from the date of Signing.
2.2. This Agreement shall remain in effect until the first of the following events occur:
(i) the Parties agree in writing to terminate this Agreement; or
(ii) at such time as there is only one Party to this Agreement.
Clause 6 or any other respective provision or part of this Agreement shall automatically terminate in case the Estonian Financial Supervision Authority (Finantsinspektsioon) gives any kind of notice to any of the Parties that the Agreement in its entirety or any parts or provisions hereof, or the performance of this Agreement or any parts or provisions hereof may create dominant influence by any or all of the Parties over the Company in the meaning of Article 166 of the Estonian Securities Market Act (väärtpaberituru seadus).
2.3. An Investor who together with its Affiliates has ceased to hold more than 50% of the Shares they hold immediately after Closing, such Investor (but not the other Investor) shall cease to be Party to this Agreement, with the exception of Clause 11.5 below that shall continue to be binding.
3. THE RIGHTS ISSUE
3.1. Subject to Clauses 3.2, 3.3 and 3.4 below, the Investors (directly or through their Affiliates) and Infortar shall participate in the Rights Issue and subscribe to a total of EUR 60 million of the newly issued shares (the “Offer Shares”) of the Company.
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4. TAG ALONG RIGHTS
4.1. If the Promoters and/or Infortar (each or jointly, as the case may be, the “Transferor”) accept an offer to sell, transfer or exchange (the „Proposed Sale”) a block of Shares (the „Holding”) in the Company in a single transaction or in a series of related transactions to a third party during the Effective Term of this Agreement, such that as a result of such Proposed Sale the Promoters’ and Infortar’s combined shareholding (the Promoters’ and Infortar’s combined shareholding in the Company hereinafter referred to as the „Combined Shareholding”) in the Company drops below 35%, then the Transferor undertakes that it will only sell the Holding on arms’ length and in compliance with this Clauses 4 and 5. Notwithstanding the aforesaid, this Clause 4 shall not apply in the event the Transferor sells or transfers the Holding to its Affiliate together with the rights and obligations under this Agreement.
4.2. Not less than 20 Business Days prior to the intended date of Proposed Sale, the Transferor shall notify the Investors in writing of the Proposed Sale, which notice (the “Notice”) shall set out, to the extent not described in any accompanying documents, the identity of the bona fide third party to whom the Transferor wishes to transfer the Shares (the “Proposed Transferee”), the purchase price and other terms and conditions of the Proposed Sale, the expected date on which such Proposed Sale is to be made and the number of Shares to be purchased by the Proposed Transferee from the Transferor.
4.3. Within 10 Business Days of receipt or deemed receipt of the Notice, an Investor and/or its Affiliates may notify the Transferor in writing (copied to the Company) that they desire to sell any or all of their Shares on the same terms and conditions as set out in the Notice save that the Investors shall not be obliged to give any warranties, representations, indemnities, covenants and other assurances other than a warranty as to its or its Affiliates’ title to the Shares and warranty that such Shares are free and clear from any third party rights. Upon such notification the Transferor shall procure that together with the Transferor’s own Holding the Proposed Transferee also acquires the Investor’s and/or their Affiliates’ respective Holding on the same terms and conditions as set out in the Notice.
5. TRANSFER RESTRICTIONS
5.1. While either of the Investors together with its Affiliates holds more than 50% of the Shares they hold immediately after Closing, the Promoters or Infortar shall not sell their Shares in the Company such that their Combined Shareholding falls below 35% without the prior written consent of each of the Investors. Notwithstanding the foregoing, the Investors' consent shall not be required in the case of a transfer by the Promoters and Infortar of Shares to an Affiliate, provided always that such transfer shall also transfer the rights and/or obligations under this Agreement).
6. SUPERVISORY COUNCIL MEMBERS
6.1. As long as a Secondary Listing has not occurred or either of the Investors together with their Affiliates holds more than 50% of the Shares they hold immediately after Closing, each Investor shall have the right to present for appointment 1 member to the Supervisory Council of the Company and to the Supervisory Council of the Target.
6.2. Each of the Parties undertakes to exercise, within their capacity and discretion, their voting rights so as to effect the appointment and replacement (if requested by the respective Investor) of the Supervisory Council members presented pursuant to Clause 6.1 above.
6.3. The Parties shall ensure that the Company maintains insurance arrangements for full and proper supervisory council member liability insurance in respect of the members of the Supervisory Council (including the members presented pursuant to Clause 6.1 above).
7. SECONDARY LISTING
7.1. The Promoters, Infortar and the Investors agree to use their best efforts to ensure that by 31 December 2009, the Company achieves a secondary listing on the London Stock Exchange, the New York Stock Exchange or the NASDAQ, or other international exchange acceptable to Infortar and the Investors. The Promoters, Infortar and the Investors agree to ensure that the Parties’ and their Affiliates’ Shares will be registered in accordance with the rules of the applicable exchange so as to be freely transferable.
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11. GENERAL
11.1. The persons signing this Agreement warrant that they are duly authorised to sign it on behalf of the CVCI, Amber, Infortar or the Promoters as applicable.
11.2. Notwithstanding Clause 6.2 above, each member of the Supervisory Council and each shareholder of the Company (including the Parties) shall remain independent in their decisions and shall not be restricted by this Agreement or otherwise, directly or indirectly, to exercise their voting rights or any other powers available to them, in the manner which, in its own opinion, best complies with its duties under Estonian laws, any Rules of Tallinn Stock Exchange or the Corporate Governance Recommendations (Hea Ühingujuhtimise Tava).
11.3. Nothing in this Agreement, express or implied, is intended to create any form of concerted action between the Investors and Infortar for the purpose of acquiring dominant influence in or control over the Company, and the Parties shall refrain from all acts which may constitute such concerted practice.
11.4. The Promoters and Infortar warrant that the Company shall continue to follow the highest standards of ethical business practice and will not make payments to public officials to obtain a business advantage.
11.5. The Investors, Infortar, the Promoters and any other person acting on their behalf shall keep this Agreement and all related correspondence and documentation in strict confidence, and shall not issue any public statement or press release concerning the proposed transaction without the prior written consent of the other parties, except that disclosure shall be allowed to the extent required by law, any order of a court of competent jurisdiction or other competent governmental body, the rules of any national stock exchange or trading market, or the Corporate Governance Recommendations (Hea Ühingujuhtimise Tava).
11.6. No Party shall at any time be obliged to lend or otherwise provide additional funding whether by equity subscription, working capital, or otherwise to fulfil the requirements of the Company, except as explicitly foreseen in this Agreement.
11.7. No Party shall be responsible for any failure or delay on its part in performing any of its obligations or for any loss, damages, costs, charges or expenses incurred or suffered by any other Party by reason of that failure or delay if that failure or delay is caused due to any force majeure conditions, such as acts of God, government laws and regulations, strikes, lock-outs, war or any other causes beyond its control.
11.8. A waiver (whether express or implied) by one of the Parties of any of the provisions of this Agreement or of any breach of or default by any other Party in performing any of those provisions shall not constitute a continuing waiver and that waiver shall not prevent the waiving Party from subsequently enforcing any of the provisions of this Agreement not waived or from acting on any subsequent breach of or default by any Party under any of the provisions of this Agreement.
11.9. Any amendment, waiver or variation of this agreement shall not be binding on the Parties unless set out in writing, expressed to amend this agreement and signed by or on behalf of each of the Parties.
11.10. This agreement does not create any partnership or agency relationship between the Parties.
11.11. Nothing in this agreement, express or implied, is intended to confer upon any person, other than the Parties hereto and their respective successors and assigns, any rights or remedies of any nature whatsoever under or by reason of this agreement.
11.12. This agreement contains the entire agreement between the Parties with respect to the subject matter hereof and may not be modified in the absence of a written document executed by the Parties sought to be so bound, and no obligations shall be implied beyond the express terms hereof.
11.13. Without prejudice to Clause 2.3 above, a Party or any successor or permitted assignee of a Party, who ceases to be legally and beneficially entitled to any shares of the Company and who has complied with Clause 4 and 5 and all other applicable provisions of this Agreement relating to the transfer of such shares, shall (subject as provided in Clause 2) cease to be bound by this Agreement, with the exception of Clause 11.5 above.
11.14. The Parties agree, as between themselves, that they shall procure the convening of all meetings, the giving of all waivers and consents and the passing of all resolutions and shall otherwise exercise all powers and rights available to them in order to give effect to the provisions of this Agreement.
THIS AGREEMENT has been signed on behalf of the Parties by their duly authorised representatives on the date which first appears on page 1.
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