, October 12, 2015

Shareholder Circular on Proposed Merger and Extraordinary General Meeting

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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

THIS DOCUMENT CONTAINS A PROPOSAL WHICH, IF IMPLEMENTED, WILL RESULT IN GDRS OF EURASIA DRILLING COMPANY LIMITED NO LONGER BEING LISTED ON THE OFFICIAL LIST OR ADMITTED TO TRADING ON THE LONDON STOCK EXCHANGE.

If you are in any doubt as to the action you should take, you are recommended to seek your own financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other authorised independent professional adviser.

If you have sold or otherwise transferred all of your Shares, please send this document immediately to the purchaser or transferee, or to the bank, stockbroker or other agent through whom the sale or transfer was effected for delivery to the purchaser or transferee. However, this document should not be forwarded or transmitted in or into any jurisdiction in which such act would constitute a violation of the relevant laws in such jurisdiction. If you have sold or transferred only part of your Shares, please consult the bank, stockbroker or other agent through whom the sale or transfer was effected.

Recommended proposal for a transaction
involving the merger of

EURASIA DRILLING COMPANYLIMITED
(the "Company")

with

EDC ACQUISITION COMPANY LIMITED
("EACL")

to be effected by means of a Plan of Merger under
Part XVI of the Cayman Islands Companies Law, as amended

 

Shareholders should read carefully the whole of this document and the accompanying Form of Proxy. Your attention is drawn to the letter from the Chairman of the Special Committee at the front of this document which contains the unanimous recommendation of the Special Committee that you vote in favour of the resolution to approve the Merger at the Extraordinary General Meeting of Shareholders to be held on 13 November 2015.

The Merger is being implemented by the Company and neither the Company nor any of its advisers is making communications or solicitations in the United States or in or from any jurisdiction where it is not permissible to do so. The distribution of this document in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this document comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the Company disclaims any responsibility or liability for the violation of such restrictions by any person. This document is not intended to and does not constitute an offer or an invitation to purchase or subscribe for any securities or a solicitation of an offer to buy any securities or the solicitation of any vote or approval pursuant to the Merger or otherwise in any jurisdiction in which such offer, invitation or solicitation is unlawful.

Copies of this document are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any jurisdiction where to do so would violate the laws of that jurisdiction and persons receiving this document (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it into or from any such jurisdiction.

The statements contained herein are made as at the date of this document, unless some other time is specified in relation to them, and service of this document shall not give rise to any implication that there has been no change in the facts set forth herein since such date. Nothing contained in this document shall be deemed to be a forecast, projection or estimate of the future financial performance of the Company, except where otherwise stated.

No person should construe the contents of this document as legal, financial or tax advice but should consult their own advisers in connection with the matters contained herein.

The date of this document is 12 October 2015.

 

 

TABLE OF CONTENTS

 

PART 1 - LETTER FROM THE CHAIRMAN OF THE SPECIAL COMMITTEE.. 4

PART 2 - NOTICE OF EXTRAORDINARY GENERAL MEETING.. 8

PART 3 - TIMETABLE.. 11

PART 4 - SUMMARY OF THE MERGER TRANSACTION AND CERTAIN KEY PROVISIONS. 12

PART 5 - SPECIAL FACTORS. 19

PART 6 - THE EXTRAORDINARY GENERAL MEETING.. 24

PART 7 - PROVISIONS FOR SHAREHOLDERS AND AFFILIATES. 26

PART 8 - DISSENTERS' RIGHTS. 27

PART 9 - DEPOSITARY.. 29

PART 10 - CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS. 30

PART 11 - WHERE YOU CAN FIND MORE INFORMATION.. 32

PART 12 - MERGER IMPLEMENTATION AGREEMENT ANNEXING THE PLAN OF MERGER.. 33

PART 13 - CAYMAN COMPANIES LAW - SECTION 238. 34

PART 14 - DEFINITIONS. 36

ANNEX A: FORM OF PROXY CARD AND WRITTEN DIRECTION FOR THE COMPANY.. 38

ANNEX B: FORM OF VOTING INSTRUCTION CARD FOR GDR HOLDERS. 40

 


 

PART 1 - LETTER FROM THE CHAIRMAN OF THE SPECIAL COMMITTEE

 

Eurasia Drilling CompanyLimited
Boundary Hall, Cricket Square
PO Box 1111
Grand Cayman KY1-1102
Cayman Islands

12 October 2015

 

To: The Shareholders of Eurasia Drilling Company Limited (the "Shareholders")

Re: Merger with EDC Acquisition Company Limited and Notice of Extraordinary General Meeting of Shareholders

Dear Shareholder,

On 20 January 2015, it was announced that Eurasia Drilling Company Limited (the "Company") had agreed a transaction with certain members of the Company's management team and certain significant shareholders, which would result in the Company being delisted and, subsequently, in a subsidiary of Schlumberger Limited acquiring a significant minority investment in the Company (the "Schlumberger Transaction").

Following several extensions to the long-stop date for completion of the Schlumberger Transaction, and despite the considerable efforts of all parties concerned, it was announced on 30 September 2015 that the long-stop date for the Schlumberger Transaction had expired and that the Schlumberger Transaction would not take place. 

On 8 October 2015, it was announced that the Companyhad received an offer fromcertain members of the Company's management team and certain significant shareholders (the "Participants") of a merger (the "Merger") between the Company and EDC Acquisition Company Limited ("EACL"), a company formed by one of the Participants, under the provisions of the Companies Law (2013 Revision) of the Cayman Islands, as amended (the "Cayman Companies Law"). The Company's board of directors formed a special committee (the "Special Committee") comprised solely of independent non-executive directors of the Company who are unaffiliated with EACL and any of the Participants or their affiliates, to negotiate the terms of the Merger on behalf of the board of directors with the assistance of advisers appointed by the Special Committee.  Following a detailed evaluation of the proposed Merger by the Special Committee and its advisers and as a result of robust negotiations between the Special Committee and EACL, EACL submitted a revised offer in respect of the Merger on 10 October 2015.  Today, it was announced that the terms of the Merger had been agreed.

I am the Chairman of the Special Committee and the other members of the Special Committee are Igor Belikov and Alexander Shokhin. I am writing to invite you to attend and/or vote at an Extraordinary General Meeting of the Shareholders to be held on Friday 13 November 2015 at 12 noon (GMT) (the "Extraordinary General Meeting"). The Extraordinary General Meeting will be held at the offices of Willkie Farr & Gallagher (UK) LLP at CityPoint, 1 Ropemaker Street, London EC2Y 9AW. This document and the notice of the Extraordinary General Meeting provide information regarding the matters to be voted on at the Extraordinary General Meeting.

At the Extraordinary General Meeting you will be asked to consider and vote upon a proposal to approve the plan of merger (the "Plan of Merger") between the Company and EACL and the transactions contemplated by the Plan of Merger. A copy of the Plan of Merger is included in Part 12 of this document. The business to be carried out at the Extraordinary General Meeting shall be special business for the purposes of the Company's articles of association.

Under the terms of the Plan of Merger, the Company will be merged with EACL, with the Company continuing as the surviving company after the Merger.

EACL is an exempted company incorporated and existing under the Cayman Companies Law formed solely for purposes of the Merger. The Plan of Merger is made pursuant to a merger implementation agreement dated 12 October 2015 and made between the Company and EACL (the "Merger Implementation Agreement").

It is expected that the holders of the Shares currently owned directly or indirectly by the Participants and which comprise approximately 71% of the issued and outstanding Shares will vote in favour of the resolution to be voted on at the Extraordinary General Meeting.

If the resolution to approve the Merger is passed at the Extraordinary General Meeting by the requisite percentage of the Shareholders and the Merger is consummated:

  • each of the Company's issued and outstanding shares each with a nominal or par value of US$0.01 (the "Shares") at the Merger Consideration Record Date (as defined below), other than the Excluded Shares (as defined below), will be cancelled in exchange for payment of cash consideration of US$11.75 per Share (the "Merger Consideration") following completion of the Merger or, in the case of Dissenting Shares (as defined below), the fair value of the Shares as determined in accordance with section 238 of the Cayman Companies Law;

 

  • Dissenting Shares shall cease to confer upon any Dissenting Shareholder (as defined below) any of the rights of a member except the right to payment of the fair value of such Dissenting Shares held by them, the right to participate in proceedings until the determination of fair value is reached and the right to institute proceedings to obtain relief on the ground that the Merger is void and unlawful subject to and in accordance with the provisions of section 238 of the Cayman Companies Law, unless any holders of Dissenting Shares fail to perfect or effectively withdraw or lose their dissenter rights, in which event they shall receive the Merger Consideration;

 

  • each share of EACL issued and outstanding as at the date that the Plan of Merger is registered by the Cayman Islands Registrar of Companies (the "Merger Implementation Date") shall each be converted into and exchanged for one Share;

 

  • each Share held by EACL and by EDC Incentive Plan Limited in issue and outstanding as at the Merger Consideration Record Date shall be cancelled by operation of law at the Merger Implementation Date;

 

  • each Share held by the Participants in issue and outstanding as at the Merger Consideration Record Date shall remain issued and outstanding as at and following the Merger Implementation Date.

The "Dissenting Shares" are any Shares owned by Dissenting Shareholders who have validly exercised and have not effectively withdrawn or lost their rights to dissent from the Merger in accordance with section 238 of the Cayman Companies Law and who have the right to seek payment of the fair value of their Shares as described in more detail in Part 8 of this document.

The "Excluded Shares" are the Shares of the Company that will be held by EACL and the Participants at the Merger Implementation Date, representing approximately 71% of the Company's total Shares.

"Merger Consideration Record Date" means 5 p.m. (EST) on the business day immediately prior to the day on which the Plan of Merger is filed with the Cayman Islands Registrar of Companies.

HOLDERS OF GLOBAL DEPOSITARY RECEIPTS ("GDRS") WISHING TO EXERCISE THE RIGHT TO DISSENT MUST SURRENDER THEIR GDRS TO THE BANK OF NEW YORK MELLON (THE "DEPOSITARY"), PAY THE DEPOSITARY FEES (CONSISTING OF UP TO US$0.03 PER GDR SURRENDERED, A CABLE FEE OF US$17.50 AND ANY APPLICABLE TAXES OR GOVERNMENTAL CHARGES) AND BECOME SHAREHOLDERS BY 7 A.M. (EST) ON TUESDAY 10 NOVEMBER 2015. THEREAFTER, SUCH FORMER GDR HOLDERS MUST COMPLY WITH THE PROCEDURES AND REQUIREMENTS FOR EXERCISING THE RIGHT TO DISSENT FROM THE MERGER UNDER SECTION 238 OF THE CAYMAN COMPANIES LAW. THE DEADLINE FOR RECEIPT OF CANCELLATION INSTRUCTIONS BY THE DEPOSITARY IS 7 A.M. (EST) ON FRIDAY 30 OCTOBER 2015.

Pursuant to the terms of the Merger Implementation Agreement, in addition to approval by Shareholders and the shareholder of EACL, the filing of the Plan of Merger with the Cayman Islands Registrar of Companies is subject to certain conditions, including: (i) no material adverse change having arisen in relation to the Company; (ii) sufficient financing being available to the Company in order to pay the Merger Consideration; (iii) none of EACL, the Company, any subsidiary of the Company nor any of the Participants becoming subject to European Union or United States sanctions or sanctions extended by an Order of Her Majesty in Council to the Cayman Islands; and (iv) no order, judgment or communication having been made by any governmental authority which has the effect of making unlawful or of restraining or prohibiting the Merger or any of the related transactions and no verbal or written notice of an intention to make such an order or judgment having been received. Unless the conditions precedent to the Merger have been satisfied or waived (where applicable) by 31 January 2016 (or such other date as is agreed between the Company and EACL), the Merger will not proceed and the Merger Implementation Agreement will be terminated.

The Merger is conditional on the Merger Consideration being available to the Company.  It is expected that the Merger Consideration will be financed from existing cash reserves of the Company, loans from certain of the Participants and/or borrowing facilities available to the Company.  The Participants are confident that such financing will be available to the Company by the time needed in order to complete the Merger.

At the effective time of the Merger (if completed), the Merger will result in the Company becoming a privately-held company. The GDRs will no longer be listed on the Official List maintained by the Financial Conduct Authority (the "FCA") or admitted to trading on the London Stock Exchange plc ("LSE").

The Special Committee considers the terms of the Merger to be fair and reasonable so far as the Qualifying Shareholders are concerned. The Special Committee, in deliberating whether to recommend the Merger, has taken financial and other advice which it deems appropriate, including an opinion from Renaissance Capital on the fairness, from a financial point of view and as at 11 October 2015, of the consideration payable to the Qualifying Shareholders under the terms of the Merger (the "Fairness Opinion"). In providing the Fairness Opinion to the Special Committee, Renaissance Capital has placed reliance on the Special Committee's commercial assessment of the Merger and on information provided by or on behalf of the Company without verification of its factual accuracy.  Renaissance Capital is acting exclusively for the Special Committee and no one else in connection with the provision of the Fairness Opinion and will not be responsible to any person other than the Company for providing the Fairness Opinion.

The Merger Consideration of US$11.75 per Share (US$11.75 per GDR) represents a premium of approximately 7.3% over the GDR price on 7 October 2015. The other factors considered by the Special Committee in reaching the decision to recommend the Merger are described in more detail in Part 5 of this document.

The Special Committee unanimously recommends that you vote FOR the special resolution to authorise and approve the Merger Implementation Agreement, the Plan of Merger and the transactions contemplated by the Plan of Merger, including the Merger.

This document provides detailed information about the Merger and the Extraordinary General Meeting. The Company encourages you to read the entire document and all of the attachments carefully. The consolidated audited accounts of the Company for the financial year ended 31 December 2014 and the interim report of the Company for the six months ended 30 June 2015 are available at www.eurasiadrilling.com/investor-relations/financial-information (but do not form part of and are not incorporated by reference in this document).

Regardless of the number of Shares you own, your vote is very important. The Merger cannot be implemented unless the Plan of Merger and transactions contemplated by the Plan of Merger, including the Merger, are approved by an affirmative vote of a majority of at least two-thirds of those Shareholders present and entitled to vote and voting in person or by proxy at the Extraordinary General Meeting. Even if you plan to attend the Extraordinary General Meeting in person, the Company requests that you submit your proxy card and the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of the power of attorney or other authority, in hard copy form by post, by courier or by hand to the registered office of the Company at Boundary Hall, Cricket Square, PO Box 1111, Grand Cayman KY1-1102, Cayman Islands for the attention of Paget-Brown Trust Company Ltd. or by email to the Company's registered office by emailing Richard Lewis (richard@paget-brown.com.ky) and Dominique Massias (dominique@pagetbrowntrust.ky) with a copy to S. Douglas Stinemetz (doug.stinemetz@eurasiadrilling.com) as promptly as possible and in any event prior to 5 p.m. (EST) on Tuesday 10 November 2015.  Voting at the Extraordinary General Meeting will take place by a show of hands unless a poll is demanded in accordance with the Company's articles of association. It is expected that one or more of the Participants will demand a poll and that voting will take place by poll voting in accordance with the Company's articles of association.

HOLDERS OF GDRS ALONE WILL NOT HAVE A RIGHT TO ATTEND OR VOTE AT THE EXTRAORDINARY GENERAL MEETING OR DISSENT UNLESS THEY SURRENDER THEIR GDRS, PAY THE DEPOSITARY FEES (CONSISTING OF UP TO US$0.03 PER GDR SURRENDERED, A CABLE FEE OF US$17.50 AND ANY APPLICABLE TAXES OR GOVERNMENTAL CHARGES) AND BECOME SHAREHOLDERS BY 7 A.M. (EST) ON TUESDAY 10 NOVEMBER 2015. THE DEADLINE FOR RECEIPT OF CANCELLATION INSTRUCTIONS BY THE DEPOSITARY IS 7 A.M. (EST) ON FRIDAY 30 OCTOBER 2015. HOWEVER, A GDR HOLDER MAY, IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE DEPOSIT AGREEMENT, DELIVER TO THE DEPOSITARY VOTING INSTRUCTIONS IN RESPECT OF SOME OR ALL OF THE SHARES REPRESENTED BY ITS GDRS BY 12:00 NOON (EST) ON FRIDAY 6 NOVEMBER 2015, WHEREUPON THE DEPOSITARY SHALL USE ITS REASONABLE ENDEAVOURS TO VOTE SUCH SHARES IN ACCORDANCE WITH SUCH VOTING INSTRUCTIONS AT THE EXTRAORDINARY GENERAL MEETING.

Dissenting Shareholders will have the right to seek payment of the fair value of their Shares if the Merger is completed, but only if they deliver to the Company, before the vote is taken at the Extraordinary General Meeting, a written objection to the Merger complying with the requirements of section 238 (2) and (3) of the Cayman Companies Law and subsequently comply with all procedures and requirements of section 238 of the Cayman Companies Law for the exercise of the right to dissent, which is attached at Part 13 of this document. The fair value of the Dissenting Shares as determined under that statute, could be more than, the same as, or less than the Merger Consideration which Dissenting Shareholders would receive pursuant to the Plan of Merger if such Dissenting Shareholders do not exercise the right to dissent. If the fair value determined under the Cayman Companies Law is less than the Merger Consideration, Dissenting Shareholders may be liable to pay a proportion of the Company's costs in defending any petition by such Dissenting Shareholders or the Company under the Cayman Companies Law.

Dissenters' Rights are available only to registered holders of Shares. Shareholders wishing to dissent must comply with the procedures and requirements for exercising Dissenters' Rights with respect to the Shares under section 238 of the Cayman Companies Law.

Neither the LSE nor the FCA nor any other securities regulatory agency or governmental or regulatory authority has approved or disapproved the Merger, passed upon the merits or fairness of the Merger or passed upon the adequacy or accuracy of the disclosure in this document or in the accompanying notice of the Extraordinary General Meeting.

Thank you for your cooperation and continued support.

Yours sincerely,

The Earl of Clanwilliam

Chairman of the Special Committee

PART 2 - NOTICE OF EXTRAORDINARY GENERAL MEETING

 

Notice of Extraordinary General Meeting of Shareholders of Eurasia Drilling Company Limited (the "Company") to be held on 13 November 2015

 

Dear Shareholder,

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the shareholders of the Company (the "Shareholders") will be held at 12 noon (GMT), on Friday 13 November 2015, at the offices of Willkie Farr & Gallagher (UK) LLP at CityPoint, 1 Ropemaker Street, London EC2Y 9AW (the "Extraordinary General Meeting").

Only registered holders of issued and outstanding shares of the Company each with a nominal or par value of US$0.01 (the "Shares") at 5 p.m. (EST) on Tuesday 10 November 2015 being the Voting Record Date are entitled to vote at the Extraordinary General Meeting or any adjournment thereof. At the Extraordinary General Meeting, you will be asked to consider and vote:

AS A SPECIAL RESOLUTION:

THAT, subject to the satisfaction or waiver of the conditions precedent pursuant to the Merger Implementation Agreement (as defined below): (a) the Company be authorised to merge with EDC Acquisition Company Limited ("EACL") so that the Company shall be the surviving company for the purposes of Part XVI of the Companies Law (2013 Revision) of the Cayman Islands, as amended (the "CaymanCompanies Law"); (b)the merger implementation agreement between the Company and EACL dated 12 October 2015 (the "Merger Implementation Agreement") and the plan of merger between the Company and EACL (the "Plan of Merger"), and the transactions contemplated by the Plan of Merger, including the merger of the Company and EACL pursuant to the Cayman Companies Law (the "Merger"), be authorised and approved by the Company; (c) the Company be authorised to enter into the Plan of Merger; and (d) the Plan of Merger be executed by any one member of the Special Committee on behalf of the Company and filed with the Cayman Islands Registrar of Companies.

After careful consideration by the special committee of non-executive independent directors of the board of directors of the Company composed solely of directors of the Company who are unaffiliated with EACL, any of the Participants or their affiliates (the "Special Committee"), the Special Committee, in accordance with the powers and authority delegated to it by the board of directors of the Company, has approved the Merger Implementation Agreement and the Plan of Merger and recommends that you vote FOR the proposal to authorise and approve the Merger Implementation Agreement and the Plan of Merger and the transactions contemplated by the Plan of Merger, including the Merger, subject to the satisfaction or waiver of the conditions precedent pursuant to the Merger Implementation Agreement.

The Merger cannot be implemented unless the Plan of Merger and transactions contemplated by the Plan of Merger including the Merger are approved by an affirmative vote of a majority of at least two-thirds of the votes of those Shareholders present and entitled to vote and voting in person or by proxy at the Extraordinary General Meeting. Even if you plan to attend the Extraordinary General Meeting in person, the Company requests that you submit your proxy card and the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of the power of attorney or other authority, in hard copy form by post, by courier or by hand to the registered office of the Company at Boundary Hall, Cricket Square, PO Box 1111, Grand Cayman KY1-1102, Cayman Islands for the attention of Paget-Brown Trust Company Ltd. or by email to the Company's registered office by emailing Richard Lewis (richard@paget-brown.com.ky) and Dominique Massias (dominique@pagetbrowntrust.ky) with a copy to S. Douglas Stinemetz (doug.stinemetz@eurasiadrilling.com) as promptly as possible and in any event prior to 5 p.m. (EST) on Tuesday 10 November 2015. Voting at the Extraordinary General Meeting will take place by a show of hands unless a poll is demanded in accordance with the Company's articles of association. It is expected that one or more of the Participants will demand a poll and that voting will take place by poll voting in accordance with the Company's articles of association.

Completing the proxy card in accordance with the instructions set forth on the proxy card will not deprive you of your right to attend the Extraordinary General Meeting and vote your Shares in person. Please note, however, that if your Shares are registered in the name of a broker, bank or other nominee and you wish to vote at the Extraordinary General Meeting in person, a letter of representation from your nominee will be required.

If you receive more than one proxy card because you own Shares that are registered in different names, please vote all of your Shares shown on each of your proxy cards in accordance with the instructions set forth on each such proxy card.

When proxy cards are properly dated, executed and returned to the Company's registered office by Shareholders, the Shares they represent will be voted at the Extraordinary General Meeting in accordance with the instructions of the Shareholders. If no specific instructions are given by such Shareholders, the Shares will be voted "FOR" proposals and in the proxy holder's discretion as to other matters that may properly come before the Extraordinary General Meeting.

For the Extraordinary General Meeting to proceed to business, a quorum of Shareholders holding a majority of the issued voting shares entitled to vote at such Extraordinary General Meeting, present in person or by proxy, is required.

The business to be carried out at the Extraordinary General Meeting shall be special business for the purposes of the Company's articles of association.

If you elect to dissent from the Merger, you will have the right to seek payment of the fair value of your Shares if the Merger is completed, but only if you deliver to the Company, before the vote is taken, a written objection to the Merger complying with the requirements of section 238 (2) and (3) of the Cayman Companies Law and subsequently comply with all procedures and requirements of section 238 of the Cayman Companies Law with respect to the exercise of the right to dissent, a copy of which set out in Part 13 of the accompanying document. The fair value of your Shares as determined under that statute could be more than, the same as, or less than the Merger Consideration you would receive pursuant to the Plan of Merger if you do not exercise the right to dissent with respect to your Shares. If the fair value determined under the Cayman Companies Law is less than the Merger Consideration, Dissenting Shareholders may be liable to pay a proportion of the Company's costs in defending any petition by such Dissenting Shareholders or the Company under the Cayman Companies Law.

HOLDERS OF GLOBAL DEPOSITARY RECEIPTS ("GDRS") WILL NOT HAVE THE RIGHT TO DISSENT FROM THE MERGER AND SEEK PAYMENT OF THE FAIR VALUE OF THE SHARES UNDERLYING THEIR GDRS. THE BANK OF NEW YORK MELLON (THE "DEPOSITARY") WILL NOT ATTEMPT TO EXERCISE THE RIGHT TO DISSENT WITH RESPECT TO ANY OF THE SHARES THAT IT HOLDS, EVEN IF A GDR HOLDER REQUESTS THE DEPOSITARY TO DO SO. GDR HOLDERS WISHING TO EXERCISE THE RIGHT TO DISSENT MUST SURRENDER THEIR GDRS TO THE DEPOSITARY, PAY THE DEPOSITARY'S FEES (CONSISTING OF UP TO US$0.03 PER GDR SURRENDERED, A CABLE FEE OF US$17.50 AND ANY APPLICABLE TAXES OR GOVERNMENTAL CHARGES), PROVIDE INSTRUCTIONS FOR THE REGISTRATION OF THE CORRESPONDING SHARES, AND CERTIFY THAT THEY HAVE NOT GIVEN, AND WILL NOT GIVE, VOTING INSTRUCTIONS AS TO THE GDRS BEFORE 12 NOON (EST) ON FRIDAY 6 NOVEMBER 2015, AND BECOME SHAREHOLDERS BY 7 A.M. (EST) ON TUESDAY 10 NOVEMBER 2015. THEREAFTER, SUCH FORMER GDR HOLDERS MUST COMPLY WITH THE PROCEDURES AND REQUIREMENTS FOR EXERCISING THE RIGHT TO DISSENT FROM THE MERGER UNDER SECTION 238 OF THE CAYMAN COMPANIES LAW. THE DEADLINE FOR RECEIPT OF CANCELLATION INSTRUCTIONS BY THE DEPOSITARY IS 7 A.M. (EST) ON FRIDAY 30 OCTOBER 2015.

Dissenters' Rights are available only to registered holders of Shares. Registered holders must comply with the procedures and requirements for exercising Dissenters' Rights with respect to the Shares under section 238 of the Cayman Companies Law.

PLEASE DO NOT SEND YOUR SHARE CERTIFICATES AT THIS TIME. IF THE MERGER IS COMPLETED, YOU WILL BE SENT INSTRUCTIONS REGARDING THE SURRENDER OF YOUR SHARE CERTIFICATES.

The Plan of Merger and the Merger are described in the accompanying document. A copy of the Plan of Merger is included in Part 12 of the accompanying document. The Company urges you to read the entire document carefully.

Notes:

  1. Where there are joint holders of any Share any one of such joint holders may vote, either in person or by proxy, in respect of such Share as if he were solely entitled thereto, but if more than one of such joint holders be present at the Extraordinary General Meeting the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

 

  1. The instrument of proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer or attorney authorised to sign the same.

 

  1. In the case of a proxy purporting to be signed on behalf of a corporation by an officer thereof it shall be assumed, unless the contrary appears, that such officer was duly authorised to sign such proxy on behalf of the corporation without further evidence of the facts.

 

  1. A proxy need not be a Shareholder.

 

  1. A proxy card that is not deposited in the manner permitted shall be invalid. A proxy card may be deemed to have been duly deposited in the absolute discretion of the Secretary of the Company.

 

  1. A vote given in accordance with the terms of a proxy card shall be valid notwithstanding the previous death or insanity of the principal, or revocation of the instrument of proxy or of the authority under which it was executed, provided that no intimation in writing of such death, insanity or revocation shall have been received by the Company at its registered office two hours at least before the commencement of the Extraordinary General Meeting or adjourned Extraordinary General Meeting, or the taking of a poll, at which the proxy is used.

 

  1. In this notice of extraordinary general meeting, "Business Day" means a day, other than a Saturday or Sunday or public holiday in London (England) or Grand Cayman (the Cayman Islands) or New York (United States) or Moscow (Russia), on which banks are open in London (England), Grand Cayman (the Cayman Islands), New York (United States) and Moscow (Russia) for general commercial business.

 

By Order of the Special Committee,

The Earl of Clanwilliam

Chairman

Dated: 12 October 2015

 

PART 3 - TIMETABLE

 

EVENT

DATE

Final date by which GDR Holders are required to provide voting instructions to the Depositary

12 noon (EST), Friday 6 November 2015

Voting Record Date

5 p.m. (EST), Tuesday 10 November 2015

Final date for receipt of Proxy Card

5 p.m. (EST), Tuesday 10 November 2015

Extraordinary General Meeting

12 noon (GMT), Friday 13 November 2015

Filing of Plan of Merger

Monday 16 November 2015

Merger Implementation Date

Monday 16 November 2015

 

 

 

PART 4 - SUMMARY OF THE MERGER TRANSACTION AND CERTAIN KEY PROVISIONS

 

This summary highlights selected information regarding the Merger. As it is a summary, it does not contain all of the information that may be relevant to your consideration of the Merger. You should carefully read this entire document for a more complete understanding of the matters being considered at the Extraordinary General Meeting.

Parties to the Merger

The Company

The Company is an exempted company formed under the laws of the Cayman Islands. Its registered office in the Cayman Islands is located at Boundary Hall, Cricket Square, PO Box 1111, Grand Cayman KY1-1102, Cayman Islands.

The Company is the largest provider of onshore drilling services in Russia, as measured by the number of meters drilled. The Company is also a leading provider of offshore drilling services in the Russian, Kazakh and Turkmen sectors of the Caspian Sea, and provides onshore drilling services in Iraq. For a description of the Company's history, development, business and organisational structure, please see the interim report of the Company for the six months ended 30 June 2015 and the consolidated audited accounts of the Company for the financial year ended 31 December 2014. The interim report of the Company for the six months ended 30 June 2015 and the consolidated audited accounts of the Company for the financial year ended 31 December 2014 are available at www.eurasiadrilling.com/investor-relations/financial-information (but do not form part of and are not incorporated by reference in this document).

Members of the Board of Directors

  • The Earl of Clanwilliam
  • Alexander Djaparidze
  • Murat Sampiev
  • Taleh Aleskerov
  • Alexander Bogachev
  • Alexander Shokhin
  • Igor Belikov

Participants

The Participants are:

  • Patrimony Asset Management Limited as trustee for The Patrimony D Trust
  • Cloudburst Orange Ltd.
  • Topaz Opportunities Ltd
  • Amber Universal Holdings Limited
  • Burned Sun Ltd.
  • Blue Sunset Ltd.
  • Winfield Business Trading Inc.
  • Alexander Bogachev
  • Alexander Vaigel
  • Eagle Eye Holdings, Inc.
  • Isa Shabanov
  • Ivan Kolomeytsev
  • John J. Lendrum III
  • Konstantin Merkuryev
  • Martin Hansen
  • Medjeed Zulpukarov
  • Murat Sampiev
  • Nail Gabdulin
  • W. Richard Anderson
  • Richard Matzke
  • Taleh Aleskerov

EACL

EACL is an exempted company formed under the laws of the Cayman Islands for the purpose of entering into the Merger and consummating the transactions contemplated by the Merger. The current sole shareholder of EACL is Burned Sun Ltd., one of the Participants.

The Merger

You are being asked to vote to approve the Merger Implementation Agreement, the Plan of Merger and the transactions contemplated by the Plan of Merger, including the Merger, pursuant to which, once the Plan of Merger is approved by the requisite vote of the Shareholders and the other conditions to the completion of the transactions contemplated by the Merger Implementation Agreement and the Plan of Merger are satisfied or waived (where applicable) in accordance with the terms of the Merger Implementation Agreement and the Plan of Merger, the Company will merge with EACL, with the Company continuing as the surviving company. If the Merger is implemented, the GDRs will cease to be listed on the Official List and admitted to trading on the LSE. Copies of the Plan of Merger and Merger Implementation Agreement are included in Part 12 of this document. You should read the Plan of Merger and the Merger Implementation Agreement in their entirety because they, and not this document, are the legal documents that govern the Merger.

Pursuant to the terms of the Merger Implementation Agreement, in addition to approval by Shareholders and the shareholder of EACL, the filing of the Plan of Merger with the Cayman Islands Registrar of Companies is subject to certain conditions, including: (i) no material adverse change having arisen in relation to the Company; (ii) sufficient financing being available to the Company in order to pay the Merger Consideration; (iii) none of  EACL, the Company, any subsidiary of the Company nor any of the Participants becoming subject to European Union or United States sanctions or sanctions extended by an Order of Her Majesty in Council to the Cayman Islands; and (iii) no order, judgment or communication having been made by any governmental authority which has the effect of making unlawful or of restraining or prohibiting the Merger or any of the related transactions and no verbal or written notice of an intention to make such an order or judgment having been received.

Unless the conditions precedent to the Merger have been satisfied or waived (where applicable) by 5:00 p.m. (EST)  on 31 January 2016 (or such other date as is agreed between the Company and EACL), the Merger will not proceed and the Merger Implementation Agreement will be terminated.

Financing

The Merger is conditional on the Merger Consideration being available to the Company.  It is expected that the Merger Consideration will be financed from existing cash reserves of the Company, loans from certain of the Participants and/or borrowing facilities available to the Company.  The Participants are confident that such financing will be available to the Company by the time needed in order to complete the Merger.

Voting Record Date

You are entitled to vote at the Extraordinary General Meeting if you have Shares registered in your name at
5 p.m. (EST) on the Voting Record Date. The Company expects that, on the Voting Record Date, 146,865,243 Shares will be issued and outstanding. If you are the registered holder of Shares at 5 p.m. (EST) on the Voting Record Date, you must lodge your proxy card and the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of the power of attorney or other authority, in hard copy form by post, by courier or by hand to the registered office of the Company at Boundary Hall, Cricket Square, PO Box 1111, Grand Cayman KY1-1102, Cayman Islands for the attention of Paget-Brown Trust Company Ltd. or by email to the Company's registered office by emailing Richard Lewis (richard@paget-brown.com.ky) and Dominique Massias (dominique@pagetbrowntrust.ky) with a copy to S. Douglas Stinemetz (doug.stinemetz@eurasiadrilling.com) as promptly as possible and in any event prior to 5 p.m. (EST) on Tuesday 10 November 2015.  On the demand of a poll in accordance with the Company's articles of association, each outstanding Share on the Voting Record Date entitles the holder to one vote on the resolution submitted to the Shareholders for approval at the Extraordinary General Meeting and any adjournment thereof. See "Voting Information" below.

For the avoidance of doubt, a GDR Holder will not have a right to attend or vote at the Extraordinary General Meeting by virtue of its ownership of GDRs. However, a GDR Holder may, in accordance with the terms and conditions of the Deposit Agreement, deliver to the Bank of New York Mellon (the "Depositary") voting instructions in respect of some or all of the Shares represented by its GDRs by 12 noon (EST) on Friday 6 November 2015, whereupon the Depositary shall use its reasonable endeavours to vote such Shares in accordance with such voting instructions at the Extraordinary General Meeting.

Shareholder Vote Required to Approve the Plan of Merger

Approval of the Plan of Merger requires the affirmative vote of a majority of at least two-thirds of those Shareholders entitled to vote and voting (in person or by proxy) at the Extraordinary General Meeting.

It is expected that the holders of the Shares currently owned directly or indirectly by the Participants and which comprise approximately 71% of the issued Shares will vote in favour of the resolution to be voted on at the Extraordinary General Meeting.

If your Shares are held in the name of a broker, bank or other nominee, your broker, bank or other nominee will not vote your Shares in the absence of specific instructions from you.

Voting Information

Before voting your Shares, the Company encourages you to read this document in its entirety, including the annexures, and carefully consider how the Merger will affect you. To ensure that your Shares can be voted at the Extraordinary General Meeting, please complete the accompanying proxy card and submit it in hard copy form together with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of the power of attorney or other authority, by post, by courier or by hand to the registered office of the Company at Boundary Hall, Cricket Square, PO Box 1111, Grand Cayman KY1-1102, Cayman Islands for the attention of Paget-Brown Trust Company Ltd. or by email to the Company's registered office by emailing Richard Lewis (richard@paget-brown.com.ky) and Dominique Massias (dominique@pagetbrowntrust.ky) with a copy to S. Douglas Stinemetz (doug.stinemetz@eurasiadrilling.com) as promptly as possible and in any event prior to 5 p.m. (EST) on Tuesday 10 November 2015. If a broker holds your Shares your broker should provide you with instructions on how to vote your Shares.

When proxies are properly dated, executed and returned to the Company's registered office by Shareholders, the Shares they represent will be voted at the Extraordinary General Meeting in accordance with the instructions of the Shareholders. If no specific instructions are given by such Shareholders, the Shares will be voted "FOR" proposals and in the proxy holder's discretion as to other matters that may properly come before the Extraordinary General Meeting.

Proxy Revocation

Registered holders of Shares may revoke their proxies in one of three ways:

(i)     a registered Shareholder can revoke a proxy by written notice of revocation given to the Secretary of the Company before the Extraordinary General Meeting commences. Any written notice revoking a proxy should also be sent to the Company's registered office by emailing Richard Lewis (richard@paget-brown.com.ky) and Dominique Massias (dominique@pagetbrowntrust.ky) with a copy to S. Douglas Stinemetz (doug.stinemetz@eurasiadrilling.com);

 

(ii)   a registered Shareholder can complete, date and submit a new proxy card bearing a later date than the proxy card sought to be revoked to the Company so as to be received in hard copy form by post, by courier or by hand to the registered office of the Company at Boundary Hall, Cricket Square, PO Box 1111, Grand Cayman KY1-1102, Cayman Islands for the attention of Paget-Brown Trust Company Ltd. or by email to the Company's registered office by emailing Richard Lewis (richard@paget-brown.com.ky) and Dominique Massias (dominique@pagetbrowntrust.ky) with a copy to S. Douglas Stinemetz (doug.stinemetz@eurasiadrilling.com) as promptly as possible and in any event prior to 5 p.m. (EST) on Tuesday 10 November 2015; and

 

(iii) delivery of an instrument of proxy shall not preclude a registered Shareholder from attending and voting in person at the Extraordinary General Meeting and in such event, the proxy shall be deemed to be revoked.

If a Shareholder holds Shares through a broker and has instructed the broker to vote the Shareholder's Shares, the Shareholder must follow directions received from the broker to change those instructions.

Shareholders' Right to Dissent

Dissenting Shareholders have the right to seek payment of the fair value of their Shares if the Merger is completed, but only if they deliver to the Company, before the vote is taken at the Extraordinary General Meeting, a written objection to the Merger and subsequently comply with all procedures and requirements of section 238 of the Cayman Companies Law regarding the exercise of the right to dissent. The fair value of your Shares as determined under that statute could be more than, the same as, or less than the Merger Consideration which Qualifying Shareholders would receive pursuant to the Plan of Merger if they do not exercise right to dissent with respect to their Shares. If the fair value determined under the Cayman Companies Law is less than the Merger Consideration, Dissenting Shareholders may be liable to pay a proportion of the Company's costs in defending any petition by such Dissenting Shareholders or the Company under the Cayman Companies Law.

GDR HOLDERS WILL NOT HAVE THE RIGHT TO DISSENT FROM THE MERGER AND SEEK PAYMENT OF THE FAIR VALUE OF THE SHARES UNDERLYING THEIR GDRS. THE DEPOSITARY WILL NOT ATTEMPT TO EXERCISE THE RIGHT TO DISSENT WITH RESPECT TO ANY OF THE SHARES THAT IT HOLDS, EVEN IF A GDR HOLDER REQUESTS THE DEPOSITARY TO DO SO. GDR HOLDERS WISHING TO EXERCISE THE RIGHT TO DISSENT MUST SURRENDER THEIR GDRS TO THE DEPOSITARY, PAY THE DEPOSITARY'S FEES (CONSISTING OF UP TO US$0.03 PER GDR SURRENDERED, A CABLE FEE OF US$17.50 AND ANY APPLICABLE TAXES OR GOVERNMENTAL CHARGES), PROVIDE INSTRUCTIONS FOR THE REGISTRATION OF THE CORRESPONDING SHARES, AND CERTIFY THAT THEY HAVE NOT GIVEN, AND WILL NOT GIVE, VOTING INSTRUCTIONS AS TO THE GDRS BY 12 NOON (EST) ON FRIDAY 6 NOVEMBER 2015, AND BECOME SHAREHOLDERS BY 7 A.M. (EST) ON TUESDAY 10 NOVEMBER 2015. THEREAFTER, SUCH FORMER GDR HOLDERS MUST COMPLY WITH THE PROCEDURES AND REQUIREMENTS FOR EXERCISING THE RIGHT TO DISSENT FROM THE MERGER UNDER SECTION 238 OF THE CAYMAN COMPANIES LAW. THE DEADLINE FOR RECEIPT OF CANCELLATION INSTRUCTIONS BY THE DEPOSITARY IS 7 A.M. (EST) ON FRIDAY 30 OCTOBER 2015.

Dissenters' Rights are available only to registered holders of Shares. Registered holders must comply with the procedures and requirements for exercising Dissenters' Rights with respect to the Shares under section 238 of the Cayman Companies Law.

The Company encourages you to read the section of this document entitled "Dissenters' Rights" carefully and to consult your Cayman Islands legal counsel if you desire to exercise your right to dissent.

Purposes and Effects of the Merger

The Participants believe that operating the Company as a private enterprise provides the Company with the flexibility and latitude necessary to make investment and management decisions based on long-term strategic goals, without the concern that a public company must have for the market's shorter-term expectations.

The purpose of the Merger is to enable the Participants to acquire control of the Company in a transaction in which the Qualifying Shareholders will receive US$11.75 per Share held at the Merger Consideration Record Date in exchange for their Shares being cancelled, so that the Participants (upon completion of the Merger) will hold 100% of the Company and bear the rewards and risks of the ownership of the Company, including any future earnings and growth of the Company as a result of improvements to the Company's operations or acquisitions of other businesses. Please see "Special Factors-Reasons for the Merger and Recommendation of the Company's Board of Directors" below for additional information.

If the resolution to approve the Merger is passed at the Extraordinary General Meeting by the requisite percentage of the Shareholders and the Merger is consummated:

  • each of the Shares, other than the Excluded Shares, will be cancelled in exchange for payment of the Merger Consideration or, in the case of Dissenting Shares, the fair value of the Shares as determined in accordance with the Cayman Companies Law;

 

  • Dissenting Shares shall cease to confer upon any Dissenting Shareholder any of the rights of a member except the right to payment of the fair value of such Dissenting Shares held by them, the right to participate in proceedings until the determination of fair value is reached and the right to institute proceedings to obtain relief on the ground that the Merger is void and unlawful subject to and in accordance with the provisions of section 238 of the Cayman Companies Law, unless any holders of Dissenting Shares fail to perfect or effectively withdraw or lose their dissenter rights, in which event they shall receive the Merger Consideration;

 

  • each share of EACL issued and outstanding as at the Merger Implementation Date shall each be converted into and exchanged for one Share;

 

  • each Share held by EACL and by EDC Incentive Plan Limited in issue and outstanding as at the Merger Consideration Record shall be cancelled by operation of law at the Merger Implementation Date; and

 

  • each Share held by the Participants in issue and outstanding as at the Merger Consideration Record Date shall remain issued and outstanding as at and following the Merger Implementation Date.

The GDRs are currently listed on the Official List and admitted to trading on the LSE under the symbol "EDCL". It is expected that, promptly following the completion of the Merger, the GDRs will cease to be listed on the Official List and admitted to trading on the LSE.

Upon completion of the Merger, the Merger Consideration payable to each Qualifying Shareholder who is a GDR Holder will be transferred to the Depositary. The Depositary, upon receipt of the Merger Consideration, will call for the surrender of all outstanding GDRs in exchange for the Merger Consideration. As soon as reasonably practicable following the receipt by the Depositary of all relevant cancellation fees plus any applicable taxes or other governmental charges in relation to the GDRs, the surrender of all outstanding GDRs and the transfer of the Merger Consideration to each Qualifying Shareholder, the Depositary will effect the termination of the GDR programme.

Plans for the Company after the Merger

EACL and the Participants have advised the Company that, except for the transactions contemplated by the Plan of Merger, EACL and the Participants do not have any current plans, proposals or negotiations that relate to or would result in any of the following:

  • any extraordinary corporate transaction, such as a merger, reorganisation or liquidation, involving the Company or any of its subsidiaries;
  • the sale or transfer of a material amount of the assets of the Company or any of its subsidiaries; or
  • any other material changes in the Company's business.

Recommendation of the Special Committee

The Special Committee considers the terms of the Merger to be fair and reasonable so far as the Qualifying Shareholders are concerned. The Special Committee, in deliberating whether to recommend the Merger, has taken financial and other advice which it deems appropriate, including the Fairness Opinion. In providing the Fairness Opinion to the Special Committee, Renaissance Capital has placed reliance on the Special Committee's commercial assessment of the Merger and on information provided by or on behalf of the Company without verification of its factual accuracy.  Renaissance Capital is acting exclusively for the Special Committee and no one else in connection with the provision of the Fairness Opinion and will not be responsible to any person other than the Company for providing the Fairness Opinion.

The Special Committee unanimously recommends that you vote FOR the proposal to approve the Merger Implementation Agreement, the Plan of Merger and the transactions contemplated by the Plan of Merger, including the Merger, subject to the satisfaction or waiver of the Conditions Precedent (as defined below).

The principal reasons for the Special Committee recommending the Merger are set out in Part 5 of this document.

Share Ownership and Voting Commitments

As of the date of this document, the Participants beneficially own 71% of the Shares. The Participants have undertaken to vote in favour of the resolution to be voted on at the Extraordinary General Meeting.

Termination of the Merger Implementation Agreement

The Merger Implementation Agreement may be terminated prior to the filing of the Plan of Merger with the Cayman Islands Registrar of Companies in the circumstances set out in the Merger Implementation Agreement, including:

  • if agreed to by the Company and EACL;
  • by EACL, if sufficient financing will not be available to the Company in order to pay the Merger Consideration;
  • by the Company or EACL, if the other is in material breach of the Merger Implementation Agreement and that breach, if capable of remedy, is not remedied in a timely manner;
  • by the Company or EACL, if the resolution in the notice of the Extraordinary General Meeting is not passed at the Extraordinary General Meeting by the requisite majority;
  • by the Company or EACL, if the shareholder resolution of EACL approving the Merger is revoked or ceases to be valid and effective;
  • by the Company or EACL, if the Merger has not become effective by 31 January 2016 (or such other date as is agreed between the Company and EACL);
  • by the Company or EACL, if the Merger is permanently restrained or prohibited by a court or regulatory authority;
  • by EACL, if the Company becomes insolvent;
  • by EACL, if a material adverse change arises or occurs; or
  • by the Company or EACL, if the Merger would, if implemented, give rise to a breach of sanctions by EACL, any Participant, the Company or any subsidiary of the Company.

Material Income Tax Consequences

The receipt of cash pursuant to the Merger or through the exercise of Dissenters' Rights may be a taxable transaction for the Shareholders for income tax purposes and may also be a taxable transaction under tax laws applicable to some of the Shareholders. The tax consequences of the Merger or the exercise of Dissenters' Rights to you will depend upon your personal circumstances. You should consult your tax advisers for a full understanding of all tax consequences of the Merger to you.

The Cayman Islands currently have no form of income, corporate or capital gains tax and no estate duty, inheritance tax or gift tax. No taxes, fees or charges will be payable (either by direct assessment or withholding) to the government or other taxing authority in the Cayman Islands under the laws of the Cayman Islands in respect of the Merger or the receipt of cash for Shares under the terms of the Merger. This is subject to the qualification that: (a) Cayman Islands stamp duty of a nominal amount may be payable if any transaction documents are executed in, brought into or produced before a court in the Cayman Islands; and (b) registration fees will be payable by the Company to the Cayman Islands Registrar of Companies to register the Plan of Merger.

Conditions to the Merger

There are a number of customary conditions precedent set out in the Merger Implementation Agreement (the "Conditions Precedent") which need to be satisfied or waived before the Merger will be implemented, including the vote at the Extraordinary General Meeting upon the proposal to approve the Plan of Merger and the Plan of Merger being filed with the Cayman Islands Registrar of Companies. The key Conditions Precedent are as follows:

  • the approval of the Plan of Merger by the Shareholders at the Extraordinary General Meeting and the shareholder of EACL;
  • no material adverse change having arisen in relation to the Company;
  • sufficient financing being available to the Company in order to pay the Merger Consideration;
  • none of  EACL, the Company, any subsidiary of the Company nor any of the Participants becoming subject to European Union or United States sanctions or sanctions extended by an Order of Her Majesty in Council to the Cayman Islands; and
  • no order or judgment having been made by any governmental authority which renders unlawful, restrains or prohibits the Merger or any of the related transactions and no written notice of an intention to make such an order or judgment having been received.

If any of the Conditions Precedent to the Merger are not satisfied or waived, or the Merger Implementation Agreement were terminated, the Plan of Merger would not be signed by the parties nor filed with the Cayman Islands Registrar of Companies and the Merger would not be completed.

Fees and Expenses

All costs and expenses incurred in connection with the Plan of Merger and the transactions contemplated thereby will be paid by the party incurring such costs.

Advisers

Willkie Farr & Gallagher (UK) LLP and Maples and Calder are acting as the Special Committee's legal advisers in the United Kingdom and the Cayman Islands respectively in relation to the Merger.

Skadden, Arps, Slate, Meagher & Flom (UK) LLP and Walkers are acting as EACL's legal advisers in the United Kingdom and the Cayman Islands respectively in relation to the Merger.

PART 5 - SPECIAL FACTORS

 

Reasons for the Merger and Recommendation of the Special Committee

The Special Committee believes that it is fair and reasonable as far as the Qualifying Shareholders are concerned for the Company to undertake the Merger and terminate the admission to trading of the GDRs on the LSE at this time including, in no order of importance, for the following reasons:

  • the Schlumberger Transaction failed to complete as a result of regulatory obstacles in Russia. These obstacles are expected to limit the type of transaction available to the Company in the foreseeable future;
  • the Company is experiencing continued difficult macroeconomic conditions, geopolitical risks and high volatility, some of which have worsened since the Schlumberger Transaction was announced, such as the recent acceleration in the depreciation of the ruble; and
  • the Company finds itself in an extremely challenging short to mid-term business environment, because of cuts in upstream capital expenditure by the Russian oil majors on the back of oil price pressure and new oil tax regime, weak pricing for drilling and poor forward visibility for offshore activity.

The Merger creates liquidity and certainty of value for the Qualifying Shareholders at a premium that fairly recognises the future potential of the business.

The Special Committee evaluated the Merger, including the terms and conditions of the Merger Implementation Agreement and the Plan of Merger. In the course of reaching its determinations, the Special Committee considered the following substantive factors and potential benefits of the Merger, each of which the Special Committee believes supported its respective decisions, but which are not listed in any relative order of importance:

  • the Special Committee's knowledge of the business, financial condition, results of operations, prospects and competitive position of the Company and its belief that the Merger is more favourable to the Qualifying Shareholders than any other alternative reasonably available to the Company and the Qualifying Shareholders, including alternative mergers and acquisitions transactions due to regulatory obstacles to any such transaction (as evidenced by the Schlumberger Transaction) and the presence of a substantial percentage of shareholders who support the Merger;
  • the availability of financing (as described in Part 4 under the heading "Financing") and the ability of the Company to consummate the Merger assuming the satisfaction or waiver of the conditions precedent in the Merger Implementation Agreement;
  • the belief that the terms of the Merger Implementation Agreement and Plan of Merger, including the parties' representations, warranties and covenants, and the conditions to their respective obligations (including the Conditions Precedent), are reasonable;
  • the all-cash Merger Consideration, which will allow Qualifying Shareholders to realise immediate liquidity for their investment and provide them with certainty of the value of their Shares;
  • the Merger Consideration of US$11.75 per Share to be paid in cash to Qualifying Shareholders represents:
    • an increase of 17.5% over the price per share originally offered by EACL on 8 October 2015;
    • a 7.3% premium to the closing price of a GDR on 7 October 2015 (being the latest trading date prior to the announcement by the Company of the receipt of an offer from EACL); and
    • a 19.9% premium to the volume weighted average price of a GDR for the period from 1 October 2015 (being the first trading day after the Company's investor call on 30 September 2015 following the termination of the Schlumberger Transaction) to 7 October 2015 (being the latest trading date prior to the announcement by the Company of the receipt of an offer from EACL);
    • in light of the circumstances of and risks facing the Company, the possibility that it could take a considerable period of time before the trading price of the GDRs would reach and sustain at least that of the Merger Consideration as adjusted for the time value of money; and
    • the likelihood that the Merger would be completed based on the anticipated timing and the scope of the conditions to completion, including the Special Committee's expectation that no significant regulatory approvals will be required.

In addition, the Special Committee believes that sufficient procedural safeguards were and are present to ensure that the Merger is procedurally fair to the Qualifying Shareholders and to permit the Special Committee to represent effectively the interests of such Qualifying Shareholders. These procedural safeguards, which are not listed in any relative order of importance, are discussed below:

  • the recognition by the Special Committee that it had no obligation to recommend the approval of the Merger proposal or any other transaction;
  • the availability of the right to dissent to the Qualifying Shareholders who comply with all of the required procedures under the Cayman Companies Law for exercising the right to dissent, which allows such Shareholders to seek payment of the fair value of their Shares either as agreed between the Shareholder and the Company or, if such agreement were not reached, as determined by the Court and to institute proceedings to obtain relief on the ground that the Merger is void and unlawful subject to and in accordance with the provisions of section 238 of the Cayman Companies Law; and
  • the sufficient time period between the announcement of the Merger and the Voting Record Date to allow GDR Holders to, if desirable, surrender their GDRs to the Depositary, pay the Depositary's fees required for such surrender and provide instructions for the registration of the corresponding Shares.

The Special Committee also considered a variety of potentially negative factors discussed below concerning the Merger Implementation Agreement, the Plan of Merger and the Merger, which are not listed in any relative order of importance:

  • the fact that the financing of the Merger is not unconditional, and in particular that the Merger is conditional on sufficient financing being available to the Company in order to pay the Merger Consideration;
  • the fact that the Merger is not conditional on the Special Committee maintaining their recommendation that the Shareholders vote in favour of adopting the Plan of Merger and approving the transactions contemplated by the Plan of Merger, including the Merger;
  • the fact that the Qualifying Shareholders will have no ongoing equity participation in the Company following the Merger, and that they will cease to participate in future earnings or growth, if any, or to benefit from increases, if any, in the value of the Shares, and will not participate in any potential future sale of the Company to a third party or any potential recapitalisation of the Company which could include a dividend to Shareholders;
  • the risks and costs to the Company if the Merger is not completed, including the diversion of management and employee attention, potential employee attrition and the potential disruptive effect on business and customer relationships;
  • the possibility that the Merger might not be completed and the potential negative impact of a public announcement of the Merger on the sales and operating results of the Company and the ability of the Company to attract and retain key management, marketing and technical personnel in the event the Merger is not completed; and
  • the potential taxability of an all cash transaction for the Qualifying Shareholders.

The Special Committee also considered the current prospects of the Company and any alternatives to the Merger as a means of developing the Company. In respect of this, the following substantive factors were discussed which are not listed in any relative order of importance:

  • the Company pursued the Schlumberger Transaction, which failed to complete as a result of regulatory obstacles in Russia. These obstacles are expected to limit the type of transaction available to the Company in the foreseeable future;
  • the fluctuation of the global crude oil price;
  • the fluctuation of the value of the Russian ruble, in particular against the US dollar;
  • the imposition of US-EU sanctions on certain Russian individuals and businesses; and
  • the fluctuation of the value of and yield on Russian sovereign bonds and their ratings.

The foregoing discussion of information and factors considered by the Special Committee is not intended to be exhaustive, but includes a number of the factors considered by the Special Committee. In view of the wide variety of factors considered by the Special Committee, the Special Committee did not find practicable to quantify or otherwise assign relative weight to the foregoing factors in reaching their conclusions. In addition, individual members of the Special Committee may have given different weight to different factors and may have viewed some factors more positively or negatively than others. The Special Committee, in accordance with the powers and authority delegated to it by the board of directors of the Company, approved the Merger Implementation Agreement, the Plan of Merger and transactions contemplated by the Plan of Merger, including the Merger, based upon the totality of the information presented to and considered by it.

In the course of reaching their conclusion regarding the fairness of the Merger to the Qualifying Shareholders and their decision to recommend the adoption of the Plan of Merger and approval of the transactions contemplated by the Plan of Merger, including the Merger, the Special Committee considers the Merger Consideration to be fair and reasonable so far as the Qualifying Shareholders are concerned.

In reaching its determination that the Plan of Merger and the transactions contemplated thereby, including the Merger, are in the interests of the Company and the Qualifying Shareholders and its decision to approve the Plan of Merger and recommend the adoption of the Plan of Merger by the Shareholders, the Special Committee considered the factors as described above under this section and believes that the Plan of Merger and the transactions contemplated thereby are substantively and procedurally fair to the Qualifying Shareholders. The Special Committee, in deliberating whether to recommend the Merger, has taken financial and other advice which it deems appropriate, including the Fairness Opinion. In providing the Fairness Opinion to the Special Committee, Renaissance Capital has placed reliance on the Special Committee's commercial assessment of the Merger and on information provided by or on behalf of the Company without verification of its factual accuracy.  Renaissance Capital is acting exclusively for the Special Committee and no one else in connection with the provision of the Fairness Opinion and will not be responsible to any person other than the Company for providing the Fairness Opinion.

Purposes and Reasons of EACL for the Merger

The Participants have proposed taking the Company private because they believe that, while the market fundamentals in Russia and the Caspian region look robust in the long term, the Company requires radical adjustments in the short to medium term, and that this is the best option to facilitate the significant cost rationalisation and streamlining of operations that are needed to react to the current market conditions, based on long term strategic goals and without the concerns that a public company must have for the market's shorter-term expectations.

 

 

Effect of the Proposed Merger on the Company

Private Ownership

The GDRs are currently listed on the Official List and admitted to trading on the LSE under the symbol "EDCL". Promptly following the completion of the Merger, the GDRs will cease to be listed on the Official List and admitted to trading on the LSE and price quotations with respect to sales of the GDRs in the public market will no longer be available.

Upon completion of the Merger, each issued and outstanding Share held by the Qualifying Shareholders, other than the Dissenting Shares, will be cancelled in exchange for the right to receive US$11.75 per Share in cash, without interest and net of any applicable withholding taxes. The Dissenting Shares will be cancelled in exchange for the right to receive the fair values of those Shares. As a result, current Shareholders, other than EACL and the Participants, will no longer have any equity interest in, or be Shareholders of, the Company upon completion of the Merger. As a result, the Shareholders, other than EACL and the Participants, will not have the opportunity to participate in the earnings and growth of the Company and they will not have the right to vote on corporate matters.

Directors of the Surviving Company

Members of the Special Committee will remain as directors of the Company at least until the Merger is implemented.

Alternatives to the Merger

The Company and EACL did not consider utilising any other form of transaction such as a scheme of arrangement or tender offer because they believed that the Merger was the most direct and effective way to enable the Participants to acquire control of the Company so that the Participants will together (following the completion of the Merger) hold 100% of the Shares.

Effects on the Company if the Merger is not Completed

If the Plan of Merger is not approved by the Shareholders or if the Merger is not completed for any other reason, Qualifying Shareholders will not receive any payment for their Shares in connection with the Merger. The GDRs will continue to be listed on the Official List and admitted to trading on the LSE, provided that the Company continues to meet the FCA's and LSE's requirements in respect of the GDRs. Therefore, the Shareholders will continue to be subject to similar risks and opportunities as they currently are with respect to their ownership of the Shares. Accordingly, if the Merger were not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your Shares, including the risk that the market price of the Shares may decline to the extent that the current market price reflects a market assumption that the Merger will be completed.

If the Merger were not completed, from time to time, the Company's board of directors would evaluate and review, among other things, the business, operations, dividend policy and capitalisation of the Company and make such changes as were deemed appropriate and continue to seek to identify strategic alternatives to enhance shareholder value. If the Plan of Merger were not approved by the Shareholders or if the Merger were not completed for any other reason, there can be no assurance that any other transaction acceptable to the Company will be offered, or that the business, prospects or results of operations of the Company would not be adversely impacted.

Interests of Participants in the Merger

In considering the recommendation of the Special Committee with respect to the Merger, you should be aware that the Participants have interests in the transaction that are different from, and/or in addition to, the interests of the Shareholders generally. The Special Committee was aware of such interests and considered them, among other matters, in reaching their decisions to adopt the Plan of Merger and approve the transactions contemplated by the Plan of Merger, including the Merger, and recommends that the Shareholders vote in favour of adopting the Plan of Merger and approving the transactions contemplated by the Plan of Merger, including the Merger.

Fees and Expenses

Fees and expenses (such as, legal, financial and miscellaneous, including accounting, filing fees, printer, proxy solicitation and mailing costs, directors' and officers' insurance costs, and the cost of terminating the Deposit Agreement) have been incurred or will be incurred by the Company in connection with the Merger.

These fees and expenses will not reduce the Merger Consideration to be received by the Qualifying Shareholders. If the Merger is completed, the party incurring any costs and expenses in connection with the Merger and the Plan of Merger shall pay such costs and expenses.

Litigation related to the Merger

The Company is not aware of any lawsuit that challenges the Merger, the Plan of Merger or any of the transactions contemplated hereby.

The Right to Dissent

Please see "Part 8 - Dissenters' Rights - Requirements for Exercising Dissenters' Rights".

Material Income Tax Consequences

The receipt of cash pursuant to the Merger or through the exercise of Dissenters' Rights may be a taxable transaction for income tax purposes for some of the Qualifying Shareholders and may also be a taxable transaction for some of the Qualifying Shareholders under other tax laws. The tax consequences of the Merger or the exercise of Dissenters' Rights to you will depend upon your personal circumstances. You should consult your tax advisers for a full understanding of tax consequences of the Merger to you.

The Cayman Islands currently have no form of income, corporate or capital gains tax and no estate duty, inheritance tax or gift tax. No taxes, fees or charges will be payable (either by direct assessment or withholding) to the government or other taxing authority in the Cayman Islands under the laws of the Cayman Islands in respect of the Merger or the receipt of cash for your Shares under the terms of the Plan of Merger. This is subject to the qualification that: (a) Cayman Islands stamp duty of a nominal amount may be payable if any transaction documents are executed in, brought into or produced before a court in the Cayman Islands; and (b) registration fees will be payable by the Company to the Cayman Islands Registrar of Companies to register the Plan of Merger.

 

PART 6 - THE EXTRAORDINARY GENERAL MEETING

 

Time and place

Unless the Merger Implementation Agreement is terminated and subject to satisfaction or waiver of the Conditions Precedent, the Company shall take all actions necessary to convene an Extraordinary General Meeting of the Shareholders to be held on Friday 13 November 2015 at 12 noon (GMT). The Extraordinary General Meeting will be held at the offices of Willkie Farr & Gallagher (UK) LLP at CityPoint, 1 Ropemaker Street, London EC2Y 9AW.

Quorum

For the Extraordinary General Meeting to proceed to business, a quorum of Shareholders holding a majority of the issued voting shares entitled to vote at such Extraordinary General Meeting, present in person or by proxy, is required.

Proposals to be Considered

At the Extraordinary General Meeting the Shareholders will be asked to consider and vote upon a proposal to approve the Merger Implementation Agreement, Plan of Merger and the transactions contemplated by the Plan of Merger, including the Merger, subject to the satisfaction or waiver of the Conditions Precedent.

The business to be carried out at the Extraordinary General Meeting shall be special business for the purposes of the Company's articles of association.

Proxy and Voting

The Merger cannot be implemented unless the Plan of Merger and transactions contemplated by the Plan of Merger including the Merger are approved by an affirmative vote of a majority of at least two-thirds of the votes of those Shareholders present and entitled to vote and voting in person or by proxy at the Extraordinary General Meeting. The Company requests that, even if a Shareholder is planning to attend the Extraordinary General Meeting in person, each Shareholder submits its proxy card and the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of the power of attorney or other authority, in hard copy form by post, by courier or by hand to the registered office of the Company at Boundary Hall, Cricket Square, PO Box 1111, Grand Cayman KY1-1102, Cayman Islands for the attention of Paget-Brown Trust Company Ltd. or by email to the Company's registered office by emailing Richard Lewis (richard@paget-brown.com.ky) and Dominique Massias (dominique@pagetbrowntrust.ky) with a copy to S. Douglas Stinemetz (doug.stinemetz@eurasiadrilling.com) as promptly as possible and in any event prior to 5 p.m. (EST) on Tuesday 10 November 2015.

Voting at the Extraordinary General Meeting will take place by a show of hands unless a poll is demanded in accordance with the Company's articles of association. It is expected that one or more of the Participants will demand a poll and that voting will take place by poll voting in accordance with the Company's articles of association.

If a Shareholder completes the proxy card in accordance with the instructions set forth on the proxy card, this will not deprive such Shareholder of its right to attend the Extraordinary General Meeting and vote its Shares in person. Please note, however, that if its Shares are registered in the name of a broker, bank or other nominee and it wishes to vote at the Extraordinary General Meeting in person, a letter of representation from such nominee will be required.

If a Shareholder receives more than one proxy card because it owns Shares that are registered in different names, the Shareholder is requested to vote all of its Shares shown on each of its proxy cards in accordance with the instructions set forth on each such proxy card.

When proxies are properly dated, executed and returned to the Company's registered office by Shareholders, the Shares they represent will be voted at the Extraordinary General Meeting in accordance with the instructions of the Shareholders. If no specific instructions are given by such Shareholders, the Shares will be voted "FOR" proposals and in the proxy holder's discretion as to other matters that may properly come before the Extraordinary General Meeting.

HOLDERS OF GDRS ALONE WILL NOT HAVE A RIGHT TO ATTEND OR VOTE AT THE EXTRAORDINARY GENERAL MEETING OR DISSENT UNLESS THEY SURRENDER THEIR GDRS, PAY THE DEPOSITARY FEES (CONSISTING OF UP TO US$0.03 PER GDR SURRENDERED, A CABLE FEE OF US$17.50 AND ANY APPLICABLE TAXES OR GOVERNMENTAL CHARGES) AND BECOME SHAREHOLDERS BY 7 A.M. (EST) ON TUESDAY 10 NOVEMBER 2015. THE DEADLINE FOR RECEIPT OF CANCELLATION INSTRUCTIONS BY THE DEPOSITARY IS 7 A.M. (EST) ON FRIDAY 30 OCTOBER 2015. HOWEVER, A GDR HOLDER MAY, IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE DEPOSIT AGREEMENT, DELIVER TO THE DEPOSITARY VOTING INSTRUCTIONS IN RESPECT OF SOME OR ALL OF THE SHARES REPRESENTED BY ITS GDRS BY 12 NOON (EST) ON FRIDAY 6 NOVEMBER 2015, WHEREUPON THE DEPOSITARY SHALL USE ITS REASONABLE ENDEAVOURS TO VOTE SUCH SHARES IN ACCORDANCE WITH SUCH VOTING INSTRUCTIONS AT THE EXTRAORDINARY GENERAL MEETING.

Proxy Revocation

Registered holders of Shares may revoke their proxies in one of three ways:

(i)     a registered Shareholder can revoke a proxy by written notice of revocation given to the Secretary of the Company before the Extraordinary General Meeting commences. Any written notice revoking a proxy should also be sent to the Company's registered office by emailing Richard Lewis (richard@paget-brown.com.ky) and Dominique Massias (dominique@pagetbrowntrust.ky) with a copy to S. Douglas Stinemetz (doug.stinemetz@eurasiadrilling.com);

 

(ii)   a registered Shareholder can complete, date and submit a new proxy card bearing a later date than the proxy card sought to be revoked to the Company so as to be received in hard copy form by post, by courier or by hand to the registered office of the Company at Boundary Hall, Cricket Square, PO Box 1111, Grand Cayman KY1-1102, Cayman Islands for the attention of Paget-Brown Trust Company Ltd. or by email to the Company's registered office by emailing Richard Lewis (richard@paget-brown.com.ky) and Dominique Massias (dominique@pagetbrowntrust.ky) with a copy to S. Douglas Stinemetz (doug.stinemetz@eurasiadrilling.com) as promptly as possible and in any event prior to 5 p.m. (EST) on Tuesday 10 November 2015; and

 

(iii) delivery of a proxy card shall not preclude a registered Shareholder from attending and voting in person at the Extraordinary General Meeting and in such event, the proxy shall be deemed to be revoked.

If a Shareholder holds Shares through a broker and has instructed the broker to vote the Shareholder's Shares, the Shareholder must follow directions received from the broker to change those instructions.

 

PART 7 - PROVISIONS FOR SHAREHOLDERS AND AFFILIATES

 

No provision has been made to: (a) grant the Shareholders access to corporate files of the Company and other parties to the Merger or any of their respective affiliates; or (b) obtain counsel or appraisal services at the expense of the Company or any other such party or affiliate.

 

PART 8 - DISSENTERS' RIGHTS

 

The following is a brief summary of the rights of Shareholders to object to the Merger and receive cash equal to the fair value of their Shares ("Dissenters' Rights"). This summary is not a complete statement of the law, and is qualified in its entirety by the complete text of section 238 of the Cayman Companies Law, a copy of which is included at Part 13 of this document. If you are contemplating the possibility of objecting to the Merger, you should carefully review the text included at Part 13 of this document, particularly the procedural steps required to perfect Dissenters' Rights. These procedures are complex and you should consult your Cayman Islands legal counsel. If you do not fully and precisely satisfy the procedural requirements of the Cayman Companies Law, you will lose your Dissenters' Rights.

Requirements for Exercising Dissenters' Rights

Shares held by a Dissenting Shareholder shall cease to confer on the Dissenting Shareholder any rights as a member except the right to payment of the fair value of his Shares, the right to participate in proceedings until the determination of fair value is reached and the right to initiate proceedings to obtain relief on the ground that the Merger is void or unlawful subject to and in accordance with the provisions of section 238 of the Cayman Companies Law. A Dissenting Shareholder is entitled to exercise his Dissenters' Rights in respect of all (and not some only) of the Shares that he holds.

To preserve your Dissenters' Rights, the following procedures must be followed:

  • the Dissenting Shareholder must give written notice to the Company of the objection to the Merger before the vote at the Extraordinary General Meeting. The notice given by the Dissenting Shareholder must include a statement that the Dissenting Shareholder proposes to demand payment for his Shares if the Merger is authorised by the vote at the Extraordinary General Meeting;
  • within twenty days immediately following the date on which the vote of the Shareholders at the Extraordinary General Meeting giving authorisation for the Merger, the Company will give written notice of the authorisation to the Dissenting Shareholder;
  • the Dissenting Shareholder, within twenty days immediately following the date on which the written notice referred to above is given (the "Dissent Period"), shall give to the Company a written notice of his decision to dissent, stating:
    • his name and address;
    • the number and class of Shares in respect of which he dissents; and
    • a demand for payment of the fair value of his Shares;
    • within seven days immediately following: (i) the date of expiry of the Dissent Period; or (ii) the date on which the Plan of Merger is filed with the Cayman Islands Registrar of Companies, whichever is later, the Company must make a written offer (a "Fair Value Offer") to each Dissenting Shareholder to purchase his Shares at a price determined by the Company to be the fair value of such Shares;
    • if, within thirty days immediately following the date of the Fair Value Offer, the Company and the Dissenting Shareholder agree on a price at which the Company will purchase the Dissenting Shareholder's Shares, then, the Company must pay to the Dissenting Shareholder the amount in money forthwith, however, if the Company and the Dissenting Shareholder fail to agree on a price at which the Company will purchase the Dissenting Shareholder's Shares, then, within twenty days immediately following the date of the expiry of such thirty day period, the Company must, and the Dissenting Shareholder may, file a petition with the Court for a determination of the fair value of the Shares held by all Dissenting Shareholders who have served a notice of dissent and who have not agreed with the Company as to fair value, and such petition by the Company must be accompanied by a verified list containing the names and addresses of all shareholders who have filed a notice of dissent and who have not agreed with the Company as to the fair value of the Shares; and
    • if a petition is timely filed and served, the Court will determine, at a hearing at which Dissenting Shareholders are entitled to Dissenters' Rights, the fair value of the Shares held by those shareholders, together with a fair rate of interest, if any, to be paid by the Company upon the amount determined to be fair, and the costs of the proceeding and the allocation of such costs upon the parties.

All notices and petitions must be executed by or for the Shareholder of record, fully and correctly, as such Shareholder's name appears on the register of members of the Company. If the Shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, these notices must be executed by or for the fiduciary. If the Shares are owned by or for more than one person such notices and petitions must be executed by or for all joint owners. An authorised agent, including an agent for two or more joint owners, may execute the notices or petitions for a Shareholder of record; however, the agent must identify the record owner and expressly disclose the fact that, in exercising the notice, he is acting as agent for the record owner. A person having a beneficial interest in Shares held of record in the name of another person, such as a broker or nominee, must act promptly to cause the record holder to follow the steps summarised above and in a timely manner to perfect whatever Dissenters' Rights attached to the Shares.

Dissenters' Rights are available only to registered holders of Shares. If you hold any Shares as the beneficial owner but are not the "registered holder" of such Shares and you wish to exercise the Dissenters' Rights, you must arrange for such Shares to be registered in your name and comply with the procedures and requirements described above for exercising Dissenters' Rights with respect to the Shares under section 238 of the Cayman Companies Law.

If you do not satisfy each of these requirements, you cannot exercise Dissenters' Rights and will be bound by the terms of the Plan of Merger. Submitting a proxy card that does not direct how the Shares represented by that proxy are to be voted will give the proxy discretion to vote as it determines appropriate. In addition, failure to vote your Shares, or a vote against the proposal to adopt the Plan of Merger and approve the transactions contemplated by the Plan of Merger, including the Merger, will not alone satisfy the notice requirement referred to above. You must send all notices in hard copy form by post, by courier or by hand to the registered office of the Company at Boundary Hall, Cricket Square, PO Box 1111, Grand Cayman KY1-1102, Cayman Islands for the attention of Paget-Brown Trust Company Ltd. or by email to the Company's registered office by emailing Richard Lewis (richard@paget-brown.com.ky) and Dominique Massias (dominique@pagetbrowntrust.ky) with a copy to S. Douglas Stinemetz (doug.stinemetz@eurasiadrilling.com).

If you are considering dissenting, you should be aware that the fair value of your Shares determined under section 238 of the Cayman Companies Law could be more than, the same as, or less than US$11.75 per Share that you would otherwise receive as Merger Consideration. In addition, in any proceedings for determination of the fair value of the Shares covered by a notice of dissent, the Company and the Participants intend to assert that the Merger Consideration of US$11.75 per Share is equal to the fair value of each of your Shares. If the fair value determined under the Cayman Companies Law is less than the Merger Consideration, Dissenting Shareholders may be liable to pay a proportion of the Company's costs in defending any petition by such Dissenting Shareholders or the Company under the Cayman Companies Law.

GDR HOLDERS WISHING TO EXERCISE THE RIGHT TO DISSENT MUST SURRENDER THEIR GDRS TO THE BANK OF NEW YORK MELLON (THE "DEPOSITARY"), PAY THE DEPOSITARY FEES (CONSISTING OF UP TO US$0.03 PER GDR SURRENDERED, A CABLE FEE OF US$17.50 AND ANY APPLICABLE TAXES OR GOVERNMENTAL CHARGES) AND BECOME SHAREHOLDERS BY 7 A.M.
(EST) ON TUESDAY 10 NOVEMBER 2015. THEREAFTER, SUCH FORMER GDR HOLDERS MUST COMPLY WITH THE PROCEDURES AND REQUIREMENTS FOR EXERCISING THE RIGHT TO DISSENT FROM THE MERGER UNDER SECTION 238 OF THE CAYMAN COMPANIES LAW. THE DEADLINE FOR RECEIPT OF CANCELLATION INSTRUCTIONS BY THE DEPOSITARY IS 7 A.M. (EST) ON FRIDAY 30 OCTOBER 2015.

The provisions of section 238 of the Cayman Companies Law are technical and complex. If you fail to comply strictly with the procedures set forth in section 238, you will lose your Dissenters' Rights. You are advised to consult your Cayman Islands legal counsel if you wish to exercise Dissenters' Rights.

 

PART 9 - DEPOSITARY

 

It is intended that subject to the approval of the Merger at the Extraordinary General Meeting and the registration of the Plan of Merger by the Cayman Islands Registrar of Companies, the Company's depositary receipt facility will be terminated. All GDRs will cease to exist as soon as the underlying Shares are cancelled, which will occur upon the Merger becoming effective on the Merger Implementation Date. The GDR programme will then record a zero GDR balance until the facility itself is terminated following the transfer of the Merger Consideration to each Qualifying Shareholder who was, at the time of the Merger Implementation Date, a GDR Holder.

 

PART 10 - CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Certain statements in this document and the documents referred to herein are forward-looking statements based on estimates and assumptions. These include statements as to such things as the Company's financial condition, results of operations, plans, objectives, future performance and business, as well as forward-looking statements relating to the Merger. Such forward-looking statements are based on facts and conditions as they exist at the time such statements are made. Forward-looking statements are also based on current expectations, estimates and projections about the business of the Company and the Merger, the accurate prediction of which may be difficult and involve the assessment of events beyond the control of the Company. The forward-looking statements are further based on assumptions made by management including the Participants. Forward-looking statements can be identified by forward-looking language, including words such as "believes", "anticipates", "expects", "estimates", "intends", "may", "plans", "predicts", "projects", "will", "would" and similar expressions, or the negative of these words. These statements are not guarantees of the underlying expectations or future performance and involve risks and uncertainties that are difficult to predict. You are cautioned to consider these risks and uncertainties and not to place undue reliance on any forward-looking statements.

The following factors, among others, could cause actual results or matters related to the Merger to differ materially from what is expressed or forecasted in the forward-looking statements:

  • the satisfaction or waiver of the Conditions Precedent to completion of the Merger, including the approval of the Plan of Merger by the Shareholders;
  • the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Implementation Agreement;
  • the cash position of the Company and its subsidiaries, at the Merger Implementation Date;
  • debt financing may not be available at the Merger Implementation Date because of the failure of lenders to fund under the terms of the relevant loan documents, which may result in the Merger not being completed promptly or at all;
  • the effect of the announcement or pendency of the Merger on the GDR price, business relationships, operating results and business generally;
  • risk that the Merger may not be completed in a timely manner or at all, which may adversely affect the Company's business and the price of the GDRs and the Shares;
  • the potential adverse effect on the Company's business, properties and operations because of certain covenants agreed to in the Merger Implementation Agreement;
  • diversion of management's attention from the Company's ongoing business operations;
  • the amount of the costs, fees, expenses and charges related to the Merger; and
  • the outcome of any legal proceedings, regulatory proceedings or enforcement matters that may be instituted against the Company and others relating to the Merger.

Furthermore, the forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, collaborations, dividends or investments made by the Company. The Company believes that the assumptions on which the forward-looking statements are based are reasonable. However, many of the factors that will determine the future results of the Company are beyond the ability of the Company to control or predict and future results, levels of activity, performance or achievements cannot be guaranteed. The Company cannot assure Shareholders that the actual results or developments anticipated will be realised or, if realised, that they will have the expected effects on the Company's business or operations. In light of the significant uncertainties inherent in the forward-looking statements, readers should not place undue reliance on forward-looking statements, which speak only as of the date on which the statements were made and it should not be assumed that the statements remain accurate as of any future date. All subsequent written and oral forward-looking statements concerning the Merger or other matters addressed in this document and attributable to the Company or any person acting on behalf of the Company are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Further, forward-looking statements speak only as of the date they are made and, except as required by applicable law or regulation, the Company undertakes no obligation to update these forward-looking statements to reflect future events or circumstances.

 

PART 11 - WHERE YOU CAN FIND MORE INFORMATION

 

For further information, please see the Company's website at www.eurasiadrilling.com. Such information does not form part of and is not incorporated by reference in this document.

THIS DOCUMENT DOES NOT CONSTITUTE THE SOLICITATION OF A PROXY IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH PROXY SOLICITATION IN THAT JURISDICTION. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT TO VOTE YOUR SHARES AT THE EXTRAORDINARY GENERAL MEETING. THE COMPANY HAS NOT AUTHORISED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS DOCUMENT.

YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS DOCUMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE OF THIS DOCUMENT, AND THE MAILING OF THIS DOCUMENT TO SHAREHOLDERS DOES NOT CREATE ANY IMPLICATION TO THE CONTRARY.

 

PART 12 - MERGER IMPLEMENTATION AGREEMENT ANNEXING THE PLAN OF MERGER

 

 

 

 

 

12 OCTOBER 2015

 

 

EDC ACQUISITION COMPANY LIMITED

 

AND

 

EURASIA DRILLING COMPANY LIMITED

 

                                                                                               

MERGER IMPLEMENTATION AGREEMENT

                                                                                               

 

 

 

 

 

 

Skadden, Arps, Slate, Meagher & Flom (UK) LLP
40 Bank Street
Canary Wharf
London, E14 5DS
United Kingdom

 

TABLE OF CONTENTS

Clause                                                                                                                                                                     Page

1............ Definitions and interpretation. 3

2............ Agreement to implement the Merger. 9

3............ Announcements. 10

4............ Conditions Precedent 10

5............ Outline of Merger. 13

6............ Implementation obligations. 14

7............ Shareholder Circular and Notice of Meeting. 14

8............ Conduct of business. 15

9............ Warranties. 16

10.......... Dissenters. 17

11.......... Directors' recommendation. 17

12.......... Termination. 17

13.......... Confidential information. 18

14.......... Notices and other communications. 19

15.......... Miscellaneous. 20

16.......... Governing Law and Dispute Resolution. 22

Schedule 1 EDC Proscribed Events. 24

Schedule 2 EACL Proscribed Events. 25

Schedule 3 Conditions Precedent 26

Schedule 4 Timetable. 28

Schedule 5 EDC's Obligations. 29

Schedule 6 EACL's Obligations. 31

Schedule 7 EDC's Warranties. 32

Schedule 8 EACL's Warranties. 33

Schedule 9 Participants. 34

Annexure A Plan of Merger. 35

Annexure B EDC Shareholder Resolution. 39

Annexure C Press Announcement 40

Annexure D Shareholder Circular and Notice of Meeting. 43

 


THISAGREEMENTis made on 12 October 2015

BETWEEN

(1)            EDC ACQUISITION COMPANY LIMITED, an exempted company incorporated in the Cayman Islands with company number 00294598 and having its registered office at Intertrust Corporate Services (Cayman) Limited, 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands ("EACL"); and

(2)            EURASIA DRILLING COMPANY LIMITED, an exempted company incorporated in the Cayman Islands with company number 121302 and having its registered office at Boundary Hall, Cricket Square, PO Box 1111, Grand Cayman KY1-1102, Cayman Islands ("EDC").

WHEREAS

(A)           The merger implementation agreement between the parties dated 20 January 2015 terminated on 30 September 2015.

(B)            The parties have agreed to implement a merger between EACL and EDC under the provisions of the Companies Law (the "Merger").

(C)           The constituent companies in the Merger are EACL and EDC with EDC to be the surviving company of the Merger.

(D)           It is a pre-requisite to the parties proposing the Merger, and the Special Committee making the recommendation in relation to the Merger, that the parties enter into this Agreement.

IT IS AGREED

  1. Definitions and interpretation

1.1             Definitions

In this Agreement:

"Affiliates" means, in relation to any person, any other person directly or indirectly Controlled by, Controlling of, or under common Control with, such person;

"Announcing Party" has the meaning given in clause 3.2;

"Authorised Officer" means, in respect of a party, a director of the party or any other person appointed by a party to act as an authorised officer under this Agreement;

"BNP Paribas Facility Agreement" means the US$19,983,371.13 buyer credit facility agreement dated 23 December 2013 and made between, among others, OOO Burovaya Kompaniya EDC and BNP Paribas SA (as supplemented, amended, novated and restated from time to time, including as supplemented by the supplemental agreement dated 18 March 2014 between, among others, OOO Burovaya Kompaniya EDC and BNP Paribas SA);

"BNP Paribas Guarantee" means the guarantee dated 23 December 2013 and made between, among others, EDC and BNP Paribas SA (as supplemented, amended, novated and restated from time to time);

"Business Day" means a day, other than a Saturday or Sunday or public holiday in London (England) or Grand Cayman (the Cayman Islands) or Moscow (Russia), on which banks are open in London (England), Grand Cayman (the Cayman Islands) and Moscow (Russia) for general commercial business;

"Cayman"means the Cayman Islands;

"Cayman Registrar"means the Registrar of Companies in the Cayman Islands;

"Certificate of Merger" means the certificate of merger issued by the Cayman Registrar certifying that all the requirements of the Companies Law have been complied with in respect of the Merger;

"Change of Recommendation"means the withholding, withdrawal, lapse, qualification or modification of the Special Committee's recommendation to EDC Shareholders to vote in favour of the Plan of Merger and the transactions contemplated by the Plan of Merger, including the Merger;

"Companies Law"means the Companies Law (2013 Revision) of the Cayman Islands (as amended);

"Conditions Precedent"means the conditions precedent set out in Schedule 3;

"Confidential Information"has the meaning given in clause 13;

"Confidential Information Representative"has the meaning given in clause 13;

"Control"means the power of a person to secure, directly or indirectly (whether by the holding of shares, possession of voting rights or by virtue of any other rights conferred by the articles of association, constitution, partnership deed or other document relating to another person) that the affairs of such other person are conducted in accordance with its wishes and "Controlled"and "Controlling"shall be construed accordingly;

"DepositAgreement" means the deposit agreement dated 1 November 2007 between EDC and JPMorgan Chase Bank, N.A. (as the original depositary) as amended by the supplemental agreement dated 3 November 2014 between EDC and the Depositary (as amended, modified, or supplemented from time to time);

"Depositary" means The Bank of New York Mellon;

"Dissent Rights"means the right of each EDC Shareholder to dissent in respect of the Merger pursuant to Section 238 of the Companies Law;

"Dissenting Shareholders"has the meaning given in clause 10;

"Dissenting Shares"has the meaning given in clause 10;

"EACL Board"means the board of directors of EACL from time to time;

"EACL Information" means the information reasonably required to be included in the Shareholder Circular and Notice of Meeting in relation to EACL;

"EACL Proscribed Event"means, except to the extent specifically contemplated by this Agreement or the Plan of Merger, any of the events listed in Schedule 2;

"EACL Shareholder Approval"means the written resolution of the sole shareholder of EACL approving the Merger;

"EDC Board" means the board of directors of EDC from time to time;

"EDC GDR" means a global depositary receipt, each of which represents one (1) EDC Share;

"EDC Group" means EDC and the other EDC Group Companies;

"EDC Group Companies" means EDC and the Subsidiaries, and "EDC Group Company" means any of them;

"EDC Information"means all information contained in the Shareholder Circular and Notice of Meeting other than the EACL Information;

"EDC Proscribed Event"means, except to the extent specifically contemplated by this Agreement or the Plan of Merger, any of the events listed in Schedule 1 provided that an EDC Proscribed Event will not occur where EDC has first consulted with EACL in relation to the event and EACL has approved the proposed event in writing;

"EDC Securities" means EDC Shares or EDC GDRs, as the context so requires;

"EDC Share"means a share with a nominal or par value of US$0.01 issued by EDC;

"EDC Shareholder"means, from time to time, each person registered in the Register of Members as a holder of EDC Shares;

"EDC Shareholder Approval"means the approval of the Merger by a majority of two-thirds or more of the votes of those EDC Shareholders entitled to vote and voting (in person or by proxy) on the EDC Shareholder Resolution at a duly convened and quorate meeting of the EDC Shareholders;

"EDC Shareholder Resolution"means the resolution of EDC Shareholders substantially in the form and content set out in Annexure B;

"Encumbrance"means any mortgage, charge (fixed or floating), pledge, lien, option, right to acquire, right of pre-emption, assignment by way of security or trust arrangement for the purpose of providing security or other security interest of any kind (including any retention arrangement), or any agreement to create any of the foregoing;

"Exchange Rate Material Adverse Change" means any one or more negative changes attributable to currency exchange fluctuations (determined by reference to the average currency exchange fluctuation over any seven (7) day period) that arise or occur after the date of this Agreement and prior to the Merger Plan Filing Time which (individually or in combination) result(s) in, or can reasonably be expected to result in, a material diminution in the value of the EDC Group (taken as a whole) or a materially adverse change in the value of the business, operations or assets of the EDC Group (taken as a whole) being, in each case, in an amount which, in aggregate, is more than US$800,000,000 (determined by reference to a discounted cash flow model on a US$ basis);

"FCA" means the UK Financial Conduct Authority;

"Governmental Authority" means any nation or government, any state, municipality, locality or other political subdivision thereof, and any person, entity, body, agent, agency, commission or court or other similar body or organisation, whether domestic, foreign or multinational, exercisingde jureorde factocontrol of executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, government, and any executive official thereof;

"Incentive Compensation Plan" means EDC's 2013 Incentive Compensation Plan;

"Insolvent" means, in relation to a person:

(a)              it suspends, or threatens to suspend, payment of its debts or is unable to pay its debts as they fall due or admits inability to pay its debts or is deemed unable to pay its debts within the meaning of section 123 of the Insolvency Act 1986 as enacted in the United Kingdom or is insolvent or deemed to be insolvent within the meaning of Section 93 of the Companies Law;

(b)             it commences negotiations with all or any class of its creditors with a view to rescheduling any of its debts, or makes a proposal for or enters into any compromise or arrangement with its creditors other than for the sole purpose of a scheme for a solvent amalgamation with one or more other companies or a solvent reconstruction;

(c)              a petition is filed, a notice is given, a resolution is passed, or an order is made, for or in connection with its winding up other than for the sole purpose of a scheme for a solvent amalgamation with one or more other companies or a solvent reconstruction;

(d)             an application is made to court, or an order is made, for the appointment of a liquidator, provisional liquidator or an administrator, or if a notice of intention to appoint a liquidator, provisional liquidator or an administrator is given or if an administrator is appointed, over it;

(e)              the holder of a qualifying floating charge over its assets has become entitled to appoint or has appointed an administrative receiver;

(f)              a person becomes entitled to appoint a receiver over its assets or a receiver is appointed over its assets;

(g)              a creditor or encumbrancer of it attaches or takes possession of, or a distress, execution, sequestration or other such process is levied or enforced on or sued against, the whole or any part of its assets and such attachment or process is not discharged within ten (10) Business Days; or

(h)             any event occurs, or proceeding is taken, with respect to it in any jurisdiction to which it is subject, whether in Cayman or elsewhere, that has an effect equivalent or similar to any of the events mentioned in (a) to (g) (inclusive);

"Intervening Event"means a material event, fact, circumstance, development or occurrence that is unknown to the Special Committee or any member thereof (in each case having made all reasonable enquiry of EDC) on the date of this Agreement, which event, fact, matter, circumstance, development or occurrence becomes known to the Special Committee prior to obtaining the EDC Shareholder Approval;

"Listing Rules"means the Listing Rules of the FCA;

"Long Stop Date"means 31 January 2016or such other date as is agreed between the parties;

"Losses"means all claims, demands, damages, losses, costs, expenses and liabilities, excluding any special, consequential or indirect losses or loss of profit, goodwill or possible business;

"Material Adverse Change" means any one or more event, fact, matter, circumstance, occurrence, change or any combination thereof other than an Exchange Rate Material Adverse Change (an "Event") that arises or occurs after the date of this Agreement and prior to the Merger Plan Filing Time which (individually or in combination) result(s) in, or can reasonably be expected to result in, a material diminution in the value of the EDC Group (taken as a whole) or a materially adverse change in the value of the business, operations or assets of the EDC Group (taken as a whole) being, in each case, in an amount which, in aggregate, is more than US$100,000,000 (determined by reference to a discounted cash flow model on a US$ basis), provided that in determining whether any Material Adverse Change has occurred no account shall be taken of any of the following Events, except to the extent any such Event has a disproportionate effect on the EDC Group (taken as a whole) compared to other companies in the industry in the countries in which the EDC Group operates and to which such Event relates and, in such circumstances, only the disproportionate effect shall be taken into account for the purposes of determining whether there has been a material adverse change in the value of the business, operations or assets of the EDC Group (taken as a whole):

(a)              a change in general economic conditions or outlook, financial, commodity, credit or securities markets, whether globally or in any country (including any of the countries in which the EDC Group operates) or market;

(b)             a change in the actual or forecasted traded or market prices, or supply and demand for, any of the products or services purchased or sold by the EDC Group;

(c)              a change of law or regulation or a change in generally accepted accounting principles, or in the interpretation thereof, in any jurisdiction;

(d)             a change generally affecting the industry or any of the products or services purchased or sold by the EDC Group; or

(e)              a negative change attributable to currency exchange fluctuations;

or any combination of the foregoing, but provided always that there shall be taken into account for the purposes of calculating any Material Adverse Change any of the following Events in or affecting any country in which the EDC Group operates:

(i)               war, threat of or preparation for war, armed conflict or hostilities;

(ii)             terrorist acts or acts of any military authority;

(iii)           imposition of sanctions or embargoes that are additional to any enacted or already in place as of the date of this Agreement; or

(iv)            civil commotion or riots having a negative impact on the business of the EDC Group,

or any combination of the foregoing;

"Merger"has the meaning ascribed to it in the recitals;

"Merger Consideration"means US$11.75 in cash per EDC Share;

"Merger Consideration Record Date"means 5.00 p.m. (EST) on the Business Day immediately prior to the Merger Plan Filing Date;

"Merger ImplementationDate" means the date on which the Cayman Registrar issues the Certificate of Merger;

"Merger Meeting" means the meeting at which EDC Shareholders will vote on the Plan of Merger;

"Merger Plan Filing Date" has the meaning given in clause 4.1;

"Merger Plan Filing Time" means the local time in the Cayman Islands on the date on which the Plan of Merger is filed with the Cayman Registrar in accordance with this Agreement;

"Non-Announcing Parties" has the meaning given in clause 3.1;

"Official List" means the Official List of the FCA;

"Participants"means the persons listed in Schedule 9;

"Plan of Merger" means the plan of merger substantially in the form and content set out in Annexure A and any amendment or variation thereto made in accordance with the provisions of the Companies Law;

"Press Announcement" means an announcement in the form set out in Annexure C;

"Qualifying Shareholder" means each person who is an EDC Shareholder as at the Merger Consideration Record Date except EACL, EDC Incentive Plan Limited and the Participants;

"Register of Depositary Interests" means the register of depositary interests maintained by the Depositary in respect of the EDC GDRs;

"Register of Members" means the register of members of EDC as maintained in accordance with the provisions of the Companies Law;

"Regulatory Information Service" means a regulated information service approved by the FCA;

"Representative" means any person acting for or on behalf of a party including any director, officer, employee, agent, contractor, professional adviser or other representative of a party;

"Sanctions" means the economic, financial and trade embargoes and sanctions laws, regulations, rules and/or restrictive measures administered, enacted or enforced (from time to time) by the Office of Foreign Assets Control of the U.S. Department of Treasury, the United States Department of State, any other U.S. government entity, the United Nations Security Council, any United Nations Security Council Sanctions Committee, the European Union, any Member State of the European Union and any such embargoes, laws, regulations, rules or restrictive measures extended to the Cayman Islands by an Order of Her Majesty in Council;

"Sanctions List" means the "Specially Designated Nationals and Blocked Persons" list maintained (from time to time) by the Office of Foreign Assets Control of the U.S. Department of Treasury or any similar list maintained (from time to time) by, or public announcement of Sanctions designation made (from time to time) by, the United States Department of State or any other U.S. government entity, the United Nations Security Council, any United Nations Security Council Sanctions Committee, the European Union, any Member State of the European Union or any sanctions list extended to the Cayman Islands by an Order of Her Majesty in Council;

"Sanctions Target" means a person or entity that is (from time to time):

(a)              listed on any Sanctions List and/or targeted and identified (whether by name or by reference to a class of persons, bodies or entities) under sectoral Sanctions (including, but not limited to, those entities listed in Annex IV to Regulation (EU) 833/2014 (as amended));

(b)             resident or incorporated under the laws of any country or territory that is the target of comprehensive country- or territory-wide Sanctions (being, as at the date of this Agreement, limited to Cuba, Iran, Syria, Sudan and North Korea); or

(c)              directly or indirectly owned or controlled by, or acting on behalf, or at the direction, of any person falling within (a) or (b) above;

"Shareholder Circular andNotice of Meeting" means the circular containing, among other things, a letter from the chairman of the Special Committee, a copy of the notice of the Merger Meeting, a summary of the Merger and the Plan of Merger to be sent to EDC Shareholders in accordance with the articles of association and section 233 of the Companies Law in relation to the Merger, in the form set out in Annexure D;

"Shareholders Agreement" means the shareholders agreement to be entered into between the Participants and EDC to regulate their relationship as shareholders of EDC following the Merger;

"Special Committee" means the committee of independent non-executive directors of the EDC Board, comprising the Earl of Clanwilliam (as chairman of the Special Committee), Igor Belikov and Alexander Shokhin, established to provide an independent review of the Merger on behalf of the Company;

"Subsidiary" has the same meaning as "subsidiary undertaking";

"subsidiary undertaking" and "parent undertaking" have the meanings given in section 1162 of the Companies Act 2006;

"Taxation" or "Tax" means:

(a)              any charge, tax, duty, levy, impost and withholding having the character of taxation, wherever chargeable, imposed for support of national, state, federal, cantonal, municipal or local government or any other governmental or regulatory authority, body or instrumentality including (without limitation) tax on gross or net income, profits or gains, taxes on receipts, sales, use, occupation, franchise, transfer, value added and personal property and social security taxes; and

(b)             any penalty, fine, surcharge, interest, charges or additions to taxation payable in relation to any taxation within paragraph (a) above;

"Timetable" means the timetable set out in Schedule 4;

"Transaction" means the Merger and the transactions contemplated by the other Transaction Documents;

"Transaction Documents" means this Agreement, the Plan of Merger, the Voting and Support Agreement and the Shareholders Agreement;

"UniCredit Facility Agreement" means the US$227,000,000 syndicated term loan facility agreement dated 27 December 2012 and made between, among others, EDC and UniCredit Bank Austria AG (as supplemented, amended, novated and restated from time to time); and

"Voting and Support Agreement" means the voting and support agreement dated the date hereof between EACL, EDC and the Participants.

1.2             References to certain general terms

Unless the contrary intention appears, a reference in this Agreement to:

(a)              a document (including this Agreement) includes any variation or replacement of it;

(b)             a clause, sub-clause, Annexure or Schedule is a reference to a clause or sub-clause in or annexure or schedule to this Agreement;

(c)              except as otherwise expressly provided in this Agreement, any express reference to an enactment (which includes any legislation in any jurisdiction) includes references to (i) that enactment as amended, consolidated or re-enacted by or under any other enactment before or after the date of this Agreement; (ii) any enactment which that enactment re-enacts (with or without modification); and (iii) any subordinate legislation (including regulations) made (after the date of this Agreement) under that enactment, as amended, consolidated or re-enacted as described in (i) or (ii) above, except to the extent that any of the matters referred to in (i) to (iii) occurs after the date of this Agreement and increases or alters the liability of a party (or any person on whose behalf it is acting as agent pursuant to this Agreement) under this Agreement;

(d)             the singular includes the plural and vice versa;

(e)              the word "person" includes an individual, a firm, a body corporate, a partnership, a joint venture, an unincorporated body or association, or any Governmental Authority;

(f)              a particular person includes a reference to the person's executors, administrators, successors, substitutes (including persons taking by novation) and assigns;

(g)              a group of persons or things is a reference to any two or more of them jointly and to each of them individually;

(h)             United States dollars or USD or US$ or $, is a reference to the official currency of the United States of America;

(i)               a period of time dating from a given day or the day of an act or event, is to be calculated exclusive of that day;

(j)               a day is to be interpreted as the period of time commencing at midnight and ending 24 hours later;

(k)             the words "include", "including", "for example" or "such as" when introducing an example, do not limit the meaning of the words to which the example relates or examples of a similar kind;

(l)               a "party" or the "parties" means a party or the parties to this Agreement; and

(m)            time is a reference to London time, unless stated otherwise.

1.3             Next Business Day

Except where expressly provided otherwise, if an event must occur on a stipulated day which is not a Business Day then the stipulated day will be taken to be the next Business Day.

1.4             Headings

Headings (including those in brackets at the beginning of paragraphs) are for convenience only and do not affect the interpretation of this Agreement.

  1. Agreement to implement the Merger

2.1             Agreement to implement the Merger

The parties agree to implement the Merger on and subject to the terms and conditions of this Agreement and the Plan of Merger.

2.2             Approval of Plan of Merger

The Special Committee by way of delegated authority from the EDC Board and the EACL Board have, on or before the date of this Agreement, approved the Plan of Merger, subject to obtaining EDC Shareholder Approval in accordance with this Agreement.

2.3             Effects of the Merger

The Merger shall have the effects specified in the Companies Law. Without limiting the generality of the foregoing, and subject thereto, at the effective time of the Merger, EDC, as the surviving company for the purposes of the Companies Law, shall succeed to and assume all the rights, property of every description, including choses in action, and the business, undertaking, goodwill, benefits, immunities and privileges, mortgages, charges or security interests and all contracts, obligations, claims, debts and liabilities of EACL and EDC in accordance with the Companies Law.

2.4             Memorandum and articles of association

At the effective time of the Merger, the memorandum of association and articles of association of EDC then in effect shall be the memorandum of association and articles of association of EDC, as the surviving entity.

2.5             Directors

The directors of EDC immediately prior to the effective time of the Merger shall be the directors of EDC as the surviving company, each to hold office in accordance with the articles of association until their respective death, resignation, or removal or until their respective successors are duly appointed in accordance with the articles of association of EDC in force from time to time following completion of the Merger.

  1. Announcements

3.1             Press Announcement

After the execution and delivery of this Agreement and by no later than 7.00 a.m. on the next Business Day, EDC shall procure that a public announcement concerning the Merger in the form of the Press Announcement is made through a Regulatory Information Service.

3.2             Public announcements

Save in accordance with clauses 3.1 and 3.3 or as otherwise expressly permitted by this Agreement, each party (an "Announcing Party")must consult with the other party (the "Non-Announcing Party")in relation to any public announcement relating to the Merger to be made by it or any of its Affiliates, and, subject to the Non-Announcing Party acting reasonably, take, or procure that its Affiliate takes, the Non-Announcing Party's comments into consideration in making any public announcement in relation to the Merger.

3.3             Required disclosure

Save in accordance with clauses 3.1, prior to making any public announcement, the Announcing Party will seek to give as much notice as practicable to the Non-Announcing Party and consult to the fullest extent practicable in the circumstances with the Non-Announcing Party, except to the extent that prior notice or prior consultation is not permitted or practicable in the circumstances pursuant to a legal obligation (including any obligation under the rules of any relevant Governmental Authority).

  1. Conditions Precedent

4.1             Conditions precedent

Subject to this clause 4, the Merger will not be implemented unless each of the Conditions Precedent is satisfied to the extent and in the manner set out in clause 4.4, or is otherwise waived in accordance with clauses 4.2 or 4.3.

As soon as practicable and by no later than 9.30 a.m. (EST) on the Business Day following the EDC Shareholder Approval (or, if later, the date the last of the Conditions Precedent is satisfied or waived):

(a)              each of EDC and EACL shall execute the Plan of Merger; and

(b)             EDC shall file the executed Plan of Merger with the Cayman Registrar,

the date of such execution and filing of the executed Plan of Merger being referred to herein as the "Merger Plan Filing Date".

4.2             Benefit of certain Conditions Precedent

A Condition Precedent may only be waived in writing by a party entitled to the benefit of that Condition Precedent as noted in the table set out in Schedule 3 and will be effective only to the extent specifically set out in that waiver.

Conditions Precedent which may not be waived by either of the parties are noted in the table set out in Schedule 3 as "Cannot be waived" and the parties do not have the right to waive such Conditions Precedent.

Conditions Precedent which may only be waived with the consent of the other party are noted in the table set out in Schedule 3 as "Both" and the parties only have the right to waive such Conditions Precedent with the agreement of the other party.

A party entitled to waive the breach or non-fulfilment of a Condition Precedent under this clause 4.2 may do so in its absolute discretion.

4.3             Waiver of Conditions Precedent

If either EDC or EACL waives the breach or non-fulfilment of a Condition Precedent in accordance with this clause 4.3, then:

(a)              subject to sub-clause 4.3(b) and clause 4.6, that waiver precludes that party from making any claim against the other for any breach of this Agreement arising as a result of the breach or non-fulfilment of that Condition Precedent or arising from the same event which gave rise to the breach or non-fulfilment of that Condition Precedent; but

(b)             if the waiver of the Condition Precedent is itself conditional and the other party:

(i)               accepts the condition, then the terms of that condition apply notwithstanding any inconsistency with sub-clause 4.3(a) and the Condition Precedent shall only be waived on satisfaction of that condition; or

(ii)             does not accept the condition, then the Condition Precedent has not been waived.

4.4             Satisfaction of Conditions Precedent

(a)              Subject to clause 11, EDC agrees:

(i)               to procure (to the fullest extent it is lawfully able so to procure) that each of the Conditions Precedent listed in Schedule 3, except for paragraph 2 of Schedule 3, are satisfied as soon as possible after the date of this Agreement, and that each such Condition Precedent continues to be satisfied at all times until the last time it is to be satisfied (as the case may require); and

(ii)             not to take or permit to be taken, and to procure (to the fullest extent it is lawfully able so to procure) that no other EDC Group Company or its Representatives take or permit to be taken, any action that could reasonably be expected to adversely affect the satisfaction of any Condition Precedent.

(b)             EACL agrees:

(i)               to procure (to the fullest extent it is lawfully able so to procure) that each of the Conditions Precedent listed in paragraphs 1, 2, 3, 4, 6, 8, 9, 13, 14 and 15 of Schedule 3 are satisfied as soon as possible after the date of this Agreement and that such Condition Precedent continues to be satisfied at all times until the last time it is to be satisfied (as the case may require); and

(ii)             not to take or permit to be taken, and to procure that no other member of EACL or their Representatives take or permit to be taken, any action that could reasonably be expected to adversely affect the satisfaction of any Condition Precedent.

(c)              Each party agrees to co-operate with the other party in good faith, and to procure the cooperation by their respective Subsidiaries, with a view to the Conditions Precedent being satisfied as soon as practicable after the date of this Agreement.

4.5             Notices in relation to Conditions Precedent

Each party must:

(a)              promptly notify the other in writing of satisfaction of a Condition Precedent and must keep the other informed of any material development of which it becomes aware that may lead to the breach or non-fulfilment of a Condition Precedent;

(b)             as soon as practicable give written notice to the other upon becoming aware of a breach or non-fulfilment of a Condition Precedent, or of any event which will prevent a Condition Precedent being satisfied; and

(c)              where the party is entitled to waive the relevant Condition Precedent, upon receipt of a notice given under sub-clause 4.5(b), give written notice to the other party before 7.00 a.m. on the Long Stop Date as to whether or not it waives the breach or non-fulfilment of any Condition Precedent resulting from the occurrence of that event, specifying the Condition Precedent in question.

4.6             Effect of waiver of breach or non-fulfilment

A waiver of such breach or non-fulfilment in respect of one Condition Precedent does not constitute:

(a)              a waiver of the breach or non-fulfilment of any other Condition Precedent resulting from the same event; or

(b)             a waiver of the breach or non-fulfilment of that Condition Precedent resulting from any other event.

4.7             Consultation on failure of Conditions Precedent

If:

(a)              there is a breach or non-fulfilment of a Condition Precedent which is not waived in accordance with this Agreement by the time or date specified in this Agreement for the satisfaction of the Condition Precedent;

(b)             there is an act, failure to act or occurrence which will prevent a Condition Precedent being satisfied by the time or date specified in this Agreement for the satisfaction of the Condition Precedent (and the breach or non-fulfilment which would otherwise occur has not already been waived in accordance with this Agreement); or

(c)              the Merger has not been implemented by the Long Stop Date,

then the parties shall discuss whether: (i) the Merger may proceed by way of alternative means or methods; or (ii) to extend the Long Stop Date, it being acknowledged that any such decision shall require the agreement of each party at their discretion.

4.8             Failure to agree

If the parties are unable to reach agreement under clause 4.7 within five (5) Business Days of the occurrence of the relevant event referred to in sub-clauses 4.7(a) to 4.7(c), any party may immediately terminate this Agreement, save that a party will not be entitled to terminate this Agreement pursuant to this clause 4.8 if the relevant Condition Precedent has not been satisfied or agreement cannot be reached as a result of:

(a)              a breach of this Agreement by that party; or

(b)             a deliberate act or omission of that party for the purpose of frustrating satisfaction of the Condition Precedent.

  1. Outline of Merger

5.1             Merger

Upon the terms and subject to the conditions contained in this Agreement and in accordance with the Companies Law, the Merger shall become effective on the Merger Implementation Date, with the result that, among other things:

(a)              EACL shall merge with and into EDC and EDC shall be the company that, upon the Merger Implementation Date, continues to have a separate legal identity with the identical legal personality as it had prior to the Merger Implementation Date, without any change, modification or variance;

(b)             the corporate identity, rights, privileges, immunities, powers, objects and purposes of EDC shall continue unimpaired by the Merger;

(c)              the separate corporate existence of EACL shall cease and EACL shall be struck off by the Cayman Registrar;

(d)             the rights, the property of every description including choses in action, and the business, undertaking, goodwill, benefits, immunities and privileges of EACL, shall vest in EDC and EDC shall become liable for and subject, in the same manner as EACL, to all mortgages, charges or security interests, and all contracts, obligations, claims, debts, and liabilities of EACL;

(e)              subject to clause 10 below, each EDC Share in issue and outstanding at the effective time of the Merger held by Qualifying Shareholders shall be cancelled by operation of law in exchange for payment of the Merger Consideration in accordance with clause 5.3(a) and the Register of Members shall be updated accordingly;

(f)              each share of EACL which is issued and outstanding at the effective time of the Merger shall be converted into and exchanged for one EDC Share, as the surviving company;

(g)              each EDC Share held by EACL and by EDC Incentive Plan Limited in issue and outstanding at the Merger Consideration Record Date shall be cancelled by operation of law at the effective time of the Merger; and

(h)             each Participant Share issued and outstanding as at the Merger Consideration Record Date shall remain issued and outstanding at and following the effective time of the Merger.

5.2             Merger Consideration

EDC agrees (it being acknowledged that EDC will be the surviving company after the Merger) in consideration of the Merger, to pay the Merger Consideration for each EDC Share held by each Qualifying Shareholder who has not exercised its Dissent Right and, in the case of any Dissenting Shareholder, the consideration payable to that Dissenting Shareholder being the fair value of the Dissenting Shares held by it determined in accordance with the provisions of section 238 of the Companies Law unless any such holder of Dissenting Shares fails to perfect or effectively withdraws or loses its dissenter rights, in which event it shall receive the Merger Consideration.

5.3             Payment to EDC Shareholders

As soon as practicable and by no later than 5:00 p.m. (EST) on the Business Day following the Merger Implementation Date, EDC (it being acknowledged that EDC will be the surviving company after the Merger) shall:

(a)              transfer an amount equal to (x) the number of EDC Securities held by Qualifying Shareholders in the form of EDC GDRs as at the Merger Consideration Record Date, multiplied by (y) the Merger Consideration, to the account of the Depositary; and

(b)             retain an amount equal to (x) the number of EDC Securities held by Qualifying Shareholders in the form of EDC Shares (excluding the Depositary) as at the Merger Consideration Record Date, multiplied by (y) the Merger Consideration; and

(c)              otherwise comply with its obligations under this Agreement and the Plan of Merger.

The payment made to the Depositary in accordance with sub-clause (a)(i) above shall be applied by the Depositary to make payment of the Merger Consideration to each Qualifying Shareholder that held EDC GDRs as at the Merger Consideration Record Date in accordance with the terms of the Deposit Agreement and that is entitled to receive the Merger Consideration in accordance with this Agreement and the Plan of Merger, and EDC shall so direct the Depositary.

The amount retained by EDC in accordance with sub-clause (b) above shall:

(A)         be applied by EDC to make payment of the Merger Consideration as soon as practicable to each Qualifying Shareholder (except for the Depositary and Dissenting Shareholders) that held EDC Shares as at the Merger Consideration Record Date and that is entitled to receive the Merger Consideration in accordance with this Agreement and the Plan of Merger; and

(B)         in respect of the remaining amount:

(i)           to the extent that it is attributable to the Dissenting Shares of Dissenting Shareholders that validly exercise, and do not fail to perfect, nor withdraw or lose, their Dissenter Rights, it shall be retained by EDC pending the determination of the fair value of such Dissenting Shares in accordance with the provisions of section 238 of the Companies Law and, upon such determination, shall be applied by EDC towards making payment as soon as practicable in whole or in part of the fair value determined (including payment of any interest, fees, expenses, penalties or other costs incurred in connection therewith); and

(ii)          to the extent that it is attributable to the Dissenting Shares of Dissenting Shareholders that do not validly exercise, or fail to perfect, or withdraw or lose, their Dissenter Rights, it shall be applied by EDC as soon as practicable after such failure, withdrawal or loss to make payment of the Merger Consideration to such Dissenting Shareholders.

  1. Implementation obligations

6.1             EDC's obligations

Subject to applicable laws, EDC will comply with the obligations of EDC set out in Schedule 5 and take all reasonable steps to implement the Merger as soon as is reasonably practicable.

6.2             EACL's obligations

Subject to applicable laws, EACL will comply with the obligations of EACL set out in Schedule 6 and take all reasonable steps to assist EDC to implement the Merger as soon as is reasonably practicable.

  1. Shareholder Circular and Notice of Meeting

7.1             Preparation and Publication of Shareholder Circular and Notice of Meeting

After the execution and delivery of this Agreement and by no later than 7.00 a.m. on the next Business Day, EDC shall procure that the Shareholder Circular and Notice of Meeting are released through a Regulatory Information Service.

Without limiting clauses 6.1 or 6.2, EDC acknowledges and warrants that it has taken all necessary steps to ensure that the Shareholder Circular and Notice of Meeting:

(a)              complies with the applicable requirements of:

(i)               the Companies Law;

(ii)             the Listing Rules; and

(iii)           the memorandum and articles of association of EDC; and

(b)             subject to EACL's due compliance with clause 7.2(b), is not, having regard to applicable disclosure requirements, misleading or deceptive in any material respect (including because of any material omission).

7.2             EACL Information

EACL:

(a)              consents to the inclusion of the EACL Information in the Shareholder Circular and Notice of Meeting, in the form in which it appears in Annexure D; and

(b)             acknowledges that it is responsible for ensuring, and warrants that it has taken all necessary steps to ensure, that the EACL Information is not misleading or deceptive in any material respect (whether by omission or otherwise) on the basis that EDC will not verify or edit that information in the Shareholder Circular and Notice of Meeting.

  1. Conduct of business

8.1             Overview

Subject to the terms of this Agreement, from the date of this Agreement up to and including the Merger Implementation Date (unless this Agreement is terminated earlier), EDC undertakes that the EDC Group will conduct its business in the ordinary course and in substantially the same manner as conducted in the previous 12 months and, without prejudice to the obligations in this undertaking, EDC will promptly notify EACL in the event that it becomes aware of a breach of this undertaking.

8.2             Prohibited actions

(a)              Other than with the prior written approval of EACL or as is specifically contemplated or required to be done by EDC under the Transaction Documents, EDC must procure that each EDC Group Company does not, during the period referred to in clause 8.1, take any action which would give rise to, or be reasonably expected to give rise to an EDC Proscribed Event, whether immediately or at any time prior to the Long Stop Date.

(b)             Other than as is specifically contemplated or required to be done by EACL under the Transaction Documents, EACL must not during the period referred to in clause 8.1, take any action which would give rise to, or be reasonably expected to give rise to an EACL Proscribed Event, whether immediately or at any time prior to the Long Stop Date.

8.3             Permitted actions

Nothing in this clause 8 restricts:

(a)               any EDC Group Company undertaking any activity which:

(i)               is specifically contemplated or required to be done by EDC under the Transaction Documents;

(ii)             is reasonably undertaken by any EDC Group Company in an emergency or disaster situation with the intention of minimising any adverse effect of such situation (and EDC shall in any event promptly notify EACL of such situation);

(iii)           any EDC Group Company is required to take, or omit to take, as a result of, or in order to comply with, any applicable law, regulation or any order or decision of any Governmental Authority (and EDC shall in any event promptly notify EACL of such requirement); or

(iv)            is undertaken at the written request of EACL or for which EACL has provided written consent following the date of this Agreement (such consent not to be unreasonably withheld or delayed);

(b)             EACL undertaking any activity which:

(i)               is specifically contemplated or required to be done by EACL under the Transaction Documents;

(ii)             is reasonably undertaken by EACL in an emergency or disaster situation with the intention of minimising any adverse effect of such situation; or

(iii)           EACL is required to take, or omit to take, as a result of, or in order to comply with, any applicable law, regulation or any order or decision of any Governmental Authority.

  1. Warranties

9.1             EDC's warranties

(a)              EDC warrants to EACL that each of the statements set out in Schedule 7 is true and accurate in all material respects as at the date of this Agreement. Such warranties are deemed to be repeated on the Merger Plan Filing Date. Any reference made to the date of this Agreement (whether express or implied) in relation to any warranty shall be construed, in connection with the repetition of the warranties, as a reference to the date of such repetition.

(b)             If at any time during the period between the date of this Agreement and the Merger Plan Filing Date EDC becomes aware that a warranty set out in Schedule 7 has been breached, is untrue or is misleading, or has a reasonable expectation that any of those things might occur, it shall immediately notify EACL of the relevant occurrence in sufficient detail to enable EACL to make an accurate assessment of the situation, and use all reasonable endeavours to prevent or remedy the notified occurrence.

9.2             EDC warranty certificate

EDC must provide to EACL on the Merger Plan Filing Date a certificate signed by a director of EDC stating, as at that date, that the warranties given by EDC in clause 9.1 remain true and accurate or, if any such warranty is not true and accurate as at that date, providing reasonable particulars of the facts and matters which make the warranty untrue or inaccurate.

9.3             EACL's warranties

(a)              EACL warrants to EDC that each of the statements set out in Schedule 7 is true and accurate in all material respects as at the date of this Agreement and as at the Merger Plan Filing Date. Any reference made to the date of this Agreement (whether express or implied) in relation to any warranty shall be construed, in connection with the repetition of the warranties, as a reference to the date of such repetition.

(b)             If at any time during the period between the date of this Agreement and the Merger Implementation Date EACL becomes aware that a warranty set out in Schedule 7 has been breached, is untrue or is misleading, or has a reasonable expectation that any of those things might occur, it shall immediately notify EDC of the relevant occurrence in sufficient detail to enable EDC to make an accurate assessment of the situation, and use all reasonable endeavours to prevent or remedy the notified occurrence.

9.4             EACL warranty certificate

EACL must provide to EDC on the Merger Plan Filing Date a certificate signed by an Authorised Officer, stating, as at that date, that the warranties given by EACL in clause 9.3 remain true and accurate or, if any such warranty is not true and accurate as at that date, providing reasonable particulars of the facts and matters which make the warranty untrue or inaccurate.

  1. Dissenters

Notwithstanding any provision of this Agreement to the contrary and to the extent available under the Companies Law, EDC Shares that are issued and outstanding immediately prior to the Merger Implementation Date and that are held by EDC Shareholders who shall have validly exercised and not effectively withdrawn or lost their rights to dissent from the Merger in accordance with Section 238 of the Companies Law (collectively, the "Dissenting Shares"; holders of Dissenting Shares being referred to as "Dissenting Shareholders") shall cease to confer upon any Dissenting Shareholder any of the rights of a member except the right to payment of the fair value of such Dissenting Shares held by them and such other rights as may be provided in accordance with the provisions of such Section 238, except that all EDC Shares held by Dissenting Shareholders who shall have failed to perfect or who effectively shall have withdrawn or lost their Dissent Rights in respect of such EDC Shares under Section 238 of the Companies Law shall thereupon (i) be deemed not to be Dissenting Shares and (ii) be deemed to have been cancelled and cease to exist, as of the Merger Implementation Date, in consideration for the right of the holder thereof to receive the Merger Consideration, without any interest thereon, in the manner provided in clauses 5.2 and 5.3.

  1. Directors' recommendation

The Special Committee will not make or propose publicly to make a Change of Recommendation, except that, prior to obtaining the approval of EDC Shareholders for the Plan of Merger, the Special Committee may make a Change of Recommendation in response to an Intervening Event if the Special Committee has determined in good faith (after obtaining written advice from its legal advisers) that failure to make such a Change of Recommendation would breach the Special Committee's fiduciary duties under applicable law. Prior to making any such Change of Recommendation in response to an Intervening Event the Special Committee will give the EDC Board and EACL at least three (3) Business Days prior written notice of its intention to make a Change of Recommendation together with, subject to any confidentiality obligations applicable to EDC, a description of the Intervening Event (including, if applicable the material terms and conditions of any competing transaction).

  1. Termination

12.1          Termination events

Without limiting any other provision of this Agreement, this Agreement may be terminated prior to the Merger Plan Filing Time:

(a)              if agreed to in writing by the parties;

(b)             by EACL, if it receives notice from EDC that EDC will not have sufficient resources to satisfy its payment obligations pursuant to clauses 5.2 and 5.3 of this Agreement;

(c)              by either party, if the other is in material breach of any clause of this Agreement, the relevant party seeking to terminate the Agreement under this clause 12.1(c) has, if practicable, given notice to the other party setting out the relevant circumstances and stating an intention to terminate and, the relevant circumstances continue to exist twenty (20) Business Days after the time such notice is given and, if the Merger Plan Filing Time would otherwise occur within such notice period, the Merger Plan Filing Time will be deferred until the Business Day following the expiry of the twenty (20) Business Day notice period;

(d)             by either party, if the resolution submitted to the Merger Meeting is not approved by the requisite majority;

(e)              by either party, if the EACL Shareholder Approval is revoked or ceases to be valid and effective;

(f)              by either party, if the Merger has not become effective on or before the Long Stop Date;

(g)              by either party, if an order or judgment (whether temporary, preliminary or permanent) or other communication (whether oral or in writing) of any Governmental Authority (including in respect of any Sanctions) has been issued or made prior to the Merger Plan Filing Time in relation to EDC, any EDC Group Company, EACL and/or any Participant, which order, judgment or other communication has the effect of making unlawful or of seeking to restrain or prohibit, or makes enquiries in relation to, any of the matters contemplated by the Transaction Documents, or if any verbal or written notice of intention to issue or make any such order, judgment or communication (or proceedings in respect of the same) has been issued or made by any Governmental Authority prior to the Merger Plan Filing Time to EDC, any EDC Group Company, EACL and/or any Participant;

(h)             by EACL, if any EDC Group Company becomes Insolvent;

(i)               by EACL, if a Material Adverse Change arises or occurs;

(j)               by EACL, if an Exchange Rate Material Adverse Change arises or occurs;

(k)             by either party, if the Transaction (in whole or in part) would, if implemented in the manner envisaged hereunder, give rise to a breach of Sanctions prior to the Merger Plan Filing Time by EACL, any Participant, and/or any EDC Group Company; or

(l)               by either party, if EACL, any of the Participants or any EDC Group Company becomes a Sanctions Target prior to the Merger Plan Filing Time.

12.2          Termination

Where a party has a right to terminate this Agreement, that right for all purposes will be validly exercised if the party delivers a notice in writing to the other party stating that it terminates this Agreement.

12.3          Effect of Termination

In the event that a party terminates this Agreement, or if this Agreement otherwise terminates in accordance with its terms, this Agreement will become void and have no effect, other than:

(a)              this clause 12 and clauses 1, 13, 14, 15 and 16, which will survive termination; and

(b)             in respect of any liability for a pre-termination breach of this Agreement.

12.4          Liability of EDC and EACL under this Agreement

In addition to the right of termination under clause 12.1 where there is no appropriate remedy for the breach of this Agreement (other than termination), then the non-defaulting party is entitled to damages for Losses suffered by it and expenses incurred by it as a result of the breach of the terms of this Agreement.

  1. Confidential information

13.1       Each party shall treat as strictly confidential all documents, materials and other information, whether technical or commercial or otherwise, obtained or received by it as a result of entering into, or performing its obligations under, this Agreement, (together "Confidential Information"); and shall not, except with the prior written consent of the party from whom the Confidential Information was obtained (which shall not be unreasonably withheld or delayed), make use of (save for the purposes of performing its obligations under this Agreement) or disclose to any person (other than its Representatives and Confidential Information Representatives (as defined below)) any Confidential Information.

13.2       Each party undertakes to the other party that it shall only disclose Confidential Information to Representatives or Confidential Information Representatives (as defined below) where it is reasonably required for the purposes of performing its obligations under this Agreement and only where such recipients are informed of the confidential nature of the Confidential Information and such disclosure will not breach applicable laws.

13.3       Subject to applicable laws, each party may for the purposes contemplated by this Agreement disclose Confidential Information to the following persons ("Confidential Information Representatives") or any of them:

(a)              its professional advisers, auditors, bankers, lenders and insurers, acting as such; and

(b)             its directors, officers and senior employees.

13.4       Each party may disclose Confidential Information to the extent requested or required by law, any stock exchange or competent Governmental Authority or any order of any court of competent jurisdiction, provided that (to the extent permitted by law) the party consults with the other party as to the contents of such disclosure and, in any event, discloses only the minimum amount necessary in order to satisfy such requirement.

13.5          Notwithstanding this clause 13, EDC may disclose Confidential Information to any provider of debt financing to the extent required to satisfy its obligations in clauses 5.2 and 5.3.

  1. Notices and other communications

14.1          Form of communications

Unless expressly stated otherwise in this Agreement, all notices, certificates, consents, approvals, waivers and other communications in connection with this Agreement must be:

(a)              in writing;

(b)             signed by the sender (if an individual) or an Authorised Officer of the sender; and

(c)              marked for the attention of the person identified below or, if the recipient has notified otherwise, then marked for attention in the way last notified.

EACL

EDC Acquisition Company Limited
Intertrust Corporate Services (Cayman) Limited
190 Elgin Avenue
George Town
Grand Cayman KY1-9005
Cayman Islands

For the attention of: W. Richard Anderson, Director

With a copy to:

The Stinemetz Law Firm PLLC
One BriarLake Plaza
2000 West Sam Houston Parkway South, Suite 175
Houston, Texas 77042
USA

For the attention of: Steven Douglas Stinemetz, Director

EDC

Eurasia Drilling Company Limited
Boundary Hall
Cricket Square
PO Box 1111
Grand Cayman KY1-1102
Cayman Islands

For the attention of: The Special Committee

With a copy to:

The Stinemetz Law Firm PLLC
One BriarLake Plaza
2000 West Sam Houston Parkway South, Suite 175
Houston, Texas 77042
USA

For the attention of: Steven Douglas Stinemetz, Director

14.2          Delivery

Communications must be delivered by hand, registered post or courier using an internationally recognised courier company, to the address referred to in clause 14.1. If the intended recipient has notified a changed address, then communications must be to that address instead.

14.3          When effective

Communications take effect from the time they are received or taken to be received under clause 14.4 (whichever happens first) unless a later time is specified.

14.4          When taken to be received

Communications shall be deemed to have been received at the time of delivery, if delivered by hand, registered post or courier.

14.5          Receipt outside business hours

Notwithstanding clauses 14.3 and 14.4, if communications are received or taken to be received under clause 14.4 after 5.00 p.m. in the place of receipt or on a non-Business Day, they are taken to be received at 9.00 a.m. on the next Business Day and take effect from that time unless a later time is specified.

  1. Miscellaneous

15.1          Discretion in exercising rights

A party may exercise a right or remedy or give or refuse its consent in any way it considers appropriate (including by imposing conditions), unless this Agreement expressly states otherwise.

15.2          Partial exercising of rights

If a party does not exercise a right or remedy fully or at a given time, the party may still exercise it later.

15.3          No liability for loss

A party is not liable for loss caused by the exercise or attempted exercise of, failure to exercise, or delay in exercising a right or remedy under this Agreement.

15.4          Approvals and consents

By giving its approval or consent a party does not make or give any warranty or representation as to any circumstance relating to the subject matter of the consent or approval.

15.5          Conflict of interest

The parties' rights and remedies under this Agreement may be exercised even if it involves a conflict of duty or a party has a personal interest in their exercise.

15.6          Remedies cumulative

The rights and remedies in this Agreement are in addition to other rights and remedies given by law independently of this Agreement.

15.7          Variation and waiver

A provision of this Agreement or a right created under it, may not be waived or varied except in writing, signed by the party or parties to be bound.

A failure or delay by any person to exercise any right or remedy provided under this Agreement or by law shall not constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict any further exercise of that or any other right or remedy.

No single or partial exercise of any right or remedy provided under this Agreement or by law shall prevent or restrict the further exercise of that or any other right or remedy.

15.8          No third party enforcement rights

A person who is not a party to this Agreement shall have no right to enforce any of its terms.

15.9          Further steps

Each party agrees, at its own expense, to do anything that is reasonable that the other party asks (such as obtaining consents, signing and producing documents and getting documents completed and signed):

(a)              to bind the party and any other person intended to be bound under this Agreement; or

(b)             to show whether the party is complying with this Agreement.

15.10       Construction

No rule of construction applies to the disadvantage of a party because that party was responsible for the preparation of, or seeks to rely on, this Agreement or any part of it.

15.11       Costs

The parties agree to pay their own legal and other costs and expenses in connection with the preparation, execution and completion of this Agreement and other related documentation.

15.12       Entire agreement

This Agreement constitutes the entire Agreement of the parties about its subject matter and supersedes all previous agreements, understandings and negotiations on that subject matter.

15.13       Severance

If any provision or part-provision of this Agreement is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part-provision shall be deemed deleted. Any modification to or deletion of a provision or part-provision under this clause shall not affect the validity and enforceability of the rest of this Agreement.

15.14       Assignment

A party may not assign its rights under this Agreement without the consent of each other party. For the avoidance of doubt, a party may not transfer any of its obligations under this Agreement without the consent of each other party.

15.15       No representation or reliance

Each party acknowledges that:

(a)              no party (nor any person acting on its behalf) has made any representation or other inducement to it to enter into this Agreement, except for representations or inducements expressly set out in this Agreement; and

(b)             it does not enter into this Agreement in reliance on any representation or other inducement by or on behalf of any other party, except for any representation or inducement expressly set out in this Agreement.

15.16       Counterparts

This Agreement may be executed in counterparts. All counterparts when taken together are to be taken to constitute one instrument.

  1. Governing Law and Dispute Resolution

16.1          Governing Law

This Agreement and any dispute or claim (including any non-contractual disputes or claims) arising out of or in connection with it or its subject matter shall be governed by, and construed in accordance with, English law.

16.2          Arbitration

(a)              Any dispute, claim, difference or controversy arising out of, relating to or having any connection with this Agreement, including but not limited to any dispute as to its subject matter, existence, negotiation, validity, interpretation, performance, breach, termination or enforceability or the consequences of its nullity and any dispute or claim relating to any non-contractual obligations arising out of or in connection with it (for the purpose of this clause, a "Dispute"),shall be referred to and finally resolved by arbitration under the LCIA Arbitration Rules as amended from time to time (for the purpose of this clause, the "Rules").

(b)             The Rules are incorporated by reference into this clause and capitalised terms used in this clause which are not otherwise defined in this Agreement have the meaning given to them in the Rules.

(c)              The number of arbitrators shall be three.

(d)             Each party shall be entitled to nominate one arbitrator for appointment by the LCIA Court in accordance with the LCIA Rules. In the event that either of the two parties fails to nominate an arbitrator by the time stipulated in the Rules, then the LCIA Court shall nominate an arbitrator for such party. The third arbitrator, who shall act as the chairman of the Arbitral Tribunal, shall be nominated by agreement of the two party-appointed arbitrators within fourteen (14) days of the confirmation of the appointment of the second arbitrator, or in default of such agreement, appointed by the LCIA Court.

(e)              The seat or legal place of arbitration shall be London, England.

(f)              The language used in the arbitral proceedings shall be English. All documents submitted in connection with the proceedings shall be in the English language, or, if in another language, accompanied by an English translation. Any award shall be issued in English.

(g)              The award shall be final and binding on the parties and may be entered and enforced in any court having jurisdiction.

(h)             Delivery of any Request made pursuant to this clause shall be at the address given for the sending of notices under this Agreement at clause 14 and in a manner provided for in that clause.

 

EXECUTEDon the date first written above.

[Signature page follows schedules and annexures]

Schedule 1
EDC Proscribed Events

  1. 1.               Conversion

EDC converts all or any of its shares into a larger or smaller number of shares or redenominates such shares in another currency.

  1. 2.               Reduction of share capital

EDC or any Subsidiary of EDC which is directly or indirectly owned by EDC, resolves to reduce the number of shares which it is authorised to issue in any way or reclassifies, combines, divides, splits or redeems or repurchases directly or indirectly any of its shares.

  1. 3.               Purchase of own shares

EDC or any Subsidiary of EDC which is directly or indirectly owned by EDC, enters into an agreement to purchase its own shares or resolves to approve the terms of such an agreement.

  1. 4.               Distribution

EDC or any Subsidiary of EDC which is (directly or indirectly) owned by EDC, makes or declares, or announces an intention to make or declare, any distribution (whether by way of dividend, capital reduction or otherwise and whether in cash or in specie or redemption) except any distribution from one directly or indirectly wholly-owned Subsidiary of EDC to EDC or another directly or indirectly wholly-owned Subsidiary of EDC.

  1. 5.               Issuing or granting shares or options

EDC or any of its Subsidiaries:

(a)              issues shares or sells treasury shares;

(b)             grants an option over any of its issued or to be issued shares; or

(c)              agrees to make such an issue or grant such an option,

in each case to a person other than EDC or any Subsidiaries which are directly or indirectly wholly-owned by EDC.

  1. 6.               Securities or other instruments

EDC or any of its Subsidiaries issues securities or other instruments convertible into shares or debt securities or agrees to issue securities or other instruments convertible into shares or debt securities, in each case to a person other than EDC or any Subsidiary of EDC which is not directly or indirectly wholly-owned by EDC.

  1. 7.               Constitution

EDC or a Subsidiary of EDC which is directly or indirectly owned by EDC adopts new constitutional documents or amends, modifies or repeals its constitutional documents or a provision of them.

  1. 8.               Encumbrances

EDC or any of its Subsidiaries creates, or agrees to create, any Encumbrance over the whole or a substantial part of its business or property, other than in the ordinary course of business.

  1. 9.               Insolvency

EDC or any of its Affiliates becomes Insolvent.

Schedule 2
EACL Proscribed Events

  1. 1.               Conversion

EACL converts all or any of its shares into a larger or smaller number of shares or redenominates such shares in another currency.

  1. 2.               Reduction of share capital

EACL resolves to reduce the number of shares which it is authorised to issue in any way or reclassifies, combines, divides, splits or redeems or repurchases directly or indirectly any of its shares.

  1. 3.               Purchase of own shares

EACL enters into an agreement to purchase its own shares or resolves to approve the terms of such an agreement.

  1. 4.               Distribution

EACL makes or declares, or announces an intention to make or declare, any distribution (whether by way of dividend, capital reduction or otherwise and whether in cash or in specie or redemption).

  1. 5.               Issuing or granting shares or options

EACL:

(a)              issues shares or sells treasury shares;

(b)             grants an option over any of its issued or to be issued shares; or

(c)              agrees to make such an issue or grant such an option.

  1. 6.               Securities or other instruments

EACL issues securities or other instruments convertible into shares or debt securities or agrees to issue securities or other instruments convertible into shares or debt securities.

  1. 7.               Constitution

EACL adopts new constitutional documents or amends, modifies or repeals its constitutional documents or a provision of them.

  1. 8.               Encumbrances

EACL creates, or agrees to create, any Encumbrance over the whole or a substantial part of its business or property, other than in the ordinary course of business.

  1. 9.               Insolvency

EACL becomes Insolvent.

Schedule 3
Conditions Precedent

 (CLAUSE 4)

Condition

Party entitled to benefit

  1. 1.               EDC Shareholder Approval being obtained.

Cannot be waived

  1. 2.               EACL Shareholder Approval being obtained.

Cannot be waived

  1. 3.               Confirmation from EDC that sufficient cash is, or at the relevant time will be, available in same day funds to satisfy EDC's payment obligations in clauses 5.2 and 5.3.

Cannot be waived

  1. 4.               Each Participant withdrawing each of the EDC GDRs held by such Participant from the EDC GDR programme operated by the Depositary pursuant to the Deposit Agreement, the cancellation of such EDC GDRs by the Depositary, the transfer of the EDC Shares underlying such EDC GDRs from the Depositary to such Participant and, immediately prior to the Merger Consideration Record Date, no EDC GDRs being held by the Participants.

EACL

  1. 5.               Immediately prior to the Merger Plan Filing Time there being no reasonable grounds for EACL to believe that immediately following completion of the Merger, there will be any holders of EDC Shares other than the Participants.

EACL

  1. 6.               All secured creditor consents (if any) required under the Companies Law having been obtained by EDC and EACL.

Cannot be waived

  1. 7.               Publication by Regulatory Information Service of the Press Announcement containing written notice of EDC's intention (subject only to completion of the Merger) to cancel the listing of the EDC GDRs on the London Stock Exchange and such notice is not withdrawn or suspended.

EACL

  1. 8.               No Material Adverse Change having arisen or occurred prior to the Merger Plan Filing Time.

EACL

  1. 9.               No Exchange Rate Material Adverse Change having arisen or occurred prior to the Merger Plan Filing Time.

EACL

  1. 10.            Either:

(a)              a written waiver being obtained from UniCredit Bank Austria AG in terms reasonably satisfactory to EACL in respect of:

(i)               the provision relating to prepayment upon a change of control in clause 9.1 of the UniCredit Facility Agreement; and

(ii)             any breach of the covenant in clause 21.5 of the UniCredit Facility Agreement that may be caused as a result of the Merger; or

(b)             all amounts due under the UniCredit Facility Agreement being repaid in full such that the provisions in the UniCredit Facility Agreement referred to in paragraph 12(a)(i) no longer apply.

EACL

  1. 11.            Either:

(a)              a written waiver being obtained from BNP Paribas SA in terms reasonably satisfactory to EACL in respect of:

(i)               the provision relating to prepayment upon a change of control in clause 8.2 of the BNP Paribas Facility Agreement; and

(ii)             any breach of the covenant in clause 9.9 of the BNP Paribas Guarantee that may be caused as a result of the Merger; or

(b)             all amounts due under the BNP Paribas Facility Agreement being repaid in full such that the provisions in the BNP Paribas Facility Agreement referred to in paragraph 13(a)(i) no longer apply.

EACL

  1. 12.            Any and all outstanding awards of EDC Securities under the Incentive Compensation Plan having been converted into cash awards, cancelled or such arrangements having been made to ensure such cancellation following completion of the Merger, in each on terms reasonably satisfactory to EACL.

EACL

  1. 13.            Prior to the Merger Plan Filing Time, none of EACL, nor any EDC Group Company nor any of the Participants being or becoming a Sanctions Target.

EACL

  1. 14.            The Transaction (in whole or in part) not giving rise prior to the Merger Plan Filing Time to any breach of Sanctions by EDC, any EDC Group Company, EACL and/or any Participant.

Cannot be waived

  1. 15.            No order or judgment (whether temporary, preliminary or permanent) or other communication (whether oral or in writing) of any Governmental Authority (including in respect of any Sanctions) having been issued or made prior to the Merger Plan Filing Time in relation to EDC, any EDC Group Company, EACL and/or any Participant, which order, judgment or other communication has the effect of making unlawful or of seeking to restrain or prohibit, or makes enquiries in relation to, any of the matters contemplated by the Transaction Documents, and no verbal or written notice of intention to issue or make any such order, judgment or communication (or proceedings in respect of the same) by any Governmental Authority having been issued or made prior to the Merger Plan Filing Time to EDC, any EDC Group Company, EACL and/or any Participant, which notice remains outstanding at the Merger Plan Filing Time.

Cannot be waived

  1. 16.            Immediately prior to the Merger Consideration Record Date, there being no holders of EDC Shares or EDC GDRs other than the Qualifying Shareholders (including the Depositary solely in its capacity as depositary in relation to the EDC Shares underlying the EDC GDRs), the Participants, EACL and EDC Incentive Plan Limited.

EACL

Schedule 4
Timetable

 

Event

Date

Special Committee Approval and Recommendation of the Merger

11 October 2015

EACL Shareholder Approval of the Plan of Merger

11 October 2015

Submit draft Merger documents to the Cayman Registrar for pre-clearance

12 October 2015

EDC Shareholder Approval of the Plan of Merger

 

(a)          Notice of the meeting, accompanied by a copy of the Plan of Merger and explanatory memorandum, must be given to each EDC Shareholder, whether or not entitled to vote on the Merger.

12 October 2015

(b)          The Plan of Merger must be authorised by a special resolution of EDC Shareholders entitled to vote on the merger (being a resolution passed by a majority of in excess of two-thirds of the votes of those EDC Shareholders entitled to vote and voting on the EDC Shareholder Resolution).

13 November 2015

Execution of Plan of Merger

 

Once the Plan of Merger has been approved by EDC and EACL, each company must execute the Plan of Merger.

Merger Plan Filing Date

Filing of the Plan of Merger and approval by the Cayman Registrar

 

(a)          The Plan of Merger (together with the supporting documents) must be filed with the Cayman Registrar by EDC's registered agent.

Merger Plan Filing Date

(b)          If the Cayman Registrar is satisfied that the requirements of the Companies Law have been complied with, the Cayman Registrar will:

Merger Implementation Date

(i)           register the Plan of Merger; and

 

(ii)          issue the Certificate of Merger.

 

Payment of the Merger Consideration

 

Payment by EDC to the Depositary to make payment of the Merger Consideration to each Qualifying Shareholder that held EDC GDRs as at the Merger Consideration Record Date

By 5:00 p.m. (EST) on the Business Day following the Merger Implementation Date

 

Schedule 5
EDC's Obligations

 (CLAUSE 6.1)

  1. 1.               EDC Information

Ensure that the Shareholder Circular and Notice of Meeting complies with applicable law.

  1. 2.               Further EDC Information

Provide to EACL and EDC Shareholders such further or new EDC Information as may arise after the Shareholder Circular and Notice of Meeting has been sent until the date of the Merger Meeting as may be necessary to ensure that the EDC Information contained in the Shareholder Circular and Notice of Meeting is not, having regard to applicable disclosure requirements, false, misleading or deceptive in any material respect (including because of any material omission).

  1. 3.               Provision of information to EACL

(a)              Provide all necessary information about the EDC Shares, EDC GDRs and EDC Shareholders to EACL which EACL requires in order to assist EACL to solicit votes at the Merger Meeting, to pay (directly or indirectly) the Merger Consideration to EDC Shareholders, or otherwise in connection with implementing the Merger.

(b)             Provide all necessary directions to the Depositary to promptly provide any information that EACL requests in relation to the EDC GDRs, the Register of Depositary Interests, the Register of Members, including any sub-register, and, where requested by EACL, EDC must use its reasonable endeavours to procure that such information is provided to EACL in such electronic form as is requested by EACL.

  1. 4.               SendShareholder Circular andNotice of Meeting

Send the Shareholder Circular and Notice of Meeting and a copy of the Plan of Merger and all other necessary documentation to all EDC Shareholders as soon as practicable after the date of this Agreement in accordance with the Timetable, the articles of association and this Agreement.

  1. 5.               Merger Meeting

Convene the Merger Meeting and seek the EDC Shareholder Approval for the Plan of Merger and, for this purpose, the Special Committee (subject to the terms of this Agreement, law and their fiduciary duties) must use reasonable endeavours to promote the merits of the Merger, including meeting with key holders of EDC Securities at the request of EACL.

  1. 6.               Depositary

Liaise with the Depositary to ensure that the Shareholder Circular and Notice of Meeting and a copy of the Plan of Merger and all other necessary documentation is provided as soon as reasonably practicable following receipt by the Depositary, to the holders of EDC's GDRs.

Direct the Depositary to pay the Merger Consideration to the Qualifying Shareholders (except for the Dissenting Shareholders) in a timely manner in accordance with the Deposit Agreement.

As soon as reasonably practicable after the effective time of the Merger, provide notice to the Depositary to terminate the Deposit Agreement in accordance with its terms.

  1. 7.               Plan of Merger

On the Merger Filing Date, execute and deliver the Plan of Merger and such other documents as required under the Companies Law (including a director's declaration required under Section 233(9) of the Companies Law) to the Cayman Registrar to effect the Merger pursuant to the Companies Law (and make an appropriate Regulatory Information Service announcement).

  1. 8.               Delisting

Take all such steps and actions (including the making of an appropriate Regulatory Information Service announcement) as are necessary to ensure the cancellation of the listing of the EDC GDRs on the Official List and the admission to trading of the EDC GDRs on the London Stock Exchange on the date falling one (1) Business Day after the Merger Implementation Date, or such other date agreed by the parties (acting reasonably) which is consistent with the rules applying to the London Stock Exchange.

  1. 9.               Other steps

Do all other things necessary and reasonable to give effect to the Merger.

  1. 10.            Dissent Rights

Subject to applicable laws, promptly provide EACL with a copy of any written objection to the Merger, exercise or purported exercise of the Dissent Rights and written communications with any such EDC Shareholder objecting to the Merger or exercising or purportedly exercising such Dissent Rights, and not settle or compromise any exercise or purported exercise of Dissent Rights or action brought by any present, former or purported holder of any of its securities in connection with the Merger without the prior consent of EACL.

  1. 11.            Cancellation of EDC GDRs

Notify EACL of the cancellation of any EDC GDRs prior to the Merger Consideration Record Date and provide all necessary information about the EDC Shares, EDC GDRs and EDC Shareholders to EACL which EACL requests, including the number of EDC Shares held by the Depositary at the Merger Consideration Record Date.

  1. 12.            Registration of EDC Shares

Do all things necessary to register any transfer of EDC Shares in the Register of Members, including, but not limited to, any transfer of EDC Shares in connection with the cancellation of EDC GDRs by any EDC Shareholder, including any EDC Shareholder exercising Dissent Rights.

 

Schedule 6
EACL's Obligations

 (CLAUSE 6.2)

  1. 1.               Further EACLInformation

Provide to EDC such further or new EACL Information as may arise after the Shareholder Circular and Notice of Meeting has been sent until the date of the Merger Meeting as may be necessary to ensure that the EACL Information contained in the Shareholder Circular and Notice of Meeting is not, having regard to applicable disclosure requirements, false, misleading or deceptive in any material respect (including because of any material omission).

  1. 2.               EACL approvals

Ensure that EACL approves the Merger, the execution and filing of the documents required by the Companies Law with the Cayman Registrar (including a director's declaration required under Section 233(9) of the Companies Law) and cooperate with and consent to EDC completing the Merger pursuant to this Agreement and the Plan of Merger and filing the Plan of Merger with the Cayman Registrar.

  1. 3.               Plan of Merger

On the Merger Plan Filing Date, procure that EACL executes and delivers the Plan of Merger and such other documents as required under the Companies Law and by the Cayman Registrar to effect the Merger pursuant to the Companies Law.

  1. 4.               Other steps

Do all other things necessary and reasonable to give effect to the Merger.

Schedule 7
EDC's Warranties

 (CLAUSE 9.1)

  1. 1.               Incorporation

It is a valid existing exempted company registered under the laws of its place of incorporation.

  1. 2.               Execution

The execution and delivery of this Agreement by EDC has been properly authorised by all necessary corporate actions of EDC.

  1. 3.               Corporate power

It has full corporate power and lawful authority to execute and deliver this Agreement and to consummate and perform or cause to be performed its obligations under this Agreement in accordance with its terms except for obtaining shareholder approval.

  1. 4.               Binding obligations

This Agreement constitutes legal, valid and binding obligations on it.

  1. 5.               EDC Information

The EDC Information provided in accordance with this Agreement and included in the Shareholder Circular and Notice of Meeting complies with all applicable laws.

  1. 6.               Reliance

The EDC Information contained in the Shareholder Circular and Notice of Meeting has been included in good faith and on the understanding that EACL (and its directors) are relying on that information for the purposes of considering and approving the EACL Information in the Shareholder Circular and Notice of Meeting and implementing the Merger.

  1. 7.               Continuous disclosure

As far as EDC is aware, it is not in breach of its continuous disclosure obligations under the Listing Rules.

  1. 8.               Opinions

Any statement of opinion or belief contained in the EDC Information is honestly held and there are reasonable grounds for holding the opinion or belief.

  1. 9.               Securities

The authorised share capital of EDC is US$2,500,000 divided into 250,000,000 shares of a nominal or par value of US$0.01 each and the EDC Shares are the only class of shares issued by EDC. The number of EDC Shares is 146,865,243 and EDC has not issued or agreed to issue any other securities or instruments which are still outstanding and which may convert into EDC Shares (other than pursuant to the Incentive Compensation Plan).

Schedule 8
EACL's Warranties

 (CLAUSE 9.3)

  1. 1.               Incorporation

It is a valid existing exempted company registered under the laws of its place of incorporation.

  1. 2.               Execution

The execution and delivery of this Agreement by EACL has been properly authorised by all necessary corporate actions of EACL.

  1. 3.               Corporate power

It has full corporate power and lawful authority to execute and deliver this Agreement and to consummate and perform or cause to be performed its obligations under this Agreement in accordance with its terms.

  1. 4.               Binding obligations

This Agreement constitutes legal, valid and binding obligations on it.

  1. 5.               EACL Information

The EACL Information provided by EACL in accordance with this Agreement and included in the Shareholder Circular and Notice of Meeting complies in all material respects with all applicable laws.

  1. 6.               Reliance

The EACL Information provided to EDC by EACL for inclusion in the Shareholder Circular and Notice of Meeting has been provided in good faith and on the understanding that EDC and its directors will rely on that information for the purposes of preparing the Shareholder Circular and Notice of Meeting and proposing and implementing the Merger.

  1. 7.               Opinions

Any statement of opinion or belief contained in the EACL Information is honestly held and there are reasonable grounds for holding the opinion or belief.

  1. 8.               Securities

The authorised share capital of EACL is US$200,000 divided into 20,000,000 shares each of a nominal or par value of US$0.01. The number of issued and outstanding shares in EACL is 18,000,000 and EACL has not issued or agreed to issue any other securities or instruments which are still outstanding and which may convert into shares of EACL.

Schedule 9
Participants

(1)             Patrimony Asset Management Limited as trustee for The Patrimony D Trust

(2)             Cloudburst Orange Ltd.

(3)             Topaz Opportunities Ltd

(4)             Amber Universal Holdings Limited

(5)             Burned Sun Ltd.

(6)             Blue Sunset Ltd.

(7)             Winfield Business Trading Inc.

(8)             Alexander Bogachev

(9)             Alexander Vaigel

(10)          Eagle Eye Holdings, Inc.

(11)          Isa Shabanov

(12)          Ivan Kolomeytsev

(13)          John J. Lendrum III

(14)          Konstantin Merkuryev

(15)          Martin Hansen

(16)          Medjeed Zulpukarov

(17)          Murat Sampiev

(18)          Nail Gabdulin

(19)          W. Richard Anderson

(20)          Richard Matzke

(21)          Taleh Aleskerov

 


Annexure A
Plan of Merger

This Plan of Merger is made the _____ day of November 2015 between EDC Acquisition Company Limited ("EACL"and sometimes hereinafter referred to as the "Merging Company")and Eurasia Drilling Company Limited ("EDC",and sometimes hereinafter referred to as the "Surviving Company"). EACL and EDC are herein collectively referred to as the "Companies".

WHEREASEACL and EDC are each exempted companies incorporated and existing under and by virtue of the Companies Law (2013 Revision) of the Cayman Islands (as amended) (the "Companies Law")and are each entering into this Plan of Merger pursuant to the provisions of Part XVI of the Companies Law.

AND WHEREASthe directors of the Companies deem it desirable and in the best interests of the Companies and their respective members that EACL be merged with and into EDC and that EDC shall be the surviving company (as defined in the Companies Law) (the "Merger"),on the terms and conditions of a Merger Implementation Agreement entered into between the Companies dated 12 October 2015 (the "Agreement").

NOW THEREFOREthis Plan of Merger witnesses as follows:

Company Details

  1. 1.               The constituent companies (as defined in the Companies Law) to the Merger are EACL and EDC.
  2. 2.               The surviving company (as defined in the Companies Law) of the Merger is EDC.
  3. 3.               Immediately prior to the Merger Implementation Date (as defined below), the authorised share capital of EACL is US$200,000 divided into 20,000,000 shares each with a nominal or par value of US$0.01 and the entire issued share capital of EACL is registered in the name of Burned Sun Ltd.
  4. 4.               Immediately prior to the Merger Implementation Date (as defined below), the authorised share capital of EDC is US$2,500,000 divided into 250,000,000 shares each with a nominal or par value of US$0.01.
  5. 5.               The registered office of:

(a)              the Surviving Company is Boundary Hall, Cricket Square, PO Box 1111, Grand Cayman KY1-1102, Cayman Islands; and

(b)             the Merging Company is Intertrust Corporate Services (Cayman) Limited, 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands.

Merger

  1. 6.               At the Merger Implementation Date (as defined below) and subject to and upon the terms and conditions set forth in the Agreement, this Plan of Merger and the applicable provisions of the Companies Law:

(a)              the rights, property of every description including choses in action, and the business, undertaking, goodwill, benefits, immunities and privileges of each of the Companies shall immediately vest in the Surviving Company;

(b)             the Surviving Company shall be liable for and subject, in the same manner as each of the Companies immediately prior to the Merger, to all mortgages, charges or security interests and all contracts, obligations, claims, debts and liabilities of each of the Companies;

(c)              the separate corporate existence of the Merging Company shall cease and the Registrar of Companies (the "Registrar") shall strike the Merging Company from the register of companies in accordance with the provisions of section 236(3) of the Companies Law; and

(d)             the Surviving Company shall continue as the surviving company within the meaning of the Companies Law.

  1. 7.               In accordance with section 233(13) of the Companies Law, the Merger shall be effective on the date that this Plan of Merger is registered by the Registrar (the "Merger ImplementationDate").

Terms and Conditions - Merger Consideration

  1. 8.               The terms and conditions of the Merger, including the manner and basis of cancelling, reclassifying, converting or exchanging shares in each constituent company are set out in the Agreement.

At the Merger Implementation Date and subject to and upon the terms and conditions set forth in the Agreement and this Plan of Merger:

(a)              each EDC Share issued and outstanding as at the effective time of the Merger held by Qualifying Shareholders shall be cancelled by operation of law in exchange for the right to receive the Merger Consideration or, in the case of Dissenting Shares, the fair value of such shares as determined in accordance with Section 238 of the Companies Law;

(b)             Dissenting Shares shall cease to confer upon any Dissenting Shareholder any of the rights of a member except the right to payment of the fair value of such Dissenting Shares held by them determined in accordance with the provisions of section 238 of the Companies Law unless any holders of Dissenting Shares fail to perfect or effectively withdraw or lose their dissenter rights, in which event they shall receive the Merger Consideration;

(c)              each share of the Merging Company issued and outstanding as at the Merger Implementation Date shall be converted into and exchanged for one share (with a nominal or par value of US$0.01 each) of the Surviving Company;

(d)             each EDC Share held by EACL and by EDC Incentive Plan Limited in issue and outstanding as at the Merger Consideration Record Date shall be cancelled by operation of law at the effective time of the Merger; and

(e)              each EDC Share held by the Participants (as defined in the Agreement) issued and outstanding as at the Merger Consideration Record Date shall remain issued and outstanding as at and following the effective time of the Merger.

For the purposes of this clause 8, the following definitions shall apply:

"Dissenting Shares" means the EDC Shares that are issued and outstanding as at the Merger Consideration Record Date and that are held by EDC Shareholders who shall have validly exercised and not effectively withdrawn or lost their rights to dissent from the Merger in accordance with Section 238 of the Companies law;

"Dissenting Shareholders" means the holders of Dissenting Shares;

"EDC Share" means a share with a nominal or par value of US$0.01 issued by EDC;

"EDC Shareholders" means the holders of EDC Shares;

"Merger Consideration" means US$11.75 in cash per EDC Share;

"Merger Consideration Record Date" means 5.00 p.m. (EST) on the business day immediately prior to the day on which the Plan of Merger is filed with the Registrar of Companies in the Cayman Islands; and

"Qualifying Shareholder" means each person who is an EDC Shareholder as at the Merger Consideration Record Date except for EACL, EDC Incentive Plan Limited and the Participants (as defined in the Agreement).

  1. 9.               The memorandum of association and articles of association of EDC as in effect on the Merger Implementation Date of the Merger shall be the memorandum of association and articles of association of the Surviving Company.
  2. 10.            The rights and restrictions attaching to the shares in the Surviving Company are set out in the amended and restated memorandum of association and articles of association of EDC as in effect on the Merger Implementation Date.

Directors' Interests in the Merger

  1. 11.            The names of each director of the Surviving Company are:

(a)              The Earl of Clanwilliam;

(b)             Alexander Djaparidze;

(c)              Murat Sampiev;

(d)             Taleh Aleskerov;

(e)              Alexander Bogachev;

(f)              Alexander Shokhin; and

(g)              Igor Belikov.

  1. 12.            The address of each director is the registered office of the Surviving Company at Boundary Hall, Cricket Square, PO Box 1111, Grand Cayman KY1-1102, Cayman Islands.
  2. 13.            No director of either of the Companies will be paid any amounts or receive any benefits consequent upon the Merger.

Secured Creditors

  1. 14.            The Surviving Company has granted no fixed or floating security interests that are outstanding as at the date of this Plan of Merger.
  2. 15.            The Merging Company has granted no fixed or floating security interests that are outstanding as at the date of this Plan of Merger.

General

  1. 16.            Save in respect of any amendment in accordance with the provisions of the next-following clause, no variation of this Plan of Merger shall be effective unless in writing and signed by or on behalf of each of the parties.
  2. 17.            At any time prior to the Merger Implementation Date, this Plan of Merger may be amended by the directors of the Surviving Company and the Merging Company to amend, modify or supplement the Plan of Merger, provided that no amendment, modification or supplement may be made by the directors of the Surviving Company and the Merging Company which reduces the Merger Consideration or otherwise materially affects the terms of the Merger to the detriment of the EDC Shareholders.
  3. 18.            The Merger shall be effective as provided by the laws of the Cayman Islands.
  4. 19.            This Plan of Merger may be executed in counterparts which when taken together shall constitute one instrument.

This Plan of Merger has been entered into on the date stated at the beginning of it.

 

SIGNEDfor and on behalf of

)

 

EURASIA DRILLING COMPANY LIMITED

)

Director

 

 

 

 

 

 

 

SIGNEDfor and on behalf of

)

 

EDC ACQUISITION COMPANY LIMITED

)

 

Director

 


Annexure B
EDC Shareholder Resolution

EURASIA DRILLING COMPANY LIMITED

Company Number 121302

(the "Company")

 

Special Resolution

RESOLUTION:

THAT, subject to the satisfaction or waiver of the conditions precedent pursuant to the Merger Implementation Agreement (as defined below): (a) the Company be authorised to merge with EDC Acquisition Company Limited ("EACL") so that the Company shall be the surviving company for the purposes of Part XVI of the Companies Law (2013 Revision) of the Cayman Islands, as amended (the "Cayman Companies Law"); (b) the merger implementation agreement between the Company and EACL dated 12 October 2015 (the "Merger Implementation Agreement") and the plan of merger between the Company and EACL (the "Plan of Merger"), and the transactions contemplated by the Plan of Merger, including the merger of the Company and EACL pursuant to the Cayman Companies Law (the "Merger"),be authorised and approved by the Company; (c) the Company be authorised to enter into the Plan of Merger; and (d) the Plan of Merger be executed by any one member of the Special Committee on behalf of the Company and filed with the Cayman Islands Registrar of Companies.

 

 

 

 


Annexure C
Press Announcement

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

12 OCTOBER2015

EURASIA DRILLING COMPANY LIMITED

ANNOUNCEMENT OF PROPOSED MERGER AND INTENTION TO DE-LIST GDRS

Eurasia Drilling Company Limited (theCompany) announces that it has today agreed with certain members of the Company's management team and certain significant shareholders (theParticipants) the terms of a merger (theMerger) between the Company and EDC Acquisition Company Limited (EACL).

On 8 October 2014, the Company announced that EACL had made an offer of $10.00 per share, which was based on management's view of the likely future performance of the Company. Following a detailed evaluation of the proposed merger by the Special Committee and its advisers and as a result of robust negotiations between the Special Committee and EACL, the parties agreed to a revised offer price of $11.75 per share (theMerger Consideration).

The revised offer represents an increase of 17.5% over the price per share originally offered by EACL on 8 October 2015. The Merger Consideration represents a premium of:

  • 7.3% over the closing price of a GDR on 7 October 2015 (being the latest trading date prior to the announcement by the Company of the receipt of an offer from EACL); and

 

  • 19.9% over the volume weighted average price of a GDR for the period from 1 October 2015 (being the first trading day after the Company's investor call on 30 September 2015 following the termination of the proposed transaction earlier this year with Schlumberger) to 7 October 2015 (being the latest trading date prior to the announcement by the Company of the receipt of an offer from EACL).

Following the initial receipt of an offer from EACL which was announced on 8 October 2015, the Company's board of directors (theBoard) formed a special committee of independent non-executive directors (theSpecialCommittee), comprising the Earl of Clanwilliam (as chairman of the Special Committee), Igor Belikov and Alexander Shokhin, to evaluate and negotiate the terms of the Merger on behalf of the Company with the assistance of separate advisers appointed by the Special Committee. Following the Special Committee's recommendation to accept the terms of the Merger and the approval by the Board, a merger implementation agreement has been signed today between EACL and the Company (theMerger Implementation Agreement).

The Merger is conditional on the Merger Consideration being available to the Company. It is expected that the Merger Consideration will be financed from existing cash reserves of the Company, loans from certain of the Participants and/or borrowing facilities available to the Company. The Participants are confident that such financing will be available to the Company by the time needed in order to complete the Merger as described below.

The Company will convene an Extraordinary General Meeting of the shareholders of the Company (theShareholders) on 13 November 2015 at 12 noon (GMT) at the offices of Willkie Farr & Gallagher (UK) LLP at CityPoint, 1 Ropemaker Street, London EC2Y 9AW (theExtraordinary General Meeting). The Shareholders will be asked to consider and vote on the plan of merger (thePlan of Merger).Under the terms of the Plan of Merger, the Company will be merged with EACL, with the Company continuing as the surviving company after the Merger. To be passed, the resolution to approve the Plan of Merger requires an affirmative vote of at least two-thirds of the votes of those Shareholders present and entitled to vote and voting in person or by proxy at the Extraordinary General Meeting. The Participants, whose shares represent approximately 71% of the Company's total outstanding Shares, have undertaken to vote in favour of the resolution and, accordingly, it is expected that the resolution to approve the Plan of Merger will be passed.

A circular providing notice of the Extraordinary General Meeting and containing detailed information about the Merger (the Circular) is expected to be dispatched to shareholders of the Company today and will also be available on the Company's website - www.eurasiadrilling.com/investor-relations/EGM/.

The Circular includes instructions of how Shareholders can vote at the Extraordinary General Meeting, as well as how Shareholders can exercise their right to dissent and seek payment of the fair value of their Shares in accordance with the Cayman Companies Law if the Merger is completed. Subject as provided in the final sentence of this paragraph, GDR holders will not have a right to attend or vote at the Extraordinary General Meeting or to dissent following completion of the Merger unless they surrender their GDRs, pay to The Bank of New York Mellon as depositary for the GDR programme (theDepositary)fees (consisting of up to $0.03 per GDR surrendered, a cable fee of $17.50 and any applicable taxes or governmental charges) and become Shareholders by 7 a.m. (EST) on Tuesday 10 November 2015. The deadline for receipt of cancellation instructions by the Depositary is 7 a.m. (EST) on Friday 30 October 2015. However, a GDR holder may, in accordance with the terms and conditions of the deposit agreement in respect of the GDRs (theDeposit Agreement), deliver to the Depositary voting instructions in respect of the shares represented by its GDRs by 12.00 noon (EST) on Friday 6 November 2015, whereupon the Depositary will use its reasonable endeavours to vote such shares in accordance with such voting instructions at the Extraordinary General Meeting.

Shareholders wishing to dissent must comply with the procedures and requirements for exercising dissenters' rights with respect to the Shares under the Cayman Companies Law. The fair value of their Shares as determined under the Cayman Companies Law could be more than, the same as, or less than the Merger Consideration which dissenting Shareholders would receive pursuant to the Plan of Merger. If the fair value determined under the Cayman Companies Law is less than the Merger Consideration, dissenting Shareholders may be liable to pay a proportion of the Company's costs in defending any petition by such dissenting Shareholders.

The Merger will become effective on the date that the Plan of Merger is registered by the Cayman Islands Registrar of Companies. Subject to the satisfaction of all conditions precedent, this is expected to be shortly after the date of the Extraordinary General Meeting, on or around Monday 16 November 2015 (theEffective Date), at which point the Company will be merged with EACL, with the Company continuing as the surviving company after the Merger. The Company intends to cancel the listing of the GDRs on the Official List of the UK Financial Conduct Authority and the admission of the GDRs to trading on the London Stock Exchange with effect from or around Wednesday 18 November 2015.

If the Effective Date occurs on Monday 16 November 2015 and the Depositary receives payment of the Merger Consideration of $11.75 per share by Tuesday 17 November 2015, it is expected that the Depositary will pay the Merger Consideration to GDR holders on or around Friday 20 November 2015. Subject to the Merger becoming effective, the Deposit Agreement will be terminated with effect from or around Monday 23 November 2015.

Pursuant to the terms of the Merger Implementation Agreement, in addition to approval by the Shareholders of the Company and the shareholder of EACL, the filing of the Plan of Merger with the Cayman Islands Registrar of Companies is subject to certain conditions, including: (i) no material adverse change having arisen in relation to the Company; (ii) sufficient financing being available to the Company in order to pay the Merger Consideration; (iii) none of EACL, the Company, any subsidiary of the Company nor any of the Participants becoming subject to sanctions; and (iv) no order, judgment or communication having been made by any governmental authority which has the effect of making unlawful or of restraining or prohibiting the Merger having been received. Unless the conditions precedent to the Merger have been satisfied or waived (where applicable) by 31 January 2016 (or such other date as is agreed between the Company and EACL), the Merger will not proceed and the Merger Implementation Agreement will be terminated.

The Special Committee considers the terms of the Merger to be fair and reasonable so far as the Shareholders (other than EACL and the Participants) are concerned and unanimously recommends that Shareholders vote FOR the special resolution to authorise and approve the Merger. The Special Committee, in deliberating whether to recommend the Merger, has taken financial and other advice which it deems appropriate,including an opinion from Renaissance Capital on the fairness, from a financial point of view and as at Sunday 11 October 2015, of the consideration payable to the Shareholders (other than EACL and the Participants) under the terms of the Merger (the Fairness Opinion). In providing the Fairness Opinion to the Special Committee, Renaissance Capital has placed reliance on the Special Committee's commercial assessment of the Merger and on information provided by or on behalf of the Company without verification of its factual accuracy. Renaissance Capital is acting exclusively for the Special Committee and no one else in connection with the provision of the Fairness Opinion and will not be responsible to any person other than the Company for providing the Fairness Opinion.

Willkie Farr & Gallagher (UK) LLP and Maples and Calder are acting as the Special Committee's legal advisers in the United Kingdom and the Cayman Islands, respectively, in relation to the Merger.

XENON Capital Partners LLC is acting as financial adviser to EACL. Skadden, Arps, Slate, Meagher & Flom (UK) LLP and Walkers are acting as legal advisers to EACL in the United Kingdom and the Cayman Islands, respectively, in relation to the Merger.

Enquiries:

Eurasia Drilling Company Limited
Tom O'Gallagher, VP Investor Relations
+44 (0) 20 7717 9707
investors.relations@eurasiadrilling.com

Hudson Sander (media enquiries for the Company)
Andrew Hayes / Elena Garside
+44(0) 20 7796 4133

XENON Capital Partners LLC
Natasha Tsukanova, Managing Director
Andrey Bulanov, Vice President
+ 7 495 644 00 10

Additional information

Renaissance Capital is acting exclusively for the Special Committee in connection with the Merger and for no one else and will not be responsible to anyone other than the Special Committee for providing the protections afforded to their client or for providing advice in relation to this announcement or any matters referred to herein.

XENON Capital Partners LLC is acting exclusively for EACL and the Participants in connection with the Merger and for no one else and will not be responsible to anyone other than EACL and the Participants for providing the protections afforded to their clients or for providing advice in relation to this announcement or any matters referred to herein.

This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Company and the proposed Merger between the Company and EACL. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use future dates or words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "hope", "aim", "continue", "will", "may", "would", "could" or "should" or other words of similar meaning or the negative thereof. There are several factors which could cause actual plans and results to differ materially from those expressed or implied in forward-looking statements. Such factors include, but are not limited to, the possibility that the Merger will not be pursued or will be pursued on different terms and conditions, failure to obtain necessary approvals or to satisfy any of the conditions to the Merger, adverse effects on the market price of the GDRs and on the Company's operating results because of a failure to complete the Merger and failure to realise the expected benefits of the Merger. These forward-looking statements are based on numerous assumptions and assessments made by the Company in light of its experience and perception of historical trends, current conditions, business strategies, operating environment, future developments and other factors it believes appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. The factors described in the context of such forward-looking statements in this announcement could cause the Company's plans, actual results, performance or achievements, industry results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and persons reading this announcement are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this announcement. The Company assumes no obligation to update or revise the information contained in this announcement (whether as a result of new information, future events or otherwise), except as required by applicable law.


Annexure D
Shareholder Circular and Notice of Meeting

 

[This document]

 

 

This Agreement has been entered into on the date stated at the beginning of it.

 

SIGNEDfor and on behalf of

)

 

EURASIA DRILLING COMPANY LIMITED

)

Director

 

 

 

 

SIGNEDfor and on behalf of

)

 

EDC ACQUISITION COMPANY LIMITED

)

 

Director

 

 

 

 

 

 

 

 

 

 

PART 13 - CAYMAN COMPANIES LAW - SECTION 238

 

Section 238 of the Cayman Companies Law provides:

(1)             A member of a constituent company incorporated under this Law shall be entitled to payment of the fair value of his shares upon dissenting from a merger or consolidation.

 

(2)             A member who desires to exercise his entitlement under subsection (1) shall give to the constituent company, before the vote on the merger or consolidation, written objection to the action.

 

(3)             An objection under subsection (2) shall include a statement that the member proposes to demand payment for his shares if the merger or consolidation is authorised by the vote.

 

(4)             Within twenty days immediately following the date on which the vote of members giving authorisation for the merger or consolidation is made, the constituent company shall give written notice of the authorisation to each member who made a written objection.

 

(5)             A member who elects to dissent shall, within twenty days immediately following the date on which the notice referred to in subsection (4) is given, give to the constituent company a written notice of his decision to dissent, stating:

 

(a)              his name and address;

 

(b)             the number and classes of shares in respect of which he dissents; and

 

(c)              a demand for payment of the fair value of his shares.

 

(6)             A member who dissents shall do so in respect of all shares that he holds in the constituent company.

 

(7)             Upon the giving of a notice of dissent under subsection (5), the member to whom the notice relates shall cease to have any of the rights of a member except the right to be paid the fair value of his shares and the rights referred to in subsections (12) and (16).

 

(8)             Within seven days immediately following the date of the expiration of the period specified in subsection (5), or within seven days immediately following the date on which the plan of merger or consolidation is filed, whichever is later, the constituent company, the surviving company or the consolidated company shall make a written offer to each dissenting member to purchase his shares at a specified price that the company determines to be their fair value; and if, within thirty days immediately following the date on which the offer is made, the company making the offer and the dissenting member agree upon the price to be paid for his shares, the company shall pay to the member the amount in money forthwith.

 

(9)             If the company and a dissenting member fail, within the period specified in subsection (8), to agree on the price to be paid for the shares owned by the member, within twenty days immediately following the date on which the period expires:

 

(a)              the company shall (and any dissenting member may) file a petition with the Court for a determination of the fair value of the shares of all dissenting members; and

 

(b)             the petition by the company shall be accompanied by a verified list containing the names and addresses of all members who have filed a notice under subsection (5) and with whom agreements as to the fair value of their shares have not been reached by the company.

 

(10)          A copy of any petition filed under subsection (9)(a) shall be served on the other party; and where a dissenting member has so filed, the company shall within ten days after such service file the verified list referred to in subsection (9)(b).

 

(11)          At the hearing of a petition, the Court shall determine the fair value of the shares of such dissenting members as it finds are involved, together with a fair rate of interest, if any, to be paid by the company upon the amount determined to be the fair value.

 

(12)          Any member whose name appears on the list filed by the company under subsection (9)(b) or (10) and who the Court finds are involved may participate fully in all proceedings until the determination of fair value is reached.

 

(13)          The order of the Court resulting from proceeding on the petition shall be enforceable in such manner as other orders of the Court are enforced, whether the company is incorporated under the laws of the Islands or not.

 

(14)          The costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances; and upon application of a member, the Court may order all or a portion of the expenses incurred by any member in connection with the proceeding, including reasonable attorney's fees and the fees and expenses of experts, to be charged pro rata against the value of all the shares which are the subject of the proceeding.

 

(15)          Shares acquired by the company pursuant to this section shall be cancelled and, if they are shares of a surviving company, they shall be available for re-issue.

 

(16)          The enforcement by a member of his entitlement under this section shall exclude the enforcement by the member of any right to which he might otherwise be entitled by virtue of his holding shares, except that this section shall not exclude the right of the member to institute proceedings to obtain relief on the ground that the merger or consolidation is void or unlawful.

 

PART 14 - DEFINITIONS

 

In this document:

"Business Day" means a day, other than a Saturday or Sunday or public holiday in London (England), Grand Cayman (the Cayman Islands), New York (United States) or Moscow (Russia), on which banks are open in London (England), Grand Cayman (the Cayman Islands), New York (United States) and Moscow (Russia) for general commercial business;

"Cayman Companies Law" means the Companies Law (2013 Revision) of the Cayman Islands, as amended;

"Company" means Eurasia Drilling Company Limited, an exempted company incorporated in the Cayman Islands with company number 121302 and having its registered office at Boundary Hall, Cricket Square, PO Box 1111, Grand Cayman KY1-1102, Cayman Islands;

"Conditions Precedent" means the conditions precedent to the implementation of the Merger;

"Court" means the Grand Court of the Cayman Islands;

"Deposit Agreement" means the supplemental agreement dated 3 November 2014 between the Company and the Depositary  relating to the deposit agreement dated 1 November 2007 entered into between the Company and JPMorgan Chase Bank, N.A. (as the original depositary) establishing the GDR programme, as amended, modified or supplemented from time to time;

"Depositary" means The Bank of New York Mellon;

"Dissent Period" has the meaning given in Part 8 of this document;

"Dissenters' Rights" has the meaning given in Part 8 of this document;

"Dissenting Shares" means any Shares owned by Shareholders who have validly exercised and have not effectively withdrawn or lost their rights to dissent from the Merger in accordance with Cayman Companies Law, who have the right to seek payment of the fair value of their Shares in accordance with the Cayman Companies Law;

"Dissenting Shareholder" means any Shareholder exercising Dissenters' Rights;

"EACL" means EDC Acquisition Company Limited, an exempted company incorporated in the Cayman Islands with company number 294598 and having its registered office at Intertrust Corporate Services (Cayman) Limited, 190 Elgin Avenue, George Town, Grand Cayman, KY1-9005, Cayman Islands;

 "EST" means Eastern Standard Time;

"Excluded Shares" means the Shares that will be held by EACL, EDC Incentive Plan Limited and the Participants at the Merger Consideration Record Date;

"Extraordinary General Meeting" means the extraordinary general meeting of the Shareholders to be held at 12 noon (GMT) on Friday 13 November 2015 at the offices of Willkie Farr & Gallagher (UK) LLP at CityPoint, 1 Ropemaker Street, London EC2Y 9AW;

"Fair Value Offer" has the meaning given in Part 8 of this document;

"Fairness Opinion" has the meaning given in Part 1 of this document;

"FCA" means the Financial Conduct Authority, the United Kingdom regulator for the financial sector or its successor from time to time;

"Form of Proxy" means the form of proxy and written direction of the Company attached as Annex A to this document;

"GDR(s)" means a global depositary receipt, each of which represents one Share;

"GDR Holder" means a holder of GDRs;

"GMT" means Greenwich Mean Time;

"LSE" means the London Stock Exchange plc;

"Merger" means the merger between the Company and EACL under the provisions of the Cayman Companies Law;

"Merger Consideration" means cash consideration of US$11.75 per Share;

 "Merger Consideration Record Date" means 5 p.m. (EST) on the Business Day immediately prior to the Merger Implementation Date;

"Merger Implementation Agreement" means the merger implementation agreement dated 12 October 2015 and made between the Company and EACL;

"Merger Implementation Date" means the date the Plan of Merger is registered by the Cayman Islands Registrar of Companies;

"Official List" means the Official List maintained by the FCA;

"Participants" means the Shareholders of the Company listed in Part 4;

"Plan of Merger" means the plan of merger between the Company and EACL;

"Renaissance Capital" means Renaissance Capital - Financial Consultant Limited of 10 Presnenskaya naberezhnaja, Moscow 123317, Russian Federation;

"Qualifying Shareholders" means those shareholders holding Shares other than Excluded Shares;

"Share" means issued and outstanding shares of the Company each of nominal or par value of US$0.01;

"Shareholder" means a holder of Shares;

"Special Committee" means the special committee of the independent non-executive directors of the Company comprising the Earl of Clanwilliam (as chairman), Igor Belikov and Alexander Shokhin;

"USD", "US$" or "$"means United States dollars;

"Voting Record Date" means 5 p.m. (EST) on Tuesday 10 November 2015; and

"VWAP" means volume weighted average price.

 

ANNEX A: FORM OF PROXY CARD AND WRITTEN DIRECTION FOR THE COMPANY

 

For use at the Extraordinary General Meeting to be held on Friday 13 November 2015 at 12 noon (GMT) (or at any adjournment thereof).

The Proxy Card and Written Direction is Valid Only when Signed and Dated

PROXY CARD

EURASIA DRILLING COMPANY LIMITED(the "Company")

I/We........................................................................................................................(insert name in block capitals)

of:.............................................................................................................................................................................

............................................................................................................................(insert address in block capitals)

being a member/members of the Company, hereby appoint S. Douglas Stinemetz, the Secretary of the Company, as my/our proxy to attend, speak and vote for me/us on my/our behalf at the Extraordinary General Meeting of the Company to be held at 12 noon (GMT) on Friday 13 November 2015 at the offices of Willkie Farr & Gallagher (UK) LLP at CityPoint, 1 Ropemaker Street, London EC2Y 9AW (the "Extraordinary General Meeting") and at any adjourned meeting.

I have indicated with a 'X' how I/we wish my/our votes to be cast on the following resolution which is referred to in the notice convening the Extraordinary General Meeting (the "Notice") (see note 1 below).

RESOLUTION

FOR

AGAINST

VOTE
WITHHELD

 

Special resolution that, subject to the satisfaction or waiver of the conditions precedent pursuant to the Merger Implementation Agreement (as defined below): (a) the Company be authorised to merge with EDC Acquisition Company Limited ("EACL") so that the Company shall be the surviving company for the purposes of Part XVI of the Companies Law (2013 Revision) of the Cayman Islands, as amended (the "CaymanCompanies Law"); (b)the merger implementation agreement between the Company and EACL dated 12 October 2015 (the "Merger Implementation Agreement") and the plan of merger between the Company and EACL (the "Plan of Merger"), and the transactions contemplated by the Plan of Merger, including the merger of the Company and EACL pursuant to the Cayman Companies Law (the "Merger"), be authorised and approved by the Company; (c) the Company be authorised to enter into the Plan of Merger; and (d) the Plan of Merger be executed by any one member of the Special Committee on behalf of the Company and filed with the Cayman Islands Registrar of Companies.

 

 

 

 

Signature ……............................................................ Date............................................................. 2015

Please tick here you if are appointing more than one proxy              ………….

Number of Shares proxy appointed over                                 ……………………….

This proxy must be signed by the member or his duly authorised attorney or, in the case of a corporation, this proxy must be signed under its common seal or be signed on its behalf by an attorney or officer duly authorised, stating their capacity (e.g., director or secretary).

Notes for Proxy

  1. Every holder has the right to appoint some other person(s) of their choice, who need not be a shareholder as his proxy to exercise all or any of his rights, to attend, speak and vote on their behalf at the Extraordinary General Meeting. If you wish to appoint a person other than the Chairman, please insert the name of your chosen proxy holder in the space provided (see over). If the proxy is being appointed in relation to less than your full voting entitlement, please enter the number of Shares in relation to which they are authorised to act as your proxy. If left blank your proxy will be deemed to be authorised in respect of your full voting entitlement (or if this proxy form has been issued in respect of a designated account for a shareholder, the full voting entitlement for that designated account).
  2. To appoint more than one proxy you may photocopy this form. Please indicate the proxy holder's name and the number of Shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the number of Shares held by you). Please also indicate if the proxy instruction is one of multiple instructions being given. All forms must be signed and should be returned together in the same envelope.
  3. The 'Vote Withheld' option above is provided to enable you to abstain on any particular resolution. However, it should be noted that a 'Vote Withheld' is not a vote in law and will not be counted in the calculation of the proportion of the votes 'For' and 'Against' a resolution.
  4. The completion and return of this form will not preclude a member from attending the Extraordinary General Meeting and voting in person. In order to be valid, a proxy card must be returned to the Company's registered office in hard copy form together with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of the power of attorney or other authority, by post, by courier or by hand to the registered office of the Company at Boundary Hall, Cricket Square, PO Box 1111, Grand Cayman KY1-1102, Cayman Islands for the attention of Paget-Brown Trust Company Ltd. or by email to the Company's registered office by emailing Richard Lewis (richard@paget-brown.com.ky) and Dominique Massias (dominique@pagetbrowntrust.ky) with a copy to S. Douglas Stinemetz (doug.stinemetz@eurasiadrilling.com) as promptly as possible and in any event prior to 5 p.m. (EST) on Tuesday 10 November 2015.
  5. In order to be able to attend and vote at the Extraordinary General Meeting or any adjourned meeting, (and also for the purpose of calculating how many votes a person may cast) a person must have his/her name entered on the register of members of the Company by 5 p.m. (EST) on Tuesday 10 November 2015. Changes to entries on the register of members after this time shall be disregarded in determining the rights of any person to attend or vote at such meeting.
  6. In the case of joint holders the vote of the senior joint holder who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint holders. For this purpose seniority is determined by the order in which the names of the holders stand in the register of members in respect of the joint holding.
  7. Please indicate with a cross in the appropriate box how you wish the proxy to vote. If no specific instructions are given by such holders, the Shares will be voted 'FOR' proposals and in the proxy holder's discretion as to other matters that may properly come before the Extraordinary General Meeting.

ANNEX B: FORM OF VOTING INSTRUCTION CARD FOR GDR HOLDERS

 

 

Notice to Owners of

144 A and Regulation S Global Depositary Receipts of

 

EURASIA DRILLING COMPANY LIMITED

                             

                                        144 A CUSIP #:  29843U103  ISIN#: US29843U1034

                                     REG S CUSIP #: 29843U202 ISIN#: US29843U2024

 

 

 

Owners of record at the close of business on 12 October 2015 of Global Depositary Receipts (each GDR representing one Share) ofEurasia Drilling Company Limited(the "Company") issued under the Deposit Agreement dated 3 November 2014, among the Company, The Bank of New York Mellon, as Depositary, and the Owners of the Global Depositary Receipts issued thereunder, are hereby notified that The Bank of New York Mellon, as Depositary, has received Notice of theExtraordinary General Meetingof the Company, to be held on13 November 2015.

 

Capitalised terms used not otherwise defined in this proxy voting form have the meaning provided in the Deposit Agreement.

 

Pursuant to the voting section of the Deposit Agreement, the Depositary will only endeavour to vote or cause to be voted the votes attaching to Shares in respect of which voting instructions have been received. Neither the Depositary nor the Custodian shall, under any circumstances, exercise any discretion as to voting, vote any number of Shares other than an integral number thereof or vote Shares in a manner that would be inconsistent with any applicable law, and neither the Depositary nor the Custodian shall vote or attempt to exercise the right to vote the Shares or other Deposited Property represented by GDRs except pursuant to and in accordance with instructions from Holders. Notwithstanding the timely receipt from a Holder of GDRs as ofFriday 6 November 2015 at 12 noon ESTof voting instructions, if such voting instructions failed to specify the manner in which the Depositary is to vote the Deposited Property represented by such Holder's GDRs, the Depositary will deem such Holder to have instructed the Depositary not to vote the Deposited Property with respect to the items for which the Holder has failed to specify the manner in which the Depositary is to vote. Deposited Property represented by GDRs for which no specific voting instructions are receivedon or before Friday 6 November 2015 at 12 noon ESTby the Depositary from the Holder shall not be voted.

 

                                                                                               The Bank of New York Mellon,

                                                                                                as Depositary

Dated:14 October 2015

EXTRAORDINARY GENERAL MEETING OF

EURASIA DRILLING COMPANY LIMITED

 

 

TO:        The Bank of New York Mellon, ADR Proxy Group

               Fax Number:                     (732) 667-9098

Telephone Number:         (212) 815-5021 (Mira Daskal)

 

RE:        Eurasia Drilling Company Limited

               Extraordinary General Meeting to be held on 13 November 2015.

 

FROM:                    _________________________________________________________________

DTC Participant Name

 

DTC PARTICIPANT NUMBER:  _________________________________________________

                                                                                           Mandatory

 

SIGNATURE:    ________________________________________________________________

Authorised Signatory / Medallion required for 144 A

 

CONTACT INFO: ______________________________________________________________

Telephone / Fax Number / E-mail Address

 

TOTAL NUMBER 144 A GDRs (CUSIP # 29843U103)

HELD AS OF 12 OCTOBER 2015:               _____________________________________________

 

TOTAL NUMBER REG S GDRS (CUSIP # 29843U202)

HELD AS OF 12 OCTOBER 2015:    _____________________________________________

 

NUMBER 144 A GDRs BEING VOTED:                ________________________________________

 

NUMBER REG S GDRs BEING VOTED:               ________________________________________

 

DATE: ________________________ 2015

 

Eurasia Drilling Company Limited

Extraordinary General Meeting

13 November 2015

 

The above-noted holder of 144 A and Reg S Depositary Receipts ("GDRs") of Eurasia Drilling Company Limited (the "Company") hereby requests and instructs The Bank of New York Mellon, as Depositary, to endeavor insofar as practicable, to vote or cause to be voted the number of Deposited Securitiesunderlying the GDRs held as of close of business on 12 October 2015 at the Extraordinary General Meeting of the Company to be held on 13 November 2015 in respect of the following resolution:

 

THIS FORM MUST BE RECEIVED COMPLETED BY
 FRIDAY 6 NOVEMBER 2015 AT 12 NOON EST TO BE VALID

 


EXTRAORDINARY GENERAL MEETING OF

EURASIA DRILLING COMPANY LIMITED

 

 

 

1.        Special resolution that, subject to the satisfaction of the conditions precedent pursuant to the Merger Implementation Agreement (as defined below): (a) the Company be authorised to merge with EDC Acquisition Company Limited ("EACL") so that the Company shall be the surviving company for the purposes of Part XVI of the Companies Law (2013 Revision) of the Cayman Islands, as amended (the "Cayman Companies Law"); (b) the merger implementation agreement between the Company and EACL dated 12 October 2015 (the "Merger Implementation Agreement"), the plan of merger between the Company and EACL (the "Plan of Merger") and the transactions contemplated by the Plan of Merger, including the merger of the Company and EACL pursuant to the Cayman Companies Law (the "Merger"), be authorised and approved by the Company; (c) the Company be authorised to enter into the Plan of Merger; and (d) the Plan of Merger be executed by any one member of the Special Committee on behalf of the Company and filed with the Cayman Islands Registrar of Companies.

□FOR            □AGAINST                 □ABSTAIN

 

 

 

 

End of resolution

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Next: 12 October 2015: Announcement of Proposed Merger and intention to de-list GDRs