Exhibit 10.98
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (this "Agreement") is made and entered into as
of the 30th day of September, 1997 between Hungarian Telephone and Cable Corp.,
a Delaware, United States corporation ("HTCC") and Tele Danmark A/S, a
corporation organized under the laws of Denmark ("TD").
R E C I T A L S:
WHEREAS, Kelet-Nograd Com Rt., a Hungarian corporation and subsidiary
of HTCC ("KNC"), is a party, as borrower, to a certain German xxxx denominated
loan agreement dated as of October 10, 1995 with, among others, TD, as lender
(the "KNC DEM Loan Agreement");
WHEREAS, KNC is a party, as borrower, to a certain U.S. dollar
denominated loan agreement dated as of October 10, 1995 with, among others, TD,
as lender (the "KNC USD Loan Agreement");
WHEREAS, Raba Com Rt., a Hungarian corporation and subsidiary of HTCC
("Raba-Com"), is a party, as borrower, to a certain German xxxx denominated loan
agreement dated as of October 10, 1995 with, among others, TD, as lender (the
Raba-Com DEM Loan Agreement");
WHEREAS, Raba-Com is a party, as borrower, to a certain U.S. dollar
denominated loan agreement dated as of October 10, 1995 with, among others, TD,
as lender (the "Raba-Com USD Loan Agreement");
WHEREAS, KNC and Raba-Com owe TD in the aggregate $5,534,490 under the
KNC DEM Loan Agreement, the KNC USD Loan Agreement, the Raba-Com DEM Loan
Agreement and the Raba-Com USD Loan Agreement;
WHEREAS, TD desires to assign, transfer and convey to HTCC, and HTCC
desires to purchase and accept from TD, all of TD's respective rights, title and
interest in the KNC DEM Loan Agreement, the KNC USD Loan Agreement, the Raba-Com
DEM Loan Agreement and the Raba-Com USD Loan Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
undertakings herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. For purposes of this Agreement and any amendment
hereto, the following terms are defined as set out below:
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with such other
Person.
"Lien" means, with respect to any asset, any mortgage, lien, claim,
pledge, option, charge, right of first refusal, security interest or encumbrance
of any kind in respect of such asset.
"Person" means an individual, a corporation, a partnership, an
association, a trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
1.2 List of Additional Definitions. The following is a list of some
additional terms used in this Agreement and a reference to the Section thereto
in which such term is defined:
Term Section
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HTCC Common Stock Sec. 2.2(a)
Indemnitee Sec. 7.3
Indemnitor Sec. 7.3
KNC Recitals
KNC DEM Loan Agreement Recitals
KNC USD Loan Agreement Recitals
Loan Agreements 2.1
Raba-Com Recitals
Raba-Com DEM Loan Agreement Recitals
Raba-Com USD Loan Agreement Recitals
Transaction Shares Sec. 2.2(a)
Securities Act Sec. 2.2(b)
ARTICLE II
EXCHANGE
2.1 Assignment of Rights. Upon the terms and subject to the conditions
of this Agreement and in exchange for the consideration set forth in Section 2.2
below, on the date hereof HTCC shall purchase and accept from TD, and TD shall
sell, transfer, assign, convey, endorse and deliver to HTCC all of TD's right,
title and interests in the KNC DEM Loan Agreement, the KNC USD Loan Agreement,
the Raba-Com DEM Loan Agreement and the Raba-Com USD Loan Agreement
(collectively, the "Loan Agreements"), free and clear of all Liens.
2.2 Consideration.
(a) In consideration for the purchase of all of TD's right,
title and interests in the Loan Agreements as provided in Section 2.1
above, as of the date hereof HTCC shall issue to TD an aggregate of
447,232 shares (the "Transaction Shares") of HTCC's common stock, $.001
par value per share ("HTCC Common Stock").
(b) The Transaction Shares shall be duly authorized, validly
issued, fully paid and non-assessable. TD agrees to hold its
Transaction Shares and not to convey such shares for a period of six
(6) months from the date hereof without the prior written consent of
HTCC and, in any event, not to offer to sell or otherwise transfer the
Transaction Shares without either registration or exemption from the
Securities Act of 1933, as amended (the "Securities Act"). Each
certificate for HTCC Common Stock issued to TD pursuant to this
Agreement shall bear the following legend:
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" The shares of stock represented by this certificate have
been issued pursuant to a certain Exchange Agreement dated as
of September 30, 1997 between Hungarian Telephone and Cable
Corp. and Tele Danmark A/S and have not been registered under
the Securities Act of 1933, as amended, and may not be sold or
otherwise transferred without registration thereunder or an
applicable exemption therefrom."
ARTICLE III
REQUIRED DELIVERABLES
3.1 Delivery by HTCC. On or as of the date hereof and as a condition to
TD's obligation to assign its rights as set forth in Section 2.1 above, HTCC
shall deliver or cause to be delivered to TD a certificate(s) representing the
Transaction Shares.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TD
TD hereby represents and warrants to HTCC as follows:
4.1 Corporate Existence and Power. TD is a corporation duly
incorporated, validly existing and in good standing under the laws of Denmark,
and has all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
4.2 Corporate Authorization. The execution, delivery and performance of
this Agreement and the consummation of the transactions effected hereby by TD
are within its corporate powers and have been duly authorized by all necessary
corporate action, including the approval by its board of directors. This
Agreement constitutes a valid and binding agreement of TD.
4.3 Governmental Authorization; Consents. The execution, delivery and
performance of this Agreement by TD require no action by or in respect of, or
filing with, any governmental body, agency, official or authority other than
actions or filings which have been taken or made on or prior to the date hereof.
No consent, approval, waiver or other action by any Person under any contract,
agreement, indenture, lease, instrument or other document to which it is a party
or by which it is bound is required or necessary for the execution, delivery and
performance of this Agreement or the consummation of the transactions effected
hereby.
4.4 Non-Contravention. The execution, delivery and performance of this
Agreement by TD does not (i) contravene or conflict with the certificate of
incorporation, bylaws or other charter documents of TD or (ii) contravene or
conflict with or constitute a violation of any provision of any
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law, regulation, judgment, injunction, order or decree binding upon or
applicable to TD or (iii) contravene or conflict with any contract to which TD
is a party.
4.5 Creditor Status. TD is a party, as creditor, to each of the Loan
Agreements and has legal, valid and marketable title to all of its rights under
the Loan Agreements, free and clear of all Liens.
4.6 Accredited Investor. TD understands that the Transaction Shares
that it will acquire pursuant to this Agreement have not been registered under
the Securities Act. The Transaction Shares are being acquired under this
Agreement in good faith solely for its own account, for investment and not with
a view toward resale or other distribution within the meaning of the Securities
Act. TD is a sophisticated or accredited investor for purposes of (i) the
securities laws of the United States of America and (ii) the ability of HTCC to
issue the Transaction Shares without registration under the securities laws of
the United States of America.
4.7 Finder's Fees. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of TD who might be entitled to any fee or commission from HTCC or any of its
Affiliates upon consummation of the transactions contemplated by this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF HTCC
HTCC hereby represents and warrants to TD as follows:
5.1 Organization and Existence. HTCC is a corporation duly
incorporated, validly existing and in good standing under the laws of Delaware
and has all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
5.2 Corporate Authorization. The execution, delivery and performance by
HTCC of this Agreement and the consummation by HTCC of the transactions
contemplated hereby are within the corporate powers of HTCC and have been duly
authorized by all necessary corporate action on the part of HTCC. This Agreement
constitutes a valid and binding agreement of HTCC.
5.3 Governmental Authorization. The execution, delivery and performance
by HTCC of this Agreement requires no action by or in respect of, or filing
with, any governmental body, agency, official or authority other than such
actions or filings that have been taken or made on or prior to the date hereof.
5.4 Non-Contravention. The execution, delivery and performance by HTCC
of this Agreement does not contravene or conflict with the Certificate of
Incorporation or By-Laws of HTCC or any provision of any law, regulation,
judgment, injunction, order or decree binding upon HTCC.
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5.5 Finder's Fees. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of HTCC who might be entitled to any fee or commission from TD or any Affiliate
of TD upon consummation of the transactions effected by this Agreement.
5.6 Litigation. There is no action, suit, investigation or proceeding
pending against, or to the knowledge of HTCC, threatened against or affecting,
HTCC before any court or arbitrator or any governmental body, agency or official
which in any manner challenges or seeks to prevent, enjoin, alter or materially
delay the transactions effected hereby.
5.7 Transaction Shares. All of the Transaction Shares issued to TD in
connection with the transactions effected hereby are duly authorized, validly
issued, fully paid and nonassessable shares of HTCC Common Stock.
5.8 Due Diligence. HTCC has provided TD, through TD's representative
employee working out of HTCC's offices in Budapest, Hungary, with all the
material financial and budgeting information regarding HTCC and its Hungarian
subsidiaries. HTCC has also provided TD with all other material information that
TD has requested and all such information that investors in the United States
public markets currently have access to in making an investment decision
regarding a purchase or sale of HTCC Common Stock. None of the documents or
other information provided to TD contain any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained therein not misleading.
5.9 No Undisclosed Material Liabilities; No Material Adverse Change.
Other than as disclosed in HTCC's filings with the United States Securities and
Exchange Commission pursuant to the Securities Act or the Securities Exchange
Act of 1934, as amended, or disclosed to TD's representatives working at HTCC's
Hungarian offices or TD's representative on HTCC's, KNC's or Raba-Com's Boards
of Directors, since June 30, 1997, (i) there have been no material liabilities
incurred by HTCC other than those incurred in the ordinary course of business
consistent with past practice and (ii) there has not been any material adverse
change in the business, assets or financial condition of HTCC and its Hungarian
subsidiaries taken as a whole.
ARTICLE VI
INDEMNIFICATION
6.1 Indemnification by TD. TD does hereby indemnify and hold HTCC
harmless from and against the following:
(a) any and all losses, claims, liabilities, damages,
deficiencies, costs or expenses suffered or incurred by HTCC or its
Affiliates resulting from any untrue representation, breach of warranty
or non-fulfillment of any covenant or agreement by TD contained in this
Agreement, any document delivered by TD pursuant to this Agreement, or
in any statement, exhibit, schedule or certificate furnished or to be
furnished to HTCC pursuant hereto or in connection with the
transactions provided for herein; and
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(b) any and all actions, suits, proceedings, claims,
complaints, demands, assessments, judgments, costs and expenses
suffered or incurred by HTCC or its Affiliates, including reasonable
attorneys' fees and disbursements, incident to any of the foregoing.
6.2 Indemnification by HTCC. HTCC does hereby indemnify and hold TD
harmless from and against the following:
(a) any and all losses, claims, liabilities, damages,
deficiencies, costs or expenses suffered or incurred by TD resulting
from any untrue representation, breach of warranty or non-fulfillment
of any covenant or agreement by HTCC contained in this Agreement, any
document delivered by HTCC pursuant to this Agreement, or in any
statement, exhibit, schedule or certificate furnished or to be
furnished by HTCC to TD pursuant hereto or in connection with the
transactions provided for herein; and
(b) any and all actions, suits, proceedings, claims,
complaints, demands, assessments, judgments, costs and expenses
suffered or incurred by TD, including reasonable attorneys' fees and
disbursements, incident to any of the foregoing.
6.3 Notice of Third-Party Claims. If any action, suit or proceeding
shall be commenced against, or any claim or demand shall be asserted against
HTCC or TD, in respect of which a party (HTCC or TD) proposes to seek
indemnification under this Article VI, the party seeking indemnification (the
"Indemnitee") shall give prompt notice thereof to the other party (the
"Indemnitor"), and shall permit the Indemnitor, at its sole cost and expense, to
assume the defense of any such claim or any litigation resulting therefrom;
provided, however, that the Indemnitee shall have the option, at its own
expense, to participate in the defense thereof; and provided further, that the
failure of any Indemnitee to give notice as provided herein shall not relieve
the Indemnitor of its obligations under this Article VI except to the extent
that the Indemnitor is actually prejudiced by such failure to give notice.
Failure by the Indemnitor to notify the Indemnitee of its election to defend any
such action within fifteen (15) days after notice thereof shall be deemed a
waiver by the Indemnitor of its right to defend such action. In the defense of
such claim or any litigation resulting therefrom, the Indemnitor shall not,
without the written consent of the Indemnitee: (a) consent to the entry of any
judgment, or (b) enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnitee of a release from all liability in respect to such claim or
litigation. If such defense is unsuccessful or abandoned by the Indemnitor,
then, upon the Indemnitor's failure to pay an amount sufficient to discharge any
such claim or judgment, the Indemnitee may pay and settle the same and the
Indemnitor's liability shall be conclusively established by any such payment. If
the Indemnitor fails to assume the defense of any such claim or litigation
resulting therefrom, the Indemnitee may defend against and settle such claim or
litigation in such manner as it may seem appropriate and the Indemnitor shall
promptly reimburse the Indemnitee for the amount of all expenses, legal or
otherwise, incurred by the Indemnitee in connection with the defense against or
settlement of such claim or litigation. If no settlement is made, the Indemnitor
shall promptly reimburse the Indemnitee for the amount of any judgment rendered
with respect to such claim or such litigation and of all expenses, legal or
otherwise, incurred by the Indemnitee in the defense thereof.
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ARTICLE VII
MISCELLANEOUS
7.1 Survival of Representations and Warranties. The representations and
warranties made herein by the parties shall survive for a period of twelve (12)
months after the date hereof. Any claim for indemnification with respect to an
alleged breach of a representation or warranty not asserted by notice to the
indemnifying party, which notice specified a particular breach and the facts and
circumstances relating thereto in reasonable detail, prior to the expiration of
such survival period may not be pursued and is irrevocably waived after such
time.
7.2 Execution of Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document. Execution counterparts may
be delivered by facsimile provided that original execution copies shall be
delivered to each of the parties for signature.
7.3 Assignment, Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and assigns.
Neither this Agreement nor any rights or responsibilities hereunder shall be
assigned by any party without the prior written consent of the other parties.
7.4 Applicable Law; Consent to Jurisdiction; Forum. This Agreement
shall be governed by and construed and enforced in accordance with the laws of
the State of Delaware without giving effect to the provisions, policies or
principles of any state relating to choice or conflict of laws except to the
extent Hungarian corporate law may apply to any matter covered by this
Agreement. In accordance with Title 6, Section 2708 of the Delaware Code
Annotated, each party hereby submits to the jurisdiction of the courts of
Delaware and agrees to be served with legal process from any of such courts.
Each party hereby irrevocably waives, to the fullest extent permitted by law,
any objection that it may have, whether now or in the future, to the laying of
the venue in, or to the jurisdiction of, any and each of such courts for the
purpose of any such suit, action, proceeding or judgment and further waives any
claim that any such suit, action, proceeding or judgment has been brought in an
inconvenient forum.
7.5 Expenses. Except as otherwise expressly provided in this Agreement,
each party shall bear its own expenses incurred in connection with the execution
and performance of this Agreement and the consummation of the transactions
effected hereby, including the fees, expenses and disbursements of its counsel
and advisors.
7.6 Entire Agreement; Severability. This Agreement constitutes the
entire understanding among the parties and supersedes and cancels any other
agreement, representation, or communication, whether oral or written, between
the parties hereto relating to the transactions contemplated hereby or the
subject matter hereof unless such other agreement, representation, or
communication is in writing and bears a date contemporaneous with or subsequent
to the date hereof. In the event that any provision or any part of any provision
of this Agreement shall be void or unenforceable for any reason, whatsoever,
then such provision shall be stricken and of no force and effect. However,
unless such stricken provision goes to the essence of the consideration
bargained for by a party, the remaining provisions of this Agreement shall
continue in full force and effect, and to the extent required, shall be modified
to preserve their validity.
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7.7 Notices. Any notice, certification, request, demand and other
communication hereunder shall be in writing and shall be deemed to have been
duly given and delivered if mailed, by certified mail, first class postage
prepaid, or delivered personally or by recognized overnight air courier, or if
sent by telecopier transmission, with transmission confirmed in writing:
If to HTCC: and:
Kiralyhago u.2. 000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000
X-0000 Xxxxxxxx, Xxxxxxx Xxxxxxxx, XX 00000
Telephone: 000-00-0-000-0000 Telephone: 000-000-0000
Facsimile: 011-36-1-202-4778 Facsimile: 000-000-0000
Attn: Xxxxxx X. Xxxxxxxxx Attn: Xxxxx X. Xxxxx, Esq.
If to Tele Danmark A/S: With a copy to:
Xxxxxxxxxxxxxxx 0, Xxxxxxx & Xx0xxxxx
0000 Xxxxxxxxxx X, Xxxxxxx Telephone: 000-00-00-00-00-00
Telephone: 000-00-00-00-00-00 Facsimile: 011-45-33-12-00-14
Facsimile: 011-45-33-99-81-59 Attn: Christian Th. Kjolbye
Attn: Managing Director,
Xxxx Xxxxxxxx
or to such other address as each party may designate for itself by like notice
to the other party.
7.8 Waivers. Any term or provision of this Agreement may be waived, or
the time for its performance may be extended, by the party entitled to the
benefit thereof. Any such waiver shall be validly and sufficiently authorized
for the purposes of this Agreement if, as to any party, it is authorized in
writing by an authorized representative of such party. The failure of any party
hereto to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of any party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or subsequent
breach.
7.9 Further Assurances. If, at any time after the date hereof, HTCC or
TD shall consider or be advised that any further assignments, documents,
instruments, agreements, or releases are necessary, desirable or proper to carry
out any of the provisions or purposes of this Agreement, the parties hereto
agree to execute and deliver all such assignments, documents, instruments,
agreements or releases as reasonably may be necessary, desirable or proper to
carry out any of the provisions or purposes of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
HUNGARIAN TELEPHONE AND CABLE CORP.
By: /s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, President
and Chief Executive Officer
TELE DANMARK A/S
By: /s/Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: Managing Director
Signature Page of September 30, 1997 Exchange Agreement
Re: KNC and Raba-Com Loans
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