Exhibit 10.32
EUR 130,000,000
SENIOR SECURED DEBT FACILITY AGREEMENT
dated April 11, 2000
for
HUNGAROTEL TAVKOZLESI KONCESSZIOS RESZVENYTARSASAG
RABA-COM TAVKOZLESI KONCESSZIOS RESZVENYTARSASAG
PAPA ES TERSEGE TAVKOZLESI KONCESSZIOS RESZVENYTARSASAG
KNC KELET-NOGRAD COM TAVKOZLESI KONCESSZIOS RESZVENYTARSASAG
as Borrowers
with
HUNGARIAN TELEPHONE AND CABLE CORP.
HTCC TANACSADO RESZVENYTARSASAG
as Guarantors
arranged by
CITIBANK, N.A.
WESTDEUTSCHE LANDESBANK GIROZENTRALE
with
CITIBANK INTERNATIONAL PLC
acting as Facility Agent
and
CITIBANK RT.
acting as Security Agent
Ormai es Tarsai
CMS Cameron McKenna CMS Cameron McKenna
Xxxxxxxx Xxxxx, 0xx Xxxxx Xxxxx Xxxxx
Xxxx Center 000 Xxxxxxxxxx Xxxxxx
Szabadsag ter 0 Xxxxxx
X-0000 Xxxxxxxx XX0X 0XX
Xxxxxxx Xxxxxxx
Tel: x00 0 000 0000 Tel: x00 000 000 0000
Fax: x00 0 000 0000 Fax: x00 000 000 0000
(i)
THIS SENIOR SECURED DEBT FACILITY AGREEMENT (the "Agreement") is dated 11 April
2000 and is made between:
(1) HUNGAROTEL TAVKOZLESI KONCESSZIOS RESZVENYTARSASAG acting in its capacity
as borrower;
(2) RABA-COM TAVKOZLESI KONCESSZIOS RESZVENYTARSASAG acting in its capacity as
borrower;
(3) PAPA ES TERSEGE TAVKOZLESI KONCESSZIOS RESZVENYTARSASAG acting in its
capacity as borrower;
(4) KNC KELET-NOGRAD COM TAVKOZLESI KONCESSZIOS RESZVENYTARSASAG acting in its
capacity as borrower,
(the Parties detailed at (1) to (4) inclusive above each a "Borrower" and
together, the "Borrowers");
(5) HUNGARIAN TELEPHONE AND CABLE CORP. acting in its capacity as guarantor;
(6) HTCC TANACSADO RESZVENYTARSASAG acting in its capacity as guarantor,
(the Parties detailed at (5) and (6) above each a "Guarantor" and together, the
"Guarantors");
(7) CITIBANK, N.A. and WESTDEUTSCHE LANDESBANK GIROZENTRALE acting in their
capacity as arrangers (each an "Arranger" and together, the "Arrangers");
(8) CITIBANK INTERNATIONAL PLC acting in its capacity as facility agent (the
"Facility Agent");
(9) CITIBANK RT. acting in its capacity as security agent (the "Security
Agent"); and
(10) THE FINANCIAL INSTITUTIONS listed in Schedule 1 (The Original Lenders)
acting in their capacity as lenders (each, an "Original Lender" and
together, the "Original Lenders").
IT IS AGREED as follows:
1
SECTION 1 - DEFINITIONS AND INTERPRETATION
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement the following terms have the meanings given to them
in this Clause 1.1.
"10K Document" means any 10K filing made by Hungarian Telephone and
Cable Corp. to the Securities and Exchange Commission of the United
States of America in respect of any financial year of Hungarian
Telephone and Cable Corp. ending on 31 December each year.
"10Q Document" means any 10Q filing made by Hungarian Telephone and
Cable Corp. to the Securities and Exchange Commission of the United
States of America in respect of any quarter financial year of Hungarian
Telephone and Cable Corp.
"Affiliate" means, in relation to any person, a Subsidiary of that
person or a Holding Company of that person or any other Subsidiary of
that Holding Company.
"Agents" means each of the Facility Agent and the Security Agent and
"Agent" means any and each of them.
"Amendment No. 1 to Securities Purchase Agreement" means the first
amendment to the Securities Purchase Agreement dated on or about the
date of this Agreement made between: (1) Hungarian Telephone and Cable
Corp.; and (2) Postabank es Takarekpenztar Reszvenytarsasag.
"Annual Operating Budget" means, in respect of the Group at any time,
the annual operating budget of the Group at such time, being as at the
date of this Agreement as set out in the Information Memorandum and
with each revised or amended annual operating budget (if any) to be,
except as otherwise approved in advance in writing by the Facility
Agent, acting on the instructions of the Majority Lenders, in
substantially the same form as the annual operating budget set out in
the Information Memorandum.
"Applicable Law" means, in relation to any person, any law, regulation,
rule, executive order, decree, judicial or official order, code of
practice, circular, guidance note or injunction of, or made by, any
Competent Authority, which is binding and enforceable on or against the
relevant person and/or with which the relevant person is required to
comply.
"Applicable Margin" means the margin from time to time applicable to
Interest Periods for Loans, determined in accordance with Clause 9.5
(Applicable Margin).
"Articles of Association" means the articles of incorporation, the
articles of association or the deed of foundation, as applicable, of
any person as at the date of this Agreement.
"Assignment of Contractual Rights No. 1 Agreement" means the assignment
of contractual rights agreement dated on or about the date of this
Agreement made between: (1) Hungarotel Tavkozlesi Koncesszios
Reszvenytarsasag as assignor; (2) Citibank Rt. as assignee and Security
Agent; (3) RABA-COM Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor; (4) Papa es Tersege Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; and (5) KNC Kelet-Nograd COM
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
2
"Assignment of Contractual Rights No. 2 Agreement" means the assignment
of contractual rights agreement dated on or about the date of this
Agreement made between: (1) RABA-COM Tavkozlesi Koncesszios
Reszvenytarsasag as assignor; (2) Citibank Rt. as assignee and Security
Agent; (3) Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor; (4) Papa es Tersege Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; and (5) KNC Kelet-Nograd COM
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
"Assignment of Contractual Rights No. 3 Agreement" means the assignment
of contractual rights agreement dated on or about the date of this
Agreement made between: (1) Papa es Tersege Tavkozlesi Koncesszios
Reszvenytarsasag as assignor; (2) Citibank Rt. as assignee and Security
Agent; (3) Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor; (4) RABA-COM Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor; and (5) KNC Kelet-Nograd COM Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor.
"Assignment of Contractual Rights No. 4 Agreement" means the assignment
of contractual rights agreement dated on or about the date of this
Agreement made between: (1) KNC Kelet-Nograd COM Tavkozlesi Koncesszios
Reszvenytarsasag as assignor; (2) Citibank Rt. as assignee and Security
Agent; (3) Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor; (4) RABA-COM Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor; and (5) Papa es Tersege Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor.
"Assignment of Contractual Rights No. 5 Agreement" means the assignment
of contractual rights agreement dated on or about the date of this
Agreement made between: (1) HTCC Tanacsado Reszvenytarsasag as
assignor; (2) Citibank Rt. as assignee and Security Agent; (3)
Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag as countersignor;
(4) RABA-COM Tavkozlesi Koncesszios Reszvenytarsasag as countersignor;
(5) Papa es Tersege Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor; and (6) KNC Kelet-Nograd COM Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor.
"Assignment of Contractual Rights No. 6 Agreement" means the assignment
of contractual rights agreement dated on or about the date of this
Agreement made between: (1) Hungarian Telephone and Cable Corp. as
assignor; (2) Citibank Rt. as assignee and Security Agent; (3)
Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag as countersignor;
(4) RABA-COM Tavkozlesi Koncesszios Reszvenytarsasag as countersignor;
(5) Papa es Tersege Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor; (6) KNC Kelet-Nograd COM Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; and (7) HTCC Tanacsado
Reszvenytarsasag as countersignor.
"Assignment of Contractual Rights Agreements" means, at any time, each
of the Assignment of Contractual Rights No. 1 Agreement, the Assignment
of Contractual Rights No. 2 Agreement, the Assignment of Contractual
Rights No. 3 Agreement, the Assignment of Contractual Rights No. 4
Agreement, the Assignment of Contractual Rights No. 5 Agreement, the
Assignment of Contractual Rights No. 6 Agreement and any other
assignment of contractual rights agreement at such time designated as
such in writing jointly by the Facility Agent, the Security Agent and
the Obligors.
"Associated Costs" means, in relation to each Loan and/or Unpaid Sum,
the percentage rate from time to time determined by the Facility Agent
(at its sole discretion, in consultation with the other Finance
Parties) as reflecting the costs, loss or difference in return which
would be suffered or incurred by the Facility Agent and/or any Finance
Party or Finance Parties if the Facility Agent or such Finance Party or
Finance Parties funded such Loan or Unpaid Sum, as a result of any
maintenance or reserve requirements of and/or any charge imposed by the
Bank of
3
England, the Financial Services Authority, the NBH, the European
Central Bank or any central bank or similar authority, agency or body
having authority with respect to that Finance Party or Finance Parties,
as applicable, (or any other authority which replaces all of any of
such authority's functions) in respect of eligible liabilities or
analogous liabilities (assuming these to be in excess of any stated
minimum) which relate to funding such Loan and/or Unpaid Sum.
"Auditors" means, at any time, the auditors of each member of the Group
at such time, being, as at the date of this Agreement, KPMG Hungaria
Konyvvizsgalo, Ado- es Kozgazdasagi Tanacsado Kft., or any other
internationally recognised firm of independent auditors licensed to
practice in Hungary and/or the United States of America, as
appropriate, duly appointed by each member of the Group to replace
such firm and approved in advance in writing by the Facility Agent,
acting on the instructions of the Majority Lenders.
"Authorisation" means an authorisation, notification, permit,
acknowledgement, consent, approval, resolution, licence, exemption,
filing, notarisation, registration or similar proceedings.
"Authorised Signatory" means, in respect of any person at any time, any
individual duly authorised under Applicable Law and by such person's
by-laws, board of directors and/or analogous body, as applicable, at
such time to sign, execute and deliver at such time the applicable
document(s), notice(s) or instrument(s) for and on behalf of such
person.
"Availability Period" means:
(a) in relation to Facility A, the period from and including the
date of this Agreement to and including the date thirty (30)
days following the date of this Agreement or, if earlier, the
date Facility A is first utilised or cancelled in full; and
(b) in relation to Facility B, the period from and including the
date of this Agreement to and including the date falling one
(1) Month prior to the Final Maturity Date or, if earlier, the
date Facility B is cancelled in full.
"Available Commitment" means:
(a) in relation to Facility A, prior to the simultaneous making of
the Facility A Loans as contemplated and provided for in
Clause 5 (Utilisation), a Lender's Commitment under Facility
A, thereafter, zero (0); and
(b) in relation to Facility B, a Lender's Commitment under
Facility B minus:
(i) the amount of such Lender's participation in any
outstanding Facility B Loans; and
(ii) in relation to any proposed Utilisation, the amount
of its participation in any Facility B Loans that are
due to be made under Facility B on or before the
proposed Utilisation Date, other than that Lender's
participation in any Facility B Loans that are due to
be repaid or prepaid on or before the proposed
Utilisation Date.
"Available Facility" means, in relation to a Facility, the aggregate
for the time being of each Lender's Available Commitment in respect of
that Facility.
4
"Bankruptcy Act" means Act IL of 1991 on Bankruptcy, Liquidation and
Final Accounting, as amended, of Hungary.
"Base Currency" means the euro.
"Base Currency Amount" means, in relation to a Loan, the amount
specified in the Utilisation Request delivered by a Borrower for such
Loan (or, if the amount requested is not denominated in the Base
Currency, that amount converted into the Base Currency at the Security
Agent's Spot Rate of Exchange on the date which is three (3) Business
Days before the Utilisation Date or, if later, on the date the Facility
Agent receives the Utilisation Request) adjusted to reflect any
repayment or prepayment of such Loan.
"Break Costs" means the amount (if any) by which:
(a) the interest which a Lender should have received for the
period from the date of receipt of all or any part of its
participation in a Loan or Unpaid Sum to the last day of the
current Interest Period in respect of that Loan or Unpaid Sum,
had the principal amount or Unpaid Sum received been paid on
the last day of that Interest Period;
exceeds:
(b) the amount which that Lender would be able to obtain by
placing an amount equal to the principal amount or Unpaid Sum
received by it on deposit with a leading bank in the Relevant
Interbank Market for a period starting on the Business Day
following receipt or recovery and ending on the last day of
the current Interest Period.
"Bridge Loan Agreement" means the thirty three billion seven hundred
million forints (HUF 33,700,000,000) dual currency bridge loan
agreement dated 10 May 1999 made between: (1) Hungarotel Tavkozlesi
Koncesszios Reszvenytarsasag as borrower; (2) RABA-COM Tavkozlesi
Koncesszios Reszvenytarsasag as borrower; (3) Papa es Tersege
Tavkozlesi Koncesszios Reszvenytarsasag as borrower; (4) KNC
Kelet-Nograd COM Tavkozlesi Koncesszios Reszvenytarsasag as borrower;
(5) Postabank es Takarekpenztar Reszvenytarsasag as arranger; (6)
Postabank es Takarekpenztar Reszvenytarsasag as facility agent; (7)
Postabank es Takarekpenztar Reszvenytarsasag as security agent; and (8)
the banks defined therein as the Banks; and countersigned by (9)
Hungarian Telephone and Cable Corp. as countersignor; and (10) HTCC
Tanacsado Reszvenytarsasag as countersignor.
"BUBOR" means, in relation to any Loan or Unpaid Sum denominated in
forints:
(a) the applicable Screen Rate; and
(b) if no Screen Rate is available for the period of that Loan,
the arithmetic mean of the rates (rounded upwards to four
decimal places) as supplied to the Facility Agent at its
request quoted by the Relevant Reference Banks to leading
banks in the Budapest interbank market,
as of the Specified Time on the Quotation Day for the offering of
deposits in forint for a period comparable to the Interest Period of
the relevant Loan or period on which interest is to accrue.
"Budget Comparison Certificate" means a certificate substantially in
the form set out in Schedule 6 (Form of Budget Comparison Certificate).
5
"Business Day" means a day (other than a Saturday or Sunday) on which
banks are open for general business in both London and Budapest and:
(a) in relation to any date for payment or purchase of a currency
other than euro, the principal financial centre of the country
of that currency; or
(b) in relation to any date for payment or purchase of euro, any
TARGET Day.
"Business Plan" means, in respect of the Group at any time, the
business plan of the Group at such time, being as at the date of this
Agreement, as set out in the Information Memorandum and with each
revised or amended business plan (if any) to be, except as otherwise
approved in advance in writing by the Facility Agent, acting on the
instructions of the Majority Lenders, in substantially the same form as
the business plan set out in the Information Memorandum.
"Citizens International Management Services Company" means Citizens
International Management Services Company, a company duly incorporated
under the laws of the State of Delaware, United States of America,
whose principal place of business is at 0 Xxxx Xxxxx Xxxx, Xxxxxxxx,
Xxxxxxxxxxx, XX00000, Xxxxxx Xxxxxx of America.
"Citizens Utilities Company" means Citizens Utilities Company, a
corporation incorporated under the laws of the State of Delaware,
United States of America, whose principal place of business is at 0
Xxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx, XX00000, Xxxxxx Xxxxxx of
America.
"Citizens" means Citizens Utilities Company, Citizens International
Management Services Company or any of their respective Affiliates.
"Civil Code" means Act IV of 1959 on the Civil Code, as amended, of
Hungary.
"Commitment" means a Facility A Commitment or Facility B Commitment.
"Companies Act" means Act CXLIV of 1997 on Business Associations, as
amended, of Hungary.
"Competent Authority" means, in respect of any person, any local,
national, supranational agency, authority, department, inspectorate,
minister, official, court, tribunal or public or statutory person
(whether autonomous or not) of any other country, which has
jurisdiction over such person.
"Compliance Certificate" means a certificate substantially in the form
set out in Schedule 5 (Form of Compliance Certificate).
"Concession Contract" means, in respect of:
(a) Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag:
(i) the concession contract in respect of the Bekescsaba
primary area dated 6 May 1994 made between: (1)
Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag;
and (2) the Minister, as amended on 16 June 1996; and
(ii) the concession contract in respect of the Oroshaza
primary area dated 6 May 1994 between: (1) Hungarotel
Tavkozlesi Koncesszios Reszvenytarsasag; and (2) the
Minister, as amended on 16 June 1996;
6
(b) RABA-COM Tavkozlesi Koncesszios Reszvenytarsasag, the
concession contract in respect of the primary area dated 6 May
1994 made between: (1) RABA-COM Tavkozlesi Koncesszios
Reszvenytarsasag; and (2) the Minister;
(c) Papa es Tersege Tavkozlesi Koncesszios Reszvenytarsasag, the
concession contract in respect of the primary area dated 6 May
1994 made between: (1) Papa es Tersege Tavkozlesi Koncesszios
Reszvenytarsasag; and (2) the Minister, as amended on 16 June
1996; and
(d) KNC Kelet-Nograd COM Tavkozlesi Koncesszios Reszvenytarsasag,
the concession contract in respect of the primary area dated 6
May 1994 made between: (1) KNC Kelet-Nograd COM Tavkozlesi
Koncesszios Reszvenytarsasag; and (2) the Minister.
"Confidentiality Undertaking" means a confidentiality undertaking
substantially in the form set out in Schedule 8 (Form of
Confidentiality Undertaking) or in any other form agreed between the
Obligors and the Facility Agent.
"Constitutional Documents" means, in respect of any person at any time,
the then current and up-to-date constitutional documents of such person
at such time (including, inter alia, such person's articles of
incorporation, by-laws, articles of association or deed of foundation,
as applicable, internal rules of organisation and operation, rules of
procedure of board of directors meetings, if applicable, rules of
procedure of supervisory board meetings, if applicable, register of
quotaholder(s) or shareholder(s), as appropriate, and all similar
and/or analogous documents whatsoever).
"Default" means an Event of Default or any fact, event or circumstance
specified in Clause 22 (Events of Default) which would (with the expiry
of a grace period which has commenced, the giving of notice where such
notice could be issued, the making of any determination under the
Finance Documents or any combination of any of the foregoing) be an
Event of Default.
"Deed of Guarantee No. 1" means the deed of guarantee dated on or about
the date of this Agreement made between: (1) Hungarotel Tavkozlesi
Koncesszios Reszvenytarsasag as guarantor; (2) Citibank International
plc as beneficiary and Facility Agent; (3) Citibank Rt. as beneficiary
and Security Agent; (4) RABA-COM Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; (5) Papa es Tersege Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; and (6) KNC Kelet-Nograd
COM Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
"Deed of Guarantee No. 2" means the deed of guarantee dated on or about
the date of this Agreement and made between: (1) RABA-COM Tavkozlesi
Koncesszios Reszvenytarsasag as guarantor; (2) Citibank International
plc as beneficiary and Facility Agent; (3) Citibank Rt. as beneficiary
and Security Agent; (4) Hungarotel Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; (5) Papa es Tersege Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; and (6) KNC Kelet-Nograd
COM Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
"Deed of Guarantee No. 3" means the deed of guarantee dated on or about
the date of this Agreement and made between: (1) Papa es Tersege
Tavkozlesi Koncesszios Reszvenytarsasag as guarantor; (2) Citibank
International plc as beneficiary and Facility Agent; (3) Citibank Rt.
as beneficiary and Security Agent; (4) Hungarotel Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; (5) RABA-COM Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; and (6) KNC Kelet-Nograd
COM Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
7
"Deed of Guarantee No. 4" means the deed of guarantee dated on or about
the date of this Agreement and made between: (1) KNC Kelet-Nograd COM
Tavkozlesi Koncesszios Reszvenytarsasag as guarantor; (2) Citibank
International plc as beneficiary and Facility Agent; (3) Citibank Rt.
as beneficiary and Security Agent; (4) Hungarotel Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; (5) RABA-COM Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; and (6) Papa es Tersege
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
"Deed of Guarantee No. 5" means the deed of guarantee dated on or about
the date of this Agreement made between: (1) HTCC Tanacsado
Reszvenytarsasag as guarantor; (2) Citibank International plc as
beneficiary and Facility Agent; (3) Citibank Rt. as beneficiary and
Security Agent; (4) Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag
as countersignor; (5) RABA-COM Tavkozlesi Koncesszios Reszvenytarsasag
as countersignor; (6) Papa es Tersege Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; and (7) KNC Kelet-Nograd COM
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
"Deed of Guarantee No. 6" means the deed of guarantee dated on or about
the date of this Agreement made between: (1) Hungarian Telephone and
Cable Corp. as guarantor; (2) Citibank International plc as beneficiary
and Facility Agent; (3) Citibank Rt. as beneficiary and Security Agent;
(4) Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor; (5) RABA-COM Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor; (6) Papa es Tersege Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; (7) KNC Kelet-Nograd COM Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; and (8) HTCC Tanacsado
Reszvenytarsasag as countersignor.
"Deeds of Guarantee" means, at any time, each of the Deed of Guarantee
No. 1, the Deed of Guarantee No. 2, the Deed of Guarantee No. 3, the
Deed of Guarantee No. 4, the Deed of Guarantee No. 5, the Deed of
Guarantee No. 6 and any other deed of guarantee at such time designated
as such in writing jointly by the Facility Agent, the Security Agent
and the Obligors.
"Dispute" has the meaning attributed to it in Clause 37.7 (Facility
Agent's option to refer disputes to arbitration).
"Distribution" means, at any time, any dividend or distribution or
other payment whatsoever made, paid or otherwise provided by, or on
behalf of, any Obligor to or for the benefit of any of its
shareholders.
"EBITDA" means, in respect of any period, the consolidated net
operating income of the Group for such period plus any net hedging
costs, net interest, Tax, and any amount(s) of depreciation and
amortisation charged to the consolidated profit and loss account of the
Group, adjusted to reflect the amounts of any extraordinary items and
any foreign exchange gains and losses (such that foreign exchange gains
are deducted and foreign exchange losses added back) and non-cash items
in respect of ongoing operations, in each case, during such period.
"Encumbrance" means: (a) a mortgage, charge, pledge, lien or other
encumbrance or security interest whatsoever securing any obligation of
any person; (b) any arrangement under which money or claims to, or the
benefit of, a bank or other account may be applied, set-off or made
subject to a combination of accounts so as to effect payment of sums
owed or payable to any person; or (c) any other type of agreement or
arrangement (including, but not limited to, title transfer and
retention arrangements) having a similar effect.
8
"Enforcement of Judicial Decisions Act" means Act LIII of 1994 on the
Enforcement of Judicial Decisions, as amended, of Hungary.
"Escrow Account" means the closed ("zarolt") bank account denominated
in dollars of Hungarian Telephone and Cable Corp. opened (or to be
opened) and maintained with the Escrow Bank for the purposes of the
Escrow Agreement.
"Escrow Agreement" means the escrow agreement dated on or about the
date of this Agreement made between: (1) Hungarian Telephone and Cable
Corp.; (2) Citibank Rt. as Escrow Bank; and (3) Citibank International
plc in its capacity as Facility Agent.
"Escrow Bank" means Citibank Rt. acting in its capacity as Escrow Bank
under the Escrow Agreement.
"EURIBOR" means, in relation to any Loan or Unpaid Sum denominated in
euro:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the period of that Loan or
Unpaid Sum) the arithmetic mean of the rates (rounded upwards
to four (4) decimal places) as supplied to the Facility Agent
at its request quoted by the Relevant Reference Banks to
leading banks in the European interbank market,
as of the Specified Time on the Quotation Day for the offering of
deposits in euro for a period comparable to the Interest Period of the
relevant Loan or period on which interest is to accrue.
"Event of Default" means any fact, event or circumstance specified or
described as such in Clause 22 (Events of Default).
"Excess Cashflow" means, in respect of any period, EBITDA for such
period adjusted downwards to reflect any changes in working capital,
capital expenditure, acquisitions (less disposals), amount(s) paid in
respect of Tax, net interest costs (including in respect of the Notes),
any costs incurred as a result of implementing the Hedging Strategy,
any Related Party Payments, any payments of dividends made in respect
of the Preference Shares and scheduled repayments of the Loans (or
part(s) thereof).
"Facility" means Facility A or Facility B.
"Facility A" means the term loan facility made available under this
Agreement as described in Clause 2 (The Facilities).
"Facility A Commitment" means:
(a) in relation to an Original Lender, the amount in the Base
Currency set opposite its name under the heading "Facility A
Commitment" in Schedule 1 (The Original Lenders) and the
amount of any other Facility A Commitment transferred to it
under this Agreement; and
(b) in relation to any other Lender, the amount in the Base
Currency of any Facility A Commitment transferred to it under
this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
9
"Facility A EURO Commitment" means, in respect of any Lender, such Base
Currency Amount of its Facility A Commitment which is not to be funded
in forint pursuant to the Utilisation Request in respect of Facility A.
"Facility A HUF Commitment" means, in respect of any Lender, such Base
Currency Amount, if any, of its Facility A Commitment as such Lender
has previously, by written notice to the Facility Agent, agreed to
provide denominated in forint.
"Facility A Loan" means a loan made or to be made under Facility A or
the principal amount outstanding for the time being of that loan.
"Facility B" means the revolving loan facility made available under
this Agreement as described in Clause 2 (The Facilities).
"Facility B Commitment" means:
(a) in relation to an Original Lender, the amount in the Base
Currency set opposite its name under the heading "Facility B
Commitment" in Schedule 1 (The Original Lenders) and the
amount of any other Facility B Commitment transferred to it
under this Agreement; and
(b) in relation to any other Lender, the amount in the Base
Currency of any Facility B Commitment transferred to it under
this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"Facility B Loan" means a loan made or to be made under Facility B or
the principal amount outstanding for the time being of that loan.
"Facility Office" means the office or offices notified by a Lender to
the Facility Agent in writing on or before the date such Lender becomes
a Lender (or, following that date, by not less than five (5) Business
Days' written notice) as the office or offices through which such
Lender will perform its obligations under this Agreement.
"Fee Letter" means any letter or letters dated on or before the date of
this Agreement from the Arrangers to any of the Obligors (or from any
Agent to any of the Obligors) setting out any of the fees referred to
in Clause 12 (Fees).
"Final Maturity Date" means 31 December 2007.
"Finance Documents" means, at any time, each of this Agreement, each
Fee Letter, each Hedging Document, the Letter of Borrowings and
Encumbrances, each Note, each Security Agreement, the Subordination and
Trust Deed and any other document, notice, instrument or agreement
entered into or delivered pursuant to any of the foregoing and any
other document, notice, instrument or agreement at such time designated
as such in writing jointly by the Facility Agent, the Security Agent
and the Obligors, and "Finance Document" means any and each such
document, notice, instrument or agreement.
"Finance Parties" means, at any time, each of the Arrangers, the
Facility Agent, the Security Agent, the Lenders and the Hedging Banks
at such time and "Finance Party" shall mean any or each of them.
"Financial Indebtedness" means any indebtedness for or in respect of:
10
(a) moneys borrowed;
(b) any amount raised by acceptance under any acceptance credit
facility or any other documentary credit facility;
(c) any amount raised pursuant to any note purchase facility or
the issue of bonds, notes, debentures, loan stock or any
similar instrument;
(d) any guarantee, indemnity, bond, standby letter of credit or
any other instrument issued in connection with the performance
of any contract or other obligation;
(e) the amount of any liability in respect of any lease or hire
purchase contract which would, in accordance with US GAAP, IAS
and/or HAS, as appropriate and as consistently applied in such
jurisdiction, be treated as a finance or capital lease;
(f) any amount raised pursuant to any issue of shares which are
expressed to be redeemable;
(g) receivables sold or discounted (other than any receivables to
the extent they are sold on a non-recourse basis);
(h) the amount of any liability in respect of any advance or
deferred purchase agreement if one of the primary reasons for
entering into such agreement is to raise finance;
(i) any amount raised under any other transaction (including, but
not limited to, any forward sale or purchase agreement) having
the commercial effect of a borrowing;
(j) any agreement or option to re-acquire an asset if one of the
primary reasons for entering into such agreement or option is
to raise finance;
(k) any derivative transaction, including, but not limited to, any
interest rate swap, currency swap, forward foreign exchange
transaction, cap, floor, or option transaction or any other
transaction entered into in connection with protection against
or benefit from fluctuation in any rate or price (and the
amount of the Financial Indebtedness in relation to any such
transaction shall be calculated by reference to the
marked-to-market valuation of such transaction at the relevant
time);
(l) any counter-indemnity obligation in respect of a guarantee,
indemnity, bond, standby or documentary letter of credit or
any other instrument issued by a bank or financial
institution; and
(m) the amount of any liability in respect of any guarantee or
indemnity for any of the items referred to in paragraphs (a)
to (l) above.
"Financial Services Authority" means the Financial Services Authority
of the United Kingdom of Great Britain and Northern Ireland.
"Fixed Charge No. 1 Agreement" means the fixed charge agreement dated
on or about the date of this Agreement made between: (1) Hungarotel
Tavkozlesi Koncesszios Reszvenytarsasag as pledgor; (2) Citibank Rt. as
pledgee and Security Agent; (3) RABA-COM Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; (4) Papa es Xxxxxxx Xxxxxxxxxx
Xxxxxxxxxxx Xxxxxxxxxxxxxxxx
00
as countersignor; and (5) KNC Kelet-Nograd COM Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor.
"Fixed Charge No. 2 Agreement" means the fixed charge agreement dated
on or about the date of this Agreement made between: (1) RABA-COM
Tavkozlesi Koncesszios Reszvenytarsasag as pledgor; (2) Citibank Rt. as
pledgee and Security Agent; (3) Hungarotel Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; (4) Papa es Tersege Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; and (5) KNC Kelet-Nograd
COM Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
"Fixed Charge No. 3 Agreement" means the fixed charge agreement dated
on or about the date of this Agreement made between: (1) Papa es
Tersege Tavkozlesi Koncesszios Reszvenytarsasag as pledgor; (2)
Citibank Rt. as pledgee and Security Agent; (3) Hungarotel Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; (4) RABA-COM Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; and (5) KNC Kelet-Nograd
COM Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
"Fixed Charge No. 4 Agreement" means the fixed charge agreement dated
on or about the date of this Agreement made between: (1) KNC
Kelet-Nograd COM Tavkozlesi Koncesszios Reszvenytarsasag as pledgor;
(2) Citibank Rt. as pledgee and Security Agent; (3) Hungarotel
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor; (4) RABA-COM
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor; and (5) Papa
es Tersege Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
"Fixed Charge No. 5 Agreement" means the fixed charge agreement dated
on or about the date of this Agreement made between: (1) HTCC Tanacsado
Reszvenytarsasag as pledgor; (2) Citibank Rt. as pledgee and Security
Agent; (3) Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor; (4) RABA-COM Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor; (5) Papa es Tersege Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; and (6) KNC Kelet-Nograd COM
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
"Fixed Charge Agreements" means, at any time, each of the Fixed Charge
No. 1 Agreement, the Fixed Charge No. 2 Agreement, the Fixed Charge No.
3 Agreement, the Fixed Charge No. 4 Agreement, the Fixed Charge No. 5
Agreement and any other fixed charge agreement at such time designated
as such in writing jointly by the Facility Agent, the Security Agent
and the Obligors.
"Floating Charge No. 1 Agreement" means the floating charge agreement
dated on or about the date of this Agreement made between: (1)
Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag as pledgor; (2)
Citibank Rt. as pledgee and Security Agent; (3) RABA-COM Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; (4) Papa es Tersege
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor; and (5) KNC
Kelet-Nograd COM Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor.
"Floating Charge No. 2 Agreement" means the floating charge agreement
dated on or about the date of this Agreement made between: (1) RABA-COM
Tavkozlesi Koncesszios Reszvenytarsasag as pledgor; (2) Citibank Rt. as
pledgee and Security Agent; (3) Hungarotel Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; (4) Papa es Tersege Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; and (5) KNC Kelet-Nograd
COM Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
12
"Floating Charge No. 3 Agreement" means the floating charge agreement
dated on or about the date of this Agreement made between: (1) Papa es
Tersege Tavkozlesi Koncesszios Reszvenytarsasag as pledgor; (2)
Citibank Rt. as pledgee and Security Agent; (3) Hungarotel Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; (4) RABA-COM Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; and (5) KNC Kelet-Nograd
COM Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
"Floating Charge No. 4 Agreement" means the floating charge agreement
dated on or about the date of this Agreement made between: (1) KNC
Kelet-Nograd COM Tavkozlesi Koncesszios Reszvenytarsasag as pledgor;
(2) Citibank Rt. as pledgee and Security Agent; (3) Hungarotel
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor; (4) RABA-COM
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor; and (5) Papa
es Tersege Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
"Floating Charge No. 5 Agreement" means the floating charge agreement
dated on or about the date of this Agreement made between: (1) HTCC
Tanacsado Reszvenytarsasag as pledgor; (2) Citibank Rt. as pledgee and
Security Agent; (3) Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag
as countersignor; (4) RABA-COM Tavkozlesi Koncesszios Reszvenytarsasag
as countersignor; (5) Papa es Tersege Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; and (6) KNC Kelet-Nograd COM
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
"Floating Charge Agreements" means, at any time, each of the Floating
Charge No. 1 Agreement, the Floating Charge No. 2 Agreement, the
Floating Charge No. 3 Agreement, the Floating Charge No. 4 Agreement,
the Floating Charge No. 5 Agreement and any other floating charge
agreement designated at such time as such in writing jointly by the
Facility Agent, the Security Agent and the Obligors.
"Foreign Exchange Act" means Act XCV of 1995 on Foreign Exchange, as
amended, of Hungary.
"Good Industry Practice" means the exercise of that degree of skill,
diligence, prudence, foresight and operating practice which would
reasonably and ordinarily be expected from a skilled and experienced
telecommunications operator engaged in the same type of undertaking as
the Group.
"Government Decree" means government decree number 7 of 1997 (I.22.)
issued by the Hungarian Government pursuant to the Civil Code.
"Group" means, at any time, Hungarian Telephone and Cable Corp. and its
Subsidiaries at such time.
"HAS" means, at any time, accounting principles, standards and
practices generally accepted and implemented in Hungary at such time.
"Hedging Bank" means, at any time, any financial institution or bank
which is at such time a counterparty to a Hedging Document entered into
by any Borrower.
"Hedging Document" means each agreement in respect of any derivative
transaction, including, but not limited to, any interest rate swap,
currency swap, forward foreign exchange transaction, cap, floor, or
option transaction, or any other transaction entered into in connection
with protection against any fluctuation in any rate or price, in each
case, entered into by a Borrower in compliance with and in order to
implement the Hedging Strategy, each such agreement to be based on the
1992
13
ISDA Master Agreement (multicurrency-cross border) and each in a form
approved in advance by the Facility Agent, acting on the instructions
of the Majority Lenders.
"Hedging Strategy" means, at any time, in respect of the Borrowers, the
strategy of the Borrowers at such time, devised by the Borrowers in
accordance with sound and prudent business practices, for the
management and mitigation of the risks arising to the financial
condition of the Borrowers from interest rate and/or foreign exchange
rates and implemented by the Borrowers during the term of this
Agreement pursuant to Clause 21.20 (Hedging Strategy).
"Holding Company" means, in relation to a company or corporation, any
other company or corporation in respect of which it is a Subsidiary.
"HTCC Tanacsado Reszvenytarsasag" means HTCC Tanacsado
Reszvenytarsasag, a company duly incorporated under the laws of
Hungary, with its registered office at Terez krt. 46, X-0000 Xxxxxxxx,
Xxxxxxx and registered at the Metropolitan Court of Registration with
registration number 00-00-000000.
"Hungarian Telephone and Cable Corp." means Hungarian Telephone and
Cable Corp., a company registered under the laws of the State of
Delaware, United States of America and whose principal place of
business as at the date of this Agreement is at 100 First Stamford
Place Suite, 204 Stamford, CT06902, Connecticut, United States of
America.
"Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag" means Hungarotel
Tavkozlesi Koncesszios Reszvenytarsasag, a company duly incorporated
under the laws of Hungary, with its registered office at Terez krt. 46,
X-0000 Xxxxxxxx, Xxxxxxx and registered at the Metropolitan Court of
Registration with registration number 00-00-000000.
"Hungary" means the Republic of Hungary.
"IAS" means, at any time, international accounting standards issued by
the International Accounting Standards Committee from time to time as
such international accounting standards are accepted and implemented in
Hungary at such time.
"Income" means, in respect of any person at any time, the entire income
of and all cash and/or money and/or money equivalent receivables
whatsoever and howsoever arising of such person at such time.
"Income Accounts" means the bank accounts of the Obligors, being, as at
the date of this Agreement, in respect of:
(a) Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag, those set
out and detailed in Schedule 11 (List of Bank Accounts) and
any sub-accounts of such account;
(b) RABA-COM Tavkozlesi Koncesszios Reszvenytarsasag, those set
out and detailed in Schedule 11 (List of Bank Accounts) and
any sub-accounts of such account;
(c) Papa es Tersege Tavkozlesi Koncesszios Reszvenytarsasag, those
set out and detailed in Schedule 11 (List of Bank Accounts)
and any sub-accounts of such account;
(d) KNC Kelet-Nograd COM Tavkozlesi Koncesszios Reszvenytarsasag,
those set out and detailed in Schedule 11 (List of Bank
Accounts) and any sub-accounts of such account; and
14
(e) HTCC Tanacsado Reszvenytarsasag, those set out and detailed in
Schedule 11 (List of Bank Accounts) and any sub-accounts of
such account,
and/or any other account(s) and/or branch(es) with any Lender or which
the Facility Agent and the Security Agent, acting on the instructions
of the Majority Lenders, may approve.
"Information Memorandum" means the document in the form approved by
each member of the Group concerning the Obligors which, at the
Hungarian Telephone and Cable Corp.'s request and on its behalf, was
prepared in relation to this transaction and distributed by the
Arrangers to selected financial institutions prior to the date of this
Agreement.
"Interest Period" means, in relation to a Loan, each period determined
in accordance with Clause 10 (Interest periods) and, in relation to an
Unpaid Sum, each period determined in accordance with Clause 9.3
(Default interest).
"IO Fund" means the Danish Investment Fund for Central and Eastern
Europe, an entity organised under the laws of Denmark.
"Key Performance Indicators Certificate" means a certificate
substantially in the form set out in Schedule 7 (Form of Key
Performance Indicators Certificate).
"KNC Kelet-Nograd COM Tavkozlesi Koncesszios Reszvenytarsasag" means
KNC Kelet-Nograd COM Tavkozlesi Koncesszios Reszvenytarsasag, a company
duly incorporated under the laws of Hungary, with its registered office
at Xxxxx Xx. xxxx 00., X-0000 Xxxxxxxxx, Xxxxxxx and registered at the
Nograd County Court of Registration with registration number
00-00-000000.
"Lender" means:
(a) any Original Lender; and
(b) any bank or financial institution which has become a Party in
accordance with Clause 23 (Changes to the Lenders),
which in each case has not ceased to be a Party in accordance with the
terms of this Agreement.
"Letter of Borrowings and Encumbrances" means the letter dated on or
about the date of this Agreement, addressed to the Facility Agent and
signed by each member of the Group setting out, in reasonable detail,
particulars of: (i) all of their respective indebtedness, (whether
incurred as principal or surety), whether present or future, actual or
contingent; (ii) all Encumbrances (if any), whether present or future,
actual or contingent, over any of their respective assets (other than
Permitted Encumbrances); and (iii) an explanation as to how such
indebtedness and encumbrances will be repaid, eliminated, discharged,
released, replaced and/or consolidated, as applicable, on the basis
agreed in advance in writing prior to the date of this Agreement by
each member of the Group and the Facility Agent.
"LIBOR" means, in relation to any Loan or Unpaid Sum denominated in a
currency other than forint or euro:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the currency or period of
that Loan or Unpaid Sum) the arithmetic mean of the rates
(rounded upwards to four decimal places) as supplied to the
15
Facility Agent at its request quoted by the Relevant Reference
Banks to leading banks in the London interbank market,
as of the Specified Time on the Quotation Day for the offering of
deposits in the currency of that Loan or Unpaid Sum and for a period
comparable to the Interest Period of the relevant Loan or period on
which interest is to accrue.
"Loan" means a Facility A Loan or a Facility B Loan.
"Majority Lenders" means:
(a) if there are no Loans then outstanding, a Lender or Lenders
whose Commitments aggregate more than sixty six and two-thirds
per cent. (66 2/3%) of the Total Commitments (or, if the Total
Commitments have been reduced to zero (0), aggregated more
than sixty six and two-thirds per cent. (66 2/3%) of the Total
Commitments immediately prior to the reduction); or
(b) at any other time, a Lender or Lenders whose participations in
the Loans then outstanding aggregate more than sixty six and
two-thirds per cent. (66 2/3%) of all the Loans then
outstanding,
Provided that, in respect of any Lender which, at the time of any
determination to be made by the Majority Lenders pursuant to this
Agreement, owns, legally and/or beneficially, directly and/or
indirectly, five per cent. (5%) or more of the issued and paid-up share
capital of Hungarian Telephone and Cable Corp. and/or any Note(s)
and/or any Warrant(s), such Lender's Commitment and participation in
the Total Commitments or participations in all the Loans then
outstanding, as applicable, shall be deemed to be zero (0) for the
purposes of determining the composition of the Majority Lenders and
such Lender shall not be entitled to take part in any such
determination by the remaining Lenders.
"Material Adverse Effect" means, in relation to any fact(s), event(s)
and/or circumstance(s) or series of the foregoing, such fact(s),
event(s) and/or circumstance(s) which has or would be reasonably likely
to have a material adverse effect on:
(a) the business, condition (financial or otherwise) or results of
operations of any Obligor;
(b) the business, condition (financial or otherwise) or results of
operations of the Group taken as a whole; and/or
(c) the ability of any Obligor to duly comply, perform and
discharge such Obligor's respective obligations and
liabilities under any of the Finance Documents.
"Minister" means, at any time, the Minister appointed at such time to
head the Ministry.
"Minister's Letter" means the letter from the Minister to Xxxxx
Xxxxxxxx Chance Punder (as legal counsel acting on behalf of the
Borrowers) confirming, inter alia, the Minister's approval of the
creation of the Encumbrances created by and constituted in the Security
Agreements and approving, on terms and conditions set out in such
letter(s), the transfer of ownership of the Borrowers and/or the assets
of the Borrowers upon the enforcement of the Encumbrances created by
and constituted in the Security Agreements.
16
"Ministry" means, as at the date of this Agreement, the Ministry of
Transport, Communication and Water Management of Hungary (or any
successor Competent Authority with relevant responsibilities at such
time in respect of the Concession Contracts).
"Month" means a period starting on one day in a calendar month and
ending on the numerically corresponding day in the next calendar month,
except that:
(a) (subject to paragraph (c) below) if the numerically
corresponding day is not a Business Day, that period shall end
on the next Business Day in that calendar month in which that
period is to end if there is one, or if there is not, on the
immediately preceding Business Day;
(b) if there is no numerically corresponding day in the calendar
month in which that period is to end, that period shall end on
the last Business Day in that calendar month; and
(c) if an Interest Period begins on the last Business Day of a
calendar month, that Interest Period shall end on the last
Business Day in the calendar month in which that Interest
Period is to end.
The above rules will only apply to the last Month of any period.
"Mortgage No. 1 Agreement" means the mortgage agreement dated on or
about the date of this Agreement made between: (1) Hungarotel
Tavkozlesi Koncesszios Reszvenytarsasag as mortgagor; (2) Citibank Rt.
as mortgagee and Security Agent; (3) RABA-COM Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; (4) Papa es Tersege Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; and (5) KNC Kelet-Nograd
COM Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
"Mortgage No. 2 Agreement" means the mortgage agreement dated on or
about the date of this Agreement made between: (1) RABA-COM Tavkozlesi
Koncesszios Reszvenytarsasag as mortgagor; (2) Citibank Rt. as
mortgagee and Security Agent; (3) Hungarotel Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; (4) Papa es Tersege Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; and (5) KNC Kelet-Nograd
COM Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
"Mortgage No. 3 Agreement" means the mortgage agreement dated on or
about the date of this Agreement made between: (1) Papa es Tersege
Tavkozlesi Koncesszios Reszvenytarsasag as mortgagor; (2) Citibank Rt.
as mortgagee and Security Agent; (3) Hungarotel Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; (4) RABA-COM Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; and (5) KNC Kelet-Nograd COM
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
"Mortgage No. 4 Agreement" means the mortgage agreement dated on or
about the date of this Agreement made between: (1) KNC Kelet-Nograd COM
Tavkozlesi Koncesszios Reszvenytarsasag as mortgagor; (2) Citibank Rt.
as mortgagee and Security Agent; (3) Hungarotel Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; (4) RABA-COM Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; and (5) Papa es Tersege Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor.
"Mortgage No. 5 Agreement" means the mortgage agreement dated on or
about the date of this Agreement made between: (1) HTCC Tanacsado
Reszvenytarsasag as mortgagor; (2) Citibank Rt. as mortgagee and
Security Agent; (3) Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag
as
17
countersignor; (4) RABA-COM Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor; (5) Papa es Tersege Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; and (6) KNC Kelet-Nograd COM
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
"Mortgage Agreements" means, at any time, each of the Mortgage No. 1
Agreement, the Mortgage No. 2 Agreement, the Mortgage No. 3 Agreement,
the Mortgage No. 4 Agreement, the Mortgage No. 5 Agreement and any
other mortgage agreement at such time designated as such in writing
jointly by the Facility Agent, the Security Agent and the Obligors.
"NBH" means the National Bank of Hungary.
"NBH Acknowledgement" means the acknowledgement of the NBH issued in
respect of Facility A pursuant to the Foreign Exchange Act.
"NBH Permission" means the licence of the NBH issued in respect of
Facility B pursuant to the Foreign Exchange Act.
"Net Cumulative Excess Cashflow" means, at any time, the aggregate of
all positive Excess Cashflow amounts, calculated from 1 January 2000
onwards, up to such time less the aggregate of all prepayments made to
the Lenders, calculated from 1 January 2000 onwards, up to such time by
any Borrower(s) pursuant to Clause 8.2 (Mandatory prepayment).
"Notaries Public Act" means Act XLI of 1991 on Notaries Public, as
amended, of Hungary.
"Notary Public" means a notary public of Hungary, duly operating under
the Notaries Public Act who, amongst other matters, is entitled to
notarise and enter details of applicable collateral securities into the
Register of Pledges.
"Notes" means each of the twenty five (25) unsecured loan notes, each
of one million dollar (USD 1,000,000) nominal value, dated 10 May 1999
issued by Hungarian Telephone and Cable Corp. to Postabank es
Takarekpenztar Reszvenytarsasag as noteholder, as amended and restated
pursuant to the Amendment No. 1 to Securities Purchase Agreement, as
such notes may have been prepaid in accordance with this Agreement and
"Note" means any or each of them.
"Obligors" means each of the Borrowers and each Guarantor and "Obligor"
shall mean any or each of them.
"Optional Currency" means, in respect of Facility A, forint.
"Original Financial Statements" means, in respect of:
(i) Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag, its
financial statements for its financial year ended 31 December
1998 audited by the Auditors;
(ii) RABA-COM Tavkozlesi Koncesszios Reszvenytarsasag, its
financial statements for its financial year ended 31 December
1998 audited by the Auditors;
(iii) Papa es Tersege Tavkozlesi Koncesszios Reszvenytarsasag, its
financial statements for its financial year ended 31 December
1998 audited by the Auditors;
(iv) KNC Kelet-Nograd COM Tavkozlesi Koncesszios Reszvenytarsasag,
its financial statements for its financial year ended 31
December 1998 audited by the Auditors;
18
(v) HTCC Tanacsado Reszvenytarsasag, its financial statements for
its financial year ended 31 December 1998 audited by the
Auditors;
(vi) PILISTAV Tavkozlesi, Epito es Szolgaltato Korlatolt
Felelossegu Tarsasag, its financial statements for its
financial year ended 31 December 1998 audited by the Auditors;
and
(vii) Hungarian Telephone and Cable Corp., the 10K Document for its
financial year ended 31 December 1998 audited by KPMG L.L.P.
and the 10Q Document in respect of the first nine (9) Months
of its 1999 financial year, such nine (9) Month period ending
30 September 1999.
"Papa es Tersege Tavkozlesi Koncesszios Reszvenytarsasag" means Papa es
Tersege Tavkozlesi Koncesszios Reszvenytarsasag, a company duly
incorporated under the laws of Hungary, with its registered office at
Xxxxx xxxx 0., X-0000 Xxxx, Xxxxxxx and registered at the Veszprem
County Court of Registration with registration number 00-00-000000.
"Participating Member State" means any member state of the European
Communities that adopts or has adopted the euro as its lawful currency
in accordance with legislation of the European Communities relating to
European Monetary Union.
"Party" means a party to this Agreement and includes its successors in
title, permitted assigns and permitted transferees and "Parties" means
any two (2) or more such persons.
"Permitted Fee Distribution" means any Distribution to be made by any
Obligor (other than Hungarian Telephone and Cable Corp.) to Hungarian
Telephone and Cable Corp. and/or HTCC Tanacsado Reszvenytarsasag, as
appropriate, as guarantee or similar fees in respect of the guarantees
created by and constituted in the Deed of Guarantee No. 5 or the Deed
of Guarantee No. 6, as applicable, and/or as loan fees, interest or
similar fees in respect of the Financial Indebtedness of such Obligor
to Hungarian Telephone and Cable Corp. or HTCC Tanacsado
Reszvenytarsasag, as applicable, made in accordance with Clause 21.13
(Loans and guarantees), in each case the amounts of which have been
expressly approved in advance in writing by the Facility Agent, acting
on the instructions of the Majority Lenders.
"Permitted Inter-company Loan" means any loan made between any of the
Borrowers or any loan made between any of the Borrowers and HTCC
Tanacsado Reszvenytarsasag, expressly contemplated by and permitted
pursuant to paragraph (a) of Clause 21.13 (Loans and guarantees).
"Permitted Management Contracts" means any management or similar
agreement, contract or other arrangement whatsoever to which any member
of the Group is or will be a party which:
(a) has been fully disclosed to and approved by the Facility Agent
prior to the date of this Agreement;
(b) which has been approved in advance in writing by the Facility
Agent, acting on the instructions of the Majority Lenders; or
(c) does not give rise to a Material Adverse Effect and which (if
not already falling into the scope of paragraphs (a) or (b)
above) when aggregated with all other such agreements,
contracts or other arrangements does not in any financial year
give rise to a liability (present or future, actual or
contingent) of an amount more than the equivalent to five
hundred thousand dollars (USD 500,000).
00
"XXXXXXXX Xxxxxxxxxx, Xxxxx xx Xxxxxxxxxxx Xxxxxxxxx Felelossegu
Tarsasag" means PILISTAV Tavkozlesi, Epito es Szolgaltato Korlatolt
Felelossegu Tarsasag a company duly incorporated under the laws of
Hungary, with its registered office at Xxxxxx Xxxxxx x. 0., X-0000
Xxxxxxx, Xxxxxxx and registered at the Pest County Court of
Registration with registration number 00-00-000000.
"Pledge and Security Agreement" means the pledge and security agreement
dated on or about the date of this agreement made between: (1)
Hungarian Telephone and Cable Corp. as grantor; and (2) Citibank Rt. as
Security Agent.
"Pledge Over Bank Accounts No. 1 Agreement" means the pledge over bank
accounts agreement dated on or about the date of this Agreement made
between: (1) Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag as
pledgor; (2) Citibank Rt. as pledgee and Security Agent; (3) RABA-COM
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor; (4) Papa es
Tersege Tavkozlesi Koncesszios Reszvenytarsasag as countersignor; and
(5) KNC Kelet-Nograd COM Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor.
"Pledge Over Bank Accounts No. 2 Agreement" means the pledge over bank
accounts agreement dated on or about the date of this Agreement made
between: (1) RABA-COM Tavkozlesi Koncesszios Reszvenytarsasag as
pledgor; (2) Citibank Rt. as pledgee and Security Agent; (3) Hungarotel
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor; (4) Papa es
Tersege Tavkozlesi Koncesszios Reszvenytarsasag as countersignor; and
(5) KNC Kelet-Nograd COM Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor.
"Pledge Over Bank Accounts No. 3 Agreement" means the pledge over bank
accounts agreement dated on or about the date of this Agreement made
between: (1) Papa es Tersege Tavkozlesi Koncesszios Reszvenytarsasag as
pledgor; (2) Citibank Rt. as pledgee and Security Agent; (3) Hungarotel
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor; (4) RABA-COM
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor; and (5) KNC
Kelet-Nograd COM Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor.
"Pledge Over Bank Accounts No. 4 Agreement" means the pledge over bank
accounts agreement dated on or about the date of this Agreement made
between: (1) KNC Kelet-Nograd COM Tavkozlesi Koncesszios
Reszvenytarsasag as pledgor; (2) Citibank Rt. as pledgee and Security
Agent; (3) Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor; (4) RABA-COM Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor; and (5) Papa es Tersege Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor.
"Pledge Over Bank Accounts No. 5 Agreement" means the pledge over bank
accounts agreement dated on or about the date of this Agreement made
between: (1) HTCC Tanacsado Reszvenytarsasag as pledgor; (2) Citibank
Rt. as pledgee and Security Agent; (3) Hungarotel Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; (4) RABA-COM Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; (5) Papa es Tersege
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor; and (6) KNC
Kelet-Nograd COM Tavkozlesi Koncesszios Reszvenytarsasag as
countersignor.
"Pledge Over Bank Accounts No. 6 Agreement" means the pledge over bank
accounts agreement dated on or about the date of this Agreement made
between: (1) Hungarian Telephone and Cable Corp. as pledgor; (2)
Citibank Rt. as pledgee and Security Agent; (3) Hungarotel Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; (4) RABA-COM Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; (5) Papa es Xxxxxxx
Xxxxxxxxxx
00
Xxxxxxxxxxx Xxxxxxxxxxxxxxxx as countersignor; and (6) KNC Kelet-Nograd
COM Tavkozlesi Koncesszios Reszvenytarsasag as countersignor; and (7)
HTCC Tanacsado Reszvenytarsasag as countersignor.
"Pledge Over Bank Accounts Agreements" means, at any time, each of the
Pledge Over Bank Accounts No. 1 Agreement, the Pledge Over Bank
Accounts No. 2 Agreement, the Pledge Over Bank Accounts No. 3
Agreement, the Pledge Over Bank Accounts No. 4 Agreement, the Pledge
Over Bank Accounts No. 5 Agreement, the Pledge Over Bank Accounts No. 6
Agreement and any other pledge over bank accounts agreement at such
time designated as such in writing jointly by the Facility Agent, the
Security Agent and the Obligors.
"Preference Shares" means the thirty thousand (30,000) preference
shares ("Preferred Stock Series A"), each with a par value of zero
point zero zero one dollars (USD 0.001) and each with a liquidation
value of seventy dollars (USD 70), in Hungarian Telephone and Cable
Corp. issued to Citizens International Management Services Company on
12 May 1999 which are convertible at any time after 10 May 2000, at the
option of the holder, into common shares of Hungarian Telephone and
Cable Corp. on a one for ten (1:10) basis and which until such
conversion entitle the holder to receive cumulative dividends payable
in arrears at an annual rate of five per cent. (5%) compounded annually
on the liquidation value.
"Qualifying Lender" has the meaning provided for in Clause 13.1
(Definitions).
"Quotation Day" means, in relation to any period for which an interest
rate is to be determined:
(a) if the currency is euro, two (2) TARGET Days before the first
day of that period; or
(b) for any currency other than euro, two (2) Business Days before
the first day of that period,
unless market practice differs in the Relevant Interbank Market for a
currency, in which case the Quotation Day for that currency will be
determined by the Facility Agent in accordance with market practice in
the Relevant Interbank Market (and if quotations would normally be
given by leading banks in the Relevant Interbank Market on more than
one day, the Quotation Day will be the last of those days).
"RABA-COM Tavkozlesi Koncesszios Reszvenytarsasag" means RABA-COM
Tavkozlesi Koncesszios Reszvenytarsasag, a company duly incorporated
under the laws of Hungary, with its registered office at Xxx Xxxxx utca
1., X-0000 Xxxxxx, Xxxxxxx and registered at the Vas County Court of
Registration with registration number 00-00-000000.
"Reduction Date" means 31 December 2005.
"Reduction Instalment" means two million five hundred thousand euro
(EUR 2,500,000).
"Register of Pledges" means the register of pledges maintained by the
Hungarian National Chamber of Notaries Public, as provided for by the
Government Decree.
"Related Party" means, at any time, with respect to any person: (a) an
Affiliate of such person; (b) a director, managing director,
supervisory board member, employee or similar officer of such person;
or (c) any spouse, relative in a direct line, adopted child, stepchild,
foster-child, adoptive, step- or foster-parent, brother or sister of
any person referred to in paragraph (a) above at such time.
21
"Related Party Payments" means the payments to be made to former
members of the management of the Group as detailed in the Information
Memorandum, being for 2000 the amount not to exceed one million two
hundred and eight thousand three hundred and forty dollars (USD
1,208,340), for 2001 the amount not to exceed one million two hundred
and eight thousand three hundred and forty dollars (USD 1,208,340) and
for 2002 an amount not to exceed seven hundred and seventeen thousand
dollars (USD 717,000).
"Relevant Interbank Market" means:
(a) in respect of any Facility A Loan or Unpaid Sum denominated in
forint, the Budapest interbank market for BUBOR;
(b) in respect of any Facility A Loan, Facility B Loan or Unpaid
Sum denominated in euro, the Brussels interbank market for
EURIBOR; and
(c) in respect of any Unpaid Sum denominated in any currency other
than euro or forint, the London interbank market for LIBOR.
"Relevant Interbank Market Rate" means
(a) in respect of a Facility A Loan or Unpaid Sum denominated in
forints, BUBOR;
(b) in respect of a Facility A Loan, Facility B Loan or Unpaid Sum
denominated in euro, EURIBOR; and
(c) in respect of an Unpaid Sum denominated in a currency other
than euro or forint, LIBOR.
"Relevant Reference Banks" means:
(a) in respect of BUBOR, the principal Budapest offices of
Citibank Rt., Westdeutsche Landesbank (Hungaria) Rt. and
Magyar Kulkereskedelmi Bank Rt. and/or such other bank or
banks as may be appointed as such by the Facility Agent after
consultation with the Borrowers;
(b) in respect of EURIBOR, the principal Brussels offices of
Citibank, N.A., principal Dusseldorf offices of Westdeutsche
Landesbank Girozentrale and principal Paris offices of Credit
Lyonnais S.A. and/or such other bank or banks as may be
appointed as such by the Facility Agent after consultation
with the Borrowers; and
(c) in respect of LIBOR, the principal London offices of Citibank,
N.A., Westdeutsche Landesbank Girozentrale and Credit Lyonnais
S.A. and/or such other bank or banks as may be appointed as
such by the Facility Agent after consultation with the
Borrowers.
"Repayment Dates" means each of the dates provided for under Clause 7.1
(Repayment of Facility A Loans) and "Repayment Date" means any such
date Provided that where any such Repayment Date is not a Business Day,
the relevant date shall be deemed to be the Business Date immediately
preceding such Repayment Date and "Repayment Date" and "Repayment
Dates" shall, in such circumstances, be construed accordingly.
22
"Repeating Representations" means each of those representations set out
in Clause 18 (Representations) which are stated as being deemed to be
repeated as provided for pursuant to Clause 18.29 (Repetition).
"Rollover Loan" means one or more Facility B Loans:
(a) made or to be made on the same day that a maturing Facility B
Loan is due to be repaid;
(b) the aggregate amount of which is equal to or less than the
maturing Facility B Loan; and
(c) made or to be made to the same Borrower for the purpose of
refinancing a maturing Facility B Loan.
"Screen Rate" means:
(a) in relation to LIBOR, the British Bankers Association Interest
Settlement Rate for the relevant currency and period displayed
on the appropriate page of the Telerate Screen, being, as at
the date of this Agreement, page 3750;
(b) in relation to EURIBOR, the percentage rate per annum
determined by the Banking Federation of the European Union for
the relevant period displayed on the appropriate page of the
Telerate Screen, being, as at the date of this Agreement, page
248; and
(c) in relation to BUBOR, the percentage rate per annum determined
according to the rules established by the Hungarian Forex
Association and published by the NBH for the relevant period
displayed on the appropriate page of the Reuters Screen,
being, as at the date of this Agreement, page BUBOR,
or, if the agreed page is replaced or service ceases to be available,
such other page or service displaying the appropriate rate as the
Facility Agent, after consultation with the Borrowers and the Lenders,
may select.
"Securities Purchase Agreement" means the securities purchase agreement
dated 10 May 1999 made between: (1) Hungarian Telephone and Cable
Corp.; and (2) Postabank es Takarekpenztar Reszvenytarsasag.
"Security Agent's Spot Rate of Exchange" means the Security Agent's
spot rate of exchange for the purchase of the relevant currency with
the Base Currency in the Budapest foreign exchange market at or about
10.00 a.m. (Budapest time) on a particular day.
"Security Agreements" means, at any time, each of the Assignment of
Contractual Rights Agreements, the Deeds of Guarantee, the Fixed Charge
Agreements, the Floating Charge Agreements, the Mortgage Agreements,
the Pledge and Security Agreement, the Pledge Over Bank Accounts
Agreements, the Security Deposit Agreements and any other document at
such time designated as such in writing jointly by the Facility Agent,
the Security Agent and the Obligors.
"Security Deposit No. 1 Agreement" means the security deposit agreement
dated on or about the date of this Agreement made between: (1)
Hungarian Telephone and Cable Corp. as depositor; (2) Citibank Rt. as
depositee and Security Agent; (3) Hungarotel Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; (4) RABA-COM Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; (5) KNC Kelet-Nograd COM Tavkozlesi
Koncesszios
23
Reszvenytarsasag as countersignor; (6) Papa es Tersege Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; and (7) HTCC Tanacsado
Reszvenytarsasag as countersignor.
"Security Deposit No. 2 Agreement" means the security deposit agreement
dated on or about the date of this Agreement made between: (1) HTCC
Tanacsado Reszvenytarsasag as depositor; (2) Citibank Rt. as depositee
and Security Agent; (3) Hungarotel Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; (4) RABA-COM Tavkozlesi Koncesszios
Reszvenytarsasag as countersignor; (5) KNC Kelet-Nograd COM Tavkozlesi
Koncesszios Reszvenytarsasag as countersignor; and (6) Papa es Tersege
Tavkozlesi Koncesszios Reszvenytarsasag as countersignor.
"Security Deposit Agreements" means each of the Security Deposit No. 1
Agreement, the Security Deposit No. 2 Agreement and any other security
deposit agreement designated as such in writing jointly by the Facility
Agent, the Security Agent and the Obligors.
"Selection Notice" means a notice substantially in the form set out in
Part II of Schedule 3 (Form of Requests) given in accordance with
Clause 10 (Interest Periods) in relation to Facility A.
"Senior Finance Documents" means, at any time, each of this Agreement,
each Fee Letter, each Hedging Document, each Security Agreement, the
Subordination and Trust Deed and any other document, notice, instrument
or agreement entered into or delivered pursuant to any of the foregoing
and any other document, notice, instrument or agreement at such time
designated as such in writing jointly by the Facility Agent, the
Security Agent and the Obligors, and "Senior Finance Document" means
any and each such document, notice, instrument or agreement.
"Specified Time" means a time determined in accordance with Schedule 9
(Timetables).
"Subordination and Trust Deed" means the subordination and trust deed
dated on or about the date of this Agreement made between: (1)
Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag; (2) RABA-COM
Tavkozlesi Koncesszios Reszvenytarsasag; (3) Papa es Tersege Tavkozlesi
Koncesszios Reszvenytarsasag; (4) KNC Kelet-Nograd COM Tavkozlesi
Koncesszios Reszvenytarsasag; (5) Hungarian Telephone and Cable Corp.;
(6) HTCC Tanacsado Reszvenytarsasag; (7) Citibank International plc
acting in its capacity as Facility Agent on behalf of each and every
Finance Party; and (8) Citibank Rt. acting in its capacity as Security
Agent on behalf of each and every Finance Party.
"Subsidiary" means, in respect of a company or corporation, any other
company or corporation:
(a) which is controlled, directly or indirectly, by the
first-mentioned company or corporation;
(b) more than half the issued share or quota capital of which is
beneficially owned, directly or indirectly, by the
first-mentioned company or corporation; or
(c) which is a subsidiary of another subsidiary of the
first-mentioned company or corporation;
and, for these purposes, a company or corporation shall be treated as
being controlled by another if that other company or corporation is
able to direct its affairs and/or to direct and/or control the
composition of its board of directors or equivalent body.
24
"TARGET" means Trans-European Automated Real-time Gross Settlement
Express Transfer payment system.
"TARGET Day" means any day on which TARGET is open for the settlement
of payments in euro.
"Tax" means any tax, stamp tax, registration tax, documentary tax,
levy, impost, duty or other charge or withholding of a similar nature
(including any penalty or interest payable in connection with any
failure to pay or any delay in paying any of the same).
"Taxes Act" means the Income and Corporation Taxes Xxx 0000, as
amended, of England and Wales.
"Telecommunications Act" means Act LXXVII of 1992 on Telecommunication,
as amended, of Hungary.
"Telecommunications Authority" means Hirkozlesi Fofelugyelet, being an
organ of the Ministry, with, inter alia, certain responsibilities,
duties and rights in respect of the Telecommunications Act.
"Tele Danmark A/S" means Tele Danmark A/S, a corporation duly
incorporated under the laws of Denmark, whose principal place of
business is at Xxxxxxxxxxx 00, XX 0000, Xxxxxx-X, Xxxxxxx.
"Total Commitments" means the aggregate of the Total Facility A
Commitments and the Total Facility B Commitments, being one hundred and
thirty million euro (EUR 130,000,000) at the date of this Agreement.
"Total Facility A Commitments" means the aggregate of the Facility A
Commitments, being one hundred and twenty five million euro (EUR
125,000,000) at the date of this Agreement.
"Total Facility A EURO Commitments" means the aggregate Base Currency
Amount of the Facility A EURO Commitments of the Lenders.
"Total Facility A HUF Commitments" means the aggregate Base Currency
Amount of the Facility A HUF Commitments of the Lenders.
"Total Facility A Loan" means, at any time, the Base Currency Amount of
all Facility A Loans drawn down and outstanding at such time.
"Total Facility B Commitments" means the aggregate of the Facility B
Commitments, being five million euro (EUR 5,000,000) at the date of
this Agreement.
"Transfer Certificate" means a certificate substantially in the form
set out in Part I of Schedule 4 (Form of Transfer Certificate) or any
other form agreed between the Facility Agent and the Obligors.
"Transfer Date" means, in relation to a transfer, the later of:
(a) the proposed Transfer Date specified in the Transfer
Certificate; and
(b) the date on which the Facility Agent executes the Transfer
Certificate.
25
"Trigger Date" means the first date on which, for the then two (2)
preceding financial quarter years of the Group, the ratio, calculated
on the basis of the financial statements set out in the relevant 10K
Document and/or 10Q Documents in respect of such financial quarter
years, of the aggregate amount of all indebtedness (including, for the
purpose of these calculations, the amount of twenty five million
dollars (USD 25,000,000) being the amount of principal outstanding
under the Notes) of each member of the Group (excluding any
indebtedness arising between members of the Group) to EBITDA
(calculated, in each case, on the basis of the four (4) previous
financial quarter years) was less than three point five to one (3.5:1).
"Unpaid Sum" means any sum due and payable but unpaid by an Obligor
under the Finance Documents.
"US GAAP" means, from time to time, the general accounting principles
generally accepted in the United Sates of America at such time;
"Utilisation" means a utilisation of a Facility.
"Utilisation Date" means the date of a Utilisation, being the date on
which the relevant Loan is to be made.
"Utilisation Request" means a notice substantially in the form set out
in Part I of Schedule 3 (Form of Requests).
"VAT" means value added tax and any other Tax of a similar nature.
"Warrant Confirmation Letter" means the letter dated on or about the
date of this Agreement from Hungarian Telephone and Cable Corp. to
Postabank es Takarekpenztar Reszvenytarsasag, in its capacities as
holder of the Notes and as holder of the Warrants, confirming and
affirming that each of the Warrants remains in full force and effect
notwithstanding the amendment and restatement of the Notes pursuant to
the Amendment No. 1 to Securities Purchase Agreement.
"Warrants" means each warrant dated 12 May 1999 made between: (1)
Hungarian Telephone and Cable Corp.; and (2) Postabank es
Takarekpenztar Reszvenytarsasag, issued pursuant to the Securities
Purchase Agreement and "Warrant" means any and each of them.
1.2 Construction
(a) Any reference in this Agreement to:
(i) the "Arrangers", any "Arranger", the "Facility Agent", the
"Security Agent", the "Agents", any "Agent", the "Lenders",
any "Lender", any "Finance Party", the "Finance Parties",
"Citizens", "Tele Danmark A/S", "IO Fund" or "Beneficiary"
shall be construed so as to include its (and any
participant's) and any subsequent successors, transferees
assigns and/or replacements in accordance with their
respective interests;
(ii) "assets" includes present and future properties, revenues and
rights of every description;
(iii) the "equivalent" on any given date in one currency (the "first
currency") of an amount denominated in another currency (the
"second currency") is, where neither the first currency nor
the second currency is forint, a reference to the amount of
the first currency which could be purchased with the amount of
the second currency at the spot rate of exchange quoted by the
Facility Agent at or about 9.15 a.m. (London time) on
26
such date for the purchase of the first currency with the
second currency or, if either the first currency or the second
currency is forint, the amount of the first currency which
could be purchased with the amount of the second currency at
the spot rate of exchange quoted by the Security Agent at or
about 10.00 a.m. (Budapest time) on such date for the purchase
of the first currency with the second currency;
(iv) the "European interbank market" means the interbank market for
euro operating in Participating Member States;
(v) a "Finance Document" or any other agreement or instrument is a
reference to that Finance Document or other agreement or
instrument as amended or novated;
(vi) "indebtedness" includes any obligation (whether incurred as
principal or as surety) for the payment or repayment of money,
whether present or future, actual or contingent;
(vii) "laws and regulations of Hungary" shall be construed so as to
include any and all laws and regulations adopted in accordance
with Act XI of 1987 on Law Making, as amended, of Hungary;
(viii) a "person" includes any person, firm, company, corporation,
government, state or agency of a state or any association,
trust or partnership (whether or not having separate legal
personality) or two or more of the foregoing;
(ix) a "regulation" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law) of any governmental, intergovernmental or
supranational body, agency, department or regulatory,
self-regulatory or other authority or organisation and, in
respect of any such, request or guideline, self-imposed
regulation, being those with which it is customary to comply;
(x) "repay" (or any derivative form thereof) shall, subject to any
contrary indication, be construed to include "prepay" (or, as
the case may be, the corresponding derivative form thereof);
(xi) a "successor" shall be construed so as to include an assignee
or successor in title of such party and any person who under
the laws of its jurisdiction of incorporation or domicile has
assumed the rights and obligations of such party under this
Agreement or to which, under such laws, such rights and
obligations have been transferred;
(xii) the "winding-up", "dissolution" or "administration" of a
company or corporation shall be construed so as to include any
equivalent or analogous proceedings under the law of the
jurisdiction in which such company or corporation is
incorporated or any jurisdiction in which such company or
corporation carries on business including the seeking of
bankruptcy, liquidation, final accounting, winding-up,
reorganisation, dissolution, administration, arrangement,
adjustment, protection or relief of debtors;
(xiii) a statute, law regulation, treaty or provision of any of the
foregoing is, in the absence of express wording to the
contrary, a reference to that statute, law, regulation, treaty
or such provision as amended or re-enacted;
(xiv) unless a contrary indication appears, a time of day is a
reference to Budapest time;
(xv) words imparting the singular shall be deemed to include the
plural and vice versa.
27
(b) Section, Clause and Schedule headings are for ease of reference only.
(c) Unless a contrary indication appears, a term used in any other Finance
Document or in any notice given under or in connection with any Finance
Document has the same meaning in that Finance Document or notice as in
this Agreement.
(d) A Default (other than an Event of Default) is "continuing" if it has
not been remedied or waived and an Event of Default is "continuing" if
it has not been waived.
(e) "US$", "$", "USD", "dollars" and "Dollars" denote lawful currency of
the United States of America; "HUF", "Forint" and "forint" denote
lawful currency of Hungary; and "EUR", "euro" and "Euro" denote lawful
currency of the Participating Member States.
28
SECTION 2 - THE FACILITIES
2. THE FACILITIES
2.1 The Facilities
Subject to the terms of this Agreement, the Lenders make available to
the Borrowers:
(a) a dual currency term loan facility in an aggregate amount
equal to the Total Facility A Commitments; and
(b) a revolving loan facility in an aggregate amount equal to the
Total Facility B Commitments.
2.2 Lenders' rights and obligations
(a) The obligations of each Lender under the Finance Documents are several.
Failure by a Lender to perform its obligations under the Finance
Documents does not affect the obligations of any other Party under the
Finance Documents. No Finance Party is responsible for the obligations
of any other Finance Party under the Finance Documents.
(b) The rights of each Lender under or in connection with the Finance
Documents are separate and independent rights and any debt arising
under the Finance Documents to a Lender from an Obligor shall be a
separate and independent debt.
(c) A Finance Party may, except as otherwise stated in the Finance
Documents, separately enforce its rights under the Finance Documents
without the prior consent or approval of any other person.
3. PURPOSE
3.1 Purpose
(a) Each Borrower shall apply all amounts borrowed by it under Facility A
towards the refinancing of such Borrower's existing indebtedness
arising under the Bridge Loan Agreement.
(b) Each Borrower shall apply all amounts borrowed by it under Facility B
towards the payment of amounts arising under any Fee Letter, interest
arising under this Agreement and/or for general corporate working
capital purposes.
3.2 Monitoring
No Finance Party is (other than, in respect of a Lender which is a
Hungarian credit institution, as required by mandatory laws and
regulations of Hungary), obliged to monitor, verify or otherwise
concern itself with the application of any amount(s) borrowed pursuant
to this Agreement.
4. CONDITIONS OF UTILISATION
4.1 Initial conditions precedent
No Borrower may deliver a Utilisation Request unless the Facility Agent
has received all of the documents and other evidence listed in Schedule
2 (Conditions precedent) in form and substance satisfactory to the
Facility Agent. The Facility Agent shall notify the Obligors and the
Lenders in writing promptly upon being so satisfied.
4.2 Further conditions precedent
The Lenders will only be obliged to comply with Clause 5.4 (Lenders'
participation) if on the date of the Utilisation Request and on the
proposed Utilisation Date:
29
(a) no Event of Default is continuing or would result from the
proposed Loan and, in the case of any other Loan (subject to
Clause 7.2 (Repayment of Facility B Loans), other than a
Rollover Loan), no Default is continuing or would result from
the proposed Loan; and
(b) the Repeating Representations made or deemed to be made by
each Obligor on such date are true in all material respects.
4.3 Conditions relating to Optional Currency
The Borrowers have expressed a desire for all or part of the Facility A
to be utilised and drawn down in Facility A Loans which are denominated
in forints. The forint will constitute the Optional Currency in
relation to the making of a Facility A Loan if it has been approved in
writing by the Facility Agent (acting on the instructions of all the
Lenders who have previously agreed to fund a Facility A Loan in forint)
on or prior to the date four (4) Business Days before the receipt by
the Facility Agent of the relevant Utilisation Request for that
Facility A Loan.
4.4 Maximum number of Loans
A Borrower may not deliver a Utilisation Request if, as a result of the
proposed Utilisation:
(a) more than eight (8) Facility A Loans would then be
outstanding; or
(b) more than five (5) Facility B Loans would then be outstanding.
30
SECTION 3 - UTILISATION
5. UTILISATION
5.1 Delivery of a Utilisation Request
(a) The Borrowers may only utilise Facility A by delivery to the Facility
Agent of a single duly completed Utilisation Request not later than the
Specified Time.
(b) A Borrower may utilise Facility B by delivery to the Facility Agent of
a duly completed Utilisation Request not later than the Specified Time.
5.2 Completion of a Utilisation Request
Each Utilisation Request is irrevocable and will not be regarded as
having been duly completed unless:
(a) it identifies the Facility to be utilised;
(b) the proposed Utilisation Date is a Business Day within the
Availability Period applicable to that Facility;
(c) the currency and amount of each Utilisation comply with Clause
5.3 (Currency and amount); and
(d) the proposed Interest Period complies with Clause 10 (Interest
Periods).
5.3 Currency and amount
(a) The currency specified in a Utilisation Request in respect of any
Facility A Loan must be the Base Currency or the Optional Currency and,
in respect of any Facility B Loan must be the Base Currency.
(b) In respect of Facility A:
(i) the Base Currency Amount of any proposed Facility A Loan which
is to be utilised and drawn down by a Borrower denominated in
forint shall, when aggregated with all other Facility A Loans
to be utilised and drawn down by the Borrowers denominated in
forint, not exceed the Base Currency Amount, if any, of
Facility A which the Lenders have previously, by written
notice to the Facility Agent, agreed to provide to the
Borrowers in forint;
(ii) the Base Currency Amount of any proposed Facility A Loan which
is to be utilised and drawn down by a Borrower shall, when
aggregated with any other Facility A Loans to be utilised and
drawn down by such Borrower, not exceed the following Base
Currency Amounts:
(1) in respect of Hungarotel Tavkozlesi Koncesszios
Reszvenytarsasag, seventy nine million euro (EUR
79,000,000);
(2) in respect of RABA-COM Tavkozlesi Koncesszios
Reszvenytarsasag, fourteen million euro (EUR
14,000,000);
31
(3) in respect of Papa es Tersege Tavkozlesi Koncesszios
Reszvenytarsasag, thirteen million euro (EUR
13,000,000); and
(4) in respect of KNC Kelet-Nograd COM Tavkozlesi
Koncesszios Reszvenytarsasag, twenty six million euro
(EUR 26,000,000); and
(iii) the aggregate Base Currency Amount of each Facility A Loan to
be utilised and drawn down by all of the Borrowers shall not
exceed the Total Facility A Commitments.
(c) The amount of any proposed Facility B Loan must be a minimum of one
million euro (EUR 1,000,000) or, if less, the Available Facility (in
respect of Facility B) and, if for a greater amount, an integral
multiple thereof of one million euro (EUR 1,000,000) or the balance of
the Available Facility (in respect of Facility B), up to the Total
Facility B Commitments.
5.4 Lenders' participation
(a) If the conditions set out in this Agreement have been met, each Lender
shall make its participation in each applicable Loan available through
its Facility Office.
(b) In respect of any Facility A Loans to be utilised and drawn down
denominated in forint, each Lender shall participate in such Facility A
Loans in an amount equal to the proportion borne by such Lender's
Facility A HUF Commitment to the Total Facility A HUF Commitments.
(c) In respect of any Facility A Loans to be utilised and drawn down
denominated in euro, each Lender shall participate in each such
Facility A Loan in an amount equal to the proportion borne by such
Lender's Facility A EURO Commitment to the Total Facility A EURO
Commitments.
(d) The amount of each Lender's participation in each Facility B Loan will
be equal to the proportion borne by its Available Commitment to the
Available Facility immediately prior to making such Facility B Loan.
(e) The Facility Agent shall notify each Lender in writing of the amount,
currency and the Base Currency Amount of each Loan at the Specified
Time.
5.5 Rounding by Facility Agent
Each Obligor and each Finance Party hereby authorises and directs the
Facility Agent to make such minor adjustments in respect of the amounts
of the Facility A Loans, with the intent of avoiding problems,
including but not limited to, the rounding of figures and to simplify
the ongoing management of such Facility A Loans.
6. OPTIONAL CURRENCY
6.1 Selection of currency
(a) A Borrower shall select the currency of a Facility A Loan in a
Utilisation Request.
(b) If a Borrower fails to select a currency in relation to a Facility A
Loan, such Facility A Loan will be denominated in euro.
6.2 Unavailability of the Optional Currency
If before the Specified Time on any Quotation Day:
(a) the Facility Agent has received notice from a Lender that the
Optional Currency requested is not readily available to it in
the amount required; or
32
(b) a Lender notifies the Facility Agent that compliance with its
obligation to participate in a Facility A Loan in the proposed
Optional Currency would contravene an Applicable Law,
the Facility Agent will give notice to the relevant Borrower to that
effect by the Specified Time on that day. In this event, any Lender
that gives notice pursuant to this Clause 6.2 will be required to
participate in the Facility A Loan in the Base Currency (in an amount
equal to that Lender's proportion of the Base Currency Amount of that
Facility A Loan) and its participation will be treated as a separate
Loan denominated in the Base Currency during that Interest Period.
33
SECTION 4 - REPAYMENT, PREPAYMENT AND CANCELLATION
7. REPAYMENT
7.1 Repayment of Facility A Loans
(a) The Borrowers will repay the Facility A Loans in accordance with the
schedule set out below:
--------------------------------------------------------------------------------
Repayment Date (subject to the proviso Amount of the Total Facility A
contained in the definition of Repayment Loan to be repaid on the
Dates in Clause 1.1 (Definitions)) relevant Repayment Date,
expressed as a percentage of the
Total Facility A Loan
outstanding immediately
following the making of the
Facility A Loans (subject to any
adjustment(s) made in respect of
any prepayments made pursuant to
Clause 8.4 (Voluntary Prepayment
of Facility A Loans))
-------------------------------------------------------------------------------------------
1. 30 June 2001 three per cent. (3%)
-------------------------------------------------------------------------------------------
2. 31 December 2001 four per cent. (4%)
-------------------------------------------------------------------------------------------
3. 30 June 2002 five per cent. (5%)
-------------------------------------------------------------------------------------------
4. 31 December 2002 six per cent. (6%)
-------------------------------------------------------------------------------------------
5. 30 June 2003 seven per cent. (7%)
-------------------------------------------------------------------------------------------
6. 31 December 2003 seven per cent. (7%)
-------------------------------------------------------------------------------------------
7. 30 June 2004 seven per cent. (7%)
-------------------------------------------------------------------------------------------
8. 31 December 2004 seven per cent. (7%)
-------------------------------------------------------------------------------------------
9. 30 June 2005 eight per cent. (8%)
-------------------------------------------------------------------------------------------
10. 31 December 2005 eight per cent. (8%)
-------------------------------------------------------------------------------------------
11. 30 June 2006 eight per cent. (8%)
-------------------------------------------------------------------------------------------
12. 31 December 2006 ten per cent. (10%)
-------------------------------------------------------------------------------------------
13. 30 June 2007 ten per cent. (10%)
-------------------------------------------------------------------------------------------
14. 31 December 2007 ten per cent. (10%)
-------------------------------------------------------------------------------------------
TOTAL: one hundred per cent. (100%)
--------------------------------------------------------------------------------
(b) Each Borrower will, on each Repayment Date, repay such percentage of
the Facility A Loan(s) then drawn down by and outstanding from such
Borrower, as is provided for in the schedule set out under paragraph
(a) above Provided that for the avoidance of doubt, the percentages
specified in the schedule set out under paragraph (a) above are such
percentages as adjusted and revised to reflect any prepayments made
pursuant to Clause 8.4 (Voluntary prepayment of Facility A Loans) and
such percentages or adjusted and revised percentages, as applicable,
are, in respect of any Facility A Loans denominated in forint,
expressed as percentages of the forint amount of each Facility A Loan
funded in forint and, in respect of Facility A Loans funded in euro,
expressed as percentages of the euro amount of each Facility A Loan
funded in euro.
(c) No Borrower may reborrow any part of Facility A which is repaid.
7.2 Repayment of Facility B Loans
Each Borrower which has drawn a Facility B Loan shall repay that Loan
on the last day of its Interest Period or, if earlier, on the Final
Maturity Date. If, in respect of any Facility B Loan which is
outstanding and which the relevant Borrower wishes to continue to
utilise as a Rollover Loan, on the day of issue of a Utilisation
Request by the relevant Borrower (for such Facility B
34
Loan to be a Rollover Loan) and/or on the last day of the Interest
Period for that Facility B Loan, a Default is continuing, then, subject
to paragraph (h) of Clause 8.7 (Restrictions), that Facility B Loan
shall not be repaid on the last day of the Interest Period for that
Facility B Loan, but shall continue to be utilised as a Rollover Loan
for one (1) further Interest Period of (irrespective of any request by
that Borrower for a longer Interest Period in the relevant Utilisation
Request and in any event subject to the other provisions of this
Agreement) one (1) Month and if on the last day of such subsequent one
(1) Month Interest Period a Default is still continuing, that Facility
B Loan shall be repaid on the last day of such subsequent one (1) Month
Interest Period.
7.3 Reduction of Facility B
The amount of Facility B shall reduce on the Reduction Date by the
Reduction Instalment to two million five hundred thousand euro (EUR
2,500,000).
8. PREPAYMENT AND CANCELLATION
8.1 Illegality
If it becomes unlawful in any jurisdiction for a Lender to perform any
of its obligations as contemplated by this Agreement or to fund its
participation in any Loan:
(a) that Lender shall promptly notify the Facility Agent upon
becoming aware of that event;
(b) upon the Facility Agent notifying the relevant Obligor, the
Commitment of that Lender will be immediately cancelled; and
(c) each Borrower shall repay that Lender's participation in the
Loans made to that Borrower on the last day of the Interest
Period for each Loan occurring after the Facility Agent has
notified the relevant Obligor or, if earlier, the date
specified by the Lender in the notice delivered to the
Facility Agent (being no earlier than the last day of any
applicable grace period permitted by Applicable Law).
8.2 Mandatory prepayment
During the period commencing on the date of this Agreement and ending
at such time as at which an aggregate amount (aggregating amounts or
their equivalents which are, in relation to each respective prepayment
made pursuant to this Clause 8.2, determined by reference to the date
on which such prepayment is actually received by the Lenders)
equivalent to twenty five million dollars (USD 25,000,000) of the
aggregate amount of the Facility A Loans (outstanding following the
making of the Facility A Loans pursuant to this Agreement) has been
pre-paid, the Obligors shall procure and ensure that, within fifteen
(15) days of the publication of each 10K Document (commencing with the
10K Document in respect of the financial year ending 31 December 2000),
at least fifty per cent. (50%) of the Group's Excess Cashflow in each
such financial year to which each such 10K Document relates, is applied
towards prepayment of the Facility A Loans. Provided that for the
avoidance of doubt, such amount(s) so repaid will be applied
proportionately between the Facility A Loans denominated in euro and
any Facility A Loans denominated in HUF, in each case by reference to
the amounts of such Facility A Loans, converted into the Base Currency
at the Security Agent's Spot Rate of Exchange on the date of such
mandatory prepayment. Repayments made pursuant to this Clause 8.2 shall
be made in inverse order of maturity.
35
8.3 Voluntary cancellation
(a) The Borrowers may, if they give the Facility Agent not less than
fifteen (15) Business Days' (or such shorter period as the Facility
Agent, acting on the instructions of the Majority Lenders, may agree)
prior notice, cancel the whole or any part (being, during the period
commencing on the date of satisfaction of the conditions precedent
pursuant to Clause 4.1 (Initial conditions precedent) and ending
fifteen (15) days thereafter, a minimum amount of two million euro (EUR
2,000,000) and thereafter being a minimum amount of five million euro
(EUR 5,000,000) and if, in either case, being for a larger amount, an
integral multiple of one million euro (EUR 1,000,000)) of Facility A.
Any cancellation under this Clause 8.3 shall reduce the Commitments of
the Lenders rateably under Facility A.
(b) The Borrowers may, if they give the Facility Agent not less than
fifteen (15) Business Days' (or such shorter period as the Facility
Agent acting on the instructions of the Majority Lenders, may agree)
prior notice, cancel the whole or any part (being a minimum amount of
two million five hundred thousand euro (EUR 2,500,000)) of Facility B.
Any cancellation under this Clause 8.3 shall reduce the Commitments of
the Lenders rateably under Facility B.
8.4 Voluntary prepayment of Facility A Loans
(a) A Borrower to which a Facility A Loan has been made may, if such
Borrower gives the Facility Agent not less than twenty (20) Business
Days' (or such shorter period as the Facility Agent, acting on the
instructions of the Majority Lenders, may agree) prior notice, prepay
the whole or any part of any Facility A Loan (but, in each case, the
amount being so prepaid shall, when aggregated with all other amounts
being prepaid on such date pursuant to this Clause 8.4, be not less
than an amount equivalent to five million euro (EUR 5,000,000) or, if a
larger amount, an integral multiple of one million euro (EUR
1,000,000)).
(b) A Facility A Loan may only be prepaid after the last day of the
Availability Period (or, if earlier, the day on which the applicable
Available Facility is zero (0)).
(c) Any prepayment under this Clause 8.4 shall be applied so as to satisfy
pro rata the obligations under Clause 7.1 (Repayment of Facility A
Loans). The Facility Agent shall, as quickly as practicable following
any prepayment made pursuant to this Clause 8.4, confirm to the
Obligors and to each Lender in writing the percentages provided for in
paragraph (a) of Clause 7.1 (Repayment of Facility A Loans) adjusted
and revised to reflect such prepayment.
8.5 Voluntary prepayment of Facility B Loans
The Borrower to which a Facility B Loan has been made may, if it gives
the Facility Agent not less than twenty (20) Business Days' (or such
shorter period as the Facility Agent, acting on the instructions of the
Majority Lenders, may agree) prior notice, prepay the whole or any part
of a Facility B Loan (but, if in part, being an amount that reduces the
Base Currency Amount of the Facility B Loan by a minimum amount of one
million euro (EUR 1,000,000) and integral multiples of one million euro
(EUR 1,000,000) thereafter).
8.6 Right of repayment and cancellation in relation to a single Lender
(a) If:
(i) any sum payable to any Lender by an Obligor is required to be
increased under paragraph (c) of Clause 13.2 (Tax gross-up);
or
(ii) any Lender claims indemnification from any Borrower under
Clause 13.3 (Tax indemnity) or Clause 14.1 (Increased costs),
36
such Borrower may, whilst the circumstance giving rise to the
requirement or indemnification continues, give the Facility Agent
notice of cancellation of the Commitment of that Lender and such
Borrower's intention to procure the repayment of that Lender's
participation in the Loans.
(b) On receipt of a notice referred to in paragraph (a) above, the
Commitment of that Lender shall immediately be reduced to zero (0).
(c) On the last day of each Interest Period which ends after a Borrower has
given notice under paragraph (a) above (or, if earlier, the date
specified by such Borrower in that notice), such Borrower to which a
Loan is outstanding shall repay that Lender's participation in that
Loan.
8.7 Restrictions
(a) Any notice of cancellation or prepayment given by any Party under this
Clause 8 shall be irrevocable and, unless a contrary indication appears
in this Agreement, shall specify the date or dates upon which the
relevant cancellation or prepayment is to be made and the amount of
that cancellation or prepayment.
(b) Any prepayment under this Agreement shall be made together with accrued
interest on the amount prepaid and, subject to any Break Costs, without
premium or penalty.
(c) No Borrower may reborrow any part of Facility A which is prepaid.
(d) Unless a contrary indication appears in this Agreement, any part of
Facility B which is prepaid may be reborrowed in accordance with the
terms of this Agreement.
(e) The Borrowers shall not repay or prepay all or any part of the Loans or
cancel all or any part of the Commitments except at the times and in
the manner expressly provided for in this Agreement.
(f) No amount of the Total Commitments cancelled under this Agreement may
be subsequently reinstated.
(g) If the Facility Agent receives a notice under this Clause 8 it shall
promptly forward a copy of that notice to either the relevant
Borrower(s) or the affected Lender, as appropriate.
(h) No Interest Period in respect of a Facility B Loan may extend beyond
the Final Maturity Date.
37
SECTION 5 - COSTS OF UTILISATION
9. INTEREST
9.1 Calculation of interest
(a) The rate of interest on each Loan for each Interest Period is the
percentage rate per annum which is the aggregate of:
(i) the Applicable Margin;
(ii) in relation to any Loan denominated in forint, BUBOR or, in
relation to any Loan denominated in euro, EURIBOR; and
(iii) the Associated Costs, if any.
(b) Subject to Clause 9.3 (Default interest), the rate of interest on each
Unpaid Sum for each Interest Period is the percentage rate per annum
which is the aggregate of:
(i) the Applicable Margin;
(ii) in relation to any Unpaid Sum denominated in forint, BUBOR, in
relation to any Unpaid Sum denominated in euro, EURIBOR or, in
relation to any Unpaid Sum denominated in any other currency,
LIBOR; and
(iii) the Associated Costs, if any.
9.2 Payment of interest
The Borrower to which a Loan has been made shall pay accrued interest
on that Loan on the last day of each Interest Period.
9.3 Default interest
(a) If an Obligor fails to pay any amount payable by it under a Finance
Document on its due date, interest shall accrue on the overdue amount
from the due date up to the date of actual payment (both before and
after judgment) at a rate two per cent. (2%) higher than the rate which
would have been payable if the overdue amount had, during the period of
non-payment, constituted a Loan in the currency of the overdue amount
for successive Interest Periods, each of a duration selected by the
Facility Agent (acting reasonably). Any interest accruing under this
Clause 9.3 shall be immediately payable by the Obligor on demand by the
Facility Agent.
(b) Default interest (if unpaid) arising on an overdue amount will be
compounded with the overdue amount at the end of each Interest Period
applicable to that overdue amount but will remain immediately due and
payable.
9.4 Notification of rates of interest
The Facility Agent shall promptly notify the Lenders and the relevant
Borrower(s) in writing of the determination of a rate of interest under
this Agreement. Without prejudice to Clause 30.1 (Communications in
writing), such notification may be made by the Facility Agent by e-mail
to a Lender or Borrower where such Lender or Borrower, as appropriate,
has expressly agreed, by written notice to the Facility Agent, to
receive such notification by e-mail and has informed the Facility Agent
of an e-mail address pursuant to Clause 30.2 (Addresses) or, to the
extent that it becomes common practice in the syndicated euroloan
markets to do so and such Lender or Borrower, as appropriate, has
expressly agreed, by written notice to the Facility Agent (in each
38
case, such agreement not to be unreasonably withheld or delayed), by
reference to rates quoted on a web site, the address of which (and the
location of the relevant rates at such web site) has been confirmed to
such Lender or Borrower, as appropriate, in accordance with Clause 30
(Notices).
9.5 Applicable Margin
The margin from time to time applicable to Interest Periods (the
"Applicable Margin") shall be:
(a) for any Interest Period which begins on the first Utilisation
or during the twelve (12) Month period following such first
Utilisation, one point seven five per cent. per annum (1.75%
p.a.); and
(b) for any Interest Period which begins on or after the date
which falls twelve (12) Months after the date of first
Utilisation, one point seven five per cent. per annum (1.75%
p.a.) subject to adjustment in accordance with Clause 9.6
(Adjustments to Margin).
9.6 Adjustments to Margin
(a) If, in respect of any Interest Period which commences on or after the
date falling twelve (12) Months after the date of first Utilisation,
the Group's Senior Debt to EBITDA Ratio calculated in accordance with
Clause 20.1 (Financial Condition of the Group) and following the
delivery of Hungarian Telephone and Cable Corp.'s then most recent 10K
Document or 10Q Document, as applicable, together with the supporting
calculations and workings of such calculations:
(i) is equal to or less than four point zero to one (4.0:1) and on
such date no Default or Event of Default is continuing then
the Applicable Margin on the Loan to which such Interest
Period relates will be set at one point six zero per cent. per
annum (1.60% p.a.) for the period up to the earlier of:
(A) the commencement of a subsequent Interest Period
following a change in the Group's Senior Debt to
EBITDA Ratio; and
(B) the occurrence of a Default or Event of Default;
(ii) is equal to or less than three point zero to one (3.0:1) and
on such date no Default or Event of Default is continuing then
the Applicable Margin on the Loan to which such Interest
Period relates will be set at one point three five per cent.
per annum (1.35% p.a.) for the period up to the earlier of:
(A) the commencement of a subsequent Interest Period
following a change in the Group's Senior Debt to
EBITDA Ratio; and
(B) the occurrence of a Default or Event of Default; or
(iii) is equal to or less than two point zero to one (2.0:1) and on
such date no Default or Event of Default is continuing then
the Applicable Margin on the Loan to which such Interest
Period relates will be set at one point five per cent. per
annum (1.15% p.a.) for the period up to the earlier of:
(A) the commencement of a subsequent Interest Period
following a change in the Group's Senior Debt to
EBITDA Ratio, and
(B) the occurrence of a Default or Event of Default,
39
Provided that, and notwithstanding this Clause 9.6 no more than one
downward adjustment of Applicable Margin may take place in any three
(3) Month period.
(b) if the Applicable Margin applicable to a Loan is reduced by operation
of the provisions of paragraph (a) above and:
(i) it is subsequently established that the relevant 10K
Document(s) and/or 10Q Document(s) used for the purposes of
calculating the Group's Senior Debt to EBITDA Ratio before the
relevant Interest Period(s) did not in all material respects
reflect the actual financial position of Hungarian Telephone
and Cable Corp. and/or the Group during the relevant
period(s); and/or
(ii) the relevant 10K Document(s) and/or 10Q Document(s) used for
the purposes of calculating the Group's Senior Debt to EBITDA
Ratio are (with the involvement of the Auditors or otherwise)
re-calculated and/or re-stated and as a result the Applicable
Margin should not have been fixed at the reduced rate, then:
(A) if the reduced Applicable Margin applies to a Loan,
in respect of which the Interest Period has not yet
ended, the Facility Agent may revoke the reduced
Applicable Margin in respect of the entire Interest
Period by notice in writing to the relevant Borrower
and the appropriate rate set out in the definition of
Applicable Margin in Clause 9.5 (Applicable Margin)
or paragraph (a) of this Clause 9.6 (Adjustments to
Margin), as appropriate, shall apply; and/or
(B) if the reduced Applicable Margin applies to a Loan,
in respect of which one or more Interest Period(s)
have already ended, the relevant Borrower shall
promptly on demand by the Facility Agent pay to the
Facility Agent, by way of additional interest, the
amount determined by the Facility Agent to be equal
to that by which the amount of interest that would
have been payable in respect of the relevant Interest
Period(s) calculated in accordance with the
appropriate rate set out in the definition of
Applicable Margin in Clause 9.5 (Applicable Margin)
or paragraph (a) of this Clause 9.6, as appropriate,
exceeds the amount(s) actually paid in respect of the
relevant Interest Period(s).
10. INTEREST PERIODS
10.1 Selection of Interest Periods
(a) The Borrowers may select an Interest Period for their respective
Facility A Loan(s) in the Utilisation Request for Facility A Loan(s) or
(if such Facility A Loan(s) has/have already been borrowed) in a
Selection Notice Provided that (and subject to the provisions of this
Agreement), unless agreed otherwise in advance in writing by the
Facility Agent, acting on the instructions of the Majority Lenders,
each of the Facility A Loans denominated in forint shall have Interest
Periods commencing on the same date and of the same duration and each
of the Facility A Loans denominated in euro shall have Interest Periods
commencing on the same date and of the same duration.
(b) Each Selection Notice in respect of the Facility A Loan(s) then
outstanding is irrevocable and must be delivered to the Facility Agent
by the Borrower(s) to which such Facility A Loan(s) was/were made not
later than the Specified Time Provided that in respect of any such
Facility A Loan denominated in forint, the Borrowers may select from
one (1) and three (3) Months and in respect of any such Facility A Loan
denominated in euro, the Borrowers may select from one (1),
40
three (3) and six (6) Months and in respect of any Facility B Loan, the
Borrower(s) may select from one (1), three (3) and six (6) Months.
(c) If the Borrowers fail to deliver a Selection Notice to the Facility
Agent in accordance with paragraph (b) above, the relevant Interest
Period will, subject to Clause 10.2 (Changes to Interest Periods), be
three (3) Months.
(d) Subject to this Clause 10, the Borrowers may select an Interest Period
of any other period agreed between the Borrowers and the Facility
Agent, acting on the instructions of all the Lenders.
(e) An Interest Period for a Facility A Loan shall not extend beyond a
Repayment Date applicable to Facility A.
(f) Each Interest Period for a Facility A Loan shall start on the
Utilisation Date or (if already made) on the last day of its preceding
Interest Period.
(g) A Facility B Loan has one (1) Interest Period only.
10.2 Changes to Interest Periods
(a) Prior to determining the interest rate for any Facility A Loan(s), the
Facility Agent may shorten an Interest Period for any Facility A Loan
to ensure the Interest Periods for such Facility A Loan does not extend
beyond a Repayment Date.
(b) Prior to determining the interest rate for a Facility B Loan, the
Facility Agent may shorten an Interest Period for any Facility B Loan
to ensure that, when aggregated with the Available Facility for
Facility B, there are sufficient Facility B Loans with an Interest
Period ending on the Reduction Date for the Reduction Instalment to be
made on the Reduction Date.
(c) If the Facility Agent makes any of the changes to an Interest Period
referred to in this Clause 10.2, it shall promptly notify the Obligors
and the Lenders in writing.
10.3 Non-Business Days
Subject to paragraph (e) of Clause 10.1 (Selection of Interest
Periods), if an Interest Period would otherwise end on a day which is
not a Business Day, that Interest Period will instead end on the
preceding Business Day.
11. CHANGES TO THE CALCULATION OF INTEREST
11.1 Absence of quotations
Subject to Clause 11.2 (Market disruption), if a Relevant Interbank
Market Rate is to be determined by reference to the Relevant Reference
Banks but a Relevant Reference Bank does not supply a quotation by the
Specified Time on the Quotation Day, the Relevant Interbank Market Rate
shall be determined on the basis of the quotations of the remaining
Relevant Reference Banks.
11.2 Market disruption
(a) If a Market Disruption Event occurs in relation to a Loan for any
Interest Period, then the rate of interest on each Lender's share of
that Loan for that Interest Period shall be the rate per annum which is
the sum of:
(i) the Applicable Margin;
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(ii) the rate notified to the Facility Agent by that Lender as soon
as practicable and in any event before interest is due to be
paid in respect of that Interest Period, to be that which
expresses as a percentage rate per annum the cost to that
Lender of funding its participation in that Loan from whatever
source it may reasonably select; and
(iii) the Associated Costs, if any, applicable to that Lender's
participation in the Loan.
(b) In this Agreement "Market Disruption Event" means:
(i) at or about noon on the Quotation Day for the relevant
Interest Period the Screen Rate is not available and none or
only one of the Relevant Reference Banks supplies a rate to
the Facility Agent to determine the Relevant Interbank Market
Rate for the relevant currency and period; or
(ii) before close of business in London on the Quotation Day for
the relevant Interest Period, the Facility Agent receives
notifications from a Lender or Lenders (whose participations
in a Loan exceed in aggregate thirty five per cent. (35%) of
that Loan) that the cost to it of obtaining matching deposits
in the Relevant Interbank Market would be in excess of the
Relevant Interbank Market Rate.
11.3 Alternative basis of interest or funding
(a) If a Market Disruption Event occurs in respect of an Interest Period
and the Facility Agent or the Obligors so require(s), the Facility
Agent and the Obligors shall enter into negotiations (for a period of
not more than thirty (30) days) with a view to agreeing a substitute
basis for determining the rate of interest for that Interest Period.
(b) Any alternative basis agreed pursuant to paragraph (a) above shall,
with the prior consent of all the Lenders and the Obligors, be binding
on all Parties.
11.4 Break Costs
(a) Each Borrower shall, within three (3) Business Days of demand by a
Finance Party, pay to that Finance Party such Finance Party's Break
Costs attributable to all or any part of a Loan or Unpaid Sum being
paid by that Borrower on a day other than the last day of an Interest
Period for that Loan or Unpaid Sum.
(b) Each Lender shall, as soon as reasonably practicable after a demand by
the Facility Agent, provide a certificate confirming the amount of its
Break Costs for any Interest Period in which they accrue.
12. FEES
12.1 Commitment fee
(a) The Borrowers shall, on the basis of joint and several liability, pay
to the Facility Agent (for the account of each Lender) a fee in the
Base Currency computed at the rate of:
(i) the lower of zero point seven five per cent. per annum (0.75%
p.a.) or fifty per cent. (50%) of the Applicable Margin at
such time on that Lender's Available Commitment under Facility
A for the Availability Period applicable to Facility A; and
(ii) the lower of zero point seven five per cent. per annum (0.75%
p.a.) or fifty per cent. (50%) of the Applicable Margin at
such time on that Lender's Available Commitment under Facility
B for the Availability Period applicable to Facility B.
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(b) The accrued commitment fee is payable on the last day of each
successive period of three (3) Months which ends during the relevant
Availability Period, on the last day of the Availability Period and on
the cancelled amount of the relevant Lender's Commitment at the time
the cancellation is effective.
12.2 Arrangement fee
The Borrowers shall pay to the Arrangers an arrangement fee in the
amount and at the times agreed in a Fee Letter.
12.3 Agency fee
The Obligors shall pay to the Facility Agent (for its own account) an
agency fee in the amount and at the times agreed in a Fee Letter.
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SECTION 6 - ADDITIONAL PAYMENT OBLIGATIONS
13. TAX GROSS-UP AND INDEMNITIES
13.1 Definitions
(a) In this Clause 13:
"Protected Party" means a Finance Party which is or will be, for or on
account of Tax, subject to any liability or required to make any
payment in relation to a sum received or receivable (or any sum deemed
for the purposes of Tax to be received or receivable) under a Finance
Document.
"Qualifying Lender" means a Lender which is (on the date of this
Agreement):
(i) resident in Hungary for tax purposes under Applicable Law;
(ii) entitled to that payment under a double taxation agreement in
force on the date (subject to the completion of any necessary
procedural formalities) without a Tax Deduction (a "Treaty
Lender").
"Tax Credit" means a credit against, relief or remission for, or
repayment of any Tax.
"Tax Deduction" means a deduction or withholding for or on account of
Tax from a payment under a Finance Document.
"Tax Payment" means an increased payment made by an Obligor to a
Finance Party under Clause 13.2 (Tax gross-up) or a payment under
Clause 13.3 (Tax indemnity).
(b) In this Clause 13 a reference to "determines" or "determined" means a
determination made in the absolute discretion of the person making the
determination.
13.2 Tax gross-up
(a) Each Obligor shall make all payments to be made by it without any Tax
Deduction, unless a Tax Deduction is required by Applicable Law.
(b) An Obligor shall promptly upon becoming aware that an Obligor must make
a Tax Deduction (or that there is any change in the rate or the basis
of a Tax Deduction) notify the Facility Agent in writing accordingly.
(c) If a Tax Deduction is required by Applicable Law to be made by an
Obligor in one of the circumstances set out in paragraph (d) below, the
amount of the payment due from that Obligor shall be increased to an
amount which (after making any Tax Deduction) leaves an amount equal to
the payment which would have been due if no Tax Deduction had been
required.
(d) The circumstances referred to in paragraph (c) above are where a person
entitled to the payment:
(i) is the Facility Agent or the Arranger (on its own behalf); or
(ii) is a Qualifying Lender, unless that Qualifying Lender is a
Treaty Lender and the Obligor making the payment is able to
demonstrate the Tax Deduction is required to be made as a
result of the failure of that Qualifying Lender to comply with
paragraph (g) below; or
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(iii) has ceased to be a Qualifying Lender to the extent that this
altered status results from any change after the date of this
Agreement in (or in the interpretation, administration, or
application of) any Applicable Law or double taxation
agreement or any published practice or published concession of
any relevant taxing authority.
(e) If an Obligor is required to make a Tax Deduction, that Obligor shall
make that Tax Deduction and any payment required in connection with
that Tax Deduction within the time allowed and in the minimum amount
required by Applicable Law.
(f) Within thirty (30) days of making either a Tax Deduction or any payment
required in connection with that Tax Deduction, the Obligor making that
Tax Deduction shall deliver to the Facility Agent for the Finance Party
entitled to the payment evidence reasonably satisfactory to that
Finance Party that the Tax Deduction has been made or (as applicable)
any appropriate payment paid to the relevant taxing authority.
(g) A Treaty Lender and each Obligor which makes a payment to which that
Treaty Lender is entitled shall co-operate in completing as quickly as
is practicable in the context of the circumstances at such time any
procedural formalities necessary for that Obligor to obtain
authorisation to make that payment without a Tax Deduction.
13.3 Tax indemnity
(a) The Obligors shall (within three (3) Business Days of demand by the
Facility Agent) pay to a Protected Party an amount equal to the loss,
liability or cost which that Protected Party determines will be or has
been (directly or indirectly) suffered for or on account of Tax by that
Protected Party.
(b) Paragraph (a) above shall not apply with respect to any Tax assessed
on:
(i) a Finance Party:
(A) under the Applicable Law of the jurisdiction in which
that Finance Party is incorporated or, if different,
the jurisdiction (or jurisdictions) in which that
Finance Party is treated as resident for tax
purposes; or
(B) under the Applicable Law of the jurisdiction in which
that Finance Party's Facility Office is located in
respect of amounts received or receivable in that
jurisdiction,
if that Tax is imposed on or calculated by reference
to the net income received or receivable (but not any
sum deemed to be received or receivable) by that
Finance Party; or
(ii) the Facility Agent, as a result of the relevant Lender not
correctly representing that Lender's position pursuant to
Clause 25.15 (Lenders' tax status confirmation).
(c) A Protected Party making, or intending to make a claim pursuant to
paragraph (a) above shall promptly notify the Facility Agent in writing
of the event which will give, or has given, rise to the claim,
following which the Facility Agent shall notify the Obligors in
writing.
(d) A Protected Party shall, on receiving a payment from an Obligor under
this Clause 13.3, notify the Facility Agent in writing.
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13.4 Tax Credit
If an Obligor makes a Tax Payment and the relevant Finance Party
determines that:
(a) a Tax Credit is attributable to that Tax Payment; and
(b) that Finance Party has obtained, utilised and retained that
Tax Credit,
the Finance Party shall pay an amount to the Obligor which the Finance
Party, in (for the avoidance of doubt and without otherwise affecting,
qualifying or limiting the determination rights of any Finance Party
provided for in the Finance Documents) that Finance Party's sole and
absolute discretion, determines will leave it (after that payment) in
the same after-Tax position (the after-Tax position of the Finance
Party as consolidated with its Affiliates, Holding Company (or Holding
Companies, as appropriate) and with any Related Party of such Finance
Party) as would have been the case had the Tax Payment not been made by
the Obligor. Each Finance Party and each of its Affiliates, Holding
Company (or Holding Companies, as appropriate) and each Related Party
of such Finance Party, have sole and absolute discretion as to how they
organise their respective tax affairs and none of them are under any
obligation to utilise any amount of the Tax Payment as a Tax Credit.
The Finance Party and each of its Affiliates, Holding Company (or
Holding Companies, as appropriate) and each Related Party of such
Finance Party, will have no obligation to disclose any information
whatsoever regarding their tax affairs to the Obligor or to any other
Party or to any other person.
13.5 Stamp taxes
The Obligors shall, on the basis of joint and several liability, pay
and, within three (3) Business Days of demand, indemnify each Finance
Party against any cost, loss or liability that Finance Party incurs in
relation to all stamp duty, registration and other similar Taxes
payable in respect of any Finance Document.
13.6 Value added tax
(a) All consideration payable under a Finance Document by an Obligor to a
Finance Party shall be deemed to be exclusive of any VAT. If VAT is
chargeable, the Obligor shall pay to the Finance Party (in addition to
and at the same time as paying the consideration) an amount equal to
the amount of the VAT.
(b) Where a Finance Document requires an Obligor to reimburse a Finance
Party for any costs or expenses, that Obligor shall also at the same
time pay and indemnify that Finance Party against all VAT incurred by
that Finance Party in respect of the costs or expenses save to the
extent that that Finance Party is entitled to repayment or credit in
respect of the VAT.
14. INCREASED COSTS
14.1 Increased costs
(a) Subject to Clause 14.3 (Exceptions) the Obligors shall, on the basis of
joint and several liability, within three (3) Business Days of a demand
by the Facility Agent, pay for the account of a Finance Party the
amount of any Increased Costs incurred by that Finance Party or any of
its Affiliates as a result of: (i) the introduction of or any change in
(or in the interpretation or application of) any Applicable Law; or
(ii) compliance with any Applicable Law made after the date of this
Agreement.
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(b) In this Agreement "Increased Costs" means:
(i) a reduction in the rate of return from the Facility or on a
Finance Party's (or its Affiliate's) overall capital;
(ii) an additional or increased cost; or
(iii) a reduction of any amount due and payable under any Finance
Document,
which is incurred or suffered by a Finance Party or any of its
Affiliates to the extent that it is attributable to that Finance Party
having entered into its Commitment or funding or performing its
obligations under any Finance Document.
14.2 Increased cost claims
(a) A Finance Party intending to make a claim pursuant to Clause 14.1
(Increased costs) shall notify the Facility Agent in writing of the
event giving rise to the claim, following which the Facility Agent
shall promptly notify the Obligors in writing.
(b) Each Finance Party shall, as soon as practicable after a demand by the
Facility Agent, provide a certificate confirming the amount of its
Increased Costs.
14.3 Exceptions
(a) Clause 14.1 (Increased costs) does not apply to the extent any
Increased Cost is:
(i) attributable to a Tax Deduction required by law to be made by
an Obligor;
(ii) compensated for by Clause 13.3 (Tax indemnity) (or would have
been compensated for under Clause 13.3 (Tax indemnity) but was
not so compensated solely because one of the exclusions in
paragraph (b) of Clause 13.3 (Tax indemnity) applied);
(iii) compensated for by the payment of the Associated Costs; or
(iv) attributable to the wilful breach by the relevant Finance
Party or its Affiliates of any law or regulation.
(b) In this Clause 14.3, a reference to a "Tax Deduction" has the same
meaning given to the term in Clause 13.1 (Definitions).
15. OTHER INDEMNITIES
15.1 Currency indemnity
(a) If any sum due from an Obligor under the Finance Documents (a "Sum"),
or any order, judgment or award given or made in relation to a Sum, has
to be converted from the currency (the "First Currency") in which that
Sum is payable into another currency (the "Second Currency") for the
purpose of:
(i) making or filing a claim or proof against that Obligor;
(ii) obtaining or enforcing an order, judgment or award in relation
to any litigation or arbitration proceedings,
that Obligor shall as an independent obligation, within three (3)
Business Days of demand, indemnify each Finance Party to whom that Sum
is due against any cost, loss or liability arising out of or as a
result of the conversion including any discrepancy between: (A) the
rate of
47
exchange used to convert that Sum from the First Currency into the
Second Currency; and (B) the rate or rates of exchange available to
that person at the time of its receipt of that Sum.
(b) Each Obligor waives any right it may have in any jurisdiction to pay
any amount under the Finance Documents in a currency or currency unit
other than that in which it is expressed to be payable.
15.2 Other indemnities
The Obligors shall each (or shall procure that another Obligor will),
within three (3) Business Days of demand, indemnify each Lender against
any cost, loss or liability incurred by that Lender as a result of:
(a) the occurrence of any Event of Default;
(b) a failure by an Obligor to pay any amount due under a Finance
Document on its due date, including without limitation, any
cost, loss or liability arising as a result of Clause 27
(Sharing Among the Lenders) Provided that if, at any time
where no Event of Default is continuing, such cost, loss or
liability is incurred in respect any failure to pay which is
caused by administrative or technical error and payment is
made within three (3) Business Days of its due date, the
indemnity provided for pursuant to this sub-clause (ii) shall
only be in respect of any reasonable such cost, loss or
liability incurred during such cure period;
(c) funding, or making arrangements to fund, its participation in
a Loan requested by a Borrower in a Utilisation Request but
not made by reason of the operation of any one or more of the
provisions of this Agreement (other than by reason of default
or negligence by that Lender alone); or
(d) a Loan (or part of a Loan) not being prepaid in accordance
with a notice of prepayment given by an Obligor.
15.3 Indemnity to each Agent
The Obligors shall promptly indemnify the Facility Agent against any
cost, loss or liability incurred by the Facility Agent (acting
reasonably) as a result of:
(a) investigating any event which it reasonably believes is a
Default; or
(b) acting or relying on any notice, request or instruction which
it reasonably believes to be genuine, correct and
appropriately authorised.
16. MITIGATION BY THE LENDERS
16.1 Mitigation
(a) Each Finance Party shall, in consultation with the Obligors, take all
reasonable steps to mitigate any circumstances which arise and which
would result in any amount becoming payable under, or cancelled
pursuant to, any of Clause 8.1 (Illegality), Clause 13 (Tax gross-up
and indemnities), Clause 14 (Increased costs) or paragraph (c) of
Clause 15.2 (Other Indemnities) (where the reason for such Loan not
being made is not attributable to the Obligors) including (but not
limited to) transferring its rights and obligations under the Finance
Documents to another Affiliate or Facility Office.
48
(b) Paragraph (a) above does not in any way limit the obligations or
liabilities of any Obligor under the Finance Documents.
16.2 Limitation of liability
(a) The Obligors shall, on the basis of joint and several liability
indemnify each Finance Party for all costs and expenses reasonably
incurred by that Finance Party as a result of steps taken by it under
Clause 16.1 (Mitigation).
(b) A Finance Party is not obliged to take any steps under Clause 16.1
(Mitigation) if, in the opinion of that Finance Party (acting
reasonably), to do so might be prejudicial to it.
17. COSTS AND EXPENSES
17.1 Transaction expenses
The Obligors shall, on the basis of joint and several liability,
promptly on demand pay each Agent and each Arranger the amount of all
costs and expenses (including legal fees) reasonably incurred by any of
them in connection with the negotiation, preparation, printing,
execution and syndication of:
(a) this Agreement and any other documents referred to in this
Agreement; and
(b) any other Finance Documents executed after the date of this
Agreement.
17.2 Amendment costs
If: (a) an Obligor requests an amendment, waiver or consent; or (b) an
amendment is required pursuant to Clause 28.9 (Change of currency), the
Obligors shall, on the basis of joint and several liability, within
three (3) Business Days of demand, reimburse each Agent for the amount
of all costs and expenses (including legal fees) reasonably incurred by
such Agent in responding to, evaluating, negotiating or complying with
that request or requirement.
17.3 Enforcement costs
The Obligors shall, on the basis of joint and several liability, within
three (3) Business Days of demand, pay to each Finance Party the amount
of all costs and expenses (including legal fees) incurred by that
Finance Party in connection with the enforcement of, or the
preservation of any rights under, any Finance Document.
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SECTION 7 - REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
18. REPRESENTATIONS
Each Obligor makes the representations and warranties set out in this
Clause 18 to each Finance Party on the date of this Agreement and
acknowledges that the Finance Parties have entered into this Agreement
in reliance of those representations and warranties.
18.1 Status
(a) Each Obligor is a corporation, duly incorporated and validly existing
under the Applicable Law of its respective jurisdiction of
incorporation and each Obligor is a separate legal entity with
perpetual corporate existence, capable of suing and being sued.
(b) Each Obligor and each of its Subsidiaries has the power to own its
respective assets and carry on its respective business as it is being
conducted.
18.2 Binding obligations
As at the date of this Agreement, the obligations and liabilities
expressed to be assumed by each Obligor in each Finance Document to
which such Obligor is a party are, subject to any general principles of
Applicable Law limiting such Obligor's obligations and/or liabilities
which are specifically referred to in any legal opinion delivered
pursuant to Clause 4 (Conditions of Utilisation) legal, valid, binding
and enforceable obligations.
18.3 Non-conflict with other obligations
The entry into and performance by each Obligor of, and the transactions
contemplated by, the Finance Documents do not and will not conflict
with:
(a) any Applicable Law applicable to such Obligor as at the date
of this Agreement;
(b) the constitutional documents of any member of the Group; or
(c) any agreement or instrument binding upon such Obligor or any
other member of the Group or any of such Obligor's or any
member of the Group's assets.
18.4 Power and authority
Each Obligor has the power to own assets and to enter into, perform and
deliver, and has taken all necessary action to authorise such Obligor's
entry into, performance and delivery of, the Finance Documents to which
such Obligor is a party and the transactions contemplated by those
Finance Documents.
18.5 Validity and admissibility in evidence
All Authorisations required or desirable:
(a) to enable each Obligor lawfully to enter into, exercise such
Obligor's rights and perform, comply with such Obligor's
obligations in the Finance Documents and the Concession
Contract(s) to which such Obligor is a party; and
(b) to ensure that the obligations expressed to be assumed by such
Obligor in such Finance Documents and Concession Contract(s),
are legal, valid, binding and enforceable against such
Obligor,
have been obtained or effected and are in full force and effect.
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18.6 Governing law and enforcement (a) Subject to any general
principles of Applicable Law which are specifically referred to in any
legal opinion delivered pursuant to Clause 4 (Conditions of
Utilisation), as at the date of this Agreement the choice of English
law as the governing law of the Finance Documents will be recognised
and enforced in its jurisdiction of incorporation.
(b) Subject to any general principles of Applicable Law which are
specifically referred to in any legal opinion delivered pursuant to
Clause 4 (Conditions of Utilisation), as at the date of this Agreement
any court judgment obtained in England in relation to a Finance
Document will following its official translation into the Hungarian
language and any other necessary notarisation or similar process, be
admissible in evidence in court proceedings in Hungary.
(c) Subject to any general principles of Applicable Law which are
specifically referred to in any legal opinion delivered pursuant to
Clause 4 (Conditions of Utilisation), as at the date of this Agreement
any arbitral award obtained in any of England, Hungary or the United
States of America will, in respect of any proceeding(s) before the
Hungarian courts, subject to the official translation of such award
into the Hungarian language (if such award is in another language) and
any other necessary notarisation or similar process, compliance with
applicable public policy considerations and compliance with procedural
requirements, be recognised and enforced in its jurisdiction of
incorporation.
18.7 Deduction of Tax
Subject to, in respect of payments of interest, the relevant recipient
being a Treaty Lender at the time of such payments, each Obligor is not
required under the law of such Obligor's jurisdiction of incorporation
to make any deduction for or on account of Tax from any payment such
Obligor may make under any Finance Document.
18.8 No filing or stamp taxes
As at the date of this Agreement, under the Applicable Law of each
Obligor's jurisdiction of incorporation, other than the due
registration of the Fixed Charge Agreements and the Floating Charge
Agreements in the Register of Pledges with a Notary Public and the
registration of the Mortgage Agreements against the relevant land at
the relevant Land Registry (and the payment of all appropriate charges,
duties, fees, costs and expenses in respect of such registration), it
is not necessary that the Finance Documents be filed, recorded or
enrolled with any court or other authority in such jurisdictions or
that any Tax be paid on or in relation to the Finance Documents, the
transactions contemplated by the Finance Documents or (other than the
court duties ("illetek") expressly provided for under Applicable Laws
of Hungary) their enforcement in the courts of Hungary.
18.9 No default
(a) No Event of Default is continuing or would reasonably be expected to
result from the making of any Utilisation.
(b) No other fact(s), event(s) and/or circumstance(s) exist(s) or is/are
outstanding which constitute(s) a default under any other agreement or
instrument which is binding on any Obligor or any of such Obligor's
Subsidiaries or to which such Obligor's (or such Obligor's
Subsidiaries') assets are subject in a manner or to an extent which
gives rise to a Material Adverse Effect.
18.10 No misleading information
(a) As at the date of this Agreement, any factual information provided by
an Obligor or any adviser (including, without limitation, legal
counsel) of an Obligor to any Finance Party or any advisor (including,
without limitation, legal counsel) of a Finance Party for the purposes
of the
51
Information Memorandum, in connection with this Agreement and/or
otherwise in respect of the Group or any member, Affiliate or
shareholder of the Group was true and accurate in all material respects
as at the date it was provided or as at the date (if any) at which such
information and/or such Information Memorandum, as appropriate, is
stated to be correct and any projections, estimates and other
non-factual information has been prepared on a reasonable basis by
reference to the facts, events and circumstances existing and
outstanding at the time when such projections, estimates and other
non-factual information were prepared Provided that in respect of any
such factual information provided orally and subsequently (and most
recently) provided in writing, to the extent that any difference(s)
between the oral and the most recently provided written factual
information exist, that latest written information shall, in the
absence of gross negligence or wilful deceit on the part of the
person(s) providing such oral information, be deemed to restate and
correct such oral factual information and shall, for the purposes of
this paragraph (a), prevail.
(b) As at the date of this Agreement, the financial projections contained
in the Information Memorandum have been prepared on the basis of recent
historical information and on the basis of reasonable assumptions.
(c) As at the date of this Agreement, nothing has occurred or been omitted
from the Information Memorandum and no information has been given or
withheld that results in the information contained in the Information
Memorandum being untrue or misleading in any material respect.
(d) No fact(s), event(s) and/or circumstance(s) has/have arisen and/or
occurred which would reasonably be expected to have a material impact
on any of the written information supplied by an Obligor to any Finance
Party (other than any which have been disclosed in any 10K Document or
10Q Document or otherwise expressly disclosed to the Facility Agent,
together with a reasonably detailed written explanation of the
significance of such fact(s), event(s) and/or circumstance(s) within
the context of this proposed Facility).
(e) No Obligor is aware of any material fact(s), event(s) or
circumstance(s) that has/have not been disclosed to the Finance Parties
in writing which would reasonably be expected to, if disclosed,
adversely affect the decision of a prudent commercial bank considering
whether or not to provide finance to an Obligor.
18.11 Financial statements
(a) In respect of Hungarian Telephone and Cable Corp., its Original
Financial Statements were prepared in accordance with US GAAP
consistently applied.
(b) In respect of each member of the Group incorporated in Hungary, such
Obligor's Original Financial Statements were prepared in accordance
with HAS consistently applied.
(c) Each member of the Group's Original Financial Statements and, in the
case of Hungarian Telephone and Cable Corp., each 10K Document and 10Q
Document, fairly represent such Obligor's financial condition and
operations (consolidated in the case of Hungarian Telephone and Cable
Corp.) during the relevant financial year and properly reflect in all
material respects the tax position of such Obligor as at the respective
date of such Original Financial Statement.
(d) In the case of Hungarian Telephone and Cable Corp., each 10K Document,
10Q Document, Budget Comparison Certificate, Compliance Certificate,
Key Performance Indicators Certificate fairly and in all material
respects represents its consolidated financial condition and operations
during the relevant quarter.
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(e) Save as expressly disclosed to the Facility Agent in writing, no
fact(s), event(s) and/or circumstance(s) has/have occurred and/or
arisen, including without limitation in respect of an Obligor's
business or financial condition (or the business or consolidated
financial condition of Hungarian Telephone and Cable Corp.) since the
most recent 10K Document, 10Q Document, Budget Comparison Certificate,
Compliance Certificate, Key Performance Indicators Certificate was
delivered to the Facility Agent which gives rise to a Material Adverse
Effect.
18.12 Pari passu ranking
Each Obligor's payment obligations under the Finance Documents to which
such Obligor is a party rank at least pari passu with the claims of all
such Obligor's other unsecured and unsubordinated creditors, except for
obligations mandatorily preferred by operation of Applicable Law
applying to companies generally in its jurisdiction of incorporation,
in any jurisdiction in which it has significant assets and/or in any
jurisdiction in which it carries out any business activities.
18.13 No proceedings pending or threatened
Save as expressly disclosed to the Facility Agent in writing prior to
the date of this Agreement, including, inter alia, those matters set
out in the most recent 10K Document or 10Q Document as at the date of
this Agreement, no litigation, arbitration or administrative
proceedings of or before any court, arbitral body or agency which, if
adversely determined, would give rise to a Material Adverse Effect,
have (to the best of its knowledge and belief) been started or
threatened against an Obligor or any of such Obligor's Subsidiaries.
18.14 No material defaults
Save as expressly disclosed to the Facility Agent in writing,
including, inter alia, those matters set out in the most recent 10K
Document or 10Q Document, no Obligor is in breach of or in default
under any agreement to which it is a party or which is binding on it or
any of its respective assets to an extent or in a manner which gives
rise to a Material Adverse Effect.
18.15 Tax
Save as otherwise disclosed in the most recent 10K Document or 10Q
Document or otherwise expressly disclosed to the Facility Agent in
writing:
(a) the Original Financial Statements in respect of each of the
Obligors properly reflect in all material respects the tax
position of each Obligor as at the respective dates dated
thereof; and
(b) each Obligor has, to the best of its knowledge and belief,
complied in all material respects with all taxation laws in
all jurisdictions in which it is subject to taxation and has
paid all Taxes due and payable by it and no material claims
are being asserted against it with respect to Taxes.
18.16 Insolvency
Save as expressly disclosed to the Facility Agent in writing, no
Obligor has taken any formal corporate action nor to any Obligor's best
knowledge and belief, having made reasonable enquires thereto as at the
date of this Agreement, have any other formal steps been taken or legal
proceedings been started or threatened in accordance with the
procedures detailed in the Bankruptcy Act or in the Companies Act (or
in accordance with similar or analogous provisions or proceedings)
against it or against any other member of the Group (other than
PILISTAV Tavkozlesi, Epit es Szolgaltato Korlatolt Felel sseg
Tarsasag) for its or for any such other member of the Group's (other
than PILISTAV Tavkozlesi, Epit es Szolgaltato Korlatolt Felel sseg
53
Tarsasag) bankruptcy, liquidation, winding-up, dissolution,
administration or reorganisation or final accounting (in each case
pursuant to the Bankruptcy Act, the Companies Act or otherwise).
18.17 No undisclosed liabilities
Save as expressly disclosed to the Facility Agent in writing, as at the
date as of which the Original Financial Statements were prepared, no
Obligor or, to each Obligor's best knowledge and belief, no other
member of the Group had any material liabilities (contingent or
otherwise) which were not disclosed thereby (or by the notes thereto)
or reserved against therein or to each Obligor's best knowledge and
belief, having made all reasonable enquiries thereto, any material
unrealised or anticipated losses arising from commitments entered into
by such Obligor which were not so disclosed or reserved against in such
Original Financial Statements.
18.18 Encumbrances
Subject to any general principles of Applicable Law which are
specifically referred to in any legal opinion delivered pursuant to
Clause 4 (Conditions of Utilisation), other than an Encumbrance falling
into the scope of paragraph (c) of Clause 21.3 (Negative pledge) no
Encumbrance exists over all or any of the present or future assets of
an Obligor, nor to each Obligor's best knowledge and belief, those of
any other Obligor.
18.19 No obligation to create security
Each Obligor's execution of any of the Finance Documents to which such
Obligor is a party and the exercise of its respective rights and
performance of such Obligor's respective obligations under such Finance
Documents will not, as at the date of the Agreement, result in the
existence of nor oblige such Obligor to create any Encumbrance over all
or any of any Obligor's respective present or future assets, other than
as expressly provided for in and contemplated by the Finance Documents.
18.20 Compliance with laws and regulations
Each Obligor and, to the best of each Obligor's respective knowledge
and belief, having made all reasonable enquiries thereto, as at the
date of the Agreement, each member of the Group, in carrying out its
respective activities, business and operations is in all material and
substantial respects doing so in compliance with Applicable Law
governing the same.
18.21 Entire Agreement
No Obligor is and, in respect of any Obligor which, directly or
indirectly, legally or beneficially, owns any equity capital in any
member of the Group, to the best of such Obligor's knowledge and
belief, having made all reasonable enquiries thereto, no such member of
the Group is, as at the date of this Agreement, a party to any material
agreement or contract whatsoever (oral, written or otherwise) which is
or which would reasonably be expected to become material to the
Facility and/or the Encumbrances created and/or constituted by the
applicable Security Agreements, which is not expressly provided for in
any of the Finance Documents and/or which has not been disclosed in the
most recent 10K Document or 10Q Document or otherwise fully and
properly disclosed in writing prior to the date of this Agreement to
the Facility Agent.
18.22 Environment
Each Obligor and, in respect of any Obligor which, directly or
indirectly, legally or beneficially, owns any equity capital in any
member of the Group, to the best of such Obligor's knowledge and
belief, each such member of the Group is, as at the date of this
Agreement, in compliance with:
(a) all Applicable Law concerning the protection of the
environment and to the best of each Obligor's knowledge and
belief, having made reasonable enquires thereto, there are no
54
fact(s), event(s) and/or circumstance(s) which may prevent
that compliance in the future; and
(b) the terms of all permits and authorisation required by any
Applicable Law in respect of the environment for the ownership
and operation of each Obligor's businesses,
in each case, in a manner and to an extent required to procure and
ensure the avoidance of the occurrence of a Material Adverse Effect.
18.23 Management of business
Save for any Permitted Management Contracts, no Obligor has, nor has
any other member of the Group, entered into any management contract or
similar arrangement whereby a material part of its or the Group's
assets, business or operations are managed or are to be managed by any
other person. Save as expressly disclosed to the Facility Agent in
writing, each Obligor is managing its assets, business and operations
in accordance with Good Industry Practice.
18.24 Corporate chart
The chart prepared after consultation with the Obligors, detailed in
paragraph (f) of Clause 1 of Schedule 2 (Conditions precedent), and
delivered to the Facility Agent pursuant to Clause 4.1 (Initial
conditions precedent) showing the percentage ownership of each member
of the Group and the relationship of the Obligors is true and correct
in all respects as at the date of this Agreement and that no member of
the Group has any form of equity and/or ownership interest whatsoever
in any other person except as so disclosed in such chart.
18.25 Compliance with Finance Documents
Each Obligor is, as at the date of this Agreement, in compliance with
each of the covenants and each of the terms and conditions of each
Finance Document to which such Obligor is a party.
18.26 Subordinated Financial Indebtedness
(a) All indebtedness and encumbrances of each member of the Group as at the
date of this Agreement are set out and detailed in the Letter of
Borrowings and Encumbrances.
(b) Any payments with repayment obligations received by or loans provided
to any member of the Group from/by any other member of the Group are
and have been fully subordinated at all times and in all respects to
the obligations of such first member of the Group to the Finance
Parties under the Finance Documents, with such other member of the
Group being a party to the Subordination and Trust Deed.
(c) In respect of any Borrower which has entered into an Hedging Document
on or prior to the date of this Agreement, such Borrower has procured
and ensured that the other party to such Hedging Document has become a
party (in the capacity of Hedging Creditor) to the Subordination and
Trust Deed.
18.27 Bank accounts
No Obligor has opened or maintains any bank or similar account(s) with
any bank, financial institution or other person other than as provided
for in the definition of Income Accounts in Clause 1.1 (Definitions) as
amended from time to time in compliance with this Agreement and all
material financial services of whatever nature utilised by each Obligor
since the date of this Agreement have been or are being provided by one
or more of the Finance Parties and/or any Affiliate(s) of any Finance
Party.
55
18.28 Validity and extent of Encumbrances
Save as expressly disclosed in the Letter of Borrowings and
Encumbrances, or otherwise fully disclosed in writing to the Facility
Agent, or otherwise arising in accordance with and pursuant to Clause
21.3 (Negative pledge) and subject to any general principles of
Applicable Law which are specifically referred to in any legal opinion
delivered pursuant to Clause 4 (Conditions of Utilisation), as at the
date of this Agreement, Security Agreements create legal and valid
first ranking Encumbrances over all the assets of the members of the
Group (other than PILISTAV Tavkozlesi, Epit es Szolgaltato Korlatolt
Felel sseg Tarsasag), other than the Concession Contracts, and each
such Encumbrance is binding on and enforceable against the member of
the Group over whose assets such Encumbrance has been created.
18.29 Repetition
The representations and warranties set out in:
(a) Clause 18.1 (Status);
(b) paragraphs (b) and (c) of Clause 18.3 (Non-conflict with other
obligations);
(c) Clause 18.4 (Power and authority);
(d) Clause 18.5 (Validity and admissibility in evidence);
(e) Clause 18.7 (Deduction of tax);
(f) Clause 18.9 (No default);
(g) paragraphs (d) and (e) of Clause 18.10 (No misleading
information);
(h) Clause 18.11 (Financial statements);
(i) Clause 18.12 (Pari passu ranking);
(j) Clause 18.14 (No material defaults);
(k) Clause 18.15 (Tax);
(l) Clause 18.16 (Insolvency);
(m) Clause 18.17 (No undisclosed liabilities);
(n) Clause 18.18 (Encumbrances);
(o) Clause 18.23 (Management of business);
(p) paragraph (b) of clause 18.26 (Subordinated Financial
Indebtedness); and
(q) Clause 18.27 (Bank accounts),
collectively the "Repeating Representations", are deemed to be made by
each Obligor by reference to the facts and circumstances then existing
on the date of each Utilisation Request and the first day of each
Interest Period and if by such date any Obligor has delivered financial
statements to the Facility Agent in accordance with its obligations
under Clause 19.1 (Financial statements), references to the "Original
Financial Statements" in this Clause 18 shall be deemed to
56
be references to the then most recent financial statements delivered by
such Obligor(s) to the Facility Agent in accordance with its respective
obligations under Clause 19.1 (Financial statements).
19. INFORMATION UNDERTAKINGS
The undertakings in this Clause 19 remain in force from the date of
this Agreement for so long as any amount is outstanding under the
Finance Documents or any Commitment is in force.
19.1 Financial statements
(a) Hungarian Telephone and Cable Corp. shall supply to the Facility Agent
in sufficient copies for all the Lenders as soon as the same become
available, but in any event within:
(i) ninety (90) days of the end of each of its financial years,
its audited 10K Document for that financial year or if
Hungarian Telephone and Cable Corp. duly applies to the
Securities Exchange Commission of the Untied States of America
for an extension of the deadline for the filing of such a 10K
Document, up to a maximum of one hundred and five (105) days;
and
(ii) sixty (60) days of the end of each quarter of each of its
financial years, its (unaudited) 10Q Document for that quarter
financial year.
(b) Each Obligor (other than Hungarian Telephone and Cable Corp.) shall
supply to the Facility Agent in sufficient copies for all the Lenders
as soon as the same become available, but in any event within one
hundred and fifty (150) days of the end of each of its financial years,
its audited financial statements for that financial year.
19.2 Certificates
(a) Hungarian Telephone and Cable Corp. shall supply to the Facility Agent,
at the same time as the earlier of: (i) Hungarian Telephone and Cable
Corp.'s delivery of each 10K Document or 10Q Document, as appropriate
to the Facility Agent pursuant to Clause 19.1 (Financial Statements);
and (ii) Hungarian Telephone and Cable Corp.'s release of a 10K
Document or 10Q Document to the Securities and Exchange Commission of
the United States of America following the end of the relevant quarter
of its financial year:
(i) a Budget Comparison Certificate;
(ii) a Compliance Certificate setting out (in reasonable detail)
computations as to compliance with Clause 20 (Financial
covenants) as at the date as at which those financial
statements were drawn up; and
(iii) a Key Performance Indicators Certificate.
(b) Each Budget Comparison Certificate, Compliance Certificate and Key
Performance Indicators Certificate shall be signed by two officers of
Hungarian Telephone and Cable Corp. identified as such in the relevant
10K Document or 10Q Document, with one such officer being the chief
financial officer or similar officer of Hungarian Telephone and Cable
Corp.
19.3 Business Plan
The Obligors shall, as quickly as practicable, but in any event within
fourteen (14) days after the making of any amendment to the Business
Plan, deliver to the Facility Agent in sufficient copies for the
Lenders, such amended Business Plan for the period of up to and
including 31 December
57
2010, together with a written explanation of the rationale and effect
of such change(s) to the reasonable satisfaction of the Facility Agent.
19.4 Annual Operating Budget
The Obligors shall, as quickly as practicable, but in any event within
fourteen (14) days after the approval by Hungarian Telephone and Cable
Corp.'s board of directors (or analogous body) of the Annual Operating
Budget in respect of a financial year, or during the course of a
financial year, fourteen (14) days after the making of any amendments
or revisions to the Annual Operating Budget for such financial year,
deliver to the Facility Agent in sufficient copies for the Lenders of
such Annual Operating Budget, together with a written explanation of
such Annual Operating Budget(s).
19.5 Requirements as to financial statements
(a) Each set of financial statements delivered by the Obligors pursuant to
Clause 19.1 (Financial statements) shall be certified by an officer or
director, as applicable, of the relevant company as fairly representing
its financial condition as at the date as at which those financial
statements were drawn up.
(b) Each Obligor shall procure and ensure that each set of financial
statements of such Obligor delivered pursuant to Clause 19.1 (Financial
statements) and in the case of Hungarian Telephone and Cable Corp.,
pursuant to Clause 19.2 (Certificates), in the case of Hungarian
Telephone and Cable Corp., is prepared using and in accordance with US
GAAP and, in the case of each Obligor other than Hungarian Telephone
and Cable Corp., is prepared using and in accordance with HAS, in each
case using accounting practices and financial reference periods
consistent with those applied in the preparation of such Obligor's
Original Financial Statements unless, in relation to any set of
financial statements, such Obligor notifies the Facility Agent in
writing that there has been a change in HAS or US GAAP, as appropriate,
the accounting practices or reference periods and in each such case
such Obligor will procure and ensure that such Obligor's Auditors
promptly deliver to the Facility Agent:
(i) a description of any change(s) necessary for those financial
statements to reflect the HAS or US GAAP, as appropriate,
accounting practices and reference periods upon which such
Obligor's Original Financial Statements were prepared; and
(ii) sufficient information, in form and substance as may be
reasonably required by the Facility Agent, to enable the
Lenders to determine whether Clause 20 (Financial covenants)
has been complied with and make an accurate comparison between
the financial position indicated in those financial statements
and such Obligor's Original Financial Statements.
Any reference in this Agreement to those financial statements shall be
construed as a reference to those financial statements as adjusted to
reflect the basis upon which the Original Financial Statements were
prepared.
(c) In respect of the financial statements of the members of the Group
(other than Hungarian Telephone and Cable Corp.) to be delivered
pursuant to this Agreement, such financial statements may be delivered
prepared in the Hungarian language together with a "working"
translation into the English language, it being agreed by the Finance
Parties that, in the event of any discrepancy between the English and
Hungarian language versions, no Obligor will have any liability in
respect of such discrepancy towards any Finance Party pursuant to this
Agreement and the Hungarian language version shall prevail.
58
19.6 Transactions with Affiliates
Each Obligor shall deliver statements in sufficient detail satisfactory
to the Facility Agent of all financial transactions, if any, entered
into with any other member of the Group during the previous quarter of
each of such Obligor's financial years, at the same time as the
financial statements are delivered to the Facility Agent pursuant to
paragraph (a) of Clause 19.1 (Financial statements).
19.7 Information: miscellaneous
Each Obligor shall supply to the Facility Agent (in sufficient copies
for all the Lenders, if the Facility Agent so requests):
(a) all documents dispatched by such Obligor to its shareholders
(or any class of them) or its creditors generally at the same
time as they are dispatched;
(b) promptly upon becoming aware of them, the details of any
litigation, arbitration or administrative proceedings which
are current, threatened or pending against any member of the
Group, and which, if it were to be adversely determined, gives
rise to a Material Adverse Effect; and
(c) promptly, such further information (including but not limited
to its extract of general ledger ("fokonyvi kivonat"))
regarding the financial condition, business and operations of
any member of the Group as any Finance Party (through the
Facility Agent) may reasonably request,
Provided that if such Obligor is able to immediately furnish such
information albeit in a format and/or presentational format then used
by the relevant internal functions of the relevant member of the Group,
such Obligor will immediately furnish such information to the Facility
Agent (or such Lender through the Facility Agent) in such format and/or
presentational format Provided Further that if such format and/or
presentational format is not acceptable to the Facility Agent or such
Lender, acting reasonably, such Obligor will as quickly as practicable
and in any event within twenty one (21) days, provide the Facility
Agent or such Lender, as applicable, such information in a format
and/or presentational format reasonably requested by the Facility Agent
or such Lender, as applicable.
19.8 Notification of default
(a) Each Obligor shall notify the Facility Agent in writing of any Default
(and the steps, if any, being taken to remedy it) promptly upon
becoming aware of its occurrence (unless that Obligor is aware that a
notification has already been provided by another Obligor).
(b) Promptly upon a request by the Facility Agent, each Obligor shall
supply to the Facility Agent a certificate signed by two of its
directors or officers (as identified in the then most recent 10K
Document, 10Q Document or other filing made to the Securities Exchange
Commission of the United States of America), as applicable, on its
behalf certifying that no Default is continuing (or if a Default is
continuing, specifying the Default and the steps, if any, being taken
to remedy it).
19.9 Accounting Terms
All accounting expressions which are not otherwise defined in this
Agreement shall be construed in accordance with US GAAP and/or HAS, as
appropriate, consistently applied in the United States of America
and/or Hungary, as applicable.
19.10 Access to Records
Each Obligor shall, upon the reasonable request of the Facility Agent:
59
(a) permit the Facility Agent, the Security Agent and/or any
representatives of the Majority Lenders to visit such
Obligor's premises and to inspect such Obligor's books,
accounts and records and each Obligor shall provide the
Facility Agent, the Security Agent or such representative with
all necessary assistance and co-operation for such purpose;
(b) promptly provide the Facility Agent, the Security Agent and/or
any representative of the Majority Lenders with copies and/or
extracts of such Obligor's books, accounts and records as the
Facility Agent, the Security Agent and/or any representative
of the Majority Lenders may request.
19.11 Corporate records
Each Obligor undertakes to procure and ensure that it and each other of
the Group maintains such books, accounts and records require under
Applicable Law and in accordance with Good Industry Practice.
19.12 Ownership of Notes
(a) At the same time as it delivers 10K Document pursuant to paragraph (a)
of Clause 19.1 (Financial Statements), and promptly upon the written
request of the Facility Agent, Hungarian Telephone and Cable Corp.,
will provide the Facility Agent with a copy extract of the register of
Notes maintained by Hungarian Telephone and Cable Corp., showing the
holders (and numbers held) of the Notes, as at 31 December of the
financial year to which such 10K Document relates.
(b) As quickly as possible upon becoming aware of any change in ownership
of any Note(s), but in any event within three (3) Business days of
becoming so aware, Hungarian Telephone and Cable Corp. will confirm to
the Facility Agent in writing details of such change(s), including,
inter alia, details of the new holder of such Note(s).
19.13 Conversion of Preference Shares
As quickly as possible upon any conversion of a Preference Share into
common stock of Hungarian Telephone and Cable Corp., but in any event
within three (3) Business Days of such conversion, Hungarian Telephone
and Cable Corp. will confirm to the Facility Agent in writing details
of such conversion, including, inter alia, details of the holder of the
shares arising from such conversion.
19.14 Ownership of Shares
(a) At the same time as it delivers a 10K Document pursuant to paragraph
(a) of Clause 19.1 (Financial Statements), and promptly upon the
written request of the Facility Agent, Hungarian Telephone and Cable
Corp., will provide the Facility Agent with an analysis of the register
of shares maintained by Hungarian Telephone and Cable Corp., showing
the shareholdings (expressed as an absolute number of shares and as a
percentage of all Hungarian Telephone and Cable Corp.'s issues share
capital) of: (i) Citizens; (ii) IO Fund; (iii) Postabank es
Takarekpenztar Reszvenytarsasag; (iv) Tele Danmark A/S; (v) to the best
knowledge and belief of Hungarian Telephone and Cable Corp., any person
who, together with any Related Person to such person, holds five per
cent. (5%) of the issued share capital of Hungarian Telephone and Cable
Corp.; and (vi) the amount held by all other shareholders.
(b) Hungarian Telephone and Cable Corp. will promptly upon, and in any
event within five (5) Business Days of, becoming aware that any Lender
and/or any Affiliate(s) of any Lender has or have become(s) the owner
of five per cent. (5) or more of the issued share capital of Hungarian
Telephone and Cable Corp., notify the Facility Agent in writing
thereof.
60
20. FINANCIAL COVENANTS
20.1 Financial condition of the Group
The financial condition of the Group, as evidenced by the consolidated
financial statements of Hungarian Telephone and Cable Corp. set out in
the Original Financial Statements or subsequently delivered to the
Facility Agent in accordance with the provisions of Clause 19.1
(Financial statements) shall be such that:
(a) the Group's Senior Debt to EBITDA Ratio shall not on any date
after this Agreement exceed the values applicable at such time
as set out in the table below:
------------------------------------------------------------------------------------------------------
Date of determining the Group's Senior Debt to The Group's Senior Debt to EBITDA Ratio
EBITDA Ratio
------------------------------------------------------------------------------------------------------
from the date of this Agreement to 30 December 2000 five point zero zero to one (5.00:1)
------------------------------------------------------------------------------------------------------
From 31 December 2000 to 29 June 2001 four point seven five to one (4.75:1)
------------------------------------------------------------------------------------------------------
From 30 June 2001 to 30 December 2001 four point two five to one (4.25:1)
------------------------------------------------------------------------------------------------------
From 31 December 2001 to 29 June 2002 three point seven five to one (3.75:1)
------------------------------------------------------------------------------------------------------
From 30 June 2002 to 30 December 2002 three point five zero to one (3.50:1)
------------------------------------------------------------------------------------------------------
From 31 December 2002 to 30 December 2003 three point zero zero to one (3.00:1)
------------------------------------------------------------------------------------------------------
From 31 December 2003 to 30 December 2004 two point five zero to one (2.50:1)
------------------------------------------------------------------------------------------------------
From 31 December 2004 to 31 December 2007 two point zero zero to one (2.00:1)
------------------------------------------------------------------------------------------------------
The Group's Senior Debt to EBITDA Ratio shall be calculated on
a quarterly basis until the Trigger Date and, thereafter,
semi-annually as follows:
A = (B - C) / D
where:
A = the Group's Senior Debt to EBITDA Ratio;
B = the aggregate of all Financial Indebtedness of the
Group (as specified in the relevant 10K Document or 10Q
Document);
C = the aggregate amount of all Financial Indebtedness in
respect of the Notes (as specified in the relevant 10K
Document or 10Q Document);
D = EBITDA for the Group determined on the basis of the
preceding four (4) quarter financial years of Hungarian
Telephone and Cable Corp.;
(b) the Group's Senior Interest Cover Ratio in respect of any
quarter financial year, as determined as at the date up to
which such quarter financial year relates, shall not be less
than the value set out in the table below:
------------------------------------------------------------------------------------------------------
Date for determining the Group's Senior Interest Cover The Group's Senior Interest Cover Ratio
Ratio
------------------------------------------------------------------------------------------------------
From 31 December 2000 to 29 June 2001 one point five to one (1.5:1)
------------------------------------------------------------------------------------------------------
From 30 June 2001 to 30 September 2001 one point seven five to one (1.75:1)
------------------------------------------------------------------------------------------------------
61
The Group's Senior Interest Cover Ratio shall be calculated on
a quarterly basis until the Trigger Date and, thereafter,
semi-annually as follows:
A = B / (C - D)
where:
A = the Group's Senior Interest Cover Ratio;
B = EBITDA for the Group determined on a consolidated basis
with reference to the preceding four (4) quarter
financial years of Hungarian Telephone and Cable Corp.;
C = the aggregate amount of all gross cash interest payable
by and all hedging costs for the Group, on a consolidated
basis, during the preceding four (4) quarter financial
years of Hungarian Telephone and Cable Corp.;
D = the aggregate amount of all cash interest paid in
respect of the Notes during the preceding four (4)
quarter financial years of Hungarian Telephone and Cable
Corp.;
(c) the Group's Senior Debt Service Cover Ratio shall not in
respect of any quarter financial year, as determined as at the
date up to which such quarter financial year relates, at any
time from 30 June 2001 until 31 December 2007 be less than one
point one five to one (1.15:1). The Group's Senior Debt
Service Cover Ratio shall be calculated on a quarterly basis
until the Trigger Date and, thereafter, semi-annually as
follows:
A = (B - C) / D
where:
A = the Group's Senior Debt Service Cover Ratio;
B = EBITDA for the Group determined on the basis of the
preceding four (4) quarter financial years of Hungarian
Telephone and Cable Corp.;
C = the aggregate of an amount equal to all reductions in
working capital, capital expenditure and payments of Tax
by the Group, on a consolidated basis, during the
preceding four (4) quarter financial years of Hungarian
Telephone and Cable Corp.;
D = the aggregate of an amount equal to all net hedging
costs, gross interest and scheduled repayment of
indebtedness, including without limitation under this
Agreement, payable by the Group (other than by Hungarian
Telephone and Cable Corp. in respect of the Notes), on a
consolidated basis, during the preceding four (4) quarter
financial years of Hungarian Telephone and Cable Corp.;
and
(d) the EBITDA of the Group for the preceding four (4) quarter
financial years of Hungarian Telephone and Cable Corp. taken
in aggregate, expressed in forint, shall not, during the
period commencing on the date of this Agreement and ending on
and including the earlier of 31 December 2003 and the Trigger
Date, as at the last day of each of its quarter financial
years, be less than the value provided for at such time in the
column headed "Covenant-minimum EBITDA (HUF)" of Schedule 10
(EBITDA
62
Variance Table), adjusted on the basis provided for in
Schedule 10 (EBITDA Variance Table).
21. GENERAL UNDERTAKINGS
The undertakings in this Clause 21 remain in force from the date of
this Agreement for so long as any amount is outstanding under the
Finance Documents or any Commitment is in force.
21.1 Authorisations
(a) Each Obligor shall promptly:
(i) obtain, comply with and do all that is necessary to maintain
in full force and effect; and
(ii) supply certified copies to the Facility Agent of,
any Authorisation required under any law or regulation of its
jurisdiction of incorporation to enable such Obligor to perform such
Obligor's obligations under the Finance Documents and to ensure the
legality, validity, enforceability or admissibility in evidence in such
Obligor's jurisdiction of incorporation, in any jurisdiction in which
such Obligor has any assets and/or in which such Obligor carries on any
business, of any Finance Document including, but not limited to, duly
notarising the Fixed Charge Agreements and the Floating Charge
Agreements before a Notary Public and duly registering the Mortgage
Agreement at the relevant Land Registry Provided that in respect of
those Finance Documents which are not already available as official
translations in the Hungarian language, such Obligor shall only be
obligated to have such Finance Documents officially translated into the
Hungarian language upon receipt of a written request from the Facility
Agent, acting reasonably and, on the receipt of such a written request,
the Borrower shall arrange for the prompt official translation into the
Hungarian language of such Finance Documents and the prompt delivery of
such translations to the Facility Agent.
(b) Each Obligor shall (and Hungarian Telephone and Cable Corp. shall
procure and ensure that each of its Subsidiaries other than PILISTAV
Tavkozlesi, Epito es Szolgaltato Korlatolt Felelossegu Tarsasag shall)
take all actions and steps necessary to maintain such Obligor's
corporate existence.
21.2 Compliance with laws
Each Obligor shall comply in all respects with all Applicable Law, if
failure so to comply would materially impair such Obligor's ability to
perform its obligations under the Finance Documents.
21.3 Negative pledge
(a) Subject to paragraph (c) below, no Obligor shall (and Hungarian
Telephone and Cable Corp. shall procure and ensure that no other member
of the Group will) create or permit to subsist any Encumbrance over any
of its assets.
(b) Subject to paragraph (c) below, no Obligor shall (and Hungarian
Telephone and Cable Corp. shall procure and ensure that no other member
of the Group will):
(i) sell, transfer or otherwise dispose of any of its assets on
terms whereby they are or may be leased to or re-acquired by
an Obligor or any other member of the Group;
(ii) sell, transfer or otherwise dispose of any of its receivables
on recourse terms;
(iii) enter into any arrangement under which money or the benefit of
a bank or other account may be applied, set-off or made
subject to a combination of accounts; or
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(iv) enter into any other preferential arrangement having a similar
effect,
in circumstances where the arrangement or transaction is entered into
primarily as a method of raising Financial Indebtedness or of financing
the acquisition of an asset.
(c) Paragraphs (a) and (b) above do not apply to:
(i) any Encumbrance detailed in the Letter of Borrowings and
Encumbrances which is not to be eliminated, discharged or
released by Postabank es Takarekpenztar Reszvenytarsasag
pursuant to the releases provided for in paragraph 3(t) of
Schedule 2 (Conditions Precedent);
(ii) any Encumbrance arising in respect of any assets of an Obligor
by mandatory operation of Applicable Law which such Obligor
has, upon becoming aware of such an Encumbrance, confirmed in
writing to the Facility Agent;
(iii) any Encumbrance arising pursuant to the Security Agreements;
(iv) any lien arising by operation of law and in the ordinary
course of trading;
(v) any Encumbrance created with the prior written consent of the
Facility Agent acting on the instruction of the Majority
Lenders; or
(vi) any Encumbrance in respect of assets with an aggregate value
which does not exceed two million five hundred thousand euro
(EUR 2,500,000) securing indebtedness the principal amount of
which (when aggregated with the principal amount of any other
indebtedness which has the benefit of an Encumbrance other
than any permitted under paragraphs (i) to (v) above) does not
exceed two million five hundred thousand euro (EUR 2,500,000)
(or their equivalent in another currency or currencies).
21.4 Disposals
(a) Subject to paragraph (b) below, no Obligor shall (and Hungarian
Telephone and Cable Corp. shall procure and ensure that no other member
of the Group will), enter into a single transaction or a series of
transactions (whether related or not) and whether voluntary or
involuntary to sell, lease, transfer or otherwise dispose of any asset.
(b) Paragraph (a) above does not apply to any sale, lease, transfer or
other disposal:
(i) made in the ordinary course of business of the disposing
entity;
(ii) of assets on an arm's length and open market basis with the
prior written consent of the Facility Agent acting on the
instructions of the Majority Lenders;
(iii) of assets which are certified by an officer or director, as
applicable, of the relevant Obligor as being redundant or
obsolete;
(iv) of assets which are being exchanged for comparable or superior
assets and where the assets of the Obligor being exchanged are
not worth materially more than the value of the assets being
acquired or otherwise obtained; or
(v) where the higher of the market value or consideration
receivable (when aggregated with the higher of the market
value or consideration receivable for any other sale, lease,
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transfer or other disposal, other than any permitted under
paragraphs (i) to (iv) above) does not in any financial year
exceed the equivalent of two million, five hundred thousand
dollars (USD 2,500,000).
21.5 Merger and acquisition
No Obligor shall (and Hungarian Telephone and Cable Corp. shall procure
and ensure that no other member of the Group other than PILISTAV
Tavkozlesi, Epito es Szolgaltato Korlatolt Felelossegu Tarsasag will,
without the prior written consent of the Facility Agent, acting on the
instructions of the Majority Lenders ):
(a) enter into any amalgamation, demerger, merger or corporate
reconstruction other than any such transaction in respect of
two (2) or more Obligors (other than Hungarian Telephone and
Cable Corp.) which has been notified to the Facility Agent in
writing no less than twenty one (21) Business Days prior to
the date on which any resolutions are passed by the founder,
general meeting or analogous body of any such Obligor and
which would not in all reasonable likelihood, save as
expressly approved in advance in writing by the Facility
Agent, acting on the instructions of the Majority Lenders,
taken as a whole adversely affect the interests of the Finance
Parties under the Finance Documents; or
(b) acquire or create any person which results or gives rise to
any loss, payment, cost, liability or other obligation
whatsoever (whether present or future, actual or contingent)
which in aggregate with all other such losses, payments, costs
and liabilities exceeds, in any financial year, an amount
equivalent to one million dollars (USD 1,000,000) and/or
during the period from the date of this Agreement up to and
including the Final Maturity Date, an amount equivalent to
five million dollars (USD 5,000,000).
21.6 Change of business
Each Obligor and Hungarian Telephone and Cable Corp. shall procure and
ensure that no substantial change is made to the general nature of the
business of Hungarian Telephone and Cable Corp. or the Group from that
carried on at the date of this Agreement. No Obligor shall, without the
prior written consent of the Facility Agent, acting on the instruction
of the Majority Lenders, create any subsidiaries and/or become a party
to a joint venture agreement or arrangement and/or enter or become
involved in areas or types of activities or business in each such case
that would fall outside the scope of activities and business
specifically provided for pursuant to the Concession Contracts or
activities and business related to the telecommunications business
which are specified in Government Decree Number 48 of 1997 of Hungary
which are significantly different to those currently being carried on
by the Obligors and as envisaged in the Finance Documents, the overall
effect of which would be reasonably expected to change the overall
nature of the credit risk of the Obligors, as determined by the
Facility Agent, acting on the instructions of the Majority Lenders.
21.7 Insurance
(a) Each Obligor shall take out and maintain insurances on and in relation
to its respective activities, business, operations and assets with
reputable underwriters or insurance companies against such risks and to
such extent as is usual and is available upon commercial terms, in
respect of Hungarian Telephone and Cable Corp., in the United States
and, in respect of the other Obligors, in Hungary for companies
carrying on similar activities, businesses and operations such as those
carried on by it and its subsidiaries whose practice is not to
self-insure.
(b) Each Obligor as quickly as practicable shall, upon it taking out any
such insurance pursuant to this Clause 21.7, notify the Facility Agent
in writing, providing sufficient information on such
65
insurance as reasonably required by the Facility Agent and execute an
assignment of contractual rights agreement in respect of such material
insurance, substantially in the form of the Assignment of Contractual
Rights Agreements, as appropriate, if the Facility Agent (acting on the
instructions of the Majority Lenders, acting reasonably) so requires.
Each Obligor shall also not act or fail to act in any way which could
by such action or failure to act cause any material adverse effect on
the validity and enforceability of such insurances.
(c) In the event that fact(s), event(s) and/or circumstance(s) arise(s)
whereby an Obligor intends to make a material claim under such
insurance policies, such Obligor will promptly notify the Facility
Agent in writing of such fact(s), event(s) and/or circumstance(s),
together with an estimate of the amount of the damage or loss and an
estimate of the likely amount of such claim and, at any time when: (i)
a Default or Event of Default is continuing; and/or (ii) when the
amount of such claim, when aggregated with all other claims of the
Obligors which are outstanding at such time and with all other amounts
claimed and paid but not at such time already applied by the Obligors
towards repairs and/or reinstatement, as appropriate, exceeds an amount
equivalent to two hundred and fifty thousand euro (EUR 250,000), such
Obligor(s) will, as soon as reasonably practicable thereafter, enter
into negotiations in good faith with the Facility Agent in order to
determine an appropriate strategy for the use of any monies paid out as
a result of such a claim.
21.8 Untrue representations
After the delivery of any Utilisation Request and before the making of
the Loan(s) requested in such Utilisation Request, each Obligor shall
immediately notify the Facility Agent in writing of the existence or
occurrence of any fact(s), event(s) and/or circumstance(s) which
result(s) in or which would reasonably be expected to result in any of
the representations contained in Clause 18 (Representations) being
untrue at or before the time of the making of such Loan.
21.9 Notification of Events of Default Each Obligor shall, promptly
upon becoming aware of such occurrence, inform the Facility Agent of
the occurrence of any Default or Event of Default, howsoever described
under any of the Finance Documents, or of the receipt of any
correspondence from any person relating to the obligations of any
Borrower under the relevant Concession Contract which gives rise to a
Material Adverse Effect and, upon receipt of a written request to that
effect from the Facility Agent, confirm to the Facility Agent that,
save as previously notified to the Facility Agent or as notified in
such confirmation, no Default or Event of Default, howsoever described
under any of the Finance Documents, has, to the best of its knowledge
and belief, having made all reasonable enquiries thereto, occurred and
no such correspondence has been received by any Obligor.
21.10 Claims pari passu
Each Obligor shall, subject to any Encumbrances permitted pursuant to
Clause 21.3 (Negative Pledge), ensure that at all times the claims of
each Finance Party against such Obligor under the Finance Documents to
which it is a party rank at least pari passu with the claims of all its
other unsecured and unsubordinated creditors save those whose claims
are preferred by the operation of mandatory Applicable Law applying to
companies generally.
21.11 Auditors
No Obligor shall, without the prior written consent of the Facility
Agent (such consent not to be unreasonably withheld) change or propose
to/at such Obligor's founder, general meeting or analogous body, as
applicable, the changing of such Obligor's Auditors except as provided
for in the definition of Auditors in Clause 1.1 (Definitions).
66
21.12 Bank accounts
(a) No Obligor shall, without the prior written consent of the Facility
Agent, acting on the instructions of the Majority Lenders:
(i) open, have, maintain or otherwise operate at any time a bank
account (or similar account) with a bank, other financial
institution or person except for the Income Accounts; and
(ii) in the case of Hungarian Telephone and Cable Corp., open,
have, maintain or otherwise operate at any time a bank account
(or similar account) with a bank, other financial institution
or person which is a holder of any Note(s) at such time other
than for the Income Accounts of Hungarian Telephone and Cable
Corp. held with Postabank es Takarekpenztar Reszvenytarsasag
as at the date of this Agreement Provided that Hungarian
Telephone and Cable Corp. unconditionally and irrevocably
agrees and undertakes not to allow a payment into such Income
Account which on any day exceeds an amount equivalent to fifty
thousand euro (EUR 50,000) and in any calendar Month, exceed
in aggregate an amount equivalent to one hundred thousand euro
(EUR 100,000).
(b) Each Obligor shall procure and ensure that all of its respective Income
is paid into an Income Account.
(c) Each Obligor agrees and undertakes that if it opens any additional bank
or similar account(s) (having first received the prior written consent
of the Facility Agent, acting on the instructions of the Majority
Lenders), prior to or simultaneous with such account(s) becoming
operational, such Obligor will create an Encumbrance over such
account(s) in favour of the Security Agent, substantially in the form
of a Pledge Over Bank Accounts Agreement, with such amendments as the
Security Agent shall require to reflect the circumstances at such time
and any changes in Applicable Law.
(d) In the event that Hungarian Telephone and Cable Corp. receives any
Income from any person whatsoever who is at such time exercising any
call options, warrants or similar rights that such person holds in the
equity capital of Hungarian Telephone and Cable Corp., other than in
respect of any stock options awarded to employees (and former
employees) of Hungarian Telephone and Cable Corp., Hungarian Telephone
and Cable Corp. agrees and undertakes to open the Escrow Account and
either:
(i) to deposit such moneys in the Escrow Account; or
(ii) to open a bank account with an Affiliate of the Escrow Bank in
the United States of America and deposit such moneys in such
bank account with such bank account being subject to an
unconditional and irrevocable instruction from Hungarian
Telephone and Cable Corp. to transfer immediately such moneys
to the Escrow Account,
and to hold such moneys in the Escrow Account until such time as the
Facility Agent, acting on the instructions of the Majority Lenders,
determines, without undue delay, that no Event of Default under Clause
22.22 (Ownership of Hungarian Telephone and Cable Corp.) has arisen and
is continuing as a result of the exercise of such call options,
warrants or rights, including those in respect of any stock options
awarded to employees (and former employees) of Hungarian Telephone and
Cable Corp. (and for the purposes of this paragraph (d) the term
"employees" shall be construed so as to include directors, officers and
employees).
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21.13 Loans and guarantees
(a) Save as expressly permitted pursuant to this paragraph (a), no Borrower
shall at any time, without the prior written consent of the Facility
Agent, acting on the instructions of the Majority Lenders, make any
loans, grant any credit or give any guarantee or indemnity whatsoever
(except as required or provided for under any Finance Document) to or
for the benefit of any person whatsoever or otherwise voluntarily
assume any liability whatsoever, whether actual or contingent, in
respect of any obligation of any other person. Each Borrower may from
time to time extend a Permitted Inter-company Loan, being a loan or
loans to other Borrower(s) and/or to HTCC Tanacsado Reszvenytarsasag
for the purposes of, but not limited to, short-term working capital
requirements of the recipient Borrower or HTCC Tanacsado
Reszvenytarsasag, as applicable, the outstanding amount(s) of which in
aggregate do(es) not at any time exceed an amount equivalent to two
million dollars (USD 2,000,000). No Borrower (being a recipient
Borrower), to which a loan has been extended by another Borrower, may
itself extend a loan to any other Borrower(s) until such time as such
recipient Borrower has repaid all amounts outstanding to each other
Borrower prior to such time. The aggregate amount of all indebtedness
arising pursuant to this paragraph (a) shall not at any time exceed an
amount equivalent to six million dollars (USD 6,000,000).
(b) Neither Hungarian Telephone and Cable Corp. nor HTCC Tanacsado
Reszvenytarsasag shall, without the prior written consent of the
Facility Agent, acting on the instructions of the Majority Lenders,
make any loans, grant any credit or give any guarantee or indemnity
whatsoever (except as required or provided for under any Finance
Document) to or for the benefit of any person whatsoever or otherwise
voluntarily assume any liability whatsoever, whether actual or
contingent, in respect of any obligation of any other person, other
than such loans granted to the Borrowers as are disclosed in the Letter
of Borrowings and Encumbrances.
(c) Each of Hungarian Telephone and Cable Corp. and HTCC Tanacsado
Reszvenytarsasag will take such steps and actions as are necessary and
appropriate and procure and ensure that within two (2) years of the
date of this Agreement, the loans provided for in paragraph (b) above
(other than such loans which arose directly from the funds resulting
from the issue of the Notes) which are outstanding at such time are
duly converted into registered paid-up share capital in the Borrowers,
and such other member of the Group will provide Hungarian Telephone and
Cable Corp. and HTCC Tanacsado Reszvenytarsasag with all assistance
necessary to procure and complete such conversion.
(d) Subject to paragraph (e) below, each of the Obligors shall, at all
times, procure and ensure that any and all indebtedness of each
Borrower owed to Hungarian Telephone and Cable Corp. and/or HTCC
Tanacsado Reszvenytarsasag is at all times and in all respects fully
subordinated to any indebtedness and/or other obligations of each such
Borrower owing or expressed to be in favour of any Finance Party. Each
Obligor will enter into the Subordination and Trust Deed and any other
agreement, contract or arrangement deemed necessary or desirable by the
Facility Agent, acting on the instructions of the Majority Lenders, to
give full effect to such subordination.
(e) Subject to there being no Default or Event of Default which is
continuing at such time, the Borrowers shall, notwithstanding paragraph
(d) above, be entitled to pay interest on the loans provided for in
paragraph (c) above which arose directly from the funds resulting from
the issue of the Notes (including, to the extent that such Borrower is
able to do so from Net Cumulative Excess Cash Flow, represented by
cash-at-bank, any such interest accruing during any period in which an
Event of Default or Default is continuing, with such payment to be made
only following receipt by such Borrower of a written waiver in respect
of such Event of Default or Default from the Facility Agent, acting on
the instructions of the Majority Lenders), with such rate of interest
to be no higher than the rate of interest accruing pursuant to the
Notes. Other
68
than as provided for in this paragraph (e), no Borrower shall, without
the prior written consent of the Facility Agent, acting on the
instructions of the Majority Lenders, make any payment of any interest
on any indebtedness owed to another member of the Group (save, where
such interest is at an arm's length open-market rate, in respect of
inter-Borrower loans expressly permitted pursuant to paragraph (a)
above).
21.14 Shares
No Obligor shall, without the prior written consent of the Facility
Agent, acting on the instructions of the Majority Lenders, alter any
rights attaching to its issued ordinary shares, Preference Shares
and/or Warrants in existence at the date of this Agreement. No Obligor
shall, without the prior written consent of the Facility Agent, acting
on the instructions of the Majority Lenders, issue any share or other
equity instrument whatsoever which is redeemable at the option of the
holder or which, does not expressly provide for, at all times up to the
full discharge of all obligations and liabilities in favour of the
Finance Parties under the Finance Documents, the obtaining, at the
time(s) of any redemption(s), of the prior written consent of the
Facility Agent, acting on the instructions of the Majority Lenders.
21.15 Distributions
(a) Subject to paragraphs (b), (c) and (d) below, no member of the Group
(other than PILISTAV Tavkozlesi, Epito es Szolgaltato Korlatolt
Felelossegu Tarsasag) shall make any Distribution which is not a
payment of amounts due and payable under any Permitted Management
Contract, in respect of or on account of any due and payable Related
Party Payment, in respect of or on account of any due and payable
Permitted Fee Distribution or in respect of or on account of a due and
payable Distribution arising under the Preference Shares or a repayment
of any amount outstanding pursuant to and arising under a Permitted
Inter-company Loan.
(b) No member of the Group shall, without the prior written consent of the
Facility Agent, acting on the instructions of the Majority Lenders,
make any Distribution at a time when an Event of Default is continuing
or would arise if such Distribution were made.
(c) Subject to paragraph (b) above, prior to the later of the Trigger Date
and 1 January 2003, no Borrower shall, without the prior written
consent of the Facility Agent, acting on the instructions of the
Majority Lenders make any Distribution to Hungarian Telephone and Cable
Corp. and/or HTCC Tanacsado Reszvenytarsasag, other than any such
Distribution being used to make the payments of interest arising under
the Notes Provided that, in any event, a condition of any such consent
for any other Distribution would include, but not be limited to, an
amount equivalent to or more than the proposed amount of such
Distribution being applied to prepay the Facility A Loan, such
prepayment to be applied in inverse order of maturity.
(d) Following the later of the Trigger Date and 1 January 2003, a Borrower
may make a Distribution to Hungarian Telephone and Cable Corp. of an
amount equivalent to the amount of Net Cumulative Excess Cashflow up to
the date of such proposed Distribution, with the full amount of such
Distribution being used to make the payments of interest and/or to
prepay and redeem one or more of the Notes Provided that it is agreed
that if the Trigger Date occurs on or before 30 September 2003, the
Obligors will, in respect of the 2003 financial year of the Obligors,
be entitled to calculate and determine the amount of Net Cumulative
Excess Cashflow for the first three (3) quarters of such financial
year, as evidenced by the relevant 10Q Document, and apply such amount,
together with any other Net Cumulative Excess Cashflow towards the
prepayment of Notes and any directly related payment then due and
payable in respect of the relevant cancellation of Warrants on or after
15 December 2003.
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21.16 Reduction of capital
Save as may be required to comply with mandatory Applicable Law, no
Obligor shall, without the prior written consent of the Facility Agent,
acting on the instructions of the Majority Lenders, propose to/at any
Obligor's founder or general meeting, as applicable, the reduction of
such Obligor's registered and paid-up share capital or pass such
resolution and each Obligor agrees that it shall not take any action or
steps whatsoever to facilitate the reduction of its registered and
paid-up share capital without the prior written consent of the Facility
Agent, acting on the instructions of the Majority Lenders. Each Obligor
shall not without the prior written consent of the Facility Agent,
acting on the instructions of the Majority Lenders, agree, permit or
otherwise allow or fail to take steps to prevent any person from
withdrawing funds from an Obligor's assets and/or business save as
provided for and permitted in the Finance Documents.
21.17 Material contracts
No Obligor shall, without the prior written consent of the Facility
Agent, acting reasonably, enter into any material agreement(s) and
material contract(s) which is entered into on business terms that are
worse than at arm's-length and/or which gives rise to a Material
Adverse Effect.
21.18 Revocation
No Obligor shall, without the prior written consent of the Facility
Agent, take any formal action or fail to perform any duty or obligation
which is likely to lead to the revocation of any Finance Document to
which such Obligor is a party or to the cancellation or suspension of
the rights of such Obligor included in any such agreement.
21.19 Articles of Association
No Obligor shall, without the prior written consent of the Facility
Agent, acting on the instruction of the Majority Lenders, propose to/at
any Obligor's founder or general meeting, as applicable, an amendment
to its Articles of Association which gives rise to a Material Adverse
Effect.
21.20 Hedging Strategy
(a) Each Borrower shall ensure that at all times it has devised a Hedging
Strategy appropriate at such time and that such Hedging Strategy is
duly being implemented pursuant to the Hedging Documents.
(b) Each Borrower will notify the Facility Agent in writing of the Hedging
Strategy and promptly of any changes to such Hedging Strategy.
(c) No Obligor shall, without the prior written consent of the Facility
Agent, acting on the instructions of the Majority Lenders, enter into
any agreement, arrangement or contract whatsoever which might have a
material adverse effect on the Hedging Strategy or on the
implementation of the Hedging Strategy and/or which might amount to
speculation, gambling or risk taking in respect of any fluctuation in
any rate or price.
(d) Each Borrower will promptly notify the Facility Agent and the Security
Agent of the execution of any Hedging Document and take all steps and
actions to procure and ensure that the benefit of each such Hedging
Document is assigned as quickly as practicable in favour of the
Security Agent (acting on behalf of the Finance Parties) on terms and
conditions required by the Security Agent (in consultation with the
other Finance Parties) at such time.
(e) Each Borrower shall procure and ensure that:
70
(i) in respect of any Hedging Document entered into on or prior to
the date of this Agreement, on the date of this Agreement, the
other party to such Hedging Document becomes a party to the
Subordination and Trust Deed (in the capacity of Hedging
Director); and
(ii) in respect of any Hedging Document entered into after the date
of this Agreement, the other party to such Hedging Document
becomes a party to the Subordination and Trust Deed (in the
capacity of Hedging Director) within five (5) Business Days of
entering into such Hedging Document.
21.21 Alteration or amendment of Finance Documents
No Obligor shall alter or amend, or cause to be altered or amended, any
of the Finance Documents to which it is a party, without the prior
written consent of the Facility Agent acting on the instructions of the
Majority Lenders or, if expressly provided for in such a Finance
Document, all of the Lenders Provided that each Obligor will promptly
take any actions or other steps required or desirable under Applicable
Law to give full force and effect to the Finance Documents (and to the
rights, security interests and Encumbrances created in such Finance
Documents) to which it is a party.
21.22 Filing of tax returns
Each Obligor shall file or cause to be filed all tax returns required
to be filed in all jurisdictions in which it and/or any of its
subsidiaries is situated or carries on business or otherwise subject to
pay tax and will promptly pay all taxes which are due and payable on
such returns or any assessment made against it except to the extent
contested in good faith and by appropriate means and either adequate
reserves have been set aside with respect to the unpaid amount or the
Obligor has established to the satisfaction of the Facility Agent,
acting on the instructions of the Majority Lenders, that the setting
aside of adequate reserves is not necessary Provided that an Obligor
will notify the Facility Agent in writing as soon as practicable after
such Obligor decides to contest the amount of tax due and/or payable by
it.
21.23 Amount of Loan specified in the Utilisation Request
Each Obligor will ensure that the amounts specified in any issued
Utilisation Request is in full accordance with the amount(s) provided
for pursuant to this Agreement.
21.24 Environment Each Obligor shall comply with:
(a) all Applicable Law concerning the protection of the
environment; and
(b) the terms of all permits and authorisation required by any
Applicable Law in respect of the environment for the ownership
and operation of its business,
in the manner and to the extent required to procure and ensure the
avoidance of the occurrence of a Material Adverse Effect.
21.25 No new Financial Indebtedness
(a) Hungarian Telephone and Cable Corp. shall not without (subject to
paragraph (d) of Clause 34.2 (Exceptions)) the prior written consent of
the Facility Agent, acting on the instructions of the Majority Lenders,
make or enter into any agreement or arrangement whatsoever whereby any
additional Financial Indebtedness will be created, established or
incurred, by Hungarian Telephone and Cable Corp., or otherwise permit
to subsist any such additional Financial Indebtedness other than in
respect of the Notes Provided that, for the avoidance of doubt, any
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Financial Indebtedness arising pursuant to and/or in respect of
Hungarian Telephone and Cable Corp.'s obligations and liabilities
towards the Finance Parties under the Finance Documents to which
Hungarian Telephone and Cable Corp. is a party shall not fall within
the scope of the restriction expressly provided for in this paragraph
(a).
(b) HTCC Tanacsado Reszvenytarsasag shall not, without (subject to
paragraph (e) of Clause 34.2 (Exceptions)) the prior written consent of
the Facility Agent, acting on the instructions of the Majority Lenders,
make or enter into any agreement or arrangement whatsoever whereby any
additional Financial Indebtedness will be created, established or
incurred, by HTCC Tanacsado Reszvenytarsasag, or otherwise permit to
subsist any such additional Financial Indebtedness other than:
(i) in respect of any vendor finance provided to HTCC Tanacsado
Reszvenytarsasag by any telecommunications or civil works
contractor or telecommunications equipment supplier, in each
case with an initial maturity of up to one hundred and twenty
(120) days, as extended in the ordinary course of trade; or
(ii) indebtedness expressly contemplated and/or permitted pursuant
to paragraph (a) of Clause 21.13 (Loans and guarantees),
Provided that, for the avoidance of doubt, any Financial Indebtedness
arising pursuant to and/or in respect of HTCC Tanacsado
Reszvenytarsasag's obligations and liabilities towards the Finance
Parties under the Finance Documents to which HTCC Tanacsado
Reszvenytarsasag is a party shall not fall within the scope of the
restriction expressly provided for in this paragraph (b).
(c) No Borrower shall, without (subject to paragraph (f) of Clause 34.2
(Exceptions)) the prior written consent of the Facility Agent, acting
on the instructions of the Majority Lenders, make or enter into any
agreement or arrangement whatsoever whereby any additional Financial
Indebtedness will be created, established or incurred, by such Borrower
or any of them, or otherwise permit to subsist any such additional
Financial Indebtedness other than:
(i) in respect of the Loans utilised pursuant to this Agreement;
(ii) in respect of the Hedging Documents;
(iii) in respect of any vendor finance provided to any Borrower by
any telecommunications or civil works contractor or
telecommunications equipment supplier, in each case with an
initial maturity of up to one hundred and twenty (120) days,
as extended in the ordinary course of trade,
(iv) indebtedness expressly contemplated and/or permitted pursuant
to paragraph (a) of Clause 21.13 (Loans and guarantees); or
(v) in respect of any indebtedness not already falling into the
scope of paragraphs (i) to (iv) inclusive above, is in
aggregate for an amount not more than the equivalent of five
million euro (EUR 5,000,000),
Provided that, for the avoidance of doubt, any Financial Indebtedness
arising pursuant to and/or in respect of any of the Borrower's
obligations and liabilities towards the Finance Parties under the
Finance Documents to which such Borrower(s) is/are a party shall not
fall within the scope of the restriction expressly provided for in this
paragraph (c).
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21.26 Stamp Taxes
Each Obligor shall as quickly as practicable upon becoming aware of any
requirement to do so (including following the receipt of written
notification by the Facility Agent in respect thereof) take and/or
procure the taking of all actions required to be done, fulfilled or
performed in order to pay any stamp, registration or similar Tax or
charges arising under any of the Finance Documents.
21.27 Litigation
Each Obligor shall, promptly upon becoming aware of the same, notify
the Facility Agent in writing of any material litigation, arbitration,
administrative proceedings or other actions, whatsoever, of or before
any court, arbitral body, agency or similar body whatsoever, involving
any Obligor not previously disclosed to each Finance Party pursuant to
this Agreement including, inter alia, in each 10K Document and 10Q
Document, which, if adversely determined, would give rise to a Material
Adverse Effect and will continue to provide written updates of any
material developments in respect of any such material litigation,
arbitration, administrative proceedings or other actions to the
Facility Agent.
21.28 Purpose of the Loans
Each of the Borrowers shall apply each Facility A Loan and each
Facility B Loan to its intended purpose as specified in Clause 3.1
(Purpose).
21.29 Additional security
Each Obligor except Hungarian Telephone and Cable Corp. shall:
(a) maintain an inventory ("Leltar") of each of its assets which
are of a type and/or class capable of being the subject of a
fixed charge pursuant to a Fixed Charge Agreement which exceed
a value of ten million forints (HUF 10,000,000), a copy of
which shall from time to time at the request of the Facility
Agent acting reasonably and in any event within thirty (30)
days of the acquisition of any such asset and within ninety
(90) days of the end of each financial year be delivered to
the Facility Agent;
(b) once the aggregate value of assets detailed in the Inventory
of Business Assets, which are not already subject to a fixed
charge pursuant to a Fixed Charge Agreement, equals or exceeds
an amount equivalent to two hundred and fifty thousand euro
(EUR 250,000), such Obligor shall promptly and in any event
within ten (10) days of a request in writing by the Facility
Agent, acting reasonably, execute a Fixed Charge Agreement in
favour of the Security Agent acting on behalf of all of the
Finance Parties over such assets as identified to it by the
Facility Agent; and
(c) promptly upon the written request of the Facility Agent,
acting reasonably, execute further assignment of contractual
agreements in favour of the Security Agent in respect of new
contracts and agreements which give rise to interests, rights
and benefits in favour of such Obligor which are capable of
being assigned with such further assignment of contractual
rights agreements to be substantially in the form of an
Assignment of Contractual Rights Agreement, with such
amendments as the Security Agent shall require to reflect the
circumstances at such time and any changes in Applicable Law.
21.30 Notes
(a) Hungarian Telephone and Cable Corp. shall not alter the terms and
conditions of the Notes without the prior written consent of the
Facility Agent, acting on the instructions of the Majority Lenders.
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(b) Prior to the occurrence of a Default or Event of Default which is
continuing, Hungarian Telephone and Cable Corp. will duly pay all
interest arising under the Notes on the dates such interest falls due
and payable.
(c) Following the occurrence of a Default or Event of Default, Hungarian
Telephone and Cable Corp. will not, without the prior written consent
of the Facility Agent, acting on the instructions of the Lenders, pay
any interest or other amounts whatsoever arising under the Notes until
the Obligors have duly performed and discharged in full their
respective obligations and liabilities to the Finance Parties under the
Finance Documents.
21.31 Preference Shares
If Citizens at any time exercises its conversion rights under all or
any of the Preference Shares, Hungarian Telephone and Cable Corp. shall
inform the Facility Agent of such exercise with three (3) Business Days
of becoming aware of such occurrence.
21.32 Minority shareholders
If any minority shareholder of a Borrower at any time converts, swaps
or in any way exchanges its shareholding in such Borrower for issued
and fully paid-up shares in Hungarian Telephone and Cable Corp.,
Hungarian Telephone and Cable Corp. shall promptly thereafter grant an
Encumbrance over such issued and fully paid-up shares in such Borrower
in favour of the Security Agent acting on behalf of the Lenders. Such
Encumbrance(s) are to be created by and constituted in a security
deposit agreement in all material respects in the form of Security
Deposit Agreements, with such changes as the Security Agent may require
to reflect changes in Applicable Law.
21.33 Further assurance
Each Obligor shall, at its own expense, execute and do all such
assurances, acts and things as the Facility Agent and/or the Security
Agent may reasonably require for perfecting, or protecting the
interests of the Finance Parties under, the security and subordination
constituted or evidenced or purported to be constituted or evidenced by
any of the Finance Documents.
21.34 Concession Contracts
(a) Each Borrower will take all best efforts to maintain in full force and
effect and to comply in all material respects with the Concession
Contracts to which such Borrower is a party.
(b) Each Borrower will promptly copy to the Facility Agent any material
correspondence in respect of the Concession Contracts received from any
other party to and/or in connection with such Concession Contracts
and/or the Telecommunications Authority.
21.35 Related Party Payments
No Obligor shall, without the prior written consent of the Facility
Agent, acting on the instructions of the Majority Lenders, make any
prepayment or otherwise accelerate any payment of, on account of or
otherwise in respect of any Related Party Payment.
22. EVENTS OF DEFAULT
Each of the facts, events or circumstances set out in Clause 22 is an
Event of Default.
22.1 Non-payment
An Obligor does not pay on the due date any amount payable pursuant to
any Finance Document at the place at and in the currency in which it is
expressed to be payable unless:
(i) its failure to pay is caused by administrative or technical
error; and
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(ii) payment is made within three (3) Business Days of its due
date.
22.2 Financial covenants
Any requirement of Clause 20 (Financial Covenants) is not satisfied
Provided that it shall not be an Event of Default under this Clause
22.2 if, between the last day of the financial accounting period to
which a 10K Document or 10Q Document relates and the delivery of such
10K Document or 10Q Document to the Facility Agent in compliance with
the requirements under this Agreement, one or more shareholders of
Hungarian Telephone and Cable Corp. provide funds to Hungarian
Telephone and Cable Corp., in the form of non-redeemable paid-up share
capital and/or Financial Indebtedness fully subordinated to the Senior
Credit (as defined in the Subordination Trust Deed), with such
shareholder(s) becoming a party (or parties, as applicable) to the
Subordination and Trust Deed, as a Subordinated Creditor (as defined in
the Subordination and Trust Deed), in a minimum amount of five million
dollars (USD 5,000,000) or such greater amount as would have ensured
that, if Hungarian Telephone and Cable Corp. had received such funds
during the relevant financial accounting period, there would have been
no breach of or failure to comply with the requirements of Clause 20
(Financial Covenants).
22.3 Other obligations
(a) An Obligor does not comply with any provision of the Finance Documents
(other than those referred to in Clause 22.1 (Non-payment) and Clause
22.2 (Financial covenants)).
(b) No Event of Default under paragraph (a) above will occur:
(i) in relation to Clause 21 (General Undertakings) if the failure
to comply is capable of remedy and is remedied within ten (10)
Business Days or, if in order to effect such remedy, an
application must be made to an organ, agency or other
administrative or regulatory body of Hungary, then such period
shall be extended by a further twenty (20) Business Days; or
(ii) any other obligation which is deemed to be material by the
Facility Agent, expressed to be assumed by any Obligor in any
of the Finance Documents to which such Obligor is a party and
such failure, if capable of remedy, is remedied within twenty
five (25) Business Days or, if in order to effect such remedy,
an application must be made to an organ, agency or other
administrative or regulatory body of Hungary, then such period
shall be extended by a further fifteen (15) Business Days.
22.4 Misrepresentation
Any representation or statement made or deemed to be made by an Obligor
in the Finance Documents or any other document delivered by or on
behalf of any Obligor under or in connection with any Finance Document
is or proves to have been incorrect or misleading in any material
respect when made or deemed to be made and, if the circumstance(s)
giving rise to or causing such misrepresentation are, in the opinion of
the Facility Agent, acting on the instructions of the Majority Lenders,
capable of remedy, the Obligor has failed to remedy such
circumstance(s) within ten (10) Business Days of the making or deemed
making of such incorrect or misleading representation or statement.
22.5 Cross default
(a) Any Financial Indebtedness (other than any Financial Indebtedness which
is owed to any other member of Group and which is subject to the
Subordination and Trust Deed) of any member of the Group (other than
PILISTAV Tavkozlesi, Epito es Szolgaltato Korlatolt Felelossegu
Tarsasag) is not paid when due or within any originally applicable
grace period.
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(b) Any Financial Indebtedness (other than any Financial Indebtedness which
is owed to any other member of Group and which is subject to the
Subordination and Trust Deed) of any member of the Group (other than
PILISTAV Tavkozlesi, Epito es Szolgaltato Korlatolt Felelossegu
Tarsasag) is or is capable of being declared to be or otherwise becomes
due and payable prior to its specified maturity as a result of an event
of default (however described or provided for).
(c) Any commitment for any Financial Indebtedness of any member of the
Group (other than PILISTAV Tavkozlesi, Epito es Szolgaltato Korlatolt
Felelossegu Tarsasag) is cancelled or suspended by a creditor of any
member of the Group as a result of an event of default (however
described or provided for).
(d) Any creditor of any member of the Group (other than PILISTAV
Tavkozlesi, Epito es Szolgaltato Korlatolt Felelossegu Tarsasag)
becomes entitled to declare any Financial Indebtedness (other than any
Financial Indebtedness which is owed to any other member of Group and
which is subject to the Subordination and Trust Deed) of any member of
the Group (other than PILISTAV Tavkozlesi, Epito es Szolgaltato
Korlatolt Felelossegu Tarsasag) due and payable prior to its specified
maturity as a result of an event of default (however described or
provided for).
(e) Any Encumbrance securing Financial Indebtedness over any asset of any
of the Borrowers becomes enforceable as a result or by virtue of the
occurrence of an event of default (however described or provided for).
(f) No Event of Default will occur under this Clause 22.5 if the aggregate
amount of Financial Indebtedness or commitment for Financial
Indebtedness falling within paragraphs (a) to (e) above is less than
two hundred and fifty thousand euro (EUR 250,000) (or its equivalent in
any other currency or currencies aggregated with the anticipated
monetary value, cost or other expense of all then applicable claims
provided for in Clause 22.10 (Litigation)).
22.6 Insolvency
(a) A member of the Group is unable or admits inability to pay its debts as
they fall due, suspends making payments on any of its debts makes a
general assignment for the benefit of or a composition with its
creditors, or seeks any of the protections provided for in the
Bankruptcy Act or in its relevant jurisdiction, becomes subject to any
of the procedures provided for in the Bankruptcy Act or in its relevant
jurisdiction, and in the case of any such proceeding instituted against
it (but not instituted by it), either such proceeding shall remain
undismissed or unstayed for a period of forty five (45) days, or any of
the actions sought in such proceeding (including the entry of an order
for relief against it or the appointment of a receiver, trustee,
custodian or other similar official for it or for any part of its
assets) shall occur or, by reason of actual or anticipated financial
difficulties, commences negotiations with one or more of its creditors
with a view to rescheduling any of its indebtedness Provided that a
mere claimant against an Obligor shall not be regarded as a creditor
until such claim is recognised by such Obligor pursuant to Applicable
Law or otherwise.
(b) To the extent that, at any time, the value of the assets of any
Borrower is less than its liabilities (taking into account contingent
and prospective liabilities) such Borrower fails at such time to take
all appropriate and applicable steps to procure and ensure full
compliance with mandatory Applicable Law and the requirements under the
Concession Contracts.
(c) A moratorium is declared in respect of any indebtedness of any member
of the Group.
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22.7 Insolvency proceedings
Any corporate action, legal proceedings or other procedure or step is
taken in relation to:
(a) the suspension of payments, a moratorium of any indebtedness,
winding-up, dissolution, administration or reorganisation (by
way of voluntary arrangement, scheme of arrangement or
otherwise) of any member of the Group other than a solvent
liquidation or reorganisation of any member of the Group which
is not an Obligor;
(b) a composition, assignment or arrangement with any creditor of
any member of the Group;
(c) the appointment of a liquidator (other than in respect of a
solvent liquidation of a member of the Group which is not an
Obligor), receiver, administrator, administrative receiver,
compulsory manager or other similar officer in respect of any
member of the Group or any of its assets; or
(d) enforcement of any Encumbrance over any assets of any member
of the Group.
22.8 Unlawfulness
(a) It is or becomes unlawful and/or in conflict with any Applicable Law
for an Obligor to comply, perform and/or discharge any of its payment
obligations under the Finance Documents which, in the opinion of the
Facility Agent, acting on the instructions of the Majority Lenders,
cannot be fully addressed and/or mitigated so as to leave the Finance
Parties in no worse a position than that prior to such unlawfulness.
(b) It is or becomes unlawful and/or in conflict with any Applicable Law
for an Obligor to comply, perform and/or discharge any or all of such
Obligor's material non-payment obligations and liabilities under the
Finance Documents which, in the opinion of the Facility Agent, acting
on the instructions of the Majority Lenders, gives rise to a Material
Adverse Effect.
22.9 Repudiation
An Obligor repudiates a Finance Document or clearly evidences an
intention to repudiate a Finance Document.
22.10 Litigation
Notwithstanding any notification to the Facility Agent pursuant to this
Agreement, any litigation, arbitration, administrative proceedings or
other actions whatsoever are commenced against any Obligor and/or any
other member(s) of the Group or the nature of any existing such
proceedings or other actions changes in any way whatsoever which, if it
were to be adversely determined, in the opinion of the Facility Agent,
acting on the instructions of the Majority Lenders, gives rise to a
Material Adverse Effect and which such Obligor and/or such other
member(s) of the Group fail(s) within a reasonable period of time (as
determined by the Facility Agent, acting on the instructions of the
Majority Lenders) to demonstrate, to the satisfaction of the Facility
Agent, acting on the instructions of the Majority Lenders, that such
Obligor and other member of the Group is contesting such proceedings or
actions in good faith and that such contesting has a reasonable
expectation of being successful and/or that the reasonably anticipated
monetary value, cost or other expense of such claim(s) individually
does not exceed the equivalent of one million euro (EUR 1,000,000) and
in aggregate do(es) not exceed the equivalent of one million five
hundred thousand euro (EUR 1,500,000) when aggregated with the amount,
if any, of Financial Indebtedness to which the operative provisions of
Clause 22.5 (Cross default) then applies.
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22.11 Execution or distress
Any execution or distress is levied against, or an encumbrancer takes
possession of, the whole or any part of, the property, undertaking or
assets of any Obligor which when aggregated with all other execution
and distress exceeds an amount equivalent to one hundred and twenty
five thousand euro (EUR 125,000) which such Obligor fails to
demonstrate within a reasonable period of time (as determined by the
Facility Agent, acting reasonably) to the satisfaction of the Facility
Agent, acting reasonably, are frivolous or vexatious and/or will be
paid out and/or duly discharged within thirty (30) Business Days, or
such later date as the Facility Agent, acting on the instructions of
the Majority Lenders, may agree.
22.12 Analogous events
Any event occurs in respect of an Obligor which under the laws of any
jurisdiction has a similar or analogous effect to any of those events
mentioned in Clause 22.6 (Insolvency), Clause 22.7 (Insolvency
proceedings) or Clause 22.11 (Execution or distress).
22.13 Governmental intervention
By or under the authority of any government any of the following events
occur or threaten to occur: (a) the management of any Obligor is wholly
or partially displaced or the authority of any Obligor in the conduct
of its business is wholly or partially curtailed; or (b) all or a
majority of the issued and paid-up shares of any Obligor or the whole
or any part of its respective revenues or assets is seized,
nationalised, expropriated or compulsorily acquired.
22.14 Control of Hungarian Telephone and Cable Corp.
Other than pursuant to any transaction made in compliance with
paragraph (c) of Clause 22.22 (Ownership of Hungarian Telephone and
Cable Corp.) or as expressly approved in advance in writing by the
Facility Agent, acting on the instructions of the Majority Lenders, any
person and/or Related Party of such person and/or any other person
acting in concert with such person gains control over Hungarian
Telephone and Cable Corp. and, for these purposes, control of Hungarian
Telephone and Cable Corp. shall include the ability to, directly or
indirectly, direct its affairs and/or direct and/or control the
composition of its board of directors or equivalent body as well as
ownership, beneficially and/or legally, directly and/or indirectly, of
more than half the issued share capital of Hungarian Telephone and
Cable Corp.
22.15 Ownership of the Borrowers
Other than as expressly approved in advance in writing by the Facility
Agent, acting on the instructions of the Majority Lenders, other than
for the purposes of consolidation with another Borrower or in
connection with an issue of shares on the Budapest Stock Exchange for
the purpose of meeting the Hungarian ownership requirements of the
relevant Concession Contract, Hungarian Telephone and Cable Corp.
sells, transfers or otherwise disposes of any of its issued share
capital of a Borrower or of HTCC Tanacsado Reszvenytarsasag.
22.16 The Obligors' business
Any Obligor ceases to carry on or changes in any material respect the
business it carries on at the date of this Agreement or enters into any
unrelated business which in the opinion of the Facility Agent, acting
on the instructions of the Majority Lenders, gives rise to a Material
Adverse Effect and such circumstance(s), if capable of remedy, is/are
not remedied within ten (10) Business Days.
22.17 Validity and admissibility
At any time any act, condition or thing required to be done, fulfilled
or performed in order: (a) to enable an Obligor lawfully to enter into,
exercise its rights under and perform the obligations expressed to be
assumed by it under any of the Finance Documents to which it is a
party; or (b) to ensure that the obligations expressed to be assumed by
an Obligor under any of the Finance
78
Documents to which it is a party are legal, valid, in full force and
effect, binding on and enforceable against it; or (c) to make the
Finance Documents admissible in evidence in Hungary is not done,
fulfilled or performed and, if such failure to do, fulfil or perform is
capable of being remedied, the same is not so remedied within twenty
(20) Business Days of the date of any written notice given by the
Facility Agent to such Obligor in respect of such failure or, if in
order to effect such remedy, an application must be made to an organ,
agency or other administrative or regulatory body of any jurisdiction,
then such period shall be extended by a further twenty (20) Business
Days Provided that in respect of those Finance Documents which were not
executed in the Hungarian language and for which no official
translation is available in the Hungarian language, the Borrower shall
be only be obligated to have such Finance Documents officially
translated into the Hungarian language upon receipt of a written
request from the Facility Agent, acting reasonably, and on the receipt
of such a written request the Borrowers shall arrange for the prompt
translation into the Hungarian language of such Finance Documents and
the prompt delivery of such translations to the Facility Agent.
22.18 Performance of obligations
Any fact(s), event(s) or other circumstance(s) or series of the
foregoing arise(s) (other than any such fact(s), event(s) or other
circumstance(s) which already fall fully into the scope of any other
specific Event of Default expressly provided for in this Clause 22)
which in the opinion of the Facility Agent, acting on the instructions
of the Majority Lenders, gives rise to a Material Adverse Effect.
22.19 Failure to implement Hedging Strategy
An Obligor, at any time, fails to duly and properly comply with the
terms of Clause 21.20 (Hedging Strategy) and/or in the opinion of the
Facility Agent, acting on the instructions of the Majority Lenders, the
strategy (if any) adopted by the Obligors is inappropriate and/or
inadequate and gives rise to a Material Adverse Effect and such
circumstances, if capable of remedy are not remedied within ten (10)
Business Days.
22.20 Failure to comply with final judgment
Any Obligor fails to comply with or pay any sum due from it under any
material final judgment or any final order made or given by any court
of competent jurisdiction.
22.21 Concession Contracts
Any Borrower publicly announces that it is abandoning or intends to
abandon the activities which it carries out pursuant to a Concession
Contract or the decision of a Borrower to abandon such activities
becomes public or a Borrower fails or is unable to comply with any of
the terms of a Concession Contract or any other contract which is
material to such Borrower's ability to carry on its business or
revocation, cancellation or surrender of a Concession Contract occurs.
22.22 Ownership of Hungarian Telephone and Cable Corp.
Prior to the later of: (i) 31 December 2001; and (ii) the Trigger Date:
(a) Tele Danmark A/S and/or any person which at all times and in
all respects is a wholly owned Subsidiary of Tele Danmark A/S
and the IO Fund, together or individually, fail to maintain
ownership of a minimum of thirty point one per cent. (30.1%)
of the issued and paid-up share capital of Hungarian Telephone
and Cable Corp.; or
(b) Tele Danmark A/S and/or any person which at all times and in
all respects is a wholly owned Subsidiary of Tele Danmark A/S
fails to maintain ownership of the issued and paid-up share
capital of Hungarian Telephone and Cable Corp. which Tele
Danmark A/S holds at the date of this Agreement; or
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following the Trigger Date,
(c) Tele Danmark A/S and/or any person which at all times and in
all respects is a wholly owned Subsidiary of Tele Danmark A/S
sells, transfers or otherwise disposes of any or all of its
issued and paid-up shares in Hungarian Telephone and Cable
Corp. without the prior written consent of the Majority
Lenders Provided that such consent shall be based on the
determination by the Majority Lenders, acting reasonably, that
the proposed new shareholder in Hungarian Telephone and Cable
Corp. is an internationally recognised telecommunications
operator of similar standing to Tele Danmark A/S and has a
minimum long-term credit rating of A2 or better from Moody's
Investor Services or A or better from Standard and Poor's
Investor Services.
22.23 Technical and Management Support
Tele Danmark A/S fails duly to provide any of the Obligors with
technical and management support as such support is required by such
Obligor from time to time until the later of: (i) 31 December 2001; and
(ii) the Trigger Date.
22.24 Authorisations
Any Authorisation of any Competent Authority required for the
execution, delivery or performance of any Finance Document is modified
in any material respect, revoked or withdrawn or ceases to remain in
full force and effect and, in any such case, in the opinion of the
Facility Agent, acting on the instructions of the Majority Lenders, it
gives rise to a Material Adverse Effect and such circumstance is not
remedied within twenty five (25) Business Days, or if in order to
effect such remedy, an application must be made to an organ, agency or
other administrative or regulatory body of Hungary, then such period
shall be extended by a further fifteen (15) Business Days.
22.25 Financial Indebtedness
Any Obligor wilfully enters into any agreement, arrangement or contract
whatsoever with the primary intention of directly and/or indirectly
causing and/or giving rise to a breach of the provisions of the Finance
Documents regarding Financial Indebtedness, and/or Permitted Financial
Indebtedness.
22.26 Enforceability
Any of the Finance Documents cease to be enforceable and valid under
any Applicable Law or any of the Encumbrances created by and
constituted in the Security Agreements ceases to constitute a valid
first ranking Encumbrance, in a manner and to an extent which in the
opinion of the Facility Agent, acting on the instructions of the
Majority Lenders, has or would in all reasonable likelihood have a more
than nominal adverse effect on the interests of any of the Finance
Parties.
22.27 The Notes
Hungarian Telephone and Cable Corp. fails to make full payment under
the Notes on the date such interest falls due and payable.
22.28 Acceleration and cancellation
On and at any time after the occurrence of an Event of Default which is
continuing and which has not been expressly waived in writing by the
Facility Agent, acting on the instructions of the Majority Lenders or
Lenders, as appropriate, the Facility Agent may, and shall if so
directed by the Majority Lenders, by notice (by the Facility Agent or
any person on the Facility Agent's behalf) to the Obligors:
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(a) cancel the Total Commitments whereupon they shall immediately
be cancelled;
(b) declare that all or part of the Loans, together with accrued
interest, and all other amounts accrued under the Finance
Documents be immediately due and payable, whereupon they shall
become immediately due and payable; and/or
(c) declare that all or part of the Loans be payable on demand,
whereupon they shall immediately become payable on demand by
the Facility Agent on the instructions of the Majority
Lenders.
22.29 Loans Due on demand
If, pursuant to Clause 22.28 (Acceleration and cancellation), the
Facility Agent declares the Loan(s) to be due and payable on demand of
the Facility Agent, then, and at any time thereafter, the Facility
Agent may (and, if so instructed by the Majority Lenders, shall) by
written notice (by the Facility Agent or any person on the Facility
Agent's behalf) to the Borrowers:
(a) require repayment of the Loan(s) on such date as it may
specify in such notice (whereupon the same shall become due
and payable on such date together with accrued interest
thereon and any other sums then owed by the Borrowers under
this Agreement) or withdraw its declaration with effect from
such date as it may specify in such notice; and/or
(b) select as the duration of any Interest Period which begins
whilst such declaration remains in effect a period of three
(3) Months or less; and/or
(c) without prejudice to the provisions of any other Finance
Documents, declare that the Security Agreements (or any of
them) shall have become enforceable and enforce any or all of
the same.
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SECTION 8 - CHANGES TO PARTIES
23. CHANGES TO THE LENDERS
23.1 Assignments and transfers by the Lenders
Subject to this Clause 23, a Lender (the "Existing Lender") may:
(a) assign any of its rights; or
(b) transfer by novation any of its rights and obligations,
to another bank or financial institution (the "New Lender").
23.2 Conditions of assignment or transfer
(a) The consent of the Obligors is required for an assignment or transfer
by a Lender, unless the assignment or transfer is to another Lender or
an Affiliate of a Lender and/or an Event of Default at such time is
continuing.
(b) The consent of the Obligors to an assignment or transfer must not be
unreasonably withheld or delayed. The Obligors will be deemed to have
given their consent five (5) Business Days after the Lender has
requested it unless consent is expressly refused by the Obligors within
that time.
(c) The consent of the Obligors to an assignment or transfer must not be
withheld solely because the assignment or transfer may result in an
increase to the Associated Costs.
(d) An assignment will only be effective on receipt by the Facility Agent
of written confirmation from the New Lender (in form and substance
satisfactory to the Facility Agent) that the New Lender will assume the
same obligations to the other Finance Parties as it would have been
under if it was an Original Lender.
(e) A transfer will only be effective if the procedure set out in Clause
23.5 (Procedure for transfer) is complied with.
(f) Any assignment or transfer by an Existing Lender to a New Lender shall
only be effective if it transfers or assigns the Existing Lender's
share of each Facility pro rata.
(g) If:
(i) a Lender assigns or transfers any of its rights or obligations
under the Finance Documents or changes its Facility Office;
and
(ii) as a result of circumstances existing at the date the
assignment, transfer or change occurs, an Obligor would be
obliged to make a payment to the New Lender or Lender acting
through its new Facility Office under Clause 13 (Tax Gross-up
and Indemnities) or Clause 14 (Increased Costs),
then the New Lender or Lender acting through its new Facility Office is
only entitled to receive payment under those Clauses to the same extent
as the Existing Lender or Lender acting through its previous Facility
Office would have been if the assignment, transfer or change had not
occurred.
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23.3 Assignment or transfer fee
In respect of any assignment or transfer which takes place after the
period commencing on the date of this Agreement and ending on the
earlier of date on which the Arrangers notify the Facility Agent in
writing that the syndication of the Facility has been completed and the
date falling thirty (30)] days after the date of this Agreement, the
New Lender shall, on the date upon which an assignment or transfer
takes effect, pay to the Facility Agent (for the Facility Agent's own
account) a fee of one thousand euro (EUR 1,000).
23.4 Limitation of responsibility of Existing Lenders
(a) Unless expressly agreed to the contrary, an Existing Lender makes no
representation or warranty and assumes no responsibility to a New
Lender for:
(i) the legality, validity, effectiveness, adequacy or
enforceability of the Finance Documents or any other
documents;
(ii) the financial condition of any Obligor;
(iii) the performance and observance by any Obligor of such
Obligor's obligations under the Finance Documents or any other
documents; or
(iv) the accuracy of any statements (whether written or oral) made
in or in connection with any Finance Document or any other
document,
and any representations or warranties implied by Applicable Law are
excluded.
(b) Each New Lender confirms to the Existing Lender and the other Finance
Parties that such New Lender:
(i) has made (and shall continue to make) such New Lender's own
independent investigation and assessment of the financial
condition and affairs of each Obligor and such Obligor's
related entities in connection with such New Lender's
participation in this Agreement and has not relied exclusively
on any information provided to such New Lender by the Existing
Lender in connection with any Finance Document; and
(ii) will continue to make such New Lender's own independent
appraisal of the creditworthiness of each Obligor and such
Obligor's related entities whilst any amount is or may be
outstanding under the Finance Documents or any Commitment is
in force.
(c) Nothing in any Finance Document obliges an Existing Lender to:
(i) accept a re-transfer from a New Lender of any of the rights
and obligations assigned or transferred under this Clause 23;
or
(ii) support any losses directly or indirectly incurred by the New
Lender by reason of the non-performance by any Obligor of such
Obligor's obligations under the Finance Documents or
otherwise.
23.5 Procedure for transfer
(a) Subject to the conditions set out in Clause 23.2 (Conditions of
assignment or transfer) a transfer is effected in accordance with
paragraph (b) below when the Facility Agent executes an otherwise duly
completed Transfer Certificate delivered to the Facility Agent by the
Existing Lender and the New Lender. The Facility Agent shall, as soon
as reasonably practicable after receipt by the Facility Agent of a duly
completed Transfer Certificate appearing on such Transfer Certificate's
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face to comply with the terms of this Agreement and delivered in
accordance with the terms of this Agreement, execute that Transfer
Certificate.
(b) On the Transfer Date:
(i) to the extent that in the Transfer Certificate the Existing
Lender seeks to transfer by novation such Existing Lender's
rights and obligations under the Finance Documents each of the
Obligors and the Existing Lender shall be released from
further obligations towards one another under the Finance
Documents and their respective rights against one another
shall be cancelled (being the "Discharged Rights and
Obligations");
(ii) each of the Obligors and the New Lender shall assume
obligations towards one another and/or acquire rights against
one another which differ from the Discharged Rights and
Obligations only insofar as that Obligor and the New Lender
have assumed and/or acquired the same in place of that Obligor
and the Existing Lender;
(iii) each Agent, each Arranger, the New Lender and other Lenders
shall acquire the same rights and assume the same obligations
between themselves as they would have acquired and assumed had
the New Lender been an Original Lender with the rights and/or
obligations acquired or assumed by such New Lender as a result
of the transfer and to that extent each Agent, each Arranger
and the Existing Lender shall each be released from further
obligations to each other under this Agreement; and
(iv) the New Lender shall become a Party as a "Lender".
(c) At the same time as any Transfer Certificate is delivered to the
Facility Agent in accordance with this Agreement, the New Lender will
simultaneously deliver or procure the delivery of a duly completed
power of attorney in favour of the Security Agent in respect of the
Security Agreements, such power of attorney to be substantially in the
form set out in Part II (Form of the power of attorney to be provided
by the New Lender in favour of the Security Agent) of Schedule 4 (Form
of Transfer Certificate).
23.6 Disclosure of information
Any Lender may disclose to any of its Affiliates and any other person
(subject to such other person agreeing to enter into a Confidentiality
Agreement):
(a) to (or through) whom that Lender assigns or transfers (or may
potentially assign or transfer) all or any of such Lender's
rights and obligations under this Agreement;
(b) with (or through) whom that Lender enters into (or may
potentially enter into) any sub-participation in relation to,
or any other transaction under which payments are to be made
by reference to, this Agreement or any Obligor;
(c) to whom, and to the extent that, information is required to be
disclosed by any applicable law or regulation,
(d) with whom it does share data, information and similar matters;
any information about any Obligor, the Group and the Finance Documents
as that Lender shall consider appropriate.
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24. CHANGES TO THE OBLIGORS
24.1 Assignments and transfer by Obligors
No Obligor may assign any of its rights or transfer any of its rights
or obligations under the Finance Documents to which it is a party save
in the case of any such transfer to a legal successor arising pursuant
to a transaction contemplated by and in accordance with paragraph (a)
of Clause 21.5 (Merger and acquisition).
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SECTION 9 - THE FINANCE PARTIES
25 ROLE OF THE AGENTS AND THE ARRANGERS
25.1 Appointment of the Agents
(a) Each Arranger and each Lender appoints each of the Facility Agent and
the Security Agent to act as its agent under and in connection with the
Finance Documents.
(b) Each Arranger and each Lender authorises each Agent to exercise the
rights, powers, authorities and discretions specifically given to such
Agent under or in connection with the Finance Documents together with
any other incidental rights, powers, authorities and discretions.
25.2 Duties of the Agents
(a) Each Agent shall promptly forward to a Party the original or a copy of
any document which is delivered to such Agent for that Party by any
other Party. Without prejudice to Clause 30.1 (Communications in
writing), an Agent may discharge its duty to forward a copy of any
document supplied to it pursuant to Clause 19 (Information
Undertakings) by sending such document to a relevant Party by e-mail
where such relevant Party has informed such Agent of an e-mail address
pursuant to Clause 30.2 (Addresses) or by reference to a web site where
such Agent has previously informed a relevant Party of the address of
such web site and the location of the relevant document on such web
site pursuant to Clause 30.2 (Addresses).
(b) If an Agent receives notice from a Party referring to this Agreement,
describing a Default and stating that the fact(s), event(s) and/or
circumstance(s) described in such notice is/are a Default, it shall
promptly notify the Lenders in writing.
(c) Each Agent shall promptly notify the Lenders in writing of any Default
arising under Clause 22.1 (Non-payment).
(d) Each Agent's duties under the Finance Documents are solely mechanical
and administrative in nature.
(e) Upon any request from the Facility Agent, or as otherwise contemplated
and/or required pursuant to this Agreement, the Security Agent will in
good time notify the Facility Agent of the relevant Security Agent's
Spot Rate of Exchange required pursuant to this Agreement.
25.3 Role of the Arrangers
Except as specifically provided in the Finance Documents, no Arranger
has any obligations of any kind to any other Party under or in
connection with any Finance Document.
25.4 No fiduciary duties
(a) Nothing in this Agreement constitutes any Agent or any Arranger as a
trustee or fiduciary of any other person.
(b) Neither any Agent nor any Arranger shall be bound to account to any
Lender for any sum or the profit element of any sum received by such
Agent or Arranger, as applicable, for its own account.
25.5 Business with the Group
Each Agent and each Arranger may accept deposits from, lend money to
and generally engage in any kind of banking or other business with any
member of the Group.
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25.6 Rights and discretions of the Agent
(a) Each Agent may rely on:
(i) any representation, notice or document believed by it to be
genuine, correct and appropriately authorised; and
(ii) any statement made by a director, authorised signatory or
employee of any person regarding any matters which may
reasonably be assumed to be within his knowledge or within his
power to verify.
(b) Each Agent may assume (unless it has received notice to the contrary in
its capacity as agent for the Lenders) that:
(i) no Default has occurred (unless it has actual knowledge of a
Default arising under Clause 22.1 (Non-payment));
(ii) any right, power, authority or discretion vested in any Party
or the Majority Lenders has not been exercised; and
(iii) any notice or request made by an Obligor is made on behalf of
and with the consent and knowledge of all the Obligors.
(c) Each Agent may engage, pay for and rely on the advice or services of
any lawyers, accountants, surveyors or other experts.
(d) Each Agent may act in relation to the Finance Documents through its
personnel and agents.
25.7 Majority Lenders' instructions
(a) Unless a contrary indication appears in a Finance Document, each Agent
shall: (a) act in accordance with any instructions given to it by the
Majority Lenders (or, if so instructed by the Majority Lenders, refrain
from acting or exercising any right, power, authority or discretion
vested in it as Agent); and (b) not be liable for any act (or omission)
if such Agent acts (or refrains from taking any action) in accordance
with such an instruction of the Majority Lenders.
(b) Unless a contrary indication appears in a Finance Document, any
instructions given by the Majority Lenders will be binding on all the
Lenders and all the Arrangers.
(c) Each Agent may refrain from acting in accordance with the instructions
of the Majority Lenders (or, if appropriate, the Lenders) until such
Agent has received such security as such Agent may require for any
cost, loss or liability (together with any associated VAT) which such
Agent may incur in complying with the instructions.
(d) In the absence of instructions from the Majority Lenders, (or, if
appropriate, the Lenders) each Agent may act (or refrain from taking
action) as such Agent considers to be in the best interest of the
Lenders.
(e) Each Agent is not authorised to act on behalf of a Lender (without
first obtaining that Lender's consent) in any legal or arbitration
proceedings relating to any Finance Document.
25.8 Responsibility for documentation
No Agent nor any Arranger:
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(a) is responsible for the adequacy, accuracy and/or completeness
of any information (whether oral or written) supplied by any
Agent, any Arranger, any Obligor or any other person given in
or in connection with any Finance Document or the Information
Memorandum; or
(b) is responsible for the legality, validity, effectiveness,
adequacy or enforceability of any Finance Document or any
other agreement, arrangement or document entered into, made or
executed in anticipation of or in connection with any Finance
Document.
25.9 Exclusion of liability
(a) Without limiting paragraph (b) below, no Agent will be liable for any
action taken by such Agent under or in connection with any Finance
Document, unless directly caused by such Agent's gross negligence or
wilful misconduct.
(b) No Party may take any proceedings against any officer, employee or
agent of any Agent in respect of any claim such Party might have
against such Agent or in respect of any act or omission of any kind by
that officer, employee or agent in relation to any Finance Document and
any officer, employee or agent of an Agent may rely on this Clause 25.
(c) An Agent will not be liable for any delay (or any related consequences)
in crediting an account with an amount required under the Finance
Documents to be paid by an Agent if such Agent has taken all necessary
steps as soon as reasonably practicable to comply with the regulations
or operating procedures of any recognised clearing or settlement system
used by such Agent for that purpose.
25.10 Lenders' indemnity to each Agent
Each Lender shall (in proportion to its share of the Total Commitments
or, if the Total Commitments are then zero (0), to such Lender's share
of the Total Commitments immediately prior to their reduction to zero
(0)) indemnify each Agent, within three (3) Business Days of demand,
against any cost, loss or liability incurred by such Agent (otherwise
than by reason of such Agent's gross negligence or wilful misconduct)
in acting as Agent under the Finance Documents (unless such Agent has
been reimbursed by an Obligor pursuant to a Finance Document).
25.11 Resignation of the Agents
(a) Each Agent may resign and appoint one of its Affiliates located in: (i)
any jurisdiction in which a Lender is situated; (ii) Hungary; (iii) any
jurisdiction in the European Union; and/or (iv) any jurisdiction which
is a party to a double taxation agreement in force on the date of such
appointment the effect of which is to provide for all payments made (by
the relevant Obligor) under the Finance Documents to be made (subject
to the completion of any necessary procedural formalities) without a
Tax Deduction, as successor by giving notice to the Lenders and the
Obligors.
(b) Alternatively an Agent may resign by giving notice to the Lenders and
the Obligors, in which case the Majority Lenders (after consultation
with the Obligors) may appoint a successor Agent located in: (i) any
jurisdiction in which a Lender is situated; (ii) Hungary; (iii) any
jurisdiction in the European Union; and/or (iv) any jurisdiction which
is a party to a double taxation agreement in force on the date of such
appointment the effect of which is to provide for all payments made (by
the relevant Obligor) under the Finance Documents to be made (subject
to the completion of any necessary procedural formalities) without a
Tax Deduction.
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(c) If the Majority Lenders have not appointed a successor Agent in
accordance with paragraph (b) above within thirty (30) days after
notice of resignation was given, the relevant Agent (after consultation
with the Obligors) may appoint a successor Agent located in: (i) any
jurisdiction in which a Lender is situated; (ii) Hungary; (iii) any
jurisdiction in the European Union; and/or (iv) any jurisdiction which
is a party to a double taxation agreement in force on the date of such
appointment the effect of which is to provide for all payments made (by
the relevant Obligor) under the Finance Documents to be made (subject
to the completion of any necessary procedural formalities) without a
Tax Deduction.
(d) A retiring Agent shall, at its own cost, make available to the
successor Agent such documents and records and provide such assistance
as the successor Agent may reasonably request for the purposes of
performing its functions as Agent under the Finance Documents.
(e) An Agent's resignation notice shall only take effect upon the
appointment of a successor.
(f) Upon the appointment of a successor, the retiring Agent shall be
discharged from any further obligation in respect of the Finance
Documents but shall remain entitled to the benefit of this Clause 25.
Its successor and each of the other Parties shall have the same rights
and obligations amongst themselves as they would have had if such
successor had been an original Party.
(g) After consultation with the Obligors, the Majority Lenders may, by
notice to an Agent, require such Agent to resign in accordance with
paragraph (b) above. In this event, such Agent shall resign in
accordance with paragraph (b) above.
25.12 Confidentiality
(a) In acting as agent for the Finance Parties, each Agent shall be
regarded as acting through its agency division which shall be treated
as a separate entity from any other of its divisions or departments.
(b) If information is received by another division or department of an
Agent, such information may be treated as confidential to that division
or department and such Agent shall not be deemed to have notice of such
information.
(c) Notwithstanding any other provision of any Finance Document to the
contrary, neither the Agent nor the Arranger are obliged to disclose to
any other person (i) any confidential information or (ii) any other
information if the disclosure would or might in its reasonable opinion
constitute a breach of any law or a breach of a fiduciary duty.
25.13 Relationship with the Lenders
(a) Each Agent may treat each Lender as a Lender, entitled to payments
under this Agreement and acting through its Facility Office unless it
has received not less than five (5) Business Days prior notice from
that Lender to the contrary in accordance with the terms of this
Agreement.
(b) Each Lender shall supply the Agent with any information required by the
Agent in order to calculate the Associated Costs.
25.14 Credit appraisal by the Lenders
Without affecting the responsibility of any Obligor for information
supplied by such Obligor or on such Obligor's behalf in connection with
any Finance Document, each Lender confirms to each Agent and each
Arranger that such Finance Party has been, and will continue to be,
solely responsible for making such Finance Party's own independent
appraisal and investigation of all risks arising under or in connection
with any Finance Document including, but not limited to:
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(a) the financial condition, status and nature of each member of
the Group;
(b) the legality, validity, effectiveness, adequacy or
enforceability of any Finance Document and any other
agreement, arrangement or document entered into, made or
executed in anticipation of, under or in connection with any
Finance Document;
(c) whether that Lender has recourse, and the nature and extent of
that recourse, against any Party or any of its respective
assets under or in connection with any Finance Document, the
transactions contemplated by the Finance Documents or any
other agreement, arrangement or document entered into, made or
executed in anticipation of, under or in connection with any
Finance Document; and
(d) the adequacy, accuracy and/or completeness of the Information
Memorandum and any other information provided by any Agent,
any Party or by any other person under or in connection with
any Finance Document, the transactions contemplated by the
Finance Documents or any other agreement, arrangement or
document entered into, made or executed in anticipation of,
under or in connection with any Finance Document.
25.15 Lenders' tax status confirmation
(a) Each Original Lender confirms in favour of the Facility Agent on the
date of this Agreement that either:
(i) it is not resident for tax purposes in the United Kingdom and
is beneficially entitled to its share of the Loan and
associated interest; or
(ii) it is a bank as defined for the purposes of section 349 of the
Taxes Act and is beneficially entitled to its share of the
Loan and associated interest,
and each Lender shall promptly notify the Facility Agent in writing if
there is any change in its position from that set out above.
(b) Each Lender which becomes a Party pursuant to a transfer or assignment
shall, in the case of a transfer, confirm in favour of the Facility
Agent in the relevant Transfer Certificate, or otherwise, confirm by
written notice to the Facility Agent, as to whether or not such Lender
is:
(i) resident for tax purposes in the United Kingdom and is
beneficially entitled to its share of the Loan and associated
interest;
(ii) a bank as defined for the purposes of section 349 of the Taxes
Act and is beneficially entitled to its share of the Loan and
associated interest; and/or
(iii) a Qualifying lender,
and each lender shall promptly notify the Facility Agent in writing if
there is any change in its position from that set out in the relevant
Transfer Certificate of written notice to the Facility Agent.
25.16 Relevant Reference Banks
If a Relevant Reference Bank (or, if a Relevant Reference Bank is not a
Lender, the Lender of which it is an Affiliate) ceases to be a Lender,
the Facility Agent shall (in consultation with the
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Obligors) appoint another Lender or an Affiliate of a Lender to replace
that Relevant Reference Bank.
25.17 Agent's management time
In the event that any Agent, acting reasonably, determines that, as a
result of the occurrence or existence, as appropriate, of any event(s),
fact(s) and/or circumstance(s), the scope and/or extent of such Agent's
management time or other resources necessary and/or desirable to enable
and facilitate such Agent to properly discharge and perform such
Agent's obligations under the Finance Documents is significantly
greater than that originally contemplated (in the context of the
relevant Fee Letter(s)), such Agent shall confirm such determination in
writing to the Obligors and the Lenders, following which any amount
payable to an Agent under Clause 15.3 (Indemnity to each Agent), Clause
17 (Costs and expenses) and Clause 25.10 (Lenders' indemnity to each
Agent) shall include the cost of utilising such Agent's management time
or other resources and will be calculated on the basis of such
reasonable daily or hourly rates as such Agent may notify to the
Obligors and the Lenders in writing, and is in addition to any fee paid
or payable to such Agent under Clause 12 (Fees).
26. CONDUCT OF BUSINESS BY THE FINANCE PARTIES
No provision of this Agreement will:
(a) interfere with the right of any Finance Party to arrange its
affairs (tax or otherwise) in whatever manner such Finance
Party thinks fit;
(b) oblige any Finance Party to investigate or claim any credit,
relief, remission or repayment available to such Finance Party
or the extent, order and manner of any claim; or
(c) oblige any Finance Party to disclose any information relating
to its affairs (tax or otherwise) or any computations in
respect of Tax.
27. SHARING AMONG THE LENDERS
27.1 Payments to Lenders
If a Lender (a "Recovering Lender") receives or recovers any amount
from an Obligor other than in accordance with Clause 28 (Payment
Mechanics) and applies that amount to a payment due under the Finance
Documents then:
(a) the Recovering Lender shall, within three (3) Business Days,
notify details of the receipt or recovery, to the Facility
Agent;
(b) the Facility Agent shall determine whether the receipt or
recovery is in excess of the amount the Recovering Lender
would have been paid had the receipt or recovery been received
or made by the Facility Agent and distributed in accordance
with Clause 28 (Payment Mechanics), without taking account of
any Tax which would be imposed on such Facility Agent in
relation to the receipt, recovery or distribution; and
(c) the Recovering Lender shall, within three (3) Business Days of
demand by the Facility Agent, pay to the Facility Agent an
amount (the "Sharing Payment") equal to such receipt or
recovery less any amount which the Facility Agent determines
may be retained by the Recovering Lender as such Recovering
Bank's share of any payment to be made, in accordance with
Clause 28.5 (Partial payments).
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27.2 Redistribution of payments
The Facility Agent shall treat the Sharing Payment as if it had been
paid by the relevant Obligor and distribute such Sharing Payment
between the Finance Parties (other than the Recovering Lender) in
accordance with Clause 28.5 (Partial payments).
27.3 Recovering Lender's rights
(a) On a distribution by the Facility Agent under Clause 27.2
(Redistribution of payments), the Recovering Lender will be subrogated
to the rights of the Finance Parties which have shared in the
redistribution.
(b) If and to the extent that the Recovering Lender is not able to rely on
its rights under paragraph (a) above, the relevant Obligor shall be
liable to the Recovering Lender for a debt equal to the Sharing Payment
which is immediately due and payable.
27.4 Reversal of redistribution
If any part of the Sharing Payment received or recovered by a
Recovering Lender becomes repayable and is repaid by that Recovering
Lender, then:
(a) each Lender which has received a share of the relevant Sharing Payment
pursuant to Clause 27.2 (Redistribution of payments) shall, upon
request of the Facility Agent, pay to the Facility Agent for account of
that Recovering Lender an amount equal to its share of the Sharing
Payment (together with an amount as is necessary to reimburse that
Recovering Lender for its proportion of any interest on the Sharing
Payment which that Recovering Lender is required to pay); and
(b) that Recovering Lender's rights of subrogation in respect of any
reimbursement shall be cancelled and the relevant Obligor will be
liable to the reimbursing Lender for the amount so reimbursed.
27.5 Exceptions
(a) This Clause 27 shall not apply to the extent that the Recovering Lender
would not, after making any payment pursuant to this Clause, have a
valid and enforceable claim against the relevant Obligor.
(b) A Recovering Lender is not obliged to share with any other Lender any
amount which the Recovering Lender has received or recovered as a
result of taking legal or arbitration proceedings, if:
(i) it notified the other Lenders of the legal or arbitration
proceedings; and
(ii) the other Lender had an opportunity to participate in those
legal or arbitration proceedings but did not do so as soon as
reasonably practicable having received notice or did not take
separate legal or arbitration proceedings.
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SECTION 10 - ADMINISTRATION
28. PAYMENT MECHANICS
28.1 Payments to the Facility Agent
(a) On each date on which an Obligor or a Lender is required to make a
payment under a Finance Document, that Obligor or Lender shall make the
same available to the Facility Agent (unless a contrary indication
appears in a Finance Document) for value on the due date at the time
and in such funds specified by the Facility Agent as being customary at
the time for settlement of transactions in the relevant currency in the
place of payment.
(b) Payment shall be made to such account in the principal financial centre
of the country of that currency (or, in relation to euro, in a
principal financial centre in a Participating Member State or London)
with such bank as the Facility Agent specifies.
28.2 Distributions by the Facility Agent
Each payment received by the Facility Agent under the Finance Documents
for another Party shall, subject to Clause 28.3 (Distributions to an
Obligor) and Clause 28.4 (Clawback) be made available by the Facility
Agent as soon as practicable after receipt to the Party entitled to
receive payment in accordance with this Agreement (in the case of a
Lender, for the account of its Facility Office), to such account as
that Party may notify to the Facility Agent by not less than five (5)
Business Days' written notice with a bank in the principal financial
centre of the country of that currency (or, in relation to euro, in the
principal financial centre of a Participating Member State or London).
28.3 Distributions to an Obligor
The Facility Agent may (with the consent of an Obligor or in accordance
with Clause 29 (Set-Off)) apply any amount received by it for that
Obligor in or towards payment (on the date and in the currency and
funds of receipt) of any amount due from that Obligor under the Finance
Documents or in or towards purchase of any amount of any currency to be
so applied.
28.4 Clawback
(a) Where a sum is to be paid to the Facility Agent under the Finance
Documents for another Party, the Facility Agent is not obliged to pay
that sum to that other Party (or to enter into or perform any related
exchange contract) until it has been able to establish to its
satisfaction that it has actually received that sum.
(b) If the Facility Agent pays an amount to another Party and it proves to
be the case that the Facility Agent had not actually received that
amount, then the Party to whom that amount (or the proceeds of any
related exchange contract) was paid by the Facility Agent shall on
demand refund the same to the Facility Agent together with interest on
that amount from the date of payment to the date of receipt by the
Facility Agent, calculated by the Facility Agent to reflect its cost of
funds.
28.5 Partial payments
(a) If the Facility Agent receives a payment that is insufficient to
discharge all the amounts then due and payable by an Obligor under the
Finance Documents, the Facility Agent shall apply that payment towards
the obligations of that Obligor under the Finance Documents in the
following order:
(i) first, in or towards payment pro rata of any unpaid fees,
costs and expenses of the Agents under the Finance Documents;
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(ii) secondly, in or towards payment pro rata of any accrued
interest or commission due but unpaid under this Agreement;
(iii) thirdly, in or towards payment pro rata of any principal due
but unpaid under this Agreement; and
(iv) fourthly, in or towards payment pro rata of any other sum due
but unpaid under the Finance Documents.
(b) The Facility Agent shall, if so directed by the Majority Lenders, vary
the order set out in paragraphs (a)(ii) to (iv) above.
(c) Paragraphs (a) and (b) above will override any appropriation made by an
Obligor.
28.6 No set-off by Obligors
All payments to be made by an Obligor under the Finance Documents shall
be calculated and be made without (and free and clear of any deduction
for) set-off or counterclaim.
28.7 Business Days
(a) Any payment which is due to be made on a day that is not a Business Day
shall, subject to the terms of this Agreement be made on the preceding
Business Day.
(b) During any extension of the due date for payment of any principal or an
Unpaid Sum under this Agreement interest is payable on the principal at
the rate payable on the original due date.
28.8 Currency of account
(a) Subject to paragraphs (b) to (e) below, the Base Currency is the
currency of account and payment for any sum due from an Obligor under
any Finance Document.
(b) A repayment of a Loan or Unpaid Sum or a part of a Loan or Unpaid Sum
shall be made in the currency in which that Loan or Unpaid Sum is
denominated on its due date.
(c) Each payment of interest shall be made in the currency in which the sum
in respect of which the interest is payable was denominated when that
interest accrued.
(d) Each payment in respect of costs, expenses or Taxes shall be made in
the currency in which the costs, expenses or Taxes are incurred.
(e) Any amount expressed to be payable in a currency other than the Base
Currency shall be paid in that other currency.
28.9 Change of currency
(a) Unless otherwise prohibited by Applicable Law, if more than one
currency or currency unit are at the same time recognised by the
central bank of any country as the lawful currency of that country,
then:
(i) any reference in the Finance Documents to, and any obligations
arising under the Finance Documents in, the currency of that
country shall be translated into, or paid in, the currency or
currency unit of that country designated by the Facility Agent
(after consultation with the Obligors); and
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(ii) any translation from one currency or currency unit to another
shall be at the official rate of exchange recognised by the
central bank for the conversion of that currency or currency
unit into the other, rounded up or down by the Facility Agent
(acting reasonably).
(b) If a change in any currency of a country occurs, this Agreement will,
to the extent the Facility Agent (acting reasonably and after
consultation with the Obligors) specifies to be necessary, be amended
to comply with any generally accepted conventions and market practice
in the Relevant Interbank Market and otherwise to reflect the change in
currency.
29. SET-OFF
A Finance Party may set off any matured obligation due from an Obligor
under the Finance Documents (to the extent beneficially owned by that
Finance Party) against any matured obligation owed by that Finance
Party to that Obligor, regardless of the place of payment, booking
branch or currency of either obligation. If the obligations are in
different currencies, the Finance Party may convert either obligation
at a market rate of exchange in its usual course of business for the
purpose of the set-off.
30. NOTICES
30.1 Communications in writing
Any communication to be made under or in connection with the Finance
Documents shall (subject to the appropriate prior written agreement of
the Obligors and Finance Parties, as appropriate, as contemplated by
and provided for pursuant to Clause 9.4 (Notification of rates of
interest), be made in writing and, unless otherwise stated, may be made
by telex, fax, e-mail or letter to the extent that the relevant Party
has specified such address pursuant to Clause 30.2 (Addresses) or, in
addition to the foregoing and in the case of rates of interest to be
notified by the Facility Agent pursuant to Clause 9.4 (Notification of
rates of interest) and in the case of any document to be forwarded by
an Agent pursuant to paragraph (a) of Clause 25.2 (Duties of the
Agents) where such document has been supplied to such Agent pursuant to
Clause 19 (Information Undertakings), the relevant Agent may refer the
relevant Party or Parties to a web site and to the location of the
relevant information on such web site.
30.2 Addresses
The address, fax number, e-mail address, telex number and, where
appropriate, web site (and the department or officer, if any, for whose
attention the communication is to be made) of each Party for any
communication or document to be made or delivered under or in
connection with the Finance Documents is:
(a) in the case of each Obligor, that identified with its name
below;
(b) in the case of each Lender, that notified in writing to the
Facility Agent on or prior to the date on which it becomes a
Party; and
(c) in the case of each Agent, that identified with its name
below,
or any substitute address, fax number, e-mail address, telex number,
web site, department or officer as the Party may notify to the Facility
Agent (or the Facility Agent may notify to the other Parties, if a
change is made by the Facility Agent or a web site carrying relevant
information has been set up by an Agent) by not less than five (5)
Business Days' written notice.
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30.3 Delivery
(a) Any communication or document made or delivered by one person to
another under or in connection with the Finance Documents will only be
effective:
(i) if by way of fax, e-mail or telex when a valid receipt has
been obtained by the sender and it has been received in
legible form;
(ii) if by way of letter, when it has been left at the relevant
address or five (5) Business Days after being deposited in the
post postage prepaid in an envelope addressed to it at that
address; or
(iii) if by way of posting such communication or document on a web
site, when such web site may be accessed and read;
and, in the case of (i) and (ii) above, if a particular department or
officer is specified as part of its address details provided under
Clause 30.2 (Addresses), if addressed to that department or officer.
(b) Any communication or document to be made or delivered to an Agent will
be effective only when actually received by such Agent and then only if
it is expressly marked for the attention of the department or officer
identified with such Agent's signature below (or any substitute
department or officer such Agent shall specify for this purpose).
(c) All notices from or to an Obligor shall be sent through the Facility
Agent.
(d) Any communication or document made or delivered to any Obligor in
accordance with this Clause 30 will be deemed to have been made or
delivered to each of the Obligors.
30.4 Notification of address, fax number and telex number
Upon receipt of notification of an address, fax number and telex number
or change of address, fax number or telex number pursuant to Clause
30.2 (Addresses) or changing its own address, fax number or telex
number, the Facility Agent shall notify the other Parties accordingly
in writing.
30.5 English language
(a) Any notice given under or in connection with any Finance Document must
be in English.
(b) All other documents provided under or in connection with any Finance
Document must be:
(i) in English; or
(ii) if not in English, and if so required by an Agent, accompanied
by a certified English translation and, in this case, the
English translation will prevail unless the document is a
constitutional, statutory or other official document.
30.6 Communications Through the Facility Agent
The Facility Agent will act as facility agent with the intent of
administering the Facility and centralising all communications between
the Obligors and the Finance Parties and such communications will
normally only be made through the Facility Agent and all communications
from any of the Finance Parties to any Obligor will also only normally
be made through the Facility Agent Provided that any Finance Party may
in exceptional circumstances be entitled to communicate directly with
any Obligor(s).
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31. CALCULATIONS AND CERTIFICATES
31.1 Accounts
In any litigation or arbitration proceedings arising out of or in
connection with a Finance Document, the entries made in the accounts
maintained by a Finance Party are, in the absence of manifest error,
prima facie evidence of the matters to which they relate.
31.2 Certificates and Determinations
(a) Any certification or determination by a Finance Party of a rate or
amount under any Finance Document is, in the absence of manifest error,
conclusive evidence of the matters to which it relates.
(b) A certificate of a Finance Party to the Facility Agent and/or any
Obligor(s) as to: (a) the amount by which a sum payable to such Finance
Party under this Agreement is to be increased under Clause 13.2 (Tax
gross-up) or Clause 14.1 (Increased costs); or (b) the amount for the
time being required to indemnify such Finance Party against any loss,
cost, payment or liability under Clause 13.3 (Tax indemnity), Clause
13.5 (Stamp taxes), Clause 13.6 (Value added tax), Clause 15.1
(Currency indemnity) and Clause 15.2 (Other indemnities), shall set out
in reasonable details the basis of any such claim and the workings of
such amount Provided that nothing in this Agreement shall require any
Finance Party to disclose any confidential information in respect of
such Finance Party Provided Further that the Facility Agent shall not
have any obligation or incur any liability whatsoever to any person in
respect of any such certification provided pursuant to this Agreement.
31.3 Day count convention
Any interest, commission or fee accruing under a Finance Document will
accrue from day to day and is calculated on the basis of the actual
number of days elapsed and a year of three hundred and sixty (360) days
or, in any case where the practice in the Relevant Interbank Market
differs, in accordance with that market practice.
32. PARTIAL INVALIDITY
If, at any time, any provision of the Finance Documents is or becomes
illegal, invalid or unenforceable in any respect under any Applicable
Law of any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions nor the legality, validity
or enforceability of such provision under the Applicable Law of any
other jurisdiction will in any way be affected or impaired.
33. REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of any
Finance Party, any right or remedy under the Finance Documents shall
operate as a waiver, nor shall any single or partial exercise of any
right or remedy prevent any further or other exercise or the exercise
of any other right or remedy. The rights and remedies provided in this
Agreement are cumulative and not exclusive of any rights or remedies
provided by law.
34. AMENDMENTS AND WAIVERS
34.1 Required consents
(a) Subject to Clause 34.2 (Exceptions) any term of the Finance Documents
may be amended or waived only with the consent of the Majority Lenders
and the Obligors and any such amendment or waiver will be binding on
all Parties.
(b) The Facility Agent may effect, on behalf of any Finance Party, any
amendment or waiver permitted by this Clause 34.
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34.2 Exceptions
(a) An amendment or waiver that has the effect of changing or which relates
to:
(i) the definition of "Majority Lenders" in Clause 1.1
(Definitions);
(ii) an extension to the date of payment of any amount under the
Finance Documents;
(iii) a reduction in the Applicable Margin or the amount of any
payment of principal, interest, fees or commission payable;
(iv) an increase in Commitment;
(v) any provision which expressly requires the consent of all the
Lenders; or
(vi) Clause 2.2 (Lenders' rights and obligations), Clause 23
(Changes to the Lenders) or this Clause 34,
shall not be made without the prior consent of all the Lenders.
(b) Any amendment or waiver that has the effect of changing or which
relates to any releases or any of the Encumbrances created by and
constituted in the Security Agreements, except for any release required
to give effect to a disposal expressly permitted pursuant to Clause
21.4 (Disposals), shall not be made without the prior written consent
of all the Lenders, other than any Lender(s) which at such time hold(s)
five per cent. (5%) or more of the equity share capital of Hungarian
Telephone and Cable Corp.
(c) An amendment or waiver which relates to the rights or obligations of
any Agent or any Arranger may not be effected without the consent of
such Agent or Arranger, as applicable.
(d) Any amendment that relates to this paragraph (d) or any amendment or
express waiver that relates to the restriction contained in paragraph
(a) of Clause 21.25 (No new Financial Indebtedness) on the ability of
Hungarian Telephone and Cable Corp. to incur additional Financial
Indebtedness, shall, to the extent that at such time Postabank es
Takarekpenztar Reszvenytarsasag is the legal and beneficial owner of
any of the Notes, require the prior written consent of Postabank es
Takarekpenztar Reszvenytarsasag, with Postabank es Takarekpenztar
Reszvenytarsasag to confirm such approval or otherwise by written
notice within fourteen (14) days of any request for such consent,
failing which written notice (confirming or refusing such consent),
Postabank es Takarekpenztar Reszvenytarsasag will be deemed to have
given its consent.
(e) Any amendment that relates to this paragraph (e) or any amendment or
express waiver that relates to the restriction contained in paragraph
(b) of Clause 21.25 (No new Financial Indebtedness) on the ability of
HTCC Tanacsado Reszvenytarsasag to incur additional Financial
Indebtedness which, when aggregated with any other amendment or express
waiver in respect of the restriction contained in paragraph (c) (v) of
Clause 21.25 (No new Financial Indebtedness) on the ability of the
Borrowers to incur additional Financial Indebtedness, would result in
the aggregate of any such additional Financial Indebtedness of the
Group (other than any Financial Indebtedness owing to any another
member(s) of the Group provided in accordance with the provisions of
this Agreement) exceeding the equivalent of sixteen million euro (EUR
16,000,000), shall, to the extent that at such time Postabank es
Takarekpenztar Reszvenytarsasag is the legal and beneficial owner of
any of the Notes, require the prior written consent of Postabank es
Takarekpenztar Reszvenytarsasag, with Postabank es Takarekpenztar
Reszvenytarsasag to
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confirm such approval or otherwise by written notice within fourteen
(14) days of any request for such consent, failing which written notice
(confirming or refusing such consent), Postabank es Takarekpenztar
Reszvenytarsasag will be deemed to have given its consent.
(f) Any amendment that relates to this paragraph (f) or any amendment or
express waiver that relates to the restriction contained in paragraph
(c) (v) of Clause 21.25 (No new Financial Indebtedness) on the ability
of the Borrowers to incur additional Financial Indebtedness which, when
aggregated with any other amendment or express waiver in respect of the
restriction contained in paragraph (b) of Clause 21.25 (No new
Financial Indebtedness) on the ability of HTCC Tanacsado
Reszvenytarsasag to incur additional Financial Indebtedness, would
result in the aggregate of any such additional Financial Indebtedness
of the Group (other than any Financial Indebtedness owing to any
another member(s) of the Group provided in accordance with the
provisions of this Agreement) exceeding the equivalent of sixteen
million euro (EUR 16,000,000), shall, to the extent that at such time
Postabank es Takarekpenztar Reszvenytarsasag is the legal and
beneficial owner of any of the Notes, require the prior written consent
of Postabank es Takarekpenztar Reszvenytarsasag, with Postabank es
Takarekpenztar Reszvenytarsasag to confirm such approval or otherwise
by written notice within fourteen (14) days of any request for such
consent, failing which written notice (confirming or refusing such
consent), Postabank es Takarekpenztar Reszvenytarsasag will be deemed
to have given its consent.
35. COUNTERPARTS
Each Finance Document may be executed in any number of counterparts,
and this has the same effect as if the signatures on the counterparts
were on a single copy of the Finance Document.
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SECTION 11 - GOVERNING LAW AND ENFORCEMENT
36. GOVERNING LAW
This Agreement is governed by and shall be construed in accordance with
English law.
37. ENFORCEMENT
37.1 English courts
Subject to Clause 37.7 (Facility Agent's option to refer disputes to
arbitration) and Clause 37.3 (Non-exclusive jurisdiction), each of the
Parties irrevocably agrees for the benefit of each of the Finance
Parties that the courts of England shall have exclusive jurisdiction to
hear and determine any suit, action or proceeding, and to settle any
disputes, which may arise out of or in connection with this Agreement
and, for such purposes, irrevocably submits to the jurisdiction of such
courts.
37.2 Convenient forum
Each Obligor irrevocably waives any objection which it might now or
hereafter have to the courts referred to in Clause 37.1 (English
courts) above being nominated as the forum to hear and determine any
suit, action or proceeding, and to settle any disputes, which may arise
out of or in connection with this Agreement and agrees not to claim
that any such court is not a convenient or appropriate forum.
37.3 Non-exclusive jurisdiction
This Clause 37.3 and Clause 37.1 (English courts) are for the benefit
of the Finance Parties and nothing in Clause 37.1 (English courts)
shall prevent any Finance Party from taking proceedings relating to a
Dispute in any other courts with jurisdiction. To the extent allowed by
law, the Finance Parties may take concurrent proceedings in any number
of jurisdictions.
37.4 Service of process
Each Obligor agrees that the documents which start any court
proceedings ("Proceedings") and any other documents required to be
served in relation to those Proceedings may be served on it at the
offices of Clifford Chance Secretaries Limited, 000 Xxxxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX, Xxxxxxx, Xxxxxx Xxxxxxx. If the appointment of the
person mentioned in this Clause 37.4 ceases to be effective, each
Obligor shall immediately appoint another person in England to accept
service of process on its behalf in England. If any Obligor fails to do
so (and such failure continues for a period of not less than fourteen
(14) days), the Facility Agent shall be entitled to appoint on behalf
of such Obligor(s) such a person to accept service of proceedings by
notice to the relevant Obligor(s). Nothing contained in this Agreement
shall restrict the right of the Finance Parties to serve process in any
other manner allowed by law. This Clause 37.4 applies to Proceedings in
England and to Proceedings elsewhere. Each Obligor agrees that failure
by a process agent to notify such Obligor of the process will not
invalidate the proceedings concerned.
37.5 Waiver of immunity
To the extent that any Obligor may in any jurisdiction claim for itself
or its assets immunity from suit, execution, attachment (whether in
respect of execution, before judgment or otherwise) or other legal
process and to the extent that in any such jurisdiction there may be
attributed to such Obligor or its assets such immunity (whether or not
claimed), such Obligor hereby unconditionally and irrevocably agrees
not to claim and hereby irrevocably waives such immunity to the full
extent permitted by the Applicable Law of such jurisdiction.
37.6 Obligors' consent to ancillary measures
The Obligors hereby consent generally in respect of any legal action or
proceeding arising out of or in connection with this Agreement to the
giving of any relief or the issue of any process in
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connection with such action or proceeding including, without
limitation, the making, enforcement or execution against any property
whatsoever (irrespective of its use or intended use) of any order or
judgment whether final, interim or otherwise, which may be made or
given in such action or proceeding.
37.7 Facility Agent's option to refer disputes to arbitration
Notwithstanding the provisions of Clause 37.1 (English courts), if any
dispute or difference arises out of or in connection with this
Agreement, including any question as to its existence, validity or
termination (a "Dispute"), and on condition that the Facility Agent,
acting on the instructions of the Majority Lenders, shall have elected
by giving notice in writing to each of the other Parties, such Dispute
shall be referred to and finally settled by arbitration in accordance
with the UNCITRAL Arbitration Rules as at present in force (the
"UNCITRAL Rules"), which are deemed to be incorporated by reference
into this Clause 37.
37.8 Appointment of the arbitral tribunal
(a) Any arbitral tribunal appointed pursuant to Clause 37.7 (Facility
Agent's option to refer disputes to arbitration) shall be composed of
three (3) arbitrators one of whom shall be the presiding arbitrator.
The appointing authority shall be the London Court of International
Arbitration (the "LCIA") The LCIA shall appoint all three (3) members
of the arbitral tribunal and shall nominate which of them shall act as
the presiding arbitrator.
(b) In all matters relating to the appointment of arbitrators under this
Agreement or under any other Finance Document, the Parties agree that
the LCIA shall be free to appoint whomsoever the LCIA considers
appropriate in the LCIA's sole discretion, save that the LCIA shall
take account of the views of the Parties and shall give effect to any
agreement of the Parties in relation to the appointment of the
arbitrators unless the LCIA determines in the LCIA's absolute
discretion that it is not appropriate to do so.
37.9 Initiation of arbitration proceedings
Subject to Clause 37.7 (Facility Agent's option to refer disputes to
arbitrators), any of the Parties which wishes to initiate an
arbitration shall simultaneously:
(a) give a notice of arbitration to the other Parties in
accordance with Article 3 of the UNCITRAL Rules; and
(b) request in writing the LCIA to appoint the three (3)
arbitrators and to nominate the presiding arbitrator and give
a copy of such request to all the other parties to this
agreement. Each party may make its own representations to the
LCIA concerning the appointment of arbitrators within twenty
one (21) days of receipt of such notice of arbitration. For
the avoidance of doubt, the Parties agree that the LCIA may
take note of any such representations, but shall otherwise be
free in the LCIA's discretion to appoint whomsoever the LCIA
consider appropriate as the three (3) arbitrators.
37.10 Place and language of the proceedings
The place and seat of the arbitration shall be London and language of
the arbitral proceedings shall be English.
37.11 The award
All and any awards of the arbitral tribunal shall be made in accordance
with the UNCITRAL Rules in writing and shall be final and binding on
the relevant Parties. All and any awards shall be made by majority
decision. If there be no majority, the award shall be made by the
presiding arbitrator alone. The final award shall be made within six
(6) months from the appointment of
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the third arbitrator, but insofar as this is impractical it shall be
made as soon as possible thereafter.
37.12 Notice of arbitration
In relation to any arbitration proceedings, the provisions of Clause 30
(Notices) of this Agreement shall apply in respect of this Clause 37 in
addition to the notification provisions of the UNCITRAL Rules.
37.13 Expedition of arbitration
The appointed arbitrators shall conduct the arbitration in accordance
with the UNCITRAL Rules and at all times in such a manner as to ensure
a speedy resolution of the Dispute.
AND EACH OBLIGOR expressly agrees and consents to each of the provisions of this
Clause 37.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
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