Exhibit 10.84
POSTABANK ES TAKAREKPENZTAR RT.
as Lender
HUNGAROTEL RT.
PAPATEL RT.
KNC
RABA-COM RT.
HTCC CONSULTING RT.
as Borrowers
HUNGARIAN TELEPHONE AND CABLE CORP.
as Guarantor
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HUF equivalent of U.S.$170,000,000
MULTI CURRENCY CREDIT FACILITY AGREEMENT
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THIS AGREEMENT is made on October 10, 1996, effective as of October 15, 1996.
BETWEEN
(1) Xxxxxxxxx xx Xxxxxxxxxxxxxx Xx. ("xxx Xxxx"), 0000 Xxxxxxxx,
Vaci ut 48.
as Lender ("Lender" or "Bank").
and
(2) Xxxxxxxxxx Xxxxxxxxxx Xx. ("Xxxxxxxxxx"), 0000 Xxxxxxxx,
Xxxxxxxxxx u.2.
(3) Papa es Tersege Telefon Koncesszios Reszvenytarsasag
("Papatel"), 8500 Papa, Major u. 2.
(4) Kelet-Nograd Com. ("KNC"), 0000 Xxxxxxxxxxx, Munkasotthon ter
1.
(5) RABA-Com Tavkozlesi es Telekommunikacios Koncesszios Rt.
("Raba-Com."), 9600 Sarvar, Xxx Xxxxx u. 1.
(6) HTCC Consulting Rt. ("HTCC Consulting"), 1126 Budapest,
Kiralyhago u. 2.
(2) to (6) together hereinafter referred to as "Borrowers",
and any one of them a "Borrower")
and
(7) Hungarian Telephone and Cable Corp. ("HTCC USA"), Hungarian
address: 1126 Budapest, Kiralyhago u. 2., ("the Guarantor")
Lender, Borrowers and Guarantor are hereinafter referred as to
"Parties",
WHEREAS
The Lender has issued a commitment letter dated September 30, 1996 which was
amended the same day (the "Commitment Letter") in which the Lender irrevocably
stated and confirmed that it would finance the telecommunication development of
the HTCC subsidiaries, Hungarotel, KNC, Raba-Com, Papatel - (hereinafter: "HTCC
Subsidiaries"), and according to the terms and conditions of the Commitment
Letter with the cooperation of enterprises jointly appointed by Fazis Rt. and
the Lender, and the Lender shall accept full responsibility for the provision of
the facility.
NOW, IT IS AGREED AS FOLLOWS:
PART 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS AND INTERPRETATION
The following terms have the meanings given to them in this Clause 1.1.
"Agreement" means this MULTI CURRENCY Credit Facility
Agreement.
"Advance" means, except as otherwise provided herein, an advance made
or to be made by the Bank hereunder.
"Available Facility" means, at any time, the aggregate amount
of the Facility at such time.
"Business Day" means a day (other than a Saturday or Sunday) on which
banks generally are open for business in Budapest.
"Event of Default" means any circumstances described as such in Part 8
(Events of Default).
"Encumbrance" means (a) a mortgage, charge, pledge, lien or other
encumbrance 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 preferential arrangement (including title
transfer and retention arrangements) having a similar effect.
"Exchange Rate" means, save as otherwise provided herein, the
USD/HUF commercial sell exchange rate of the Bank on the
relevant date.
"Facility" means the MULTI CURRENCY loan facility in an
aggregate amount of the HUF equivalent of USD 170,000,000.
(one hundred and seventy million) as established by this
Agreement.
"Final Maturity Date of HUF Loan" means December 31, 2006.
"Final Maturity Date of USD Loan" means December 31, 2002.
"Group" means the Guarantor and the Borrowers for the time
being.
"HUF or forint" means the lawful currency of the Republic of
Hungary.
"HUF Loan" means the aggregate of all Advances drawn down in
HUF.
"LIBOR" means, in relation to any amount owed by an Obligor hereunder
on which interest for a given period is to accrue, the rate per annum
equal to the arithmetic mean (rounded upwards, if not already such a
multiple, to the nearest whole multiple of one-sixteenth of one per
cent.) of the rates at which Barclays Bank was offering to prime banks
in the London Interbank Market deposits in the currency of such amount
for such period at or about 11.00 a.m. (London time) on the relevant
date for such period.
"Loan" means the aggregate principal amount for the time being
outstanding hereunder.
"Notice of Drawdown" means a notice substantially in the form set out
in the Fourth Schedule (Notice of Drawdown).
"Permitted Lien" means (i) liens of vendors, carriers and mechanics
arising by law in the ordinary course of business for sums not yet due
or contested in good faith, (ii) liens for taxes not yet due and
payable, and (iii) Postabank's liens.
"Obligors" means the Borrowers and the Guarantor and "Obligor"
means any one of them.
"Repayment Date" means, in relation to any Advance, the last
day of the Term thereof.
"Term" means, except as otherwise provided herein, in relation to any
Advance, the period for which such Advance is borrowed as specified in
the Notice of Drawdown relating thereto.
"Transfer Certificate" means a certificate signed by the Bank
and a Transferee whereby:
(a) the Bank seeks to procure the transfer to Transferee of all or
a part of the Bank's rights, benefits and obligations
hereunder as contemplated in clause 12.3 (Assignments and
Transfers by Bank); and
(b) such Transferee undertakes to perform the obligations it will
assume as a result of delivery of such certificate to the
Borrower as is contemplated in Clause 12.3.
"Transfer Date" means, in relation to any Transfer Certificate, the
date for the making of the transfer as specified in the schedule to
such Transfer Certificate.
"Transferee" means any third party, to which the Bank seeks to transfer
all or part of its rights, benefits and obligations hereunder pursuant
to the provisions of clause 12.3.
"USD or US Dollars" means the lawful currency of the United
States of America.
"USD Loan" means the aggregate of all Advances drawn down in
USD.
1.2 INTERPRETATION ANY REFERENCE IN THIS AGREEMENT TO:
the "equivalent" on any given date in one currency (the "first
currency") of an amount denominated in another currency (the "second
currency") is a reference to the amount of the first currency which
could be purchased with the amount of the second currency at the
commercial sell exchange rate of the Lender on such date for the
purchase of the first currency with the second currency;
"indebtedness" shall be construed so as to include any obligation
(whether incurred as principal or as surety) for the payment or
repayment of money borrowed, whether present or future, actual or
contingent;
a "month" is a reference to a period starting on one day in a calendar
month and ending on the numerically corresponding day in the next
succeeding calendar month that, where any such period would otherwise
end on a day which is not a business day, it shall end on the next
succeeding business day, unless that day falls in the calendar month
succeeding that in which it would otherwise have ended, in which case
it shall end on the immediately preceding business day, and references
to "months" shall be construed accordingly.
A "quarter" means any quarter of the calendar year starting at January
1 and ending at March 31, or starting at April 1 and ending at June 30,
or starting at July 1 and ending at September 30, or starting at
October 1, and ending at December 31.
"subsidiary" of a company or corporation means any company or
corporation:
(a) which is controlled, directly or indirectly, by the
first-mentioned company or corporation;
(b) more than half the issued share 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 control the composition of its
board of directors or equivalent body.
"tax" shall be construed so as to include any tax, levy, impost, duty
or other charge 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) imposed by the relevant authorities of the Republic of
Hungary.
"value date" shall be construed as a reference to the day when a
transfer to a particular bank account is completed and the transferred
funds have been credited to that particular bank account and are at the
full disposal of the bank account holder.
"VAT" shall be construed as a reference to value added tax including
any similar tax which may be imposed in place thereof from time to time
by the relevant authorities of the Republic of Hungary.
"wholly-owned subsidiary" shall be construed as a reference to
any company or corporation which has no other members or
shareholders except that other company or corporation and that other
company's or corporation's wholly-owned subsidiaries or persons acting
on behalf of that other company or corporation or its wholly-owned
subsidiaries; and
"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 Republic of Hungary
including the seeking of liquidation, winding-up, reorganisation,
dissolution, administration, arrangement, adjustment, protection or
relief of debtors.
PART 2
THE FACILITY
2.1 THE FACILITY
2.1.1 GRANT OF THE FACILITY The Bank grants to the Borrowers,
upon the terms and subject to the conditions hereof, a
MULTI CURRENCY credit facility in an aggregate amount of
the HUF equivalent of USD 170,000,000. (one hundred
seventy million) calculated using the Exchange Rate. A
maximum of 20 (twenty) percent of the facility may be
drawn down in USD. At the option of the Borrowers, the
amount of interest due in the two year period following
the date of execution of this Agreement may be
capitalized, thereby automatically increasing the amount
of the Facility as specified in this section.
2.1.2 In respect of any Advance that is drawn down in USD (subject
to the limit referred to above in clause 2.1.1) which the
relevant Borrower, immediately upon receipt of the USD, wishes
to convert to HUF, the relevant exchange rate for the
conversion to be applied by the Lender is the USD/HUF
commercial buy rate.
2.1.3 MATURITY OF THE FACILITY The final maturity date of the
Facility is December 31, 2006. The final maturity date of the
USD Loan portion of the Facility is December 31, 2002.
2.1.4 PURPOSE AND APPLICATION The Facility is intended for the
refinancing of a portion of the existing indebtedness of
the Borrowers, for the telecommunication development of
the Borrowers, and for general working capital purposes,
and accordingly, the Borrowers shall apply all amounts
raised by it hereunder in or towards satisfaction of its
refinancing and development financing requirements and
for general working capital purposes.
2.1.5 INDIVIDUAL LOAN AGREEMENTS The Lender and each Borrower shall
enter into individual loan agreements for the amounts set out
in the First Schedule to this Agreement next to their
respective names, which individual loan agreements will
reflect the terms and conditions of this Agreement.
2.1.6 SEVERAL LIABILITY AND NOT JOINT The liability of the Borrowers
under this Agreement shall be several and not joint.
PART 3
UTILISATION OF THE FACILITY
3.1 DELIVERY OF NOTICE OF DRAWDOWN
In accordance with the Notice of Drawdown attached to this Agreement as
the Fourth Schedule, a Borrower may from time to time request the
making of an Advance according to the Second Schedule ("Proposed Draw
Down Schedule") under the individual loan agreements by the delivery to
the Bank, not more than ten nor less than five Business Days before the
proposed date for
the making of such Advance, of a duly completed Notice of Drawdown
therefor. This Clause shall not apply for the first Advance which is
dealt with in Clause 3.4.
3.2 DRAWDOWN DETAILS
Each Notice of Drawdown delivered to the Bank pursuant to Clause 3.1
shall be irrevocable and shall specify:
a) the proposed date for the making of the Advance
requested;
b) the currency of denomination of the Advance requested,
which shall be in HUF or USD (subject to the limit on USD
Advances set out in clause 2.1.1);
c) the amount of the Advance requested, which shall be an
amount of the integral multiple of HUF 10,000,000 (or,
if the Advance is to be denominated in USD, such
comparable and convenient amount thereof) and the amount
of which shall not exceed the Available Facility adjusted
to take account of the amounts in USD of any Advances
which are scheduled to be made or repaid on or before the
date of drawdown of the proposed Advance; and
d) the account to which the proceeds of the proposed
drawdown is to be paid.
3.3 DRAWDOWN CONDITIONS
If the Borrower requests an Advance in accordance with the preceding
provisions of this Clause 3 and, on the proposed date for the making of
such Advance:
a) if the request is for an Advance in USD, the amount in
USD of such Advance does not exceed the maximum USD
portion of the Available Facility and if the request is for an
Advance in HUF, the amount in HUF of such Advance does not
exceed the Available Facility; and
b) no Event of Default has occurred and the representations
set out in Clause 7 (Representations) are true on and as
of the proposed date for the making of such Advance; and
c) the proposed date for the making of such Advance is no
later than 31 March 1999
then, except as otherwise provided herein, such Advance will be made in
accordance with the provisions hereof.
3.4 FIRST ADVANCE
The first Advance, which shall be used (i) to repay loans provided by
the Guarantor to the Borrowers from, among other sources, funds
borrowed by the Guarantor from Citicorp North America, Inc.
("Citicorp") and other lenders, and (ii) to pay the management fee of
the Lender as set out in clause 5, will be transferred to and deposited
in the relevant Borrowers' accounts, and the Borrowers hereby instruct
the Bank to transfer the deposited first Advances in USD to the Bank
account of the Guarantor. The Lender hereby agrees to exchange HUF
amounts of the loan into USD using the Exchange Rate without charging
further fees. The Guarantor hereby instructs the Bank to transfer to
and deposit in the appropriate Citicorp account the amount due to
settle the Citicorp loan made to the Guarantor. The Parties agree and
the Lender undertakes that the above mentioned transfers shall be
completed in such a way that the Citicorp Loan Settlement Account and
the bank accounts of the other relevant creditors of the Guarantor will
be credited on value date October 15, 1996.
3.5 CURRENCY OF DRAWDOWN
The Bank shall disburse the Advance to a Borrower, in USD or HUF at the
option of the Borrower, but in USD only to the extent set out in Clause
2.1, - pursuant to statutory regulation from time to time. If the
Advance is disbursed in HUF, the Bank shall disburse the loan applying
the Exchange Rate in force on the day of the disbursement.
3.6 DOCUMENTING OF THE FACILITY DISBURSEMENT
The Bank shall inform the Borrowers of all financial transactions by
sending an account statement. The account statement contains the
facility settlement account number, the account number for handling
other financial transactions in relation to the Facility.
3.7 DAY OF DRAWDOWN
The day of the Advance drawdown is the day when the Bank debits its
facility settlement account number specified in point 3.6 with the
amount of the Advance according to the Notice of Drawdown and the Bank
is entitled to transfer the amount of the Advance to the relevant
Borrower's account on the same day without further instructions.
PART 4
INTEREST
4.1 PAYMENT DATE OF INTEREST
A Borrower shall pay accrued interest on all Advances it receives
quarterly on the last day of each quarter, or at the option of the
Borrower, interest may be capitalized thereby automatically increasing
the amount of the facility above USD 170,000,000 as specified under
section 1. This option is only
available in respect of the interest due in the period up to December
31 1998. In case the loan matures or expires during the quarter, the
due date is the date of maturity and expiration, respectively.
4.2 THE RATE OF INTEREST
The rate of interest applicable to an Advance for a quarter
during its Term shall be
a) in respect of Advances in HUF, the weighted arithmetical
average of the yield on six and twelve month discounted
Hungarian treasury bills during the previous quarter plus
2.5 per cent.
The weighted arithmetical average is calculated by reference
to the average of the published yield of all 6 and 12 month
Treasury Bills issued in the quarter, weighted for the amount
of such issues.
If the issuance of the discounted treasury bills is terminated
during the term of the Facility, then the interest of the loan
shall be calculated on the basis of securities representing
Hungarian government debt of the same term as the above, and
in the absence of such securities the parties shall agree with
regard to the calculation of the interest within 30 days. If
they fail to do so, the Bank is entitled to terminate the
Agreement on 360 days notice. Until the notice period expires,
the last applicable interest rate, calculated on the basis of
the above, shall prevail.
b) in respect of Advances in USD, the LIBOR rate on the
first day of the quarter for the six months term plus 2.5
per cent. Interest maintained in USD but paid in HUF
shall be paid by the Borrowers to the Bank calculated by
applying the Exchange Rate in force at the time the
payment is due.
4.3 CALCULATION OF INTEREST
Interest shall be calculated only in respect of amounts which have
actually been drawn down. The Bank shall inform the Borrower of the
extent of the interest 10 days before the interest payment date.
Interest calculation - by applying the annual interest rate, daily
interest calculation on a 365/360 day basis - is done according to the
following formula:
outstanding amount * term shown in calendar days * interest rate
360 * 100
The Bank shall calculate interest on the amount of the Loan from the
date of drawdown until the day preceding the date when payment
obligations of the Borrower are fulfilled.
4.4 INTEREST DEDUCTION
The Bank shall pay to Hungarotel an interest rate deduction of USD
2,000,000 (two million) (or the HUF equivalent thereof, at the option
of Hungarotel) in cash in quarterly installments of USD 250,000 (or the
HUF equivalent thereof, at the option of Hungarotel) beginning on the
first quarter following execution of this Agreement and terminating on
the second anniversary thereof. The Parties agree that this interest
deduction in cash shall be due to Hungarotel regardless of whether the
interest is paid by Hungarotel or capitalised according to Clause 4.1.
PART 5
MANAGEMENT FEES
5.1 A management fee equal to the HUF equivalent of USD 5,600,000 (five
million six hundred thousand), to be split equally among the Borrowers,
is payable to the Bank. The portion of the management fee to be paid by
a Borrower becomes payable at the time of the first Advance made to the
relevant Borrower and will be deducted from such first Advance.
5.2 Apart from those set out in Clause 5.1 the Bank shall charge no further
fees in relation to the Facility including but not limited to any kind
of arranging fee, administration fee, etc.
PART 6
REPAYMENT
6.1 MATURITY OF THE FACILITY
The final maturity date of the Facility is December 31, 2006. The final
maturity of the USD Loan portion of the Facility is December 31, 2002.
6.2 REPAYMENT OF THE FACILITY
6.2.1 The repayment of the aggregate of the Advances drawn down by
March 31, 1999 is due in equal quarterly installments between
March 31, 1999 and December 31, 2006.
6.2.2 The Borrowers must provide sufficient funds on their
respective accounts without special notice from the Bank
to the extent and at maturity dates specified herein
covering the loan amount and interest due; the Borrowers
acknowledge that the Bank is entitled to transfer funds
from the above described accounts to the facility
settlement account on due dates without any special
instructions.
6.2.3 The day when the Bank credits the repaid amount to the
facility settlement account is the day when a Borrower
satisfies its payment obligations.
6.3. PREPAYMENT
A Borrower shall be entitled to repay each or all Advances in full at
any time prior to the maturity of the Facility on 30 days notice.
6.4. CURRENCY OF THE REPAYMENT
A Borrower shall repay the Advances in the same currency as that in
which they were drawn down, with the HUF equivalent of USD calculated
by applying the Exchange Rate in force at the due date.
PART 7
REPRESENTATIONS, COVENANTS
7.1 REPRESENTATIONS OF THE BORROWERS
Each of the Borrowers makes the representations and warranties set out
in Clause 7.1.1. to Clause 7.1.9. The liability of the Borrowers under
these representations and warranties is several and not joint.
7.1.1 LIABILITIES TOWARDS MATAV
The Borrowers declare that they have no further indebtedness
towards MATAV other than the indebtedness set out opposite
their respective names in the Third Schedule equal to a total
of USD 11.2 million in connection with the transfer of the
MATAV assets in the
concession areas.
7.1.2 TOTAL DEBT
The Borrowers declare that other than in the ordinary course
of business they have no further indebtedness toward any third
parties other than those listed in the Third Schedule to this
Agreement.
7.1.3 TAXES
The Borrowers declare that they have no material overdue taxes
owing other than those included in the Third Schedule in this
Agreement. The Borrowers are obliged to provide proof of
fulfillment of the obligations included in this point and to
report non-fulfilment within 3 working days following such
events.
7.1.4 THE GUARANTOR'S OBLIGATIONS AND COMMITMENTS
The Guarantor represents that, to the best of its knowledge,
it has no further significant and known obligations and
commitments concerning HTCC Subsidiaries other than listed in
the Six Schedule.
7.1.5 STATUS AND DUE AUTHORIZATION
Each Borrower is a corporation duly organized under the laws
of the Republic of Hungary, and the Guarantor is a Delaware,
U.S. Company with power to enter into this Agreement and to
exercise its rights and perform its obligations hereunder and
all corporate and other action required to authorize its
execution of this Agreement and its performance of its
obligations hereunder has been duly taken, subject to: the
approval of Tele Danmark A/S and the Investment Fund for
Eastern and Central Europe in
respect of KNC and Raba-Com, full payment of Citicorp and
MATAV in respect of all share, and, in relation to the deposit
of the shares in the Borrowers, the Hungarian Ministry of
Telecommunication and Water Management has
given its consent.
7.1.6 CLAIMS PARI PASSU
Under the laws of the Republic of Hungary, the claims of the
Bank against it under this Agreement will rank at least pari
passu with the claims of all its other unsecured creditors
except those whose claims are preferred solely by any
bankruptcy, insolvency, liquidation or other similar laws of
general application.
7.1.7 NO FILING OR STAMP TAXES
Under the laws of the Republic of Hungary, it is not necessary
that this Agreement be filed, recorded or enrolled with any
court or other authority in such jurisdiction or that any
stamp, registration or similar tax be paid on or in relation
to this Agreement.
7.1.8 OWNERSHIP OF THE BORROWERS
The Borrowers are subsidiaries of the Guarantor.
7.1.9 OWNERSHIP OF THE GUARANTOR
The Guarantor is a U.S. public company with its shares
traded on the American Stock Exchange.
7.2 COVENANTS
7.2.1 MAINTENANCE OF LEGAL VALIDITY
Each of the Obligors shall obtain, comply with the terms of
and do all that is necessary to maintain in full force and
effect all authorisations, approvals, licences and consents
required in or by the laws and regulations of its jurisdiction
of incorporation to enable it lawfully to enter into and
perform its obligations under this Agreement and the relating
Agreement and to ensure the legality, validity, enforceability
or admissibility in evidence in its jurisdiction of
incorporation of this Agreement.
7.2.2 CLAIMS PARI PASSU
Each of the Obligors shall ensure that at all times the claims
of the Bank against it under this Agreement rank at least pari
passu with the claims of all its other unsecured creditors
except those whose claims are preferred by any bankruptcy,
insolvency, liquidation or other similar laws of general
application. Furthermore, each Borrower states and represents,
that it will not enter into any other loan agreement -except
the individual loan agreements mentioned in Clause 2.1.4 of
this Agreement - before the repayment all the made Advances
without the prior written notice to the Bank.
7.2.3 NEGATIVE PLEDGE
Each Borrower hereby undertakes that, without the prior
written consent of the Bank, it shall not create or permit to
subsist any encumbrance except for a Permitted Lien over all
or any of its present or future revenues or assets purchased
or constructed from the proceeds of the
Facility, or other debt repaid out of the Facility.
7.2.4 REPORTING
The Borrowers undertake to send to the Bank the quarterly
report of its parent company, the Guarantor in a 10-Q format,
the annual reports in a 10-k format and the quarterly
cash-flow reports and the monthly statistical reports, and
their balance sheets for the respective quarter, and any other
reasonable request of the Bank from time to time.
PART 8
EVENTS OF DEFAULT
8.1 Each of Clause 8.1.1 to Clause 8.1.12 describes circumstances which
constitute an Event of Default for the purposes of the individual loan
agreements to be concluded with each Borrower. Clause 8.2 and Clause
8.3, and Clause 8.4 deal with the rights of the Bank after the
occurrence of an Event of Default.
8.1.1 FAILURE TO PAY
A Borrower fails to pay any sum due from it hereunder at the
time, in the currency and in the manner specified in its
respective individual loan agreement.
8.1.2 TERMINATING ACCOUNT AGREEMENTS
A Borrower or the Guarantor terminates its Bank accounts held
with the Bank during the term of the Facility provided under
this Agreement.
8.1.3 MORTGAGING OR SELLING OF ASSETS
Mortgaging or selling of assets as defined in 11.1.2 or in
case of announcing bankruptcy or liquidation, selling the
asset(s) earmarked as security in different ways from what is
specified in the mortgage agreement without consent of the
Bank.
8.1.4 MISREPRESENTATION
Any representation or statement made by any of the Obligors in
this Agreement or in any notice or other document, certificate
or statement delivered by it pursuant hereto or in connection
herewith is or proves to have been incorrect or misleading in
any material respect when made.
8.1.5 OTHER OBLIGATIONS
Any Obligor fails duly to perform or comply with any other
obligation expressed to be assumed by it in this Agreement or
in any security agreement and such failure is not remedied
within thirty days after the Lender has given notice in
writing thereof to such Obligor.
8.1.6 CROSS DEFAULT
Any indebtedness of a Borrower in an amount in excess of USD
1,000,000 is not paid when due, any indebtedness in an amount
in excess of USD 1,000,000 of that Borrower is declared to be
or otherwise becomes due and payable prior to its specified
maturity or any creditor or creditors of the Borrower become
entitled to declare any indebtedness in an amount in excess of
USD 1,000,000 of the Borrower due and payable prior to its
specified maturity, and no waiver has been obtained or is
contented in good faith by
the Borrower. For the avoidance of doubt, the default of a
Borrower under its separate individual loan agreement does not
have any effect on the status of the individual loan
agreements of the other Borrowers.
8.1.7 INSOLVENCY AND RESCHEDULING
A Borrower is unable to pay its debts as they fall due,
commences negotiations with any one or more of its creditors
with a view to the general readjustment or rescheduling of its
indebtedness or makes a general assignment for the benefit of
or a composition with its creditors.
8.1.8 WINDING-UP
A Borrower takes any corporate action or other steps are taken
or legal proceedings are started for its winding-up,
dissolution, administration or re-organisation or for the
appointment of a liquidator, receiver, administrator,
administrative receiver, conservator, custodian, trustee or
similar officer of it or of any or all of its revenues and
assets.
8.1.9 VALIDITY AND ADMISSIBILITY
At any time any material act, condition or thing required to
be done, fulfilled or performed in order (a) to enable any of
the Obligors lawfully to enter into, exercise its rights under
and perform the obligations expressed to be assumed by it in
this Agreement, (b) to ensure that the obligations expressed
to be assumed by any of the Obligors in this Agreement are
legal, valid and binding or (c) to make this Agreement
admissible in evidence in each Obligor's jurisdiction of
incorporation is not done, fulfilled or performed.
8.1.10 ILLEGALITY
At any time it is or becomes unlawful for any of the Obligors
to perform or comply with any or all of its obligations
hereunder or any of the obligations of any of the Obligors
hereunder are not or cease to be legal, valid and binding.
8.1.11 TERMINATION OF THE CONCESSION CONTRACTS
At any time the Concession Contract of a Borrower is finally
terminated and the termination comes into effect.
8.2. NOTICE TO THE BORROWERS
Upon the occurrence of an Event of Default at any time, the Bank shall
by a 60 days written notice to the relevant Borrower request that the
Borrower cure such Event of Default according to the relevant
individual loan agreement.
8.3 ACCELERATION AND CANCELLATION
Upon the occurrence of an Event of Default and the failure to cure such
Event of Default as set forth in Clause 8.2 above at any time
thereafter, the Bank shall by a 60 days written notice to the relevant
Borrower:
a) declare the Advances drawn down by the relevant Borrower
to be immediately due and payable (whereupon the same
shall become so payable together with accrued interest
thereon and any other sums then owed by the Borrower
hereunder); and/or
b) declare that the Facility shall be cancelled in respect
of the relevant Borrower, whereupon the same shall be
cancelled.
8.4 LENGTH OF TERMS
If, pursuant to Clause 8.3 (Acceleration and Cancellation), the Bank
declares the Advances to be due and payable, the Term in respect of any
such Advance shall, if the Bank subsequently demands payment before the
scheduled Repayment Date in respect of such Advance, be deemed of such
length that it ends on the date that such demand is made.
PART 9
GUARANTEE
9.1. GUARANTEE
The Guarantor irrevocably and unconditionally guarantees to the Bank
the due and punctual observance and performance of all the terms,
conditions and covenants on the part of the Borrowers contained in this
Agreement and agrees to pay to the Bank from time to time on demand any
and every sum or sums of money which the Borrowers are at any time
liable to pay to the Bank under or pursuant to this Agreement and which
has become due and payable but has not been paid at the time such
demand is made with at least 60 days notice. The Guarantor shall
perform the above mentioned obligations on a 60 days prior written
notice of the Bank.
9.2. INDEMNITY
The Guarantor irrevocably and unconditionally agrees as a primary
obligation to indemnify the Bank from time to time on demand by the
Bank from and against any loss incurred by the Bank as a result of any
of the obligations of the Borrowers under or pursuant to this Agreement
being or becoming void, voidable, unenforceable or ineffective as
against the Borrower for any reason whatsoever, whether or not known to
the Bank or any of them or any other person, the amount of such loss
being
the amount which the person or persons suffering it would otherwise
have been entitled to recover from the Borrowers.
9.3. ADDITIONAL SECURITY
The obligations of the Guarantor herein contained shall be in addition
to and independent of every other security which the Bank may at any
time hold in respect of any of the Borrower's obligations hereunder.
9.4. CONTINUING OBLIGATIONS
The obligations of the Guarantor herein contained shall constitute and
be continuing obligations notwithstanding any settlement of account or
other matter or thing whatsoever and shall not be considered satisfied
by any intermediate payment or satisfaction of all or any of the
obligations of the Borrowers under this Agreement and shall continue in
full force and effect until final payment in full of all amounts owing
by the Borrowers hereunder and total satisfaction of all the Borrowers'
actual obligations hereunder.
9.5. ASSIGNMENT OF CLAIM
If the Guarantor is obliged to make any payments under this Guarantee,
it will take over the Bank's right to claim repayment and interest and
other costs from the defaulting Borrower according to this Agreement,
to the extent of the amount the Guarantor actually paid, without any
further notice to or consent by the Bank.
9.6. COMFORT LETTER FROM CITIZENS UTILITIES COMPANY
Citizens Utilities Company shall issue a comfort letter to the Lender
in a form attached to this Agreement as the Fifth Schedule.
PART 10
DEFAULT INTEREST AND INDEMNITY
10.1 DEFAULT INTEREST PERIODS
If any sum due (principal, interest) and payable by the Borrowers
hereunder is not paid on the due date therefor in accordance with the
provisions of Parts 4 and 6 or if any sum due and payable by the
Borrowers under any judgment of any court in connection herewith is not
paid on the date of such judgment, the period beginning on such due
date or, as the case may be, the date of such judgment and ending on
the date upon which the obligation of Borrowers to pay such sum (the
balance thereof for the time being unpaid being herein referred to as
an "unpaid sum") is discharged shall be divided into calendar days.
10.2 DEFAULT INTEREST
During each such period relating thereto as is mentioned in Clause 10.1
(Default Interest Periods) an unpaid sum shall bear interest at the
rate per annum which is 6 per cent above the interest rate defined in
Clause 4.2.a.
10.3 PAYMENT OF DEFAULT INTEREST
Any interest which shall have accrued under Clause 10.1 (Default
Interest) in respect of an unpaid sum shall be due and payable and
shall be paid by the Borrowers owing such unpaid sum at the end of the
period by reference to which it is calculated or on such other dates as
the Bank may specify by written notice to the Borrowers.
10.4 CURRENCY OF DEFAULT INTEREST
In case of a failure to pay the amount maintained in USD when due, the
Bank shall convert the USD amount to HUF at the time it is due, thus
the interest on this shall be governed also by this clause.
PART 11
GUARANTEES OF THE LOAN REPAYMENT
11.1 The security for the repayment of any debt incurred by the Borrowers to
the Bank based on this Agreement shall include the following:
11.1.1 IMPUTATION RIGHT
Each Borrower shall authorize the Bank to debit at the due
date - by exercising its imputation right - any account of the
Borrower according to point No. 3.2 of the Business Regulation
of Loans of the Bank, provided the debt still exists, by the
amount of the matured facility and its interest and to enforce
it with a prompt collection order debiting the Borrower's
accounts held with the Bank, following the sequence for
fulfilling payment orders with prior ranking, but before all
other payment orders as specified in section (2) of paragraph
5 of Government Decree No. 39/1984. (XI.5.) pertaining to
financial transactions and loans. A Borrower shall not be
permitted to withdraw its authorization included in this point
while its debt to the Bank still exists.
11.1.2 THE MORTGAGING OF THE ASSETS OF THE BORROWERS
Each Borrower hereby agrees to xxxxx x xxxx on all its assets
(i) purchased or constructed from the Facility provided
according to this Agreement and (ii) purchased
or constructed from those loans which are refinanced by the
Facility provided in this Agreement, however the lien does not
cover any assets to be purchased or constructed from a
facility other than provided according to this Agreement.
The grant of a lien is subject to the approval of each
Borrower's Board of Directors. The mortgaging of the assets of
KNC and Raba-Com are also subject to the approval of Tele
Denmark and the Danish Investment Fund for Central and Eastern
Europe, and the repayment of Siemens Telefongyar Kft.
supplier's credit. The mortgaging of the assets of Hungarotel
is subject to the terms and conditions of the Turn-key
Construction Contract between Fazis Rt. and Hungarotel.
The Parties will enter into a separate Security Agreement to
establish these mortgages. Such Security Agreement will
provide an option to the Lender allowing it to register the
mortgaging of the assets in a public notary register upon the
coming into force of a law to that effect.
11.1.3 DEPOSITING THE SHARES IN BORROWERS OWNED BY THE GUARANTOR
FOR THE BENEFIT OF THE BANK
The Guarantor hereby agrees to deposit all of its shares held
in the Borrowers with ABN AMRO Bank Magyarorszag Rt. as an
escrow agent for the securing the repayment of the Facility
provided under this Agreement. The deposit/lien is subject to
the approval of Tele Denmark and the Danish Investment Fund
for Central and Eastern Europe with respect to the shares of
KNC and Raba-Com. It is understood that the shares in the
Borrowers are currently deposited for securing indebtedness
owed to MATAV and to Citicorp, therefore the deposit under
this clause can be
effected only upon the full payment of the debt to MATAV. The
Parties will enter into a separate agreement to implement this
deposit.
11.1.4 INSURANCE POLICY COVERING THE ASSETS OF THE BORROWERS
Each Borrower shall be obliged to (i) obtain an insurance
policy covering the total value of the asset(s) earmarked for
security if no such policy is already in place, (ii) send the
policy, which must name the Bank as the beneficiary to the
Bank within 60 days and (iii) confirm payment of premiums at
the request of the Bank. A Borrower must not modify or
terminate such insurance policy without the Bank's consent.
11.1.5 BANK ACCOUNTS OF BORROWERS
Each Borrower and the Guarantor shall conduct all practical
financial transactions through settlement accounts opened for
this purposes exclusively with the Bank where available. In
those regions not having local Bank facilities, alternative
financial institutions may be used. Each Borrower and the
Guarantor shall use its best efforts to open all bank accounts
by December 31, 1996. The Bank shall charge a turnover fee of
0.125% for all debit transactions.
11.1.6 SUPERVISORY BOARD SEATS
The Guarantor agrees that, at the next General Meetings of
each Borrower (which each Borrower agrees to hold no later
than 60 days from the date of the execution of this Agreement)
it shall nominate and vote its shares in favour of a nominee
of the Bank as one member of the respective Supervisory boards
of the Borrowers.
11.1.7 FINANCING SUPPORT AGREEMENT WITH THE MINISTRY OF
TRANSPORT, TELECOMMUNICATIONS AND WATER MANAGEMENT
Each Borrow undertakes to sign an agreement with the Lender
and the Hungarian Ministry of Transport, Telecommunications
and Water Management ("the Ministry") relating to its
concession agreement, and such agreement will cover the
following issues:
- the Ministry approves the grant of a mortgage on the
assets as set forth in Clause 11.1.2 and a lien on
the Guarantor's shares in each Borrower, to the
Lender, including the enforcement of these securities
by the Lender in the event of default;
- the Ministry approves the continuation of the
concession agreements if the Lender enforces its
rights as a secured party;
- the Ministry will not approve the grant of further
mortgage over the assets without consent of the
Lender in respect of assets that were
purchased/installed using the Facility or other
loans/supplier credits repaid from the Facility;
- the Lender will receive copies of all Notifications
sent by the Ministry to the Borrowers;
- if, after a Borrower is liquidated due to
bankruptcy, a new concession company is formed, the
Lender has the right to determine the new
shareholding structure. However, the Lender
undertakes to make all reasonable actions required
to avoid the liquidation of the Borrowers;
- if a concession agreement is terminated and a new
tender is announced, the new concession holder will
be obliged to buy all the assets of the relevant
Borrower at a price determined by the Lender and
accepted by an independent auditor,
- the Ministry is not entitled to amend a concession
agreement when the relevant Borrower is in material
default (which has not been cured within 30 days
following written notice of such default by the
Lender) of its individual loan agreement without the
Lender's consent, which shall not be unreasonably
withheld.
This Agreement and any of the separate individual loan
agreements with the Borrowers are effective regardless of
whether the Ministry agrees to any or all of the points raised
in this clause 11.1.7, and the lack of Agreement because of
the Minister does not enter into such Agreement, does not
constitute an event of default.
PART 12
ASSIGNMENTS AND TRANSFERS
12.1 BINDING AGREEMENT
The Agreement shall be binding upon and enure to the benefit of each
party hereto and its or any subsequent successors, Transferees and
assigns.
12.2 NO ASSIGNMENTS AND TRANSFERS BY THE OBLIGORS
No Obligor shall be entitled to assign or transfer all or any of its
rights, benefits and obligations hereunder except in the event of a
merger or consolidation of the Obligors.
12.3 ASSIGNMENTS AND TRANSFERS BY BANK
The Bank may, at any time and by completing a Transfer Certificate,
assign all or any of its rights, benefits and obligations hereunder to
a consortium of banks. Any transfer to a third party who is not a
member of a consortium of banks
requires the consent of the Guarantor, which can not to be unreasonably
withheld. In the event of such transfer, the Bank will remain bound by
its obligations under this Agreement and any individual loan agreements
with the Borrowers.
PART 13
SPECIAL AGREEMENTS REGARDING FAZIS RT.
13.1 RIGHT OF FIRST NEGOTIATION
The Guarantor hereby agrees to secure the right of first negotiation of
Fazis Rt. to purchase Guarantor's shares in the Borrowers in compliance
with current legal regulations subject to Tele Denmark's and the Danish
Fund for Central and Eastern Europe's rights of first refusal with
respect to the shares. This right of negotiation does not apply to any
change in the ownership of the Borrowers which is due to (i) a merger
or consolidation of the Borrowers, (ii) a merger or consolidation or
joint venture of the Borrowers (or the merged Borrowers) or with other
local Hungarian telephone concession companies or (iii) the transfer of
shares in the Borrowers to affiliates of the Guarantor.
13.2 CONSULTANCY
The Borrowers and the Guarantor hereby accept FAZIS Rt. as the
consultant of the Bank.
PART 14
LEGAL DISPUTE AND GOVERNING LAW
14.1 LEGAL DISPUTES
The Parties shall attempt to resolve all disputes pertaining to this
contract through mutual agreement, and in case of the failure of such
attempts the Permanent Arbitration Court
attached to the Hungarian Chamber of Commerce and Industry will be
assigned exclusively to deal with the issue. The language of the
proceedings shall be Hungarian.
14.2 GOVERNING LAW
Issues not regulated in this contract shall be governed by the
following:
a) The bank account agreement to be signed between the Bank
and each Borrower;
b) General Business Conditions of the Bank and the Business
Regulations for Loans;
c) Provisions pertaining to bank loans of the Civil Code of
the Republic of Hungary;
d) other laws and statutes of the republic of Hungary on
money transactions and bank loans.
14.3 GOVERNING LANGUAGE
This Agreement is executed in both English and Hungarian. In the event
of any discrepancies, the Hungarian language version shall prevail,
except in respect of Part 9 (Guarantee) where the English language
version shall prevail.
PART 15
MISCELLANEOUS
15.1 EFFECTIVENESS
This Agreement shall come into effect upon the authorized signing by
the Parties except in the case of Raba-Com and KNC, for whom it shall
come into effect only upon receipt of required approval from Tele
Denmark A/S and the Investment Fund for Eastern and Central Europe.
15.2 COMMUNICATIONS AND NOTICES
Each communication and notice to be made hereunder shall be made in
writing and, unless otherwise stated, shall be made by fax, and
confirmed by letter to the following addresses and fax numbers:
(1) Xxxxxxxxx xx Xxxxxxxxxxxxxx Xx., 0000 Xxxxxxxx, Vaci ut
48.
To the attention of: Xxxxxxx Xxxx fax number: 000-0000
(2) Xxxxxxxxxx Xxxxxxxxxx Xx., 0000 Xxxxxxxx, Xxxxxxxxxx u.2
To the attention of: Xxxxxx X. Xxxxxxxxx fax number: 202-
4778
(3) Papa es Tersege Telefon Koncesszios Reszvenytarsasag,
8500 Papa, Major u. 2. To the attention of: Xxxxxx X.
Xxxxxxxxx fax number:000-0000
(4) Kelet-Nograd Com., 3100 Salgotarjan, Munkasotthon ter 1.
To the attention of: Xxxxxx X. Xxxxxxxxx fax number:202-
4778
(5) Raba-Com Tavkozlesi es Telekommunikacios Koncesszios Rt.,
9600 Sarvar, Xxx Xxxxx u. 1.
To the attention of: Xxxxxx X. Xxxxxxxxx fax number:202-
4778
(6) HTCC Consulting Rt., 1126 Budapest, Kiralyhago u. 2.
To the attention of: Xxxxxx X. Xxxxxxxxx fax number:202-
4778
(7) Hungarian Telephone and Cable Corp., 1126 Budapest,
Kiralyhago u. 2.,
To the attention of: Xxxxxx X. Xxxxxxxxx fax number: 202-
4778
All communications shall be copied to Xx. Xxxxx Xxxxxxx fax
number: 268-1610
15.3 LANGUAGE OF COMMUNICATION
Each communication and document made or delivered by one party to
another pursuant to this Agreement shall be in the English language or
accompanied by a translation thereof into English certified (by an
officer of the person making or delivering the same) as being a true
and accurate translation thereof. Bank account statements may be in
Hungarian.
15.4 COPIES
This Agreement is signed in 8 original copies.
AS WITNESS the hands of the duly authorized representatives of the parties
hereto the day and year first before written.
[Duly Executed by all of the parties]
