Exhibit 10.85
POSTABANK ES TAKAREKPENZTAR RT.
as Lender
[RELEVANT SUBSIDIARY OF HUNGARIAN TELEPHONE AND CABLE CORP.]
as Borrower
HUNGARIAN TELEPHONE AND CABLE CORP.
as Guarantor
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HUF equivalent of U.S.$_________
LOAN AGREEMENT
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THIS AGREEMENT is made on October 15, 1996.
BETWEEN
(1) Xxxxxxxxx xx Xxxxxxxxxxxxxx Xx. ("xxx Xxxx"), 0000 Xxxxxxxx,
Vaci ut 48.
as Lender ("Lender" or "Bank").
and
(2) [Relevant Subsidiary of Hungarian Telephone and Cable Corp.]
as Borrower ("Borrower")
and
(3) Hungarian Telephone and Cable Corp. ("HTCC USA"), Hungarian
address: 1126 Budapest, Kiralyhago u. 2.,
as Guarantor ("the Guarantor")
Lender, Borrower 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. Postabank, Hungarotel, Papatel, KNC, Rabacom, HTCC Consulting,
HTCC entered into a Multi Currency Credit Facility Agreement on October 15,
1996.
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 LOAN 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 loan facility in an aggregate amount of the HUF
equivalent of USD _______________ 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 Borrower 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 Third 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 Borrower 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 Borrower,
upon the terms and subject to the conditions hereof, a
loan facility in an aggregate amount of the HUF
equivalent of USD _____________ 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
Borrower, 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
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 Borrower, for the telecommunication development of
the Borrower, and for general working capital purposes,
and accordingly, the Borrower 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.
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 Third Schedule, the Borrower may from time to time request the
making of an Advance according to the First 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 Borrower 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 Borrower's
accounts, and the Borrower hereby instructs 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 the 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 Borrower 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 Borrower's
account on the same day without further instructions.
PART 4
INTEREST
4.1 PAYMENT DATE OF INTEREST
The 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 _________ 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 Borrower 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.
PART 5
MANAGEMENT FEES
5.1 A management fee equal to the HUF equivalent of USD _________, is
payable to the Bank. The management fee to be paid by the Borrower
becomes payable at the time of the first Advance made 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 AND CANCELLATION
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 Borrower must provide sufficient funds on their
respective accounts without special notice from the Bank
to the extent and at maturity dates specified here in covering
the loan amount and interest due; the Borrower acknowledges
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 the Borrower
satisfies its payment obligations.
6.3 PREPAYMENT
The 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
The 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 BORROWER
The Borrower makes the representations and warranties set out
in Clause 7.1.1. to Clause 7.1.9.
7.1.1 LIABILITIES TOWARDS MATAV
The Borrower declares that it has no further indebtedness
towards MATAV other than the indebtedness set out in the
Second Schedule equal to a total of USD _______ in connection
with the transfer of the MATAV assets in the concession areas.
7.1.2 TOTAL DEBT
The Borrower declares that other than in the ordinary course
of business it has no further indebtedness toward any third
parties other than those listed in the Second Schedule to this
Agreement.
7.1.3 TAXES
The Borrower declares that it has no material overdue taxes
owing other than those included in the Third Schedule in this
Agreement. The Borrower is 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 Fourth Schedule.
7.1.5 STATUS AND DUE AUTHORIZATION
The 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 full payment of Citicorp and MATAV in
respect of all shares, and, in relation to the deposit of the
shares in the Borrower, 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 BORROWER
The Borrower is subsidiariy 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
The Obligor 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
The Obligor 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, the Borrower states and represents,
that it will not enter into any other loan agreement before
the repayment all the made Advances without the prior written
notice to the Bank.
7.2.3 NEGATIVE PLEDGE
The 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 Borrower undertakes to procure the sending 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 EVENTS OF DEFAULT
Each of Clause 8.1.1 to Clause 8.1.12 describes circumstances which
constitute an Event of Default. 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
The 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
The 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 the 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 the 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.
8.1.7 INSOLVENCY AND RESCHEDULING
The 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
The 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 the Borrower is finally
terminated and the termination comes into effect.
8.2 NOTICE TO THE BORROWER
Upon the occurrence of an Event of Default at any time, the Bank shall
by a 60 days written notice to the Borrower request that the Borrower
cures 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 Borrower:
a) declare the Advances drawn down by the 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) or declare
such Advances to be due and payable; and/or
b) declare that the Facility shall be cancelled in respect
of the 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 Borrower 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 Borrower is 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 Borrower 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 Borrower.
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 Borrower under this Agreement and shall continue in
full force and effect until final payment in full of all amounts owing
by the Borrower hereunder and total satisfaction of all the Borrower's
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 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.
PART 10
DEFAULT INTEREST AND INDEMNITY
10.1 DEFAULT INTEREST PERIODS
If any sum due (principal, interest) and payable by the
Borrower 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 Borrower 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 Borrower 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 Borrower xxxxxx 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 Borrower.
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 Borrower to
the Bank based on this Agreement shall include the following:
11.1.1 IMPUTATION RIGHT
The 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. The 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 BORROWER
The 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 mortgaging of the assets of the Borrower is subject to the
terms and conditions of the Turn-key Construction Contract
between Fazis Rt. and the Borrower.
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 BORROWER OWNED BY THE GUARANTOR
FOR THE BENEFIT OF THE BANK GUARANTEE
The Guarantor hereby agrees to deposit all of its shares held
in the Borrower with ABN AMRO Bank Magyarorszag Rt. as an
escrow agent for the securing the repayment of the Facility
provided under this Agreement. It is understood that the
shares in the Borrower 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 BORROWER
The Borrower shall be obliged to (i) obtain an insurance
policy covering, to the extent that cover is commercially
available in the market 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. The Borrower
must not modify or terminate such insurance policy without the
Bank's consent.
11.1.5 BANK ACCOUNTS OF BORROWER
The 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. The 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 SEAT
The Guarantor agrees that, at the next General Meetings of the
Borrower (which the 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 Supervisory board of the
Borrower.
11.1.7 FINANCING SUPPORT AGREEMENT WITH THE MINISTRY OF
TRANSPORT, TELECOMMUNICATIONS AND WATER MANAGEMENT
The Borrower 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 the 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 agreement 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 Borrower;
- if, after the 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 Borrower;
- 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 Borrower at a
price determined by the Lender and accepted by an
independent auditor,
- the Ministry is not entitled to amend the
concession agreement when the 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 is 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 with the Borrower.
PART 13
LEGAL DISPUTE AND GOVERNING LAW
13.1 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.
13.2 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 the 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.
13.3 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 14
MISCELLANEOUS
14.1 EFFECTIVENESS
This Agreement shall come into effect upon the authorized signing by
the Parties.
14.2 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) [Relevant Subsidiary of Hungarian Telephone and Cable
Corp.] To the attention of: Xxxxxx X. Xxxxxxxxx fax
number:202-4778
(3) 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
14.3 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.
14.4 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]
