Exhibit 1
HUNGARIAN TELEPHONE AND CABLE CORP.
2,428,572 SHARES OF COMMON STOCK
AND
$25,000,000 AGGREGATE PRINCIPAL AMOUNT
OF
FLOATING RATE UNSECURED NOTES DUE 2007
WITH
WARRANTS TO PURCHASE
2,500,000 SHARES OF COMMON STOCK
SECURITIES PURCHASE AGREEMENT
DATED MAY 12, 1999
TABLE OF CONTENTS
Page
ARTICLE I.....................................................................1
SECTION 1.1. AUTHORIZATION OF THE SECURITIES.............................1
SECTION 1.2. SALE AND PURCHASE OF THE SHARES, THE NOTES AND WARRANTS......2
ARTICLE II....................................................................2
ARTICLE III...................................................................3
SECTION 3.1. ORGANIZATION AND EXISTENCE...................................3
SECTION 3.2. SUBSIDIARIES.................................................3
SECTION 3.3. CAPITALIZATION...............................................3
SECTION 3.4. AUTHORIZATION; BINDING OBLIGATIONS...........................4
SECTION 3.5. COMPLIANCE WITH INSTRUMENTS, ETC.............................5
SECTION 3.6. LITIGATION...................................................5
SECTION 3.7. FINANCIAL STATEMENTS; TAXES..................................5
SECTION 3.8. TAXES........................................................6
SECTION 3.9. OFFERING.....................................................6
SECTION 3.10. PERMITS; GOVERNMENTAL AND OTHER APPROVALS...................6
SECTION 3.11. FORM 10-K...................................................6
SECTION 3.12. REGISTRATION RIGHTS.........................................6
SECTION 3.13. ORDINARY COURSE; NO MATERIAL ADVERSE CHANGE.................7
SECTION 3.14. DISCLOSURE..................................................7
SECTION 3.15. REPRESENTATIONS AND WARRANTIES IN THE BRIDGE LOAN AGREEMENT.7
ARTICLE IV....................................................................7
SECTION 4.1. REPRESENTATIONS AND WARRANTIES CORRECT.......................7
SECTION 4.2. PERFORMANCE..................................................7
SECTION 4.3. COMPLIANCE CERTIFICATE.......................................8
SECTION 4.4. NO IMPEDIMENTS...............................................8
SECTION 4.5. NO MATERIAL ADVERSE CHANGE...................................8
SECTION 4.6. LEGAL INVESTMENT.............................................8
SECTION 4.7. QUALIFICATIONS...............................................8
SECTION 4.8. ISSUANCE TAXES...............................................8
SECTION 4.9. PROCEEDINGS AND OTHER DOCUMENTS..............................8
SECTION 4.10. OPINION OF COUNSEL..........................................8
SECTION 4.11. CONSENTS, WAIVERS, ETC......................................9
SECTION 4.12. OTHER MATTERS...............................................9
SECTION 4.13. CONDITIONS IN THE BRIDGE LOAN AGREEMENT.....................9
ARTICLE V.....................................................................9
SECTION 5.1. PAYMENT OF PURCHASE PRICE....................................9
SECTION 5.2. PERFORMANCE..................................................9
ARTICLE VI...................................................................10
SECTION 6.1. REPORTS.....................................................10
SECTION 6.2. ACCOUNTS AND RECORDS........................................12
SECTION 6.3. INSPECTION..................................................12
SECTION 6.4. INDEPENDENT ACCOUNTANTS.....................................12
SECTION 6.5. RULE 144A INFORMATION.......................................13
SECTION 6.6. USE OF PROCEEDS.............................................13
SECTION 6.7. SEAT ON BOARD OF DIRECTORS..................................13
SECTION 6.7. FURTHER ASSURANCES..........................................13
ARTICLE VII..................................................................14
SECTION 7.1 SURVIVAL......................................................14
SECTION 7.2 INDEMNIFICATION...............................................14
SECTION 7.3 CERTAIN DEFINITIONS AND LIMITATIONS...........................14
SECTION 7.4 PROCEDURES....................................................15
ARTICLE VIII.................................................................16
SECTION 8.1 RESTRICTIONS OF TRANSFER OF SHARES...........................16
SECTION 8.2. RIGHT OF FIRST REFUSAL......................................16
ARTICLE IX...................................................................17
SECTION 9.1 AMENDMENT AND WAIVER.........................................17
SECTION 9.2. BINDING EFFECT..............................................17
ARTICLE X....................................................................18
ARTICLE XI...................................................................18
ARTICLE XII..................................................................18
ARTICLE XIII.................................................................19
SECTION 13.1 GOVERNING LAW...............................................19
SECTION 13.2 CONSENT OF JURISDICTION....................................19
SECTION 13.3 SUCCESSORS AND ASSIGNS......................................20
SECTION 13.4 ENTIRE AGREEMENT............................................20
SECTION 13.5 NOTICES, ETC................................................20
SECTION 13.6 DELAYS OR OMISSIONS.........................................21
SECTION 13.7 SEVERABILITY................................................22
SECTION 13.8 AGENT'S FEES................................................22
SECTION 13.9 EXPENSES....................................................22
SECTION 13.10 TITLES AND SUBTITLES.......................................22
SECTION 13.11 COUNTERPARTS...............................................22
EXHIBITS AND SCHEDULES
Exhibit A - Form of Note
Exhibit B - Form of Warrant
Exhibit C - Form of Legal Opinion
Schedule 3.2 - Subsidiaries
Schedule 3.3(a) - Derivative Securities
Schedule 3.3(b) - Preemptive Rights
Schedule 3.5 - Conflicts, Breaches
Schedule 3.6 - Litigation
Schedule 3.10 - Permits
Schedule 3.11 - Registration Rights
SECURITIES PURCHASE AGREEMENT dated as of May 12, 1999 (this
"Agreement"), between Hungarian Telephone and Cable Corp., a Delaware
corporation (the "Company"), and Postabank es Takarekpenztar Rt., a Hungarian
commercial bank (the "Bank").
WHEREAS, the Bank, as lender, Hungarotel Tavkozlesi Rt.
("Hungarotel"), Papa es Tersege Telefon Koncesszios Rt. ("Papatel"),
Kelet-Nograd Com. ("Kelet-Nograd"), RABA-Com Tavkozlesi es Telekommunikacios
Koncesszios Rt. ("Xxxxxxx") and HTCC Consulting Rt. ("HTCC Consulting"), as
borrowers (collectively the "Borrowers"), and the Company, as guarantor, entered
into a Multi-Currency 1996 Credit Facility Agreement, dated October 10, 1996, as
well as individual Loan Agreements between the Bank and each of the Borrowers
(collectively, the "1996 Credit Facility Agreement"); and
WHEREAS, the parties desire to negotiate a restructuring of the
Borrowers' and the Company's obligations under the 1996 Credit Facility
Agreement; and
WHEREAS, as part of such restructuring, the Bank, as lender, and each
of Hungarotel, Papatel, Kelet-Nograd and Xxxxxxx, as borrowers respectively,
have entered into individual Loan Agreements dated the date hereof
(collectively, "Bridge Loan Agreement"), with respect to which the Company and
HTCC Consulting will act as guarantors; and
WHEREAS, as part of such restructuring, the Bank wishes to purchase
from the Company, and the Company wishes to issue and sell to the Bank, (i)
2,428,572 shares of the Common Stock, par value $.001 per share, of the Company
(the "Common Stock"), and (ii) $25,000,000 aggregate principal amount of
Floating Rate Unsecured Notes due 2007 of the Company (the "Notes") with
detachable warrants (the "Warrants") to purchase an aggregate of 2,500,000
shares of Common Stock; and
WHEREAS, the proceeds from the issuance and sale of the Common Stock
and the Notes with detachable Warrants will be provided by the Company to one or
more of the Borrowers to be applied to the repayments of amounts outstanding
under the 1996 Credit Facility Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties hereto agree as follows:
ARTICLE I
AUTHORIZATION, AND, AS APPLICABLE, SALE AND PURCHASE, OF THE
SHARES, THE NOTES AND THE WARRANTS
SECTION 1.1. Authorization of the Securities; Detachability.
(a) The Company has authorized (i) the issue and sale of up to
2,428,572 shares of Common Stock (the "Shares") and (ii) the issue of the Notes,
the terms of which shall be substantially as set forth on Exhibit A attached
hereto, with detachable Warrants, the terms of which shall be substantially as
set forth on Exhibit B attached hereto. The Shares, the Notes and the Warrants
are collectively referred to herein as the "Securities"; the term "Warrant"
means a Warrant to purchase one share of Common Stock.
(b) The Notes and the Warrants shall be sold in units (each, a
"Unit"). Each Unit shall consist of (i) $1,000,000 aggregate principal amount of
Notes and (ii) one hundred thousand (100,000) Warrants. Immediately following
the Closing (as such term is defined in Article III), the Units shall
automatically dissolve and the Bank may dispose of Notes and Warrants
separately, subject to the terms of this Agreement, the Notes and the Warrants.
SECTION 1.2. Sale and Purchase of the Shares, the Notes and Warrants.
Subject to the terms and conditions hereof and in reliance on the
representations and warranties contained herein, or made pursuant hereto, on the
Closing Date (as hereinafter defined), the Company will issue and sell to the
Bank and the Bank will purchase from the Company the Securities for a purchase
price per Share of $14.00, with the aggregate purchase price for all the Shares
being $34,000,000, and the aggregate purchase price for the Units being
$25,000,000.
ARTICLE II
CLOSING
The closing of the purchase and sale of the Securities (the "Closing")
will take place at the offices of Xxxxxxx XxXxxxx Ormai, Bank Center, Citibank
Tower, 4F, Szabadsag ter 7, H-1944 Budapest, Hungary at 10:00 a.m., local time,
on May 12, 1999, or such other time and date or place as shall be mutually
agreed to by the Company and the Bank. Such time and date are hereinafter
referred to as the "Closing Date."
At the Closing, (a) the Company will deliver to the Bank (i) stock
certificates (in definitive form) representing the Shares to be purchased by the
Bank registered in the name of the Bank or in the name of the Bank's nominee,
(ii) twenty five (25) Units, each Unit consisting of $1,000,000 aggregate
principal amount of Notes (in definitive form) registered in the name of the
Bank or in the name of the Bank's nominee and one hundred thousand (100,000)
Warrants (in definitive form) registered in the name of the Bank or in the name
of the Bank's nominee and (iii) all other documents, instruments and writings
required to have been delivered at or prior to the Closing by the Company
pursuant to this Agreement, and (b) the Bank shall deliver to the Company the
Purchase Price in United States dollars in immediately available funds by wire
transfer to an account of the Company maintained at the Bank, which account
shall be established by the Company at least two (2) business days prior to the
Closing and designated as the applicable account for purposes of this Article
III.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Bank as follows:
SECTION 3.1. Organization and Existence. The Company (i) is duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all requisite power and authority to
carry on its business as now conducted and proposed to be conducted, and (ii) is
duly qualified to do business as a foreign corporation and is in good standing
(or the equivalent thereof under applicable law) in each jurisdiction in which
the conduct of its business requires such qualification by reason of the
ownership or leasing of property or otherwise (except for those jurisdictions in
which the failure so to qualify has not had and will not have a Material Adverse
Effect). "Material Adverse Effect" means, when used in connection with the
Company, any development, change or effect that is materially adverse to the
business, properties (including, without limitation, Intellectual Property (as
defined in Section 3.11), assets, net worth, condition (financial or other),
results of operations or prospects of the Company. The Company has furnished the
Bank with true, correct and complete copies of the bylaws (including any
amendments to date of any thereof) of the Company.
SECTION 3.2. Subsidiaries. The Company has subsidiaries as described
in Schedule 3.2. Each of the Subsidiaries is (i) duly incorporated or organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, and has all requisite power and authority to
carry on its business as now conducted and proposed to be conducted, and (ii) is
duly qualified to do business as a foreign corporation or limited liability
company and is in good standing (or the equivalent thereof under applicable law)
in each jurisdiction in which conduct of its business requires such
qualification by reason of ownership or leasing of property or otherwise (except
for those jurisdictions in which the failure to so qualify has not and will not
have a Material Adverse Effect).
SECTION 3.3. Capitalization.
(a) As of the date hereof, (i) the Company's authorized capital stock
consists of (1) 5,000,000 shares of preferred stock, of which no shares are
issued and outstanding and (2) 25,000,000 shares of Common Stock, of which
5,395,864 shares are validly issued and outstanding, fully paid and
nonassessable and; (ii) the Company has outstanding the securities set forth on
Schedule 3.3(a) which are convertible into or exercisable or exchangeable for
Common Stock (the "Derivative Securities"). From the date hereof to the Closing,
there will be no changes in such authorized capital stock or Derivative
Securities, except as contemplated by this Agreement or upon the exercise of
Derivative Securities.
(b) Except as set forth on Schedule 3.3(b), all the issued and
outstanding shares of capital stock are free of preemptive and similar rights
and have been offered, issued, sold and delivered by the Company in transactions
either in compliance with applicable federal, state and foreign securities laws,
or as to which all limitation periods that are applicable have expired. Other
than as set forth in Schedule 3.3(b), there are no outstanding agreements or
commitments requiring the Company to issue capital stock or Derivative
Securities.
SECTION 3.4. Authorization; Binding Obligations.
(a) The Company has full corporate power and authority to execute and
deliver this Agreement, and such other documents furnished or to be furnished by
the Company hereunder. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity. The issuance, offering and sale of the Securities pursuant
to this Agreement, the compliance by the Company with the provisions of this
Agreement and the Securities, and the consummation of the other transactions
herein contemplated will not result in the creation or imposition of any lien,
charge, security interest or encumbrance upon any of the assets of the Company
pursuant to the terms or provisions of, or result in a breach or violation of or
conflict with any of the terms or provisions of, or constitute a default under,
or give any other party a right to terminate any of its obligations under, or
result in the acceleration of any obligation under, (i) the organizational and
governing documents of the Company, (ii) any contract or other agreement to
which the Company is a party or by which the Company or any of its respective
properties is bound or affected, or (iii) any judgment, ruling, decree, order,
statute, rule or regulation of any court or other governmental agency or body,
domestic or foreign, applicable to the business or properties of the Company.
(b) The Shares have been duly authorized for issuance prior to the
Closing, and, when issued and delivered in accordance with the provisions of
this Agreement, will be validly issued, fully paid and nonassessable.
(c) The Notes have been duly authorized and when the Notes have been
duly executed and delivered by the Company, the Notes will constitute valid and
legally binding obligations of the Company enforceable against the Company in
accordance with their terms, subject to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting creditors'
rights and to general principles of equity.
(d) The Warrants have been duly authorized prior to the Closing and
the shares of Common Stock issuable upon exercise of the Warrants (the "Warrant
Shares") will be duly authorized and reserved for issuance prior to the Closing
and when the Warrants have been duly executed and delivered by the Company, (i)
the Warrants will constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with their terms, subject
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity, (ii) the Warrants will be exercisable for the Warrant
Shares in accordance with their terms, and (iii) the Warrant Shares, when issued
and delivered in accordance with the provisions of the Warrants, will be validly
issued, fully paid and nonassessable.
SECTION 3.5. Compliance with Instruments, etc. Except as set forth on
Schedule 3.5 hereto, neither the Company (nor the manner in which it conducts
its business) is in breach or violation of, or in default under, any term or
provision of (i) its organizational and governing documents, (ii) any indenture,
mortgage, deed of trust, voting trust agreement, stockholders agreement, note
agreement or other agreement or instrument to which it is a party or by which it
is or may be bound or to which any of its property is or may be subject, or any
indebtedness, the effect of which breach, violation or default, individually or
in the aggregate, may have a Material Adverse Effect, or (iii) any statute,
judgment, decree, order, rule or regulation applicable to the Company or of any
arbitrator, court, regulatory body, administrative agency or any other
governmental agency or body, domestic or foreign, having jurisdiction over the
Company or any of its respective activities or properties and the effect of
which breach, violation or default, individually or in the aggregate, could have
a Material Adverse Effect.
SECTION 3.6. Litigation. Except as set forth on Schedule 3.6 hereto,
there is no action, suit, proceeding or investigation pending, or, to the
knowledge of the Company, threatened, against the Company before or by any
court, regulatory body or administrative agency or any other governmental agency
or body, domestic or foreign, or any action, suit, proceeding or investigation
pending, or, to the knowledge of the Company, threatened, which, individually or
in the aggregate, could have a Material Adverse Effect, or which challenges the
validity of any action taken or to be taken pursuant to or in connection with
this Agreement or the issuance of the Shares, the Notes, the Warrants and the
Warrant Shares. As it pertains to the Company, when used herein, the phrases "to
the knowledge of," "to the best knowledge of" or derivatives thereof shall mean
the actual knowledge of the chief executive officer and the chief financial
officer of the Company, and the knowledge that a reasonable person serving in
the same or substantially similar capacities as such persons, acting prudently
under similar circumstances, would be expected to have. The Company is not
involved in any proceeding under the United States Bankruptcy Code or any other
applicable national, federal or state bankruptcy law or similar law and has
taken no action to seek relief under such Code or any such laws.
SECTION 3.7. Financial Statements. The Company has previously
delivered to the Bank or the Bank's representative true, correct and complete
copies of its financial statements for the years ended December 31, 1996, 1997
and 1998 (all such financial statements being collectively referred to as the
"Financial Statements"). The Financial Statements have been prepared in
accordance with United States generally accepted accounting principles ("US
GAAP") and fairly present, in all material respects, the financial position of
the Company and its Subsidiaries on a consolidated basis as of the dates thereof
and the results of their operations and cash flows for the periods then ended.
The Financial Statements as are audited have been examined by KPMG LLP, who are
independent public accountants within the meaning of the Securities Act of 1933,
as amended (the "Securities Act") and the rules and regulations promulgated
thereunder and they have expressed their opinions thereon, which are
unqualified, except to the extent set forth in the opinion of KPMG LLP in the
1998 Form 10-K, as such term is hereinafter defined, and in the Annual Report on
Form 10-K of the Company for the fiscal year ended December 31, 1997. As of
their respective dates, the Company had no liabilities or obligations of any
nature (absolute, accrued, contingent or otherwise) which would normally be
reflected on a balance sheet or disclosed in the notes thereto and which are not
reflected on any balance sheet contained in the Financial Statements or
disclosed in such notes.
SECTION 3.8. Taxes. The Company has filed all necessary income,
franchise and other material tax returns, domestic and foreign, and has paid all
taxes shown as due thereunder, and the Company has no knowledge of any tax
deficiency which might be assessed against the Company.
SECTION 3.9. Offering. Subject to the Bank's representations and
warranties in Article IV of this Agreement, the offer, sale and issuance of the
Securities as contemplated by this Agreement are not subject to the registration
requirements of the Securities Act and neither the Company nor anyone acting on
its behalf, has taken or will take any action that would cause such registration
requirements to be applicable.
SECTION 3.10. Permits; Governmental and Other Approvals. Except as set
forth on Schedule 3.10 hereto, the Company has such licenses, permits, consents,
orders, approvals and other authorizations necessary for the conduct of its
business as now being conducted and proposed to be conducted, except such
licenses, permits, consents, orders, approvals, and other authorizations the
absence of which has not and will not have a Material Adverse Effect. Except as
set forth on Schedule 3.10 hereto, no approval, consent, authorization or other
order of, and no designation, filing, registration, qualification or recording
with any governmental authority, domestic or foreign, is required for the
Company's performance of this Agreement or the consummation of the transactions
contemplated hereby.
SECTION 3.11. Form 10-K. The Annual Report on Form 10-K of the Company
for the fiscal year ended December 31, 1998 (the "1998 Form 10-K") complies as
to form in all material respects with the applicable requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and does not
contain any untrue statement of a material fact or omit to state a material fact
necessary on order to make the statements made, in the light of the
circumstances under which they were made, not misleading.
SECTION 3.12. Registration Rights. Except as set forth on Schedule
3.12 hereto, the Company is not under any obligation to register under the
Securities Act any of its currently outstanding securities or any of its
securities which may hereafter be issued.
SECTION 3.13. Ordinary Course; No Material Adverse Change. Since
December 31, 1998, the Company, has conducted its business in the ordinary
course, has not incurred any material obligation, absolute or contingent, or
entered into any material transactions not in the ordinary course of business,
and has not declared or paid any dividends or distributions on their capital
shares or reacquired any of such shares; and, since that date, there has been no
change which would, individually or in the aggregate, have a Material Adverse
Effect, except as disclosed in the 1998 Form 10-K.
SECTION 3.14. Disclosure. The written information with respect to the
Company heretofore provided and to be provided by the Company pursuant to this
Agreement, including the Schedules and Exhibits hereto, and each of the
agreements, documents, certificates and writings to be delivered to the Bank or
its representatives at the Closing, do not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated herein or therein or necessary in order to make the statements and
writings contained herein and therein not false or misleading in the light of
the circumstances under which they were made.
SECTION 3.15. Representations and Warranties in the Bridge Loan
Agreement. The representations and warranties contained in Clause 12
(Representations) of the Bridge Loan Agreement are true and correct.
ARTICLE IV
CONDITIONS OF OBLIGATIONS OF THE BANK
The obligations of the Bank under this Agreement are subject to the
fulfillment to their reasonable satisfaction on or prior to the Closing Date of
each of the following conditions:
SECTION 4.1. Representations and Warranties Correct. The
representations and warranties of the Company in Article III hereof shall be
true and correct in all respects on and as of the date hereof, and shall be true
and correct in all respects on and as of the Closing Date with the same force
and effect as if they had been made on and as of the Closing Date.
SECTION 4.2. Performance. All covenants, agreements and conditions
contained in this Agreement to be performed or complied with on or prior to the
Closing Date by the Company shall have been substantially performed or complied
with by the Company in all respects on or prior to the Closing Date.
SECTION 4.3. Compliance Certificate. The Company shall have delivered
to the Bank a certificate, dated the Closing Date and signed by an executive
officer of the Company, certifying the accuracy of the Company's representations
and warranties as of such Closing Date and certifying the compliance by the
Company with the conditions precedent set forth in this Article IV as of the
Closing Date and such other matters as the Bank shall reasonably request.
SECTION 4.4. No Impediments. No statute, judgment, order, decree of
any court, regulatory body, administrative agency or any other governmental
agency or body shall be in effect which would impose any material limitation on
the ability of the Bank to exercise full rights of ownership of the Securities.
SECTION 4.5. No Material Adverse Change. Except as disclosed in 1998
Form 10-K, since December 31, 1998, there shall have been no development, change
or effect that would have a Material Adverse Effect on the Company and there
shall have been no material adverse change in the Company's financial condition
from that indicated in the Financial Statements.
SECTION 4.6. Legal Investment. At the time of the Closing, the
purchase of the Securities by the Bank hereunder shall be legally permitted by
all statutes, rules and regulations to which the Bank is subject.
SECTION 4.7. Qualifications. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body that are now required
in connection with the lawful issuance and sale of the Securities by the Company
and the acquisition of the Securities by the Bank pursuant to this Agreement
shall have been duly obtained and shall be in full force and effect on and as of
the Closing Date.
SECTION 4.8. Issuance Taxes. All taxes imposed by law in connection
with the initial issuance, sale and delivery of the Securities shall have been
fully paid by the Company, and all laws imposing such taxes shall have been
fully complied with.
SECTION 4.9. Proceedings and Other Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
shall have been taken and the Bank shall have received such other documents and
instruments in form and substance reasonably satisfactory to them and their
counsel, as to such other matters incident to the transaction contemplated
hereby as they may reasonably request.
SECTION 4.10. Opinion of Counsel. The Bank shall have received the
opinion of Xxxxx X. Xxxxx, Esq., counsel for the Company, dated the Closing
Date, substantially in the form attached hereto as Exhibit C.
SECTION 4.11. Consents, Waivers, Etc. Prior to the Closing, the
Company shall have obtained all consents or waivers, necessary to execute and
deliver this Agreement and carry out the transactions contemplated hereby, and
all such consents and waivers shall be in full force and effect.
SECTION 4.12. Other Matters. The Company shall have delivered to the
Bank (i) certificates (in definitive form) in the denominations specified by the
Bank and registered in its name (or in the names of its nominees) representing
the Common Stock, (ii) Subordinated Notes (in definitive form) in the
denominations specified by the Bank and registered in its name (or in the names
of its nominees), (iii) Warrants (in definitive form) in the denominations
specified by the Bank and registered in its name (or in the names of its
nominees) and (iv) the following:
(a) A certified copy of the Company's articles of incorporation
and all amendments thereto, appropriately authenticated;
(b) A copy of the Company's by-laws, as amended to date,
certified as being true by a principal officer of the Company; and
(c) A certificate of good standing and tax status of the Company
certified as of a recent date by the Secretary of State of the State of
Delaware, and from every jurisdiction in which the Company is qualified to
do business.
Each of the conditions precedent set forth in Clause 2.3 (Conditions Precedent
Documents) and the Third Schedule (Conditions Precedent Documents) of the Bridge
Loan Agreement shall have been fulfilled to the reasonable satisfaction of the
Bank.
ARTICLE V
CONDITIONS OF OBLIGATIONS OF THE COMPANY
The Company's obligations under this Agreement are subject to the
fulfillment to its reasonable satisfaction on or prior to the Closing Date of
each of the following conditions:
SECTION 5.1. Payment of Purchase Price. The Company shall have
received payment in full of the aggregate purchase price required to be paid
under Article I.
SECTION 5.2. Performance. All covenants, agreements and conditions
contained in this Agreement to be performed or complied with on or prior to the
Closing Date by the Bank shall have been performed or complied with in all
respects on or prior to the Closing Date.
ARTICLE VI
AFFIRMATIVE COVENANTS OF THE COMPANY
The Company hereby covenants and agrees, so long as the Bank is the
holder of any of the Securities, as follows:
SECTION 6.1. Reports. The Company will deliver to the Bank:
(a) Financial Information.
(i) within forty-five (45) days after the end of each of the
first three fiscal quarters of each fiscal year, consolidated and
consolidating statements of income and retained earnings and cash flows of
the Company and its subsidiaries, if any, for the period from the beginning
of the fiscal year to the end of such fiscal quarter, and consolidated and
consolidating balance sheets as at the end of such fiscal quarter, setting
forth in each case in comparative form corresponding figures for the
preceding fiscal year, which statements will be prepared in accordance with
US GAAP, consistently applied and will be accompanied by a certificate of
the Chief Financial Officer of the Company certifying that such financial
statements were prepared in accordance with US GAAP consistently applied
and present fairly in all material respects the results of operations and
financial condition of the Company for such period and as of the last day
of such period.
(ii) within ninety (90) days after the end of each fiscal year,
consolidated and consolidating statements of income and retained earnings
and cash flows of the Company and its subsidiaries, if any, for the period
from the beginning of each fiscal year to the end of such fiscal year, and
consolidated and consolidating balance sheets as at the end of such fiscal
year, setting forth in each case in comparative form corresponding figures
for the preceding fiscal year, which statements will be prepared in
accordance with US GAAP, consistently applied (except as approved by the
accounting firm examining such statements and disclosed by the Company) and
will be accompanied by:
(A) an unqualified report on the consolidated statements of
the US Auditors, as such term is defined in the Bridge Loan Agreement;
and
(B) a report from such accounting firm, addressed to each
Bank, stating that in making the audit necessary to express their
opinion on such financial statements, nothing has come to their
attention which would lead them to believe that the Company is not in
compliance with all the financial covenants contained in any material
agreements to which the Company or its subsidiaries, if any, is a
party or by which it is bound, including, without limitation, Notes
(an "Event of Noncompliance") or, if such accountants have reason to
believe that any Event of Noncompliance has occurred, a letter
specifying the nature thereof; and
(C) the management letter of such accounting firm if one is
issued;
(iii) within twenty (20) days after the end of each quarterly
accounting period in each fiscal year, a certificate of the Chief Financial
Officer of the Company stating that the Company is in compliance in all
material respects with the terms of this Agreement and/or each of the
Company and its subsidiaries, if any, is in compliance with every other
material contract or commitment to which the Company or any of such
subsidiaries is a party, as the case may be, or if a material Event of
Noncompliance has occurred, specifying the nature and period of
noncompliance, and what actions the Company or such subsidiary has taken
and/or proposes to take with respect thereto. Notwithstanding the
foregoing, the certificate delivered at the end of each fiscal year of the
Company shall be signed by both the Chief Executive Officer and the Chief
Financial Officer of the Company and shall be delivered within sixty (60)
days after the end of the fiscal year;
(iv) promptly upon receipt thereof, any additional reports or
other detailed information concerning significant aspects of the operations
and condition, financial or otherwise, of the Company and its subsidiaries,
if any, given to the Company by its independent accountants;
(v) within ten (10) days after transmission or receipt thereof,
copies of all financial statements, proxy statements, reports and other
communications which the Company sends to its stockholders, and copies of
all registration statements and all regular, special or periodic reports
which it files with the Securities and Exchange Commission (the "SEC") or
with any securities exchange on which any of the securities of the Company
are then listed or proposed to be listed, copies of all press releases and
other statements made generally available by the company to the public
concerning material developments in the business of the Company and its
subsidiaries, if any, and copies of all material communications sent to and
received from any lender to the Company or any subsidiary of the Company;
and
(vi) with reasonable promptness such other information and
financial data concerning the Company as the Bank may reasonably request,
including, without limitation, information and financial data with respect
to the use of proceeds by the Company from the sale of the Securities.
(b) Notice of Adverse Change. Promptly after the occurrence
thereof (but in any event within seven (7) days after such occurrence is known
to the Company) notice of any condition or event which constitutes, or the
occurrence of, any of the following:
(i) any Event of Noncompliance;
(ii) the institution or threatened institution of an action,
suit or proceeding against the Company or any of its subsidiaries by
or before any court, regulatory authority, administrative agency or
any other governmental agency or body, domestic or foreign, which, if
adversely decided, could have a Material Adverse Effect; or
(iii) any information relating to any event, development or
circumstance with respect to or affecting the Company or any of its
subsidiaries which, in the Company's reasonable judgment, could be
expected to have a Material Adverse Effect or materially and adversely
affect the ability of the Company to perform its obligations under
this Agreement and the transactions contemplated hereby. Any notice
given under this Section 7.1(b)(iii) shall specify the nature and
period of existence of the condition, event, information, development
or circumstance, the anticipated effect thereof and what actions the
Company has taken and/or proposes to take with respect thereto.
SECTION 6.2. Accounts and Records. The Company shall keep true records
and books of account in which entries will be made of all dealings or
transactions in relation to the business and affairs of the Company and its
subsidiaries, if any, in accordance with US GAAP applied on a consistent basis.
SECTION 6.3. Inspection. The Company shall permit any officers,
employees, representatives or such other person as the Bank may designate (the
"Bank Representative") during regular business hours of the Company, upon
reasonable notice and as often as such Bank Representative may reasonably
request, to visit and inspect the offices and properties of the Company and to
(i) make extracts or copies of the books, accounts and records of the Company,
and (ii) discuss the affairs, finances and accounts of the Company, with the
Company's directors and officers, independent public accountants, consultants
and attorneys.
SECTION 6.4. Independent Accountants. The Company will retain an US
Auditors to audit the Company's financial statements at the end of each fiscal
year. In the event the services of the US Auditors shall be terminated, the
Company shall promptly notify the Bank of the occurrence of such event and shall
promptly thereafter request the firm of independent public accountants whose
services are terminated to deliver to the Bank a letter of such firm setting
forth its understanding as to the reasons for the termination of its services
and whether there were, during the two most recent fiscal years or such period
during which said firm had been retained by the Company, any disagreements
between it and the Company on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure. In its notice,
the Company shall state whether the change of accountants was recommended or
approved by the Board of Directors or any committee thereof. In the event of
such termination, the Company will promptly thereafter engage another US
Auditors approved by the Bank which approval shall not be unreasonably withheld.
SECTION 6.5. Rule 144A Information. In the event that the Company
ceases to be subject to Section 13 or 15(d) of the Exchange Act, the Company
will (i) make available, upon request, to any holder of Notes and any
prospective purchaser thereof designated by such a holder, upon the request of
such holder or prospective purchaser, the information required to be provided to
such holder or prospective purchaser by Rule 144A(d)(4) under the Securities Act
and (ii) update such information from time to time in order to prevent such
information from becoming false and misleading and will take such other actions
as are necessary to ensure that the safe harbor exemption from the registration
requirements of the Securities Act under Rule 144A is and will be available for
resales of the Notes conducted in accordance with Rule 144A.
SECTION 6.6. Use of Proceeds. The Company shall use the proceeds from
transactions contemplated in this Agreement to make capital contributions to the
Subsidiaries to be used for the repayment of the indebtedness of the
Subsidiaries under the 1996 Credit Facility Agreement and to pay fees and
expenses in connection with the Bridge Loan Agreement.
SECTION 6.7. Seat on Board of Directors.
(a) The Company shall take all action legally possible to cause a
person designated by the Bank to be at all times a member of the Board of
Directors of the Company, including, without limitation, the inclusion of a
person designated by the Bank on the slate of nominees proposed by the Company
for election to the Board of Directors of the Company and the endorsement of
such person for election as a director of the Company. The director of the
Company designated by the Bank pursuant to this Section 6.7(a) shall be referred
to hereinafter as the "Bank Director".
(b) If at any time the Board of Directors designates a committee or
committees to act on behalf of the Board of Directors, the Bank Director shall
be a member of such committee or committees.
(c) The Company shall pay fees to the Bank Director in an amount not
less than the fees paid to any other director of the Company representing one or
more institutional investors, and shall reimburse such director for his or her
reasonable expenses incurred in attending each Board of Directors or committee
meeting or otherwise serving as a director.
SECTION 6.8. Further Assurances. From time to time the Company shall
execute and deliver to the holders of Securities such other instruments,
certificates, agreements and documents and take such other action and do all
other things as may be reasonably requested by such holders in order to
implement or effectuate the terms and provisions of this Agreement.
ARTICLE VII
SURVIVAL; INDEMNIFICATION
SECTION 7.1 Survival. The representations and warranties of the
parties contained in this Agreement or in any certificate or other writing
delivered pursuant hereto or in connection herewith will survive any
investigation made at any time by or on behalf of any party hereto and will
survive the Closing until the third anniversary of the Closing Date; provided,
however, that the representations and warranties contained in Sections 3.3 and
3.4 will survive until expiration of the statute of limitations applicable to
the matters covered thereby (giving effect to any waiver, mitigation or
extension thereof), if later. Notwithstanding the preceding sentence, any
representation or warranty in respect of which indemnity may be sought under
this Agreement will survive the time at which it would otherwise terminate
pursuant to the preceding sentence, if written notice of the inaccuracy or
breach thereof giving rise to such right of indemnity shall have been given to
the party against whom such indemnity may be sought prior to such time;
provided, however, that the applicable representation or warranty will survive
only with respect to the particular inaccuracy or breach specified in said
written notice. All covenants and agreements of the parties contained in this
Agreement will survive the Closing indefinitely.
SECTION 7.2 Indemnification.
(a) The Company will indemnify the Bank against and hold harmless from
any and all Indemnifiable Losses incurred or suffered by the Bank and relating
to, resulting from or arising out of: (i) any misrepresentation or breach of any
representation or warranty of the Company contained in this Agreement, or (ii)
any breach by the Company of any covenant or undertaking made or to be performed
by the Company pursuant to this Agreement.
(b) The Bank will indemnify the Company against and hold each of them
harmless from any and all Indemnifiable Losses incurred or suffered by the
Company and relating to, resulting from or arising out of: (i) any
misrepresentation or breach of any representation or warranty of the Bank
contained in this Agreement, or (ii) any breach by the Bank of any covenant or
undertaking made or to be performed by the Bank pursuant to this Agreement.
SECTION 7.3 Certain Definitions and Limitations.
(a) For purposes of this Agreement, (i) "Damages" means any and all
damages, losses, liabilities or expenses, including in the case of Taxes any
interest, penalties and additions to Taxes (including without limitation
expenses of investigation and attorneys' fees and expenses) incurred in
connection with any pending or threatened claims, demands or suits, (ii)
"Indemnifiable Loss" means (A) with respect to the Bank, any Damages incurred or
suffered by the Bank arising out of or any misrepresentation or breach of any
representation or warranty, covenant or agreement made or to be performed by the
Company and (B) with respect to the Company, any Damages incurred or suffered by
the Company arising out of any misrepresentation or breach of any representation
or warranty, covenant or agreement made or to be performed by the Bank, (iii)
"Indemnified Party" means any person entitled to indemnification under this
Agreement, and (iv) "Indemnifying Party" means any person required to provide
indemnification under this Agreement.
(b) No Indemnified Party will be entitled to assert a claim against an
Indemnifying Party under this Article VII in respect of any misrepresentation or
breach of any representation or warranty unless and until the aggregate amount
of claims which may be asserted for Indemnifiable Losses exceeds $175,000 (the
"Threshold Amount"), at which time the Indemnified Party will be entitled to
assert a claim for the amount of such Indemnifiable Losses in excess of the
Threshold Amount; provided, however, that this Section 8.3(b) shall not apply to
claims with respect to any misrepresentation or breach of the representations
contained in Sections 3.3 or 3.4.
(c) The Company shall not have any obligation to indemnify the Bank
for Indemnifiable Losses in excess of $ 59,000,000.
SECTION 7.4. Procedures. In case any proceeding (including any
governmental investigation) shall be instituted involving any Person in respect
of which indemnity may be sought pursuant to Section 7.2, such Person will
promptly notify the Person against whom such indemnity may be sought in writing
and the Indemnifying Party upon request of the Indemnified Party will retain
counsel reasonably satisfactory to the Indemnified Party to represent the
Indemnified Party and any others the Indemnifying Party may designate in such
proceeding and will pay the fees and disbursements of such counsel relating to
the proceeding. In any such proceeding, any Indemnified Party will have the
right to retain its own counsel, but the fees and expenses of such counsel will
be at the expense of such Indemnified Party unless (i) the Indemnifying Party
and the Indemnified Party shall have mutually agreed to the retention of such
counsel, or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnified Party and the Indemnifying Party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them, in which case fees
and expenses of such counsel will be paid by the Indemnifying Party. It is
understood that the Indemnifying Party will not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) at any time for all such Indemnified Parties, and that all
such fees and expenses will be reimbursed as they are incurred. In each case of
any such separate firm for the Indemnified Parties, such firm will be designated
in writing by the Indemnified Parties. The Indemnifying Party will not be liable
for any settlement of any proceeding effected without its consent, but if
settled with such consent, or if there be a final judgment for the plaintiff,
the Indemnifying Party will indemnify and hold harmless such Indemnified Parties
from and against any loss or liability (to the extent stated above) by reason of
such settlement or judgment.
ARTICLE VIII
RESTRICTIONS ON TRANSFER OF SHARES; RIGHT OF FIRST REFUSAL
SECTION 8.1 Restrictions of Transfer of Shares. The Bank agrees not to
dispose of any of the Shares prior to the earlier to occur of (i) the repayment
of the Senior Secured Bridge Loan, dated as of the date hereof, by and between
the Bank and certain of the Subsidiaries and (ii) March 31, 2000. The Bank may
dispose in any twelve month period beginning April 1, 2000 up to 25% of the
aggregate number of Shares originally issued without the consent of the Company
and in accordance with the provisions of Section 8.2. Any disposition of Shares
in excess of the amount set forth in the preceding sentence shall require the
consent of the Company. All restrictions in this Agreement on the Bank's right
to dispose of any of the Shares shall expire on January 1, 2003.
SECTION 8.2. Right of First Refusal.
(a) Should the Bank receive a bona fide offer for any of the Shares
and desire to accept such offer, the Bank agrees to give the Company written
notice of its intention, describing the Shares to be offered (the "Offered
Securities"), the price (the "Offered Price") and the general terms which the
Bank received with respect to the sale of the Offered Securities. The Company
shall have twenty (20) business days from the date of receipt of any such notice
(the "Exercise Period") to agree to purchase all or a portion of the Offered
Securities for the Offered Price and upon the general terms specified in the
notice by giving written notice to the Bank, which notice shall state the
quantity of Offered Securities to be purchased by the Company and the date on
which such purchase shall occur (which shall be not less than fifteen (15) nor
more than twenty (20) business days after the date of receipt of such notice).
(b) In the event the Company's right of first refusal is not exercised
within the Exercise Period as to all of the Offered Securities, the Bank shall
have one hundred and twenty (120) days thereafter (the "Offering Period") to
sell or enter into an agreement (pursuant to which the sale of the Offered
Securities covered thereby shall be closed, if at all, within ninety (90) days
from the date of said agreement) to sell the Offered Securities at the Offered
Price and upon general terms no more favorable to the purchasers thereof than
specified in the Company's notice. In the event the Bank has not sold within the
Offering Period or entered into an agreement to sell the Offered Securities
within the Offering Period (or sold and issued Offered Securities in accordance
with the foregoing within 90 days from the date of said agreement), the Bank
shall not thereafter sell any Offered Securities, without first offering to the
Company the right to purchase such Offered Securities, in the manner provided
above. Offered Securities sold during the Offering Period shall cease to be
subject to this Section 8.2.
(c) The Company's right of first refusal set forth in this Section 8.2
shall expire on January 1, 2003.
(d) Any time the Company exercises its right of first refusal in
accordance with this Section, it shall pay the Bank a fee in the amount of
$250,000 (subject to a maximum of $250,000 in any twelve month period).
(e) Notwithstanding the foregoing, in the event a tender offer is made
for the Common Stock (including the Shares) by a third party, then the Bank
shall be free to accept the terms of such tender offer, subject to compliance
with Section 8.2(a) and (b); provided, however, that the Exercise Period shall
be deemed to end on the date which is three (3) Business Days prior to the last
date on which the Bank may accept the offer to purchase its Shares. For purposes
of this Section 8.2, a "Business Day" is a day which is not a Saturday, a Sunday
or a legal holiday in Budapest, Hungary or New York, New York, United State of
America. The Bank agrees that it will not induce a tender offer for the Common
Stock prior to January 1, 2003.
(f) The Company may assign its rights under Section 8.2 (a) and (b) to
any stockholder of the Company to any beneficial holder of more than ten percent
(10.0 %) of the then outstanding Common Stock.
ARTICLE IX
AMENDMENT AND WAIVER
SECTION 9.1. Amendment and Waiver. This Agreement may not be amended
or modified (or any provision hereof waived), except that the Company and the
Bank (and assignees of the Bank) holding at least a majority of the Shares, a
majority in principal amount of the Notes and a majority of the Warrants and
Warrant Shares issued upon exercise of the Warrants may by written instrument
amend or waive any term or condition of this Agreement relating to the rights or
obligations of such holders, but in no event shall the obligation of any holder
of the Shares, the Notes, the Warrants or the Warrant Shares hereunder be
increased, except upon the written consent of each such holder.
SECTION 9.2. Binding Effect. The Company and each holder of Securities
(and any Warrant Shares) shall be bound by any amendment or waiver effected in
accordance with the provisions of this Article IX, whether or not such
Securities shall have been marked to indicate such modification, but any
Securities issued thereafter shall bear a notation as to any such modification.
Promptly after obtaining the written consent of the holders herein provided, the
Company shall transmit a copy of such modification to all holders of Securities.
ARTICLE X
LOST OR MUTILATED CERTIFICATES
Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of any certificate for Securities and, in the
case of any such loss, theft, or destruction, upon delivery of a bond of
indemnity satisfactory to the Company (provided that if the holder is a
financial institution, its own agreement will be satisfactory), or in the case
of any such mutilation, upon surrender and cancellation of such certificate, the
Company will issue a new certificate of like tenor as if the lost, stolen,
destroyed or mutilated certificate were then surrendered for exchange in lieu of
such lost, stolen, destroyed or mutilated certificate.
ARTICLE XI
TRANSFER OF SECURITIES
No sale or other disposition shall be made with respect to any
Securities or any other securities issued in respect of the Securities, upon any
stock split, stock dividend, recapitalization, merger, consolidation or similar
event unless (i) the holder shall have supplied to the Company an opinion of
counsel for the holder reasonably acceptable to the Company to the effect that
no registration under the Securities Act or other applicable law is required
with respect to such sale or other disposition, or (ii) an appropriate
registration statement with respect to such sale or other disposition shall have
been filed by the Company and declared effective by the SEC. The Company may
endorse on all certificates for such Securities the legend on the form of Note
in Exhibit A and on the form of Warrant in Exhibit B., and provided, further,
that if an opinion of counsel satisfactory to the Company concludes that the
legend is no longer necessary, the Company will deliver upon transfer such
Securities without such legends. Any transfer of Warrants or Notes shall be
subject to any further restrictions contained therein.
ARTICLE XII
REPRESENTATIONS AND WARRANTIES OF THE BANK
The Bank represents and warrants to the Company that (i) it is an
"accredited investor" as that term is defined in Rule 501(a) promulgated under
the Securities Act, (ii) it has the requisite knowledge and experience in
financial and business matters to be capable of evaluating the merits and risks
of an investment in the Company, (iii) it has had an opportunity to discuss the
Company's business, management and financial affairs with the Company's
management, (iv) it is acquiring the Securities for investment for its own
account and not with a view to, or for resale in connection with, any
distribution thereof; nor with any present intention of distributing or selling
the same and, except as contemplated by this Agreement, such Purchaser has no
present or contemplated agreement, undertaking, arrangement, obligation,
indebtedness or commitment providing for the disposition thereof and (v) it
understands that the Securities and the shares of Common Stock issuable upon
exercise of the Warrants have not been registered under the Securities Act and
it will not offer, sell, transfer, pledge, hypothecate or otherwise dispose of
any Securities except pursuant to an exemption from, or otherwise in a
transaction not subject to, the registration requirements of the Securities Act
or pursuant to an effective registration statement under the Securities Act,
and, in each case, in accordance with any applicable state securities or "blue
sky" laws. The Bank further represents and warrants that (i) it is a company
limited by shares duly incorporated, validly existing and in good standing under
the laws of Hungary, (ii) the execution, delivery and performance of this
Agreement and the consummation of the transactions effected hereby by the Bank
are within its corporate powers and have been duly authorized by all necessary
corporate action, including the approval by its board of directors, (iii) this
Agreement constitutes a valid and binding agreement of the Bank, (iv) the
execution, delivery and performance of this Agreement by the Bank requires no
action by or in respect of, or filing with, any governmental body, agency,
official or authority other than actions or filings which have been taken or
made on or prior to the date hereof, (v) no consent, approval, waiver or other
action by any Person under any contract, agreement, indenture, lease, instrument
or other document to which it is a party or by which it is bound is required or
necessary for the execution, delivery and performance by the Bank of this
Agreement or the consummation of the transactions effected hereby by the Bank,
(vi) the execution, delivery and performance of this Agreement by the Bank does
not (A) contravene or conflict with the charter documents of the Bank or (B)
contravene or conflict with or constitute a violation of any provision of any
law, regulation, judgment, injunction, order or decree binding upon or
applicable to the Bank or (C) contravene or conflict with any contract to which
the Bank is a party.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. Governing Law. This Agreement and the rights of the
parties hereunder shall be governed in all respects by the laws of the State of
New York, United States of America, without giving effect to the provisions
thereof relating to conflicts of law.
SECTION 13.2. Consent to Jurisdiction.
(a) The Company hereby irrevocably submits to the jurisdiction of any
New York State or Federal court sitting in New York City in any action or
proceeding arising out of or relating to this Agreement, and hereby irrevocably
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State court or, to the extent permitted by law,
in such Federal court. The Company hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. The Company irrevocably consents to
the service of any and all process in any such action or proceeding by the
mailing, or delivery, of copies of such process to the Company at its address
specified in Section 13.5. The Company agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(b) Nothing in this Section 13.2 shall affect the right of the Bank to
serve legal process in any other manner permitted by law or affect the right of
the Bank to bring any action or proceeding against the Company or its property
in the courts of other jurisdictions.
SECTION 13.3. Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon and enforceable by and against, the successors, assigns, heirs,
executors and administrators of the parties hereto; provided, however, that the
Company may not assign its rights hereunder, except to an affiliated corporation
as a result of a merger or consolidation in which the Company is not the
surviving corporation.
SECTION 13.4. Entire Agreement. This Agreement (including the
Schedules and Exhibits hereto) and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subject matter hereof and thereof.
SECTION 13.5. Notices, etc. All notices, demands or other
communications given hereunder shall be in writing and shall be sufficiently
given if delivered either personally or by a United States nationally recognized
courier service marked for next business day delivery or sent by facsimile or in
a sealed envelope by first class mail, postage prepaid and either registered or
certified, addressed as follows:
(a) if to the Company;
Hungarian Telephone and Cable Corp.
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Hungarian Telephone and Cable Corp.
0000 Xxxxxxxx
Xxxxxxxxxx x. 2.
Hungary
Attention: Chief Executive Officer
Telephone: (00-0) 000-0000
Facsimile: (00-0) 000-0000
(b) if to the Bank:
Postabank es Takarekpenztar Rt.
H-1920
Xxxxxx xxxxx ter 1.
Hungary
Attention: Chief Executive Officer
Telephone: (00-0) 000-0000
Facsimile: (00-0) 000-0000
with a copy (which shall not constitute notice) to:
Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx xx Xxxxxxx
Attention: Xxxxxx X. Xxxxxxx, Xx.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other address with respect to any party hereto as such party may from
time to time notify (as provided above) the other parties hereto. Any such
notice, demand or communication shall be deemed to have been received (i) on the
date of delivery, if delivered personally, (ii) one business day after delivery
to a nationally recognized overnight courier service, if marked for next day
delivery, (iii) five business days after the date of mailing, if mailed or (iv)
on the date of transmission, if sent by facsimile.
SECTION 13.6. Delays or Omissions. No delay or omission to exercise
any right, power or remedy accruing to any holder of any Securities or Warrant
Shares upon any breach or default of the Company under this Agreement shall
impair any such right, power or remedy of such holder nor shall it be construed
to be a waiver of any such breach or default, or an acquiescence, therein, or of
or in any similar breach or default thereafter occurring; nor shall any waiver
of any single breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any holder of any breach or
default under this Agreement, or any waiver on the part of any holder of any
provisions or conditions of this Agreement must be, made in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
holder, shall be cumulative and not alternative.
SECTION 13.7. Severability. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 13.8. Agent's Fees. The Company hereby represents and warrants
to the Bank that it has not retained a finder or broker in connection with the
transactions contemplated by this Agreement. The Bank hereby represents and
warrants to the Company that it has retained no finder or broker in connection
with the transactions contemplated by this Agreement.
SECTION 13.9. Expenses. The Company shall bear its own expenses and
legal fees incurred on its behalf with respect to the negotiation, execution and
consummation of the transactions contemplated by this Agreement, and the Company
will pay all of the legal fees and disbursements of counsel and any other
reasonable out-of-pocket expenses for the Bank in connection therewith.
SECTION 13.10. Titles and Subtitles. The titles of the articles,
sections and subsections of this Agreement are for convenience of reference only
and are not to be considered in construing this Agreement.
SECTION 13.11. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Company and the Bank have caused this
Agreement to be executed and delivered by their respective officers thereunto
duly authorized.
Very truly yours,
POSTABANK ES TAKAREKPENZTAR RT.
By: /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
Title:
By: /s/ Xxxxx Xxxxx
-------------------------------
Name: Xxxxx Xxxxx
Title:
HUNGARIAN TELEPHONE AND CABLE CORP.
By: /s/Xxx Xxxxxxx
--------------------------------
Name: Xxx Xxxxxxx
Title: President and Chief
Executive Officer
