EXHIBIT 7.7
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 10, 1999
TABLE OF CONTENTS
Page
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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...................................................................2
SECTION 3.1. ORGANIZATION AND EXISTENCE...................................2
SECTION 3.2. SUBSIDIARIES.................................................2
SECTION 3.3. CAPITALIZATION...............................................2
SECTION 3.4. AUTHORIZATION; BINDING OBLIGATIONS...........................3
SECTION 3.5. COMPLIANCE WITH INSTRUMENTS, ETC.............................3
SECTION 3.6. LITIGATION...................................................3
SECTION 3.7. FINANCIAL STATEMENTS; TAXES..................................3
SECTION 3.8. TAXES........................................................4
SECTION 3.9. OFFERING.....................................................4
SECTION 3.10. PERMITS; GOVERNMENTAL AND OTHER APPROVALS...................4
SECTION 3.11. FORM 10-K...................................................4
SECTION 3.12. REGISTRATION RIGHTS.........................................4
SECTION 3.13. ORDINARY COURSE; NO MATERIAL ADVERSE CHANGE.................4
SECTION 3.14. DISCLOSURE..................................................4
SECTION 3.15. REPRESENTATIONS AND WARRANTIES IN THE BRIDGE LOAN AGREEMENT.4
ARTICLE IV....................................................................4
SECTION 4.1. REPRESENTATIONS AND WARRANTIES CORRECT.......................4
SECTION 4.2. PERFORMANCE..................................................4
SECTION 4.3. COMPLIANCE CERTIFICATE.......................................5
SECTION 4.4. NO IMPEDIMENTS...............................................5
SECTION 4.5. NO MATERIAL ADVERSE CHANGE...................................5
SECTION 4.6. LEGAL INVESTMENT.............................................5
SECTION 4.7. QUALIFICATIONS...............................................5
SECTION 4.8. ISSUANCE TAXES...............................................5
SECTION 4.9. PROCEEDINGS AND OTHER DOCUMENTS..............................5
SECTION 4.10. OPINION OF COUNSEL..........................................5
SECTION 4.11. CONSENTS, WAIVERS, ETC......................................5
SECTION 4.12. OTHER MATTERS...............................................5
ARTICLE V.....................................................................5
SECTION 5.1. PAYMENT OF PURCHASE PRICE....................................6
SECTION 5.2. PERFORMANCE..................................................6
ARTICLE VI....................................................................6
SECTION 6.1. REPORTS......................................................6
SECTION 6.2. ACCOUNTS AND RECORDS.........................................7
SECTION 6.3. INSPECTION...................................................7
SECTION 6.4. INDEPENDENT ACCOUNTANTS......................................7
SECTION 6.5. RULE 144A INFORMATION........................................7
SECTION 6.6. USE OF PROCEEDS..............................................7
SECTION 6.7. SEAT ON BOARD OF DIRECTORS...................................7
SECTION 6.8. FURTHER ASSURANCES...........................................8
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ARTICLE VII...................................................................8
SECTION 7.1 SURVIVAL.......................................................8
SECTION 7.2 INDEMNIFICATION................................................8
SECTION 7.3 CERTAIN DEFINITIONS AND LIMITATIONS............................8
SECTION 7.4 PROCEDURES.....................................................8
ARTICLE VIII..................................................................9
SECTION 8.1 RESTRICTIONS OF TRANSFER OF SHARES............................9
SECTION 8.2. RIGHT OF FIRST REFUSAL.......................................9
ARTICLE IX...................................................................10
SECTION 9.1 AMENDMENT AND WAIVER.........................................10
SECTION 9.2. BINDING EFFECT..............................................10
ARTICLE X....................................................................10
ARTICLE XI...................................................................10
ARTICLE XII..................................................................10
ARTICLE XIII.................................................................11
SECTION 13.1 GOVERNING LAW...............................................11
SECTION 13.2 CONSENT OF JURISDICTION.....................................11
SECTION 13.3 SUCCESSORS AND ASSIGNS......................................11
SECTION 13.4 ENTIRE AGREEMENT............................................11
SECTION 13.5 NOTICES, ETC................................................11
SECTION 13.6 DELAYS OR OMISSIONS.........................................12
SECTION 13.7 SEVERABILITY................................................12
SECTION 13.8 AGENT'S FEES................................................12
SECTION 13.9 EXPENSES....................................................12
SECTION 13.10 TITLES AND SUBTITLES........................................12
SECTION 13.11 COUNTERPARTS................................................12
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
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SECURITIES PURCHASE AGREEMENT dated as of May 10, 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.
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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
2
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
3
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
4
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:
5
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
6
(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".
7
(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
8
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.
9
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
10
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 xx Xxxxxxx
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
11
(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]
12
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
13
