EXHIBIT 4.9
SUBSCRIPTION AGREEMENT
Between
ING BANK XXXXXX X.X.
as the Subscriber
- and -
NETIA HOLDINGS S.A.
as the Company
THIS SUBSCRIPTION AGREEMENT ("AGREEMENT") is made on 20 November 2002 between:
(1) ING BANK SU\SKI S.A., a Polish joint stock company (the "SUBSCRIBER"); and
(2) NETIA HOLDINGS S.A., a Polish joint stock company (the "COMPANY");
RECITALS
(A) Netia Holdings B.V. ("B.V.I") issued three series of notes: US$200,000,000
10.25% Senior Notes due 2007, US$193,550,000 11.25% Senior Discount Notes
due 2007, and DM207,062,000 11% Senior Discount Notes due 2007 (the "B.V. I
NOTES");
(B) Netia Holdings II B.V. ("B.V.II") issued three series of notes:
US$100,000,000 13.125% Senior Notes due 2009, EUR100,000,000 13.5% Senior
Notes due 2009, and EUR200,000,000 13.75% Senior Notes due 2010 (the "B.V.
II NOTES" and together with the B.V. I Notes the "OLD NOTES");
(C) Each of the Old Notes are guaranteed by the Company under the terms of each
applicable indenture (the "OLD NOTES GUARANTEES");
(D) Certain Beneficial Holders (each together the "CONSENTING NOTEHOLDERS")
agreed, by signing the Restructuring Agreement dated 5 March 2002 (the
"RESTRUCTURING AGREEMENT"), and the Exchange Agreement dated 14 June 2002
as amended from time to time (the "EXCHANGE AGREEMENT") (the Restructuring
Agreement and the Exchange Agreement together, the "RESTRUCTURING
DOCUMENTS") to (i) cancel the primary debt obligations of B.V. I and B.V.
II, respectively, under the Old Notes in exchange for new secured notes
(the "NEW NOTES") to be issued by a Company's Dutch subsidiary now
determined to be B.V. I in composition proceedings in the Netherlands (the
"DUTCH COMPOSITION PROCEEDINGS") as set forth in the Restructuring
Documents; and (ii) to reduce the Old Notes Guarantees in arrangement
proceedings involving the Company in Poland (together with the arrangement
proceedings with regard to Netia South Sp. z o.o. ("South") and Netia
Telekom S.A. ("TELEKOM"), the "POLISH ARRANGEMENT PROCEEDINGS"; Dutch
Composition Proceedings and Polish Arrangement Proceedings together
referred to as "FINANCIAL RESTRUCTURING") to receiving zero coupon,
zioty-denominated transferable instalment rights (the "NOTEHOLDERS'
INSTALMENT RIGHTS") as set forth in the Restructuring Documents;
(E) XX Xxxxxx Chase Bank ("JPMC"), in its capacity as the holder of a claim
under a conditional guarantee by the Company dated 20 February 2002 (the
"JPMC SWAP GUARANTEE") in respect of the payment due from Netia Holdings
III B.V. ("B.V.III") under the terms of a swap close-out agreement dated 10
January 2002 (the "JPMC SWAP TERMINATION LETTER") terminating two cross
currency swap contracts both dated 18 January 2001 agreed to (i) cancel its
close-out amount claims under the JPMC Swap Termination Letter against B.V.
Ill in Dutch Composition Proceedings involving B.V. Ill in exchange for
receiving its entitlement to New Notes in the amount set forth in the Dutch
Composition Plan and (ii) to reduce, in the Polish Arrangement Proceedings,
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the JPMC Swap Guarantee to zero coupon, zioty-denominated transferable
instalment rights as set forth in the Restructuring Documents (the "JPMC'S
INSTALMENT RIGHTS"),
(F) Under the terms of the Financial Restructuring in addition to the claims of
the Consenting Noteholders also the claims of the remaining Beneficial
Holders of the Old Notes under the Old Notes Guarantees were reduced and
converted into zero coupon, zioty-denominated transferable instalment
rights (together with Noteholders' Instalment Rights and JPMC's Instalment
Rights, the "INSTALMENT RIGHTS");
(G) As signatories to the Restructuring Documents, each of the Consenting
Noteholders and JPMC have agreed, among other things, to transfer their
Instalment Rights to an entity in order to facilitate distributing to the
interested Claim Holders (as defined below) their entitlement to series 'H'
shares in the Company which, upon their issue (x) will be admitted to
public trading by the Polish Securities and Exchange Commission ("POLISH
SEC"), and (y) listed on the Warsaw Stock Exchange ("WSE") (the
"RESTRUCTURING SHARES") (the "CONSENTING NOTEHOLDERS' TRANSACTION");
(H) The Company has agreed to allow Beneficial Holders not previously
signatories to the Restructuring Documents (together with the Consenting
Noteholders, and JPMC, the "Claim HOLDERS") to tender their Instalment
Rights to the Subscriber, and to receive from the Subscriber their pro rata
entitlement to Restructuring Shares (together with the Consenting
Noteholders' Transaction, the "TRANSACTION");
(I) The purpose of the Transaction is to implement the composition plans
relating to B.V.I, B.V.II and B.V.III respectively (the "DUTCH COMPOSITION
PLANS") once (i) the court judgments ratifying the Dutch Composition Plans
become final and conclusive and (ii) the court judgments ratifying the
Polish Arrangement Proceedings become final and conclusive;
(J) Each of the Claim Holders is entitled to assign and transfer any and all of
its claims against the Company arising from the Instalment Rights, as
reduced in the Polish Arrangement Proceedings (the "CLAIMS"), to the
Subscriber;
(K) The subscription price payable to the Company in respect of the
Restructuring Shares shall be set off against the amount payable by the
Company under the Claims.
(L) The Company intends to appoint herein the Subscriber to subscribe for the
Restructuring Shares to facilitate the Transaction set forth herein in
connection with the Financial Restructuring;
(M) The Subscriber is willing to act as Subscriber upon the terms and subject
to the conditions set forth herein and has agreed to act with reasonable
care in connection with the assignment of the Claims and subscription of
the Restructuring Shares to assist in the Company's ensuring that each
interested Claim Holder receives its entitlement to Restructuring Shares in
accordance with the provisions of the Restructuring Documents and this
Agreement and in number calculated by the Subscriber under the Algorithm
(as defined below);
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(N) The Company has agreed to use its best commercial efforts to liaise with
the Subscriber to ensure that each of the interested Claim Holders receives
its entitlement to the Restructuring Shares in accordance with the
provisions of the Restructuring Documents and this Agreement and in number
in accordance with the Dutch Composition Plans.
NOW THEREFORE the parties hereto agree as follows:
1. DEFINITIONS AND INTERPRETATION 1.1 DEFINITIONS
"AGREEMENT" means this Agreement (as from time to time altered in
accordance with this Agreement) and any other document executed in
accordance with this Agreement (as from time to time so altered) and
expressed to be supplemental to this Agreement.
"ALGORITHM" means an algorithm prepared in accordance with the
Restructuring Agreement and the Dutch Composition Plans by the Company in
co-operation with the Ad Hoc Committee of the Claim Holders (as defined in
Section 6.2(a) of the Restructuring Agreement) and delivered by the Company
to the Subscriber as soon as reasonably practicable after the date of this
Agreement but in any event prior to the date of the Confirmation Notice, by
which both the total and individual numbers of the entitlements of each
Assigning Claim Holder (as defined in Clause 3.1(i) below) to the Rights to
Restructuring Shares will be calculated by the Subscriber;
"BANK OF NEW YORK, LONDON BRANCH" means The Bank of New York, London Branch
and whose address is Corporate Trust Administration, 00xx Xxxxx, Xxx Xxxxxx
Xxxxxx, Xxxxxx X00 XXX (attn: Xxxx Xxxxxxx), which agreed to facilitate
certain actions in connection with the Financial Restructuring;
"BENEFICIAL HOLDER" means an owner or a person entitled to manage the Old
Notes;
"CLEARSTREAM, LUXEMBOURG" MEANS Clearstream Banking, societe anonyme;
"DTC" means DEPOSITORY Trust Company of New York;
"EUROCLEAR" means Euroclear Bank S.A./N.V., as operator of the Euroclear
System;
"PARTY" means a party to this Agreement, and "PARTIES" shall be construed
accordingly;
"RECORD DATE" means the date as of which the list of Beneficial Holders
entitled to receive the New Notes under the Dutch Composition Plans will be
determined and being the date upon which the Old Notes will be blocked.
"RIGHTS TO RESTRUCTURING SHARES" means the rights to the Restructuring
Shares within the meaning of Art. 4.22 of the Act on Public Trading in
Securities of 21 August 1997 as amended, incorporating the entitlement to
receive the Restructuring Shares and arising upon the allotment of the
Restructuring Shares and expiring on the date when the Restructuring Shares
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are registered with the depository for securities or on the date when the
decision of the registration court refusing to register the share capital
increase in connection with the Restructuring Shares becomes final.
1.2 INTERPRETATION
In this Agreement:
(a) Clause headings are for ease of reference only;
(b) unless stated otherwise, a time of day is a reference to Warsaw time;
(c) any reference to costs, charges, remuneration or expenses include any
value added, turnover or similar tax charged in respect thereof;
(d) any reference to a "PERSON" includes any person, firm, company,
corporation, government, state or agency of a state or any
association, trust or partnership of two or more of the foregoing;
(e) any reference to the "SUBSCRIBER" shall be construed so as to include
its (and any subsequent) successors and any permitted transferees in
accordance with its respective interests;
(f) references in this Agreement to any Clause or Schedule shall be to a
Clause or Schedule contained in this Agreement unless expressly
provided otherwise;
(g) the words "THIS AGREEMENT", "HEREIN", "HEREOF, "HEREBY", "HEREUNDER"
and words of similar import refer to the Agreement as a whole as in
effect between the parties and not to any particular subdivision
unless expressly so limited;
(h) words DENOTING the singular shall also include the plural and vice
versa;
(i) words DENOTING one gender only shall include the other gender; and
(j) any reference to any provision or to any statute shall be deemed also
to be a reference to any statutory modification or to re-enactment
thereof or any statutory instrument, order or regulation made
thereunder or under such modification or re-enactment.
2 CONDITION PRECEDENT
Subject to Clause 3.5 below, the obligations of the Subscriber set out in
Clauses 4, 5 and 6 of this Agreement shall be conditional (condition
precedent) on the Confirmation Notice (as defined in Clause 3.2 below)
having been published as required under this Agreement after the occurrence
of the events required to be confirmed in the Confirmation Notice.
3 COMPANY'S UNDERTAKINGS
3.1 Subject to Clause 3.5 below, the Company hereby undertakes that in order to
comply with the Dutch Composition Plans and the Restructuring Documents it shall
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as soon as is possible upon the Polish Arrangement Proceedings and the Dutch
Composition Plans having become final and conclusive but in any event not later
than 31 July 2003:
(i) offer to the Subscriber the Restructuring Shares in the total number
calculated by the Subscriber (under the Algorithm) as the aggregation
of all individual numbers of the Rights to Restructuring Shares
transferable to all Claim Holders who will, prior to such an offer,
have assigned their Claims to the Subscriber (the "ASSIGNING CLAIM
HOLDERS");
(ii) set off the subscription price for the Restructuring Shares in the
number referred to in Sub-Clause 3.1(i) above against the Claims
acquired by Subscriber from the Assigning Claim Holders;
(iii) confirm in writing also to and for the benefit of the Subscriber that
by the set-off referred to in Sub-Clause 3.1(ii) above the obligation
of the Subscriber to pay the subscription price for the Restructuring
Shares in cash has been duly performed by the Subscriber and that the
Restructuring Shares are duly paid up in full; and
(iv) allot the Restructuring Shares and deliver the Rights to Restructuring
Shares to the Subscriber.
3.2 The Company undertakes to procure that a written notice (the "CONFIRMATION
NOTICE") is published in the Luxembourger Wort and through each of DTC,
Euroclear and Clearstream, Luxembourg (each together, the "CLEARING
SYSTEMS") confirming that:
(i) subject to Clause 3.5 below, final and unappealable ratifying court
judgments had been granted in the Dutch Composition Proceedings and
Polish Arrangement Proceedings respectively and that,
(ii) the Polish SEC had granted permission for the Subscriber (i) to
acquire the Restructuring Shares, provided that the Polish SEC
considers such a permission to be necessary and (ii) to distribute the
Rights to Restructuring Shares among the Assigning Claim Holders in an
off exchange transaction or series of transactions outside the WSE's
market, and that,
(iii) the prospectus of the Restructuring Shares has been approved by the
Polish SEC and has been published as required by Polish law, and that,
(iv) all other consents of governmental or regulatory bodies which should
be obtained by the Subscriber prior to the consummation of the
Transaction had been obtained or made (if any such consents are
necessary).
3.3 Immediately following the execution of this Agreement, the information
should be sent to the Claim Holders specifying at least:
(i) the list of documents necessary for the execution of their respective
Claim Holder Agreements (as such term is defined below) which the
Claim Holders wishing to be the Assigning Claim Holders will need to
deliver to Bank of New York, London Branch for onward transmission to
the Subscriber as well as the manner and the deadline for the delivery
of the documents referred to above (the "EXECUTION DATE");
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(ii) that (y) no later than on the date of the dispatch to Bank of New
York, London Branch of the Claim Holder Agreements they should possess
or open a securities account with an entity authorised under the
relevant Polish securities regulations to maintain securities accounts
in the Polish securities markets, or that (z) they should deliver to
the Subscriber documents necessary to open such account with the
Subscriber, which account (in either case) should not be closed until
at least the day immediately following the day when it is credited
with such a number of Rights to Restructuring Shares or Restructuring
Shares as a given Claim Holder will be entitled to pursuant to the
Dutch Composition Plans as calculated by the Subscriber under the
Algorithm; and
(iii) that only Claim Holders who, as of the date of the execution of their
respective Claim Holder Agreement, were the Beneficial Holders orJPMC,
as the case may be, will be eligible to receive the Rights to
Restructuring Shares after the Restructuring Shares are allotted to
the Subscriber pursuant to this Agreement; and
3.4 Subject to Clause 3.5 below, the Company will be allowed to publish the
Confirmation Notice not earlier than after all the events referred to in Clause
3.2 above having occurred. Any notice published in breach of this Clause 3.4
will not be deemed a Confirmation Notice.
3.5 The Parties, after receiving the prior written consent of the Ad Hoc
Committee of the Claim Holders (as defined in the Restructuring Agreement)
(represented by at least two representatives of Beneficial Holders and a
representative of JPMC) may decide that the condition referred to in Clause 3.1
and Sub-Clause 3.2(i) above will not apply to the Polish Arrangement Proceedings
with respect to South and/or Telekom.
4 SUBSCRIPTION AND DELIVERY OF SHARES, TRANSFER OF CLAIMS
4.1 The Subscriber undertakes towards the Company that at any time until the
Execution Date (as defined in Sub-Clause 3.3(i)) each Claim Holder shall be
entitled to deliver to the Subscriber a Claim Holder Agreement, duly executed by
such Claim Holder. A copy of the form of the Claim Holder Agreement is attached
hereto as SCHEDULE 2 (the "CLAIM HOLDER AGREEMENT"),
4.2 The Subscriber will have not the obligation but the right to rely on the
following documents as sufficient proof of the existence of the Claims and of
the authorisation of the persons signing the Claim Holder Agreements in the name
of the Assigning Claim Holders: (i) the evidence produced by the Clearing
Systems and/or Bank of New York, London Branch, (ii) the representations and
warranties given by the Assigning Claim Holders in their Claim Holder Agreements
and (iii) other documents delivered by them or on their behalf to Bank of New
York, London Branch and/or to the Subscriber (as may be requested by the
Subscriber at any time prior to the execution by it of any Claim Holder
Agreement). In the case of any doubts, the Company shall decide after the
consultation with the Ad Hoc Committee of the Claim Holders (as defined in the
Restructuring Agreement) on the existence of the Claims and of the authorisation
of the persons signing the Claim Holder Agreements. The Subscriber shall not be
authorised to refuse to enter into any Claim Holder Agreement, unless the
Subscriber, acting reasonably, concludes that its entering into such Claim
Holder Agreement could result in criminal liability of any of its managers,
employees or agents, or that any administrative penalty could be imposed on the
persons referred to above or on the Subscriber or that it could result in an
action of any governmental or regulatory body, which could have an adverse
effect on the authorisation of the Subscriber to act as a bank under Polish law.
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4.3 The Company shall be responsible towards the Subscriber and the Claim
Holders for the accurateness of the calculation of the number of the
Restructuring Shares to which the Assigning Claim Holders will be entitled
pursuant to the Restructuring Documents, provided that the calculation is made
by the Subscriber under the Algorithm.
4.4 As soon as reasonably possible after receipt of a Claim Holder Agreement
duly executed by the relevant Assigning Claim Holder (but in no event earlier
than on the date of the Confirmation Notice), the Subscriber shall duly execute
such Claim Holder Agreement and accept the assignment of the Claim of such
Assigning Claim Holder.
4.5 Subject to Clause 2 above, the Subscriber undertakes that it shall
subscribe, not later than seven days following the day of the publication of the
Confirmation Notice, upon the terms and conditions set forth in this Agreement,
for the Restructuring Shares in the total number as the Assigning Claim Holders
are entitled to receive in accordance with the Exchange Agreement and the Dutch
Composition Plans corresponding to the value of the Claims assigned to the
Subscriber under all Claim Holder Agreements. The total number of the
Restructuring Shares to be subscribed for by the Subscriber will be calculated
by aggregating all individual numbers of the Restructuring Shares to which each
Assigning Claim Holder will be entitled according to the Algorithm.
4.6 The Subscriber undertakes that it shall re-assign and re-transfer the Claims
to the Assigning Claim Holders prior to the Company's registration of the
increase in its share capital should for any reason the Transaction not be
capable of being carried out prior to the Closing Date (as defined in Clause
10.1).
4.7 As soon as reasonably possible after Restructuring Shares are allotted to
the Subscriber the Subscriber shall transfer the Rights to Restructuring Shares
to each Assigning Claim Holder in accordance with the Dutch Composition Plans.
The Subscriber undertakes to transfer to each of the Assigning Claim Holders
such number of the Rights to Restructuring Shares as will be calculated by the
Subscriber under the Algorithm. It is the intention of the Parties that, subject
to the regulations of Krajowy Depozyt Papierow Wartosciowych S.A. and provided
that the Subscriber will have received the information necessary to effect the
transfer of the Rights to Restructuring Shares to the Assigning Claim Holders,
the steps referred to in Clause 4.5 and in this Clause 4.7 occur on the same
day.
4.8 The Subscriber hereby undertakes to perform, or cause to be performed the
services identified to be performed in SCHEDULE 1 attached hereto (the "SERVICES
SCHEDULE")
5 THIRD PARTY BENEFITS
5.1 Each of BV I, BV II, BV III and each Claim Holder shall be entitled to
directly demand the Parties to this Agreement to fulfil its respective
obligations undertaken in this Agreement for the benefit of themselves
individually. For the avoidance of any doubt, this shall not be read as giving
any right to the Claim Holders for so long as they have not executed their
respective Claim Holder Agreements with the Subscriber, to directly demand from
the Subscriber any action or omission in performance of this Agreement.
5.2 Except as otherwise provided herein, all the obligations and covenants,
which allow the Claim Holders to become shareholders of the Company, undertaken
by the Company towards the Subscriber pursuant to this Agreement shall be also
considered as undertaken for the benefit of the Claim Holders, in accordance
with Art. 393 of the Polish Civil Code.
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6 SUBSCRIPTION PRICE
6.1 The Subscriber and the Company agree that the amount payable by the
Subscriber to the Company in respect of the subscription price for the
Restructuring Shares shall be set off against the amount payable by the Company
under the Claims acquired by the Subscriber in full discharge of each Party's
obligations to the other in respect thereof pursuant to the deed of set-off
which shall be executed by both Parties in performance of this Agreement (the
"DEED OF Set-Off). A copy of the form of the Deed of Set-Off is attached to this
Agreement as Schedule 3.
6.2 For the avoidance of doubt, upon the subscription of the Restructuring
Shares, it shall be deemed that:
(i) the aggregate amount payable by the Company, under the Claims
assigned under all Claim Holder Agreements; and
(ii) the aggregate amount payable by the Subscriber to the Company as
the subscription price for the Restructuring Shares has in each case been
fully and unconditionally paid.
7 CONSEQUENCES OF TERMINATION
In the event that this Agreement is at any time terminated in accordance with
the provisions of Clause 9 below:
(i) the Subscriber undertakes towards the Claim Holders that it shall
as soon as reasonably possible re-assign and re-transfer to each Assigning
Claim Holder each Claim (if any) previously assigned and/or transferred to
the Subscriber by each such Assigning Claim Holder; and
(ii) the obligations of the parties hereto shall terminate and the
Transaction contemplated hereunder shall be abandoned.
8 STANDARD OF CARE
8.1 The Subscriber shall have no responsibilities, duties or obligations
hereunder except as specifically set forth in this Agreement. The Subscriber
agrees to perform the services described in the Services Schedule without
negligence or bad faith.
8.2 The Subscriber shall not be deemed to make any representations, and shall
have no responsibilities, as to the validity, sufficiency, legality, value or
genuineness of the Transaction contemplated in this Agreement and/or the
existence, title of any of the Claim Holder to, or the marketability of, any of
the Claims and will not be required to make any, and will make no,
representations as to, or be responsible for, the validity, sufficiency,
legality, value or genuineness of the Transaction or and/or the existence, title
of any of the Claim Holder to (and, in particular, for the determination whether
the title deemed to belong to an Assigning Claim is legal/nominal or beneficial
title), or the marketability of, any of the Claims beyond the representations
and warranties it will have received from the Assigning Claim Holders (and on
which it will be entitled to rely without verifying them).
8.3 The Subscriber shall not be called upon, at any time to and shall not,
advise any person acting in relation to the Transaction described hereunder as
to the wisdom of acting thereunder or as to the market value of the
Restructuring Shares or the Rights to Restructuring Shares. The Subscriber shall
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not be liable or responsible for any recital or statement contained in any
documents published by the Company in relation to the Transaction.
8.4 The Subscriber shall not be liable or responsible for any failure by any
other party to comply with any of its obligations relating to the Transaction,
including, without limitation, obligations under applicable securities laws.
8.5 The Subscriber shall not, nor have any obligations to, pay any commissions
or soliciting fees to any person, or reimburse any brokers, dealers or custodian
banks in connection with the Transaction.
8.6 Except as set out in Clause 6.1, the Subscriber shall not exercise any right
of set-off or lien against the Company in respect of any moneys payable by it or
on behalf of the Company under the terms of this Agreement and the Transaction
contemplated herein.
8.7 The Subscriber confirms that it has applied for the consents of the Polish
SEC necessary to be obtained by the Subscriber for the consummation of the
Transaction and undertakes that it will not withdraw the relevant applications.
9 TERM OF AGREEMENT
9.1 This Agreement shall terminate upon the earliest to occur of (i) rescission
of one or more of the Dutch Composition Plans, or (ii) the completion of the
Transaction. Upon the termination of this Agreement, the Subscriber and the
Company shall have no further duties hereunder except as otherwise set forth in
the following provisions of this Clause 9.
9.2 Upon the termination of this Agreement, the Subscriber shall promptly
deliver to or to the order of the Company any securities, certificates, funds
and other property held under the terms hereof for the person or entity directed
by the Company and which are not held for the benefit of the Claim Holders
pursuant to this Agreement. Upon termination of this Agreement and payment to
the Subscriber of all amounts payable to them under the terms hereof, copies of
all information maintained by the Subscriber for the Company under this
Agreement or the Mandate Letter (as defined below) shall be delivered to the
Company upon request to the person or entity directed by the Company. Upon
termination the provisions of Clause 8 shall apply.
9.3 Notwithstanding anything else contained in this Agreement, the term of
Clause 10 and Clause 11 shall survive termination of this Agreement.
9.4 To the extent permitted by law, Art. 746 of the Polish Civil Code shall not
apply to this Agreement nor to relations established pursuant to this Agreement.
10 REPRESENTATIONS AND WARRANTIES
10.1 The Company represents and warrants that (i) the consummation of the
Financial Restructuring and the performance of the Transaction contemplated
herein is as of the date hereof and will remain, on the consummation of the
Financial Restructuring (the "CLOSING DATE"), duly authorised by all necessary
corporate actions of the Company, and (ii) the Transaction does, and will
continue to comply, in all respects with all applicable requirements of law
(including, without limitation, U.S., Dutch and Polish securities laws).
10.2 Each Party represents and warrants to the other as follows:
(i) it is duly organised and validly existing under the laws of the
jurisdiction in which it is incorporated;
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(ii) it has the power to enter into the transactions contemplated
hereunder, and to execute and deliver this Agreement and each document
contemplated hereunder; and
(iii) its obligations hereunder constitute legal, valid, binding and
enforceable obligations.
The above representations made by the Parties shall survive the
termination of this Agreement.
11 INDEMNIFICATION
11.1 The Company shall indemnify the Subscriber and its agents (together with
their directors, officers and employees) against any losses, liabilities, costs,
expenses, claims, action or demand which the Subscriber or the agents may incur
or which may be made against the Subscriber or its agents as a result of or in
connection with the appointment or the exercise of or performance of all the
powers, authorities and duties of the Subscriber (whether directly or as
delegated by it to its agents), as the case may be, under this Agreement
relating to the Rights to Restructuring Shares and the Restructuring Shares
except such as may result from the Subscriber's own wilful default, fraud,
negligence, bad faith or wilfully defaulted failure to comply with its
obligations hereunder or that of its officers, employees or agents. For the
avoidance of any doubt, this indemnity shall extend to any losses, liabilities,
costs, expenses, claims, actions or demands connected with: (i) the calculation
of the total number of the Restructuring Shares subscribed for by the Subscriber
and the calculation of the entitlement of each individual Assigning Claim Holder
to receive the Restructuring Shares (provided that it is made by the Subscriber
under the Algorithm), (ii) the non-existence or any marketability restrictions
applicable to the Claims assigned or deemed to have been assigned under the
Claim Holder Agreements, (iii) the capacity of the Assigning Claim Holders to
execute and perform the Claim Holder Agreements and (iv) the authorisation of
any representatives of the Assigning Claim Holders to validly execute the Claim
Holder Agreements.
11.2 The Subscriber shall indemnify the Company against any loss, liability,
cost, expense, claim, action or demand which the Company may incur or which may
be made against the Company, as a result of the Subscriber's own wilful default,
fraud, negligence, bad faith or wilfully defaulted failure to comply with its
obligations under this Agreement or that of its officers, employees or agents.
11.3 In relation to Clause 11.1 and 11.2 above, the Company shall indemnify the
Subscriber, and the Subscriber shall indemnify the Company, respectively and as
applicable, promptly upon receipt by the Company or the Subscriber of a demand
thereof supported by evidence of such loss, liability, cost, expense, claim,
action or demand.
11.4 The Subscriber shall not be liable for any loss caused by events beyond its
reasonable control including any malfunction, interruption or error in the
transmission of information caused by any machine or systems or interception of
communication facilities, abnormal operating conditions or any reason being
beyond its control (which, for the avoidance of any doubts, includes any
evidence produced by any Clearing System). The Subscriber shall have no
liability whatsoever for any consequential, special, indirect or speculative
loss or damages (including, but not limited to, loss of profits, whether or not
foreseeable) suffered by the Company in connection with the transactions
contemplated by and the relationship established by this Agreement even if the
Subscriber has been advised as to the possibility of the same. These provisions
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will override all other provisions of this Agreement. However, this Clause shall
not be deemed to apply in the event of a determination or fraud or gross
negligence on the part of the Subscriber in a non-appealable judgment of a court
having jurisdiction.
11.5 The indemnities set out in Clauses 11.1 and 11.2 herein shall continue in
full force and effect notwithstanding any termination or expiry of this
Agreement.
12 FEES
The Subscriber shall not be entitled to any fees and reimbursements from
the Company apart from those set forth in the Mandate Letter executed
between the Subscriber and the Company on 27 September 2002 (the "MANDATE
LETTER").
13 OTHER RIGHTS AND DUTIES OF SUBSCRIBER
13.1 ADVISERS
(i) The Subscriber may engage at the Company's expense on the advice
or services of any lawyers, accountants, or other experts.
(ii) The Subscriber may act in relation to this Agreement through its
personnel and agents.
13.2 RESIGNATION OR REMOVAL OF SUBSCRIBER
The Subscriber may resign its appointment and the Company may remove the
Subscriber under this Agreement at any time; by giving 15 days' prior
written notice to that effect provided that no such resignation or removal,
as the case may be, shall be effective until:
(i) a successor for the Subscriber is appointed in accordance with the
provisions of Clause 13.3 herein;
(ii) the resigning Subscriber has transferred to its successor all of
the rights and obligations in its capacity as Subscriber hereunder; and
(iii) the successor for such Subscriber has duly acceded to this
Agreement.
13.3 REPLACEMENT OF SUBSCRIBER
If the Subscriber gives notice of its resignation, or if the Company issues
a notice of removal pursuant to Clause 13.2 herein, then the Company may
appoint a successor to the Subscriber during the period of such notice. No
such replacement may have an adverse effect on the right of the Assigning
Claim Holders resulting from their respective Claim Holder Agreements. The
Company shall be liable to each of the Assigning Claim Holders for any
damage or detriment suffered by the Assigning Claim Holder in relation with
such a replacement.
13.4 TITLE AS SUBSCRIBER
The Subscriber may, to the extent permitted under applicable law, accept
without enquiry, reservation or objection such right and title as the Claim
Holder may have to the Claims or the Restructuring Shares and shall not be
required to investigate or make any enquiry into the right or title of any
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Claim Holder to such Claims or the Restructuring Shares provided, that if
it is or becomes aware of any defect in the right or title of such Claim
Holder it shall immediately advise the Company.
14 AMENDMENT AND ASSIGNMENTS
14.1 The terms of this Agreement may be waived, amended or supplemented only by
a supplemental agreement duly executed in writing by both the Company and the
Subscriber.
14.2 None of the rights or obligations of the parties under this Agreement may
be assigned except (i) upon receipt of prior written consent of the other Party
to this Agreement, or (ii) as otherwise specifically permitted under this
Agreement. Any assignment or delegation in violation of this Clause 14.2 shall
be null and void.
14.3 No amendment or assignment made pursuant to Clauses 14.1 and 14.2 above may
have an adverse effect on the right of the Assigning Claim Holders resulting
from their respective Claim Holder Agreements. The Company shall be liable to
each of the Assigning Claim Holders for any damage or detriment suffered by the
Assigning Claim Holder in relation with such an amendment or assignment.
15 PARTIAL INVALIDITY
In the event that any provision of this Agreement or the application
thereof to any person or circumstances is determined to be invalid or
unenforceable to any event, the remaining provisions of this Agreement, and
the application of such provisions to persons or circumstances other than
those as to which they are to be invalid or unenforceable, shall be
unaffected thereby and such provisions shall be valid and enforced to the
fullest extent permitted by law so long as the fundamental relationships
among the parties hereunder are not altered.
16 FORCE MAJEURE
The Subscriber shall be excused from performance of its obligations under
this Agreement and shall not be liable for any losses, damages, or expenses
caused by the occurrence of any contingency beyond its control, including,
without limitation, nationalisation, expropriations, currency restrictions,
work stoppages, strikes, fire, civil unrest, insurrections, revolutions,
riots, rebellions, acts of terrorism, explosions, floods, storms, computer
failures, acts of war, acts of God or similar occurrences nor shall the
Subscriber incur any liability if it shall be prevented or forbidden from,
or debarred in, doing or performing any act or thing required by the terms
of this Agreement, by reason of any provision of any present or future law
or regulation of any country or of any other governmental authority or
regulatory authority or stock exchange or on account of possible criminal
or civil penalties or restraint.
7 SCOPE OF THIS AGREEMENT
This Agreement (including its Schedules) sets forth the entire
understanding of the parties in respect of the subject matter hereof and
supersedes any and all prior agreements, arrangements and understandings
relating thereto. For the avoidance of any doubt, this clause 17 shall have
no impact on the existence, validity and enforceability of the Mandate
Letter.
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18 COUNTERPARTS AND LANGUAGE VERSIONS
This Agreement has been executed in eight counterparts (four in Polish and
four in English), one of each of the language versions for each of the
following persons: (i) the Company, (ii) the Subscriber, (iii) the Ad Hoc
Committee of the Claim Holders and, (iv) jointly, for BV I, BV II and BV
III, each of which shall be deemed an original. The Parties agree that if
for any reason any inconsistency exists between the English and Polish
language versions, the Polish version shall prevail.
19 NOTICES
19.1 COMMUNICATIONS IN WRITING
All notices and communications hereunder shall be made in writing (by
letter or facsimile) and shall be sent as follows:
in the case of the Company, to:
Netia Holdings S.A.
xx. Xxxxxxxx 00
00-000Xxxxxxxx, Xxxxxx
Telephone: + 00 00 000 0000
Facsimile: + 48 22 330 2323 and + 48 22 330 2083
Attention: Avi Xxxxxxx, Xxx Don-Xxxxxxx
With copies to:
Well, Gotshal & Xxxxxx - Xxxxx Xxxxxx Spotka komandytowa
xx. Xxxxxx Xxxxxx 00, XX xxxxx
00-000 Xxxxxx
Telephone: + 00 00 000 00 00
Facsimile: x00 00 000 00 00
Attention: Xxxxx Xxxxxx, Xxxxx Xxxxxxxxxx
and
Xxxxxxx X.X. x/x Xxxxx (Xxxxxxxxxxx) X.X.
Xxxxxxxxxx 000-0
0000 XX Xxxxxxxxx, xxx Xxxxxxxxxxx
Telephone: x00 00 000 0000
Facsimile: x00 00 000 0000
and
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Wardynski & Partners
Xx. Xxxxxxxxxxx 00
00-000 Xxxxxx
Telephone: + 00 00 000 00 00
Facsimile: + 48 22 628 90 40
Attention: Xxxxxxx Xxxxxxxxxx
In the case of the Subscriber, to:
ING Bank Xxxxxx X.X. PI. TrzechKrzyzy 10/00 00-000 Xxxxxxxx Telephone: +48
00 000 00 00 Facsimile: x00 00 000 00 00 or x00 00 000 00 00 Attention:
Michaf Pelwecki, Securities Services Division and Xxxxxxx Xxxxxxxxx,
Investment Banking
19.2 DELIVERY
Every notice or communication sent in accordance with this Clause 19 shall
be effective, if sent by letter or facsimile, upon receipt by the
addressee, provided, however, that any such notice or communication which
would otherwise take effect after 4.00 p.m. on any particular day shall not
take effect until 10.00 a.m. on the immediately succeeding day on which
banks are ordinarily open for the transaction of normal banking business in
Warsaw ("BUSINESS DAY"). All notices and other communications hereunder
shall be made in the Polish or English language.
20 TAXES
20.1 The Company shall pay all stamp, issue, documentary or other taxes and
duties, including interest and penalties, payable in relation to the
transactions contemplated in this Agreement and the execution and delivery of
this Agreement. The Company will also indemnify the Subscriber from and against
all stamp, issue, documentary or other taxes paid by any of them in any
jurisdiction in connection with any action taken by or on behalf of the
Subscriber to enforce its obligations under this Agreement. Any such costs
referred to above shall be reimbursed to the Subscriber by the Company. The
Company hereby indemnifies the Subscriber and Claim Holders against the Polish
tax on civil law transactions due, if any, on the Claim Holder Agreements and/or
on the transfer of the Rights to Restructuring Shares to the Claim Holders and
agrees to pay such tax if it is due and payable.
20.2 The Subscriber shall have the right to require that a cash collateral (in
the form to be agreed later by both Parties acting reasonably and in good faith)
be placed by the Company for the benefit of the Subscriber to secure the payment
or the reimbursement to the Subscriber of the tax on civil transactions in
relation to any transaction relating to the Transaction if, in the reasonable
opinion of the Bank (supported by written opinions of at least two reputable
firms of tax advisors or law firms selected by the Bank), such tax is due and
payable. In the case that there are any reasonable doubts as to the status of
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the tax referred to above, both Parties shall take all reasonable steps to
clarify such doubts in order to decide on the status of the cash collateral
referred to in the previous sentence as soon as reasonably practicable.
21 CONFIDENTIALITY
Notwithstanding any other provision of this Agreement or the Restructuring
Documents, the Subscriber shall not disclose to any other person other than
its agent, advisor or counsel (and their respective directors, officers and
employees) (a) any confidential information pertaining to the Company or
the Financial Restructuring (including the Transaction) or (b) any other
information if the disclosure might constitute a breach of any law or a
breach of a fiduciary duty.
22 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with Polish
law.
23 JURISDICTION 23.1 POLISH COURTS
The courts of Poland shall have exclusive jurisdiction to settle any
disputes which may arise out of or in connection with this Agreement
(including a dispute regarding the existence, validity or termination of
this Agreement or the consequences of its nullity) and accordingly any
legal action or proceedings arising out of or in connection with this
Agreement may be brought in such courts.
23.2 CONVENIENT FORUM
The parties agree that the courts of Poland are the most appropriate and
convenient courts to settle disputes between them and, accordingly, that
they will not argue to the contrary.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorised, as of the date first
written above.
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SUBSCRIPTION AGREEMENT SIGNATURE PAGE
Executed as a Agreement by ING BANK XXXXXX X.X.
By: /S/ TANNO ROOZEN
-----------------------------------------
Name: Tanno Roozen
Title: President of the Management Board
By: /S/ PRZEMYSLAW CISZECKI
-----------------------------------------
Name: Przemyslaw Ciszecki
Title: Commercial Proxy
17
SUBSCRIPTION AGREEMENT SIGNATURE PAGE
Executed by NETIA HOLDINGS S.A.
By: /S/ EWA DON-XXXXXXX
-------------------------------
Name: Ewa Don-Xxxxxxx
Title: Vice President, Legal
By: /S/ XXXXXXX XXXXXXX
-------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Chief Financial Officer
18
SCHEDULE 1
SERVICES SCHEDULE
A SERVICES
The Subscriber shall provide the following services:
1. DISTRIBUTION OF TRANSACTION MATERIALS
The Company has made arrangements with the Clearing Systems to deliver
explanatory materials in connection with the Transaction (the "TRANSACTION
MATERIALS") to persons entitled to take part in the Transaction and otherwise to
publicise the Transaction and to communicate with Claim Holders in respect of
the Transaction.
2. REPORTS; MAINTENANCE AND RETENTION OF RECORDS
The Subscriber shall provide written reports to the Company by facsimile
transmission or other agreed form of delivery upon such terms and at such
intervals as the Company and the Subscriber will have agreed on in advance
specifying the following:
(i) information relating to the contact which the Subscriber has had in
connection with the Transaction with the Clearing Systems, any Claim
Holders or their agents;
(ii) information enabling the Company to verify the number of the Rights to
Restructuring Shares or Restructuring Shares to be delivered on the Closing
Date.
The Subscriber will keep and maintain complete and accurate records showing the
number of the Rights to Restructuring Shares or Restructuring Shares delivered
by it on the Closing Date. The Subscriber shall retain records of any written
communications with any of the Clearing Systems, any Claim Holders or their
agents and shall remit copies of the same to the Company if so requested by the
Company.
3. CALCULATION OF RESTRUCTURING SHARES
The Subscriber shall be entitled to rely on the amount of Restructuring Shares
to be received by each Claim Holder in accordance with the Dutch Composition
Plans if it is calculated by the Subscriber under the Algorithm.
B ASSIGNMENT OF CLAIMS
1. The Subscriber shall enable each Claim Holder wishing to be an Assigning
Claim Holder, or their agents, to execute Claim Holder Agreements in favour of
the Subscriber in respect of each Claim held by such Claim Holders.
2. The Subscriber will, if directed by the Claim Holders, establish safekeeping
accounts with the Subscriber on a conditional basis, subject to delivery of an
executed Claim Holder Agreement and any other documentation reasonably requested
by the Subscriber from each Assigning Claim Holder. This documentation can be
delivered to the Subscriber by the Claim Holder via Bank of New York, London
Branch.
19
C SUBSCRIPTION OF RESTRUCTURING SHARES
The Subscriber will subscribe for the Restructuring Shares and shall be obliged
to apply for all necessary permits to either the Polish SEC or other regulatory
agency in connection with the subscription for the Restructuring Shares and the
issuance and delivery to it of the Rights to Restructuring Shares and the
re-distribution of the Rights to the Restructuring Shares among the Assigning
Claim Holders.
D DELIVERY OF THE RIGHTS TO RESTRUCTURING SHARES OR RESTRUCTURING SHARES
The Subscriber shall, in accordance with this Agreement, deliver or cause to be
delivered to each Assigning Claim Holder's designated securities account in
Poland, the number of the Rights to Restructuring Shares or Restructuring Shares
(as the case may be) to which it is entitled in accordance with and subject to
the terms and conditions set out herein.
E CO-OPERATION
The Company reserves the right to terminate or amend the Transaction. In the
event of an amendment to the Transaction, the Subscriber will follow the
reasonable instructions of the Company with respect to the amended Transaction
to the extent consistent with this Agreement.
F TELEPHONE ENQUIRIES AND PUBLIC STATEMENTS
The Subscriber shall not make any statements and shall not make public any
information in respect of the Transaction not previously authorised by the
Company.
20
