-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SeOj7y92mEO8EB9hQACVFvq9ux98qxpsk6Jlk3ST2epp0iM/shJyXqk4L9SQJVNz IRNOQndZLHT1WwZ19cuWSA== 0000950123-04-010738.txt : 20040908 0000950123-04-010738.hdr.sgml : 20040908 20040908162221 ACCESSION NUMBER: 0000950123-04-010738 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20040908 DATE AS OF CHANGE: 20040908 GROUP MEMBERS: ASHMORE EMERGING MARKETS DEBT FUND GROUP MEMBERS: ASHMORE GLOBAL SPECIAL SITUATION FUND LIMITED GROUP MEMBERS: ASHMORE GROUP LIMITED GROUP MEMBERS: ASHMORE INVESTMENTS UK LIMITED GROUP MEMBERS: ASHMORE MANAGEMENT COMPANY LIMITED GROUP MEMBERS: ASSET HOLDER PCC LIMITED GROUP MEMBERS: ASSET HOLDER PCC NO 2 LIMITED FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ASHMORE INVESTMENT MANAGEMENT LTD CENTRAL INDEX KEY: 0001267311 IRS NUMBER: 000000000 FISCAL YEAR END: 0631 FILING VALUES: FORM TYPE: SC 13D/A MAIL ADDRESS: STREET 1: 20 BEDFORDBURY CITY: LONDON STATE: X0 ZIP: WC2N 4BL SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HUNGARIAN TELEPHONE & CABLE CORP CENTRAL INDEX KEY: 0000889949 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 133652685 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-47185 FILM NUMBER: 041020927 BUSINESS ADDRESS: STREET 1: 1201 THIRD AVENUE, SUITE 3400 CITY: SEATTLE STATE: WA ZIP: 98101 BUSINESS PHONE: 206-654-0204 MAIL ADDRESS: STREET 1: 1201 THIRD AVENUE, SUITE 3400 CITY: SEATTLE STATE: WA ZIP: 98101 SC 13D/A 1 w01841sc13dza.htm AMENDMENT NO.3 TO SCHEDULE 13D AMENDMENT NO.3 TO SCHEDULE 13D
 

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 3)*

Hungarian Telephone and Cable Corp.

(Name of Issuer)

Common Stock, par value $0.001 per share

(Title of Class of Securities)

4455421030

(Cusip Number)

Ashmore Investment Management Limited
20 Bedfordbury
London WC2N 4BL
United Kingdom
Attn: Mark Grimwood

Copy To:
Dewey Ballantine
One London Wall
London EC2Y 5EZ
United Kingdom
Attn: Douglas L. Getter, Esq.

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

September 3, 2004

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

             
CUSIP No. 4455421030 Page 2 of 16
  1. Name of Reporting Person:
Ashmore Investment Management Limited		 I.R.S. Identification Nos. of above persons (entities only):
N/A
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
AF
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
England and Wales
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
0
8. Shared Voting Power:
6,934,480*
9. Sole Dispositive Power:
0
10.Shared Dispositive Power:
6,934,480*
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
6,934,480*
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
45.6%**
  14.Type of Reporting Person (See Instructions):
IA

*   Includes (i) 4,134,480 shares of Hungarian Telephone and Cable Corp. (“HTCC”) common stock, (ii) warrants exercisable within the next 60 days to acquire an aggregate of 2,500,000 shares of HTCC common stock (the “Warrant Shares”) and (iii) 30,000 shares of HTCC Series A Convertible Preferred Stock, each share of which is convertible into ten (10) shares of common stock of HTCC at the option of the holder (the “Preferred Shares”), in each case currently owned by the Ashmore Parties.
 
**   The calculation of the foregoing percentage is based upon the number of shares of HTCC common stock outstanding as of August 9, 2004 (12,430,417) as set forth in HTCC’s Form 10-Q for the quarter ended June 30, 2004 as filed with the Securities and Exchange Commission (the “Commission”) on August 13, 2004 (the “HTCC Outstanding Shares”) plus the total number of Warrant Shares and Preferred Shares.

 

             
CUSIP No. 4455421030 Page 3 of 16
  1. Name of Reporting Person:
Ashmore Group Limited		 I.R.S. Identification Nos. of above persons (entities only):
N/A
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
AF
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
England and Wales
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
0
8. Shared Voting Power:
6,934,480*
9. Sole Dispositive Power:
0
10.Shared Dispositive Power:
6,934,480*
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
6,934,480*
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
45.6%**
  14.Type of Reporting Person (See Instructions):
CO

*   Includes (i) 4,134,480 shares of HTCC Common Stock, (ii) warrants exercisable with the next 60 days to acquire the Warrant Shares and (iii) 30,000 shares of HTCC Series A Convertible Preferred Stock convertible into the Preferred Shares, in each case owned by the Ashmore Parties.
 
**   The calculation of the foregoing percentage is based upon the number of HTCC Outstanding Shares plus the total number of Warrant Shares and Preferred Shares.

 

             
CUSIP No. 4455421030 Page 4 of 16
  1. Name of Reporting Person:
Ashmore Investments (UK) Limited		 I.R.S. Identification Nos. of above persons (entities only):
N/A
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
AF
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
England and Wales
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
0
8. Shared Voting Power:
6,934,480*
9. Sole Dispositive Power:
0
10.Shared Dispositive Power:
6,934,480*
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
6,934,480*
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
45.6%**
  14.Type of Reporting Person (See Instructions):
CO

*   Includes (i) 4,134,480 shares of HTCC Common Stock, (ii) warrants exercisable with the next 60 days to acquire the Warrant Shares and (iii) 30,000 shares of HTCC Series A Convertible Preferred Stock convertible into the Preferred Shares, in each case owned by the Ashmore Parties.
 
**   The calculation of the foregoing percentage is based upon the number of HTCC Outstanding Shares plus the total number of Warrant Shares and Preferred Shares.

 

             
CUSIP No. 4455421030 Page 5 of 16
  1. Name of Reporting Person:
Ashmore Management Company Limited		 I.R.S. Identification Nos. of above persons (entities only):
N/A
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
AF
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Guernsey, Channel Islands
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
0
8. Shared Voting Power:
6,934,480*
9. Sole Dispositive Power:
0
10.Shared Dispositive Power:
6,934,480*
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
6,934,480*
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
45.6%**
  14.Type of Reporting Person (See Instructions):
IA

*   Includes (i) 4,134,480 shares of HTCC Common Stock, (ii) warrants exercisable with the next 60 days to acquire the Warrant Shares and (iii) 30,000 shares of HTCC Series A Convertible Preferred Stock convertible into the Preferred Shares, in each case owned by the Ashmore Parties.
 
**   The calculation of the foregoing percentage is based upon the number of HTCC Outstanding Shares plus the total number of Warrant Shares and Preferred Shares.

 

             
CUSIP No. 4455421030 Page 6 of 16
  1. Name of Reporting Person:
Ashmore Global Special Situations Fund Limited		 I.R.S. Identification Nos. of above persons (entities only):
N/A
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
WC
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Guernsey, Channel Islands
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
0
8. Shared Voting Power:
1,848,572*
9. Sole Dispositive Power:
0
10.Shared Dispositive Power:
1,848,572*
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
1,848,572*
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
14.5%**
  14.Type of Reporting Person (See Instructions):
CO

*   Includes 1,548,572 shares of HTCC common stock and the Preferred Shares currently owned by Ashmore Global Special Situations Fund Limited.
 
**   The calculation of the foregoing percentage is based upon the number of HTCC Outstanding Shares plus the number of Preferred Shares.

 

             
CUSIP No. 4455421030 Page 7 of 16
  1. Name of Reporting Person:
Asset Holder PCC No. 2 Limited re: Ashmore Emerging Economy Portfolio		 I.R.S. Identification Nos. of above persons (entities only):
N/A
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
WC
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Guernsey, Channel Islands
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
0
8. Shared Voting Power:
683,000
9. Sole Dispositive Power:
0
10.Shared Dispositive Power:
683,000
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
683,000
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
5.5%
  14.Type of Reporting Person (See Instructions):
CO

 

 

             
CUSIP No. 4455421030 Page 8 of 16
  1. Name of Reporting Person:
Asset Holder PCC Limited re: Ashmore Emerging Markets Liquid Investment Portfolio		 I.R.S. Identification Nos. of above persons (entities only):
N/A
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
WC
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Guernsey, Channel Islands
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
0
8. Shared Voting Power:
2,100,000*
9. Sole Dispositive Power:
0
10.Shared Dispositive Power:
2,100,000*
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
2,100,000*
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
14.5%**
  14.Type of Reporting Person (See Instructions):
CO

*   2,100,000 Warrant Shares owned by Asset Holder PCC Limited re: Ashmore Emerging Markets Liquid Investment Portfolio.
 
**   The foregoing percentage is based upon the number of HTCC Outstanding Shares plus 2,100,000 Warrant Shares owned by Asset Holder PCC Limited re: Ashmore Emerging Markets Liquid Investment Portfolio.

 

             
CUSIP No. 4455421030 Page 9 of 16
  1. Name of Reporting Person:
Ashmore Emerging Markets Debt Fund		 I.R.S. Identification Nos. of above persons (entities only):
N/A
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
WC
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Grand Cayman, Cayman Islands
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
0
8. Shared Voting Power:
400,000*
9. Sole Dispositive Power:
0
10.Shared Dispositive Power:
400,000*
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
400,000*
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
3.1%
  14.Type of Reporting Person (See Instructions):
CO

*   400,000 Warrant Shares owned by Ashmore Emerging Markets Debt Fund.
 
**   The foregoing percentage is based upon the number of HTCC Outstanding Shares plus 400,000 Warrant Shares owned by Ashmore Emerging Markets Debt Fund.

 

ITEM 1. SECURITY AND ISSUER.

This Amendment No. 3 (this “Amendment”) to the Schedule 13D filed by AIML relates to the ownership of shares of common stock, par value $0.001 per share (the “Common Stock”), and Series A Convertible Preferred Stock, par value $0.01 per share (the “Preferred Stock”), of Hungarian Telephone and Cable Corp. (the “Company”). This Amendment No. 3 amends and supplements the Schedule 13D filed by AIML on October 20, 2003, as amended by Amendment No. 1 to the Schedule 13D filed by AIML on November 2, 2003 and Amendment No. 2 to the Schedule 13D filed by AIML on May 26, 2004 (the “Original Schedule 13D”). Except as set forth below, the information in the Original Schedule 13D remains as stated therein and is incorporated by reference to this amendment in all respects. Capitalized terms used but not defined in this amendment have the meanings assigned to them in the Original Schedule 13D.

ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

Item 3 of the Original Schedule 13D is hereby amended and supplemented by adding the following:

On September 3, 2004, AEEP entered into a Purchase and Sale Agreement with Citizens Communications Company pursuant to which it purchased 403,000 shares of Common Stock for a purchase price of US$2,015,000 or US$5.00 per share of Common Stock (the “AEEP Purchase and Sale Agreement”). The funds for the purchase of the Common Stock by AEEP were provided out of the general investment funds of AEEP.

On September 3, 2004, GSSF entered into a Purchase and Sale Agreement with CU Capital LLC (formerly CU Capital Corp.) pursuant to which it purchased 30,000 shares of Preferred Stock for a purchase price of US$1,650,000 or US$55.00 per share of Preferred Stock (the “GSSF Purchase and Sale Agreement”). The funds for the purchase of the Preferred Stock by GSSF were provided out of the general investment funds of GSSF. Because each share of Preferred Stock is immediately convertible into ten (10) shares of Common Stock, GSSF will be deemed to beneficially own the 300,000 shares of Common Stock into which the 30,000 shares of Preferred Stock it purchased may be converted.

On September 3, 2004 EMDCD Limited entered into a Purchase and Sale Agreement with CU Capital LLC (formerly CU Capital Corp.) pursuant to which it purchased 1,902,908 shares of Common Stock for a purchase price of US$9,514,540 or US$5.00 per share of Common Stock (the “EMDCD Purchase and Sale Agreement”). The funds for the purchase of the Common Stock by EMDCD were provided out of the general investment funds of EMDCD. EMDCD is a discretionary investment account of certain of the Ashmore Parties.

The AEEP Purchase and Sale Agreement, the GSSF Purchase and Sale Agreement and the EMDCD Purchase and Sale Agreement are collectively referred to herein as the “Ashmore Purchase and Sale Agreements.”

The foregoing descriptions of the Ashmore Purchase and Sale Agreements and the transactions contemplated thereby are qualified in their entirety by reference to the

Page 10 of 16

 

complete text of such agreements which are filed with this Amendment as Exhibits 7.11 — 7.13 and are incorporated by reference into this Item 3 in all respects.

ITEM 4. PURPOSE OF TRANSACTION.

Item 4 of the Original Schedule 13D is hereby amended and Supplemented by adding the following (and the last paragraph of Item 4 of the Original Schedule 13D is hereby deleted and replaced in its entirety by the last paragraph of this Item 4 below) :

The Common Stock and Preferred Stock were acquired from Citizens Communications Company and CU Capital LLC pursuant to the Ashmore Purchase and Sale Agreements.

Each of AEEP, GSSF and EMDCD acquired the Common Stock or Preferred Stock for investment purposes.

Except as set forth in Item 6 which is incorporated by reference into this Item 4 in all respects, the Ashmore Parties do not at the present time have any plans or proposals that relate to or would result in any of the transactions described in paragraphs (a)-(j) of Item 4 of Schedule 13D.

The Ashmore Parties intend to review on a continuing basis their ownership of the Common Stock, the Preferred Stock and the Warrants and the Company’s business, prospects and financial condition. Based on such continuing reviews, alternate investments opportunities available to the parties and all other factors deemed relevant (including, without limitation, the market for and the price of the Preferred Stock, the Warrants and the underlying Common Stock, offers for the underlying Common Stock, transfer restrictions applicable to the Preferred Stock, the Warrants and the underlying Common Stock, general economic conditions and other future developments), the Ashmore Parties may decide to sell or seek the sale of all or part of the Common Stock, Preferred Stock, the Warrants or the underlying Common Stock or increase their holdings of Common Stock.

ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.

Paragraphs (a) and (b) of Item 5 of the original Schedule 13D are hereby deleted and replaced in their entirety by the following:

(a) — (b) Based on information disclosed by the Company in its Form 10-Q for the quarter ended June 30, 2004 as filed with the Commission on August 13, 2004, the Company had 12,430,417 shares of Common Stock issued and outstanding as of August 9, 2004.

GSSF is deemed to directly beneficially own 1,848,572 shares of Common Stock representing 14.5 percent of the outstanding Common Stock after conversion of the 30,000 shares of Preferred Stock owned by it to 300,000 shares of Common Stock. GSSF has shared voting and investment power with respect to such shares of Common Stock.

AEEP directly beneficially owns 683,000 shares of Common Stock representing 5.5 percent of the outstanding Common Stock. AEEP has shared voting and investment power with respect to such shares of Common Stock.

Page 11 of 16

 

EMLIP is deemed to directly beneficially own 2,100,000 shares of Common Stock, representing 14.5 percent of the outstanding Common Stock after the exercise of the Warrants owned by EMLIP and purchase of the underlying Common Stock. EMLIP has shared voting and investment power with respect to such shares of Common Stock.

AEMDF is deemed to directly beneficially own 400,000 shares of Common Stock, representing 3.1 percent of the outstanding Common Stock after the exercise of the Warrants owned by AEMDF and purchase of the underlying Common Stock. AEMDF has shared voting and investment power with respect to such shares of Common Stock.

AGL indirectly beneficially owns 6,934,480 shares of Common Stock representing 45.6 percent of the outstanding Common Stock after (i)(A) the exercise of the Warrants by EMLIP and AEMDF and the purchase of the underlying Common Stock by such parties and (B) the conversion by GSSF of the 30,000 shares of Preferred Stock to 300,000 shares of Common Stock, by virtue of AGL’s indirect beneficial ownership of GSSF, AEEP, EMLIP and AEMDF and (ii) the purchase of 1,902,908 shares of Common Stock on behalf of a discretionary investment account. AGL has shared voting and investment power with respect to such shares of Common Stock.

AI(UK)L indirectly beneficially owns 6,934,480 shares of Common Stock representing 45.6 percent of the outstanding Common Stock after (i)(A) the exercise of the Warrants by EMLIP and AEMDF and the purchase of the underlying Common Stock by such parties and (B) the conversion by GSSF of the 30,000 shares of Preferred Stock to 300,000 shares of Common Stock by virtue of AI(UK)L’s indirect beneficial ownership of GSSF, AEEP, EMLIP and AEMDF and (ii) the purchase of 1,902,908 shares of Common Stock on behalf of a discretionary investment account. AI(UK)L has shared voting and investment power with respect to such shares of Common Stock.

AMCL indirectly beneficially owns 6,934,480 shares of Common Stock representing 45.6 percent of the outstanding Common Stock after (i)(A) the exercise of the Warrants by EMLIP and AEMDF and the purchase of the underlying Common Stock by such parties and (B) the conversion by GSSF of the 30,000 shares of Preferred Stock to 300,000 shares of Common Stock, by virtue of AMCL’s indirect beneficial ownership of GSSF, AEEP, EMLIP and AEMDF and (ii) the purchase of 1,902,908 shares of Common Stock on behalf of a discretionary investment account. AMCL has shared voting and investment power with respect to such shares of Common Stock.

AIML indirectly beneficially owns 6,934,480 shares of Common Stock representing 45.6 percent of the outstanding Common Stock after (i)(A) the exercise of the Warrants by EMLIP and AEMDF and the purchase of the underlying Common Stock by such parties and (B) the conversion by GSSF of the 30,000 shares of Preferred Stock to 300,000 shares of Common Stock, by virtue of AIML’s indirect beneficial ownership of GSSF, AEEP, EMLIP and AEMDF and (ii) the purchase of 1,902,908 shares of Common Stock on behalf of a discretionary investment account. AIML has shared voting and investment power with respect to such shares of Common Stock.

Page 12 of 16

 

ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.

Item 6 of the Original Schedule 13D is hereby amended and supplemented by adding the following:

AEEP, GSSF and EMDCD entered into the Ashmore Purchase and Sale Agreements relating to the Company’s Common Stock and Preferred Stock as set forth in Item 3. The information set forth in Item 3 is incorporated by reference in this Item 6 in all respects.

Pursuant to the (i) AEEP Purchase and Sale Agreement, AEEP acquired 403,000 shares of Common Stock from Citizens Communications Company, (ii) GSSF Purchase and Sale Agreement, GSSF acquired 30,000 preference shares of Preferred Stock from CU Capital LLC (formerly known as CU Capital Corp.) and (iii) EMDCD Purchase and Sale Agreement, EMDCD acquired 1,902,908 shares of Common Stock from CU Capital LLC (formerly known as CU Capital Corp.).

The final closing of each of the Ashmore Purchase and Sale Agreements is subject to certain conditions to closing as set forth in the Ashmore Purchase and Sale Agreements, copies of which are attached hereto as Exhibits 7.11 - 7.13 and incorporated by reference in this Item 6 all respects.

Following their entering into the Ashmore Purchase and Sale Agreements, each of AEEP, GSSF and EMDCD entered into Call Option Agreements with TDC A/S (“Option 1,” “Option 2” and “Option 3,” respectively, and collectively the “Options”).

Option 1 was entered into by AEEP and TDC A/S on September 3, 2004 pursuant to which TDC A/S acquired an option to purchase 241,800 shares of Common Stock from AEEP for a period of 60 days from the date thereof. The exercise of the option is contingent upon the final closing of the AEEP Purchase and Sale Agreement. Following the satisfaction of such contingency, TDC A/S may, at its discretion, exercise the option to purchase the 241,800 shares of Common Stock of the Company. TDC A/S acquired such option at a price of US$1.00. The option permits TDC A/S to acquire shares of Common Stock at a price of between US$5.01 and US$5.12 per share, depending on when the option is exercised.

Option 2 was entered into by EMDCD and TDC A/S on September 3, 2004 pursuant to which TDC A/S acquired an option to purchase 1,141,744 shares of Common Stock from EMDCD for a period of 60 days from the date thereof. The exercise of the option is contingent upon the final closing of the EMDCD Purchase and Sale Agreement. Following the satisfaction of such contingency, TDC A/S may, at its discretion, exercise the option to purchase the 1,141,744 shares of Common Stock of the Company. TDC A/S acquired such option at a price of US$1.00. The option permits TDC A/S to acquire shares of Common Stock at a price of between US$5.01 and US$5.12 per share, depending on when the option is exercised.

Option 3 was entered into by GSSF and TDC A/S on September 3, 2004 pursuant to which TDC A/S acquired an option to purchase 18,000 shares of Preferred Stock from GSSF for a period of 60 days from the date thereof. The exercise of the option is contingent upon the final closing of the GSSF Purchase and Sale Agreement and the exercise in full of Option 1 and Option 2. Following the satisfaction of such

Page 13 of 16

 

contingencies, TDC A/S may, at its discretion, exercise the option to purchase the 18,000 shares of Preferred Stock. TDC A/S acquired such option at a price of US$1.00. The option permits TDC A/S to acquire the shares of Preferred Stock at a price of between US$55.11 and US$56.32 per share, depending on when the option is exercised.

Pursuant to the Options, GSSF, AEEP, EMDCD and TDC A/S have agreed to enter into a stockholders agreement substantially in the form attached to the Options (the “Stockholders Agreement”) promptly following the execution and delivery of the Options; provided, that the Stockholders Agreement shall not be effective unless and until Option 2 is exercised by TDC A/S. The Stockholders Agreement provides the parties thereto with customary tag-along rights and rights of first refusal.

In addition, subject to regulatory approval and approval under certain agreements to which the Company is a party (prior to which the following provisions shall not be effective), the Stockholders Agreement provides that each of the Ashmore Parties, collectively, and TDC A/S and its affiliates collectively, shall have the right, for so long as each such party owns at least 20% of the Common Stock to nominate two directors to the board of the Company (reducing to one director in the event such party holds less than 20%, but more than 10%, of the Common Stock). The parties have also agreed (i) to maintain a joint majority of the board of directors of the Company for so long as each of the Ashmore Parties, collectively, and TDC A/S and its affiliates collectively, hold at least 20% of the Common Stock outstanding (ii) if TDC A/S and its affiliates collectively, hold at least 20% of the common stock outstanding, TDC A/S will have the right to nominate a TDC Director as Chairman and (iii) if TDC A/S and its affiliates collectively, hold at least 30% of the Common Stock outstanding, TDC A/S will have the right to nominate the chief executive officer and the chief financial officer of the Company.

The foregoing descriptions of the Options and the Stockholders Agreement and the transactions contemplated thereby are qualified in their entirety by reference to the complete texts of the Options and the form of Stockholders Agreement which are filed with this Amendment as Exhibits 7.14 — 7.17 and incorporated by reference into this Item 6 in all respects.

ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.

Item 7 of the Schedule 13D is hereby supplemented by adding at the end as follows:

Exhibit 7.11: Purchase and Sale Agreement between (i) Citizens Communications Company and (ii) AEEP, dated September 3, 2004.

Exhibit 7.12: Purchase and Sale Agreement between (i) CU Capital LLC (formerly CU Capital Corp.) and (ii) GSSF, dated September 3, 2004.

Exhibit 7.13: Purchase and Sale Agreement between (i) CU Capital LLC (formerly CU Capital Corp.) and (ii) EMDCD, dated September 3, 2004.

Exhibit 7.14: Call Option Agreement (Option 1) between AEEP and TDC A/S dated, September 3, 2004.

Exhibit 7.15: Call Option Agreement (Option 2) between EMDCD and TDC A/S, dated September 3, 2004.

Page 14 of 16

 

Exhibit 7.16: Call Option Agreement (Option 3) between GSSF and TDC A/S, dated September 3, 2004.

Exhibit 7.17: Form of Stockholders Agreement among the Stockholders named therein appended to each of the Options.

Page 15 of 16

 

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, we certify that the information set forth in this statement is true, complete and correct.

Date:                   , 2004


     

Name: Tim Davis
Title: General Counsel

On behalf of:
Ashmore Investment Management Limited


     

Name: Mark Coombs
Title: Director

On behalf of:
Ashmore Group Limited
Ashmore Investments (UK) Limited


     

Name: Mark Coombs
Title: Director

On behalf of:
Ashmore Management Company Limited
Ashmore Global Special Situations Fund Limited
Asset Holder PCC No. 2 Limited re: Ashmore Emerging Economy Portfolio
Asset Holder PCC Limited re: Ashmore Emerging Markets Liquid Investment Portfolio


     

Name: Martin Byrne
Title: Director

On behalf of:
Ashmore Emerging Markets Debt Fund

Page 16 of 16

EX-99.7.11 2 w01841exv99w7w11.htm EX-99.7.11 PURCHASE AND SALE AGREEMENT EXHIBIT 99.7.11
 

Exhibit 7.11

Purchase And Sale Agreement

Dated as of September 3, 2004

by and between

Citizens Communications Company

and

Asset Holder PCC No 2 Limited
re Ashmore Emerging Economy Portfolio

 

 

TABLE OF CONTENTS

         
1.     Definitions
    1  
2.     Purchase and Sale of Shares
    3  
3.     Representations and Warranties Concerning the Transaction
    4  
4.     Assignment and Transfer of Registration Agreement
    7  
5.     Pre-Closing Covenants
    8  
6.     Post-Closing Covenants
    8  
7.     Conditions to Obligation to Close
    8  
8.     Remedies for Breaches of this Agreement
    10  
9.     Termination
    11  
10.   Miscellaneous
    12  
EXHIBIT A     Registration Agreement
    17  
EXHIBIT B     Replacement Agreement
    18  
EXHIBIT C     Escrow Arrangements
    19  

 i 

 

 

     THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made as of September 3, 2004 by and between Citizens Communication Company, a Delaware corporation (together, the “Seller”), and Asset Holder PCC No 2 Limited re Ashmore Emerging Economy Portfolio, a protected cell company organised under the laws of Guernsey (“Buyer”). The Buyer and the Seller are referred to collectively herein as the “Parties” and each individually as a “Party”.

RECITALS

     WHEREAS, Seller is the owner of the Shares (as defined in Section 1);

     WHEREAS, Seller wishes to sell and Buyer wishes to buy the Shares (as defined in Section 1) on the terms and conditions set forth in this Agreement; and

     WHEREAS, Seller wishes to assign to Buyer and Buyer wishes to assume from Seller all of Seller’s rights, duties and obligations under the Registration Agreement and, subject to the consent of HTCC, the Replacement Agreement (each as defined in Section 1) on the terms and conditions set forth in this Agreement;

     NOW, THEREFORE, in consideration of the premises and the mutual agreements, provisions and covenants set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

     1. Definitions.

     “Accredited Investor” has the meaning set forth in Regulation D promulgated under the Securities Act.

     “Adverse Consequences” means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable amounts paid in settlement, liabilities, obligations, taxes, liens, losses, expenses, and fees, including court costs and reasonable attorneys’ fees and expenses.

     “Affiliate” means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

     “Buyer” has the meaning set forth in the preface above.

     “Closing” has the meaning set forth in Section 2(c) below.

     “Closing Date” has the meaning set forth in Section 2(c) below.

     “Common Stock” means the shares of Common Stock, par value $0.001 per share, of Hungarian Telephone and Cable Corp.

     “Credit Agreement” means the Senior Secured Facility Agreement dated April 11, 2000 for Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag, Raba-com Tavkozlesi Koncesszios Reszvenytarsasag, Papa Es Tersege Tavkozlesi Koncesszios Reszvenytarsasag and KNC Kelet-Nograd Com Tavkozlesi Koncesszios

 

 

Reszvenytarsasag, as Borrowers, with Hungarian Telephone and Cable Corp. and HTCC Tanacsada Reszvenytarsasag, as Guarantors, Citibank, N.A. and Westdeutsche Landesbank Girozentrale as arrangers, Citibank International PLC as facility agent, Citibank RT. as security agent, and the financial institutions named therein as Lenders.

     “GAAP” means United States generally accepted accounting principles as in effect from time to time.

     “HTCC” means Hungarian Telephone and Cable Corp., a Delaware corporation, together with all of its Subsidiaries and Affiliates.

     “Income Tax” means any federal, state, local, or foreign income tax, including any interest, penalty, or addition thereto, whether disputed or not.

     “Indemnified Party” has the meaning set forth in Section 8(d) below.

     “Indemnifying Party” has the meaning set forth in Section 8(d) below.

     “Knowledge” shall mean the actual knowledge, without independent investigation, of the executive officers of the Seller identified in its most recent proxy statement.

     “Material Adverse Effect” means any event which will or could reasonably be expected to have, either individually or in the aggregate, a material adverse effect on the properties, business, operations, earnings, assets, liabilities, condition (financial or otherwise) of HTCC whether or not in the ordinary course of business taken as a whole, other than any effect arising from the aggregate number of shares of Common Stock and Preferred Stock held by the Buyer and its Affiliates.

     “Party” or “Parties” has the meaning set forth in the preface above.

     “Person” means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a governmental entity (or any department, agency, or political subdivision thereof).

     “Preferred Stock” means the shares of Series A Convertible Preferred Stock, par value 0.01 per share, of Hungarian Telephone and Cable Corp.

     “Purchase Price” has the meaning set forth in Section 2(b) below.

     “Registration Agreement” means the Registration Agreement, dated May 31, 1995 by and between CU Capital Corp. and Hungarian Telephone and Cable Corp. in the form attached to this Agreement as Exhibit A.

     “Replacement Agreement” means the Replacement and Termination Agreement, dated September 30, 1998 by and among CU Capital Corp., Citizens International Management Services Company and Hungarian Telephone and Cable Corp. in the form attached to this Agreement as Exhibit B.

     “Securities Act” means the Securities Act of 1933, as amended.

2

 

     “Security Interest” means any charge, claim, community property interest, condition, equitable interest, lien, pledge, security interest, right of first refusal, or restriction or encumbrance of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute.

     “Seller” has the meaning set forth in the preface above.

     “Shares” means the four hundred and three thousand shares of Common Stock.

     “Subsidiary” means any corporation with respect to which a specified Person (or a Subsidiary thereof) owns a majority of the common stock or has the power to vote or direct the voting of sufficient securities to elect a majority of the directors.

     “Third Party Claim” has the meaning set forth in Section 8(d) below.

     2. Purchase and Sale of Shares.

     (a) Purchase and Sale. On and subject to the terms and conditions of this Agreement, the Buyer agrees to purchase from the Seller, and the Seller agrees to sell to the Buyer the Shares.

     (b) Purchase Price. The Buyer agrees to pay to the Seller at the Closing US$2,015,000 (the “Purchase Price”) in cash, which Purchase Price shall be payable by wire transfer or other delivery of immediately available funds as contemplated by the arrangements set forth in Exhibit C hereto.

     (c) The Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Dewey Ballantine LLP in New York, New York, commencing at 9:00 a.m. local time on September 3, 2004 or on such other date as the Buyer and the Seller may mutually determine (the “Closing Date”) provided, however, that the Closing Date shall be not later than November 30, 2004.

     (d) Delivery of the Shares. On the Closing Date the Seller will arrange for the Shares to be delivered to the Escrow Agent (as defined in Exhibit C) through a credit to the Escrow Agent’s participants account at Depository Trust Company with transfer instructions in favour of the Buyer, together with the opinion contemplated by Section 6.2 of the Replacement Agreement, to be delivered in accordance with the arrangements set forth in Exhibit C hereto.

     (e) Delivery of Certificates, etc. at the Closing. At the Closing, (i) the Seller will deliver to the Buyer the various certificates referred to in Section 7(a) below and (ii) the Buyer will deliver to the Seller the various certificates referred to in Section 7(b) below in accordance with the arrangement set forth in Exhibit C.

     (f) Delivery of Purchase Price at the Closing. At the Closing, Buyer will deliver to the Seller the consideration specified in Section 2(b) above in accordance with the arrangements set forth in Exhibit C.

3

 

     3. Representations and Warranties Concerning the Transaction.

     (a) Representations and Warranties of the Seller. The Seller represents and warrants to the Buyer that the statements contained in this Section 3(a) are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then).

     (i) Organization of Seller. The Seller is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation.

     (ii) Authorization of Transaction. The Seller has full power and authority, and all corporate actions necessary on the part of the Seller have been taken, to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Seller, enforceable against it in accordance with its terms, except to the extent that the enforcement of the rights and remedies created therein is subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting the enforcement of creditors’ rights and general principles of equity. Except as otherwise set forth in this Agreement, the Seller need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any third parties (including HTCC), any U.S. government or any U.S. governmental agency in order to consummate the transactions contemplated by this Agreement, or if such notice, filing, authorization, consent or approval is needed, it has been given or obtained except in each case for any approval required under the Credit Agreement and the acceptability under Section 6.2 of the Replacement Agreement of the opinion, and the counsel providing the opinion, contemplated by Section 2(d).

     (iii) Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will violate any agreement or any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any U.S. government, U.S. governmental agency, or U.S. court to which the Seller or, to the Knowledge of the Seller, to which HTCC is subject or any provision of the Seller’s charter or bylaws except in each case for any approval required under the Credit Agreement and the acceptability under Section 6.2 of the Replacement Agreement of the opinion, and the counsel providing the opinion, contemplated by Section 2(d).

     (iv) Brokers’ Fees. The Seller has no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which the Buyer could become liable or obligated.

     (v) Shares. The Seller beneficially owns the Shares free and clear of any restrictions on transfer (other than restrictions under the Securities Act and state securities laws and Section 6.2 of the Replacement Agreement), taxes, Security Interests, options, warrants, purchase rights, contracts, commitments, equities, claims, and demands. The Seller is not a party to any

4

 

option, warrant, purchase right, or other contract or commitment that could require the Seller to sell, transfer, or otherwise dispose of the Shares (other than this Agreement). The Seller is not a party to any voting trust, proxy, or other agreement or understanding with respect to the voting of the Shares. Upon transfer of the Shares in accordance with the terms of this Agreement, Buyer shall acquire good, valid and marketable title to the Shares, free and clear of any Security Interests other than the obligation to obtain opinions under the Replacement Agreement or arising under the Securities Act and state securities laws.

     (vi) No Proceedings against Seller. There is no civil, criminal or administrative suit or claim, proceeding or investigation before any court, arbitrator or similar panel at law or in equity now pending or, to the Knowledge of the Seller, threatened against the Seller or the Shares, which could reasonably be expected to materially adversely affect the ability of the Seller to consummate the transaction contemplated by this Agreement or encumber the Shares.

     (vii) Seller is a Sophisticated Seller. Seller (A) is a sophisticated seller with respect to the sale of the Shares, (B) has adequate information concerning the business and financial condition of HTCC to make an informed decision regarding the sale of the Shares, and (C) has independently and without reliance upon Buyer, and based on such information as Seller has deemed appropriate, made its own analysis and decision to enter into this Agreement, except that Seller has relied upon Buyer’s express representations, warranties, covenants and indemnities in this Agreement. Seller acknowledges that Buyer has not given Seller any investment advice, credit information, or opinion on whether the sale of the Shares is prudent.

     (viii) Excluded Information. Seller acknowledges that (A) Buyer currently may have, and later may come into possession of, information with respect to the Shares or HTCC or any of its Affiliates that is not known to Seller and that may be material to a decision to sell the Shares including the transaction involving HTCC and PanTel Rt. (“Seller Excluded Information”), (B) Seller has determined to sell the Shares notwithstanding its lack of knowledge of the Seller Excluded Information and (C) Buyer shall have no liability to Seller, and Seller waives and releases any claims that it might have against Buyer whether under applicable securities laws or otherwise, with respect to the nondisclosure of the Seller Excluded Information in connection with the transactions contemplated by this Agreement; provided, however, that the Seller Excluded Information shall not and does not affect the truth or accuracy of Buyer’s representations or warranties in this Agreement.

     (ix) Provision of Documents. Seller has provided or otherwise made available to Buyer copies of all material agreements between Seller and HTCC relating to the Shares (other than any such material agreement filed with the United States Securities and Exchange Commission).

     (x) No Other Agreements. Seller is not a party to, or bound by, any document or agreement that could reasonably be expected to materially

5

 

and adversely affect the Shares or Buyer’s rights and remedies under this Agreement (other than the Replacement Agreement).

     (xi) Disclaimer of other Representations and Warranties. The Seller makes no representation or warranty, express or implied, at law or in equity, in respect of HTCC or any of its assets, liabilities or operations. Except as expressly set forth herein, Buyer hereby acknowledges and agrees that the Buyer is purchasing the Shares having made, to its full and complete satisfaction, a due diligence investigation of HTCC.

     (b) Representations and Warranties of the Buyer. The Buyer represents and warrants to the Seller that the statements contained in this Section 3(b) are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then).

     (i) Organization of the Buyer. The Buyer is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation.

     (ii) Authorization of Transaction. The Buyer has full power and authority to execute and has taken all corporate actions required to deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Buyer, enforceable in accordance with its terms and conditions, except to the extent that the enforcement of the rights and remedies created therein is subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting the enforcement of creditors’ rights and general principles of equity. The Buyer need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement.

     (iii) Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which the Buyer is subject or any provision of its charter or bylaws.

     (iv) Brokers’ Fees. The Buyer has no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which the Seller could become liable or obligated.

     (v) No Proceedings against Buyer. There is no civil, criminal or administrative suit or claim, proceeding or investigation before any court, arbitrator or similar panel at law or in equity now pending or, to the knowledge of the Buyer, threatened against the Buyer, which could reasonably be expected to materially adversely affect the ability to consummate the transaction contemplated by this Agreement.

6

 

     (vi) Investment. The Buyer (A) understands that the Shares have not been, and will not be, registered under the Securities Act, or under any state securities laws, and are being offered and sold in reliance upon federal and state exemptions for transactions not involving any public offering, (B) is acquiring the Shares solely for its own account for investment purposes, and not with a view to the distribution thereof in violation of any applicable securities laws, (C) is a sophisticated investor with knowledge and experience in business and financial matters, (D) has received certain information concerning HTCC and has had the opportunity to obtain additional information as desired in order to evaluate the merits and the risks inherent in holding the Shares and (E) is able to bear the economic risk and lack of liquidity inherent in holding the Shares.

     (vii) Buyer is a Sophisticated Buyer. Buyer (A) is a sophisticated buyer with respect to the purchase of the Shares, (B) has adequate information concerning the business and financial condition of HTCC to make an informed decision regarding the purchase of the Shares, (C) has independently and without reliance upon Seller, and based on such information as Buyer has deemed appropriate, made its own analysis and decision to enter into this Agreement, except that Buyer has relied upon Seller’s express representations, warranties, covenants and indemnities in this Agreement, (D) understands that the Shares are restricted securities (within the meaning of Rule 144 of Securities Act) have not been registered under the Securities Act, and cannot be resold except pursuant to registration under the Securities Act or an exemption from registration; and (E) acknowledges that the certificates representing the Shares shall bear a legend noting their restricted nature. Buyer acknowledges that Seller has not given Buyer any investment advice, credit information, or opinion on whether the sale of the Shares is prudent.

     (viii) Excluded Information. Buyer acknowledges that (A) Seller currently may have, and later may come into possession of, information with respect to the Shares or HTCC or any of its Affiliates that is not known to Buyer and that may be material to a decision to buy the Shares including the transaction involving HTCC and PanTel Rt. (“Buyer Excluded Information”), (B) Buyer has determined to buy the Shares notwithstanding its lack of knowledge of the Buyer Excluded Information and (C) Seller shall have no liability to Buyer, and Buyer waives and releases any claims that it might have against Seller whether under applicable securities laws or otherwise, with respect to the nondisclosure of the Buyer Excluded Information in connection with the transactions contemplated by this Agreement; provided, however, that the Buyer Excluded Information shall not and does not affect the truth or accuracy of Seller’s representations or warranties in this Agreement.

     4. Assignment and Transfer of Registration Agreement. Pursuant to Section 8(b) of the Registration Agreement, the Seller from and after the Closing Date assigns, transfers and delegates to the Buyer all of its rights, duties and obligations under the Registration Agreement, and Buyer accepts such assignment and assumes the Seller’s rights, duties and obligations under the Registration Agreement.

7

 

     5. Pre-Closing Covenants.

     (a) Cooperation Prior to Closing. Between the execution of this Agreement and the final release of the new Share Certificates and the Purchase Price as contemplated in paragraph 2(a) of Exhibit C (“Final Transfer”), each of the Parties will use its commercially reasonable best efforts to take all action and to do all things necessary in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the closing conditions set forth in Section 7 below).

     (b) Seller to Refrain from Taking or to Undertake Certain Actions. Between the execution of this Agreement and the Closing, Seller agrees:

     (i) not to take any action with regard to the Shares without the consent of the Buyer, which consent shall not be unreasonably withheld;

     (ii) to exercise all rights attaching to the Shares, including without limitation the right to vote in meetings of the Company, in accordance with the instructions of the Buyer;

     (iii) not take any action which would have a Material Adverse Effect on the Shares or which would result in a breach of the Agreement; and

     (iv) to take such reasonable actions with respect to the Shares, as the Buyer may request.

     (c) From the date of this Agreement, Seller shall use its reasonable commercial efforts to assign and to obtain HTCC’s consent to the assignment of the Replacement Agreement to EMDCD Limited.

     (d) Seller shall use all reasonable endeavours to procure that the Seller’s representative on the board of directors of HTCC shall resign as soon as practicable and to deliver a copy of such resignation letter to the Buyer.

     6. Post-Closing Covenants.

     (a) In case at any time after the Closing any further action is necessary to carry out the purposes of this Agreement, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as any other Party reasonably may request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefore under Section 8 below).

     (b) If the Seller’s representative on the board of directors of HTCC shall have not yet resigned the Seller shall continue to use all reasonable endeavours to procure that the Seller’s representative on the board of directors of HTCC shall resign as soon as practicable and to deliver a copy of such resignation letter to the Buyer.

     7. Conditions to Obligation to Close.

8

 

     (a) Conditions to Obligation of the Buyer. The obligation of the Buyer to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

     (i) the representations and warranties set forth in Section 3(a) above shall be true and correct in all material respects at and as of the Closing Date;

     (ii) the Seller shall have performed and complied with all of its covenants hereunder in all material respects through the Closing;

     (iii) there shall not be any injunction, judgment, order, decree, ruling, or charge in effect preventing consummation of any of the transactions contemplated by this Agreement;

     (iv) all necessary governmental and third party consents and approvals in connection with the transactions contemplated by this Agreement shall have been obtained except in each case for any approval required under the Credit Agreement and the acceptability under Section 6.2 of the Replacement Agreement of the opinion, and the counsel providing the opinion, contemplated by Section 2(d);

     (v) the Seller shall have delivered to the Buyer certificates executed by the responsible officer or the secretary of the Seller certifying (A) that each of the conditions specified in Section 7(a)(i)-(iv) is satisfied in all respects, and (B) the incumbency of the officer of the Seller executing this Agreement and all other documents executed and delivered in connection therewith;

     (vi) the Buyer shall have received from US Counsel to the Seller, an opinion in a form acceptable to the Buyer, and dated as of the Closing Date covering (x) the matters set forth in Section 3(a)(ii) and (y) that no registration is required under the Securities Act to transfer the Shares to Buyer in accordance with this Agreement;

     (vii) since the date of this Agreement, no event or events shall have occurred which have had or reasonably may be expected to have a Material Adverse Effect;

     (viii) all actions to be taken by the Seller in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to be delivered by the Seller to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to the Buyer; and

     The Buyer may waive any condition specified in this Section 7(a) if it executes a writing so stating at or prior to the Closing.

     (b) Conditions to Obligation of the Seller. The obligation of the Seller to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

9

 

     (i) the representations and warranties set forth in Section 3(b) above shall be true and correct in all material respects at and as of the Closing Date;

     (ii) the Buyer shall have performed and complied with all of its covenants hereunder in all material respects through the Closing;

     (iii) there shall not be any injunction, judgment, order, decree, ruling, or charge in effect preventing consummation of any of the transactions contemplated by this Agreement;

     (iv) all necessary governmental and third party consents and approvals in connection with the transactions contemplated by the Agreement shall have been obtained;

     (v) the Buyer shall have delivered to the Seller a certificate to the effect that each of the conditions specified above in Section 7(b)(i)-(iv) is satisfied in all respects; and

     (vi) all actions to be taken by the Buyer in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to the Seller.

     The Seller may waive any condition specified in this Section 7(b) if it executes a writing so stating at or prior to the Closing.

     8. Remedies for Breaches of this Agreement.

     (a) Survival of Representations and Warranties. All of the representations, warranties, covenants and obligations of the Parties contained in this Agreement and any certificate or document delivered with this Agreement shall survive the Closing (unless the damaged Party knew or had reason to know of any misrepresentation or breach of warranty at the time of Closing) and continue in full force for a period of 2 years thereafter (subject to any applicable statutes of limitations) or the specific terms thereof.

     (b) Indemnification Provisions for Benefit of the Buyer. In the event that the Seller breaches any of its representations, warranties, and covenants contained herein, and, if there is an applicable survival period pursuant to Section 8(a) above, provided that the Buyer makes a written claim for indemnification against the Seller pursuant to Section 10(g) below within such survival period, then the Seller agrees to indemnify the Buyer up to the amount of the Purchase Price from and against the entirety of any Adverse Consequences the Buyer shall suffer through and after the date of the claim for indemnification caused proximately by the breach.

     (c) Indemnification Provisions for Benefit of the Sellers. In the event that the Buyer breaches any of its representations, warranties, and covenants contained herein, and, if there is an applicable survival period pursuant to Section 8(a) above, provided that the Seller makes a written claim for indemnification against the Buyer

10

 

pursuant to Section 10(g) below within such survival period, then the Buyer agrees to indemnify the Seller up to the amount of the Purchase Price from and against the entirety of any Adverse Consequences the Seller shall suffer through and after the date of the claim for indemnification caused proximately by the breach. Seller agrees and acknowledges that the obligations set forth in this Section 8(c) are solely those of Buyer. Seller expressly waives any and all claims arising under this Agreement and the transactions contemplated hereby against any Affiliates of Buyer.

     (d) Matters Involving Third Parties.

     (i) If any third party shall notify any Party (the “Indemnified Party”) with respect to any matter (a “Third Party Claim”) which may give rise to a claim for indemnification against the other Party (the “Indemnifying Party”) under this Section 8, then the Indemnified Party shall promptly (and in any event within thirty (30) days after receiving notice of the Third Party Claim) notify the Indemnifying Party thereof in writing.

     (ii) Notwithstanding the fact that the Indemnifying Party will have the right at any time to assume and thereafter conduct the defense of the Third Party Claim with counsel of his or its choice, the Indemnified Party will have the right to participate in such proceedings at its own cost.

     (iii) Unless and until an Indemnifying Party assumes the defense of the Third Party Claim as provided in Section 8(d)(ii) above, however, the Indemnified Party may defend, at the cost of the Indemnifying Party, against the Third Party Claim in any manner it reasonably may deem appropriate.

     (iv) In no event will the Indemnified Party consent to the entry of any judgment or enter into any settlement with respect to monetary damages, with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (not to be unreasonably withheld or delayed).

     (e) Exclusive Remedy. The Buyer and the Seller acknowledge and agree that the foregoing indemnification provisions in this Section 8 shall be the exclusive remedy of the Buyer and the Seller with respect to the transactions contemplated by this Agreement except for fraud or intentional misrepresentation.

     9. Termination.

     (a) Termination of Agreement. The Parties may terminate this Agreement as provided below:

     (i) the Buyer and the Seller may terminate this Agreement by mutual written consent at any time prior to the Closing;

     (ii) the Buyer may terminate this Agreement by giving written notice to the Seller (A) at any time prior to the Closing in the event the Seller has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, the Buyer has notified the Seller of the breach, and the breach has continued without cure for a period of thirty (30)

11

 

days after the notice of breach or (B) if the Closing has not occurred by November 30, 2004;

     (iii) the Seller may terminate this Agreement by giving written notice to the Buyer (A) at any time prior to the Closing in the event the Buyer has breached any material representation, warranty, or covenant contained in this Agreement or any similar agreement between an Affiliate of the Buyer and the Seller in any material respect, the Seller has notified the Buyer of the breach, and the breach has continued without cure for a period of thirty (30) days after the notice of breach or (B) if the Closing has not occurred by November 30, 2004; and

     (iv) the Buyer may terminate this Agreement if the registration of the Shares in the Buyer’s name has not occurred by November 30, 2004.

     (b) Effect of Termination. If any Party terminates this Agreement pursuant to Section 9(a) above, all rights and obligations of the Parties hereunder, with the express exception of the provisions of Sections 10(g), 10(h), 10(i) and 10(l) hereof, shall terminate without any liability of any Party to any other Party (except for any liability of any Party then in breach). For the avoidance of doubt, the arrangements set forth in Exhibit C hereto will terminate and the Purchase Price and all interest in the escrow account shall be returned promptly to the Buyer and the Share Certificates and related documentation shall be returned promptly to the Seller.

     10. Miscellaneous.

     (a) Press Releases and Public Announcements. No Party shall issue any press release or make any public announcement relating to the subject matter of this Agreement without the prior written approval of the other Party; provided, however, that any Party may make any public disclosure it believes in good faith is required by applicable law or any listing or trading agreement concerning its publicly traded securities (in which case the disclosing Party will use its reasonable best efforts to advise the other Parties prior to making the disclosure).

     (b) No Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.

     (c) Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they have related in any way to the subject matter hereof.

     (d) Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of his or its rights, interests, or obligations hereunder without the prior written approval of the other Party, except that the Buyer may freely assign without consent the benefit of this Agreement or otherwise sell or transfer all the Shares to any fund or account managed by Ashmore Investment Management Limited.

12

 

     (e) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.

     (f) Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

     (g) Notices. All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given if (and then two business days after) it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below:

If to the Seller:

Citizens Communications Company and CU Capital LLC
c/o Citizens Communications Company
Three High Ridge Park
Stamford CT 06905
Attn: Treasurer
Fax: + 1-203-614-4602

Copy to:
Citizens Communications Company
Three High Ridge Park
Stamford CT 06905
Attn: General Counsel
Fax: +203-614-4651

If to the Buyer:
Asset Holder PCC No 2 Limited re Ashmore Emerging Economy Portfolio
Barings (Guernsey) Limited
P.O. Box 71, Trafalgar Court
Les Banques, St Peter Port
Guernsey GY1 3DA
Attn: Sarah Brouard
Fax: + 44-1481-745-058

Copy to:
Ashmore Investment Management Limited
20 Bedfordbury
London WC2N 4BL
United Kingdom
Attention: Tim Davis
Facsimile: +44-20-7557-4141

     Any Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex or ordinary mail), but no such notice, request, demand, claim,

13

 

or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Party notice in the manner herein set forth.

     (h) Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

     (i) Dispute Resolution.

     (i) In the event of any dispute between the Parties, the Parties shall first attempt to settle such dispute amicably. Provided that, unless the Parties otherwise agree, arbitration may be commenced on or after the thirtieth (30) day after the day on which notice of intention to commence arbitration of such dispute was given, even if no attempt at amicable settlement thereof has been made.

     (ii) If amicable settlement has not been reached within the period stated in Section 10(i)(i) above, the dispute shall be finally settled under the Rules of Arbitration of the American Arbitration Association by one or more arbitrators appointed under such Rules. Each arbitrator shall have experience in agreements of this type generally. The language of the arbitration shall be English and all documents submitted to the arbitration shall be in English (or where applicable an English translation shall be provided). The place of such arbitration shall be New York, New York, United States of America. The prevailing party in any such arbitration shall be fully reimbursed by the other party for all costs associated with the arbitration, including reasonable legal fees.

     (j) Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by each Party. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

     (k) Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

     (l) Expenses. Each of the Buyer and the Seller will bear its own costs and expenses (including legal fees and expenses) incurred in connection with the negotiation and execution of this Agreement and the transactions contemplated hereby.

14

 

     (m) Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “including” shall mean including without limitation.

     (n) Stamp Taxes, etc. Seller agrees that it will pay, and will hold the Buyer harmless from any and all liability with respect to any stamp or similar taxes which may be determined to be payable in connection with the execution, delivery and performance of this Agreement.

     (o) Incorporation of Exhibits and Schedules. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof.

     (p) Barings (Guernsey) Limited is executing this Agreement and any other documents relating hereto to which Buyer is a party or shall be a party on behalf of Buyer and solely in its capacity as custodian for Buyer, and is making no independent representations or warranties and shall have no independent liability under this Agreement or such documents.

[remainder of page intentionally left blank]

15

 

     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

             
SELLER:
      BUYER:    
 
            
CITIZENS COMMUNICATIONS COMPANY   ASSET HOLDER PCC NO 2 LIMITED RE
ASHMORE EMERGING ECONOMY PORTFOLIO
 
            
By:       By BARINGS (GUERNSEY) LIMITED as Custodian for ASSET HOLDER PCC NO 2 LIMITED RE ASHMORE EMERGING ECONOMY ORTFOLIO
 
 		        
Name:
            
Title:
            
 
            
      By:    
         
 
      Name:    
      Title:    

16

 

EXHIBIT A

Registration Agreement

 

 

EXHIBIT B

Replacement Agreement

18

 

EXHIBIT C

Escrow Arrangements

     This Exhibit sets forth the escrow arrangements to be entered into in connection with the purchase and sale of the Shares contemplated by this Agreement.

     The steps below are intended to insure that the Shares are duly registered in the name of the Buyer and are held by Bear Stearns or another entity mutually agreeable to the Parties (the “Escrow Agent”) prior to the release of the Purchase Price by the Buyer to the Seller.

     1. Delivery of Shares and Purchase Price to Escrow Agent

     (a) On the Closing Date, (i) Seller will arrange for the Shares to be delivered to the Escrow Agent through a credit to the Escrow Agent’s participants account at Depository Trust Company with transfer instructions in favour of the Buyer and (ii) the Opinion of the Seller’s US Counsel in a form acceptable to the Buyer (the “Legal Opinion”) will be delivered to Escrow Agent.

     (b) Prior to the Closing Date, Buyer will arrange for the Purchase Price to be paid to the Escrow Agent.

     (c) Upon receipt of the share certificates representing the Shares, the Legal Opinion and the Purchase Price, after the Closing Date, upon confirmation to the Escrow Agent by (i) the Buyer that the conditions set forth in Section 7(a) of the Agreement have been fulfilled or waived and (ii) the Seller that the conditions set forth in Section 7(b) of the Agreement have been fulfilled or waived (each of the Buyer and the Seller covenant to promptly provide notice to Escrow Agent upon the fulfilment or waiver of such conditions), the Escrow Agent will procure the registration of the transfer of the Shares in the share register of HTCC and the issuance of new share certificates in the name of the Buyer and hold them on behalf of the Buyer and the Seller.

     2. Release of Shares and Purchase Price by Escrow Agent

     (a) Upon receipt of the new Share Certificates the Escrow Agent will confirm promptly to the Buyer that it holds the new share certificates and thereafter the Escrow Agent will simultaneously release the Purchase Price to Seller and release the new share certificates representing the Shares to the Buyer.

     (b) If either Buyer or Seller shall advise the Escrow Agent that this Agreement has been terminated in accordance with Section 9 prior to or following the Closing Date, the Escrow Agent shall simultaneously release the Purchase Price (and any interest in the escrow account) to Buyer and the share certificates representing the Shares to the Seller, and Buyer and Seller shall take all steps necessary to cause the Share certificates, if they shall have them registered in the name of the Buyer, to be registered in the name of the Seller.

 

EX-99.7.12 3 w01841exv99w7w12.htm EX-99.7.12 PURCHASE AND SALE AGREEMENT EXHIBIT 99.7.12
 

Exhibit 7.12

Purchase And Sale Agreement

Dated as of September 3, 2004

by and between

CU Capital LLC
(formerly CU Capital Corp.)

and

Ashmore Global Special Situations Fund Limited

 

 

TABLE OF CONTENTS

             
1.
   Definitions.     1  
2.
   Purchase and Sale of Shares.     3  
3.
   Representations and Warranties Concerning the Transaction.     3  
4.
   Assignment and Transfer of Registration Agreement     7  
5.
   Pre-Closing Covenants.     7  
6.
   Post-Closing Covenants     8  
7.
   Conditions to Obligation to Close.     8  
8.
   Remedies for Breaches of this Agreement.     10  
9.
   Termination.     11  
10.
   Miscellaneous.     12  
EXHIBIT A Registration Agreement     17  
EXHIBIT B Replacement Agreement     18  
EXHIBIT C Escrow Arrangements     19  

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     THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made as of September 3, 2004 by and between CU Capital LLC (formerly CU Capital Corp.), a Delaware limited liability company (the “Seller”), and Ashmore Global Special Situations Fund Limited, an open ended investment fund with limited liability registered in Guernsey (“Buyer”). The Buyer and the Seller are referred to collectively herein as the “Parties” and each individually as a “Party”.

RECITALS

     WHEREAS, Seller is the owner of the Shares (as defined in Section 1);

     WHEREAS, Seller wishes to sell and Buyer wishes to buy the Shares (as defined in Section 1) on the terms and conditions set forth in this Agreement; and

     WHEREAS, Seller wishes to assign to Buyer and Buyer wishes to assume from Seller all of Seller’s rights, duties and obligations under the Registration Agreement and, subject to the consent of HTCC, the Replacement Agreement (each as defined in Section 1) on the terms and conditions set forth in this Agreement;

     NOW, THEREFORE, in consideration of the premises and the mutual agreements, provisions and covenants set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

     1. Definitions.

     “Accredited Investor” has the meaning set forth in Regulation D promulgated under the Securities Act.

     “Adverse Consequences” means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable amounts paid in settlement, liabilities, obligations, taxes, liens, losses, expenses, and fees, including court costs and reasonable attorneys’ fees and expenses.

     “Affiliate” means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

     “Buyer” has the meaning set forth in the preface above.

     “Closing” has the meaning set forth in Section 2(c) below.

     “Closing Date” has the meaning set forth in Section 2(c) below.

     “Credit Agreement” means the Senior Secured Facility Agreement dated April 11, 2000 for Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag, Raba-com Tavkozlesi Koncesszios Reszvenytarsasag, Papa Es Tersege Tavkozlesi Koncesszios Reszvenytarsasag and KNC Kelet-Nograd Com Tavkozlesi Koncesszios Reszvenytarsasag, as Borrowers, with Hungarian Telephone and Cable Corp. and HTCC Tanacsada Reszvenytarsasag, as Guarantors, Citibank, N.A. and Westdeutsche Landesbank Girozentrale as arrangers, Citibank International PLC as facility agent,

 

 

Citibank RT. as security agent, and the financial institutions named therein as Lenders.

     “GAAP” means United States generally accepted accounting principles as in effect from time to time.

     “HTCC” means Hungarian Telephone and Cable Corp., a Delaware corporation, together with all of its Subsidiaries and Affiliates.

     “Income Tax” means any federal, state, local, or foreign income tax, including any interest, penalty, or addition thereto, whether disputed or not.

     “Indemnified Party” has the meaning set forth in Section 8(d) below.

     “Indemnifying Party” has the meaning set forth in Section 8(d) below.

     “Knowledge” shall mean the actual knowledge, without independent investigation, of the executive officers of the Seller identified in its most recent proxy statement.

     “Material Adverse Effect” means any event which will or could reasonably be expected to have, either individually or in the aggregate, a material adverse effect on the properties, business, operations, earnings, assets, liabilities, condition (financial or otherwise) of HTCC whether or not in the ordinary course of business taken as a whole, other than any effect arising from the aggregate number of shares of Common Stock and Preferred Stock held by the Buyer and its Affiliates.

     “Party” or “Parties” has the meaning set forth in the preface above.

     “Person” means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a governmental entity (or any department, agency, or political subdivision thereof).

     “Preferred Stock” means the shares of Series A Convertible Preferred Stock, par value 0.01 per share, of Hungarian Telephone and Cable Corp.

     “Purchase Price” has the meaning set forth in Section 2(b) below.

     “Registration Agreement” means the Registration Agreement, dated May 31, 1995 by and between CU Capital Corp. and Hungarian Telephone and Cable Corp. in the form attached to this Agreement as Exhibit A.

     “Replacement Agreement” means the Replacement and Termination Agreement, dated September 30, 1998 by and among CU Capital Corp., Citizens International Management Services Company and Hungarian Telephone and Cable Corp. in the form attached to this Agreement as Exhibit B.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Security Interest” means any charge, claim, community property interest, condition, equitable interest, lien, pledge, security interest, right of first refusal, or

2

 

restriction or encumbrance of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute.

     “Seller” has the meaning set forth in the preface above.

     “Shares” means the thirty thousand preference shares of Preferred Stock.

     “Subsidiary” means any corporation with respect to which a specified Person (or a Subsidiary thereof) owns a majority of the common stock or has the power to vote or direct the voting of sufficient securities to elect a majority of the directors.

     “Third Party Claim” has the meaning set forth in Section 8(d) below.

     2. Purchase and Sale of Shares.

     (a) Purchase and Sale. On and subject to the terms and conditions of this Agreement, the Buyer agrees to purchase from the Seller, and the Seller agrees to sell to the Buyer the Shares.

     (b) Purchase Price. The Buyer agrees to pay to the Seller at the Closing US$1,650,000 (the “Purchase Price”) in cash, which Purchase Price shall be payable by wire transfer or other delivery of immediately available funds as contemplated by the arrangements set forth in Exhibit C hereto.

     (c) The Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Dewey Ballantine LLP in New York, New York, commencing at 9:00 a.m. local time on September 3, 2004 or on such other date as the Buyer and the Seller may mutually determine (the “Closing Date”) provided, however, that the Closing Date shall be not later than November 30, 2004.

     (d) Delivery of the Shares. On the Closing Date the Seller will arrange for one or more stock certificates representing the shares of Preferred Stock, each such stock certificate with stock powers attached and duly endorsed in favour of Buyer, together with the opinion contemplated by Section 6.2 of the Replacement Agreement, to be delivered in accordance with the arrangements set forth in Exhibit C hereto.

     (e) Delivery of Certificates, etc. at the Closing. At the Closing, (i) the Seller will deliver to the Buyer the various certificates referred to in Section 7(a) below and (ii) the Buyer will deliver to the Seller the various certificates referred to in Section 7(b) below in accordance with the arrangement set forth in Exhibit C.

     (f) Delivery of Purchase Price at the Closing. At the Closing, Buyer will deliver to the Seller the consideration specified in Section 2(b) above in accordance with the arrangements set forth in Exhibit C.

     3. Representations and Warranties Concerning the Transaction.

     (a) Representations and Warranties of the Seller. The Seller represents and warrants to the Buyer that the statements contained in this Section 3(a) are correct

3

 

and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then).

     (i) Organization of Seller. The Seller is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation.

     (ii) Authorization of Transaction. The Seller has full power and authority, and all corporate actions necessary on the part of the Seller have been taken, to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Seller, enforceable against it in accordance with its terms, except to the extent that the enforcement of the rights and remedies created therein is subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting the enforcement of creditors’ rights and general principles of equity. Except as otherwise set forth in this Agreement, the Seller need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any third parties (including HTCC), any U.S. government or any U.S. governmental agency in order to consummate the transactions contemplated by this Agreement, or if such notice, filing, authorization, consent or approval is needed, it has been given or obtained except in each case for any approval required under the Credit Agreement and the acceptability under Section 6.2 of the Replacement Agreement of the opinion, and the counsel providing the opinion, contemplated by Section 2(d).

     (iii) Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will violate any agreement or any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any U.S. government, U.S. governmental agency, or U.S. court to which the Seller or, to the Knowledge of the Seller, to which HTCC is subject or any provision of the Seller’s charter or bylaws except in each case for any approval required under the Credit Agreement and the acceptability under Section 6.2 of the Replacement Agreement of the opinion, and the counsel providing the opinion, contemplated by Section 2(d).

     (iv) Brokers’ Fees. The Seller has no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which the Buyer could become liable or obligated.

     (v) Shares. The Seller beneficially owns the Shares free and clear of any restrictions on transfer (other than restrictions under the Securities Act and state securities laws and Section 6.2 of the Replacement Agreement), taxes, Security Interests, options, warrants, purchase rights, contracts, commitments, equities, claims, and demands. The Seller is not a party to any option, warrant, purchase right, or other contract or commitment that could require the Seller to sell, transfer, or otherwise dispose of the Shares (other than this Agreement). The Seller is not a party to any voting trust, proxy, or other agreement or understanding with respect to the voting of the Shares.

4

 

Upon transfer of the Shares in accordance with the terms of this Agreement, Buyer shall acquire good, valid and marketable title to the Shares, free and clear of any Security Interests other than the obligation to obtain opinions under the Replacement Agreement or arising under the Securities Act and state securities laws.

     (vi) No Proceedings against Seller. There is no civil, criminal or administrative suit or claim, proceeding or investigation before any court, arbitrator or similar panel at law or in equity now pending or, to the Knowledge of the Seller, threatened against the Seller or the Shares, which could reasonably be expected to materially adversely affect the ability of the Seller to consummate the transaction contemplated by this Agreement or encumber the Shares.

     (vii) Seller is a Sophisticated Seller. Seller (A) is a sophisticated seller with respect to the sale of the Shares, (B) has adequate information concerning the business and financial condition of HTCC to make an informed decision regarding the sale of the Shares, and (C) has independently and without reliance upon Buyer, and based on such information as Seller has deemed appropriate, made its own analysis and decision to enter into this Agreement, except that Seller has relied upon Buyer’s express representations, warranties, covenants and indemnities in this Agreement. Seller acknowledges that Buyer has not given Seller any investment advice, credit information, or opinion on whether the sale of the Shares is prudent.

     (viii) Excluded Information. Seller acknowledges that (A) Buyer currently may have, and later may come into possession of, information with respect to the Shares or HTCC or any of its Affiliates that is not known to Seller and that may be material to a decision to sell the Shares including the transaction involving HTCC and PanTel Rt. (“Seller Excluded Information”), (B) Seller has determined to sell the Shares notwithstanding its lack of knowledge of the Seller Excluded Information and (C) Buyer shall have no liability to Seller, and Seller waives and releases any claims that it might have against Buyer whether under applicable securities laws or otherwise, with respect to the nondisclosure of the Seller Excluded Information in connection with the transactions contemplated by this Agreement; provided, however, that the Seller Excluded Information shall not and does not affect the truth or accuracy of Buyer’s representations or warranties in this Agreement.

     (ix) Provision of Documents. Seller has provided or otherwise made available to Buyer copies of all material agreements between Seller and HTCC relating to the Shares (other than any such material agreement filed with the United States Securities and Exchange Commission).

     (x) No Other Agreements. Seller is not a party to, or bound by, any document or agreement that could reasonably be expected to materially and adversely affect the Shares or Buyer’s rights and remedies under this Agreement (other than the Replacement Agreement).

     (xi) Disclaimer of other Representations and Warranties. The Seller makes no representation or warranty, express or implied, at law or in

5

 

equity, in respect of HTCC or any of its assets, liabilities or operations. Except as expressly set forth herein, Buyer hereby acknowledges and agrees that the Buyer is purchasing the Shares having made, to its full and complete satisfaction, a due diligence investigation of HTCC.

     (b) Representations and Warranties of the Buyer. The Buyer represents and warrants to the Seller that the statements contained in this Section 3(b) are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then).

     (i) Organization of the Buyer. The Buyer is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation.

     (ii) Authorization of Transaction. The Buyer has full power and authority to execute and has taken all corporate actions required to deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Buyer, enforceable in accordance with its terms and conditions, except to the extent that the enforcement of the rights and remedies created therein is subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting the enforcement of creditors’ rights and general principles of equity. The Buyer need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement.

     (iii) Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which the Buyer is subject or any provision of its charter or bylaws.

     (iv) Brokers’ Fees. The Buyer has no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which the Seller could become liable or obligated.

     (v) No Proceedings against Buyer. There is no civil, criminal or administrative suit or claim, proceeding or investigation before any court, arbitrator or similar panel at law or in equity now pending or, to the knowledge of the Buyer, threatened against the Buyer, which could reasonably be expected to materially adversely affect the ability to consummate the transaction contemplated by this Agreement.

     (vi) Investment. The Buyer (A) understands that the Shares have not been, and will not be, registered under the Securities Act, or under any state securities laws, and are being offered and sold in reliance upon federal and state exemptions for transactions not involving any public offering, (B) is acquiring the Shares solely for its own account for investment purposes, and

6

 

not with a view to the distribution thereof in violation of any applicable securities laws, (C) is a sophisticated investor with knowledge and experience in business and financial matters, (D) has received certain information concerning HTCC and has had the opportunity to obtain additional information as desired in order to evaluate the merits and the risks inherent in holding the Shares and (E) is able to bear the economic risk and lack of liquidity inherent in holding the Shares.

     (vii) Buyer is a Sophisticated Buyer. Buyer (A) is a sophisticated buyer with respect to the purchase of the Shares, (B) has adequate information concerning the business and financial condition of HTCC to make an informed decision regarding the purchase of the Shares, (C) has independently and without reliance upon Seller, and based on such information as Buyer has deemed appropriate, made its own analysis and decision to enter into this Agreement, except that Buyer has relied upon Seller’s express representations, warranties, covenants and indemnities in this Agreement, (D) understands that the Shares are restricted securities (within the meaning of Rule 144 of Securities Act) have not been registered under the Securities Act, and cannot be resold except pursuant to registration under the Securities Act or an exemption from registration; and (E) acknowledges that the certificates representing the Shares shall bear a legend noting their restricted nature. Buyer acknowledges that Seller has not given Buyer any investment advice, credit information, or opinion on whether the sale of the Shares is prudent.

     (viii) Excluded Information. Buyer acknowledges that (A) Seller currently may have, and later may come into possession of, information with respect to the Shares or HTCC or any of its Affiliates that is not known to Buyer and that may be material to a decision to buy the Shares including the transaction involving HTCC and PanTel Rt. (“Buyer Excluded Information”), (B) Buyer has determined to buy the Shares notwithstanding its lack of knowledge of the Buyer Excluded Information and (C) Seller shall have no liability to Buyer, and Buyer waives and releases any claims that it might have against Seller whether under applicable securities laws or otherwise, with respect to the nondisclosure of the Buyer Excluded Information in connection with the transactions contemplated by this Agreement; provided, however, that the Buyer Excluded Information shall not and does not affect the truth or accuracy of Seller’s representations or warranties in this Agreement.

     4. Assignment and Transfer of Registration Agreement. Pursuant to Section 8(b) of the Registration Agreement, the Seller from and after the Closing Date assigns, transfers and delegates to the Buyer all of its rights, duties and obligations under the Registration Agreement, and Buyer accepts such assignment and assumes the Seller’s rights, duties and obligations under the Registration Agreement.

     5. Pre-Closing Covenants.

     (a) Cooperation Prior to Closing. Between the execution of this Agreement and the final release of the new Share Certificates and the Purchase Price as contemplated in paragraph 2(a) of Exhibit C (“Final Transfer”), each of the Parties

7

 

will use its commercially reasonable best efforts to take all action and to do all things necessary in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the closing conditions set forth in Section 7 below).

     (b) Seller to Refrain from Taking or to Undertake Certain Actions. Between the execution of this Agreement and the Closing, Seller agrees:

     (i) not to take any action with regard to the Shares without the consent of the Buyer, which consent shall not be unreasonably withheld;

     (ii) to exercise all rights attaching to the Shares, including without limitation the right to vote in meetings of the Company, in accordance with the instructions of the Buyer;

     (iii) not take any action which would have a Material Adverse Effect on the Shares or which would result in a breach of the Agreement; and

     (iv) to take such reasonable actions with respect to the Shares, as the Buyer may request.

     (c) From the date of this Agreement, Seller shall use its reasonable commercial efforts to assign and to obtain HTCC’s consent to the assignment of the Replacement Agreement to EMDCD Limited.

     (d) Seller shall use all reasonable endeavours to procure that the Seller’s representative on the board of directors of HTCC shall resign as soon as practicable and to deliver a copy of such resignation letter to the Buyer.

     6. Post-Closing Covenants.

     (a) In case at any time after the Closing any further action is necessary to carry out the purposes of this Agreement, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as any other Party reasonably may request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefore under Section 8 below).

     (b) If the Seller’s representative on the board of directors of HTCC shall have not yet resigned the Seller shall continue to use all reasonable endeavours to procure that the Seller’s representative on the board of directors of HTCC shall resign as soon as practicable and to deliver a copy of such resignation letter to the Buyer.

     7. Conditions to Obligation to Close.

     (a) Conditions to Obligation of the Buyer. The obligation of the Buyer to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

     (i) the representations and warranties set forth in Section 3(a) above shall be true and correct in all material respects at and as of the Closing Date;

8

 

     (ii) the Seller shall have performed and complied with all of its covenants hereunder in all material respects through the Closing;

     (iii) there shall not be any injunction, judgment, order, decree, ruling, or charge in effect preventing consummation of any of the transactions contemplated by this Agreement;

     (iv) all necessary governmental and third party consents and approvals in connection with the transactions contemplated by this Agreement shall have been obtained except in each case for any approval required under the Credit Agreement and the acceptability under Section 6.2 of the Replacement Agreement of the opinion, and the counsel providing the opinion, contemplated by Section 2(d);

     (v) the Seller shall have delivered to the Buyer certificates executed by the responsible officer or the secretary of the Seller certifying (A) that each of the conditions specified in Section 7(a)(i)-(iv) is satisfied in all respects, and (B) the incumbency of the officer of the Seller executing this Agreement and all other documents executed and delivered in connection therewith;

     (vi) the Buyer shall have received from US Counsel to the Seller, an opinion in a form acceptable to the Buyer, and dated as of the Closing Date covering (x) the matters set forth in Section 3(a)(ii) and (y) that no registration is required under the Securities Act to transfer the Shares to Buyer in accordance with this Agreement;

     (vii) since the date of this Agreement, no event or events shall have occurred which have had or reasonably may be expected to have a Material Adverse Effect;

     (viii) all actions to be taken by the Seller in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to be delivered by the Seller to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to the Buyer; and

     The Buyer may waive any condition specified in this Section 7(a) if it executes a writing so stating at or prior to the Closing.

     (b) Conditions to Obligation of the Seller. The obligation of the Seller to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

     (i) the representations and warranties set forth in Section 3(b) above shall be true and correct in all material respects at and as of the Closing Date;

     (ii) the Buyer shall have performed and complied with all of its covenants hereunder in all material respects through the Closing;

9

 

     (iii) there shall not be any injunction, judgment, order, decree, ruling, or charge in effect preventing consummation of any of the transactions contemplated by this Agreement;

     (iv) all necessary governmental and third party consents and approvals in connection with the transactions contemplated by the Agreement shall have been obtained;

     (v) the Buyer shall have delivered to the Seller a certificate to the effect that each of the conditions specified above in Section 7(b)(i)-(iv) is satisfied in all respects; and

     (vi) all actions to be taken by the Buyer in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to the Seller.

     The Seller may waive any condition specified in this Section 7(b) if it executes a writing so stating at or prior to the Closing.

     8. Remedies for Breaches of this Agreement.

     (a) Survival of Representations and Warranties. All of the representations, warranties, covenants and obligations of the Parties contained in this Agreement and any certificate or document delivered with this Agreement shall survive the Closing (unless the damaged Party knew or had reason to know of any misrepresentation or breach of warranty at the time of Closing) and continue in full force for a period of 2 years thereafter (subject to any applicable statutes of limitations) or the specific terms thereof.

     (b) Indemnification Provisions for Benefit of the Buyer. In the event that the Seller breaches any of its representations, warranties, and covenants contained herein, and, if there is an applicable survival period pursuant to Section 8(a) above, provided that the Buyer makes a written claim for indemnification against the Seller pursuant to Section 10(g) below within such survival period, then the Seller agrees to indemnify the Buyer up to the amount of the Purchase Price from and against the entirety of any Adverse Consequences the Buyer shall suffer through and after the date of the claim for indemnification caused proximately by the breach.

     (c) Indemnification Provisions for Benefit of the Sellers. In the event that the Buyer breaches any of its representations, warranties, and covenants contained herein, and, if there is an applicable survival period pursuant to Section 8(a) above, provided that the Seller makes a written claim for indemnification against the Buyer pursuant to Section 10(g) below within such survival period, then the Buyer agrees to indemnify the Seller up to the amount of the Purchase Price from and against the entirety of any Adverse Consequences the Seller shall suffer through and after the date of the claim for indemnification caused proximately by the breach. Seller agrees and acknowledges that the obligations set forth in this Section 8(c) are solely those of Buyer. Seller expressly waives any and all claims arising under this Agreement and the transactions contemplated hereby against any Affiliates of Buyer.

10

 

     (d) Matters Involving Third Parties.

     (i) If any third party shall notify any Party (the “Indemnified Party”) with respect to any matter (a “Third Party Claim”) which may give rise to a claim for indemnification against the other Party (the “Indemnifying Party”) under this Section 8, then the Indemnified Party shall promptly (and in any event within thirty (30) days after receiving notice of the Third Party Claim) notify the Indemnifying Party thereof in writing.

     (ii) Notwithstanding the fact that the Indemnifying Party will have the right at any time to assume and thereafter conduct the defense of the Third Party Claim with counsel of his or its choice, the Indemnified Party will have the right to participate in such proceedings at its own cost.

     (iii) Unless and until an Indemnifying Party assumes the defense of the Third Party Claim as provided in Section 8(d)(ii) above, however, the Indemnified Party may defend, at the cost of the Indemnifying Party, against the Third Party Claim in any manner it reasonably may deem appropriate.

     (iv) In no event will the Indemnified Party consent to the entry of any judgment or enter into any settlement with respect to monetary damages, with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (not to be unreasonably withheld or delayed).

     (e) Exclusive Remedy. The Buyer and the Seller acknowledge and agree that the foregoing indemnification provisions in this Section 8 shall be the exclusive remedy of the Buyer and the Seller with respect to the transactions contemplated by this Agreement except for fraud or intentional misrepresentation.

     9. Termination.

     (a) Termination of Agreement. The Parties may terminate this Agreement as provided below:

     (i) the Buyer and the Seller may terminate this Agreement by mutual written consent at any time prior to the Closing;

     (ii) the Buyer may terminate this Agreement by giving written notice to the Seller (A) at any time prior to the Closing in the event the Seller has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, the Buyer has notified the Seller of the breach, and the breach has continued without cure for a period of thirty (30) days after the notice of breach or (B) if the Closing has not occurred by November 30, 2004;

     (iii) the Seller may terminate this Agreement by giving written notice to the Buyer (A) at any time prior to the Closing in the event the Buyer has breached any material representation, warranty, or covenant contained in this Agreement or any similar agreement between an Affiliate of the Buyer and the Seller in any material respect, the Seller has notified the Buyer of the breach, and the breach has continued without cure for a period of thirty (30)

11

 

days after the notice of breach or (B) if the Closing has not occurred by November 30, 2004; and

     (iv) the Buyer may terminate this Agreement if the registration of the Shares in the Buyer’s name has not occurred by November 30, 2004.

     (b) Effect of Termination. If any Party terminates this Agreement pursuant to Section 9(a) above, all rights and obligations of the Parties hereunder, with the express exception of the provisions of Sections 10(g), 10(h), 10(i) and 10(l) hereof, shall terminate without any liability of any Party to any other Party (except for any liability of any Party then in breach). For the avoidance of doubt, the arrangements set forth in Exhibit C hereto will terminate and the Purchase Price and all interest in the escrow account shall be returned promptly to the Buyer and the Share Certificates and related documentation shall be returned promptly to the Seller.

     10. Miscellaneous.

     (a) Press Releases and Public Announcements. No Party shall issue any press release or make any public announcement relating to the subject matter of this Agreement without the prior written approval of the other Party; provided, however, that any Party may make any public disclosure it believes in good faith is required by applicable law or any listing or trading agreement concerning its publicly traded securities (in which case the disclosing Party will use its reasonable best efforts to advise the other Parties prior to making the disclosure).

     (b) No Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.

     (c) Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they have related in any way to the subject matter hereof.

     (d) Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of his or its rights, interests, or obligations hereunder without the prior written approval of the other Party, except that the Buyer may freely assign without consent the benefit of this Agreement or otherwise sell or transfer all the Shares to any fund or account managed by Ashmore Investment Management Limited.

     (e) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.

     (f) Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

12

 

     (g) Notices. All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given if (and then two business days after) it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below:

If to the Seller:

CU Capital LLC
c/o Citizens Communications Company
Three High Ridge Park
Stamford CT 06905
Attn: Treasurer
Fax: +203-614-4602

Copy to:
Citizens Communications Company
Three High Ridge Park
Stamford CT 06905
Attn: General Counsel
Fax: +203-614-4651

If to the Buyer:
Ashmore Global Special Situations Fund Limited
Barings (Guernsey) Limited
P.O. Box 71, Trafalgar Court
Les Banques, St Peter Port
Guernsey GY1 3DA
Attn: Sarah Brouard
Fax: + 44 1481 745 058

Copy to:
Ashmore Investment Management Limited
20 Bedfordbury London WC2N 4BL
United Kingdom
Attention: Tim Davis
Facsimile: +44-20-7557-4141

     Any Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex or ordinary mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Party notice in the manner herein set forth.

     (h) Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York

13

 

or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

     (i) Dispute Resolution.

     (i) In the event of any dispute between the Parties, the Parties shall first attempt to settle such dispute amicably. Provided that, unless the Parties otherwise agree, arbitration may be commenced on or after the thirtieth (30) day after the day on which notice of intention to commence arbitration of such dispute was given, even if no attempt at amicable settlement thereof has been made.

     (ii) If amicable settlement has not been reached within the period stated in Section 10(i)(i) above, the dispute shall be finally settled under the Rules of Arbitration of the American Arbitration Association by one or more arbitrators appointed under such Rules. Each arbitrator shall have experience in agreements of this type generally. The language of the arbitration shall be English and all documents submitted to the arbitration shall be in English (or where applicable an English translation shall be provided). The place of such arbitration shall be New York, New York, United States of America. The prevailing party in any such arbitration shall be fully reimbursed by the other party for all costs associated with the arbitration, including reasonable legal fees.

     (j) Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by each Party. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

     (k) Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

     (l) Expenses. Each of the Buyer and the Seller will bear its own costs and expenses (including legal fees and expenses) incurred in connection with the negotiation and execution of this Agreement and the transactions contemplated hereby.

     (m) Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “including” shall mean including without limitation.

14

 

     (n) Stamp Taxes, etc. Seller agrees that it will pay, and will hold the Buyer harmless from any and all liability with respect to any stamp or similar taxes which may be determined to be payable in connection with the execution, delivery and performance of this Agreement.

     (o) Incorporation of Exhibits and Schedules. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof.

     (p) Barings (Guernsey) Limited is executing this Agreement and any other documents relating hereto to which Buyer is a party or shall be a party on behalf of Buyer and solely in its capacity as custodian for Buyer, and is making no independent representations or warranties and shall have no independent liability under this Agreement or such documents.

[remainder of page intentionally left blank]

15

 

     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

             
SELLER:

   BUYER:    
CU CAPITAL LLC

   ASHMORE GLOBAL SPECIAL
SITUATIONS FUND LIMITED
By:
             
Name:
Title:		   By BARINGS (GUERNSEY) LIMITED as Custodian for
ASHMORE GLOBAL SPECIAL SITUATIONS FUND LIMITED
      By:    
         
 
      Name:
Title:		    

16

 

EXHIBIT A

Registration Agreement

17

 

EXHIBIT B

Replacement Agreement

18

 

EXHIBIT C

Escrow Arrangements

     This Exhibit sets forth the escrow arrangements to be entered into in connection with the purchase and sale of the Shares contemplated by this Agreement.

     The steps below are intended to insure that the Shares are duly registered in the name of the Buyer and are held by Bear Stearns or another entity mutually agreeable to the Parties (the “Escrow Agent”) prior to the release of the Purchase Price by the Buyer to the Seller.

1. Delivery of Shares and Purchase Price to Escrow Agent

     (a) Prior to the Closing Date, (i) Seller will arrange for the share certificates representing the Shares to be delivered to the Escrow Agent, each such share certificate with stock powers attached and duly endorsed in favour of the Buyer and (ii) the Opinion of the Seller’s US Counsel in a form acceptable to the Buyer (the “Legal Opinion”) will be delivered to Escrow Agent.

     (b) Prior to the Closing Date, Buyer will arrange for the Purchase Price to be paid to the Escrow Agent.

     (c) Upon receipt of the share certificates representing the Shares, the Legal Opinion and the Purchase Price, after the Closing Date, upon confirmation to the Escrow Agent by (i) the Buyer that the conditions set forth in Section 7(a) of the Agreement have been fulfilled or waived and (ii) the Seller that the conditions set forth in Section 7(b) of the Agreement have been fulfilled or waived (each of the Buyer and the Seller covenant to promptly provide notice to Escrow Agent upon the fulfilment or waiver of such conditions), the Escrow Agent will procure the registration of the transfer of the Shares in the share register of HTCC and the issuance of new share certificates in the name of the Buyer and hold them on behalf of the Buyer and the Seller.

2. Release of Shares and Purchase Price by Escrow Agent

     (a) Upon receipt of the new Share Certificates the Escrow Agent will confirm promptly to the Buyer that it holds the new share certificates and thereafter the Escrow Agent will simultaneously release the Purchase Price to Seller and release the new share certificates representing the Shares to the Buyer.

     (b) If either Buyer or Seller shall advise the Escrow Agent that this Agreement has been terminated in accordance with Section 9 prior to or following the Closing Date, the Escrow Agent shall simultaneously release the Purchase Price (and any interest in the escrow account) to Buyer and the share certificates representing the Shares to the Seller, and Buyer and Seller shall take all steps necessary to cause the Share certificates, if they shall have them registered in the name of the Buyer, to be registered in the name of the Seller.

19

EX-99.7.13 4 w01841exv99w7w13.htm EX-99.7.13 PURCHASE AND SALE AGREEMENT EXHIBIT 99.7.13
 

Exhibit 7.13

_________________________________

Purchase And Sale Agreement

 

Dated as of September 3, 2004

by and between

 

CU Capital LLC
(formerly CU Capital Corp.)

 

and

 

EMDCD Limited

_________________________________

 

 

TABLE OF CONTENTS

             
1.
   Definitions     1  
2.
   Purchase and Sale of Shares     3  
3.
   Representations and Warranties Concerning the Transaction     4  
4.
   Assignment and Transfer of Registration Agreement     7  
5.
   Pre-Closing Covenants     8  
6.
   Post-Closing Covenants     8  
7.
   Conditions to Obligation to Close     8  
8.
   Remedies for Breaches of this Agreement     10  
9.
   Termination     11  
10.
   Miscellaneous     12  
EXHIBIT A Registration Agreement     17  
EXHIBIT B Replacement Agreement     18  
EXHIBIT C Escrow Arrangements     19  

 i 

 

 

     THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made as of September 3, 2004 by and between CU Capital LLC, a Delaware limited liability company (the “Seller”), and EMDCD Limited, an exempted company incorporated in the Cayman Islands with limited liability (“Buyer”). The Buyer and the Seller are referred to collectively herein as the “Parties” and each individually as a “Party”.

RECITALS

     WHEREAS, Seller is the owner of the Shares (as defined in Section 1);

     WHEREAS, Seller wishes to sell and Buyer wishes to buy the Shares (as defined in Section 1) on the terms and conditions set forth in this Agreement; and

     WHEREAS, Seller wishes to assign to Buyer and Buyer wishes to assume from Seller all of Seller’s rights, duties and obligations under the Registration Agreement and, subject to the consent of HTCC, the Replacement Agreement (each as defined in Section 1) on the terms and conditions set forth in this Agreement;

     NOW, THEREFORE, in consideration of the premises and the mutual agreements, provisions and covenants set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

     1. Definitions.

     “Accredited Investor” has the meaning set forth in Regulation D promulgated under the Securities Act.

     “Adverse Consequences” means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable amounts paid in settlement, liabilities, obligations, taxes, liens, losses, expenses, and fees, including court costs and reasonable attorneys’ fees and expenses.

     “Affiliate” means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

     “Buyer” has the meaning set forth in the preface above.

     “Closing” has the meaning set forth in Section 2(c) below.

     “Closing Date” has the meaning set forth in Section 2(c) below.

     “Common Stock” means the shares of Common Stock, par value $0.001 per share, of Hungarian Telephone and Cable Corp.

     “Credit Agreement” means the Senior Secured Facility Agreement dated April 11, 2000 for Hungarotel Tavkozlesi Koncesszios Reszvenytarsasag, Raba-com Tavkozlesi Koncesszios Reszvenytarsasag, Papa Es Tersege Tavkozlesi Koncesszios Reszvenytarsasag and KNC Kelet-Nograd Com Tavkozlesi Koncesszios Reszvenytarsasag, as Borrowers, with Hungarian Telephone and Cable Corp. and

 

 

HTCC Tanacsada Reszvenytarsasag, as Guarantors, Citibank, N.A. and Westdeutsche Landesbank Girozentrale as arrangers, Citibank International PLC as facility agent, Citibank RT. as security agent, and the financial institutions named therein as Lenders.

     “GAAP” means United States generally accepted accounting principles as in effect from time to time.

     “HTCC” means Hungarian Telephone and Cable Corp., a Delaware corporation, together with all of its Subsidiaries and Affiliates.

     “Income Tax” means any federal, state, local, or foreign income tax, including any interest, penalty, or addition thereto, whether disputed or not.

     “Indemnified Party” has the meaning set forth in Section 8(d) below.

     “Indemnifying Party” has the meaning set forth in Section 8(d) below.

     “Knowledge” shall mean the actual knowledge, without independent investigation, of the executive officers of the Seller identified in its most recent proxy statement.

     “Material Adverse Effect” means any event which will or could reasonably be expected to have, either individually or in the aggregate, a material adverse effect on the properties, business, operations, earnings, assets, liabilities, condition (financial or otherwise) of HTCC whether or not in the ordinary course of business taken as a whole, other than any effect arising from the aggregate number of shares of Common Stock and Preferred Stock held by the Buyer and its Affiliates.

     “Party” or “Parties” has the meaning set forth in the preface above.

     “Person” means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a governmental entity (or any department, agency, or political subdivision thereof).

     “Preferred Stock” means the shares of Series A Convertible Preferred Stock, par value 0.01 per share, of Hungarian Telephone and Cable Corp.

     “Purchase Price” has the meaning set forth in Section 2(b) below.

     “Registration Agreement” means the Registration Agreement, dated May 31, 1995 by and between CU Capital Corp. and Hungarian Telephone and Cable Corp. in the form attached to this Agreement as Exhibit A.

     “Replacement Agreement” means the Replacement and Termination Agreement, dated September 30, 1998 by and among CU Capital Corp., Citizens International Management Services Company and Hungarian Telephone and Cable Corp. in the form attached to this Agreement as Exhibit B.

     “Securities Act” means the Securities Act of 1933, as amended.

2

 

     “Security Interest” means any charge, claim, community property interest, condition, equitable interest, lien, pledge, security interest, right of first refusal, or restriction or encumbrance of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute.

     “Seller” has the meaning set forth in the preface above.

     “Shares” means the one million, nine hundred and two thousand, nine hundred and eight shares of Common Stock.

     “Subsidiary” means any corporation with respect to which a specified Person (or a Subsidiary thereof) owns a majority of the common stock or has the power to vote or direct the voting of sufficient securities to elect a majority of the directors.

     “Third Party Claim” has the meaning set forth in Section 8(d) below.

     2. Purchase and Sale of Shares.

     (a) Purchase and Sale. On and subject to the terms and conditions of this Agreement, the Buyer agrees to purchase from the Seller, and the Seller agrees to sell to the Buyer the Shares.

     (b) Purchase Price. The Buyer agrees to pay to the Seller at the Closing US$9,514,540 (the “Purchase Price”) in cash, which Purchase Price shall be payable by wire transfer or other delivery of immediately available funds as contemplated by the arrangements set forth in Exhibit C hereto.

     (c) The Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Dewey Ballantine LLP in New York, New York, commencing at 9:00 a.m. local time on September 3, 2004 or on such other date as the Buyer and the Seller may mutually determine (the “Closing Date”) provided, however, that the Closing Date shall be not later than November 30, 2004.

     (d) Delivery of the Shares. On the Closing Date the Seller will arrange for one or more stock certificates representing the shares of Common Stock, each such share certificate with stock powers attached and duly endorsed in favour of the Buyer, together with the opinion contemplated by Section 6.2 of the Replacement Agreement, to be delivered in accordance with the arrangements set forth in Exhibit C hereto.

     (e) Delivery of Certificates, etc. at the Closing. At the Closing, (i) the Seller will deliver to the Buyer the various certificates referred to in Section 7(a) below and (ii) the Buyer will deliver to the Seller the various certificates referred to in Section 7(b) below in accordance with the arrangements set forth in Exhibit C.

     (f) Delivery of Purchase Price at the Closing. At the Closing, Buyer will deliver to the Seller the consideration specified in Section 2(b) above in accordance with the arrangements set forth in Exhibit C.

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     3. Representations and Warranties Concerning the Transaction.

     (a) Representations and Warranties of the Seller. The Seller represents and warrants to the Buyer that the statements contained in this Section 3(a) are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then).

     (i) Organization of Seller. The Seller is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation.

     (ii) Authorization of Transaction. The Seller has full power and authority, and all corporate actions necessary on the part of the Seller have been taken, to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Seller, enforceable against it in accordance with its terms, except to the extent that the enforcement of the rights and remedies created therein is subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting the enforcement of creditors’ rights and general principles of equity. Except as otherwise set forth in this Agreement, the Seller need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any third parties (including HTCC), any U.S. government or any U.S. governmental agency in order to consummate the transactions contemplated by this Agreement, or if such notice, filing, authorization, consent or approval is needed, it has been given or obtained except in each case for any approval required under the Credit Agreement and the acceptability under Section 6.2 of the Replacement Agreement of the opinion, and the counsel providing the opinion, contemplated by Section 2(d).

     (iii) Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will violate any agreement or any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any U.S. government, U.S. governmental agency, or U.S. court to which the Seller or, to the Knowledge of the Seller, to which HTCC is subject or any provision of the Seller’s charter or bylaws except in each case for any approval required under the Credit Agreement and the acceptability under Section 6.2 of the Replacement Agreement of the opinion, and the counsel providing the opinion, contemplated by Section 2(d).

     (iv) Brokers’ Fees. The Seller has no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which the Buyer could become liable or obligated.

     (v) Shares. The Seller beneficially owns the Shares free and clear of any restrictions on transfer (other than restrictions under the Securities Act and state securities laws and Section 6.2 of the Replacement Agreement), taxes, Security Interests, options, warrants, purchase rights, contracts, commitments, equities, claims, and demands. The Seller is not a party to any

4

 

option, warrant, purchase right, or other contract or commitment that could require the Seller to sell, transfer, or otherwise dispose of the Shares (other than this Agreement). The Seller is not a party to any voting trust, proxy, or other agreement or understanding with respect to the voting of the Shares. Upon transfer of the Shares in accordance with the terms of this Agreement, Buyer shall acquire good, valid and marketable title to the Shares, free and clear of any Security Interests other than the obligation to obtain opinions under the Replacement Agreement or arising under the Securities Act and state securities laws.

     (vi) No Proceedings against Seller. There is no civil, criminal or administrative suit or claim, proceeding or investigation before any court, arbitrator or similar panel at law or in equity now pending or, to the Knowledge of the Seller, threatened against the Seller or the Shares, which could reasonably be expected to materially adversely affect the ability of the Seller to consummate the transaction contemplated by this Agreement or encumber the Shares.

     (vii) Seller is a Sophisticated Seller. Seller (A) is a sophisticated seller with respect to the sale of the Shares, (B) has adequate information concerning the business and financial condition of HTCC to make an informed decision regarding the sale of the Shares, and (C) has independently and without reliance upon Buyer, and based on such information as Seller has deemed appropriate, made its own analysis and decision to enter into this Agreement, except that Seller has relied upon Buyer’s express representations, warranties, covenants and indemnities in this Agreement. Seller acknowledges that Buyer has not given Seller any investment advice, credit information, or opinion on whether the sale of the Shares is prudent.

     (viii) Excluded Information. Seller acknowledges that (A) Buyer currently may have, and later may come into possession of, information with respect to the Shares or HTCC or any of its Affiliates that is not known to Seller and that may be material to a decision to sell the Shares including the transaction involving HTCC and PanTel Rt. (“Seller Excluded Information”), (B) Seller has determined to sell the Shares notwithstanding its lack of knowledge of the Seller Excluded Information and (C) Buyer shall have no liability to Seller, and Seller waives and releases any claims that it might have against Buyer whether under applicable securities laws or otherwise, with respect to the nondisclosure of the Seller Excluded Information in connection with the transactions contemplated by this Agreement; provided, however, that the Seller Excluded Information shall not and does not affect the truth or accuracy of Buyer’s representations or warranties in this Agreement.

     (ix) Provision of Documents. Seller has provided or otherwise made available to Buyer copies of all material agreements between Seller and HTCC relating to the Shares (other than any such material agreement filed with the United States Securities and Exchange Commission).

     (x) No Other Agreements. Seller is not a party to, or bound by, any document or agreement that could reasonably be expected to materially

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and adversely affect the Shares or Buyer’s rights and remedies under this Agreement (other than the Replacement Agreement).

     (xi) Disclaimer of other Representations and Warranties. The Seller makes no representation or warranty, express or implied, at law or in equity, in respect of HTCC or any of its assets, liabilities or operations. Except as expressly set forth herein, Buyer hereby acknowledges and agrees that the Buyer is purchasing the Shares having made, to its full and complete satisfaction, a due diligence investigation of HTCC.

     (b) Representations and Warranties of the Buyer. The Buyer represents and warrants to the Seller that the statements contained in this Section 3(b) are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then).

     (i) Organization of the Buyer. The Buyer is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation.

     (ii) Authorization of Transaction. The Buyer has full power and authority to execute and has taken all corporate actions required to deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Buyer, enforceable in accordance with its terms and conditions, except to the extent that the enforcement of the rights and remedies created therein is subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting the enforcement of creditors’ rights and general principles of equity. The Buyer need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement.

     (iii) Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which the Buyer is subject or any provision of its charter or bylaws.

     (iv) Brokers’ Fees. The Buyer has no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which the Seller could become liable or obligated.

     (v) No Proceedings against Buyer. There is no civil, criminal or administrative suit or claim, proceeding or investigation before any court, arbitrator or similar panel at law or in equity now pending or, to the knowledge of the Buyer, threatened against the Buyer, which could reasonably be expected to materially adversely affect the ability to consummate the transaction contemplated by this Agreement.

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     (vi) Investment. The Buyer (A) understands that the Shares have not been, and will not be, registered under the Securities Act, or under any state securities laws, and are being offered and sold in reliance upon federal and state exemptions for transactions not involving any public offering, (B) is acquiring the Shares solely for its own account for investment purposes, and not with a view to the distribution thereof in violation of any applicable securities laws, (C) is a sophisticated investor with knowledge and experience in business and financial matters, (D) has received certain information concerning HTCC and has had the opportunity to obtain additional information as desired in order to evaluate the merits and the risks inherent in holding the Shares and (E) is able to bear the economic risk and lack of liquidity inherent in holding the Shares.

     (vii) Buyer is a Sophisticated Buyer. Buyer (A) is a sophisticated buyer with respect to the purchase of the Shares, (B) has adequate information concerning the business and financial condition of HTCC to make an informed decision regarding the purchase of the Shares, (C) has independently and without reliance upon Seller, and based on such information as Buyer has deemed appropriate, made its own analysis and decision to enter into this Agreement, except that Buyer has relied upon Seller’s express representations, warranties, covenants and indemnities in this Agreement, (D) understands that the Shares are restricted securities (within the meaning of Rule 144 of Securities Act) have not been registered under the Securities Act, and cannot be resold except pursuant to registration under the Securities Act or an exemption from registration; and (E) acknowledges that the certificates representing the Shares shall bear a legend noting their restricted nature. Buyer acknowledges that Seller has not given Buyer any investment advice, credit information, or opinion on whether the sale of the Shares is prudent.

     (viii) Excluded Information. Buyer acknowledges that (A) Seller currently may have, and later may come into possession of, information with respect to the Shares or HTCC or any of its Affiliates that is not known to Buyer and that may be material to a decision to buy the Shares including the transaction involving HTCC and PanTel Rt. (“Buyer Excluded Information”), (B) Buyer has determined to buy the Shares notwithstanding its lack of knowledge of the Buyer Excluded Information and (C) Seller shall have no liability to Buyer, and Buyer waives and releases any claims that it might have against Seller whether under applicable securities laws or otherwise, with respect to the nondisclosure of the Buyer Excluded Information in connection with the transactions contemplated by this Agreement; provided, however, that the Buyer Excluded Information shall not and does not affect the truth or accuracy of Seller’s representations or warranties in this Agreement.

     4. Assignment and Transfer of Registration Agreement. Pursuant to Section 8(b) of the Registration Agreement, the Seller from and after the Closing Date assigns, transfers and delegates to the Buyer all of its rights, duties and obligations under the Registration Agreement, and Buyer accepts such assignment and assumes the Seller’s rights, duties and obligations under the Registration Agreement.

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     5. Pre-Closing Covenants.

     (a) Cooperation Prior to Closing. Between the execution of this Agreement and the final release of the new Share Certificates and the Purchase Price as contemplated in paragraph 2(a) of Exhibit C (“Final Transfer”), each of the Parties will use its commercially reasonable best efforts to take all action and to do all things necessary in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the closing conditions set forth in Section 7 below).

     (b) Seller to Refrain from Taking or to Undertake Certain Actions. Between the execution of this Agreement and the Closing, Seller agrees:

     (i) not to take any action with regard to the Shares without the consent of the Buyer, which consent shall not be unreasonably withheld;

     (ii) to exercise all rights attaching to the Shares, including without limitation the right to vote in meetings of the Company, in accordance with the instructions of the Buyer;

     (iii) not take any action which would have a Material Adverse Effect on the Shares or which would result in a breach of the Agreement; and

     (iv) to take such reasonable actions with respect to the Shares, as the Buyer may request.

     (c) From the date of this Agreement, Seller shall use its reasonable commercial efforts to assign and to obtain HTCC’s consent to the assignment of the Replacement Agreement to the Buyer.

     (d) Seller shall use all reasonable endeavours to procure that the Seller’s representative on the board of directors of HTCC shall resign as soon as practicable and to deliver a copy of such resignation letter to the Buyer.

     6. Post-Closing Covenants.

     (a) In case at any time after the Closing any further action is necessary to carry out the purposes of this Agreement, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as any other Party reasonably may request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefore under Section 8 below).

     (b) If the Seller’s representative on the board of directors of HTCC shall have not yet resigned the Seller shall continue to use all reasonable endeavours to procure that the Seller’s representative on the board of directors of HTCC shall resign as soon as practicable and to deliver a copy of such resignation letter to the Buyer.

     7. Conditions to Obligation to Close.

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     (a) Conditions to Obligation of the Buyer. The obligation of the Buyer to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

     (i) the representations and warranties set forth in Section 3(a) above shall be true and correct in all material respects at and as of the Closing Date;

     (ii) the Seller shall have performed and complied with all of its covenants hereunder in all material respects through the Closing;

     (iii) there shall not be any injunction, judgment, order, decree, ruling, or charge in effect preventing consummation of any of the transactions contemplated by this Agreement;

     (iv) all necessary governmental and third party consents and approvals in connection with the transactions contemplated by this Agreement shall have been obtained except in each case for any approval required under the Credit Agreement and the acceptability under Section 6.2 of the Replacement Agreement of the opinion, and the counsel providing the opinion, contemplated by Section 2(d);

     (v) the Seller shall have delivered to the Buyer certificates executed by the responsible officer or the secretary of the Seller certifying (A) that each of the conditions specified in Section 7(a)(i)-(iv) is satisfied in all respects, and (B) the incumbency of the officer of the Seller executing this Agreement and all other documents executed and delivered in connection therewith;

     (vi) the Buyer shall have received from US Counsel to the Seller, an opinion in a form acceptable to the Buyer, and dated as of the Closing Date covering (x) the matters set forth in Section 3(a)(ii) and (y) that no registration is required under the Securities Act to transfer the Shares to Buyer in accordance with this Agreement;

     (vii) since the date of this Agreement, no event or events shall have occurred which have had or reasonably may be expected to have a Material Adverse Effect;

     (viii) all actions to be taken by the Seller in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to be delivered by the Seller to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to the Buyer; and

     The Buyer may waive any condition specified in this Section 7(a) if it executes a writing so stating at or prior to the Closing.

     (b) Conditions to Obligation of the Seller. The obligation of the Seller to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

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     (i) the representations and warranties set forth in Section 3(b) above shall be true and correct in all material respects at and as of the Closing Date;

     (ii) the Buyer shall have performed and complied with all of its covenants hereunder in all material respects through the Closing;

     (iii) there shall not be any injunction, judgment, order, decree, ruling, or charge in effect preventing consummation of any of the transactions contemplated by this Agreement;

     (iv) all necessary governmental and third party consents and approvals in connection with the transactions contemplated by the Agreement shall have been obtained;

     (v) the Buyer shall have delivered to the Seller a certificate to the effect that each of the conditions specified above in Section 7(b)(i)-(iv) is satisfied in all respects; and

     (vi) all actions to be taken by the Buyer in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to the Seller.

     The Seller may waive any condition specified in this Section 7(b) if it executes a writing so stating at or prior to the Closing.

     8. Remedies for Breaches of this Agreement.

     (a) Survival of Representations and Warranties. All of the representations, warranties, covenants and obligations of the Parties contained in this Agreement and any certificate or document delivered with this Agreement shall survive the Closing (unless the damaged Party knew or had reason to know of any misrepresentation or breach of warranty at the time of Closing) and continue in full force for a period of 2 years thereafter (subject to any applicable statutes of limitations) or the specific terms thereof.

     (b) Indemnification Provisions for Benefit of the Buyer. In the event that the Seller breaches any of its representations, warranties, and covenants contained herein, and, if there is an applicable survival period pursuant to Section 8(a) above, provided that the Buyer makes a written claim for indemnification against the Seller pursuant to Section 10(g) below within such survival period, then the Seller agrees to indemnify the Buyer up to the amount of the Purchase Price from and against the entirety of any Adverse Consequences the Buyer shall suffer through and after the date of the claim for indemnification caused proximately by the breach.

     (c) Indemnification Provisions for Benefit of the Sellers. In the event that the Buyer breaches any of its representations, warranties, and covenants contained herein, and, if there is an applicable survival period pursuant to Section 8(a) above, provided that the Seller makes a written claim for indemnification against the Buyer

10

 

pursuant to Section 10(g) below within such survival period, then the Buyer agrees to indemnify the Seller up to the amount of the Purchase Price from and against the entirety of any Adverse Consequences the Seller shall suffer through and after the date of the claim for indemnification caused proximately by the breach. Seller agrees and acknowledges that the obligations set forth in this Section 8(c) are solely those of Buyer. Seller expressly waives any and all claims arising under this Agreement and the transactions contemplated hereby against any Affiliates of Buyer.

     (d) Matters Involving Third Parties.

     (i) If any third party shall notify any Party (the “Indemnified Party”) with respect to any matter (a “Third Party Claim”) which may give rise to a claim for indemnification against the other Party (the “Indemnifying Party”) under this Section 8, then the Indemnified Party shall promptly (and in any event within thirty (30) days after receiving notice of the Third Party Claim) notify the Indemnifying Party thereof in writing.

     (ii) Notwithstanding the fact that the Indemnifying Party will have the right at any time to assume and thereafter conduct the defense of the Third Party Claim with counsel of his or its choice, the Indemnified Party will have the right to participate in such proceedings at its own cost.

     (iii) Unless and until an Indemnifying Party assumes the defense of the Third Party Claim as provided in Section 8(d)(ii) above, however, the Indemnified Party may defend, at the cost of the Indemnifying Party, against the Third Party Claim in any manner it reasonably may deem appropriate.

     (iv) In no event will the Indemnified Party consent to the entry of any judgment or enter into any settlement with respect to monetary damages, with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (not to be unreasonably withheld or delayed).

     (e) Exclusive Remedy. The Buyer and the Seller acknowledge and agree that the foregoing indemnification provisions in this Section 8 shall be the exclusive remedy of the Buyer and the Seller with respect to the transactions contemplated by this Agreement except for fraud or intentional misrepresentation.

     9. Termination.

     (a) Termination of Agreement. The Parties may terminate this Agreement as provided below:

     (i) the Buyer and the Seller may terminate this Agreement by mutual written consent at any time prior to the Closing;

     (ii) the Buyer may terminate this Agreement by giving written notice to the Seller (A) at any time prior to the Closing in the event the Seller has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, the Buyer has notified the Seller of the breach, and the breach has continued without cure for a period of thirty (30)

11

 

days after the notice of breach or (B) if the Closing has not occurred by November 30, 2004;

     (iii) the Seller may terminate this Agreement by giving written notice to the Buyer (A) at any time prior to the Closing in the event the Buyer has breached any material representation, warranty, or covenant contained in this Agreement or any similar agreement between an Affiliate of the Buyer and the Seller in any material respect, the Seller has notified the Buyer of the breach, and the breach has continued without cure for a period of thirty (30) days after the notice of breach or (B) if the Closing has not occurred by November 30, 2004; and

     (iv) the Buyer may terminate this Agreement if the registration of the Shares in the Buyer’s name has not occurred by November 30, 2004.

     (b) Effect of Termination. If any Party terminates this Agreement pursuant to Section 9(a) above, all rights and obligations of the Parties hereunder, with the express exception of the provisions of Sections 10(g), 10(h), 10(i) and 10(l) hereof, shall terminate without any liability of any Party to any other Party (except for any liability of any Party then in breach). For the avoidance of doubt, the arrangements set forth in Exhibit C hereto will terminate and the Purchase Price and all interest in the escrow account shall be returned promptly to the Buyer and the Share Certificates and related documentation shall be returned promptly to the Seller.

     10. Miscellaneous.

     (a) Press Releases and Public Announcements. No Party shall issue any press release or make any public announcement relating to the subject matter of this Agreement without the prior written approval of the other Party; provided, however, that any Party may make any public disclosure it believes in good faith is required by applicable law or any listing or trading agreement concerning its publicly traded securities (in which case the disclosing Party will use its reasonable best efforts to advise the other Parties prior to making the disclosure).

     (b) No Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.

     (c) Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they have related in any way to the subject matter hereof.

     (d) Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of his or its rights, interests, or obligations hereunder without the prior written approval of the other Party, except that the Buyer may freely assign without consent the benefit of this Agreement or otherwise sell or transfer all the Shares to any fund or account managed by Ashmore Investment Management Limited.

12

 

     (e) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.

     (f) Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

     (g) Notices. All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given if (and then two business days after) it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below:

If to the Seller:

CU Capital Corp LLC
c/o Citizens Communications Company
Three High Ridge Park
Stamford CT 06905
Attn: Treasurer
Fax: +203-614-4602

Copy to:
Citizens Communications Company
Three High Ridge Park
Stamford CT 06905
Attn: General Counsel
Fax: +203-614-4651

If to the Buyer:
EMDCD Limited
The Northern Trust Company
50 Bank Street
Canary Wharf
London E14 5NT
Attn: Kim Martin
Fax: 020 7982 3606

Copy to:
Ashmore Investment Management Limited
20 Bedfordbury
London WC2N 4BL
United Kingdom
Attention: Tim Davis
Facsimile: +44-20-7557-4141

     Any Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex or ordinary mail), but no such notice, request, demand, claim,

13

 

or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Party notice in the manner herein set forth.

     (h) Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

     (i) Dispute Resolution.

     (i) In the event of any dispute between the Parties, the Parties shall first attempt to settle such dispute amicably. Provided that, unless the Parties otherwise agree, arbitration may be commenced on or after the thirtieth (30) day after the day on which notice of intention to commence arbitration of such dispute was given, even if no attempt at amicable settlement thereof has been made.

     (ii) If amicable settlement has not been reached within the period stated in Section 10(i)(i) above, the dispute shall be finally settled under the Rules of Arbitration of the American Arbitration Association by one or more arbitrators appointed under such Rules. Each arbitrator shall have experience in agreements of this type generally. The language of the arbitration shall be English and all documents submitted to the arbitration shall be in English (or where applicable an English translation shall be provided). The place of such arbitration shall be New York, New York, United States of America. The prevailing party in any such arbitration shall be fully reimbursed by the other party for all costs associated with the arbitration, including reasonable legal fees.

     (j) Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by each Party. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

     (k) Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

     (l) Expenses. Each of the Buyer and the Seller will bear its own costs and expenses (including legal fees and expenses) incurred in connection with the negotiation and execution of this Agreement and the transactions contemplated hereby.

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     (m) Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “including” shall mean including without limitation.

     (n) Stamp Taxes, etc. Seller agrees that it will pay, and will hold the Buyer harmless from any and all liability with respect to any stamp or similar taxes which may be determined to be payable in connection with the execution, delivery and performance of this Agreement.

     (o) Incorporation of Exhibits and Schedules. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof.

     (p) The Northern Trust Company is executing this Agreement and any other documents relating hereto to which Buyer is a party or shall be a party on behalf of Buyer and solely in its capacity as custodian for Buyer, and is making no independent representations or warranties and shall have no independent liability under this Agreement or such documents.

[remainder of page intentionally left blank]

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     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

             
SELLER:   BUYER:
           
CU CAPITAL LLC   EMDCD LIMITED
           
By:       By The Northern Trust Company as
   
  custodian for EMDCD LIMITED
Name:        
Title:   By:    
         
        Name:
        Title:

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EXHIBIT A

Registration Agreement

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT B

Replacement Agreement

 

 

 

 

 

 

 

 

 

 

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EXHIBIT C

Escrow Arrangements

     This Exhibit sets forth the escrow arrangements to be entered into in connection with the purchase and sale of the Shares contemplated by this Agreement.

     The steps below are intended to insure that the Shares are duly registered in the name of the Buyer and are held by Bear Stearns or another entity mutually agreeable to the Parties (the “Escrow Agent”) prior to the release of the Purchase Price by the Buyer to the Seller.

     1. Delivery of Shares and Purchase Price to Escrow Agent

     (a) Prior to the Closing Date, (i) Seller will arrange for the share certificates representing the Shares to be delivered to the Escrow Agent, each such share certificate with stock powers attached and duly endorsed in favour of the Buyer and (ii) the Opinion of the Seller’s US Counsel in a form acceptable to the Buyer (the “Legal Opinion”) will be delivered to Escrow Agent.

     (b) Prior to the Closing Date, Buyer will arrange for the Purchase Price to be paid to the Escrow Agent.

     (c) Upon receipt of the share certificates representing the Shares, the Legal Opinion and the Purchase Price, after the Closing Date, upon confirmation to the Escrow Agent by (i) the Buyer that the conditions set forth in Section 7(a) of the Agreement have been fulfilled or waived and (ii) the Seller that the conditions set forth in Section 7(b) of the Agreement have been fulfilled or waived (each of the Buyer and the Seller covenant to promptly provide notice to Escrow Agent upon the fulfilment or waiver of such conditions), the Escrow Agent will procure the registration of the transfer of the Shares in the share register of HTCC and the issuance of new share certificates in the name of the Buyer and hold them on behalf of the Buyer and the Seller.

     2. Release of Shares and Purchase Price by Escrow Agent

     (a) Upon receipt of the new Share Certificates the Escrow Agent will confirm promptly to the Buyer that it holds the new share certificates and thereafter the Escrow Agent will simultaneously release the Purchase Price to Seller and release the new share certificates representing the Shares to the Buyer.

     (b) If either Buyer or Seller shall advise the Escrow Agent that this Agreement has been terminated in accordance with Section 9 prior to or following the Closing Date, the Escrow Agent shall simultaneously release the Purchase Price (and any interest in the escrow account) to Buyer and the share certificates representing the Shares to the Seller, and Buyer and Seller shall take all steps necessary to cause the Share certificates, if they shall have them registered in the name of the Buyer, to be registered in the name of the Seller.

EX-99.7.14 5 w01841exv99w7w14.htm EX-99.7.14 CALL OPTION AGREEMENT EXHIBIT 99.7.14
 

Exhibit 7.14

[Letterhead of TDC A/S]

     
Date:
  3 September 2004
 
    
To:
  Asset Holder PCC No 2 Limited
re Ashmore Emerging Economy Portfolio (“AEEP”)
c/o Ashmore Investment Management Limited (“Ashmore”)
20 Bedfordbury
London
WC2N 4BL
United Kingdom
 
    
Facsimile:
  44 207 557 4141
 
    
From:
  TDC A/S (“TDC”)
 
    
Re:
  Physically-Settled Common Stock Share Option Transaction

Dear Sirs

The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the Transaction entered into between us on the Trade Date specified below (the “Transaction”).

The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation will govern.

This Confirmation evidences a complete binding agreement between you and us as to the terms of the Transaction to which this Confirmation relates. This Confirmation, together with all other documents referring to an ISDA Master Agreement (each a “Confirmation”) confirming transactions (each a “Transaction”) entered into between us (notwithstanding anything to the contrary in a Confirmation), shall supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement as if we had executed an agreement in such form (but without any Schedule except for the election of English law as the governing law and USD as the Termination Currency) on the Trade Date of the first such Transaction between us. In the event of any inconsistency between the provisions of that agreement and this Confirmation, this Confirmation will prevail for the purpose of this Transaction.

1.   The terms of the particular Transaction to which this Confirmation relates are as follows:

             
    General Terms:    
 
            
      Trade Date:   3 September 2004
 
            
      Option Style:   American
 
            
      Option Type:   Call

 

 

             
    Seller:   Ashmore
 
            
    Buyer:   TDC
 
            
    Shares:   Shares of the common stock, par value USD 0.001 per share, of Hungarian Telephone and Cable Corp., a Delaware corporation (“HTCC”).
 
            
    Number of Options:   241,800
 
            
    Strike Price:   In the event that the Options are exercised during the portion of the Exercise Period that:
 
            
      (i)   commences on the Commencement Date and ends on the 14th day after the Commencement Date, USD5.01 per Share;
 
            
      (ii)   commences on the 15th day after the Commencement Date and ends on the 28th day after the Commencement Date, USD5.04 per Share;
 
            
      (iii)   commences on the 29th day after the Commencement Date and ends on the 42nd day after the Commencement Date, USD5.08 per Share; and
 
            
      (iv)   commences on the 43rd day after the Commencement Date and ends on the Expiration Date, USD5.12 per Share.
 
            
    Premium:   USD 1.00
 
            
    Premium Payment Date:   The Trade Date
 
            
    Exchange:   American Stock Exchange
 
            
    Related Exchange(s):   Such exchange or quotation system, if any, as the Calculation Agent considers appropriate
 
            
    Knock-in Event:   Applicable. For the purposes of this Option Transaction, the Knock-In Event is the release by the Escrow Agent (as defined in Exhibit C to the Purchase and Sale Agreement, dated the date hereof, between Citizens Communications Company and AEEP (the “AEEP Purchase and Sale Agreement”)) of (x) new share certificates to AEEP (as buyer) and (y) the Purchase Price (as defined in the AEEP Purchase and Sale Agreement) to the

-2-

 

                 
 
               seller thereunder pursuant to the AEEP Purchase and Sale Agreement.
 
                
        Knock-in Determination Day(s):   Any Scheduled Trading Day during the Exercise Period
 
                
    Procedures for Exercise:    
 
                
        Commencement Date:   The date of the signing of the AEEP Purchase and Sale Agreement
 
                
        Latest Exercise Time:   5:00 p.m. (local time in London, England)
 
                
        Expiration Time:   5:00 p.m. (local time in London, England)
 
                
        Expiration Date:   60 days after the Commencement Date
 
                
        Multiple Exercise:   Not Applicable
 
                
        Automatic Exercise:   Not Applicable
        Seller’s Telephone
Number, and
Facsimile Number and Contact
Details for purpose of giving
Notice:		    
  
 
 
Stephen Iles/Tim Davis,
Funds Administration Department
Tel: +44 207 557 4100
Fax: +44 207 557 4141
 
                
    Settlement Terms:    
 
                
        Physical Settlement:   Applicable
 
                
        Settlement Currency:   USD
 
                
    Dividends:    
 
                
        Extraordinary Dividends:   As determined by the Calculation Agent
 
                
    Adjustments:    
 
                
        Method of Adjustment:   Calculation Agent Adjustment
 
                
    Extraordinary Events:    
 
                
    Consequences of Merger Events:    
 
                
 
          Share-for-Share:   Calculation Agent Adjustment
 
                
          Share-for-Other:   Calculation Agent Adjustment
 
                
 
          Share-for-Combined:   Calculation Agent Adjustment
 
                
    Tender Offer:   Applicable

-3-

 

             
    Consequences of Tender Offers:    
 
            
      Share-for-Share:   Calculation Agent Adjustment
 
            
      Share-for-Other:   Calculation Agent Adjustment
 
            
      Share-for-Combined:   Calculation Agent Adjustment
 
            
    Composition of Combined Consideration:   Not Applicable
 
            
    Nationalization, Insolvency or Delisting:   Negotiated Close-Out
 
            
    Non-Reliance:   Applicable
 
            
    Agreements and Acknowledgments Regarding Hedging Activities:   Applicable
 
            
    Additional Acknowledgments:   Applicable
 
            
2.   Calculation Agent:   Party A and Party B. If at any time the parties are unable to agree on a determination within one Business Day of the day on which a determination would, but for such inability, be made, each party agrees to be bound by the determination of an independent leading dealer in shares, mutually selected by the parties, who shall act as the substitute Calculation Agent for the purposes of that determination, with the fees and expenses of such substitute Calculation Agent (if any) to be met equally by the parties. If the parties are unable to agree on an independent leading dealer to act as substitute Calculation Agent, each party shall select an independent leading dealer and such independent dealers shall agree on an independent third party who shall be deemed to be the substitute Calculation Agent for the purposes of that determination.
3.   Account Details:    
 
            
    Account for payments to AEEP:   Barings (Guernsey) Limited
          Account No: 104547 20230
          ABA No: 026001122
          CHIPS UID: 0112/177860
          Swift Code CNORUS33
          For further credit to AEEP 17789
 
            
    Account for delivery of Shares to TDC:   Certificates representing the Shares to be delivered (and held in escrow to the order of AEEP by Clifford Chance until confirmation of the receipt of payment by AEEP), in genuine unaltered form, duly endorsed in blank or

-4-

 

             
          accompanied by duly executed stock powers in blank, with all requisite stock transfer tax stamps, if any, attached thereto, to the offices of:
 
            
          Clifford Chance
          10 Upper Bank Street
          Canary Wharf
          London E14 5JJ
          United Kingdom
          Attn: Gil Michel-Garcia
 
            
4.   Offices:    
 
            
  (a)   The Office of TDC for the Transaction is:    
 
            
      TDC A/S    
      Noerregade 21    
      00900 Copenhagen C    
      Denmark    
      Attn: Thomas Gelting    
      Tel no. +45 33 98 80 63    
      Fax no. +45 33 99 80 55    
 
            
      and    
 
            
  (b)   The Office of AEEP for the Transaction is:    
 
            
      Barings (Guernsey) Limited    
      P.O. Box 71, Trafalgar Court    
      Les Banques, St Peter Port    
      Guernsey GY1 3DA    
      Attn: Sarah Brouard    
      Telephone: +44 1481 745493    
      Facsimile: +44 1481 745058    
 
            
5.   Governing law: English law    
 
            
6.   Ashmore as Agent    
 
            
6.1   All the provisions of this Confirmation (and the related agreement in the form of the 2002 ISDA Master Agreement) apply with AEEP as principal. For the avoidance of doubt, but without limitation, the events set forth in Section 5 and 6 of such ISDA Master Agreement apply in relation to AEEP as principal.
 
            
6.2   AEEP represents and warrants to TDC that:    
 
            
  (i)   it is duly established under the laws of the jurisdiction of its establishment and, if relevant under such laws, in good standing;
 
            
  (ii)   Ashmore has the authority to enter into this Confirmation and to execute this Confirmation as agent on behalf of AEEP and to give instructions for settlement of the same utilising assets of AEEP as principal; and

-5-

 

             
  (iii)   Ashmore has been duly appointed and authorised by AEEP as principal to enter into this Confirmation on behalf of, and to bind, AEEP as principal and its assets.

6.3 AEEP warrants and undertakes to TDC that it will, as soon as reasonably practicable, notify TDC if Ashmore’s appointment as agent for AEEP as principal is terminated.

7.1 AEEP agrees and covenants to enter into a Stockholders’ Agreement, promptly after the Trade Date, substantially in the form attached hereto as Annex I.

7.2 AEEP agrees that TDC may transfer its rights and obligations hereunder to any of its Affiliates, provided however that TDC shall be liable to AEEP for the performance of all of any such Affiliate’s obligations hereunder after any such transfer.

7.3 TDC represents and warrants to AEEP that it (A) understands that the Shares have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “Securites Act”), or under any state securities laws of the United States, and are being offered and sold in reliance upon federal and state exemptions for transactions not involving any public offering, (B) is acquiring the Shares solely for its own account for investment purposes, and not with a view to the distribution thereof in violation of any applicable securities laws, (C) is a sophisticated investor with knowledge and experience in business and financial matters, (D) has received certain information concerning HTCC and has had the opportunity to obtain additional information as desired in order to evaluate the merits and the risks inherent in holding the Shares and (E) is able to bear the economic risk and lack of liquidity inherent in holding the Shares.

7.4. TDC represents and warrants to AEEP that it (A) is a sophisticated buyer with respect to the purchase of the Shares, (B) has adequate information concerning the business and financial condition of HTCC to make an informed decision regarding the purchase of the Shares, (C) has independently and without reliance upon AEEP, and based on such information as TDC has deemed appropriate, made its own analysis and decision to enter into this Agreement, (D) understands that the Shares are “restricted securities” (within the meaning of Rule 144 of Securities Act) have not been registered under the Securities Act, and cannot be resold except pursuant to registration under the Securities Act or an exemption from registration; and (E) acknowledges that the certificates representing the Shares shall bear a legend noting their restricted nature.

7.5 AEEP agrees and covenants to use its commercially reasonable endeavours, after the Exercise, to cause TDC to become a party to, and have the benefits and obligations of a Stockholder (as defined in the AEEP Purchase and Sale Agreement) under, the Registration Agreement (as defined in the AEEP Purchase and Sale Agreement).

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation in the space provided below and returning it to us.

     
  Yours sincerely
 
    
  TDC A/S
 
    
  By:                                                                        
   
Name:
  Title:

Confirmed as of the date first above written:

-6-

 

ASSET HOLDER PCC NO.2 LIMITED
RE ASHMORE EMERGING ECONOMY PORTFOLIO
BY ITS AGENT

ASHMORE INVESTMENT MANAGEMENT LIMITED

By:                                                                        

Name:
Title:

-7-

 

ANNEX I

[Form of Stockholders Agreement]

-8-

EX-99.7.15 6 w01841exv99w7w15.htm EX-99.7.15 CALL OPTION AGREEMENT EXHIBIT 99.7.15
 

Exhibit 7.15

[Letterhead of TDC A/S]

     
Date:
  3 September 2004
 
    
To:
  EMDCD Limited (“EMDCD”)
c/o Ashmore Investment Management Limited (“Ashmore”)
20 Bedfordbury
London
WC2N 4BL
United Kingdom
 
    
Facsimile:
  44 207 557 4141
 
    
From:
  TDC A/S (“TDC”)
 
    
Re:
  Physically-Settled Common Stock Share Option Transaction

Dear Sirs

The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the Transaction entered into between us on the Trade Date specified below (the “Transaction”).

The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation will govern.

This Confirmation evidences a complete binding agreement between you and us as to the terms of the Transaction to which this Confirmation relates. This Confirmation, together with all other documents referring to an ISDA Master Agreement (each a “Confirmation”) confirming transactions (each a “Transaction”) entered into between us (notwithstanding anything to the contrary in a Confirmation), shall supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement as if we had executed an agreement in such form (but without any Schedule except for the election of English law as the governing law and USD as the Termination Currency) on the Trade Date of the first such Transaction between us. In the event of any inconsistency between the provisions of that agreement and this Confirmation, this Confirmation will prevail for the purpose of this Transaction.

1.   The terms of the particular Transaction to which this Confirmation relates are as follows:

             
    General Terms:    
 
            
 
      Trade Date:   3 September 2004
 
            
 
      Option Style:   American
 
            
 
      Option Type:   Call
 
            
 
      Seller:   Ashmore

 

 

             
    Buyer:   TDC
 
            
    Shares:   Shares of the common stock, par value USD 0.001 per share, of Hungarian Telephone and Cable Corp., a Delaware corporation (“HTCC”).
 
            
    Number of Options:   1,141,744
 
            
    Strike Price:   In the event that the Options are exercised during the portion of the Exercise Period that:
 
            
      (i)   commences on the Commencement Date and ends on the 14th day after the Commencement Date, USD 5.01 per share;
 
            
      (ii)   commences on the 15th day after the Commencement Date and ends on the 28th day after the Commencement Date, USD 5.04 per Share;
 
            
      (iii)   commences on the 29th day after the Commencement Date and ends on the 42nd day after the Commencement Date, USD 5.08 per Share; and
 
            
      (iv)   commences on the 43rd day after the Commencement Date and ends on the Expiration Date, USD 5.12 per Share.
 
            
    Premium:   USD 1.00
 
            
    Premium Payment Date:   The Trade Date
 
            
    Exchange:   American Stock Exchange
 
            
    Related Exchange(s):   Such exchange or quotation system, if any, as the Calculation Agent considers appropriate
 
            
    Knock-in Event:   Applicable.
        For the purposes of this Option Transaction, the Knock-In Event is the release by the Escrow Agent (as defined in Exhibit C to the Purchase and Sale Agreement, dated the date hereof, between CU Capital LLC (formerly CU Capital Corp.) and EMDCD (the “EMDCD Purchase and Sale Agreement”)) of (x) new share certificates to EMDCD (as buyer) and (y) the Purchase Price (as defined in the EMDCD Purchase and Sale Agreement)

-2-

 

             
          to the seller thereunder pursuant to the EMDCD Purchase and Sale Agreement.
 
            
      Knock-in Determination Day(s):   Any Scheduled Trading Day during the Exercise Period
 
            
    Procedures for Exercise:    
 
            
      Commencement Date:   The dated of the signing of the EMDCD Purchase and Sale Agreement
 
            
      Latest Exercise Time:   5:00 p.m. (local time in London, England)
 
            
      Expiration Time:   5:00 p.m. (local time in London, England)
 
            
      Expiration Date:   60 days after the Commencement Date
 
            
      Multiple Exercise:   Not Applicable
 
            
      Automatic Exercise:   Not Applicable
 
            
      Seller’s Telephone
Number, and
Facsimile Number and Contact
Details for purpose of giving
Notice: 		   
 
 
 
Stephen
Iles/Tim Davis,
Funds Administration Department
Tel: +44 207 557 4100
Fax: +44 207 557 4141
 
            
    Settlement Terms:    
 
            
      Physical Settlement:   Applicable
 
            
      Settlement Currency:   USD
 
            
    Dividends:    
 
            
      Extraordinary Dividends:   As determined by the Calculation Agent
 
            
    Adjustments:    
 
            
      Method of Adjustment:   Calculation Agent Adjustment
 
            
    Extraordinary Events:    
 
            
    Consequences of Merger Events:    
 
            
            Share-for-Share:   Calculation Agent Adjustment
 
            
 
            Share-for-Other:   Calculation Agent Adjustment
 
            
            Share-for-Combined:   Calculation Agent Adjustment
 
            
    Tender Offer:   Applicable

-3-

 

             
    Consequences of Tender Offers:    
 
            
      Share-for-Share:   Calculation Agent Adjustment
 
            
      Share-for-Other:   Calculation Agent Adjustment
 
            
      Share-for-Combined:   Calculation Agent Adjustment
 
            
    Composition of Combined Consideration:   Not Applicable
 
            
    Nationalization, Insolvency or Delisting:   Negotiated Close-Out
 
            
    Non-Reliance:   Applicable
 
            
    Agreements and Acknowledgments
Regarding Hedging Activities:		   Applicable
 
            
    Additional Acknowledgments:   Applicable
 
            
2.
   Calculation Agent:   Party A and Party B. If at any time the parties are unable to agree on a determination within one Business Day of the day on which a determination would, but for such inability, be made, each party agrees to be bound by the determination of an independent leading dealer in shares, mutually selected by the parties, who shall act as the substitute Calculation Agent for the purposes of that determination, with the fees and expenses of such substitute Calculation Agent (if any) to be met equally by the parties. If the parties are unable to agree on an independent leading dealer to act as substitute Calculation Agent, each party shall select an independent leading dealer and such independent dealers shall agree on an independent third party who shall be deemed to be the substitute Calculation Agent for the purposes of that determination.
 
            
3.
   Account Details:
 
            
    Account for payments to EMDCD:   Northern Trust Chicago, ABA 071000152, A/c 5186061000, Sub A/C 17-13740, in favour of Northern Trust Company. A.V.F.C re ARD01
 
            
    Account for delivery of Shares to TDC:   Certificates representing the Shares to be delivered (and held in escrow to the order of EMDCD by Clifford Chance until confirmation of the receipt of payment by EMDCD), in genuine unaltered form, duly endorsed in blank or accompanied by duly executed stock powers

-4-

 

             
          in blank, with all requisite stock transfer tax stamps, if any, attached thereto, to the offices of:
 
            
          Clifford Chance
          10 Upper Bank Street
          Canary Wharf
          London E14 5JJ
          United Kingdom
          Attn: Gil Michel-Garcia
 
            
4.   Offices:    
 
            
  (a)   The Office of TDC for the Transaction is:    
 
            
      TDC A/S    
      Noerregade 21    
      00900 Copenhagen C    
      Denmark    
      Attn: Thomas Gelting    
      Tel no. +45 33 98 80 63    
      Fax no. +45 33 99 80 55    
 
            
      and    
 
            
  (b)   The Office of EMDCD for the Transaction is:    
 
            
      The Northern Trust Company    
      50 Bank Street    
      Canary Wharf    
      London E14 5NT    
      Relationship Contact: Kim Martin    
      Tel no. London 020 7982 2022    
      Fax no. London 020 7982 3606    
 
            
5.   Governing law: English law    
 
            
6.   Ashmore as Agent    
 
            
6.1   All the provisions of this Confirmation (and the related agreement in the form of the 2002 ISDA Master Agreement) apply with EMDCD as principal. For the avoidance of doubt, but without limitation, the events set forth in Section 5 and 6 of such ISDA Master Agreement apply in relation to EMDCD as principal.
 
            
6.2   EMDCD represents and warrants to TDC that:
 
            
  (i)   it is duly established under the laws of the jurisdiction of its establishment and, if relevant under such laws, in good standing;
 
            
  (ii)   Ashmore has the authority to enter into this Confirmation and to execute this Confirmation as agent on behalf of EMDCD and to give instructions for settlement of the same utilising assets of EMDCD as principal; and

-5-

 

             
  (iii)   Ashmore has been duly appointed and authorised by EMDCD as principal to enter into this Confirmation on behalf of, and to bind, EMDCD as principal and its assets.

6.3 EMDCD warrants and undertakes to TDC that it will, as soon as reasonably practicable, notify TDC if Ashmore’s appointment as agent for EMDCD as principal is terminated.

7.1 EMDCD agrees and covenants to enter into a Stockholders’ Agreement, promptly after the Trade Date, substantially in the form attached hereto as Annex I.

7.2 EMDCD agrees that TDC may transfer its rights and obligations hereunder to any of its Affiliates, provided however that TDC shall be liable to EMDCD for the performance of all of any such Affiliate’s obligations hereunder after any such transfer.

7.3 TDC represents and warrants to EMDCD that it (A) understands that the Shares have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “Securites Act”), or under any state securities laws of the United States, and are being offered and sold in reliance upon federal and state exemptions for transactions not involving any public offering, (B) is acquiring the Shares solely for its own account for investment purposes, and not with a view to the distribution thereof in violation of any applicable securities laws, (C) is a sophisticated investor with knowledge and experience in business and financial matters, (D) has received certain information concerning HTCC and has had the opportunity to obtain additional information as desired in order to evaluate the merits and the risks inherent in holding the Shares and (E) is able to bear the economic risk and lack of liquidity inherent in holding the Shares.

7.4 TDC represents and warrants to EMDCD that it (A) is a sophisticated buyer with respect to the purchase of the Shares, (B) has adequate information concerning the business and financial condition of HTCC to make an informed decision regarding the purchase of the Shares, (C) has independently and without reliance upon EMDCD, and based on such information as TDC has deemed appropriate, made its own analysis and decision to enter into this Agreement, (D) understands that the Shares are “restricted securities” (within the meaning of Rule 144 of Securities Act) have not been registered under the Securities Act, and cannot be resold except pursuant to registration under the Securities Act or an exemption from registration; and (E) acknowledges that the certificates representing the Shares shall bear a legend noting their restricted nature.

7.5 EMDCD agrees and covenants to use its commercially reasonable endeavours, after the Exercise, to cause TDC to become a party to, and have the benefits and obligations of a Stockholder (as defined in the EMDCD Purchase and Sale Agreement) under, the Registration Agreement (as defined in the EMDCD Purchase and Sale Agreement).

-6-

 

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation in the space provided below and returning it to us.

     
  Yours sincerely
 
    
  TDC A/S
 
    
  By:                                                                            
 
Name:
  Title:

Confirmed as of the date first above written:

ASHMORE INVESTMENT MANAGEMENT LIMITED,
as agent for EMDCD LTD

By:                                                                             

Name:
Title:

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ANNEX I

[Form of Stockholders Agreement]

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EX-99.7.16 7 w01841exv99w7w16.htm EX-99.7.16 CALL OPTION AGREEMENT EXHIBIT 99.7.16
 

Exhibit 7.16

[Letterhead of TDC A/S]

     
Date:
  3 September 2004
 
    
To:
  Ashmore Global Special Situations Fund Limited (“GSSF”)
  c/o Ashmore Investment Management Limited (“Ashmore”)
  20 Bedfordbury
  London
  WC2N 4BL
  United Kingdom
 
    
Facsimile:
  +44 207 557 4141
 
    
From:
  TDC A/S (“TDC”)
 
    
Re:
  Physically-Settled Preferred Stock Share Option Transaction

Dear Sirs

The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the Transaction entered into between us on the Trade Date specified below (the “Transaction”).

The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation will govern.

This Confirmation evidences a complete binding agreement between you and us as to the terms of the Transaction to which this Confirmation relates. This Confirmation, together with all other documents referring to an ISDA Master Agreement (each a “Confirmation”) confirming transactions (each a "Transaction”) entered into between us (notwithstanding anything to the contrary in a Confirmation), shall supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement as if we had executed an agreement in such form (but without any Schedule except for the election of English law as the governing law and USD as the Termination Currency) on the Trade Date of the first such Transaction between us. In the event of any inconsistency between the provisions of that agreement and this Confirmation, this Confirmation will prevail for the purpose of this Transaction.

1.   The terms of the particular Transaction to which this Confirmation relates are as follows:

             
    General Terms:    
 
            
      Trade Date:   3 September 2004
 
            
      Option Style:   American
 
            
      Option Type:   Call
 
            
      Seller:   Ashmore

 

 

                 
      Buyer:   TDC    
 
                
        Shares:   Series A Convertible Preferred Stock, par value USD 0.01 per share, of Hungarian Telephone and Cable Corp., a Delaware corporation (“HTCC”).
 
                
        Number of Options:   18,000
 
                
        Strike Price:   In the event that the Options are exercised during the portion of the Exercise Period that:
 
                
          (i)   commences on the Commencement Date and ends on the 14th day after the Commencement Date, USD 55.11 per Share;
 
                
          (ii)   commences on the 15th day after the Commencement Date and ends on the 28th day after the Commencement Date, USD 55.44 per Share;
 
                
          (iii)   commences on the 29th day after the Commencement Date and ends on the 42nd day after the Commencement Date, USD 55.88 per Share; and
 
                
          (iv)   commences on the 43rd day after the Commencement Date and ends on the Expiration Date, USD 56.32 per Share.
 
                
        Premium:   USD 1.00
 
                
        Premium Payment Date:   The Trade Date
 
                
        Exchange:   Such exchange or quotation system, if any, as the
Calculation Agent considers appropriate
 
                
        Related Exchange(s):   Such exchange or quotation system, if any, as the
Calculation Agent considers appropriate
 
                
        Knock-in Event:   Applicable.
For the purposes of this Option Transaction, the Knock-In Event is (i) the release by the Escrow Agent (as defined in Exhibit C to the Purchase and Sale Agreement, dated the date hereof, between CU Capital LLC (formerly CU Capital Corp.) and GSSF (the “GSSF Purchase and Sale Agreement”)) of (x) new share certificates to GSSF (as buyer) and (y) the Purchase Price (as defined in the GSSF Purchase and Sale Agreement) to the seller

-2-

 

             
          thereunder pursuant to the GSSF Purchase and Sale Agreement and (ii) the exercise by TDC of both the EMDCD Option and the AEEP Option. For the purposes hereof “EMDCD Option” means the Physically-Settled Common Stock Share Option Transaction between EMDCD and TDC and “AEEP Option” means the Physically-Settled Common Stock Share Option Transaction between AEEP and TDC, each with a Trade Date as of the Trade Date of this Transaction.
 
            
      Knock-in Determination Day(s):   Any Scheduled Trading Day during the
Exercise Period
 
            
    Procedures for Exercise:    
 
            
      Commencement Date:   The date of the signing of the GSSF Purchase and Sale Agreement
 
            
      Latest Exercise Time:   5:00 p.m. (local time in London, England)
 
            
      Expiration Time:   5:00 p.m. (local time in London, England)
 
            
      Expiration Date:   60 days after the Commencement Date
 
            
      Multiple Exercise:   Not Applicable
 
            
      Automatic Exercise:   Not Applicable
 
            
      Seller’s Telephone Number, and Facsimile Number and Contact Details for purpose of giving Notice:   Stephen Iles/Tim Davis,
          Funds Administration Department
          Tel: +44 207 557 4100
          Fax: +44 207 557 4141
 
            
    Settlement Terms:    
 
            
      Physical Settlement:   Applicable
 
            
      Settlement Currency:   USD
 
            
    Dividends:    
 
            
      Extraordinary Dividends:   As determined by the Calculation Agent
 
            
    Adjustments:    
 
            
      Method of Adjustment:   Calculation Agent Adjustment
 
            
    Extraordinary Events:    

-3-

 

             
    Consequences of Merger Events:    
 
            
      Share-for-Share:   Calculation Agent Adjustment
 
            
      Share-for-Other:   Calculation Agent Adjustment
 
            
      Share-for-Combined:   Calculation Agent Adjustment
 
            
    Tender Offer:   Applicable
 
            
    Consequences of Tender Offers:    
 
            
      Share-for-Share:   Calculation Agent Adjustment
 
            
      Share-for-Other:   Calculation Agent Adjustment
 
            
      Share-for-Combined:   Calculation Agent Adjustment
 
            
    Composition of Combined Consideration:   Not Applicable
 
            
    Nationalization, Insolvency or Delisting:   Negotiated Close-Out
 
            
    Non-Reliance:   Applicable
 
            
    Agreements and Acknowledgments    
 
            
    Regarding Hedging Activities:   Applicable
 
            
    Additional Acknowledgments:   Applicable
 
            
2.   Calculation Agent:   Party A and Party B. If at any time the parties are unable to agree on a determination within one Business Day of the day on which a determination would, but for such inability, be made, each party agrees to be bound by the determination of an independent leading dealer in shares, mutually selected by the parties, who shall act as the substitute Calculation Agent for the purposes of that determination, with the fees and expenses of such substitute Calculation Agent (if any) to be met equally by the parties. If the parties are unable to agree on an independent leading dealer to act as substitute Calculation Agent, each party shall select an independent leading dealer and such independent dealers shall agree on an independent third party who shall be deemed to be the substitute Calculation Agent for the purposes of that determination.
 
            
3.   Account Details:    
 
            
    Account for payments to GSSF:   Barings (Guernsey) Limited
          Account No.: 10454720230

-4-

 

             
          ABA No.: 02600112
CHIPS UID: 0112/177860
Swift Code: CNORUS33
For further credit to GSSF 18887
    Account for delivery of Shares to TDC:   Certificates representing the Shares to be delivered (and held in escrow to the order of GSSF by Clifford Chance until confirmation of the receipt of payment by GSSF), in genuine unaltered form, duly endorsed in blank or accompanied by duly executed stock powers in blank, with all requisite stock transfer tax stamps, if any, attached thereto, to the offices of:
          Clifford Chance Limited
10 Upper Bank Street
Canary Wharf
London E14 5JJ
United Kingdom
Attn: Gil Michel-Garcia
4.   Offices:

    
    (a)   The Office of TDC for the Transaction is:
      TDC A/S
Noerregade 21
0900 Copenhagen C
Denmark
Attn: Thomas Gelting
Tel no. +45 33 99 80 63
Fax no. +45 33 99 80 55

    
      and

    
    (b)   The Office of GSSF for the Transaction is:
      Barings (Guernsey) Limited
P.O. Box 71
Trafalgar Court
Les Banques
St. Peter Port
Guernsey GY1 3DA
Attn: Sarah Brovard
Tel no. +44 14 81 74 54 93
Fax no. +44 14 81 74 50 58

    
5.   Governing law: English law

    
6.   Ashmore as Agent

    
6.1   All the provisions of this Confirmation (and the related agreement in the form of the 2002 ISDA Master Agreement) apply with GSSF as principal. For the avoidance of

-5-

 

             
    doubt, but without limitation, the events set forth in Section 5 and 6 of such ISDA Master Agreement apply in relation to GSSF as principal.
6.2   GSSF represents and warrants to TDC that:    
 
            
    (i)   it is duly established under the laws of the jurisdiction of its establishment and, if relevant under such laws, in good standing;
    (ii)   Ashmore has the authority to enter into this Confirmation and to execute this Confirmation as agent on behalf of GSSF and to give instructions for settlement of the same utilising assets of GSSF as principal; and
    (iii)   Ashmore has been duly appointed and authorised by GSSF as principal to enter into this Confirmation on behalf of, and to bind, GSSF as principal and its assets.
6.3   GSSF warrants and undertakes to TDC that it will, as soon as reasonably practicable, notify TDC if Ashmore’s appointment as agent for GSSF as principal is terminated.
7.1   GSSF agrees and covenants to enter into a Stockholders’ Agreement with TDC and/or its assigns, promptly after the Trade Date, substantially in the form attached hereto as Annex I.
7.2   GSSF agrees that TDC may transfer its rights and obligations hereunder to any of its Affiliates provided however that TDC shall be liable to GSSF for the performance of all of any such Affiliate’s obligations hereunder after any such transfer.
7.3   TDC represents and warrants to GSSF that it (A) understands that the Shares have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “Securities Act”), or under any state securities laws of the United States, and are being offered and sold in reliance upon federal and state exemptions for transactions not involving any public offering, (B) is acquiring the Shares solely for its own account for investment purposes, and not with a view to the distribution thereof in violation of any applicable securities laws, (C) is a sophisticated investor with knowledge and experience in business and financial matters, (D) has received certain information concerning HTCC and has had the opportunity to obtain additional information as desired in order to evaluate the merits and the risks inherent in holding the Shares and (E) is able to bear the economic risk and lack of liquidity inherent in holding the Shares.
7.4   TDC represents and warrants to GSSF that it (A) is a sophisticated buyer with respect to the purchase of the Shares, (B) has adequate information concerning the business and financial condition of HTCC to make an informed decision regarding the purchase of the Shares, (C) has independently and without reliance upon GSSF, and based on such information as TDC has deemed appropriate, made its own analysis and decision to enter into this Agreement, (D) understands that the Shares are “restricted securities” (within the meaning of Rule 144 of Securities Act) have not been registered under the Securities Act, and cannot be resold except pursuant to registration under the Securities Act or an exemption from registration; and (E) acknowledges that the certificates representing the Shares shall bear a legend noting their restricted nature.
7.5   GSSF agrees and covenants to use its commercially reasonable endeavours, after the Exercise, to cause TDC to become a party to, and have the benefits and obligations of a

-6-

 

Stockholder (as defined in the GSSF Purchase and Sale Agreement) under, the Registration Agreement (as defined in the GSSF Purchase and Sale Agreement).

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation in the space provided below and returning it to us.

         
    Yours sincerely
  TDC A/S

    
  By:    
     
 
  Name:

    
  Title:    

Confirmed as of the date first above written:

ASHMORE GLOBAL SPECIAL SITUATIONS FUND LIMITED
BY ITS AGENT
ASHMORE INVESTMENT MANAGEMENT LIMITED

         
By:
        
Name:
 
   
Title:
        

-7-

 

ANNEX I

[Form of Stockholders Agreement]

-8-

EX-99.7.17 8 w01841exv99w7w17.htm EX-99.7.17 FORM OF STOCKHOLDERS AGREEMENT EXHIBIT 99.7.17
 

Exhibit 7.17

Draft: 3 September 2004

Dated September [   ], 2004

 

HUNGARIAN TELEPHONE AND CABLE CORP.

 

 

 

STOCKHOLDERS AGREEMENT

between

THE STOCKHOLDERS NAMED HEREIN

 

 

STOCKHOLDERS AGREEMENT

This stockholders agreement is a schedule to
the Call Option (as defined herein)

     Stockholders Agreement dated as of September [     ], 2004 (this “Agreement”) by and among the holders of securities of the Company listed on Schedule I hereto (each a “Stockholder” and together the “Stockholders”).

W I T N E S S E T H :

     WHEREAS, the parties desire to enter into an agreement with respect to the management of Hungarian Telephone and Cable Corp., a Delaware corporation (the “Company”) , the transfer or other disposition of the Equity Securities (as defined below) presently owned or hereafter acquired by any of the Stockholders and certain other matters;

     NOW, THEREFORE, in consideration of the representations, warranties, agreements and covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending legally to be bound, hereby agree as follows:

ARTICLE I.

DEFINITIONS

     Section 1.01 Defined Terms. The following terms when used in this Agreement, including its preamble and recitals, shall, except where the context otherwise requires, have the following meanings, such meanings to be equally applicable to the singular and plural forms thereof:

     “Affiliate” shall mean, with respect to any Person, any person that, directly or indirectly, controls, is controlled by or is under common control with such Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise.

     “Ashmore Entities” shall mean Asset Holder PCC No. 2 Limited re: Ashmore Emerging Economy Portfolio, EMDCD Limited and Ashmore Global Special Situations Fund Limited and their transferees and all Affiliates of the Ashmore Entities who own Equity Securities.

     “Call Options” shall mean the three Option Agreements, dated as of the date of the Purchase and Sale Agreement, among (i) TDC A/S and Asset Holder PCC No. 2 Limited re: Ashmore Emerging Economy Portfolio, (ii) TDC A/S and EMDCD Limited, and (iii) TDC A/S and Ashmore Global Special Situations Fund Limited, respectively, for the acquisition by TDC A/S of an aggregate of 1,383,544 shares of common stock of the Company, and 18,000 shares of Series A Preferred Stock convertible into 180,000 shares of common stock of the Company.

2

 

     “Common Stock” means the common stock, par value $0.001 per share, of the Company.

     “EMDCD Option” shall mean the option agreement, dated as of the date of the Purchase and Sale Agreements among TDC A/S and EMDCD Limited for the acquisition of 1,141,744 Equity Securities.

     “Encumbrance” means any security interest, pledge, mortgage, lien, charge, adverse claim of ownership or use, or other encumbrance of any kind.

     “Equity Securities” shall mean any Common Stock, any securities exercisable or exchangeable for or convertible into Common Stock and any rights, options or warrants to acquire any of the foregoing.

     “Expiration Date” shall mean the date of consummation of a Sale Transaction with respect to the Company.

     “Person” shall mean and include an individual, a corporation, a limited liability company, an association, a partnership, a joint venture, a trust or estate, a government or any department or agency thereof, or any other entity or governmental body.

     “Public Offering” means the sale of Common Stock to the public pursuant to an effective registration statement (other than a registration statement on Form S-4 or S-8 or any similar or successor form or forms) filed under the Securities Act.

     “Purchase and Sale Agreements” shall mean the purchase and sale agreement or agreements, dated on September 3, 2004, among CU Capital LLC (formerly CU Capital Corp.) and/or Citizens Communications Company, as the case may be, and one or more Ashmore Entities.

     “Rule 144” shall mean Rule 144 under the Securities Act or any successor rule or regulation permitting limited purchase of restricted securities into the public markets.

     “Sale Transaction” shall mean: (a) a sale of all or substantially all of the assets of the Company; (b) a merger or consolidation of the Company (including a triangular merger involving any subsidiary thereof) with or into any other entity (other than a merger or consolidation in which shares of the Company’s voting capital stock outstanding immediately before such merger or consolidation are exchanged or converted into or constitute shares which represent more than fifty percent (50 percent) of the surviving entity’s voting capital interests after such consolidation or merger); or (c) a transaction or series of related transactions in which a person or group of persons (as defined in Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended), acquires beneficial ownership (as determined in accordance with Rule 13d-3 of such Act) of more than 50 percent of the voting power of the Company; provided, however, that any reorganization, merger or consolidation involving (a) only a change in the state of incorporation of the Company or (b) a merger of the Company with or into a wholly-owned subsidiary of the Company shall not constitute a “Sale Transaction”.

3

 

     “SEC” shall mean the United States Securities and Exchange Commission.

     “Securities Act” shall mean the Securities Act of 1933, as amended.

     “Stockholder Representative” shall mean the Ashmore Representative and/or the TDC Representative as the context may require.

     “TDC Entities” shall mean the entities purchasing Equity Securities pursuant to the Call Options and their Affiliate transferees and all Affiliates of the TDC Entities who own Equity Securities.

ARTICLE II.

REPRESENTATIONS AND WARRANTIES

     Section 2.01 Capitalization. Each party hereto represents that Schedule I Part A hereto currently reflects all Equity Securities of which such party is the record or beneficial owner and that Schedule I Part B will represent all Equity Securities of which such Stockholder will be the record or beneficial owner following the exercise of the Call Options. Unless otherwise indicated on Schedule I, such party has, or will have, as the case may be, sole record and beneficial ownership of all of the Equity Securities reflected by such party’s name, and no such Equity Securities are, or will be, subject to any voting agreement or understanding nor subject to any agreement relating to or restricting transfer (other than this Agreement and/or the Call Options).

     Section 2.02 Organization. Each party hereto represents and warrants that it is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation or formation, as the case may be.

     Section 2.03 Authorization of Transaction. Each party hereto represents and warrants that it has full power and authority, and has taken all corporate actions necessary on the part of such Stockholder, to execute and deliver this Agreement and to perform its obligations hereunder. Each party hereto represents and warrants that this Agreement has been duly authorized, executed and delivered by such party and constitutes the valid and legally binding obligation of such party, enforceable against it in accordance with its terms, except to the extent that the enforcement of the rights and remedies created therein is subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting the enforcement of creditors’ rights and general principles of equity.

     Section 2.04 Noncontravention. Each party hereto represents and warrants that neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will violate any material agreement of such party or any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling or charge of any government or governmental agency, to which such party or, to the knowledge of such party, to which the Company, is subject or any provision of such party’s charter or bylaws except in each case for any approval required under Section 6.2(a) and 6.2(b) of this Agreement.

4

 

ARTICLE III.

VOTING AGREEMENT

     Section 3.01 Board of Directors of the Company. i) So long as the Ashmore Entities collectively continue to hold Equity Securities representing at least 20 percent of the Equity Securities outstanding on a fully-diluted basis, Ashmore Investment Management Limited (the “Ashmore Representative”) shall have the right to nominate 2 (two) persons for election as directors of the Company (the “Ashmore Directors”). Such right to nominate persons for election as directors of the Company shall be reduced to one person in the event the Ashmore Entities collectively no longer hold Equity Securities representing at least 20 percent of the Equity Securities outstanding on a fully-diluted basis, and shall remain at one as long as the Ashmore Entities collectively own Equity Securities representing at least 10 percent of the Equity Securities outstanding on a fully-diluted basis.

     So long as the TDC Entities collectively continue to hold Equity Securities representing at least 20 percent of the Equity Securities outstanding on a fully-diluted basis, TDC A/S (the “TDC Representative”) shall have the right to nominate 2 (two) persons for election as directors of the Company (the “TDC Directors”). Such right to nominate persons for election as directors of the Company shall be reduced to one person in the event the TDC Entities collectively no longer hold Equity Securities representing at least 20 percent of the Equity Securities outstanding on a fully-diluted basis, and shall remain at one as long as the TDC Entities collectively own Equity Securities representing at least 10 percent of the Equity Securities outstanding on a fully-diluted basis. So long as the TDC Entities hold Equity Securities representing at least 20 percent of the Equity Securities outstanding, the TDC Representative shall have the right to nominate a TDC Director as chairman of the Company’s Board of Directors.

     The Stockholders agree to maintain joint majority in the Board of Directors of the Company as long as the TDC Entities and the Ashmore Entities each collectively hold Equity Securities representing at least 20 percent of the Equity Securities outstanding on a fully-diluted basis, meaning that if the total number of directors on the Board of Directors of the Company changes from presently 7 persons to 8 persons the TDC Representative shall have the right to nominate 3 persons while the Ashmore Representative would only have the right to nominate 2 persons and if the total number of directors on the Board of Directors of the Company changes to 9 persons both the TDC Representative and the Ashmore Representative shall have the right to nominate 3 persons.

     Section 3.02 Covenant to Vote. Each of the Stockholders shall appear in person or by proxy at any annual or special meeting of stockholders of the Company for the purpose of obtaining a quorum and shall vote or cause the vote of the shares of Common Stock or any other Equity Securities entitled to vote in the election of directors (“Voting Securities”) owned by such Stockholder, or take action by written consent, for the election of such nominee or nominees as may be specified by the Ashmore Representative and the TDC Representative in accordance with Section 3.01, or at such representatives’ request, for the removal and replacement of

5

 

any nominee previously so nominated by each of them. In addition, each of the Stockholders shall appear in person or by proxy at any annual or special meeting of stockholders of the Company for the purpose of obtaining a quorum and shall vote or cause the vote of the shares of Common Stock owned by such Stockholder or any Affiliate of such Stockholder upon any matter submitted to a vote of the stockholders of the Company in a manner so as to be consistent and not in conflict with, and to implement, the terms of this Agreement.

     Section 3.03 Vacancies/Removals. The Ashmore Directors and the TDC Directors shall be subject to removal by the Ashmore Representatives and the TDC Representatives, respectively, at any time, with or without cause. The Ashmore Representatives and the TDC Representatives shall have the right to call a special meeting of Stockholders at any time, and from time to time, for the sole purpose of designating to or removing from the Board of Directors of the Company, with or without cause, any person or persons nominated by such persons. If the Ashmore Representative or the TDC Representative calls such a special meeting, the Stockholders shall vote all of their Common Stock and other voting securities in support of such removal and for the election of such director or replacements as may be nominated by the Ashmore Representatives and the TDC Representatives.

     Section 3.04 No Voting or Conflicting Agreements. Each of the Stockholders agrees that it will not grant any proxy or enter into or agree to be bound by any voting trust with respect to its shares of Equity Securities or enter into any stockholder agreements or arrangements of any kind with any Person with respect to its Equity Securities in any such case in a manner that is inconsistent with the provisions of this Agreement.

     Section 3.05 Nomination of CEO and CFO. The Stockholders agree to use their best efforts to cause the directors nominated by them and subsequently elected to the Board of Directors of the Company (subject to such directors’ fiduciary duties) to vote in favor of nominating and electing, as chief executive officer and/or chief financial officer of the Company, (i) such person or persons as may be specified by the TDC Representative and reasonably acceptable to the Ashmore Representative (if the TDC Entities collectively hold Equity Securities representing at least 30 percent of the Equity Securities outstanding), or (ii) such person or persons the TDC Representative and the Ashmore Representative may reasonably agree (if the TDC Entities collectively hold Equity Securities representing less than 30 percent of the Equity Securities outstanding).

ARTICLE IV.

RESTRICTIONS ON TRANSFERS BY THE STOCKHOLDER

     Section 4.01 Restrictions on Transfers Generally. Each Stockholder hereby agrees that such Stockholder shall not, and shall not permit any Affiliate to, directly or indirectly, transfer, sell or otherwise dispose of any shares of Equity Securities, or create, incur or assume any Encumbrance with respect to any shares of Equity Securities, other than in accordance with the terms and conditions of this Agreement.

6

 

     Section 4.02 Right of First Refusal. (a) If, at any time, any Stockholder desires to sell, transfer or otherwise dispose of any shares of Equity Securities then owned by such Stockholder (other than a disposition to an Affiliate) to any third party pursuant to a bona fide offer, or pursuant to an effective registration statement under the Securities Act or under Rule 144, such Stockholder (the “Seller”) shall first give a written notice to the Stockholders (the “Seller’s Notice”) stating the Seller’s desire to make such sale, transfer or other disposition and the terms of the offer or of the proposed sale pursuant to an effective registration statement under the Securities Act or under Rule 144, as the case may be, including (if applicable) the identity of the person making the offer (the “Bona Fide Purchaser”), the amount and kind of securities proposed to be transferred ( the “Shares for Sale”) and the purchase price offered to the Seller by the Bona Fide Purchaser or the terms of the proposed market sale, as the case may be. The Seller’s Notice shall constitute an irrevocable offer by the Seller to sell to the other Stockholders such securities at the price and on the terms offered by the Bona Fide Purchaser or the terms of the proposed market sale, as described herein.

     (a) Any other Stockholders may elect (within 30 business days after the date of receipt by such Stockholders of the Seller’s Notice) to purchase any or all of the Shares for Sale at the price and on the terms offered by the Bona Fide Purchaser or the terms of the proposed market sale, as the case may be, in cash by giving a notice to the Seller and the other Stockholders as to the number of such securities, if any, it is electing to purchase (the “Stockholder Notice”). If more than one Stockholder elects to purchase such Shares for Sale they shall each have the right to purchase up to their pro rata share of the Shares for Sale. The Stockholder Notice shall be deemed to be an irrevocable commitment to purchase from the Seller in cash at the price and on the terms offered by the Bona Fide Purchaser or at the price and on the terms of the proposed market sale, as the case may be, the number of such securities that the Stockholder specified in the Stockholder Notice, or such pro rate share of such Shares for Sale, as the case may be. If a Stockholder elects to purchase any of such securities, such Stockholder shall have 20 business days from the date the Stockholder Notice has been sent to fund such purchase. A Stockholder’s “pro rata share” shall be determined by dividing the number of shares of Common Stock owned by such Stockholder divided by the number of shares of Common Stock owned by all Stockholders electing to make such purchases determined assuming conversion of all convertible Equity Securities owned by all such persons.

     (b) If the other Stockholders fail to elect to purchase all Equity Securities specified in the Seller’s Notice within the time periods specified above, then the Seller (i) shall be under no obligation to sell any of such Equity Securities to the Stockholders, unless the Seller so elects, and (ii) may, within a period of sixty (60) days from the date of the Seller’s Notice, sell all (but not less than all) such Equity Securities to the Bona Fide Purchaser or in accordance with the proposed market sale, as the case may be, in cash at a price per share not less than the price and on the terms specified in the Seller’s Notice; provided, however, that such Bona Fide Purchaser shall, in accordance with the provisions of Section 4.06 hereof, agree to execute and be bound by the terms of this Agreement to the same extent and in the same manner as the Seller of such shares.

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     Section 4.03 Tag Along Right. If any Stockholder proposes to transfer shares of Equity Securities to any Person or Persons (the “Selling Stockholder”) (other than pursuant to an effective registration statement under the Securities Act or Rule 144 and other than a disposition to an Affiliate), the Selling Stockholder shall notify each other Stockholder (each a “Tag Along Stockholder”) in writing (the “Tag Along Notice”) of such proposed transfer and its terms and conditions. Within thirty (30) days of receipt of a Tag Along Notice, each Tag Along Stockholder shall notify the Selling Stockholder if it elects to participate in such transfer (“Tag Along Right”) and shall state the number of shares of Equity Securities that such Tag Along Stockholder desires to sell. Upon electing to transfer, each Tag Along Stockholder shall be obligated to sell, at the same price and on the same terms as the Selling Stockholder, the number of shares stated in its notice to the Selling Stockholder. Each Tag Along Stockholder may elect to sell such number of shares of Equity Securities as is equal to the aggregate number of shares of Equity Securities to be transferred in such transaction multiplied by a fraction, the numerator of which shall be the aggregate number of shares of Equity Securities held by such Tag Along Stockholder (calculated on a fully diluted basis) and the denominator of which shall be the aggregate number of shares of Equity Securities held by all transferors (calculated on a fully diluted basis). Each such Tag Along Stockholder shall agree to enter into a purchase agreement in form and substance approved by the Selling Stockholder to the extent such agreement shall contain customary representations and warranties. If the sale is not consummated within thirty (30) days following the delivery of the Tag Along Right, then each Tag Along Stockholder shall no longer be obligated to sell its shares of Equity Securities pursuant to such Tag Along Right but shall remain subject to the provisions of this Section 4.03 with respect to any subsequent proposed transfer described in this Section 4.03. In the event that the proposed transferee does not purchase all the shares of Equity Securities that the Tag Along Stockholder elects to sell pursuant to the foregoing on the same terms and conditions as the securities purchased from the Selling Stockholder, then the Selling Stockholder shall not be permitted to sell any securities to the proposed transferee. If no Tag Along Right is delivered by the end of the 30 days referred to above and provided that no Stockholder Notice is delivered in accordance with section 4.02 above, the Selling Stockholder shall have the right for a 30 (thirty) day period thereafter to transfer the securities to the proposed transferee on the terms and conditions stated in the Tag Along Notice and in accordance with the provisions of this Section 4.03.

     Section 4.04 Transfers to Affiliates. Any Stockholder may transfer Equity Securities to an Affiliate subject to Section 4.05 but without complying with Section 4.02 or 4.03.

     Section 4.05 Affiliates Subject to Agreement. In the event of any transfer of shares of Equity Securities by any Stockholder to any Affiliate of such Stockholder or in the event of the acquisition of shares of Equity Securities by any Affiliate of a Stockholder, such Affiliate shall hold such shares of Equity Securities so acquired with all the rights conferred by, and subject to all of the restrictions imposed by, this Agreement applicable to the transferor of such shares of Equity Securities. Any such Affiliate shall, as a condition of the consummation of such transfer or purchase, duly execute and deliver this Agreement, become a Stockholder hereunder and amend Schedule I hereto accordingly.

8

 

     Section 4.06 Restrictive Legends. Each Stockholder shall use their best efforts to cause the Company to cause each certificate representing Equity Securities of which such Stockholder is the recorded or beneficial owner to bear a legend in substantially the following form:

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, and neither the securities nor any interest therein may be offered, sold, transferred, pledged or disposed of in the absence of such registration or an exemption under such Act and the rules and regulations thereunder. The securities represented by this certificate are subject to, and are transferable only upon compliance with, the provisions of the Stockholders Agreement dated as of September [   ], 2004 among certain of its shareholders. A copy of the above-referenced agreement has been filed with the United States Securities and Exchange Commission.”

     Section 4.07 Expiration of Restrictions. The rights and obligations restrictions set forth in Article III hereof shall terminate and be of no further force and effect as of the Expiration Date.

ARTICLE V.

PREEMPTIVE RIGHTS

     Section 5.01 Preemptive Right. Each Stockholder agrees not to vote its shares of Equity Securities in favour of, and to cause any directors nominated by them and subsequently elected to the Board of Directors of the Company (subject to such directors’ fiduciary duties) not to vote in favour of, any issuance of Equity Securities by the Company (other than issuances with respect to employee benefit plans or in connection with a Public Offering), unless each Stockholder shall have the pre-emptive right to subscribe in cash on the proposed terms for any amount up to its Preemptive Right Pro Rata Share of such Equity Securities. The “Preemptive Right Pro Rata Share” of a Stockholder shall be, at any given time, (i) such number of Equity Securities proposed to be issued for cash multiplied by (ii) a fraction, the numerator of which is the number of Equity Securities then held by such Stockholder assuming conversion of all convertible Equity Securities then owned by such Stockholder and the denominator of which is the total number of Equity Securities issued and outstanding on a fully-diluted basis before giving effect to the new issuance.

ARTICLE VI.

CONDITION PRECEDENT

     Section 6.01 Effective Date of this Agreement. This Agreement shall be of no force and effect unless and until the EMDCD Option is exercised by a

9

 

TDC Entity. Notwithstanding the foregoing, the effectiveness of the rights and obligations set forth in Article III hereof shall be conditioned upon the Company and/or any of the Stockholders, as the case may be, obtaining the following consents, approvals, waivers and/or authorizations:

     (a) the consent, approval, waiver and/or authorization, as the case may be, of (i) the Hungarian Competition Office in accordance with the requirements of the Hungarian Act LVII of 1996 on the Prohibition of Unfair and Restrictive Market Practices, or (ii) the European Commission in accordance with the requirements of Council Regulation (EC) No. 139/2004 of 20 January 2004 (the “EC Merger Regulations”), with respect to the acquisition of joint control of the Company by the TDC Entities and the Ashmore Entities; and

     (b) the written consent, approval, waiver and/or authorization, as the case may be, in accordance with the requirements of Section 22.14 of the Company’s €130 million Senior Secured Debt Facility, dated April 11, 2000 (the “Credit Facility”), from the Facility Agent (as defined in the Credit Facility), acting on the instructions of the Majority Lenders (as defined in the Credit Facility), with respect to the acquisition of joint control of the Company by the TDC Entities and the Ashmore Entities.

     (c) Such written consent, approval, waiver and/or authorization from any governmental regulatory authority as the TDC Representative may, in its sole discretion, consider reasonably necessary, with respect to the acquisition of joint control of the Company by the TDC Entities and the Ashmore Entities.

     Section 6.02 Commercially Reasonable Efforts. Each Stockholder agrees and covenants to use their commercially reasonable efforts to obtain any consent approval, waiver and/or authorization as any of the Ashmore Representative and/or the TDC Representative may consider reasonably necessary, including but not limited to the consents, approvals, waivers and/or authorizations enumerated in Section 6.01 hereto.

ARTICLE VII.

MISCELLANEOUS

     Section 7.01 Injunctive Relief. It is acknowledged that it will be impossible to measure in money the damages that would be suffered if the parties fail to comply with certain of the obligations imposed on them by this Agreement, including, without limitation, those obligations set forth in Article III, Article IV and Article V and that in the event of any such failure, an aggrieved Person will be irreparably damaged and will not have an adequate remedy at law. Any such Person shall, therefore, be entitled to injunctive relief and/or specific performance to enforce such obligations, and if any action should be brought in equity to enforce any of such provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law.

10

 

     Section 7.02 Further Assurances. Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

     Section 7.03 Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of New York, without giving effect to the conflict of law provisions thereof.

     Section 7.04 Entire Agreement; Amendment; Waiver. This Agreement (i) contains the entire agreement among the parties hereto with respect to the subject matter hereof, (ii) supersedes all prior written agreements and negotiations and oral understandings, if any, with respect thereto, (iii) may not be amended or supplemented except by an instrument or counterparts thereof in writing signed by each of the Stockholders. No waiver of any term or provision shall be effective unless in writing signed by the party to be charged and such waiver shall not be effective to any other provision of this Agreement.

     Section 7.05 Binding Effect. This Agreement shall be binding on and inure to the benefit of the parties hereto and, subject to the terms and provisions hereof, their respective legal representatives, successors and permitted assigns.

     Section 7.06 Invalidity of Provision. The invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other jurisdiction.

     Section 7.07 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, all of which taken together shall be deemed but one and the same instrument.

     Section 7.08 Notices. All notices and other communications provided for or given or made hereunder shall be in writing (including delivery by facsimile transmission) and, unless otherwise provided herein, shall be deemed to have been given when received by the party to whom such notice is to be given at its address set forth on Schedule II, or such other address for the party as shall be specified by notice given pursuant hereto.

     Section 7.09 Successors and Assigns. This Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective successors and permitted assigns. Except for transfers of shares of Equity Securities in compliance with the provisions of Article IV hereto, no Stockholder shall have the right to assign its rights and obligations under this Agreement without the consent of the other Stockholders.

     Section 7.10 Termination. This Agreement shall terminate and be of no further force and effect at such time as the Ashmore Entities Collectively, or the

11

 

TDC Entities collectively, cease to hold Equity Securities representing at least one (1) percent of the Equity Securities outstanding on a fully diluted basis.

     Section 7.11 Headings. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience only and do not constitute part of this Agreement.

12

 

     IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of each of the parties hereto as of the date first above written.

         
EMDCD LIMITED,
by Ashmore Investment Management Limited, as agent		    
 
        
 
        
By:
        
 
   
Name:    
Title:    
 
        
 
        
ASHMORE GLOBAL SPECIAL SITUATIONS FUND LIMITED,
by Ashmore Investment Management Limited, as agent		    
 
        
 
        
By:
        
 
   
Name:    
Title:    
 
        
 
        
ASSET HOLDER PCC NO. 2 LIMITED RE: ASHMORE EMERGING ECONOMY PORTFOLIO,
by Ashmore Investment Management Limited, as agent		    
 
        
 
        
By:
        
 
   
Name:    
Title:    
 
        
 
        
TDC A/S    
 
        
 
        
By:
        
 
   
Name:    
Title:    

13

 

SCHEDULE I

PART A

STOCKHOLDERS’ CURRENT OWNERSHIP OF SECURITIES OF THE COMPANY

             
Common Stock
 		    
Name:       Shares
 
            
(1)
  Ashmore Global Special Situations Fund     1,548,572  
 
            
(2)
  Asset Holder PCC No. 2 Limited re: Ashmore Emerging Economy Portfolio     280,000  
 
            
(3)
  TDC A/S     3,865,302  
             
Warrants
 		    
Name:       Shares:
 
            
(1)
  Asset Holder PCC Limited re: Ashmore Emerging Market
Liquid Investment Portfolio 		    2,100,000  
 
            
(2)
  Ashmore Emerging Market Debt Fund     400,000  
         
Options
        
 
       
N/A
       

14

 

SCHEDULE I

PART B

STOCKHOLDERS’ OWNERSHIP OF SECURITIES OF THE COMPANY AFTER
THE EXERCISE OF THE CALL OPTIONS

             
Common Stock
 		    
Name:
       Shares:
 
            
(1)
  Ashmore Global Special Situations Fund     1,548,572  
 
            
(2)
  Asset Holder PCC No. 2 Limited re: Ashmore Emerging Economy Portfolio     441,200  
 
            
(3)
  EMDCD Limited     761,164  
 
            
(4)
  TDC A/S     5,248,846  
             
Warrants
 		    
Name:
       Shares:
 
            
(1)
  Asset Holder PCC Limited re: Ashmore Emerging Market
Liquid Investment Portfolio 		    2,100,000  
 
            
(2)
  Ashmore Emerging Market Debt Fund     400,000  
             
Series A Convertible Preferred Stock
 		    
Name:
       Shares:
 
            
(1)
  Ashmore Global Special Situations Fund     12,000  
 
            
(2)
  TDC A/S     18,000  

15

 

SCHEDULE II

NOTICE ADDRESSES

Ashmore Global Special Situations Fund Limited
c/o Barings (Guernsey) Limited
P.O. Box 71, Trafalgar Court
Les Banques, St Peter Port
Guernsey GY1 3DA
Attn: Sarah Brouard
Telephone: +44 1481 745493
Facsimile: +44 1481 745058

EMDCD Limited
c/o The Northern Trust Company
50 Bank Street
Canary Wharf
London E14 5NT
Relationship Contact: Kim Martin
Tel no. +44 20 7982 2022
Fax no. +44 20 7982 3606

Asset Holder PCC No 2 Limited re Ashmore Emerging Economy Portfolio
c/o Barings (Guernsey) Limited
P.O. Box 71, Trafalgar Court
Les Banques, St Peter Port
Guernsey GY1 3DA
Attn: Sarah Brouard
Telephone: +44 1481 745493
Facsimile: +44 1481 745058

Ashmore Investment Management Limited
20 Bedfordbury
London WC2N 4BL
United Kingdom
Attn: Tim Davis, General Counsel
Telephone: +44 207 557 4100
Facsimile: +44 207 557 4141

TDC A/S
Noerregade 21
0900 Copenhagen C
Denmark
Attn: Thomas Gelting
Tel no. +45 33 99 80 63
Fax no. +45 33 99 80 55

16

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