UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
SCHEDULE 13D/A
(Rule 13d-101)
Under the Securities Exchange Act of 1934
(Amendment No. 10)*
Hungarian Telephone and Cable Corp.
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(Name of Issuer)
Common Stock, $0.001 par value per share
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(Title of Class of Securities)
4455421030
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(CUSIP Number)
L. Russell Mitten
Secretary
Citizens Communications Company
3 High Ridge Park
Stamford, CT 06905
(203) 614-5600
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
September 3, 2004
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(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 Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box. [ ]
Note: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 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 the cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purposes 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).
(Continued on following pages)
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
Citizens Communications Company
06-0619596
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. SOLE VOTING POWER
0
NUMBER OF SHARES
BENEFICIALLY OWNED BY EACH ----------------------------------------------------------------------------------------
REPORTING PERSON WITH: 8. SHARED VOTING POWER
None.
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9. SOLE DISPOSITIVE POWER
0
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10. SHARED DISPOSITIVE POWER
None.
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0%
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
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14. TYPE OF REPORTING PERSON
CO
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Amendment No. 10 to
Statement on Schedule 13D
This Amendment No. 10 to Statement on Schedule 13D relates to the
beneficial ownership of common stock, par value $0.001 per share (the "Common
Stock"), of Hungarian Telephone & Cable Corp., a Delaware corporation (the
"Company" or the "Issuer"). This Amendment No. 10 to Schedule 13D is being filed
by Citizens Communications Company, a Delaware corporation (the "Reporting
Person"), and amends and supplements the Schedule 13D filed by the Reporting
Person on filed on May 18, 1995, as amended by Amendment No. 1 thereto filed on
June 6, 1995, Amendment No. 2 thereto filed on September 28, 1995, Amendment No.
3 thereto filed on October 6, 1995, Amendment No. 4 thereto filed on November 7,
1995, Amendment No. 5 thereto filed on March 7, 1996, Amendment No. 6 thereto
filed on April 16, 1996, Amendment No. 7 thereto filed on October 24, 1996,
Amendment No. 8 thereto filed on October 13, 1998 and Amendment No. 9 thereto
filed on May 24, 1999.
ITEM 2. IDENTITY AND BACKGROUND.
Item 2 is hereby amended and restated as follows:
(a), (b), (c) and (f)
Name of Reporting Person: Citizens Communications Company, on behalf
of itself and its wholly owned subsidiary
CU Capital LLC f/k/a CU Capital Corp.("CUC")
State of Incorporation: Delaware
Principal Business: Citizens Communications Company provides,
directly or through its subsidiaries, (i)
wireline communications services to rural
areas and small and medium-sized towns and
cities as an incumbent local exchange
carrier and (ii) competitive local exchange
carrier services to business customers and
to other communications carriers in certain
metropolitan areas in the western United
States.
Address of Principal Business: 3 High Ridge Park, Stamford, CT 06905
Address of Principal Office: 3 High Ridge Park, Stamford, CT 06905
The names, business addresses and principal occupations of the executive
officers and directors of the Reporting Person, all of whom are United States
citizens, are set forth in Schedule I hereto and are incorporated herein by
reference.
(d) - (e) During the last five years, neither the Reporting Person nor, to the
knowledge of the Reporting Person, any of the executive officers or directors of
the Reporting Person have been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or was a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, Federal or State securities laws or finding any violation with respect to
such laws.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is hereby amended by adding the following information to the Reporting
Person's response to subsections (a), (d) and (e) by adding the following
information:
4
On September 3, 2004, the Reporting Person entered into agreements with
each of EMDCD Limited, Asset Holder DPC No. 2 Limited re Ashmore Emerging
Economy Portfolio and Ashmore Global Special Situations Fund Limited pursuant to
which such parties purchased all of the shares of Common Stock and Preferred
Stock held by the Reporting Person for an aggregate purchase price of
$13,179,540 in cash. The Reporting Person also assigned its rights under the
Registration Agreement and, subject to the consent of the Company, the
Replacement and Termination Agreement.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is hereby amended and restated in its entirety as follows:
(a) and (b) The approximate percentages of shares of Common Stock reported
as beneficially owned by the Reporting Person is based upon 12,430,417 shares of
Common Stock outstanding as of August 9, 2004, as reported in the Company's
quarterly report on Form 10-Q for the quarterly period ended June 30, 2004.
Please see Items 7, 8, 9, 10, 11, and 13 of the cover sheet for the
Reporting Person.
To the knowledge of the Reporting Person, none of the persons listed in
Schedule I owns any shares of Common Stock.
(c) Except as set forth in Item 4 above, the Reporting Person has not
effected any transaction in the Common Stock during the past 60 days. To the
knowledge of the Reporting Person, none of the persons listed in Schedule I has
effected any transaction in the Common Stock during the past 60 days.
(d) Except as set forth in this Item 5, no person other than each
respective record owner referred to herein of securities is known to have the
right to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, such securities.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Item 6 is hereby amended and restated in its entirety as follows:
Except as described in response to Item 4, there are no contracts,
arrangements, understandings or relationships with respect to the securities of
the Company between the Reporting Person or CUC and any other person. To the
best knowledge of the Reporting Person, there are no contracts, arrangements,
understandings or relationships with respect to the securities of the Company
between the any of the persons listed on Schedule I and any other person.
5
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7 is hereby amended and restated as follows:
Exhibit A Power of Attorney dated September 26, 1995 (previously
filed with the Reporting Person's Amendment No. 2 to
Schedule 13D filed September 28, 1995).
Exhibit B Replacement and Termination Agreement dated September
30, 1998 among the Issuer, CUCC and CIMS (which includes
the form of the Promissory Note as Exhibit A thereto)
(previously filed with the Reporting Person's Amendment
No. 8 to Schedule 13D filed October 13, 1998).
Exhibit C Registration Agreement dated May 31, 1995 between the
Issuer and CU Capital LLC (previously filed with the
Reporting Person's Amendment No. 1 to Schedule 13D filed
June 6, 1995)
Exhibit D Purchase and Sale Agreement, dated as of September 3,
2004, between CU Capital LLC and Ashmore Global Special
Situations Fund
Exhibit E Purchase and Sale Agreement, dated as of September 3, 2004,
between CU Capital LLC and EMDCD Limited
Exhibit F Purchase and Sale Agreement, dated as of September 3, 2004,
between Citizens Communications Company and Asset Holder PCC No. 2
Limited re Ashmore Emerging Economy Portfolio
6
Signature
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 8, 2004
CITIZENS COMMUNICATIONS COMPANY
By: /s/ Robert J. Larson
---------------------------------
Name: Robert J. Larson
Title: Senior Vice President and
Chief Accounting Officer
7
INDEX TO EXHIBITS
Exhibit A Power of Attorney dated September 26, 1995 (previously
filed with the Reporting Person's Amendment No. 2 to
Schedule 13D filed September 28, 1995).
Exhibit B Replacement and Termination Agreement dated September
30, 1998 among the Issuer, CUCC and CIMS (which includes
the form of the Promissory Note as Exhibit A thereto)
(previously filed with the Reporting Person's Amendment
No. 8 to Schedule 13D filed October 13, 1998).
Exhibit C Registration Agreement dated May 31, 1995 between the
Issuer and CU Capital LLC (previously filed with the
Reporting Person's Amendment No. 1 to Schedule 13D filed
June 6, 1995)
Exhibit D Purchase and Sale Agreement, dated as of September 3,
2004, between CU Capital LLC and Ashmore Global Special
Situations Fund
Exhibit E Purchase and Sale Agreement, dated as of September 3, 2004,
between CU Capital LLC and EMDCD Limited
Exhibit F Purchase and Sale Agreement, dated as of September 3, 2004,
between Citizens Communications Company and Asset Holder PCC
No. 2 Limited re Ashmore Emerging Economy Portfolio
8
SCHEDULE I
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The names, addresses and principal occupations of each of the executive officers
and directors of Citizens Communications Company are listed below.
NAME AND ADDRESSES PRINCIPAL OCCUPATION
------------------ --------------------
Directors:
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Aaron I. Fleischman Senior Partner
c/o Citizens Communications Company Fleischman and Walsh, LLP
3 High Ridge Road
Stamford, CT 06905
Stanley Harfenist Retired
c/o Citizens Communications Company
3 High Ridge Road
Stamford, CT 06905
Andrew N. Heine Private Investor
c/o Citizens Communications Company
3 High Ridge Road
Stamford, CT 06905
John L. Schroeder President, Pinecrest Management, LLC
c/o Citizens Communications Company
3 High Ridge Road
Stamford, CT 06905
Edwin Tornberg President and Director,
c/o Citizens Communications Company Edwin Tornberg & Company
3 High Ridge Road
Stamford, CT 06905
Claire Tow President
c/o Citizens Communications Company The Tow Foundation
3 High Ridge Road
Stamford, CT 06905
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Leonard Tow Chairman of the Board,
c/o Citizens Communications Company Citizens Communications Company
3 High Ridge Road
Stamford, CT 06905
Robert A. Stanger Chairman,
c/o Citizens Communications Company Robert A. Stanger & Company
3 High Ridge Road
Stamford, CT 06905
William M. Kraus Retired
c/o Citizens Communications Company
3 High Ridge Road
Stamford, CT 06905
David H. Ward Chief Financial Officer,
c/o Citizens Communications Company Voltarc Technologies, Inc.
3 High Ridge Road
Stamford, CT 06905
Rudy J. Graf Acting Chief Executive Officer
c/o Citizens Communications Company
3 High Ridge Road
Stamford, CT 06905
Executive Officers:
------------------
Donald B. Armour Senior Vice President, Finance and Treasurer
Citizens Communications Company
3 High Ridge Park
Stamford, CT 06905
John H. Casey III President and Chief Operating Officer of the ILEC
Citizens Communications Company Sector and Executive Vice President
3 High Ridge Park
Stamford, CT 06905
10
Jerry Elliott Executive Vice President and Chief Financial Officer
Citizens Communications Company
3 High Ridge Park
Stamford, CT 06905
Jean M. DiSturco Senior Vice President, Human Resources
Citizens Communications Company
3 High Ridge Park
Stamford, CT 06905
Michael G. Harris Senior Vice President, Engineering and New Technology
Citizens Communications Company
3 High Ridge Park
Stamford, CT 06905
Dean Jackson Senior Vice President, Business Support Services
Citizens Communications Company
3 High Ridge Park
Stamford, CT 06905
Robert J. Larson Senior Vice President and Chief Accounting Officer
Citizens Communications Company
3 High Ridge Park
Stamford, CT 06905
L. Russell Mitten Senior Vice President, General Counsel and Secretary
Citizens Communications Company
3 High Ridge Park
Stamford, CT 06905
Daniel J. McCarthy Senior Vice President Broadband Operations, President
Citizens Communications Company and COO Electric Lightwave
3 High Ridge Road
Stamford, CT 06905
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EXHIBIT D
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---------------------------
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
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, a [Guernsey Fund] ("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 restriction or encumbrance of any kind, including any restriction on
use, voting, transfer, receipt of income, or exercise of any other attribute.
2
"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 and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then).
3
(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. 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.
4
(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
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.
5
(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 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.
6
(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 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).
7
(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) days after the notice of breach or (B) if the Closing has
not occurred by November 30, 2004; and
11
(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 or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York.
13
(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: /s/ Donald B. Armour By Barings (Guernsey) Limited
--------------------- as Custodian for Ashmore Global
Name: Donald B. Armour Special Situations Fund Limited
Title: Vice President, Finance and
Treasurer By: /s/ Tracy Le Sauvage
---------------------
Name: Tracy Le Sauvage
Title: Authorized Signatory
By: /s/ Meloney Cohn
-------------------
Name: Meloney Cohn
Title: Authorized Signatory
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) 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.
19
EXHIBIT E
---------
---------------------------
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
UK1 98603v1 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, a [________] ("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.
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 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.
4
(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).
5
(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 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.
8
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;
(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 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;
11
(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, 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.
13
(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) 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]
15
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: /s/ Donald B. Armour By The Northern Trust Company as
---------------------
Name: Donald B. Armour custodian for EMDCD LIMITED
Title: Vice President, Finance and
Treasurer By: /s/ Simon Olley
---------------
Name: Simon Olley
Title: Vice President
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) 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.
19
EXHIBIT F
---------
---------------------------
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
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of September
3, 2004 by and between Citizens Communications 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.
4
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 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.
4
(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).
5
(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.
8
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;
(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 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.
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(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;
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(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.
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(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, 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.
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(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) 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]
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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: /s/ Donald B. Armour By Barings (Guernsey) Limited
---------------------
Name: Donald B. Armour as Custodian for Asset Holder PCC
Title: Senior Vice President, Finance and No 2 Limited re Ashmore
Treasurer Emerging Economy Portfolio
By: /s/ Tracy Le Sauvage
--------------------
Name: Tracy Le Sauvage
Title: Authorized Signatory
By: /s/ Meloney Cohn
------------------
Name: Meloney Cohn
Title: Authorized Signatory
16
EXHIBIT A
Registration Agreement
17
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) 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.
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