Exhibit 4.29


 


 


QUOTA
PURCHASE AGREEMENT





by and
between




t-systems
international gmbh,





t-systems beteiligungsverwaltungs-

gesellschaft mbh





and





magyar tavkozlesi rt.


 





















 


QUOTA
PURCHASE AGREEMENT



by and between



T-Systems International GmbH



HahnstraBe 43d, 

D-60528 Frankfurt am Main





a corporation organized and existing under the laws of the Federal Republic of

Germany



- hereinafter referred to as “T-Systems or Seller” -





T-Systems Beteiligungsverwaltungsgesellschaft
mbH



HahnstraBe 43d, 

D-60528 Frankfurt am Main



a corporation organized and existing under the laws of the Federal Republic of

Germany



- hereinafter referred to as “TS BV or Seller”-



(T-Systems and TS BV shall hereinafter collectively be referred to as the

“Sellers”)


and



Magyar Tavkozlesi Rt.



Krisztina krt. 55., 

H-1013 Budapest



a corporation organized and existing under the laws of Hungary



- hereinafter referred to as “Purchaser or Matav” -




relating to the quotas in 

T-Systems Hungary Kft.




- hereinafter referred to as “the Company”-



(the parties to this Share Purchase Agreement being hereinafter referred to 

separately as “Party” and collectively as the “Parties”)




 


	
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WHEREAS:


 


a)             T-Systems
and TS BV hold all the issued and outstanding quotas of the Company;


 


b)            T-Systems
and TS BV wish to sell and Purchaser wishes to purchase the Transfer Quotas in
the Company subject to the terms and conditions herein;


 


c)             The
Company will issue and Matav will acquire the Capital Increase Quote subject to
the terms and conditions set forth herein;


 


d)            After
Completion of the sale and purchase of the Transfer Quotas and the registration
of the Initial Capital Increase

T-Systems will own 51% and Matav will own 49% of the then registered capital of
the Company.


 


	
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NOW THEREFORE the Parties agree as follows:


 


Article
1 

Interpretation


 


1.1   In this Agreement
and the Schedules to it:


 


	
  “Affiliate”

  	
   

  	
  Means in relation to any company, any person (i) who
  has the control, directly or through another Affiliate, of such company, (ii)
  in which such company has the control, directly or through another Affiliate,
  or (iii) under common control directly or through another Affiliate with such
  company;

  
	
   

  	
   

  	
   

  
	
  “Assets”

  	
   

  	
  Means all assets owned or used by the Company,
  including those reflected in the Accounts;

  
	
   

  	
   

  	
   

  
	
  “Accounts”

  	
   

  	
  The balance sheet of the Company, as the company
  surviving the merger of the Company and T-Systems Magyarorszag Kft
  (reg. no: 01-09-673123) as per 31 December 2003 attached as Schedule 1;

  
	
   

  	
   

  	
   

  
	
  “Capital Increase Quota”

  	
   

  	
  Means the new quota issued by the Company to Matav of
  the nominal value of HUF 81,690,000.00 (Eighty-one million six hundred and
  ninety thousand Hungarian Forints) representing 29% of the registered capital
  and the voting rights following the registration of the Initial Capital
  Increase, with identical rights and obligations as attached or accrued to the
  Transfer Quotas;

  
	
   

  	
   

  	
   

  
	
  “Civil Code”

  	
   

  	
  Means Act IV of 1959 on the Civil Code;

  
	
   

  	
   

  	
   

  
	
  “Completion”

  	
   

  	
  Means the fulfilment of all conditions described in
  Article 3 of this Agreement including the sale and purchase of the Transfer
  Quotas pursuant to this Agreement;

  
	
   

  	
   

  	
   

  
	
  “Completion Date”

  	
   

  	
  Means the date of Completion;

  
	
   

  	
   

  	
   

  
	
  “Damages”

  	
   

  	
  Means any and all damages, losses and costs but
  excluding indirect or consequential damages accrued either to the Purchaser
  or the Company;

  
	
   

  	
   

  	
   

  
	
  “Dataware”

  	
   

  	
  Means T-Systems Dataware Szolgaltato Korlatolt
  Felelossegu Tarsasag, registered under reg. no. Cg. 01-09-062879, and having
  its registered seat at 1097

  



 


	
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  Budapest, Konyves Kalman korut 12-14. 3. em: being
  the wholly owned subsidiary of the Company;

  
	
   

  	
   

  	
   

  
	
  “Encumbrances”

  	
   

  	
  Means a mortgage, charge, pledge, lien, right of
  usufruct, depository receipt, option, restriction, right of first refusal,
  right of pre-emption, easement, lease, retention of title, any other third
  party right or interest, or any other encumbrance or security interest of any
  kind, or any other type of preferential arrangement (including, without
  limitation, any title transfer and retention arrangement) having similar
  effect with the exception of any restrictions under the Company’s Articles
  and applicable law;

  
	
   

  	
   

  	
   

  
	
  “Initial Capital Increase”

  	
   

  	
  Means the capital increase in the company by HUF 81,690,000.00
  (Eighty-one million six hundred and ninety thousand Hungarian Forints) for a
  total subscription price of HUF 2,000,000,000.00 (Two billion Hungarian
  Forints) of which amount HUF 1,918,310,000.00 (One billion nine hundred and
  eighteen million three hundred and ten thousand Hungarian Forints) shall be
  paid to the capital reserve of the Company;

  
	
   

  	
   

  	
   

  
	
  “Interim Period”

  	
   

  	
  as defined in Article 5 of this Agreement; 

  
	
   

  	
   

  	
   

  
	
  “Pre-Completion”

  	
   

  	
  Means the fulfilment of all conditions described in
  Article 2 of this Agreement required for realisation of the Initial Capital
  Increase;

  
	
   

  	
   

  	
   

  
	
  “Pre-Completion Date”

  	
   

  	
  Means the date of Pre-Completion;

  
	
   

  	
   

  	
   

  
	
  “Purchase Price”

  	
   

  	
  Means the purchase price defined in Article 4
  hereunder;

  
	
   

  	
   

  	
   

  
	
  “Quotaholders’ Agreement”

  	
   

  	
  Means the Quotaholders’ Agreement to bo entered into
  by and between T-Syslerns and Purchaser regarding the management and
  operation of the Company subsequent to acquiring the Transfer Quotas and the
  Capital Increase Quota by Purchaser, and T-Systems and Purchaser becoming the
  two quotaholders of the Company;

  
	
   

  	
   

  	
   

  
	
  “Registration Date”

  	
   

  	
  Means the date when the Initial Capital Increase is
  duly registered by the Court of Registration;

  
	
   

  	
   

  	
   

  
	
  “Third Party”

  	
   

  	
  Means any legal or natural person other than the
  Quotaholders;

  



 


	
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  “Transfer Quotas”

  	
   

  	
  Means collectively the quota including the T-Systems
  Quota and the TS BV Quota, to be purchased by Matav and sold separately by
  the Sellers to Matav in accordance with this Agreement; having the nominal
  value of HUF 56,338,000.00 (Fifty-six million three hundred and thirty-eight
  thousand Hungarian Forints), and representing 20% of the registered capital
  and the voting rights after the registration of the Initial Capital Increase;

  
	
   

  	
   

  	
   

  
	
  “Signing Date”

  	
   

  	
  Means the date on which all Parties have duly signed
  this Agreement; or if the Parties sign this Agreement not at the same time,
  when the Party who last signs this Agreement duly signed it;

  
	
   

  	
   

  	
   

  
	
  “Tax”

  	
   

  	
  Means all taxes or similar fees, with respect to,
  among others, income, sales and use of real and movable property, premiums,
  payroll and excise and all penalties, interest, additions and assessments
  with respect thereto, as well as all duties, with holdings, imposts; imposed
  by any local, municipal, governmental, state, federal, or other official body
  in the Republic of Hungary or elsewhere where the Company operates and which
  the Company becomes liable to pay;

  
	
   

  	
   

  	
   

  
	
  “Total T-Systems Quota”

  	
   

  	
  Means the total of
  T-Systems’ quota held in the Company prior to this Agreement having
  the nominal value of HUF 199,900,000.00 (One hundred and ninety nine million
  nine hundred thousand Hungarian Forints) and representing 99.95% of the
  registered capital of the Company before the registration of the Initial
  Capital Increase;

  
	
   

  	
   

  	
   

  
	
  “TS BV Quota”

  	
   

  	
  Means the quota held by TS BV in the Company’s
  registered capital, having the nominal value of HUF 100,000 (one hundred
  thousand Hungarian Forints) and representing 0.05% of the registered capital
  of the Company before the registration of the Initial Capital Increase;

  
	
   

  	
   

  	
   

  
	
  “T-Systems Quota”

  	
   

  	
  Means the quota held by T-Systems in the Company’s
  registered capital, having the nominal value of HUF 56,238.000.00 (Fifty-six
  million two hundred and thirty-eight thousand Hungarian Forints), from the
  Total T-Systems Quota;

  



 


	
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  “Warranties”

  	
   

  	
  Means the representations and warranties set
  referred to in Article 7.1 and set out in Schedule 7.1 given by Sellers
  and “Warranty” shall be construed
  accordingly;

  
	
   

  	
   

  	
   

  
	
  “Warranty Breach”

  	
   

  	
  Means any event of fact which causes a warranty to
  be untrue or mis leading or being breached as of the date of the Agreement,
  irrespective of whether said breach is attributable in any way to the Sellers
  or the Sellers being in any way liable for said breach, i.e. regardless of
  any culpability (“felrohatosag”) of the Sellers.

  



 


1.2           In
this Agreement, unless otherwise specified:


 


a.             references
to articles, paragraphs, and Schedules are to articles, sub- articles,
paragraphs, sub-paragraphs of, and Schedules to this Agreement;


 


b.             a
reference to any statute or statutory provision shall be construed as a reference
to the same as it may have been, or may from time to time be amended, modified
or re-enacted except to the extent that any amendment or modification made
after the date of this Agreement would increase or alter the liability of
Sellers under this Agreement;


 


c.             headings
to clauses and Schedules are for convenience only and do not affect the
interpretation of this Agreement;


 


d.             where
in this Agreement any word or phrase in the Hungarian language has been
inserted in the text after any word or phrase, this Agreement shall be
construed as if the meaning of such English language word or phrase is the
meaning which the laws of Hungary attribute to such Hungarian wording.


 


Article
2 

Pre-Completion: Initial Capital Increase


 


2.1           The
signing of this Agreement and, thus, the Initial Capital Increase and the sale
and purchase of the Transfer Quotas is conditional upon the following condition
precedent being satisfied or waived prior to the Signing Date in accordance
with this Article:


 


2.1.1        Sellers
having obtained written approval to enter into this Agreement in accordance
with its terms from the relevant boards of their parent company Deutsche
Telekom AG;


 


	
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2.1.2.       Purchaser
and T-Systems have finalised and signed (i) the Strategic Partnership Agreement
to be concluded between the Company and Purchaser, and (ii) the ICSS- Strategic
Partnership Agreement, to be concluded between T-Systems and Purchaser.


 


2.2           In
accordance with the terms of this Agreement, Purchaser hereby agrees to acquire
the Capital Increase Quota and pay HUF 2.000,000,000.00 (Two billion Hungarian
Forints) total subscription price not later than 5 (five) business days after
the Pre-Completion Date in accordance with the Quotaholders’ Resolutions in
Section 2.3.2 of this Agreement.


 


2.3           The
Pre-Completion of this Agreement shall take place subject to the following
conditions being satisfied or waived on or prior to the Pre-Completion Date, in
accordance with this Article:


 


2.3.1        Sellers
as Quotaholders shall validly pass the following Quotaholders’ Resolutions not
later than the 5 (fifth) business day from the Signing Date and shall present
to Purchaser original copies thereof:


 


a.             Approving
the Initial Capital Increase;


 


b.             Sellers
waiving their statutory preference rights for the Capital Increase Quota;


 


c.             Sellers
appointing the Purchaser to acquire the Capital Increase Quota;


 


d.             Approving
Version A of the Articles of Association of the Company which shall exclusively
be amended with respect to the Initial Capital Increase as attached as Schedule 2.5;


 


e.             Instructing
the management of the Company to modify the quota holders” list of the Company
in accordance with the Initial Capital Increase and to ensure the filing of the
appropriate application with the Court of Registration; and


 


f.              the
Company concluding the employment contract regarding the third managing
director of the Company appointed by Matav.


 


2.3.2        Matav
shall (1) make a statement declaring the fact of the acquisition of the Capital
Increase Quota and acknowledging that the provisions of Version A of the
Articles of Association shall be binding upon it and (ii) present to the
Sellers an original copy of said statement.


 


2.4           The
Parties shall notify each other of fulfilment of the conditions contained in
Section 2.3 without delay, on or prior to the Pre-Completion Date.


 


	
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2.5           Sellers
undertake to procure that the management of the Company shall fits the proper
application for registration of the Initial Capital Increase not later than 2
(two) business days as from the date on which the amount of the subscription
price has been credited to the Company’s bank account (Account
Nr.13700016-04136019 at ING Bank Rt., Budapest).


 


Article
3 

Completion: Safe and Transfer of Transfer Quotas


 


3.1           Subject
to and in accordance with the terms of this Agreement, Sellers hereby sell and
the Purchaser hereby buys the Transfer Quotas, including all rights and
obligations attaching or accruing to the Transfer Quotas, Free of any and all
Third Party Rights.


 


3.2           Sellers
hereby undertake to transfer at the Registration Date to Purchaser the Transfer
Quotas and Purchaser undertakes to accept the Transfer Quotas as of the
Registration Date.


 


3.3           Title
to and the risk in the Transfer Quotas shall pass from Sellers to Purchaser as
of the Registration Date.


 


3.4           The
Completion of this Agreement shall take place subject to the following conditions
being satisfied or waived on or prior to the Completion Date in accordance with
this Article;


 


a.             The
Initial Capital Increase being duly registered by the Court of Registration;


 


b.             Sellers
adopting a valid quotaholders’ resolution on splitting-up the Total T-Systems
Quota in order to create the T-Systems Quota, and presenting to Purchaser an
original copy thereof:


 


c.             Sellers
and the Company state that neither of them intend to exercise their statutory
pre-emptive rights regarding the T-Systems Quota and the TS BV Quota respectively,
and instructing the management of the Company to modify the quotaholders’ list
of the Company in accordance with she safe and purchase of the Transfer Quotas
and to ensure the Filing of the appropriate application with the Court of
Registration; and presenting to Purchaser an original copy of each related
declaration;


 


d.             Purchaser
and T-Systems signing Version B of the Articles of Association as required by
the Quotaholders’ Agreement and attached


 


	
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as Schedule 3.4 hereto, and presenting to Purchaser an original
copy thereof;


 


e.             The
managing directors of the Company signing the new quotaholders’ list of the
Company indicating the Purchaser as the owner of the Transfer Quotas and the
Capital Increase Quota, and presenting an original copy thereof to Purchaser;


 


f.              Sellers
adopting a valid quotaholders’ resolution on appointing the third managing
director of the Company, nominated by Purchaser according to the Quotaholders’
Agreement; and presenting to Purchaser an original copy thereof;


 


3.5           The
Parties shall notify each other about fulfilment of the conditions contained in
Section 3.4 without delay, on or prior to the Completion Date.


 


3.6           Sellers
undertake to procure that the management of the Company shall file the proper
application for registration of the Transfer of Quotas not later than 2 (two)
business days as from the date on which the amount of the Initial Purchase
Price (as defined in Article 4 herein) has been credited to the Company’s bank
account.


 


Article 4 

Purchase Price


 


4.1           The
Purchase Price is consisting of two components: the payment of the initial purchase
price (the “Initial Purchase Price”) and the payment of an earn-out (the “Earn-Out”).


 


4.2           The
Initial Purchase Price for the Quotas shall be HUP 1,430,000,000.00 (One billion
four hundred and thirty million Hungarian Forints).


 


4.3           In
addition to the Initial Purchase Price, the Purchaser shall pay an Earn-Out in
accordance with the formula set forth below:


 


4.3.1        The
aggregate Earn-Out to be paid by Purchaser shall be capped at a maximum amount
of HUF 490,000,000.00 (Four hundred and ninety million Hungarian Forints) (the “Earn-Out-Cap”).  The Earn-Out-Cap shall be paid by Purchaser
if the commonly defined targets of the Earn- Out (the “Targets”) as described
below are all fully reached.


 


4.3.2        The
respective period for determining the achievement of the Targets (the “Target-Period”)
is the business year 2005 and the business year 2006.  Target 1 is the order-entry of the
Company,  Target 2  is the revenue of the Company and Targets is
the EBIT of the Company. The achievement of each of the Targets shall be
determined independent


 


	
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from the others and will be weighted each with one
third in respect to the Earn-Out-Cap. Schedule 4.3.2 shows the cases in which a
respective Target have been fully reached. In case the Targets have not been
fully reached the percentage has to be determined in line with the Calculation
Scheme Schedule 4.3.2. When calculating the achievement of the Targets no
effects of the Definitive Agreements may be considered as achievement. The
effects of the Definitive Agreements includes without limitation (i) all the
outsourcing deals between the Parties, (ii) other orders from Purchaser to the
Company in the framework of the Strategic Partnership between the Purchaser and
the Company and (iii) two third (2/3) of all the effects or the accounts
jointly managed by the Purchaser and the Company.


 


4.3.3        The
achievement of every Target shall be determined solely within 2 (two) months
from audited figures presented by the Sellers to Purchaser. In the event of any
delay of determination of a respective Target attributable exclusively to
Purchaser, Purchaser will pay to the Sellers interest for the outstanding
Earn-Out in the amount of BUBOR +1% (or, if the then valid currency in Hungary
is Euro, EURIBOR +1%).


 


4.3.4        The
achievement of the Target2 and Target3 shall be determined on basis or the
accounts for 2005 and 2006 testified by the auditor of the Company; the
achievement of Target1 shall be determined on basis of the
Order-Entry/Order-Backlog-Guideline as attached as Schedule 4.3.4 hereto. In
case of any dispute between the Parties regarding interpretations of the
Order-Entry/Order-Backlog-Guideline the responsible key employee of Controlling
Deutsche Telekom AG shall act as a mediator and shall determine the achievement
of Target1 on basis of the Order-Entry/Order-Backlog-Guideline.  This final determination is binding on the
Parties.


 


4.4           The
components of the Purchase Price shall be paid by Purchaser through wire
transfer in whole into the bank

account No. 3419462-00 HUF of T-Systems at Deutsche Bank AG, Friedrichshafen
(BLZ 65070084, Swift-Code DEUTDESS651).


 


a.             with
respect to the Initial Purchase Price component within 10 (ten) business days
from the Completion Date;


 


b.             with
respect to the Earn-Out component within 10 (ten) business days after the
amount of the Earn-Out has been mutually agreed and determined in written form
duly signed by the Parties. In the event of any delay in payment attributable
exclusively to Purchaser, Purchaser will pay to the Sellers late payment
interest in the rate defined by the Hungarian Civil Code with its reference to
the public interest rate.


 


4.5           The
respective Purchase Price shall be deemed paid when credited to Seller’s
account.


 


	
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Article 5


Interim
Period


 


5.1           Obligations
of the Sellers


 


5.1.1        During
the period between the date when the total subscription price defined in
Section 2.2 hereof has been
credited to the Company’s account and the Registration Date (the “Interim
Period”) the Seller shall procure that the Company


 


a.             shall
carry on its business in the ordinary and usual course in accordance with all
legal requirements, and there shall be no interruption or alteration in the
nature, scope or manner of the Company’s business;


 


b.             shall
comply with and maintain in all material respects, all licenses, consents and
authorisations, the cancellation, revocation or non-renewal of which would have
an adverse effect on the business of the Company;


 


c.             shall
take all reasonable steps to preserve and protect its business and assets and
shall not remove any of its physical assets or otherwise encumber or dispose of
any material assets save in the ordinary and usual course of business;


 


d.             shall
not sell or otherwise dispose above any stake that the Company has in other
business associations without the prior written consent of the Purchaser
(except for the winding up of Dataware);


 


e.             shall
settle all debts incurred in the ordinary and usual course of business within
the applicable periods of credit;


 


f.              shall
not enter into any transaction with the Sellers and members of the Sellers’
Group without the prior written consent of the Purchaser;


 


g.             shall
not enter into, terminate or amend any contract, transaction or arrangement by
the Company that is material (material in this context means any contract,
transaction or other arrangement which exceeds a net value of HUF 12 Mio. per
calendar year) for performing the Company’s business without the prior written consent
of the Purchaser; and


 


	
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h.             shall
operate in a manner not to give rise and in general to avoid any adverse change
in the business and general operations or status of the Company (financially or
otherwise) occurring or threatening.


 


5.1.2        Furthermore,
the Sellers shall procure that none of the following occur during the Interim
Period:


 


a.             the
creation, or issue of any quota in the Company, the rearrangement or
modification of any quota in the Company or any rights attached thereto;


 


b.             the
increase or decrease of the registered capital of the Company other than the
Initial Capital increase;


 


c.             appointment
or recall of any Managers or members of the Supervisory Board of the Company,
or the Company’s auditor other than provided for in Section 2.3.1. d hereof;


 


d.             declaration,
payment or making any dividend, interim dividend or other distribution or doing
or allowing to be done anything which renders the Company’s financial position
less favourable than at the date of this Agreement;


 


e.             any
modification of the Company’s Articles of Association and other corporate
documents, by-laws, rules and policies other than modifications provided for in
Sections 2.5 and 3.4 hereof;


 


f.              the
adoption of any resolution or decision (on or out of the Quotaholders’ meeting)
or making any action or failure which negatively affects the value of the
Transfer Quotas; and


 


g.             any
adverse change in the Company’s enterprise value. 


 


5.2.          Co-operation
of the Parties during the Interim Period


 


5.2.1        The
Parties agree to cooperate with one another in order to, and to ensure that the
Company observes their goal, to achieve the expeditious registration of the
Initial Capital Increase. The Sellers shall procure that the Company shall
notify each of the Parties immediately (but not later than within 2 (two)
business days of its receipt) of any notice, request for additional filing or
an order rejecting the registration of the Initial Capital Increase without
allowing any additional filing received from the Court of Registration. The
Parties shall then sit together in order that the Company complies to the
fullest extent and as soon as possible with the notice or the request of the
Court of Registration. In order to support the co-operation of the Parties, the


 


	
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lawyers of each Party shall discuss and agree on all
documents to be submitted to the Court of Registration.


 


5.2.2        The
Parties agree that if the Court of Registration requests that an amendment be
made in the Articles of Association with respect to the Initial Capital
Increase, will jointly seek to amend it, but only as far as requested by the
Court of Registration and at all times ensuring, inasmuch as legally possible,
to preserve the original meaning of the text and the intention of the Parties. If
however, the Parties consider that the Court of Registration would refuse to
accept any of the provisions of the Articles of Association (or the Court of
Registration in fact refuses the registration of any provision), they will
remove those provisions from the Articles of Association and include it in the
Quotaholders’ Agreement.


 


Article
6

Post Completion


 


6.1           On
the Completion Date Sellers shall cause the Company’s managing directors
appointed by Sellers to give on behalf of the Company a power of attorney to a
legal counsel specified by Purchaser, who shall take care of reporting and
registration of the acquisition by Purchaser of the Quotas.


 


6.2           As
and when requested by Purchaser or Sellers following Completion Sellers or
Purchaser, as the case may be, shall take or procure the taking of all actions
and execute or procure the execution of all such further documents, deeds,
forms, assignments, transfers, assurances and other things as may be required
by any laws or Purchaser or Sellers, as the case may be, may reasonably
consider necessary or appropriate to give full effect to the transactions
contemplated in this Agreement,  or any
ancillary documents executed pursuant hereto.


 


6.3           Subject
to Article 1.3.1 Sellers shall provide or procure to be provided to Purchaser
all information in their possession or under their control as Purchaser shall
from time to time reasonably require (both before and after Completion) in
connection with the business and affairs of the Company and will give or procure
to be given to Purchaser and its advisers such reasonable access (including the
right to take copies) to all records.


 


6.4           If
Matáv fails to pay the Initial Purchase Price in part or in whole within 30
days from the Completion Date, Sellers shall be entitled to rescind this
Agreement. The Parties state that they are aware of the legal consequences of
exercising the right of rescission under Hungarian law, according to which the
status shall be restituted as it was prior to the Signing Date.


 


	
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6.5           If
the registration of the Initial Capital Increase has not taken place within 4
(four) months from the Pre-Completion Date due to any fact which is not
attributable to the Purchaser, Matáv shall be entitled to rescind this
Agreement with the consequences specified in Section 6.4.


 


Article
7

Sellers’ Warranties


 


7.1           Sellers
hereby represent and warrant to Purchaser that each of the Warranties set out
in Schedule 7.1 to this Agreement is true and accurate in all respect as
of the Signing Date and the Completion Date.


 


7.2           Each
of the Warranties shall be construed as a separate and independent warranty and
save where provided to the contrary shall not be limited or restricted by
reference to or inference from any other terms of this Agreement or any other
Warranty.


 


7.3           The
Parties acknowledge and confirm that Purchaser and its advisers have conducted
a due diligence review with respect to the Company, based on (i) the documents
made available to the Purchaser in the data room established by T-Systems and
the Company and made available to Purchaser between 25-28 February 2003 and
17-20 February 2004 at the seat of the Company, (ii) the information provided
on the management interviews of 27 March 2003, 18 and 24 February 2004 with
certain executives of the Company and (iii) the written responses provided by
the Company to the Purchaser’s written questions related to the reviewed
documents. Purchaser acknowledges that it is not aware of any Warranty Breaches
at the date of executing of this Agreement.


 


7.4           Each
Party shall provide to the other after Signing Date all such information and documentation
which the other Party shall reasonably require to enable it to satisfy itself
as to the accuracy and due observance of the Warranties.


 


Article
8

Purchaser’s Warranties


 


6.1           Purchaser
hereby represents and warrants that:


 


a.             It
has been duly incorporated and is validly existing and has the requisite power
and authority to enter into this Agreement and perform its obligations
hereunder;


 


b.             Neither
the execution of this Agreement by Purchaser nor the consummation of the
transaction as contemplated by this Agreement will violate, conflict with or
result in the breach of any term, limitation in or provision of, or constitute
a default under the constitutional


 


	
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documents of Purchaser or violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Purchaser.


 


Article 9

Extent of Sellers’ liability


 


9.1           In
the event of a Warranty Breach, Purchaser shall give written notice of said breach
to T-Systems within 30 (thirty) days of becoming aware of the Warranty Breach.


 


When Purchaser notifying T-Systems of a Warranty
claim, it must include in the notice the relevant facts in reasonable details
and may not withhold any information necessary to enable T-Systems to become
aware of the Warranty claim and to perform their obligations hereunder (except
if those information are available to Sellers).


 


9.2           Purchaser
shall be entitled to elect in respect of any such Warranty Breach either


 


9.2.1        to
endeavour to resolve it at its own cost and without any liability on the part
of the Sellers, with good faith and in accordance with good industry practice,
in which case Purchaser must inform the Sellers on any action made and must
consider any reasonable proposals thereof; or


 


9.2.2        to
refer it to T-Systems who shall be responsible at its own expense for resolving
the same; whereupon T-Systems shall be offered the opportunity to remedy such
Warranty Breach during a reasonable period of time specified by Purchaser, but
not less than 14 (fourteen) calendar days, following the notification of T-Systems
by Purchaser of the Warranty Breach, provided that said Warranty Breach may at
all be remedied. If T-Systems fails to remedy the Warranty Breach within said reasonable
period. Purchaser may require that T-Systems indemnify Purchaser and hold
Purchaser harmless from and against the actual Damage sustained due to the
Warranty Breach.


 


9.3           The
time period during which a claim
for indemnification may be asserted under this Agreement by Purchaser for
Warranty Breach (the “Claims Period”)
shall commence on the Completion Date and shall terminate as follows:


 


a.             with
respect to a Warranty Breach related to a Warranty contained in Sections 1-15
and 18-19 of Schedule 7.1 the Claims Period shall continue until two (2) years
after the Completion Date; and


 


b.             with
respect to a Warranty Breach related to a Warranty contained in Sections 16 and
17 of Schedule 7.1 the Claims Period shall continue


 


	
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until six (6) months after the expiry of the periods
allowed by applicable laws for carrying out any investigation and making an
assessment of the liability (including additional assessments, levies and/or
penalties).


 


9.4           No
amount shall be paid by Sellers in respect of any claim for Warranty Breach,
except to the extent and in as far that:


 


a.             the
amount of each single claim is equal to or exceeds EUR 10,000.00 (Ten thousand
Euros) (“de-minimis-threshold”); or


 


b.             the
amount of all claims together is equal to or exceeds EUR 30,000.00 (Thirty
thousand Euros) (“basket”).


 


In case the basket has been exceeded, Purchaser is
only entitled to claim indemnification in the exceeding amount of the basket.


 


9.5           The
maximum aggregate liability of T-Systems in respect of the Warranties shall not
exceed 33% of the Purchase Price. For the purposes of this section 9.5 the
Purchase Price means the aggregate of the Initial Purchase Price, plus the
maximum amount of the Earn Out, plus the Initial Capital Increase.


 


9.6           In
calculating Sellers liability for any Warranty Breach, such liability shall be reduced
by the sum of the following economic benefits, in any, pertaining to that
Warranty Breach:


 


a.             any
amount paid by a third party to Purchaser, including without limitation any
amount recovered or actually recoverable under an insurance policy by
Purchaser, or to the extent the Damage occurs within the Company, to the
Company with respect to the matter to which such Warranty Breach relates;


 


b.             the
net present value of any payment actually received or certain to be received or
any reduction of an amount due and payable actually obtained or certain to be
obtained, pursuant to any applicable tax legislation; or


 


c.             to
the extent that a claim can be made in respect of a Warranty Breach relating to
taxes or indemnities relating to taxes, the amount of future tax savings
following such Warranty Breach available to Purchaser or any Affiliate of the
Purchaser, or to the extent the damage occurs within the Company, to the
Company.


 


9.7           Warranty
claims can only be made against Sellers. Purchaser shall not be entitled to
make any claim regarding a Warranty Breach:


 


a.             for
any indirect or consequential loss (including loss of profit);


 


b.             to
the extent that provision or allowance for the matter or liability which would
otherwise give raise to the claim in question has been made in


 


	
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the Accounts or is otherwise taken account of, or
reflected in the Accounts;


 


c.             to
the extent that the claim arises as a result of any changes made in agreement
with the Purchaser after the Signing Date in the accounting policies or
practices upon which the Company values its assets;


 


d.             to
the extent that the claim arises directly or indirectly as a result of any voluntary
act or omission by Purchaser or any Affiliate of Purchaser after Completion;


 


e.             if
it would not have arisen but for a change in legislation made after the date of
this Agreement (whether relating to taxation, rates of taxation or otherwise)
whether or not that change, amendment or withdrawal purports to be effective
retrospectively in whole or in part and whether or not anticipated;


 


f.              to
the extent that the claim was recoverable under a policy of insurance had
Purchaser maintained in force with insurance cover similar to that current at
Signing.


 


The Parties agree, that Sellers will be free from any
liability if Sellers can prove that the Purchaser was aware of the defect of
performance at Completion Date.


 


If Purchaser becomes aware of a matter which could
give rise to a Warranty Claim, Seller shall not be liable in respect of it
unless notice of the relevant facts in reasonable details is given by Purchaser
to T-Systems as soon as reasonably practicable and in any event within 30 calendar
days of Purchaser becoming aware of those facts.


 


9.3           If
the claim for Warranty Breach in question is a result of or is in connection
with a liability or alleged liability to a Third Party:


 


a.             Purchaser
shall take such action to avoid, resist, appeal, compromise or contest the
liability as may reasonably be requested by Sellers and Purchaser shall not
admit liability in respect of, or compromise or settle the matter, without the
prior written consent of Sellers; except if such action would cause even
greater damages than the Warranty Breach itself; and


 


b.             Sellers
shall be entitled to have the conduct of any appeal, dispute, compromise or
defence of the dispute and of any incidental negotiations but at their expense;
while Purchaser shall be entitled to be fully involved and consulted in the
conduct of any such appeal, dispute, compromise or defence of the dispute and
of any incidental negotiations - at its expense - and all reasonable proposals
of Purchaser must be considered by Sellers; and


 


	
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c.             Purchaser
shall make available to Sellers and such other members of Sellers’ Group all
such information as Sellers may reasonably require for avoiding, disputing,
resisting, appealing, compromising or contesting any such liability.


 


9.9           The
above limitations set out in this Article 9 shall not apply to any breach of undertakings
related to Dataware set out in Article 10 below.


 


9.10         T-Systems
shall have sole liability for any and all breaches of this Agreement, including
any Warranty Breach, and for any and all payments or actions to be performed by
Sellers under or in connection with this Agreement.


 


9.11         Purchaser
expressly acknowledges and agrees that the Purchase Price and the overall terms
and conditions of this Agreement constitute due compensation for Sellers
aforesaid limitation of liabilities.


 


9.12         Apart
from the Warranties set out under Section 7 Sellers do not undertake any
liability, responsibility or warranty regarding the subject matter of this Agreement.


 


Article 10

Undertakings related to Dataware


 


10.1         Sellers
represent and warrant that no circumstances exist regarding the Company being
the sole quotaholder of Dataware that could financially or otherwise result in
any costs, expenses, losses or damages, or could represent any financial,
reputation or other kind of risk to the Company or Purchaser either prior or
subsequent to the acquisition by Purchaser of the Transfer Quotas in the Company;
and none of the above are or could be foreseen or is threatening.


 


Sellers declare that in the course of the Due
Diligence procedure in 2003 they informed Purchaser about any and all material
facts and circumstances that is related to and bears any relevance regarding
the existence and operations of Dataware and any actual or potential effect
thereof on the Company or Purchaser either prior or subsequent to the
acquisition by Purchaser of the Transfer Quotas in the Company.


 


10.2         Other
than as discussed in advance, disclosed in the Due diligence procedure and with
and approved by Purchaser and with a view to such action serving the rightful
business interests, profitability and prosperity of the Company, the Company
has not taken over and Dataware has not transferred to the Company in any
manner any assets, employees or contracts, neither any financial, contractual
legal or other obligations or liabilities of whatever nature existing towards
any person or entity and the Company has no outstanding obligation or liasility
vis-a-vis Dataware, or any third party for or on behalf of Dataware; and will
not do so subsequent to signing this Agreement without the


 


	
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prior written consent of Purchaser. Sellers also
represent and warrant that the above respectively applies to and is true in all
respect regarding any of the above in the other way around, in the relations
from the Company to Dataware.


 


10.3         Sellers
hereby undertake that they shall cause Dataware and ensure that Dataware will
not, either on its own account or in conjunction with or on behalf of any other
person or entity.


 


10.3.1      neither
directly nor indirectly, whether as shareholder, partner, agent or otherwise,
carry on or be engaged, concerned or interested in carrying on in Hungary any
new business or activities as from the Signing Date similar or identical to
those pursued by the Company and Purchaser and thus, shall not compete or
attempt to compete in any respect with the Company and Purchaser;


 


I0.3.2       canvass,
solicit or approach or cause to be canvassed, solicited or approached any
person who shall at any time within the year preceding the signing of this
Agreement have been a client or customer, prospective client or customer, representative
or agent of the Company or Purchaser or in the habit of dealing with the
Company or Purchaser for the purpose of offering to that person services which
are of the same type as or similar to any services supplied or activities
pursued by the Company or Purchaser or enter into any contract with or accept
business from any such person in relation to any such services and activities;


 


10.3.3      interfere
or seek to interfere with the continuance of supplies to the Company or
Purchaser from any person who shall at any time within one year preceding the
date of signing this Agreement have been a supplier of goods or services to the
Company or Purchaser if such interference causes or would be likely to cause
that supplier to cease supplying or materially to reduce or alter the terms of
its supply of such goods or services to the Company or Purchaser;


 


10.3.4      solicit
or entice away or attempt to solicit or entice away from the Company or
Purchaser, offer employment to or employ, or offer to conclude any contract of
services or otherwise be engaged with the aim of providing work for the Company
or Purchaser with any person who is at the date of signing this Agreement or
who was at any time during the period of six months immediately preceding said
date employed in a managerial, supervisory, technical or sales capacity by, or
engaged as a consultant to, the Company or Purchaser (whether or not such
person would commit a breach of contract by reason of leaving such employment
or engagement);


 


10.4         Sellers
undertake that they shall indemnify and hold Purchaser harmless against and
shall promptly and duly reimburse in full any and all costs.


 


	
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expenses, losses or Damages directly related to the
above representations and declarations in Article 10 herein qualifying untrue
or any breach whatsoever of the above undertakings and obligations, that is
accrued to the Company or the Purchaser directly. A direct Damage to the
Purchaser excludes any consequential losses resulting out of a direct Damage in
Dataware. The above indemnity obligation of Sellers is regardless of any
culpability and knowledge thereof and whether those are attributable to any
negligence, failure or omission of Sellers or any third Party. However, Parties
acknowledge that Seller shall not indemnify either Purchaser or the Company
against consequential damages (e.g. loss of profit) under this Section.


 


Article 11

Entire Agreement


 


11.1         This
Agreement and all annexes thereto and any other documents referred to in this
Agreement (the “Share Purchase Documents”)
constitute the whole and only agreement between the Parties relating to the
sale and purchase of the Quotas. This Agreement can only be amended by mutual
prior written consent between the Parties, which consent shall not be upheld
unreasonably.


 


11.2         Except
to the extent repeated in any of the Share Purchase Documents, the Share
Purchase Documents supersede and extinguish any pre-contractual statement.


 


11.3         Purchaser
shall not have any right of action against Sellers arising out of or in connection
with any pre-contractual statement except to the extent that such pre-contractual
statement is related in the Share Purchase Documents.


 


11.4         For
the purpose of this Article, “pre-contractual
statement” means a draft, agreement, 
undertaking,  representation,  warranty, 
promise,  assurance or arrangement
of any nature whatsoever, whether or not in writing, relating to the subject
matter of any of the Share Purchase Documents made or given by a Party to any
of the Share Purchase Documents or any other person at any time prior to the
date of this Agreement.


 


Article 12

Notices


 


12.1         A
notice under this Agreement shall only be effective if made by fax or letter.


 


12.2         Notices
under this Agreement shall be sent to a Party at its address or fax number and
for the attention of the individual set out below;


 


	
  Sellers

  	
   

  	
  T-Systems International GmbH

  
	
   

  	
   

  	
  Attention: Alexander Brencdecke
  

  D-70771 Leinfelden-Echterdingen,

  



 


	
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  Fasanenweg 5

  Fax number: +49 711 972 99015

  
	
   

  	
   

  	
   

  
	
  Purchaser

  	
   

  	
  Magyar Tavközlési
  Rt.

  Attention: András Balogh 

  Chief Strategist. Executive Director 

  1541 Budapest, Krsztina kit 55, 

  Fax number: + 36 1 458 73 55

  
	
   

  	
   

  	
   

  
	
  With copy to

  	
   

  	
  Magyar Tavkózlési Rt.

  Attention: Tamás Morvai

  Director

  1541 Budapest, Krisztina krt. 55.

  Fax number: + 36 1 458 70 25

  



 


provided that a Party may change its notice details on
giving written notice to the other Party of the change in accordance with this
Article.


 


12.3         Any
notice given under this Agreement shall, in absence of earlier receipt, be
deemed to have been duly given as follows:


 


a.             if
delivered personally, on delivery;


 


b.             if
sent by registered mail, four business days after the date of posting; or


 


c.             if
sent by fax, when transmission has been successfully completed.


 


Article 13

Announcements


 


13.1         No
announcement concerning the sale of the Quotas or any ancillary matter shall be
made by any Party or the Company without the prior written approval of
Purchaser and Sellers.


 


13.2         Notwithstanding
Article 13.1, either Parly may, after consultation with the other Parties make
an announcement concerning the sale of the Quotas or any ancillary matter if
required by:


 


a.             law;


 


b.             any
securities exchange or regulatory or governmental body to which that Party is
subject or submits, wherever situated, whether or not the requirement has the
force or law.


 


	
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in which case the Party concerned shall take all such
steps as may be reasonable and practicable in the circumstances to agree the
contents of such announcement with the Party before making such announcement.


 


13.3         The
restrictions contained in this Article shall apply without limit in time.


 


Article 14 

Confidentiality


 


14.1         Without
limitation of the preceding Article, each Party shall treat as confidential all
information received or obtained as a result
of entering into or performing this Agreement, its specific provisions as well
as the negotiations that related to this Agreement.


 


14.2         Notwithstanding
the other provisions of this Article, a Party may only disclose confidential
information:


 


a.             if
and to the extent required by the law of any relevant jurisdictions;


 


b.             if
and to the extent required by existing contractual obligations: provided that
the receiving third party is bound by appropriate confidentiality obligations;


 


c.             if
and to the extent required by any securities exchange or regulatory or governmental
body to which that Party is subject or submits, wherever situated, including
(amongst other bodies) the stock exchange, whether or not the requirement for
information has the force of law;


 


d.             if
and to the extent required to vest the full benefit of this Agreement in that
Party;


 


e.             to
its professional advisers, auditors and bankers;


 


f.              if
and to the extent the information has come into public domain through no fault
of that Party; or


 


g.             if
and to the extent the other Party has given prior written consent to the disclosure.


 


Any information to be disclosed pursuant to paragraphs
a, b or c shall be disclosed only after consultation with the other Party and
only the minimum amount of information required to comply with such request
shall be released.


 


14.3         The
restrictions contained in this Article shall continue to apply without limit in
time.


 


	
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Article
15 - Costs and Expenses


 


15.1         Each
Party shall pay its own costs and expenses in relation to the negotiations leading
up to the sale and purchase of the Transfer Quotas and the Initial Capital
Increase and the preparation, execution and carrying into effect of this Agreement
and all other documents referred to in it.


 


15.2         The
costs of executing this Agreement shall be borne by the Company as the Joint
Venture of the Parties.


 


Article
16 

Invalidity and waiver


 


16.1         If
at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable
in any respect under the law of any jurisdiction, that shall not affect or
impair the legality, validity or enforceability in that jurisdiction of any other
provision of this Agreement, or the legality, validity or enforceability under
the law of any other jurisdiction of that or any other provision of this Agreement.


 


16.2         Sellers
and Purchaser each hereby waive the right to rescind or dissolve this Agreement,
except for the right of rescission of the Parties in Sections 6.4 and 6.5 and
except for the Purchaser, if any circumstances make impossible the acquisition
of full and proper title to the Quotas.


 


Article
17

Choice of Governing Law


 


This Agreement shall be governed by and construed in
accordance with the Hungarian law.


 


Article
18

Arbitration


 


18.1         All
disputes arising in connection with the present contract, or further contracts resulting
therefrom, shall be referred to and finally settled by the Permanent Arbitration
Court attached to the Hungarian Chamber of Commerce and Industry, which shall
act in accordance with its own rules of procedure.


 


18.2         The
arbitral tribunal shall be composed of three arbitrators, from which Sellers collectively
shall be entitled to appoint one and Purchaser shall be entitled to appoint
one, and the two so appointed arbitrators shall appoint the third arbitrator
who shall be the chairman.


 


	
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18.3     The
place of arbitration shall be Budapest.


 


18.4     The
arbitration procedure shall be conducted in the English language.


 


Schedules:


 


	
  Schedule 1:

  	
  Accounts

  
	
  Schedule 2.5:

  	
  Version A of Articles of Association

  
	
  Schedule 3.4:

  	
  Version B of Articles of Association

  
	
  Schedule 4.3.2:

  	
  Achievement of Targets

  
	
  Schedule 4.3.4:

  	
  Order-Entry/Order-Backlog-Guideline

  
	
  Schedule 7.1:

  	
  Warranties

  



 


	
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  Thus agreed and signed in threefold:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Budapest, July 15, 2004

  	
  Budapest, July 9, 2004

  	
   

  
	
   

  	
   

  	
   

  
	
  For and behalf of

  	
  For and behalf of

  	
   

  
	
   

  	
   

  	
   

  
	
  T-Systems International GmbH

  	
  Magyar Távközlési-Rt.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Michael Hofmann

  	
   

  	
  /s/ Straub Elek

  	
   

  	
  [SEAL]

  
	
                                MICHAEL HOFMANN

  	
  STRAUB ELEK

  	
   

  
	
   

  	
  Chairman and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Wilfried Peters

  	
   

  	
  /s/ Balogh Andra’s

  	
   

  	
   

  
	
                                WILFRIED PETERS

  	
  BALOGH ANDRA’S

  	
   

  
	
   

  	
  Chief Strategist, Executive Director

  	
   

  
	
   

  	
   

  	
   

  
	
  Budapest, July 14, 2004

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  T-Systems Beteiligungsverwaltungsgesellschaft
  mbH

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Anne Monnich

  	
   

  	
   

  	
   

  
	
                                ANNE MONNICH

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Sunita Saxena

  	
   

  	
   

  	
   

  
	
                                SUNITA SAXENA

  	
   

  	
   

  



 


	
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