Consent Request and Notice of Extraordinary General Meeting THIS NOTICE CONTAINS IMPORTANT INFORMATION OF INTEREST TO THE BENEFICIAL OWNERS OF THE UNITS. IF APPLICABLE, ALL DEPOSITARIES, CUSTODIANS AND OTHER INTERMEDIARIES RECEIVING THIS NOTICE ARE REQUESTED TO PASS THIS NOTICE TO SUCH BENEFICIAL OWNERS IN A TIMELY MANNER. Matel Holdings Limited Registered Company No. 281519 ( Equityco ) Address Mourant Ozannes Corporate Services (Cayman) Limited 94 Solaris Avenue Camana Bay PO Box 1348 Grand Cayman, KY1-1108 6 St. Andrew Street London EC4A 3AE, United Kingdom 150,051,000 Units resulting from the combination of shares issued by Equityco ( Shares ) and Notes (as defined below) issued by Holdco (as defined below) Regulation S: Common Code 098587918 / ISIN XS0985879187 Rule 144A: Common Code 098587926 / ISIN XS0985879260 (the Units ) Reference is made herein to: (A) the unit agreement dated 12 December 2013 (as amended and/or supplemented from time to time, the Unit Agreement ), between, Magyar Telecom B.V. ( Holdco ), Equityco, The Bank of New York Mellon, London Branch, as unit agent (the Unit Agent ), and The Bank of New York Mellon (Luxembourg) S.A., as registrar; (B) the equity agency agreement dated 12 December 2013 (as amended and/or supplemented from time to time, the Equity Agency Agreement ), between, Equityco, The Bank of New York Mellon, London Branch, as share agent (the Share Agent ), and Mourant Ozannes Corporate Services (Cayman) Limited, as registrar (the Registrar ); and (C) the Holdco shareholders agreement dated 12 December 2013 (as amended and/or supplemented from time to time, the Holdco Shareholders Agreement ), between, amongst others, Equityco, Holdco and Invitel Távközlési ZRT. While in Unit form, all approvals in relation to the Shares shall be given by holders of the Units ( Unitholders ) and all references herein to instructions from Unitholders will be in their role as holders of Shares. Pursuant to the Unit Agreement and the Equity Agency Agreement, Equityco hereby gives notice to the Unitholders that it wishes to seek their written consent (as described below) in respect of the Shares which make up part of the Units in relation to the proposals described below. A WRITTEN CONSENT OR OBJECTION WILL BE DEEMED TO HAVE BEEN GIVEN IN IN ACCORDANCE WITH THE PROCEDURES SET FORTH UNDER WRITTEN CONSENTS AND WRITTEN OBJECTIONS IN RESPECT OF THE PROPOSALS.
PLEASE READ THIS SECTION CAREFULLY TO ENSURE A VALID WRITTEN CONSENT OR OBJECTION IS PROVIDED. Background a. Appointment of Holdco Directors Under the Holdco Shareholders Agreement, since an Exit is likely not to occur by 15 October 2015, an Equityco Control Event will likely take place. Pursuant to Section 7.1.2(c) of the Holdco Shareholders Agreement, following an Equityco Control Event, Equityco may, by notice in writing to Holdco, require the shareholders of Holdco to appoint, remove and/or replace a nonexecutive Chairman plus up to two (2) other directors of Holdco. Mark Nelson-Smith and Jan Vorstermans are already directors of Holdco. Equityco is proposing that András Piller is appointed as a director of Holdco, and that Mark Nelson-Smith and Jan Vorstermans continue in their roles as directors of Holdco, with Mark Nelson-Smith also taking the role of non-executive Chairman of the board of Holdco. Equityco requires the written consent of the holders of a majority of the Shares (other than Shares held by or on behalf of an Ineligible Person, a Prohibited Transferee, a Disqualified Transferee or a Restricted Purchaser) to appoint, remove and/or replace any directors of Holdco. Equityco is seeking written consent for the appointment of András Piller as a non-executive director of Holdco, Mark Nelson-Smith as non-executive Chairman of the board of Holdco and Jan Vorstermans as executive Director of Holdco, such that the Equityco appointed directors of Holdco will be: (i) (ii) (iii) Mark Nelson-Smith, as director and non-executive Chairman; Jan Vorstermans, as executive Director; and András Piller, as non-executive Director. András Piller s professional experience and qualifications are summarized below. Mr András Piller has extensive experience in the telecommunications sector, most recently assuming temporary CEO responsibilities at Baltcom (LV), Latvia s leading cable television operator, where he had also worked in 2011-2012. Between 2012 and 2014, Mr Piller was CEO at Antenna Hungária Zrt, the leading Hungarian TV and radio broadcasting company, where he successfully managed the process of switching-off analogue TV broadcasting, more than doubled the number of pay-tv customers and implemented a major cost reduction program. Mr Piller has also held roles in FN Cable holding, T-Kábel Ltd. (previously Matávkábel TV Ltd.), Hungarian RTL Television Co. (RTL Klub), Westel Radiotelephone Ltd. and Unicbank (now Raiffeisen Bank). Mr Piller attended the University of Economic Sciences, Budapest Faculty. b. Extension of stapling of Notes and Shares as Units Written consent Under Section 8.1 of the Unit Agreement, the Notes and Shares are not separately transferable, subject to compliance with applicable securities laws, until the earlier to occur of five events. None of the events have yet occurred; the Notes and Shares are thereby not separately transferable and are still stapled as Units.
Pursuant to Section 8.1(iv) of the Unit Agreement, the Notes and Shares will no longer be stapled as Units on December 12, 2015 (unless an earlier de-stapling event occurs). This date may be extended pursuant to a request of Equityco following instructions from the holders of the Shares to Equityco to make such request. Equityco is hereby requesting the written consent of a majority of the Unitholders to require the directors of Equityco to request the extension of the de-stapling date from December 12, 2015, to December 12, 2016 (unless an earlier de-stapling event occurs). Ordinary resolution It is proposed that the matters considered in this section b (Extension of stapling of Notes and Shares as Units) are approved by ordinary resolution at an extraordinary general meeting of Equityco. As a result, written consent or written objection given in respect of the matters considered in this paragraph b (Extension of stapling of Notes and Shares as Units) shall be counted as votes of shareholders of Equityco (via proxy) which will be cast at an extraordinary general meeting of Equityco to be held on October 12, 2015 (the EGM ). Schedule 3 (Notice of Extraordinary General Meeting) contains notice of the EGM. By providing written consent or written objection in respect of the matters considered in this paragraph b (Extension of stapling of Notes and Shares as Units), by voting on the proposals in the manner set out in Written consents and written objections in respect of the Proposals, Unitholders will be granting a proxy to the Share Agent to vote on the ordinary resolution at the EGM in accordance with their written consent or written objection. The electronic instruction in respect of the matters considered in this section b (Extension of stapling of Notes and Shares as Units) will inform the Share Agent how it should vote in respect of the ordinary resolution to be tabled at the EGM. As the ordinary resolution is to be voted on as a poll, Unitholders have the option of dividing their written consent, written objection or abstaining by the number of shares they hold and can therefore provide written consent, written objection or abstain in respect of each share held. If no division of a Unitholder s voting instructions is specified when a Unitholder provides its electronic instruction its vote shall be taken to be in respect of all the shares the Units it holds represent. Collection of written consents and written objections Written consents and written objections under this Consent Request will be collected by the Share Agent and summarised in a block consent/rejection which shall be given by the Share Agent to Equityco. A written consent or objection will be deemed to have been given in accordance with the procedures set forth under Written consents and written objections in respect of the Proposals, which shall be deemed to comply with Article 3 of the Equityco Articles of Association with respect to electronic communications. Proposals Proposal 1 ( Proposal 1 ) Equityco is asking the Unitholders to provide their written consent for the appointment of András Piller as a non-executive director of Holdco, Mark Nelson-Smith as non-executive Chairman of the board of Holdco and Jan Vorstermans as executive Director of Holdco, such that the Equityco appointed directors of Holdco will be: (i) Mark Nelson-Smith, as director and non-executive Chairman;
(ii) (iii) Jan Vorstermans, as executive Director; and András Piller, as non-executive Director. Proposal 2 ( Proposal 2 ) Equityco is also asking the Unitholders to provide their written consent in favour of extending the stapling of the Notes and the Shares in the Units from December 12, 2015 to December 12, 2016 (unless an earlier de-stapling event occurs). In this Consent Request, Proposal 1 and Proposal 2 are together referred to as the Proposals and each a Proposal. Each Proposal is separate and it is possible to consent to both Proposals, consent to one Proposal and reject the other Proposal or to reject both Proposals. Information regarding provision of written consent or written objection In compliance with Section 7.2 of the Equity Agency Agreement, Unitholders are hereby notified of the following procedures in relation to the request for their written consent: (a) (b) (c) (d) (e) (f) the record date for determining eligibility of Unitholders to participate in voting on the Proposals shall be September 29, 2015 (the "Record Date") holdings of Units will not be blocked and the Units will be freely transferable by Unitholders both before and after they have submitted their written consent or objection; the deadline for providing written consent or written objection in respect of the Proposals is October 9, 2015, which is one business day prior to the shareholders meeting of Equityco; Unitholders should provide written consent or written objection as set forth under Written consents and written objections in respect of the Proposals below and by doing so, authorise the Share Agent to give such consent or objection on their behalf in respect of the Shares held (including by signing a proxy), and authorise the Clearing Systems to provide verification of their holding of Shares; by providing written consent or written objection in respect of the Proposals or otherwise seeking to participate in the Proposals, each Unitholder represents, warrants and covenants that it is not an Ineligible Person, a Prohibited Transferee, Disqualified Transferee or a Restricted Purchaser; and each Unitholder agrees to disclose the full name, address, contact name and amount held for each beneficial owner of relevant holdings of Shares for which written consents or written objections are given to the Tabulation and Information Agent, the Unit Agent and the Share Agent. Failure to comply with (f) above will mean that a consent or objection is invalid and shall not be processed and the holding to which such instructions relate shall not be counted towards any quorum requirements in relation to this Consent Request. No consent fee No fee is being offered or paid to Unitholders who provide written consent in respect of one or both of the Proposals. If you do not want to provide written consent in respect of a Proposal, you do not have to take any action, but if that Proposal is consented to by Unitholders holding at least a majority in
aggregate principal amount of the outstanding Units, all Unitholders will be bound by its terms, including Unitholders who abstain from consenting and Unitholders who provide a written objection for that Proposal. Documents Available for Inspection Copies of the: Equity Agency Agreement, Unit Agreement, constitutional documents of Equityco; constitutional documents of Holdco; and this Consent Request, are available at http://www.invitel.hu/english/investor-relations#restructuring-documents. Written consents and written objections in respect of the Proposals In favour of the Proposals Unitholders that wish to consent to a Proposal(s) should arrange for their custodian to request the Clearing Systems, as appropriate, to send an electronic instruction (which will constitute their written consent) to the Tabulation Agent no later than 3:00 p.m. London time on October 9, 2015, (i) disclosing such Unitholder s identity, contact details (including name, address, telephone number and email address), participant account number and the nominal amount of such Unitholder s holding in the Units as at such date and referencing the ISIN of the Units; and (ii) stating that they consent to one or both of the Proposals on the terms set out in this Consent Request. By delivering, or procuring the delivery of such electronic instruction, Unitholders are deemed to (i) irrevocably consent to the relevant Proposal(s) in writing and (ii) authorise the relevant Clearing System to disclose their full name, address, contact name, holdings and Clearing System account details to the Tabulation Agent. Against the Proposals Unitholders that wish to object to a Proposal(s) should arrange for their custodian to request the Clearing Systems, as appropriate, to send an electronic instruction (which will constitute their written objection) to the Tabulation Agent no later than 3:00 p.m. London time on October 9, 2015, (i) disclosing such Unitholder s identity, contact details (including name, address, telephone number and email address), participant account number and the nominal amount of such Unitholder s holding in the Units as at such date and referencing the ISIN of the Units; and (ii) stating that they object to one or both of the Proposals on the terms set out in this Consent Request. By delivering, or procuring the delivery of such electronic instruction, Unitholders are deemed to (i) irrevocably reject the relevant Proposal(s) in writing and (ii) authorise the relevant Clearing System to disclose their full name, address, contact name, holdings and Clearing System account details to the Tabulation Agent. Unitholders need take no action if they would like to abstain from voting. Each Proposal is separate and it is possible to consent to both Proposals, consent to one Proposal and reject the other Proposal or to reject both Proposals. IMPORTANT INFORMATION ABOUT VOTES: Any electronic instruction from a Unitholder who has not authorised the disclosure specified in clause (f) under Information regarding voting above shall not be processed and the holding to which such instructions relate shall not be counted towards any quorum requirements in relation to this Consent Request.
Confidentiality All individual electronic instructions sent to the Tabulation Agent pursuant to this Consent Request will be held by it on a confidential basis and will not be disclosed to any person, other than the Unit Agent, Equityco, Holdco and each of their respective advisers. Each Unitholder consents to such disclosure. Further Information about this Consent Request or Equityco If you require any additional information for voting on this Consent Request, or would like more information about Equityco from the directors of Equityco, please contact the Tabulation Agent appointed by Equityco using the following details: Address: Lucid Issuer Services Limited Leroy House 436 Essex Road London N1 3QP Attention: Thomas Choquet Telephone: +44 207 704 0880 E-mail: invitel@lucid-is.com Important Notice IN ACCORDANCE WITH ITS CUSTOMARY PRACTICE, NEITHER THE UNIT AGENT NOR THE TABULATION AGENT MAKE ANY ASSESSMENT OF THE IMPACT OF THE PROPOSALS PRESENTED TO UNITHOLDERS ON THE INTERESTS OF THE UNITHOLDERS EITHER AS A CLASS OR INDIVIDUALLY AND MAKES NO RECOMMENDATION AS TO WHETHER CONSENTS TO THE PROPOSALS SHOULD BE GIVEN. NEITHER THE UNIT AGENT NOR THE TABULATION AGENT IS RESPONSIBLE FOR THE ACCURACY, COMPLETENESS, VALIDITY OR CORRECTNESS OF THE STATEMENTS MADE IN THIS CONSENT REQUEST OR OMISSIONS THEREFROM AND MAKES NO REPRESENTATION THAT ALL RELEVANT INFORMATION HAS BEEN DISCLOSED TO UNITHOLDERS IN OR PURSUANT TO THIS CONSENT REQUEST. EACH UNITHOLDER MUST MAKE ITS OWN ANALYSIS AND INVESTIGATION REGARDING THE PROPOSALS AND MAKE ITS OWN CONSENT DECISION. IF IN DOUBT AS TO WHAT ACTION SHOULD BE TAKEN, UNITHOLDERS SHOULD CONSULT WITH THEIR BROKERS, FINANCIAL ADVISERS, LEGAL COUNSEL OR OTHER INDEPENDENT ADVISERS. NOTICE ON 29 SEPTEMBER 2015 GIVEN BY: Matel Holdings Limited Address Mourant Ozannes Corporate Services (Cayman) Limited 94 Solaris Avenue Camana Bay PO Box 1348 Grand Cayman, KY1-1108 6 St. Andrew Street London EC4A 3AE, United Kingdom
Schedule 1 - Definitions For the purpose of this Consent Request, the following terms shall have the meanings specified in this Schedule 1: Capital Stock means, with respect to any Person, any and all shares, interests, partnership interests (whether general or limited), participations, rights in or other equivalents (however designated) of such Person s equity, any other interest or participation that confers the right to receive a share of the profits and losses, or distributions of assets of, or voting power in such Person and any rights (other than debt securities convertible into or exchangeable for Capital Stock), warrants or options exchangeable for or convertible into such Capital Stock. Clearing Systems means, together, Euroclear Bank, SA/NV or Clearstream Banking, société anonyme. Disqualified Transferee means a Person who is a citizen of, or domiciled or resident in, or subject to the laws of, any jurisdiction outside any member state of the European Union, the United States of America, Canada, Australia, Hong Kong, Singapore or Japan and where a transfer of Shares or other equity securities of the Company to such Person would, or would be likely to, result in the Company being required to comply with any filing, registration, disclosure or other onerous (as may be decided at the Company s sole discretion) requirement in such jurisdiction Exit means the events identified as an Exit in the Holdco Shareholder Agreement which comprise transactions featuring a sale of all of the shares of Holdco or all or substantially all of the assets of the Group. Group means Holdco, each of the Operating Companies and their respective Subsidiaries. Group Company means any one of Holdco, each of the Operating Companies and their respective subsidiaries. Indenture means the indenture dated 12 December 2013 by and between the Company, each of the Operating Companies, BNY Corporate Trustee Services Limited, The Bank of New York Mellon and The Bank of New York Mellon (Luxembourg) S.A., relating to 165,000,000 senior secured notes due 2018. Ineligible Person means the Sponsor or any Sponsor Permitted Holder. Notes means 150,051,000 senior secured notes due 2018 issued by the Company pursuant to the terms of the Indenture. Operating Companies means Invitel Távközlési ZRT, Invitel Technocom KFT and Invitel International Holdings B.V. Person means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a fund, a joint venture, an unincorporated organisation and a governmental entity or any department, agency or political subdivision thereof. Prohibited Transferee means has the meaning set out in Schedule 2 (Prohibited Transferee) to the Consent Request. Related Person means:
(a) (b) in relation to a Person (the First Person), a Person which is sponsored, managed or advised by the same sponsor, investment manager or investment adviser as the First Person or an affiliate of that sponsor, investment manager or investment adviser; in relation to a sponsor, investment manager or investment adviser, a Person which is managed or advised by the adviser or an affiliate of that sponsor, investment manager or investment adviser. Restricted Purchaser means any Person who is engaged, or any of whose affiliates is engaged, directly or indirectly, in any business (i) that is of the same or similar type to all or any material part of the business as carried out by the Group at any time within the previous 12 months and (ii) which is in any way in competition with the same (as may be decided at Holdco s sole discretion). Shares means the ordinary shares of 0.0001 nominal value in the share capital of Equityco. Sponsor means Hungarian Telecom (Netherlands) Coöperatief U.A. Sponsor Permitted Holder means the Sponsor, its affiliates, successors and Related Persons and any successors of its affiliates and Related Persons Tabulation Agent means Lucid Issuer Services Limited. Units means the units of Shares and Notes issued pursuant to the Unit Agreement. Unitholders means the holders of the Units, each a Unitholder.
Schedule 2 - Prohibited Transferee Any Person (other than natural persons) is a Prohibited Transferee if, following a proposed sale, transfer, assignment or other disposal of Shares it would hold twenty five per cent. (25%) or more of the Capital Stock in any Group Company (whether directly or indirectly) registered and/or operating in the Hungarian market or it would otherwise have a dominant influence over any Group Company registered and/or operating in the Hungarian market, and a) it is resident for tax purposes in a country other than an EU, EEA or OECD country or a country which has a double-taxation treaty with Hungary, or it is a Controlled Foreign Company; and/or b) the ultimate beneficial owners (being natural persons) of the relevant Capital Stock are not verifiable. For the purposes of this Schedule 2: Controlled Foreign Company means, in accordance with Article 4(11) of the Hungarian Act LXXXI of 1996 on Corporate Tax and Dividend Tax, a Non-Resident Company: a) in which there is a beneficial owner who is considered a Hungarian tax resident (pursuant to Act CXVII of 1995 on Personal Income Tax) during the majority of the Non-Resident Company s most recently completed tax year; or b) in relation to which more than 50% of its Revenues for the Non-Resident Company s most recently completed tax year qualify as Hungarian source revenue, in either case, if, for the relevant tax year: c) the quotient of the amount of corporate tax paid or payable by the Non-Resident Company less any tax refund, and the tax base (or in the case of a group taxation arrangement the amount of corporate tax paid or payable at the group level, less any tax refund, and the tax base), is less than ten per cent. (10%) or, if the profit and tax bases are zero or negative, the amount of the tax equivalent to corporate tax under the laws of the foreign state does not reach ten per cent (10%); or d) the Non-Resident Company did not pay any tax equivalent to corporate tax due to its tax base being zero or negative, even though it made a profit, provided that a Non-Resident Company shall not be considered to be a Controlled Foreign Company if (i) it is established in or is a tax resident of an EU or OECD member state or a state with which Hungary has an agreement on the avoidance of double taxation, provided that the Non-Resident Company (together with any affiliate established in that state) maintains a genuine economic presence in such state, or (ii) a Person listed on a Recognised Stock Exchange for a period of at least five (5) years by the first day of the relevant tax year, or its affiliated companies, holds at least twenty five per cent. (25%) interest on each day of the relevant tax year. dominant influence means, in accordance with Article 3(1)(9) of the Hungarian Act on National Assets: a) being entitled to appoint and recall the majority of the executive officers or supervisory board members of any of the Group Companies, or b) controlling more than 50% of the votes of a Group Company by virtue of an agreement with other members or shareholders of that Group Company.
genuine economic presence means, in accordance with Article 4(11)(a) of Hungarian Act LXXXI of 1996 on Corporate Tax and Dividend Tax, being engaged in any manufacturing, processing, agricultural, service providing, investment or trading activities, using its own equipment and employees where revenues from such activities represent at least 50% of all revenues. Non-Resident Company means a Person incorporated or having their place of management outside of Hungary. Recognised Stock Exchange means, in accordance with Article 4(2)(18) of Hungarian Act CXXXVIII of 2007 on Investment Firms and Commodity Dealers, and on the Regulations Governing their Activities, a stock exchange which is recognized as such by the competent supervisory authorities and which meets all of the following criteria. The exchange: a) operates regularly; b) is subject to rules, issued or approved by the competent supervisory authorities of the country where the stock exchange has its registered seat, defining the requirements for (i) the operation of the stock exchange, (ii) access to the stock exchange, (iii) listing on the stock exchange, and (iv) the entering into transactions on the stock exchange; and c) has a clearing mechanism whereby future contracts are subject to deposit margin requirements which, in the opinion of the competent supervisory authorities, provide appropriate protection. Revenues means any and all revenues that the Non-Resident Company accounts for in its books, including, without limitation, dividends, capital gains, interest, service fees, royalties and recharged expenses.
Schedule 3 Notice of Extraordinary General Meeting Matel Holdings Limited Registered Company No. 281519 ( Equityco ) Notice of Extraordinary General Meeting ( EGM ) Notice is hereby given that an extraordinary general meeting of Equityco will be held at 6 St. Andrew Street, London, EC4A 3AE, United Kingdom on October 12, 2015 at 5pm for the purpose of considering and, if thought fit, passing, with or without amendment, the following: Ordinary business To require the directors of Equityco to request the extension of the de-stapling date from December 12, 2015, to December 12, 2016 (unless an earlier de-stapling event occurs), as contemplated by Section 8.1 of the unit agreement dated 12 December 2013 (as amended and/or supplemented from time to time), between Magyar Telecom B.V., Equityco, The Bank of New York Mellon, London Branch, as unit agent and The Bank of New York Mellon (Luxembourg) S.A., as registrar. Dated September 29, 2015 By order of the board, Mark Nelson-Smith (Director) Proxies Unitholders are reminded that the only registered holder of the Shares comprised within the Units is The Bank of New York Depository (Nominees) Limited (the Nominee). As such, the requirements of the Company s Articles of Association in respect of proxies apply solely to the Nominee and for the purposes of those requirements the Nominee is hereby informed that, as it is entitled to attend and vote at the EGM, it is also entitled to appoint one or more proxies to attend the EGM and vote on its behalf (and such proxy need not be a shareholder in the Company, albeit that that Nominee is the sole registered holder of the Shares comprised within the Units) and for the avoidance of doubt such votes will be cast in accordance with the electronic instructions of the Unitholders. The Company will, pursuant to a resolution of the board of its Directors, approve and circulate a form of proxy, with instructions how to appoint a proxy, to the Nominee.