SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 8 - K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 21, 1999
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EuroWeb International Corp.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-1200 13-3696015
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(Commission File Number) (IRS Employer Identification No.)
445 Park Avenue, 15th Floor, New York, NY 10022
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 758 9870
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N/A
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(Former name or former address, if changed since last report)
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8K-2
INFORMATION TO BE INCLUDED IN REPORT
ITEM 5. OTHER EVENTS
In March 1999, Euroweb International Corp. (the "Company") embarked on
a planned expansion program beyond its base in Hungary. The Company entered
into acquisition agreements with EuNet Slovakia, a leading Internet service
provider in Slovakia, and with Luko Czech Net, a leading Internet service
provider in the Czech Republic, subject to due diligence. It also entered into
negotiations to acquire other Internet service providing companies in the Czech
Republic, Slovakia, Slovenia and Romania. To finance the acquisition program,
the Company completed the following three Private Placements in April 1999:
1. Registrant completed a private placement of 565,141 shares of its
Common Stock for $741,728.81 with J.P. Carey Inc., as placement agent
(the"Placement Agent") pursuant to Section 4(2) of the Securities Act of 1933.
Registrant paid the Placement Agent a fee of $74,172.88 and expenses of $16,250
and issued 56,514 five year Warrants to the Placement Agent to purchase 56,514
shares of its Common Stock on or after April 2, 1999 at an exercise price of
$2.10 per share. Copies of the Placement Agent Agreement, the Warrant Agreement
and the Warrant Certificates are annexed hereto as Exhibit 10(gg).
2. Registrant completed a private placement to an investor of 152,380
shares of its Common Stock for $200,000 pursuant to Section 4(2) of the
Securities Act of 1933. Registrant paid no fees or had any direct costs in
connection with this sale. A copy of the private placement agreement, is annexed
hereto as Exhibit 10(hh).
3. Registrant completed a private placement of 27 1/2 Units at $50,000
per Unit. Each Unit consists of 28,571 Shares of Common Stock and 28,571 Common
Stock A Purchase Warrants and 28,571 Common Stock B Purchase Warrants pursuant
to Rule 506 of Regulation D promulgated under Section 4(2) of the Securities Act
of 1933. Registrant thus sold 785,701 shares, 785,701 three year A Warrants
exercisable at $2 per share and 785,701 three year B Warrants exercisable at
$2.25 per share and received $1,375,000 for the Units. Registrant paid no fees,
or had any direct costs in connection with this sale other than State Blue Sky
fees. Copies of the Subscription Agreement and of the of A and B Warrants are
annexed hereto as Exhibit 10(ii).
The Company employed Zoltan Gelencser as a full time consultant to act
as Country manager of its Internet operations in the Czech Republic. Mr.
Gelencser held a management position with Hungarian Telecommunications
Corporation and served on the faculty of Technical University of Budapest prior
to his employment by the Company. The Company is currently interviewing for a
Country manager for Slovakia.
The Compensation Committee recommended, and the Board of Directors
approved, a grant of 1,000,000 options to Management for its services in
identifying and negotiating the acquisition agreement and arranging for the
financing. The 1,000,000 options were granted as follows:
(a) 370,000 Robert Genova (President)
(b) 315,000 Frank R. Cohen (Chairman of the Board)
(c) 315,000 Csaba Toro (Vice President and European
Manager of Operations)
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SIGNATURES
Pursuant to the requirement of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EUROWEB INTERNATIONAL CORP.
444 Park Avenue
New York, NY 10022
(Registrant)
By: /s/Frank R. Cohen
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Frank R. Cohen
Chairman of Board
Dated: April 24, 1999
New York, New York
PLACEMENT AGENCY AGREEMENT
THIS AGREEMENT ("Agreement"), made as of the 17th day of March, 1999 by
and between Euroweb International Corp., a Delaware corporation ("Company"), and
J.P. Carey Securities, Inc., a Georgia corporation (the "Agent").
WITNESSETH:
WHEREAS, the Company proposes to issue and sell up to $800,000 of its
shares of common stock, par value $0.001, in an offering (the "Offering") not
involving a public offering without registration under the Securities Act of
1933, as amended (the "Act"), pursuant to exemptions from the registration
requirements of the Act under Regulation D promulgated under the Act
("Regulation D"), as described below; and
WHEREAS, the Agent has offered to assist the Company in placing the
Securities on a "best efforts," basis with and the Company desires to secure the
services of the Agent on the terms and conditions hereinafter set forth;
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
promises, conditions and covenants herein contained, the parties hereto do
hereby agree as follows:
1. Engagement of Agent. The Company hereby appoints the Agent as its
exclusive placement agent for the Offering, to sell up to $800,000 of Securities
in a series of tranches on a "best efforts" basis. resulting in gross proceeds
to the Company of a maximum of $800,000. The Shares are to be offered based upon
a price of $1.3125 per share. The Agent, on the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, accepts such appointment and agrees to use its best efforts to find
purchasers for the Securities. This appointment shall be irrevocable for the
period commencing on March 17, 1999, and ending as further described in Section
5 herein, which period maybe extended by the consent of the Company and the
Agent (the "Offering Period").
2. Representations and Warranties of the Company. In order to induce
the Agent to enter into this Agreement, the Company hereby represents and
warrants to and agrees with the Agent as follows:
2.1 Offering Documents. The Company and the Placement Agent have
prepared a Securities Purchase Agreement, certain exhibits thereto, and
Registration Rights Agreement regarding the Securities, which documents have
been or will be sent to proposed investors. In addition, proposed investors have
received or will receive prior to closing copies of the Company's Annual Report
on Form 10-KSB for the period ended December 31, 1997, and other documents that
were subsequently filed with the SEC ("SEC Documents"). The SEC Documents were
prepared in conformity with the requirements (to the extent applicable) of the
Securities and Exchange Act of 1934, as amended, and the rules and regulations
("Rules and Regulations") of the Commission promulgated thereunder. As used in
this Agreement, the term
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"Offering Documents" refers to and means the SEC Documents, the Subscription
Agreement and all amendments, exhibits and supplements thereto, together with
any other documents which are provided to the Agent by, or approved for Agent's
use by, the Company for the purpose of this Offering.
2.2 Provision of Offering Documents. The Company shall deliver to the
Agent, without charge, as many copies of the Offering Documents as the Agent may
reasonably require for the purposes contemplated by this Agreement. The Company
authorizes the Agent, in connection with the Offering of the Securities, to use
the Offering Documents as from time to time amended or supplemented in
connection with the offering and sale of the Securities and in accordance with
the applicable provisions of the Act and Regulation D. The Company consents to
the Agent's distribution of the Offering Documents to prospective subscribers as
a disclosure document about the Company, its business, prospects, financial
condition and other matters.
2.3 Accuracy of Offering Documents. Taken together, the Offering
Documents, at the time of delivery to subscribers for the Securities, conformed
in all material respects with the requirements, to the extent applicable, of the
Act and the applicable Rules and Regulations and did not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. On the Closing Date
(as hereinafter defined), the Offering Documents, taken together, will contain
all statements which are required to be stated therein in accordance with the
Act and the Rules and Regulations for the purposes of the proposed Offering, and
all statements of material fact contained in the Offering Documents will be true
and correct, and the Offering Documents will not include any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the Company does
not make any representations or warranties as to the information contained in or
omitted from the Offering Documents in reliance upon written information
furnished on behalf of the Agent specifically for use therein.
2.4 Duty to Amend. If during such period of time, as in the opinion of
the Agent or its counsel, any Offering Documents relating to this Offering are
required to be delivered under the Act, any event occurs, or any event known to
the Company relating to or affecting the Company shall occur as a result of
which the Offering Documents as then amended or supplemented would include an
untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or if it is necessary at any time after
the date hereof to amend or supplement the Offering Documents to comply with the
Act or the applicable Rules and Regulations, the Company shall forthwith notify
the Agent thereof and shall prepare such further amendment or supplement to the
Offering Documents as may be required and shall furnish and deliver to the Agent
and to others, whose names and addresses are designated by the Agent, all at the
cost of the Company, a reasonable number of copies of the amendment or
supplement or of the amended or supplemented Offering
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Documents which, as so amended or supplemented, will not contain an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the Offering Documents not misleading in the light of the
circumstances when it is delivered to a purchaser or prospective purchaser, and
which will comply in all respects with the requirements (to the extent
applicable) of the Act and the applicable Rules and Regulations.
2.5 Corporation Condition. The Company's condition is as described in
its Offering Documents, except for changes in the ordinary course of business
and normal year-end adjustments that are not in the aggregate materially adverse
to the Company. The Offering Documents, taken as a whole, present fairly the
business and financial position of the Company as of the Closing Date.
2.6 No Material Adverse Change. Except as may be reflected in or
contemplated by the Offering Documents, subsequent to the dates as of which
information is given in the Offering Documents, and prior to the Closing Date,
there shall not have been any material adverse change in the condition,
financial or otherwise, or in the results of operations of the Company or in its
business taken as a whole.
2.7 No Defaults. Except as disclosed in the Offering Documents or in
writing to the Agent, the Company is not in default in any material respect in
the performance of any obligation, agreement or condition contained in any
material debenture, note or other evidence of indebtedness or any material
indenture or loan agreement of the Company. The execution and delivery of this
Agreement, and the consummation of the transactions herein contemplated, and
compliance with the terms of this Agreement will not conflict with or result in
a breach of any of the terms, conditions or provisions of, or constitute a
default under, the Articles of Incorporation or By-Laws of the Company (in any
respect that is material to the Company), any material note, indenture,
mortgage, deed of trust, or other agreement or instrument to which the Company
is a party or by which the Company or any property of the Company is bound, or
to the Company's knowledge, any existing law, order, rule, regulation, writ,
injunction or decree of any government, governmental instrumentality, agency or
body, arbitration tribunal or court, domestic or foreign, having jurisdiction
over the Company or any property of the Company. The consent, approval,
authorization or order of any court or governmental instrumentality, agency or
body is not required for the consummation of the transactions herein
contemplated except such as may be required under the Act or under the Blue Sky
or securities laws of any state or jurisdiction.
2.8 Incorporation and Standing. The Company is, and at the Closing Date
will be, duly formed and validly existing in good standing as a corporation
under the laws of the State of Delaware and with full power and authority
(corporate and other) to own its properties and conduct its business, present
and proposed, as described in the Offering Documents; the Company, has full
power and authority to enter into this Agreement; and the Company is duly
qualified and in good standing as a foreign entity in each jurisdiction in which
the failure to so qualify would have a material adverse effect on the Company or
its properties.
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2.9 Legality of Outstanding Securities. Prior to the Closing Date, the
outstanding securities of the Company have been duly and validly authorized and
issued, fully paid and nonassessable and conform in all material respects to the
statements with regard thereto contained in the Offering Documents.
2.10 Legality of Securities. The Securities, when sold and delivered,
will constitute legal, valid and binding obligations of the Company, enforceable
in accordance with the terms thereof, and shall be duly and validly issued and
outstanding, fully paid and nonassessable.
2.11 Litigation. Except as set forth in the Offering Documents, there
is now, and at the Closing Date there will be, no action, suit or proceeding
before any court or governmental agency, authority or body pending or, to the
knowledge of the Company, threatened, which might result in judgements against
the Company not adequately covered by insurance or which collectively might
result in any material adverse change in the condition (financial or otherwise)
or business of the Company or which would materially adversely affect the
properties or assets of the Company.
2.12 Finders. The Company does not know of any outstanding claims for
services in the nature of a finder's fee or origination fees with respect to the
sale of the Securities hereunder for which the Agent may be responsible.
2.13 Tax Returns. The Company has filed all federal and state tax
returns which are required to be filed, and has paid all taxes shown on such
returns and on all assessments received by it to the extent such taxes have
become due. All taxes with respect to which the Company is obligated have been
paid or adequate accruals have been set up to cover any such unpaid taxes.
2.14 Authority. The execution and delivery by the Company of this
Agreement have been duly authorized by all necessary action, and this Agreement
is the valid, binding and legally enforceable obligation of the Company subject
to standard qualifications as to the availability of equitable remedies, the
effect of bankruptcy and other laws relating to the protection of debtors and
public policy opinions promulgated by the Commission with respect to
indemnification against liabilities under the Act.
2.15 Actions by the Company. The Company will not take any action which
will impair the effectiveness of the transactions contemplated by this
Agreement.
3. Issue, Sale and Delivery of the Securities.
3.1 Deliveries of Securities. Certificates in such form that, subject
to applicable transfer restrictions as described in the Subscription Agreement,
they can be negotiated by the purchasers thereof (issued in such denominations
and in such names as the Agent may direct the Company to issue) for the
Securities, and warrants representing the Agent's warrant compensation described
in Section 3.6 below
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("Warrants"), shall be delivered by the Company to the Escrow Agent, with copies
made available to the Agent for checking at least one (1) full business day
prior to the Closing Date, it being understood that the directions from the
Agent to the Company shall be given at least two (2) full business days prior to
the Closing Date. The certificates for the Securities and the Warrants shall be
delivered at the Closing and at each Subsequent Closing (as defined
hereinafter).
3.2 Escrow of Funds. Pursuant to the Escrow Agreement, a copy of which
is attached hereto as Exhibit "A" (the "Escrow Agreement"), executed by the
Company, the Agent and the escrow agent (the "Escrow Agent"), the subscribers
shall place all funds for purchase of Securities for each Closing in an escrow
account. The Company shall have the right to approve or object the subscriptions
of each subscriber, as described in the Subscription Agreement prior to each
closing. At such time as subscribers, subscribing for at least $100,000 of
Securities, have delivered to the Escrow Agent their signed subscription
documents, those subscribers have been approved by the Company, and all other
Closing conditions have been met, Escrow Agent shall release the subscription
funds and signed documents to the Company and release the certificates
representing the Securities to the subscribers (the "Initial Closing"). In the
event that the Initial Closing shall be for an amount of Securities less than
$800,000, the Offering may be continued, and additional Closings may be held
(each a "Subsequent Closing") throughout the Offering Period. In addition, the
Agent shall have the right to act as agent for the sale of additional Debentures
or Securities as set forth in Section 5 herein.
3.3 Closing Date. The Initial Closing and any Subsequent Closing shall
take place at the offices of Sims Moss Kline & Davis LLP, 400 Northpark Town
Center, Suite 310, 1000 Abernathy Road, NE, Atlanta, Georgia 30328 at such time
and date ("Closing Date") as will be fixed either orally or in writing by notice
to be given by the Agent to the Company after consultation with the Company,
such Closing Date to be not less than one (1) full business day after the date
on which such notice shall have been given and not less than one (1)) and not
more than ten (10) full business days after the date on which the Escrow Agent
shall have given written notice to the Company and the Agent that funds
deposited with the Escrow Agent total at least $100,000. The Closing Date may be
changed by mutual agreement of the Agent and the Company.
3.4 Agent's Compensation. The Company shall pay the Agent:
(a) A commission of ten percent (10%) of the gross
subscription proceeds of the Initial Offering and any subsequent
Offerings; and
(b) In addition to the fees and reimbursement of costs set
forth in Sections 3.4 and 3.5 of this Agreement, the Company shall
issue to the Agent warrants ("Warrants") in an amount equal to 10% of
the Securities issued by the Company at an exercise price equal to 120%
of the Closing Bid Price (as defined in the Securities Purchase
Agreement). The Warrants shall have cashless
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exercise provisions. The term of the Warrant shall be five years. The
shares of Common Stock issuable upon exercise of the Warrants shall
have registration rights. The Warrants shall be delivered by the
Company to the Escrow Agent prior to each Closing, and the Escrow Agent
shall deliver to the Agent the Warrants applicable to each Closing
simultaneous with the respective Closing.
3.5 Payment of Fees. The Escrow Agent shall be instructed to pay all
fees up to $15,000 (including, but not limited to Agent's legal fees) and cost
reimbursements and Warrants pursuant to section 3.4 of this Agreement, directly
to the Agent from the proceeds of the Closing and all Subsequent Closing,
simultaneous with the transfer of proceeds to the Company.
4. Offering of the Securities on Behalf of the Company.
4.1 In offering the Securities for sale, the Agent shall offer them
solely as an agent for the Company, and such offer shall be made upon the terms
and subject to the conditions set forth in the Offering Documents. The Agent
shall commence making such offer as an agent for the Company as soon as possible
following delivery of the Offering Documents.
4.2 The Agent will not make offers to sell the Securities to, or
solicit offers to subscribe for any Securities from, persons or entities that
are not "accredited investors" as defined in Regulation D.
5. Right of First Refusal. The Company hereby grants Agent rights of
first refusal as follows:
5.1 Beginning the date hereof and ending six (6)months from the final
Closing, the Company grants to the Agent a right of first refusal to act as the
Company's exclusive placement agent for the sale of any debt or equity to be
issued by the Company ("Financing Transaction"). The Agent shall have ten (10)
business days from the date of its receipt from the Company of a detailed and
complete summary of any proposed Financing Transaction to exercise its right of
first refusal to act as Agent upon the same terms and conditions on an all or
nothing basis. In the event that the Company changes or deviates from any of the
terms of the proposed Financing Transaction contained in such written notice,
then such changes or deviation shall be deemed to constitute a new proposed
Financing Transaction and the Company shall b e required to submit a new written
right of first refusal notice to Agent and Agent shall have ten (10) business
days from the date of such notice to exercise its right of first refusal as
described herein.
5.2 The Company agrees to maintain the confidentiality of the Agent's
clients, except as required by applicable law. Such clients shall be those
entities which invest in the Offering (the "Clients"). For a period of two years
from the Closing (the "Exclusivity Period"), the Company will not solicit or
enter into any financing transaction ("Transaction") with the clients without
the written consent of Agent.
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5.3 In the event that Company breaches Section 5.1 or 5.2 of this
Agreement and engages in a Transaction with the Clients during the Exclusivity
Period, Agent shall be entitled to receive compensation in the same proportion
to the financing done without Agent's participation as the compensation to Agent
under this Agreement bears to the financing raised in this Offering.
6(a) Covenants of the Company. The Company covenants and agrees with
the Agent that:
6.1 After the date hereof, the Company will not at any time,
prepare and distribute any amendment or supplement to the Offering Documents, of
which amendment or supplement the Agent shall not previously have been advised
and the Agent and its counsel furnished with a copy within a reasonable time
period prior to the proposed adoption thereof, or to which the Agent shall have
reasonably objected in writing on the ground that it is not in compliance with
the Act or the Rules and Regulations (if applicable).
6.2 The Company will pay, whether or not the transactions
contemplated hereunder are consummated or this Agreement is prevented from
becoming effective or is terminated, all actual costs and expenses incident to
the performance of its obligations under this Agreement, including all expenses
incident to the authorization of the Securities and their issue and delivery to
the Agent, any original issue taxes in connection therewith, all transfer taxes,
if any, incident to the initial sale of the Securities, the fees and expenses of
the Company's counsel (except as provided below) and accountants, the cost of
reproduction and furnishing to the Agent copies of the Offering Documents as
herein provided.
6.3 As a condition precedent to the Initial Closing, the
Company will deliver to the Agent a true and correct copy of the Articles of
Incorporation of the Company, and all amendments and certificates of designation
of preferences of preferred stock, including without limitation the certificate
of designation of preferences regarding the Securities, if applicable, certified
by the Secretary of State of Delaware.
6.4 Prior to the Closing Date, the Company will cooperate with
the Agent in such investigation as it may make or cause to be made of all of the
properties, business and operations of the Company in connection with the
Offering of the Securities. The Company will make available to it in connection
therewith such information in its possession as the Agent may reasonably request
and will make available to the Agent such persons as the Agent shall deem
reasonably necessary and appropriate in order to verify or substantiate any such
information so supplied.
6.5 The Company shall be responsible for making any and all
filings required by the Blue Sky authorities and filings required by the laws of
the jurisdictions in which the subscribers who are accepted for purchase of
Securities are located, if any. Agent shall assist Company in this respect, but
such filings shall be the responsibility of Company.
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7. Indemnification.
7.1 The Company agrees to indemnify and hold harmless the Agent, each
person who controls the Agent within the meaning of Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934, as amended, and the Agent's
employees, accountants, attorneys and agents (the "Agent's Indemnitees") against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act or any other statute or at
common law for any legal or other expenses (including the costs of any
investigation and preparation) incurred by them in connection with any
litigation, whether or not resulting in any liability, but only insofar as such
losses, claims, damages, liabilities and litigation arise out of or are based
upon any untrue statement of material fact contained in the Offering Documents
or any amendment or supplement thereto or any application or other document
filed in any state or jurisdiction in order to qualify the Securities under the
Blue Sky or securities laws thereof, or the omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
under the circumstances under which they were made, not misleading, all as of
the date of the Offering Documents or of such amendment as the case may be;
provided, however, that the indemnity agreement contained in this Section 7.1
shall not apply to amounts paid in settlement of any such litigation, if such
settlements are made without the consent of the Company, nor shall it apply to
the Agent's Indemnitees in respect to any such losses, claims, damages or
liabilities arising out of or based upon any such untrue statement or alleged
untrue statement or any such omission or alleged omission, if such statement or
omission was made in reliance upon information furnished in writing to the
Company by the Agent specifically for use in connection with the preparation of
the Offering Documents or any such amendment or supplement thereto or any
application or other document filed in any state or jurisdiction in order to
qualify the Securities under the Blue Sky or securities law thereof. This
indemnity agreement is in addition to any other liability which the Company may
otherwise have to the Agent's Indemnitees. The Agent's Indemnitees agree, within
a reasonable time after the receipt by them of written notice of the
commencement of any action against them in respect to which indemnity may be
sought from the Company under this Section 7. 1, to notify the Company in
writing of the commencement of such action, and if the Agent's Indemnitees shall
notify the Company of the commencement thereof, the Company shall be entitled to
participate in (and, to the extent that the Company shall wish, to direct) the
defense thereof at its own expense, but such defense shall be conducted by
counsel of recognized standing and reasonably satisfactory to the Agent's
Indemnitees, defendant or defendants, in such litigation. The Company agrees to
notify the Agent's Indemnitees promptly of the commencement of any litigation or
proceedings against the Company or any of the Company's officers or directors of
which the Company may be advised in connection with the issue and sale of any of
the Securities and to furnish to the Agent's Indemnitees, at their request,
copies of all pleadings therein and o permit the Agent=s Indemnities to be
observers therein and apprise the Agent's Indemnitees of all developments
therein, all at the Company's expense.
7.2 The Agent agrees, in the same manner and to the same extent as set
forth in Section 7.1 above, to indemnify and hold harmless the Company, and the
Company's employees, accountants, attorneys
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and agents (the "Company's Indemnitees") with respect to (i) any statement in or
omission from the Offering Documents or any amendment or supplement thereto or
any application or other document filed in any state or jurisdiction in order to
qualify the Securities under the Blue Sky or securities laws thereof, or any
information furnished pursuant to Section 3.4 hereof, if such statement or
omission was made in reliance upon information furnished in writing to the
Company by the Agent or on its behalf specifically for use in connection with
the preparation thereof or supplement thereto, or (ii) any untrue statement of a
material fact made by the Agent or its agents not based on statements in the
Offering Documents or authorized in writing by the Company, or with respect to
any misleading statement made by the Agent or its agents resulting from the
omission of material facts which misleading statement is not based upon the
Offering Documents, or information furnished in writing by the Company or, (iii)
any breach of any representation, warranty or covenant made by the Agent in this
Agreement. The Agent's liability hereunder shall be limited to the amount
received by it for acting as Agent in connection with the Offerings. The Agent
shall not be liable for amounts paid in settlement of any such litigation if
such settlement was effected without its consent. In case of the commencement of
any action in respect of which indemnity may be sought from the Agent, the
Company's Indemnitees shall have the same obligation to give notice as set forth
in Section 7.1 above, subject to the same loss of indemnity in the event such
notice is not given, and the Agent shall have the same right to participate in
(and, to the extent that it shall wish, to direct) the defense of such action at
its own expense, but such defense shall be conducted by counsel of recognized
standing reasonably satisfactory to the Company. The Agent agrees to notify the
Company's Indemnitees and , at their request, to provide copies of all pleadings
therein and to permit the Company's Indemnitees to be observers therein and
apprise them of all the developments therein, all at the Agent's expense.
7.3 If for any reason the indemnity provided for in Section 7.1 or 7.2
is unavailable to an Indemnified Person or insufficient to hold an Indemnified
Person harmless, then the Indemnifying Party, to the fullest extent permitted by
law, shall contribute to the amount paid or payable by such Indemnified Person
as a result of such claims, liabilities, losses, damages or expenses in such
proportion as is appropriate to reflect the relative benefits received by the
Company on one hand and by the Agent on the other, from the transaction or
proposed transaction under this Agreement or if allocation on that basis is not
permitted under applicable law, in such proportion as is appropriate to reflect
not only the relative benefits received by the Company on the one hand and the
Agent on the other, but also the relative fault of the Company and the Agent, as
well as any relevant equitable considerations. It is hereby further agreed that
the relative benefits to the Company on the one hand and the Agent on the other
with respect to any transaction contemplated by this Agreement shall be deemed
to be paid in the same proportion as (i) the total value of the transaction
bears to (ii) the fees paid to the Agent with respect to the transaction. The
relative fault of the Company on the one hand and the Agent on the other with
respect to the transaction shall be determined by reference to, among other
things, whether any untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Agent and the parties relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The indemnity, contribution and expense reimbursement
obligations set forth herein
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(i) shall be in addition to any liability an Indemnifying Party may have to any
Indemnified Person at common law of otherwise, (ii) shall survive the
termination of this Agreement, (iii) shall apply to any modification of this
Agreement and shall remain in full force and effect following the completion or
termination of the Agreement, (iv) shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Agent or any
other Indemnified Person, and (v) shall be binding on any successor or assign of
the Company or the Agent and the respective successors or assigns to all or
substantially all of the Company's or the Agent's business and assets.
8. Effectiveness of Agreement. This Agreement shall become effective
(i) at 9:00 A.M., Atlanta, Georgia time, on the date hereof or (ii) upon release
by the Agent of the Securities for offering after the date hereof, whichever
shall last occur. The Agent agrees to notify the Company immediately after the
Agent shall have taken any action by such release or otherwise wherein this
Agreement shall have become effective. This Agreement shall, nevertheless,
become effective at such time earlier than the time specified above after the
date hereof as the Agent may determine by notice to the Company.
9. Conditions of the Agent's Obligations. The Agent's obligations to
act as agent of the Company hereunder and to find purchasers for the Securities
shall be subject to the accuracy, as of the Closing Date, of the representations
and warranties on the part of the Company herein contained, to the fulfillment
of or compliance by the Company with all covenants and conditions hereof, and to
the following additional conditions:
9.1 Counsel to the Agent shall not have objected in writing or shall
not have failed to give his consent to the Offering Documents (which objection
or failure to give consent shall not have been done unreasonably).
9.2 The Agent shall not have disclosed to the Company that the Offering
Documents, or any amendment thereof or supplement thereto, contains an untrue
statement of fact, which, in the opinion of counsel to the Agent, is material,
or omits to state a fact, which, in the opinion of such counsel, is material and
is required to be stated therein, or is necessary to make the statements
therein, under the circumstances in which they were made, not misleading.
9.3 Between the date hereof and the Closing Date, the Company shall not
have sustained any loss on account of fire, explosion, flood, accident, calamity
or any other cause of such character as would materially adversely affect its
business or property considered as an entire entity, whether or not such loss is
covered by insurance.
9.4 Between the date hereof and the Closing Date, there shall be no
litigation instituted or threatened against the Company, and there shall be no
proceeding instituted or threatened against the Company before or by any federal
or state commission, regulatory body or administrative agency or other
10
<PAGE>
governmental body, domestic or foreign, wherein an unfavorable ruling, decision
or finding would materially adversely affect the business, franchises, license,
permits, operations or financial condition or income of the Company considered
as an entity.
9.5 Except as contemplated herein or as set forth in the Offering
Documents, during the period subsequent to the most recent financial statements
contained in the Offering Documents, if any, and prior to the Closing Date, the
Company (i) shall have conducted its business in the usual and ordinary manner
as the same is being conducted as of the date hereof and (ii) except in the
ordinary course of business, the Company shall not have incurred any liabilities
or obligations (direct or contingent) or disposed of any assets, or entered into
any material transaction or suffered or experienced any substantially adverse
change in its condition, financial or otherwise. At the Closing Date, the equity
account of the Company shall be substantially the same as reflected in the most
recent balance sheet contained in the Offering Documents without considering the
proceeds from the sale of the Securities other than as may be set forth in the
Offering Documents.
9.6 The authorization of the Securities by the Company and all
proceedings and other legal matters incident thereto and to this Agreement shall
be reasonably satisfactory in all respects to counsel to the Agent, who shall
have furnished the Agent on the Closing Date with such favorable opinion with
respect to the sufficiency of all corporate proceedings and other legal matters
relating to this Agreement as the Agent may reasonably require, and the Company
shall have furnished such counsel such documents as he may have requested to
enable him to pass upon the matters referred to in this subparagraph.
9.7 The Company shall have furnished to the Agent the opinion, dated
the Closing Date, addressed to the Agent, from counsel to the Company, as
required by the Subscription Agreement.
9.8 The Company shall have furnished to the Agent a certificate of the
Chief Executive Officer and the Chief Financial Officer of the Company, dated as
of the Closing Date, to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects at and as of
the Closing Date (other than representations and warranties which by
their terms are specifically limited to a date other than the Closing
Date), and the Company has complied with all the agreements and has
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date; and
(ii) the respective signers have each carefully examined the
Offering Documents, and any amendments and supplements thereto, and, to
the best of their knowledge, in the Offering memorandum, and any
amendments and supplements thereto, all statements contained in the
Offering Documents are true and correct, and neither the Offering
Documents, nor any amendment or supplement thereto, includes any untrue
statement of a material fact or omits to state a material
11
<PAGE>
fact required to be stated therein or necessary to make the statements
therein under the circumstances in which they were made not misleading,
and since the date hereof, there has occurred no event required to be
set forth in an amended or supplemented Offering Documents, which has
not been set forth; except as set forth in the Offering Documents,
since the respective dates as of which or the periods for which the
information is given in the Offering Documents and prior to the date of
such certificate, (a) there has not been any substantially adverse
change, financial and otherwise, in the affairs of condition in the
Company, and (b) the Company has not incurred any material liabilities,
direct or contingent, or entered into any material transactions,
otherwise than in the ordinary course of business.
10. Termination.
10.1 This Agreement may be terminated by the Agent by notice to the
Company in the event that the Company shall have failed or been unable to comply
with any of the terms, conditions or provisions of this Agreement on the part of
the Company to be performed, complied with or fulfilled within the respective
times, if any, herein provided for, unless compliance therewith or performance
or satisfaction thereof shall have been expressly waived by the Agent in
writing.
10.2 This Agreement may be terminated by the Company by notice to the
Agent in the event that the Agent shall have failed or been unable to comply
with any of the terms, conditions or provisions of this Agreement on the part of
the Agent to be performed, complied with or fulfilled within the respective
times, if any, herein provided for, unless compliance therewith or performance
or satisfaction thereof shall have been expressly waived by the Company in
writing.
10.3 This Agreement may be terminated by the Agent by notice to the
Company at any time, if, in the reasonable, good faith judgment of the Agent,
payment for and delivery of the Securities is rendered impracticable or
inadvisable because: (i) additional material governmental restrictions not in
force and effect on the date hereof shall have been imposed upon trading in
securities generally; (ii) a war or other national calamity shall have occurred;
or (iii) the condition of the market (either generally or with reference to the
sale of the Securities to be offered hereby) or the condition of any matter
affecting the Company or any other circumstance is such that it would be
undesirable, impracticable or inadvisable, in the judgment of the Agent, to
proceed with this Agreement or with the Offering.
12
<PAGE>
10.4 Any termination of this Agreement pursuant to this Section shall
be without liability of any character (including, but not limited to, loss of
anticipated profits or consequential damages) on the part of any party thereto,
except that the Company shall remain obligated to pay the costs and expenses
provided to be paid by it specified in Sections 3, 5, and 6; and the Company and
the Agent shall be obligated to pay, respectively, all losses, claims, damages
or liabilities, joint or several, under Section 7.1 in the case of the Company
and Section 7.2 in the case of the Agent.
11. Agent's Representations, Warranties and Covenants. The Agent
represents and warrants to and agrees with the Company that:
11.1 Agent is a corporation duly incorporated and existing under the
laws of the state of Georgia. Agent is registered with the Securities Exchange
Commission and the NASD.
11.2 There is not now pending or threatened against the Agent any
action or proceeding of which the Agent has been advised, either in any court of
competent jurisdiction, before the Commission or before any state securities
commission or the NASD, concerning the Agent's activities which would impair the
ability of the Agent to conduct the Offering as contemplated by this Agreement.
11.3 Agent's representations and warranties under this Section shall be
true and correct as of each Closing, and shall survive each Closing for a period
of six months.
12. Notices. Except as otherwise expressly provided in this Agreement:
12.1 Whenever notice is required by the provisions of this Agreement to
be given to the Company, such notice shall be in writing, addressed to the
Company, at:
If to Company: Euroweb International Corp.
445 Park Avenue
New York, New York 10022
Facsimile: (212) 758-9896
with a copy to: Cohen & Cohen
15th Floor
445 Park Avenue
New York, New York 10022
Facsimile: (212) 758-9896
12.2 Whenever notice is required by the provisions of this Agreement to
be given to the Agent, such notice shall be given in writing, addressed to the
Agent, at:
13
<PAGE>
If to the Agent: J.P. Carey Securities, Inc.
Atlanta Financial Center, East Tower
3343 Peachtree Road, Suite 500
Atlanta, Georgia 30326
Attn: Joseph C. Canouse
with a copy to: Raymond L. Moss, Esq.
Sims Moss Kline & Davis LLP
400 Northpark Town Center, Suite 310
1000 Abernathy Road, N.E.
Atlanta, Georgia 30328
12.3 Any notice instructing the Escrow Agent to distribute monies or
Securities held in Escrow must be signed by authorized agents of both the
Company and the Agent in order to be valid.
13. Miscellaneous.
13.1 Benefit. This Agreement is made solely for the benefit of the
Agent and the Company, their respective officers and directors and any
controlling person referred to in Section 15 of the Act and their respective
successors and assigns, and no other person may acquire or have any right under
or by virtue of this Agreement, including, without limitation, the holders of
any Securities. The term "successor" or the term "successors and assigns" as
used in this Agreement shall not include any purchasers, as such, of any of the
Securities.
13.2 Survival. The respective indemnities, agreements, representations,
warranties, covenants and other statements of the Company and the Agent, or the
officers, directors or controlling persons of the Company and the Agent as set
forth in or made pursuant to this Agreement and the indemnity agreements of the
Company and the Agent contained in Section 7 hereof shall survive and remain in
full force and effect, regardless of (i) any investigation made by or on behalf
of the Company or the Agent or any such officer, director or controlling person
of the Company or of the Agent; (ii) delivery of or payment for the Securities;
or (iii) the Closing Date, and any successor of the Company or the Agent or any
controlling person, officer or director thereof, as the case may be, shall be
entitled to the benefits hereof.
13.3 Governing Law. The validity, interpretation and construction of
this Agreement and of each party hereof will be governed by the Laws of the
State of Georgia. This Agreement and each Warrant Certificate hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
without regard to the principles of conflict of laws. The parties further agree
that any action between them shall be heard in Atlanta, Georgia, and expressly
consent to the jurisdiction and venue of the Superior Court of Fulton County,
Georgia, and the United States District Court for the Northern District of
Georgia, Atlanta Division for the adjudication of any action asserted pursuant
to this Paragraph.
14
<PAGE>
13.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be deemed an original and all of which together
will constitute one and the same instrument.
13.5 Confidential Information. All confidential financial or business
information (except publicly available or freely usable material otherwise
obtained from another source) respecting either party will be used solely by the
other party in connection with the within transactions, be revealed only to
employees or contractors of such other party who are necessary to the conduct of
such transactions, and be otherwise held in strict confidence.
13.6 Public Announcements. Prior to the Closing Date, neither party
hereto will issue any public announcement concerning the within transactions
without the approval of the other party.
13.7 Finders. The parties acknowledge that no person has acted as a
finder in connection with the transactions contemplated herein and each will
agree to indemnify the other with respect to any other claim for a finder's fee
in connection with the offering.
13.8 Recitals. The recitals to this Agreement are a material part
hereof, and each recital is incorporated into this Agreement by reference and
made a part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement
to be executed as of the day and year first above written.
"THE COMPANY"
EUROWEB INTERNATIONAL CORP.
By:_____________________________________
Title: _____________________________________
"THE AGENT"
J.P. CAREY SECURITIES, INC.
By:_____________________________________
Title: _____________________________________
15
<PAGE>
EXHIBIT "A"
ESCROW AGREEMENT
ESCROW AGREEMENT
THIS AGREEMENT is made and entered into as of this 24th day of March,
1999, by and among THE BANK OF NEW YORK (the "Escrow Agent"), J. P. Carey
Securities, Inc. (the "Placement Agent"), and Euroweb International Corp. (the
"Company").
RECITALS
The Company proposes to offer for sale to investors through the Placement
Agent up to $800,000 in principal amount of the Company's common stock, par
value $0001 per shares (the "Securities") in multiple tranches with a minimum
amount for the first tranche of at least $300,000 (the "Initial Minimum") and a
minimum amount for each subsequent tranche of $100,000 (the "Subsequent
Minimum') resulting in given proceeds to the Company of up to $800,000 (the
"Proceeds").
The Placement Agent intends to sell the Securities as the Company's agent
on a best efforts basis (the "Offering").
The Company and Placement Agent desire to establish an escrow account in
which funds received from subscribers will be deposited pending completion of
the Escrow Period. The Bank of New York agrees to serve as Escrow Agent in
accordance with the terms and conditions set forth herein.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing, it is hereby agreed as
follows:
1. ESTABLISHMENT OF ESCROW ACCOUNT. On or prior to the date of the
commencement of the offering, the parties shall establish an escrow account with
the Escrow Agent, which escrow account shall be entitled, Euroweb International
Corp. (the "Escrow Account"). The Placement Agent will instruct subscribers to
wire funds to the account of the Escrow Agent as follows:
The Bank of New York
ABA #021000018
GLA 111565
Re: TAS# J.P. Carey & Euroweb International Corp
Attn: Peggy McWhorter 770-698-5186
Only wire transfers shall be accepted.
2. ESCROW PERIOD. The Escrow period shall begin with the commencement of
the Offering and shall terminate upon the earlier to occur of the following
dates:
A. The date upon which the Escrow Agent confides that its has received in
the Escrow Account gross proceeds of $800,000 in deposited, funds (the
"Maximum");
<PAGE>
B. The expiration of one hundred and twenty (120) days from the date of
commencement of the Offering (unless extended by mutual written
agreement between the Company and the Placement Agent with a copy of
such extension to the Escrow Agent); or
C. The date upon which a determination is made by the Company and the
Placement Agent to terminate the offering prior to the sale of the
Maximum.
During the Escrow Period, the Company is aware and understands that it is not
entitled to any funds received into escrow and no amounts deposited in the
Escrow Account shall become the property of the Company or any other entity, or
be subject to the debts of the Company or any other entity.
3. DEPOSITS INTO THE ESCROW ACCOUNT. The Placement Agent agrees that it
shall promptly deliver all monies received from subscribers for the payment of
the Securities to the Escrow Agent for deposit in the Escrow Account.
4. DISBURSEMENTS FROM THE ESCROW ACCOUNT. At such time as Escrow Agent has
collected and deposited instruments of payment in the total amount of either of
the initial Minimum and any Subsequent Minimum and any amounts up to the
Maximum, Escrow Agent shall notify the Company and the Placement Agent. The
Escrow Agent will continue to hold such funds until Placement Agent and Company
jointly notify Escrow Agent in writing as to the disbursement of funds pursuant
to a closing statement signed by each of the Placement Agent and the Company
(the "Closing Statement"). In disbursing such funds, Escrow Agent is authorized
to rely upon such Closing Statement from Company and Placement Agent.
In the event the Escrow Agent does not receive the minimum deposits
totaling $300,000 prior to the expiration of the Escrow Period (the "Minimum
Deposits"), the Escrow Agent shall notify the Company and the Placement Agent.
upon receipt of payment instructions from the Company, the Escrow Agent shall
refund to each subscriber with interest the amount received from each
subscriber, without deduction, penalty, or expense to the subscriber. The
purchase money returned to each subscriber shall be free and clear of any and
all claims of the Company or any of its creditors.
In the event the Escrow Agent does receive deposits totaling the Minimum
prior to expiration of the Escrow Period, in no event will the Escrow Amount be
released to the Company until such amount is received by the Escrow Agent in
collected funds. For purposes of this Agreement, the term "collected funds"
shall mean all funds received by the Escrow Agent which have cleared normal
banking channels and are in the form of cash.
5. COLLECTION PROCEDURE. The Escrow Agent is hereby authorized to forward
each wire for collection and, upon collection of the proceeds of each wire
deposit the collected proceeds in the Escrow Account.
Any wires returned unpaid to the Escrow Agent shall be returned to the
Placement Agent. In such cases, the Escrow Agent will promptly notify the
Company for such return.
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<PAGE>
If the Company rejects any subscription for which the Escrow Agent has
already collected funds, the Escrow Agent shall promptly issue a refund check or
wire to the rejected subscriber. If the Company rejects any subscription for
which the Escrow Agent has not yet collected funds but has submitted the
subscriber's wire for collection, the Escrow Agent shall promptly issue a check
or wire the amount of the subscriber's wire to the rejected subscriber after the
Escrow Agent has cleared such funds. If the Escrow Agent has not yet submitted a
rejected subscriber's wire for collection, the Escrow Agent shall promptly remit
the subscriber's wire directly to the subscriber. The Company shall provide
payment instructions to the Escrow Agent.
6. INVESTMENT OF ESCROW AMOUNT. The Escrow Agent may invest the Escrow
Amount only in such accounts or investments as the Company may specify by
written notice. The Company may only specify investment in money market
instruments.
7. COMPENSATION OF ESCROW AGENT. The Company shall, pay the Escrow Agent a
fee for its escrow services as set forth on Exhibit "A" to this Escrow
Agreement. If it is necessary for the Escrow Agent to return funds to the
subscribers, the Company shall pay to the Escrow Agent an additional amount
sufficient to reimburse it for its fees and actual cost in disbursing such
funds. However, if funds are refunded to subscribers, no such fee, reimbursement
for costs and expenses, indemnification for any damages incurred by the Escrow
Agent, or any monies whatsoever shall be paid out of or chargeable to the
principal amount of funds on deposit in the Escrow Account.
8. GENERAL PROVISIONS.
(a) (i) Escrow Agent shall not be liable to anyone for any
damages, losses, or expense which they may incur as a
result of any act or omission of Escrow Agent, unless
such damages, losses, or expenses are caused by
Escrow Agent's willful misconduct or gross
negligence. Accordingly, Escrow Agent shall not incur
any such liability with respect to (i) any action
taken or omitted in good faith upon the advice of
Escrow Agent's counsel or counsel for any other party
hereto, given with respect to any question relating
to the duties and responsibilities of Escrow Agent
under this Agreement or (ii) any action taken or
omitted in reliance upon any instrument, including
execution, or the identity or authority of any person
executing such instrument, its validity and
effectiveness, but also as to the truth and accuracy
of any information contained therein which Escrow
Agent shall, in good faith, believe to be genuine, to
have been signed by a proper person or persons and to
conform to the provisions of this Escrow Agreement.
(ii) Escrow Agent shall not be bound in any way by any
contract or agreement between other parties hereto,
whether or not it has knowledge of any such contract
or agreement or of its terms or conditions.
(iii) The parties hereto, jointly and severally, hereby
agree to indemnify and, hold harmless Escrow Agent
against any and all costs, losses, claims, damages,
liabilities, expenses, including reasonable costs of
investigation, court costs,
-3-
<PAGE>
and attorney's fees, and disbursements, which may be
imposed upon Escrow Agent in connection with its
acceptance of appointment as Escrow Agent hereunder,
including any litigation arising from this Escrow
Agreement or invoking the subject matter hereof, and
all such costs, expenses and disbursements shall be
deducted from the income (if sufficient) or paid by
the parties hereto, except for matters arising from
the gross negligence or willful misconduct of Escrow
Agent.
(iv) As security for such fees and expenses of Escrow
Agent and any and all losses, claims, damages,
liabilities and expenses incurred by Escrow Agent in
connection with its acceptance of appointment
hereunder, and with performance of the agreements
herein contained, the Escrow Agent is hereby given a
lien upon all assets held by Escrow Agent hereunder,
which lien shall be prior to all other liens upon or
claims against such assets, except for claims of
subscribers in the event the Initial Minimum is not
raised.
(b) (i) In the event of any disagreement among any of the
parties to this Agreement, or among them or any other
person resulting in adverse claims and demands being
made in connection with or from any property involved
herein or affected hereby, Escrow Agent shall be
entitled to refuse to comply with any such claims or
demands as long as such disagreement may continue,
and in so refusing, shall make no delivery or other
disposition of any property then held by it under
this Escrow Agreement, and in so doing the Escrow
Agent shall be entitled to continue to refrain from
acting until (a) the right of adverse claimants shall
have been finally settled by binding arbitration. or
finally adjudicated in a court assuming and having
jurisdiction. of the property involved herein or
affected hereby or (b) all differences shall have
been adjusted by agreement and Escrow Agent shall
have been notified in writing of such agreement
signed by the parties hereto.
(ii) In the event of such disagreement (or resignation
under the terms of this Agreement), Escrow Agent may,
but need not, tender into the registry or custody of
any court of competent jurisdiction all, money or
property in its hands under the terms of this
Agreement, together with such legal proceedings as it
deems appropriate and thereupon to be discharged from
all further duties under this Escrow Agreement. The
filing of any such legal proceeding shall not deprive
Escrow Agent of its compensation earned prior to such
filing.
(iii) Escrow Agent shall have no obligation to take any
legal, action in connection with this Escrow
Agreement or towards its enforcement, or to appear
in, prosecute or defend any action or legal
proceeding which would or might involve it in any
cost, expense, loss or liability unless security and
indemnity shall be furnished.
-4-
<PAGE>
(c) This Agreement contains the entire understanding
between and among the parties hereto, and shall be
binding upon and inure to the benefit of such
parties, and subject to its terms, their respective
successors, heirs, assigns and legal representatives.
Any corporation into which Escrow Agent may be merged
or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion
or consolidation to which Escrow Agent shall be a
party, or any corporation to which substantially all
the corporate trust business of Escrow Agent may be
transferred, shall., subject to the terms of the
Escrow Agreement, be Escrow Agent under this Escrow
Agreement without further act.
(d) This Escrow Agreement is being delivered in and shall
be governed by and construed and enforced in
accordance with the laws of the State of Georgia
without giving effect to the principals or rules
governing conflicts of laws.
(e) Notices, requests, demands or other communications
required or permitted under this Escrow Agreement
will be in writing and will be deemed given when
actually delivered, received via facsimile notice for
which a confirmation is received, or the third
business day after said notice has been sent by
certified mail, postage prepaid, return receipt
requested to:
If to Escrow Agent: The Bank of New York
Suite 520
100 Ashford Center, North
Atlanta, Georgia 30338
If to Placement Agent: J.P. Carey Securities, Inc.
Atlanta Financial Center, East Tower
3343 Peachtree Road, Suite 500
Atlanta, Georgia 30326
Fax No.: (404)816-6268
If to Company: Euroweb International Corp.
445 Park Avenue
New York , New York 10022
Fax No.: (212) 758-9896
Attn: President
or such other address as a party may specify in writing to other parties
pursuant hereto.
(f) This Escrow Agreement shall not be modified, revoked,
released or terminated except in writing and signed
by parties hereto.
(g) Should, at any time, any attempt be made to modify
this Escrow Agreement in a manner that would increase
the duties and responsibilities of Escrow Agent, or
to
-5-
<PAGE>
modify this Escrow Agreement in any matter which
Escrow Agent shall deem undesirable, or at any other
time, Escrow Agent may resign by notifying the
parties in writing, by certified mail to their
respective addresses here and above set forth. Until
(i) the acceptance by such successor Escrow Agent as
shall be appointment by such parties; or (ii) 60 days
following the date upon which notice was mailed,
whichever occurs sooner, Escrow Agent's only
remaining obligation shall be to perform its duties
hereunder in accordance with the terms of this Escrow
Agreement. If said 60 days have passed without the
acceptance by such successor Escrow Agent as shall
have been appointed by such parties, then the Escrow
Agent may exercise its rights under item 8(c) (ii) of
this Agreement.
(h) No Implied Duties. The Escrow Agent undertakes to
perform only such duties as are expressly set forth
herein and no additional duties or obligations shall
be implied hereunder. The parties hereby acknowledge
that the Escrow Agency is serving as the Escrow Agent
of the offering for the limited purposes set forth
herein, and hereby agree that they will not represent
or imply that the Escrow Agent, by serving as the
escrow agent hereunder or otherwise, has investigated
the desirability or advisability of this investment,
or has approved, endorsed or passed upon the merits
of this offering or any related, offering. It is
further agreed that no party shall in any way use the
name "The Bank of New York" in any sales presentation
or literature except in, the context of the duties of
the Escrow Agent as escrow agent of the Offering in
the strictest sense. Any breach or violation of this
paragraph (i) shall be grounds for the immediate
resignation by the Escrow Agent. This Escrow
Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute
one and the same instrument.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
-6-
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their hands and
seals the day and year above set forth.
ESCROW AGENT: THE BANK OF NEW YORK
By:_____________________
Name: Peggy T. McWhorter
Title: As Agent
PLACEMENT AGENT: J.P. CAREY SECURITIES, INC.
By:______________________
Name:
Title:
COMPANY: EUROWEB INTERNATIONAL CORP.
By:_______________________
Name:
Title:
<PAGE>
EXHIBIT "A"
ESCROW AGREEMENT BY AND AMONG THE BANK OF NEW YORK,
J.P. CAREY SECURITIES, INC. AND EUROWEB INTERNATIONAL CORP.
<TABLE>
<CAPTION>
<S> <C> <C>
I. ACCEPTANCE FEE $500.00
Includes review of all documents, attendance at document
conferences and closing (if necessary), establishment of accounts,
receipt and deposit assets. This one-time fee is payable at the
time of exercising.
II. ANNUAL ADMINISTRATION FEE $750.00
Includes performance of all administrative duties under document
provisions, including receipt and **disbursement of funds, periodic
statement of account. Our annual administration fee is billed and
payable annually in advance.
III. **DISBURSEMENT FEE $25.00
Charge for each payment each in excess of up to three disbursements
of three payments each covered by the Annual Administration Fee.
IV. REFUND OF SUBSCRIPTION DEPOSITS $50.00
Charge for each subscriber paid. Includes calculation of interest
earned and wire/check fees.
V. OUT-OF-POCKET EXPENSES AT COST
All out-of-pocket expenses such as, but not limited to, travel,
stationary, postage, insurance, courier charges, legal fees (if
required), wire transfers, retention of records, and supplies such
as check forms, will be billed at cost. In the event the
transaction terminates before closing, all out-of-pocket expenses
incurred, including our counsel fees, if applicable, will be
billed.
VI. EXTRAORDINARY SERVICES AT COST
</TABLE>
Charges for the performance of any services not of a routine
administrative nature will be determined by appraisal at such time
in amounts commensurate with the service. These extraordinary
services may partially be classified as amendments and releases:
preparation of special or interim reports which the escrow agent or
agent must submit; unusual studies, considerations and actions
taken with respect to document provisions.
We reserve the right to adjust this schedule of fees from time to
time upon 60 days written notice.
OUR PROPOSAL IS SUBJECT TO OUR REVIEW AND ACCEPTANCE OF THE GOVERNING
DOCUMENTS WHICH SET FORTH OUR DUTIES AND RESPONSIBILITIES.
DATED: _____________
<PAGE>
CLOSING OF EUROWEB INTERNATIONAL CORP.
COMMON STOCK
PRIVATE PLACEMENT
<TABLE>
<CAPTION>
(A) CASH RECEIPTS TO ESCROW AGENT
<S> <C>
From Investors referenced in item II(A) $741,728.81
(B) CASH DISBURSEMENTS
Funds in escrow with Bank of New York as Escrow Agent $741,728.81
Deductions
(1) Placement Agent Fee to JP. Carey Securities Inc. as
Placement Agent $74,172.88
(2) Attorneys' Fees of Sims Moss Kline & Davis LLP, $15,000.00
counsel to Placement Agent to be wired to firm
Operating Account at Wachovia Bank
(ABA #061000010
Account#12 884 733
Account Name: Sims Moss Kline & Davis)
(3) Escrow Agent Fee to Bank of New York as Escrow Agent $1,250.00
Amount to be wired to Euroweb International Corp. $651,305.93
Bank Name: Chase Manhattan Bank
Branch No.: 026
Bank Address: 598 Madison Avenue
New York, NY 10022
Account Title: Euroweb International Corp.
Address: c/o Cohen & Cohen
445 Park Avenue
New York, NY 10022
Account No.: 116 084 367
ABA: : 021-0000-21
Amount to be wired to J.P. Carey Securities, Inc. 74,172.88
South Trust Bank
Atlanta Financial Center
Atlanta, Georgia 30326
ABA#: 061 000 256
Account#: 66 871 293
Beneficiary: J.P. Carey Securities, Inc.
</TABLE>
Page 1 of 2
<PAGE>
(C) COMMON STOCK TO BE ISSUED TO INVESTORS
Name Certificate Nos. Number of Shares
GPS America Fund Ltd.* EI 00024 78,476
Cache Capital LP* EI 00025 34,285
Atlantis Capital Fund Ltd.* EI 00026 300,000
Markham Holding Limited 152,380
(D) WARRANTS TO PLACEMENT AGENT
Warrants to purchase 56,514 shares of Euroweb International Corp.
common stock at $2.10 per share.
Accepted and agreed to as of this 7th day of April, 1999
EUROWEB INTERNATIONAL CORP.
By:/s/Frank R. Cohen
Name: Frank R. Cohen
Title: Chairman of the Board
THE BANK OF NEW YORK
AS ESCROW AGENT
By:______________________
Name: Peggy T. McWhorter
Title: As Agent
J.P. CAREY SECURITIES, INC.
AS PLACEMENT AGENT
By:______________________
Name:
Title:
- --------------- *GPS America Fund Ltd., Cache Capital LP, and Atlantis Capital
Fund Ltd. are managed by an affiliate of J.P. Carey Securities, Inc. (the
"Agent"). The investment decisions made by these Funds are independent of the
Agent and may be contrary to any actions or recommendation made by the Agent or
its affiliates at any time.
Page 2 of 2
WARRANT AGREEMENT
WARRANT AGREEMENT dated as of March 17,1999 between Euroweb
International Corp., a Delaware corporation (the "Company"), and J.P. Carey
Securities, Inc., a Georgia corporation (hereinafter referred to as "J.P.
Carey").
W I T N E S S E T H:
WHEREAS, J.P. Carey has assisted the Company in connection with the
Company's offering (the "Offering") of $800,000 of common stock, par value
$.001 per share (the"Common Stock") and;
WHEREAS, the Warrants issued pursuant to this Agreement are being
issued by the Company to J.P. Carey and/or its designees, in consideration for,
and as part of the compensation to be paid in connection with, the services of
J.P. Carey in connection with the Offering;
NOW, THEREFORE, in consideration of the premises, the agreements herein
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Grant.
J.P. Carey and/or its designees are hereby granted the right to
purchase, at any time from the date of issuance of the aforementioned Warrants
until 5:00 P.M., Eastern Standard Time, on March 16, 2003 (the "Warrant Exercise
Term"), 56,514 shares of the Company's Common Stock, par value $.001 per share
(the "Shares") at an exercise price per share (subject to adjustment as provided
in Article 7 hereof) equal to $2.10 (the "Initial Exercise Price").
2. Warrant Certificates.
The warrant certificates (the "Warrant Certificates") delivered and to
be delivered pursuant to this Agreement shall be in the form set forth as
Exhibit "A", attached hereto and made a part hereof, with such appropriate
insertions, omissions, substitutions and other variations as required or
permitted by this Agreement.
3. Exercise of Warrants.
3.1 Cash Exercise. The Exercise Price may be paid in cash or
by check to the order of the Company, or any combination of cash or check,
subject to adjustment as provided in Article 7 hereof. Upon surrender of the
Warrant Certificate with the annexed Form of Election to Purchase duly executed,
together with payment of the Exercise Price (as hereinafter defined) for the
Shares purchased, at the Company's executive offices (currently located at 445
Park Avenue, New York, New York 10022) the registered holder of a Warrant
Certificate ("Holder" or "Holders") shall be entitled to receive a certificate
or certificates for the Shares so purchased. The purchase rights represented by
each Warrant
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Certificate are exercisable at the option of the Holder hereof, in whole or in
part (but not as to fractional shares of the Common Stock). In the case of the
purchase of less than all the Shares purchasable under any Warrant Certificate,
the Company shall cancel said Warrant Certificate upon the surrender thereof and
shall execute and deliver a new Warrant Certificate of like tenor for the
balance of the Shares purchasable thereunder.
3.2 Cashless Exercise. At any time during the Warrant Exercise
Term, the Holder may, at its option, exchange this Warrant, in whole or in part
(a "Warrant Exchange"), into the number of Shares determined in accordance with
this Section 3.2, by surrendering this Warrant at the principal office of the
company or at the office of its transfer agent, accompanied by a notice stating
such Holder's intent to effect such exchange, the number of Shares to be
exchanged and the date on which the Holder requests that such Warrant Exchange
occur (the "Notice of Exchange"). The Warrant Exchange shall take place on the
date specified in the Notice of Exchange or, if later, the date the Notice of
Exchange is received by the Company (the "Exchange Date"). Certificates for the
Shares issuable upon such Warrant Exchange and, if applicable, a new warrant of
like tenor evidencing the balance of the Shares remaining subject to this
Warrant, shall be issued as of the Exchange Date and delivered to the Holder
within seven (7) business days following the Exchange Date. In connection with
any Warrant Exchange, this Warrant shall represent the right to subscribe for
and acquire the number of Shares (rounded to the next highest integer) equal to
(i) the number of Shares specified by the Holder in its Notice of Exchange (the
"Total Number") less (ii) the number of Shares equal to the quotient obtained by
dividing (A) the product of the Total Number and the then existing Exercise
Price by (B) the current market value of a share of Common Stock.
4. Issuance of Certificates.
Upon the exercise of the Warrants, the issuance of certificates for the
Shares shall be made forthwith (and in any event within five business days
thereafter) without charge to the Holder thereof including, without limitation,
any tax which may be payable in respect of the issuance thereof, and such
certificates shall be issued in the name of, or in such names as may be directed
by, the Holder thereof; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of any such certificates in a name other than that
of the Holder and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to satisfaction of the Company that such tax has been paid.
The Warrant Certificates and the certificates representing the Shares
shall be executed on behalf of the Company by the manual or facsimile signature
of the present or any future Chairman or Vice Chairman of the Board of
Directors, Chief Executive officer or President or Vice President of the Company
under its corporate seal reproduced thereon, attested to by the manual or
facsimile signature of
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<PAGE>
the present or any future Secretary or Assistant Secretary of the Company.
Warrant Certificates shall be dated the date of execution by the Company upon
initial issuance, division, exchange, substitution or transfer.
The Warrant Certificates and, upon exercise of the Warrants, in part or
in whole, certificates representing the Shares shall bear a legend substantially
similar to the following:
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), and may not
be offered or sold except (i) pursuant to an effective registration
statement under the Act, (ii) to the extent applicable, pursuant to
Rule 144 under the Act (or any similar rule under such Act relating to
the disposition of securities), or (iii) upon the delivery by the
holder to the Company of an opinion of counsel, reasonably satisfactory
to counsel to the issuer, stating that an exemption from registration
under such Act is available.
5. Price.
5.1 Adjusted Exercise Price. The adjusted Exercise Price shall
be the price which shall result from time to time from any and all adjustments
of the Initial Exercise Price in accordance with the provisions of Article 7
hereof.
5.2 Exercise Price. The term "Exercise Price" herein shall
mean the Initial Exercise Price or the adjusted Exercise Price, depending upon
the context.
6. Registration Rights.
6.1 Registration Under the Securities Act of 1993. The
Warrants and the Shares have not been registered for purposes of public
distribution under the Securities Act of 1933, as amended ("the Act").
6.2 Registrable Securities. As used herein the term
"Registrable Security" means each of the Warrants, the Shares and any shares of
Common Stock issued upon any stock split or stock dividend in respect of such
Shares; provided, however, that with respect to any particular Registrable
Security, such security shall cease to be a Registrable Security when, as of the
date of determination, (i) it has been effectively registered under the
Securities Act and disposed of pursuant thereto, (ii) registration under the
Securities Act is no longer required for the immediate public distribution of
such security or (iii) it has ceased to be outstanding. The term "Registrable
Securities" means any and/or all of the securities falling within the foregoing
definition of a "Registrable Security." In the event of any merger,
reorganization, consolidation, recapitalization or other change in corporate
structure affecting the Common Stock, such
3
<PAGE>
adjustment shall be made in the definition of "Registrable Security" as is
appropriate in order to prevent any dilution or enlargement of the rights
granted pursuant to this Article 6.
6.3 Piggyback Registration. If, at any time during the five
years following the date of this Agreement, the Company proposes to prepare and
file any registration statement or post-effective amendments thereto covering
equity or debt securities of the Company, or any such securities of the Company
held by its shareholders (in any such case, other than in connection with a
merger, acquisition or pursuant to Form S-8 or successor form), (for purposes of
this Article 6, collectively, a "Registration Statement"), it will give written
notice of its intention to do so by registered mail ("Notice"), at ten (10)
business days prior to the filing of each such Registration Statement, to all
holders of the Registrable Securities. Upon the written request of such a holder
(a "Requesting Holder"), made within ten (10) business days after receipt of the
Notice, that the Company include any of the Requesting Holder's Registrable
Securities in the proposed Registration Statement, the Company shall, as to each
such Requesting Holder, use its best efforts to effect the registration under
the Securities Act of the Registrable Securities which it has been so requested
to register ("Piggyback Registration"), at the Company's sole cost and expense
and at no cost or expense to the Requesting Holders; Notwithstanding the
provisions of this Section 6.3, the Company shall have the right at any time
after it shall have given written notice pursuant to this Section 6.3
(irrespective of whether any written request for inclusion of such securities
shall have already been made) to elect not to file any such proposed
Registration Statement, or to withdraw the same after the filing but prior to
the effective date thereof.
6.4 Demand Registration.
(a) At any time, commencing one hundred twenty (120)
days from the date of this Agreement and during the Warrant Exercise Term, any
"Majority Holder" (as such term is defined in Section 6.4(d) below) of the
Registrable Securities shall have the right (which right is in addition to the
piggyback registration rights provided for under Section 6.3 hereof),
exercisable by written notice to the Company (the "Demand Registration
Request"), to have the Company prepare and file with the Securities and Exchange
Commission (the "Commission"), on one occasion, at the sole expense of the
Company, a Registration Statement and such other documents, including a
prospectus, as may be necessary (in the opinion of both counsel for the Company
and counsel for such Majority Holder), in order to comply with the provisions of
the Act, so as to permit a public offering and sale of the Registrable
Securities by the holders thereof, for nine (9) consecutive months.
(b) The Company covenants and agrees to give written
notice of any Demand Registration Request to all holders of the Registrable
Securities within ten (10) days from the date of the Company's receipt of any
such Demand Registration Request. After receiving notice from the Company as
provided in this Section 6.4(b), holders of Registrable Securities may request
the Company to include their Registrable Securities in the Registration
Statement to be filed pursuant to Section 6.4(a) hereof by
4
<PAGE>
notifying the Company of their decision to include such securities within twenty
(20) days of their receipt of the Company's notice.
(c) In addition to the registration rights provided
for under Section 6.3 and subsection (a) of this Section 6.4, at any time during
the Warrant Exercise Term, any Majority Holder (as defined below in Section
6.4(d)) of Registrable Securities shall have the right, exercisable by written
request to the Company, to have the Company prepare and file with the
Commission, on one occasion in respect of all holders of Registrable Securities,
a Registration Statement so as to permit a public offering and sale of such
Registrable Securities for nine (9) consecutive months, provided, however, that
all costs incident thereto shall be at the expense of the holders of the
Registrable Securities included in such Registration Statement. If a Majority
Holder shall give notice to the Company at any time of its or their desire to
exercise the registration right granted pursuant to this Section 6.4(c), then
within ten (10) days after the Company's receipt of such notice, the Company
shall give notice to the other holders of Registrable Securities, advising them
that the Company is proceeding with such registration and offering to include
therein the Registrable Securities of such holders, provided they furnish the
Company with such appropriate information in connection therewith as the Company
shall reasonably request in writing.
(d) The term "Majority Holder" as used in this
Section 6.4 shall mean any holder or any combination of holders of Registrable
Securities, if included in such holders, Registrable Securities are that
aggregate number of Shares (including Shares already issued and Shares issuable
pursuant to the exercise of outstanding Warrants) as would constitute a majority
of the aggregate number of Shares (including Shares already issued and Shares
issuable pursuant to the exercise of outstanding Warrants) included in all of
the Registrable Securities.
6.5 Covenants of the Company With Respect to Registration. The
Company covenants and agrees as follows:
(a) In connection with any registration under Section
6.4 hereof, the Company shall file the Registration Statement as expeditiously
as possible, but in no event later than forty-five (45) business days following
receipt of any demand therefor, shall use its best efforts to have any such
Registration Statements declared effective at the earliest possible time, and
shall furnish each holder of Registrable Securities such number of prospectuses
as shall reasonably be requested.
(b) The Company shall pay all costs, fees and
expenses (excluding fees of holders for their counsel, transfer taxes and
underwriting discounts or commissions) in connection with all Registration
Statements filed pursuant to Sections 6.3 and 6.4(a) hereof including, without
limitation, the Company's legal and accounting fees, printing expenses, and blue
sky fees and expenses. The holders of Registrable Securities included in any
Registration Statement filed pursuant to Section 6.4(c) hereof will pay all
costs, fees and expenses in connection with such registration.
5
<PAGE>
(c) The Company will take all necessary action which
may be required in qualifying or registering the Registrable Securities included
in a Registration Statement for offering and sale under the securities or blue
sky laws of such states as are requested by the holders of such securities.
(d) The Company shall indemnify any holder of the
Registrable Securities to be sold pursuant to any Registration Statement and any
underwriter or person deemed to be an underwriter under the Act and each person,
if any, who controls such holder or underwriter or person deemed to be an
underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), against all loss,
claim, damage, expense or liability (including all expenses reasonably incurred
in investigating, preparing or defending against any claim whatsoever) to which
any of them may become subject under the Act, the Exchange Act or otherwise,
arising from such Registration Statement to the same extent and with the same
effect as the provisions pursuant to which the Company has agreed to indemnify
the purchasers of the Company's Convertible Debentures contained in the
Registration Rights Agreement dated of even date herewith.
(e) Any holder of Registrable Securities to be sold
pursuant to a Registration Statement, and its successors and assigns, shall
severally, and not jointly, indemnify, the Company, its officers and directors
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim,
damage or expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising
from information furnished in writing by or on behalf of such holder, or its
successors or assigns, for specific inclusion in such Registration Statement to
the same extent and with the same effect as the provisions pursuant to which
purchasers of the Company's Convertible Debentures have agreed to indemnify the
Company contained in the Registration Rights Agreement dated of even date
herewith.
(f) Nothing contained in this Agreement shall be
construed as requiring any Holder to exercise his Warrants prior to the initial
filing of any Registration Statement or the effectiveness thereof.
(g) If the Company shall fail to comply with the
provisions of this Article 6, the Company shall, in addition to any other
equitable or other relief available to the holders of Registrable Securities, be
liable for any or all incidental, special and consequential damages sustained by
the holders of Registrable Securities, requesting registration of their
Registrable Securities.
(h) Except as otherwise provided to the contrary
herein, the Company shall not permit the inclusion of any securities other than
the Registrable Securities to be included in any Registration Statement filed
pursuant to Section 6.4 hereof, or permit any other registration statement to be
or remain effective during the effectiveness of a Registration Statement filed
pursuant to Section 6.4
6
<PAGE>
hereof, without the prior written consent of the Majority Holders, which consent
shall not be unreasonably withheld.
(i) The Company shall deliver promptly to each holder
of Registrable Securities participating in the offering requesting the
correspondence and memoranda described in this Section 6.5(i) and to the
managing underwriter, if any, copies of all correspondence between the
Commission and the Company, its counsel or auditors and all memoranda relating
to discussions with the Commission or its staff with respect to the Registration
Statement and permit each holder of Registrable Securities and underwriters to
do such investigation, upon reasonable advance notice, with respect to
information contained in or omitted from the Registration Statement as it deems
reasonably necessary to comply with applicable securities laws or rules of the
National Association of Securities Dealers, Inc. Such investigation shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors, all to such
reasonable extent and at such reasonable times and as often as any such holder
of Registrable Securities or underwriter shall reasonably request.
(j) If the Company shall enter into an underwriting
agreement with the managing underwriter selected for such underwriting, such
agreement shall be satisfactory in form and substance to the Company, each
holder of Registrable Securities and such managing underwriter, and shall
contain such representations, warranties and covenants by the Company and such
other terms as are customarily contained in agreements of that type used by the
managing underwriter. The holders of Registrable Securities shall be parties to
any underwriting agreement relating to an underwritten sale of their Registrable
Securities and may, at their option, require that any or all the
representations, warranties and covenants of the Company to or for the benefit
of such underwriter shall also be made to and for the benefit of such holders of
Registrable Securities. Such holders of Registrable Securities shall not be
required to make any representations or warranties to or agreements with the
Company or the underwriter except as they may relate to such holders of
Registrable Securities and their intended methods of distribution.
7. Adjustments of Exercise Price and Number of Shares.
7.1 Subdivision and Combination. In case the Company shall at
any time subdivide or combine the outstanding shares of Common Stock, the
Exercise Price shall forthwith be proportionately decreased in the case of
subdivision or increased in the case of combination.
7.2 Adjustment in Number of Shares. Upon each adjustment of
the Exercise Price pursuant to the provisions of this Article 7, the number of
Shares issuable upon the exercise of each Warrant shall be adjusted to the
nearest full Share by multiplying a number equal to the Exercise Price in
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<PAGE>
effect immediately prior to such adjustment by the number of Shares issuable
upon exercise of the Warrants immediately prior to such adjustment and dividing
the product so obtained by the adjusted Exercise Price.
7.3 Reclassification, Consolidation, Merger, etc. In case of
any reclassification or change of the outstanding shares of Common Stock (other
than a change in par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination), or in the case of any
consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger in which the Company is the
surviving corporation and which does not result in any reclassification or
change of the outstanding shares of Common Stock, except a change as a result of
a subdivision or combination of such shares or a change in par value, as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company as an entirety, the Holders shall thereafter have the
right to purchase the kind and number of shares of stock and other securities
and property receivable upon such reclassification, change, consolidation,
merger, sale or conveyance as if the Holders were the owners of the shares of
Common Stock underlying the Warrants immediately prior to any such events at a
price equal to the product of (x) the number of shares issuable upon exercise of
the Warrants and (y) the Exercise Price in effect immediately prior to the
record date for such reclassification, change, consolidation, merger, sale or
conveyance as if such Holders had exercised the Warrants.
7.4 No Adjustment of Exercise Price in Certain Cases. No
adjustment of the Exercise Price shall be made:
(a) Upon the issuance or sale of shares of Common
Stock upon the exercise of the Warrants; or
(b) Upon (i) the issuance of options pursuant to the
Company's employee stock option plan in effect on the date hereof or the
issuance or sale by the Company of any shares of Common Stock pursuant to the
exercise of any such options, or (ii) the issuance or sale by the Company of any
shares of Common Stock pursuant to the exercise of any options or warrants
previously issued and outstanding on the date hereof; or
(c) Upon the issuance of shares of Common Stock
pursuant to contractual obligations existing on the date hereof; or
(d) If the amount of said adjustment shall be less
than two cents (24) per Share, provided, however, that in such case any
adjustment that would otherwise be required then to be made shall be carried
forward and shall be made at the time of and together with the next subsequent
adjustment which, together with any adjustment so carried forward, shall amount
to at least two cents (24) per Share.
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7.5 Dividends and Other Distributions with Respect to
Outstanding Securities. In the event that the Company shall at any time prior to
the exercise of all Warrants declare a dividend (other than a dividend
consisting solely of shares of Common Stock or a cash dividend or distribution
payable out of current or retained earnings) or otherwise distribute to its
shareholders any monies, assets, property, rights, evidences of indebtedness,
securities (other than shares of Common Stock), whether issued by the Company or
by another person or entity, or any other thing of value, the Holder or Holders
of the unexercised Warrants shall thereafter be entitled, in addition to the
shares of Common Stock or other securities receivable upon the exercise thereof,
to receive, upon the exercise of such Warrants, the same monies, property,
assets, rights, evidences of indebtedness, securities or any other thing of
value that they would have been entitled to receive at the time of such dividend
or distribution. At the time of any such dividend or distribution, the Company
shall make appropriate reserves to ensure the timely performance of the
provisions of this Subsection 7.5.
7.6 Subscription Rights for Shares of Common Stock or Other
Securities. In the case the Company or an affiliate of the Company shall at any
time after the date hereof and prior to the exercise of all the Warrants issue
any rights to subscribe for shares of Common Stock or any other securities of
the Company or of such affiliate to all the shareholders of the Company, the
Holders of the unexercised Warrants shall be entitled, in addition to the shares
of Common Stock or other securities receivable upon the exercise of the
Warrants, to receive such rights at the time such rights are distributed to the
other shareholders of the Company.
8. Exchange and Replacement of Warrant Certificates.
Each Warrant Certificate is exchangeable without expense, upon the
surrender hereof by the registered Holder at the principal executive office of
the Company, for a new Warrant Certificate of like tenor and date representing
in the aggregate the right to purchase the same number of Shares in such
denominations as shall be designated by the Holder thereof at the time of such
surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor, in lieu thereof.
9. Elimination of Fractional Interests.
The Company shall not be required to issue certificates representing
fractions of shares of Common Stock and shall not be required to issue scrip or
pay cash in lieu of fractional interests, it being the intent of the parties
that all fractional interests shall be eliminated by rounding any fraction up to
the nearest
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whole number of shares of Common Stock.
10. Reservation and Listing of Securities.
The Company shall at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of issuance upon the
exercise of the Warrants, such number of shares of Common Stock as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon
exercise of the Warrants and payment of the Exercise Price therefor, all shares
of Common Stock issuable upon such exercise shall be duly and validly issued,
fully paid, nonassessable and not subject to the preemptive rights of any
shareholder. As long as the Warrants shall be outstanding, the Company shall use
its best efforts to cause all shares of Common Stock issuable upon the exercise
of the Warrants to be listed on or quoted by NASDAQ.
11. Notices to Warrant Holders.
Nothing contained in this Agreement shall be construed as conferring
upon the Holder or Holders the right to vote or to consent or to receive notice
as a shareholder in respect of any meetings of shareholders for the election of
directors or any other matter, or as having any rights whatsoever as a
shareholder of the Company. If, however, at any time prior to the expiration of
the Warrants and their exercise, any of the following events shall occur:
(a) the Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to receive a dividend
or distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings, as
indicated by the accounting treatment of such dividend or distribution on the
books of the Company; or
(b) the Company shall offer to all the holders of its Common
Stock any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the Company, or
any option, right or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed;
then, in any one or more of said events, the Company shall give written notice
of such event at least fifteen (15) days prior to the date fixed as a record
date or the date of closing the transfer books for the determination of the
shareholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, options or warrants, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such
notice shall specify such record date or the date of closing the
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<PAGE>
transfer books, as the case may be. Failure to give such notice or any defect
therein shall not affect the validity of any action taken in connection with the
declaration or payment of any such dividend or distribution, or the issuance of
any convertible or exchangeable securities or subscription rights, options or
warrants, or any proposed dissolution, liquidation, winding up or sale.
12. Notices.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made when delivered,
or mailed by registered or certified mail, return receipt requested:
(a) If to a registered Holder of the Warrants, to the address
of such Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3
of this Agreement or to such other address as the Company may designate by
notice to the Holders.
13. Supplements and Amendments.
The Company and the Placement Agent may from time to time supplement or
amend this Agreement without the approval of any Holders of Warrant Certificates
in order to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any provisions herein, or to
make any other provisions in regard to matters or questions arising hereunder
which the Company and the Placement Agent may deem necessary or desirable and
which the Company and the Placement Agent deem not to adversely affect the
interests of the Holders of Warrant Certificates.
14. Successors.
All the covenants and provisions of this Agreement by or for the
benefit of the Company and the Holders inure to the benefit of their respective
successors and assigns hereunder.
15. Termination.
This Agreement shall terminate at the close of business on March 16,
2004. Notwithstanding the foregoing, this Agreement will terminate on any
earlier date when all Warrants have been exercised and all the Shares issuable
upon exercise of the Warrants have been resold to the public; provided, however,
that the provisions of Article 6 shall survive such termination until the close
of business on March 16, 2004.
16. Governing Law.
This Agreement and each Warrant Certificate hereunder shall be
governed by and interpreted in
11
<PAGE>
accordance with the laws of the State of Delaware without regard to the
principles of conflict of laws. Any dispute or controversy between the parties
arising in connection with this Agreement or the subject matter contemplated by
this Agreement shall be resolved by arbitration before a three-member panel of
the American Arbitration Association in accordance with the commercial
arbitration rules of said forum and the Federal Arbitration Act, 9 U.S.C. 1 et
seq., with the resulting award being final and conclusive. Said arbitrators
shall be empowered to award all forms of relief and damages claimed, including,
but not limited to, attorney's fees, expenses of litigation and arbitration,
exemplary damages, and prejudgment interest. The parties further agree that any
arbitration action between them shall be heard in Atlanta, Georgia, and
expressly consent to the jurisdiction and venue of the Superior Court of Fulton
County, Georgia, and the United States District Court for the Northern District
of Georgia, Atlanta Division for the adjudication of any civil action asserted
pursuant to this Paragraph.
17. Benefits of This Agreement.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company and the Placement Agent and any other
registered holder or holders of the Warrant Certificates, Warrants or the Shares
any legal or equitable right, remedy or claim under this Agreement; and this
Agreement shall be for the sole and exclusive benefit of the Company and the
Placement Agent and any other holder or holders of the Warrant Certificates,
Warrants or the Shares.
18. Counterparts.
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and
such counterparts shall together constitute but one and the same instrument.
12
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
EUROWEB INTERNATIONAL CORP.
By: /s/Frank R. Cohen
-----------------
Name: Frank R. Cohen
Title: Chairman of Board
/s/Mary C. Courtney
Attest: ---------------------
Name: Mary C. Courtney
Title: Assistant Secretary
J.P. CAREY SECURITIES, INC.
By: -----------------------------
Name:
Title:
Attest: ------------------------
Name: ------------------------
Title: ------------------------
<PAGE>
EXHIBIT "A"
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT APPLICABLE,
PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) UPON THE DELIVERY BY THE HOLDER TO
THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE
ISSUER, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE
IS RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO
HEREIN.
EXERCISABLE ON OR BEFORE
5:00 P.M., EASTERN STANDARD TIME, MARCH 16, 2004
No. ______ 56,514 Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that J.P. Carey Securities, Inc.
("J.P. Carey") or registered assigns, is the registered holder of a
Warrant to purchase, at any time from March 17, 1999, until 5:00 p.m. Eastern
Standard Time on March 16, 2004 ("Expiration Date"), up to 56,514 shares
("Shares") of fully-paid and non-assessable common stock, par value $.001 per
share ("Common Stock"), of Euroweb International Corp., a Delaware corporation
(the "Company"), at the Initial Exercise Price, subject to adjustment in certain
events (the "Exercise Price"), of $2.10 per Share upon surrender of this Warrant
Certificate and payment of the Exercise Price at an office or agency of the
Company, but subject to the conditions set forth herein and in the warrant
agreement dated as of March 17, 1999 between the Company and J.P. Carey
(the "Warrant Agreement"). Payment of the Exercise Price may be made in cash, or
by certified or official bank check in New York Clearing House funds payable to
the order of the Company, or any combination of cash or check.
No Warrant may be exercised after 5:00 p.m., Eastern Standard Time, on
the Expiration Date, at which time all Warrants evidenced hereby, unless
exercised prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to in a description of the rights, limitation
of
<PAGE>
rights, obligations, duties and immunities thereunder of the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events, the Exercise Price and/or number of the Company's securities issuable
thereupon may, subject to certain conditions, be adjusted. In such event, the
Company will, at the, request of the holder, issue a new Warrant Certificate
evidencing the adjustment in the Exercise Price and the number and/or type of
securities issuable upon the exercise of the Warrants; provided, however, that
the failure of the Company to issue such new Warrant Certificates shall not in
any way change, alter, or otherwise impair, the rights of the holder as set
forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferees in exchange for this Warrant
Certi ficate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax, or other governmental charge
imposed in connection therewith.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Date: March 17, 1999
EUROWEB INTERNATIONAL CORP.
By: /s/Frank R. Cohen
-----------------
Name: Frank R. Cohen
Title: Chairman of Board
/s/Mary C. Courtney
Attest: ---------------------
Name: Mary C. Courtney
Title: Assistant Secretary
<PAGE>
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ____________ Shares and
herewith tenders in payment for such Shares cash or a certified or official bank
check payable in New York Clearing House Funds to the order of
_____________________ in the amount of $_______________, all in accordance with
the terms hereof. The undersigned requests that a certificate for such Shares be
registered in the name of _______________________whose address
is__________________________________________________, and that such Certificate
be delivered to __________________________________________, whose address is
_______________________________________________________________________________.
Dated: ________________________ Signature:__________________________
(Signature must conform in
all respects to name of
holder as specified on the
face of the Warrant
Certificate.)
- ------------------------------------
- ------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
<PAGE>
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such
holder desires to transfer the Warrant
Certificate.)
<TABLE>
<CAPTION>
<S> <C>
FOR VALUE RECEIVED ___________________________________________ hereby sells,
assigns and transfers unto _______________________________________________________________
- ------------------------------------------------------------------------------------.
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint
___________________________________, Attorney, to transfer the within Warrant
Certificate on the books of the within-named Company, with full power of
substitution.
Dated:______________________ Signature:_____________________________________
(Signature must conform in all respects to name of holder
as specified on the face of the Warrant Certificate)
- -------------------------------------
- -------------------------------------
(Insert Social Security or Other
Identifying Number of Assignee)
</TABLE>
AGREEMENT
Agreement made this 17th day of March, 1999 between Euroweb
International Corp., ("EWEB") a corporation organized under the laws of the
State of Delaware in the United States and M & A Management (Malta) Ltd.,
("M&A").
WITNESSETH
1. EWEB hereby sells and M & A hereby purchases a number of shares of
EWEB's common stock, .001 par value at a price of $200,000
(the"Shares"). The number is calculated by using the closing bid price
of $1.75 on March 17, 1999 or the bid price per share at closing on 1st
day of April, 1999 whichever is lower less a 25% discount and by
dividing the price into $200,000 (US).
2. The parties acknowledge that the Shares have not been registered but
are being sold in a private placement pursuant to an exemption from
Registration provided by section 4(2) of the Securities Act of 1933
and/or Regulation 506 promulgated thereunder.
3. M & A acknowledges that it has received copies of EWEB's 10-KSB for the
years ended December 31, 1996 and 1997 and of EWEB's 10-QSB for the
periods ended March 31, 1998, June 30, 1998, September 30, 1998 and of
all electronic filings made by EWEB using the Edgar system since
October 1996 and has received all information requested by it for EWEB
so as to enable it to make an informed opinion of the transaction.
4. EWEB agrees to file a Registration Statement on SEC Form S-3 no later
than July 1, 1999 to register the Shares so that the initial legend on
the shares can be removed.
5. EWEB agrees that until October 1, 1999 (the"Put Period") that it will
purchase from M & A 50% of the Shares purchased at the purchase price
in the event M & A notifies EWEB in writing of the desire to sell these
shares to EWEB during the Put Period.
EUROWEB INTERNATIONAL CORP.
Frank R. Cohen, Chairman of Board
M & A MANAGEMENT (MALTA) LTD.
Peter E. Klenner, President
EXHIBIT E
EUROWEB INTERNATIONAL CORP.
A WARRANT FOR THE PURCHASE OF COMMON SHARES
NO. W- ________ SHARES
FOR VALUE RECEIVED, EUROWEB INTERNATIONAL CORP., a Delaware
corporation (the "Company"), hereby certifies that ________________or its
permitted assigns is entitled to purchase from the Company , at any time or from
time to time after April 2, 1999 but prior to 5:00 P.M. on April 1, 2002,
__________Thousand (_______) fully paid and non-assessable shares of common
stock, par value $.001 per share, of the Company for an aggregate purchase price
of $_______ (computed on the basis of $2.25 per share). (Hereinafter, (i) said
common shares, together with any other equity securities which may be issued by
the Company in substitution therefor, are referred to as the "Common Shares",
(ii) the Common Shares purchasable hereunder are referred to as the "Warrant
Shares", (iii) the aggregate purchase price payable hereunder for the Warrant
Shares is referred to as the "Aggregate Warrant Price", (iv) the price payable
hereunder for each of the Warrant Shares, as adjusted in the manner set forth in
Section 3, is referred to as the "Per Share Warrant Price" and (v) this Warrant
and all warrants hereinafter issued in exchange or substitution for this Warrant
are referred to as the "Warrants".) The Aggregate Warrant Price is not subject
to adjustment. The Per Share Warrant Price and the number of Warrant Shares are
subject to adjustment as hereinafter provided.
1. EXERCISE OF WARRANT. (a) This Warrant may be exercised, in whole at
any time or in part from time to time (such partial exercises to be in amounts
of not less than 10,000 Warrant Shares), on and after April 2, 1999, but prior
to 5:00 P.M. on April 1, 2002, by the holder of this Warrant) the ("Holder") by
the surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the principal office of the Company's counsel Cohen & Cohen, 445
Park
1
<PAGE>
Avenue, New York, NY 10022, together with proper payment of the Aggregate
Warrant Price applicable on such date, or the proportionate part thereof if this
Warrant is exercised in part. Payment for Warrant Shares shall be made by check
or checks, payable to the order of the Company. If this Warrant is exercised in
part, this Warrant must be exercised for a number of whole Warrant Shares, and
the Holder is entitled to receive a new Warrant covering the number of Warrant
Shares in respect of which this Warrant has not been exercised and setting forth
the proportionate part of the Aggregate Warrant Price applicable to such Warrant
Shares. Upon such surrender of this Warrant, the Company will (a) issue a
certificate or certificates in the name of the Holder for the largest number of
whole Warrant Shares to which the Holder shall be entitled and, if this Warrant
is exercised in whole, in lieu of any fractional Warrant Share to which the
Holder shall be entitled, cash equal to the fair value of such fractional share
(determined in such reasonable manner as the Board of Directors of the Company
shall determine), and (b) deliver the other securities and properties receivable
upon the exercise of this Warrant, or the proportionate part thereof if this
Warrant is exercised in part, pursuant to the provisions of this Warrant. (b)
The Company shall have the right to call this Warrant at any time after April 1,
2001 (two years) by paying the holder $.125 for each share covered by this
Warrant.
2. RESERVATION OF WARRANT SHARES. The Company agrees that, prior to
the expiration of this Warrant, the Company will at all times have authorized
and will reserve, and will keep available, solely for issuance or delivery upon
the exercise of this Warrant, the shares receivable upon the exercise of this
Warrant, the Warrant Shares and other securities and properties as from time to
time shall be receivable upon the exercise of this Warrant, free and clear of
all restrictions on sale or transfer (except as may arise under applicable
securities laws) and free and clear of all preemptive rights.
2
<PAGE>
3. PROTECTION AGAINST DILUTION.
(a) If, at any time or from time to time after the date of
this Warrant, the Company shall issue to the holders of the Common Shares any
Common Shares by way of a stock dividend or stock split (including, without
limitation, a reverse stock split), then, and in each such case, the Per Share
Warrant Price on the date of such stock dividend or stock split shall be
adjusted, or further adjusted, to a price (to the nearest cent) determined by
dividing (i) an amount equal to the number of Common Shares outstanding
immediately prior to such issuance multiplied by the Per Share Warrant Price in
effect immediately prior to such issuance by (ii) the total number of Common
Shares outstanding immediately after such issuance. Upon each adjustment in the
Per Share Warrant Price resulting from a stock split or stock dividend, the
number of Warrant Shares shall be adjusted by dividing the Aggregate Warrant
Price by the Per Share Warrant Price in effect immediately after such
adjustment. Notice of each such adjustment and each such readjustment shall be
forthwith mailed to the Holder.
(b) If the Company shall be consolidated with or merged into
another corporation, or shall sell all or substantially all of its assets in
part of a reorganization to which the Company is a party within the meaning of
the Internal Revenue Code of 1986, as presently in effect, or shall issue a
security convertible into its Common Shares as a dividend on its Common Shares,
or shall reclassify or reorganize its capital structure (except a stock split
covered by Subsection 3(a) hereof), each Warrant Share shall be replaced for the
purposes hereof by the securities or properties issuable or distributable in
respect of one Common Share upon such consolidation, merger, sale,
reclassification or reorganization, and adequate provisions to that effect shall
be made at the time thereof. Notice of such consolidation, merger, sale,
reclassification or reorganization, and of said
3
<PAGE>
provisions so proposed to be made, shall be mailed to the Holder not less than
15 days prior to such event.
(c) If the Company shall sell all or substantially all of its
assets, other than as part of a reorganization to which the Company is a party
within the meaning of the Internal Revenue Code of 1986, as presently in effect,
or shall distribute its assets in dissolution or liquidation (other than as part
of such a reorganization), the Company shall mail notice thereof to the Holder
and shall make no distribution to shareholders until the expiration of 15 days
from the date of mailing of said notice and then only to shareholders of record
as of a date at least 15 days after the date of mailing of said notice.
(d) If the Board of Directors of the Company shall declare any
dividend or other distribution in cash with respect to the Common Shares, other
than out of surplus, the Company shall mail notice thereof to the Holder not
less than 15 days prior to the record date fixed for determining shareholders
entitled to participate in such dividend or other distribution.
4. FULLY PAID SHARES; TAXES. The Company agrees that the Common Shares
represented by each and every certificate for Warrant Shares delivered on the
exercise of this Warrant shall, at the time of such delivery, be validly issued
and outstanding, fully paid and non-assessable, and the Company will take all
such actions as may be necessary to assure that the par value or stated value,
if any, per Warrant Share is at all times equal to or less than the then Per
Share Warrant Price. The Company further covenants and agrees that it will pay,
when due and payable, any and all Federal and state stamp, original issue or
similar taxes which may be payable in respect of the issue of any Warrant Share
or certificate therefor.
5. LOSS, ETC. OF WARRANT. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and of
indemnify reasonably satisfactory to the
4
<PAGE>
Company, if lost, stolen or destroyed, and upon surrender and cancellation of
this Warrant, if mutilated, and upon reimbursement of the Company's reasonably
incidental expenses, the Company shall execute and deliver to the Holder a new
Warrant of like date, tenor and denomination.
6. WARRANT HOLDER NOT SHAREHOLDER. Except as otherwise provided
therein, this Warrant does not confer upon the Holder any right to vote or to
consent or to receive notice as a shareholder of the Company, as such, in
respect of any matters whatsoever, or any other rights or liabilities as a
shareholder, prior to the exercise hereof.
7. COMMUNICATION. No notice or other communication under this Warrant
shall be effective unless the same is in writing and is mailed by first-class
mail, postage prepaid, addressed to:
(a) the Company at c/o Cohen & Cohen, at 445 Park Avenue, 15th
Floor, New York, New York 10022, or such other address as the Company has
designated in writing to the Holder, or
(b) the Holder at 136 Ridge Avenue, Passaic, NJ 07055-2421 or
such other address as the Holder has designated in writing to the Company.
8. HEADINGS. The headings of this Warrant have been inserted as a
matter of convenience and shall not affect the construction hereof.
9. APPLICABLE LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, EUROWEB INTERNATIONAL CORP. has caused this
Warrant to be signed by its President and its corporate seal to be hereunto
affixed this __ day of _______, 1999.
ATTEST: EUROWEB INTERNATIONAL CORP.
By: /s/Frank R. Cohen
-----------------
Frank R. Cohen
Chairman of the Board
[Corporate Seal]
5
<PAGE>
SUBSCRIPTION
The undersigned, ___________________________________________________
pursuant to the provisions of the Warrant, dated April 2, 1999, granted by
EuroWeb International Corp. for ________ Common Shares hereby elects to purchase
____________________ (____________) Common Shares of EuroWeb International
Corp. covered by that Warrant.
Dated:____________, 1999
Signature __________________________________________
6
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SUBSCRIPTION DOCUMENTS
EUROWEB INTERNATIONAL CORP.
------------------------------------------------------------------------------
UP TO 33 UNITS
OFFERING PRICE: $50,000 PER UNIT
EACH UNIT CONSISTS OF
28,571 SHARES OF COMMON STOCK
AND
28,571 COMMON STOCK A PURCHASE WARRANTS
AND
28,571 COMMON STOCK B PURCHASE WARRANTS
------------------------------------------------------------------------------
APRIL 2, 1999
EUROWEB INTERNATIONAL CORP.
445 PARK AVENUE
NEW YORK, NY 10022
TEL: (212) 758-9870
FAX: (212) 758-9896
- -------------------------------------------------------------------------------
<PAGE>
GENERAL INSTRUCTIONS FOR INVESTORS
INDIVIDUAL PURCHASERS. Any person over twenty-one years of age, regardless
of citizenship or marital status, may purchase a Unit as an individual. (See
Special Instructions for Investors on page 3). A minor may only purchase a Unit
through a qualified legal guardian with the use a Purchaser Representative. A
person who is single, separated, divorced or a surviving spouse may purchase as
an individual and need only complete the documents for himself or herself.
(Married persons living in community property states - Arizona, California,
Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin - should
note that even if they purchase as individuals, the Units may be considered
community property, i.e. all property acquired by a husband and wife during
their marriage is presumed to belong equally to each of the marriage partners).
MARRIED COUPLES. A married person may purchase as an individual or as
co-owner with his or her spouse. An individual purchaser should complete these
forms only for himself or herself. A married couple purchasing as joint owners
should provide information for both spouses, and both spouses must sign all
applicable documents.
JOINT TENANTS OR CO-TENANTS (OTHER THAN MARRIED COUPLES). Two or more
friends, relatives, business associates or others may purchase as joint tenants
or co-tenants. Each joint tenant or co-tenant must qualify individually as being
suitable for this investment, must complete a separate Investor Questionnaire,
and each must sign all applicable documents.
CORPORATIONS. Corporate investors must provide copies of the By-laws and
Articles of Incorporation. A Corporate Resolution authorizing an investment in
the Units must also be provided. (A form "Certificate of Corporate Resolution"
is set forth on Page 19).
PARTNERSHIPS. A partnership should provide a copy of the partnership
agreement. A general partner must complete and sign all subscription documents
on behalf of the partnership. A Partnership Certificate authorizing an
investment in the Units must also be provided. (A form "Partnership Certificate"
is set forth on Page 21).
TRUSTS. Trust investors must provide a copy of the trust agreement. A trust
Certificate authorizing an investment in the Units must also be provided. (A
form "Trust Certificate" is set forth on page 22).
For trust investors which are not the taxpaying entities: Information
should be provided for the trust and not for any individuals. A trustee
must sign for the trust in a manner similar to the following: ABC Trust,
Mary Roe, Trustee. The taxpayer identification number should be the
number(s) for each person or entity which will be the taxpayer for this
investment. If the trust is not the taxpayer for this investment, do not
use the trust's taxpayer number.
For trust investors which are the taxpaying entities: Information
should be provided for the trust and not for any individuals. A trustee
must sign for the trust in a manner similar to the following: ABC Trust,
Mary Roe, Trustee. The trust's taxpayer identification number must be
provided.
- 2 -
<PAGE>
SPECIAL INSTRUCTIONS FOR INVESTORS
In order to subscribe for Units, each Prospective Investor must:
1. Read the Confidential Placement Memorandum in its entirety.
2. Read the State Securities Notices appearing in the Confidential Private
Placement Memorandum which is applicable to the jurisdiction of the
Investor's residence.
3. Complete and execute all subscription documents in accordance with the
instructions set forth herein.
Each of the following documents must be completed and signed in the manner
described below. The failure to carefully complete all applicable items
will delay the processing of your subscription.
THE SUBSCRIPTION AGREEMENT (page 12) must be completed by each Investor
prior to the sale of Units and it MUST BE SIGNED BY THE INVESTOR ON PAGE
17.
If a Purchaser Representative is designated by the Investor, THE PURCHASER
REPRESENTATIVE CERTIFICATE (page 9) must be completed by the Investor's
Purchaser Representative and delivered to the Investor prior to any sale of
Units. A copy of the complete Purchaser Representative Certificate must
also be provided to the Company.
THESE DOCUMENTS TOGETHER WITH A CHECK FOR THE FULL PURCHASE PRICE OF
THE UNITS SHOULD BE DELIVERED TO EUROWEB INTERNATIONAL CORP. 445 PARK
AVENUE, NEW YORK, NY 10022.
PLEASE MAKE YOUR SUBSCRIPTION CHECKS PAYABLE TO:
"EUROWEB INTERNATIONAL CORP.."
- 3 -
<PAGE>
CONFIDENTIAL PURCHASER QUESTIONNAIRE
Purpose of this Questionnaire
Up to 33 Units, each Unit consisting of 28,571 shares of Common Stock,
28,571 Common Stock A Purchase Warrants and 28,571 Common Stock B Purchase
Warrants of EuroWeb International Corp., a Delaware corporation (the "Company"),
are being offered pursuant to a Confidential Private Offering Memorandum of the
Company dated April 2, 1999, without registration under the Securities Act of
1933, as amended (the "Act"), or the securities laws of some states, in reliance
on the private offering exemptions contained in Sections 3(b), 4(2) and/or 4(6)
of the Act and/or in Rule 506 of the General Rules and Regulations under the Act
("Rule 506"), and in reliance on similar exemptions under applicable state laws.
The Company must determine that an organization meets certain suitability
requirements before selling (or, in some states, offering) Units to such entity.
This Questionnaire does not constitute an offer to sell or a solicitation of an
offer to buy Units or any other security.
THE COMPANY WILL NOT OFFER OR SELL UNITS TO ANY CORPORATION, TRUST,
PARTNERSHIP OR SIMILAR ENTITY UNLESS A QUESTIONNAIRE HAS BEEN DULY COMPLETED ON
BEHALF OF SUCH ENTITY, AND ON THE BASIS OF THE INFORMATION SET FORTH THEREIN THE
COMPANY HAS CONCLUDED THAT THE ENTITY IS AN "ACCREDITED INVESTOR."
INSTRUCTIONS
One (1) copy of this Questionnaire should be completed, signed, dated
and delivered to EuroWeb International Corp., 445 Park Avenue, New York, NY
10022. Please contact Frank R. Cohen, Counsel to EuroWeb International Corp.,
(212) 758-9870 if you have any questions with respect to the Questionnaire.
PLEASE ANSWER ALL QUESTIONS. If the appropriate answer is "None" or "Not
Applicable," so state. Please print or type your answers to all questions.
Attach additional sheets if necessary to complete your answers to any item.
Your answers will be kept strictly confidential at all times; however,
the Company may present this Questionnaire to such parties as it deems
appropriate in order to assure itself that the offer and sale of the Units will
not result in a violation of the registration provisions of the Act or a
violation of the securities laws of any state.
PLEASE PRINT
Name:
------------------------------------------------------------
Address:
------------------------------------------------------------
Occupation:
------------------------------------------------------------
Business Address:
------------------------------------------------------------
Tel: ( )
-------------------------------------
SS or Tax I.D. Number:
-----------------------------------------------------------
- 4 -
<PAGE>
1. Set forth in the space provided below the state(s) in which you have
maintained your principal residence during the past three (3) years and the
dates during which you resided in each state.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2. Do you maintain residence in any other state: If yes, in which state(s)?
- -------------------------------------------------------------------------------
3. In which states, if any, do you pay state income taxes?
- -------------------------------------------------------------------------------
4. In which states, if any, do you hold a presently valid driver's license?
- -------------------------------------------------------------------------------
5. What is your present age?
6. My gross income from all sources, without regard to this investment, is in
excess of: (check one)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1996 (actual) $75,000 $100,000 $200,000
-------- -------- ---------
1997 (actual) $75,000 $100,000 $200,000
-------- -------- ---------
1998 (estimated) $75,000 $100,000 $200,000
-------- -------- ---------
7. My net worth (total assets minus total liabilities) without regard to this
investment, is in excess of: (check one)
$75,000 $100,000 $250,000 $1,000,000, inclusive of
- --------- ---------- ----------- ------------
home, home furnishings and automobiles
8. If the investment will be in the name of a partnership or corporation, answer
the following:
Type of Entity:
----------------------------------------------------------------
Date of Formation: ------------------------------------------------------------
Number of Shareholders or Partners:
--------------------------------------------
</TABLE>
- 5 -
<PAGE>
Net Worth: $
----------------------------------------------------------------
Net Income for: 1996 $ 1997 $ 1998 Est. $
---------- ----------- ----------
For a corporation, please attach a copy of Corporate Resolution.
Attached: Yes No
----------------- ---------- ---------
NOTE: IF A CORPORATION, THE AGENT OF THE CORPORATION WHO WILL BE RESPONSIBLE
FOR MAKING THE DECISIONS TO PURCHASE THE NOTES MUST COMPLETE THE INVESTOR
QUESTIONNAIRE.
For a partnership, please attach a copy of the Partnership Agreement.
Attached: Yes No
----------------- ---------- ----------
NOTE: IF A PARTNERSHIP, EACH PARTNER MUST COMPLETE AN INVESTOR QUESTIONNAIRE
OR THE MANAGING PARTNER(S) WILL COMPLETE A QUESTIONNAIRE IN THE AGGREGATE
FOR THE PARTNERSHIP.
9. If the investment will be in the name of a trust or estate, answer the
following:
Type of Entity:
---------------------------------------------------------------
Date of Formation:
--------------------------------------- ---------------------
Number of Beneficiaries:
-------------------------------------------------------
Net Worth: $
-------------------------------------------
Net Income for: 1996 $ 1997 $ 1998 Est. $
--------- ---------- -----------
For a trust, please attach a copy of instrument creating trust.
Attached: Yes No
----------------- ---------- ----------
NOTE: EACH TRUSTEE AND EXECUTE OR MUST COMPLETE AN INVESTOR QUESTIONNAIRE.
10. Please describe your educational background, including dates of attendance
and degrees obtained.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- 6 -
<PAGE>
11. Please describe briefly your present occupation. Also please describe the
principal positions you have held and nature of your activities in such
positions during the last five (5) years. Specific employers need not be
identified. What is sought is a sufficient description to enable the Company to
determine the extent of your vocational related experience in financial and
business matters:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
12. My prior investment experience is as follows:
(i) Investments in stocks and bonds: Yes No
-------- ---------
(ii) Investments in new ventures and start-up companies:
(iii) % of my net worth, exclusive of home, home furnishings and
automobiles, is in investments which are not liquid, such as
the Notes.
(iv) % of my net worth, exclusive of home, home furnishings and
automobiles, constitutes liquid assets (cash or assets readily
convertible to cash).
(v) Please indicate the frequency of your investment in marketable
securities:
( ) often; ( ) occasionally; ( ) seldom: ( ) never
(vi) Please indicate the frequency of your investment in unmarketable
securities:
( ) often; ( ) occasionally; ( ) seldom: ( ) never
(vii) Please indicate the cumulative amount of your investment in
nonmarketable securities:
Securities such as Stock up to $50,000 ----------
$50,000 to $150,000
---------
over $150,000
---------
New Venture Investments up to $50,000
---------
$50,000 to $150,000
---------
over $150,000
---------
Other up to $50,000
---------
$50,000 to $150,000
---------
over $150,000
---------
- 7 -
<PAGE>
The above information supplied by me is true and correct in all
respects and I recognize that the Company is materially relying on the truth and
accuracy of such information.
IN WITNESS WHEREOF, I have executed the Questionnaire this
day of , 1999
- 8 -
<PAGE>
SELECTION OF PURCHASER REPRESENTATIVE
To invest in the Units that are being offered herewith, each Investor
must meet one of the following conditions:
1. Be an experienced and sophisticated investor;
OR
2. Be advised by a qualified Purchaser Representative.
A Purchaser Representative is an individual (accountant, attorney or
other professional advisor) who assists an Investor in evaluating the
merits and risks of the investment. Selection of a Purchaser
Representative is generally optional but may be required by the
Placement Agent for those Investors with limited investment experience.
If an Investor prefers to use a Purchaser Representative, a
questionnaire must be completed by the Purchaser Representative
relating to the representative's investment experience and
sophistication. Additional information about Purchaser Representatives
can be obtained from the Placement Agent.
A Purchaser Representative Certificate is attached.
- 9 -
<PAGE>
EUROWEB INTERNATIONAL CORP.
PURCHASER REPRESENTATIVE CERTIFICATE
The undersigned has been named by ("Subscriber") as a person
with whom the Subscriber will consult or upon whose advice the Subscriber will
rely, in evaluating the merits and risks of an investment in the Units of
EUROWEB INTERNATIONAL CORP., a Delaware corporation (the "Company"), described
in the Private Placement Memorandum dated April 2, 1999.
(i) The Undersigned is not an affiliate, officer, employee or
beneficial owner of 10% or more of any equity interest of the Company or of any
entity owned or controlled by, or affiliated with, the Company.
(ii) Described below are all material relationships between
the undersigned (or any affiliates of the undersigned) and the Company, or any
of its affiliates which now exist, which are presently contemplated to exist in
the future, or which have existed at any time during the past two years, and any
compensation received or to be received as a result of such relationship or the
sale of Units.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(This item must be completed. If the named advisor has not been involved in any
such dealings, state "NONE").
(iii) The undersigned is primarily engaged in the following
business or profession (registered investment advisor or registered
broker/dealer or the representative of a registered broker/dealer or the active
practice of law or accountancy):
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(This item must be completed.)
(iv) The undersigned had has not either previously invested
in, or advised others with respect to investments in similar types of securities
or businesses as that of the Company.
(Check appropriate answer)
- 10 -
<PAGE>
(v) The undersigned has such knowledge and experience in
financial and business matters that the Undersigned is capable of evaluating the
merits and risks of an investment in the Company and of making an informed
investment decision.
Name or Representative Signature
Dated:
- 11 -
<PAGE>
SUBSCRIPTION AGREEMENT
EuroWeb International Corp.
445 Park Avenue
New York, NY 10022
Gentlemen:
1. Pursuant to the terms of the offer contained in the
Company's Confidential Private Offering Memorandum dated April 2, 1999
Memorandum, including the exhibits and attachments thereto, being hereinafter
called the "Memorandum"), the undersigned hereby tenders this subscription and
applies for the purchase of the number of Units set forth on the signature page
of this agreement, each Unit consisting of 28,571 shares of Common Stock, 28,571
Common Stock A Purchase Warrants and 28,571 Common Stock B Purchase Warrants of
EuroWeb International Corp.(the "Company"), at a purchase price of $50,000 per
Unit. Partial Units may be purchased in the discretion of EuroWeb International
Corp. Together with this Subscription Agreement, the undersigned is delivering
to the Company a check payable to " EuroWeb International Corp." in the full
amount of the purchase price for the Units which the undersigned is subscribing
for pursuant hereto or funds by wire transfer to such account as instructed by
the Company's attorney for this Offering, Cohen & Cohen.
2. Representations and Warranties. In order to induce the
Company to accept this subscription, the undersigned hereby represents and
warrants to, and covenants with, the Company as follows:
(i) The undersigned has received and carefully reviewed the
Memorandum, and except for the Memorandum, the undersigned has not been
furnished with any other materials or literature relating to the offer
and sale of the Units;
(ii) The undersigned has had a reasonable opportunity to ask
questions of and receive answers from the Company concerning the
Company and the offering, and all such questions, if any, have been
answered to the full satisfaction of the undersigned;
(iii) The undersigned has such knowledge and expertise in
financial and business matters that the undersigned is capable of
evaluating the merits and risks involved in an investment in the Units;
(iv) The Confidential Purchaser Questionnaire being
delivered by the undersigned to the Company simultaneously herewith is
true, complete and correct in all material respects; and the
undersigned understands that the Company has determined that the
exemption from the registration provisions of the Securities Act of
1933, as amended (the "Act"), which is based upon non-public offerings
are applicable to the offer and sale of the Units, based, in part, upon
the representations, warranties and agreements made by the undersigned
herein and in the Confidential Purchaser Questionnaire referred to
above;
(v) Except as set forth in the Memorandum, no
representations or warranties have been made to the undersigned by the
Company or any agent, employee or affiliate of the Company and in
entering into this transaction the undersigned is not relying upon any
information, other than that contained in the Memorandum and the
results of independent investigation by the undersigned;
- 12 -
<PAGE>
(vi) The undersigned understands that (A) neither the Common
Stock nor the Common Stock A and B Purchase Warrants comprising the
Units have been registered under the Act or the securities laws of any
state, based upon an exemption from such registration requirements for
non-public offerings pursuant to exemptions from registration under the
Act; (B) the Units are and will be "restricted securities", as said
term is defined in Rule 144 of the Rules and Regulations promulgated
under the Act; (C) the Units may not be sold or otherwise transferred
unless they have been first registered under the Act and all applicable
state securities laws, or unless exemptions from such registration
provisions are available with respect to said resale or transfer; (D)
except as set forth below, the Company has no obligation to register
the Units under the Act or any state securities laws, or to take any
action to make any exemption from any such registration provisions
available; (E) the certificates for the Common Stock and Warrants will
bear a legend to the effect that the transfer of the securities
represented thereby is subject to the provisions hereof; and (F) stop
transfer instructions will be place with the transfer agent for the
Common Stock.
(vii) The undersigned is acquiring the Units solely for the
account of the undersigned, for investment purposes only, and not with
a view towards the resale or distribution thereof;
(viii) The undersigned will not sell or otherwise transfer any
of the Units or any interest therein, unless and until (i) said Common
Stock shall have first been registered under the Act and all applicable
state securities laws; or (ii) the undersigned shall have first
delivered to the Company a written opinion of counsel (which counsel
and opinion (in form and substance) shall be reasonably satisfactory to
the Company), to the effect that the proposed sale or transfer is
exempt from the registration provisions of the Act and all applicable
state securities laws:
(ix) The undersigned has full power and authority to execute
and deliver this Subscription Agreement and to perform the obligations
of the undersigned hereunder; and this Subscription Agreement is a
legally binding obligation of the undersigned in accordance with its
terms; and
(x) The undersigned is an "accredited investor," as such
term is defined in Regulation D of the Rules and Regulations
promulgated under the Act.
3. Registration Rights. The holders of the Units purchased in
this Offering may require the Company, to include such securities in any
registration or registrations of securities under the Act and under applicable
state securities laws effected by the Company upon the request of such holders,
until all of the Shares have been covered by at least one registration statement
which has remained effective for a consecutive period of not less than nine
months. The Company will not be obligated to include any Securities in a
registration if the managing underwriter for the public offering advises the
Company that such inclusion would interfere with the orderly sale of the
securities to be publicly offered.
The Company will bear the expenses of such registration discussed
above, other than underwriting discounts and commissions attributable to the
Securities sold by investors thereunder, fees and expenses of counsel for the
investors who sell such Securities and transfer taxes payable by such sellers.
The Company will indemnify the sellers and any underwriters against claims and
losses due to material misstatements or omissions contained in the registration
statement other than misstatements or omissions based on information provided by
such sellers. Each seller of Securities will indemnify the Company and the
underwriters thereof against claims and losses due to material misstatements or
omissions contained in the registration statement based on information provided
by such seller.
- 13 -
<PAGE>
Except as provided above, the Company will not have any obligation to
register the Securities under the Securities Act of 1933 or any state securities
laws.
4. The undersigned understands that this subscription is not
binding upon the Company until the Company accepts it, which acceptance is at
the sole discretion of the Company and is to be evidenced by the Company's
execution of this subscription Agreement where indicated. This Subscription
Agreement shall be null and void if the Company does not accept it as aforesaid.
5. The undersigned understands that the Company may, in its
sole discretion, reject this subscription and, in the event that the offering to
which the Memorandum relates is oversubscribed, offer partial Units or reduce
this subscription in any amount and to any extent, whether or not pro rata
reductions are made of any other investor's subscription.
6. The undersigned agrees to indemnify the Company and hold it
harmless from and against any and all losses, damages, liabilities, costs and
expenses which it may sustain or incur in connection with the breach by the
undersigned of any representation, warranty or covenant made by it herein.
7. Neither this Subscription Agreement nor any of the rights
of the undersigned hereunder may be transferred or assigned by the undersigned.
8. This Subscription Agreement (i) may only be modified by a
written instrument executed by the undersigned and the Company; and (ii) sets
forth the entire agreement of the undersigned and the Company with respect to
the subject matter hereof; and (iii) shall inure to the benefit of, and be
binding upon the company and the undersigned and its respective heirs, legal
representatives, successors and assigns.
9. Unless the context otherwise requires, all personal
pronouns used in this Subscription Agreement, whether in the masculine, feminine
or neuter gender, shall include all other genders.
10. All notices or other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally or
mailed by certified or registered mail, return receipt requested, postage
prepaid, as follows: if to the undersigned, to the address set forth in the
Confidential Purchaser Questionnaire referred to above; and if to the Company,
to EuroWeb International Corp., 445 Park Avenue, New York, NY 10022, or to such
other address as the Company or the undersigned shall have designed to the other
by like notice.
IN WITNESS WHEREOF, the undersigned has executed this
Subscription Agreement this day of , 1999.
- 14 -
<PAGE>
SUBSCRIPTION AGREEMENT
EuroWeb International Corp.
445 Park Avenue
New York, NY 10022
Ladies and Gentlemen:
The undersigned hereby tenders to EuroWeb International Corp.
(the "Company") this subscription agreement ("Subscription Agreement"), and
applies to purchase at $50,000 per Unit, the number of Units set forth on the
signature page of this Subscription Agreement, each Unit consisting of 28,571
shares of Common Stock of the Company (the :Common Stock") 28,571 Common Stock A
Purchase Warrants of the Company, and 28,571 Common Stock B Purchase Warrants
of the Company (such warrants being referred to collectively as the "Purchase
Warrants").
This Subscription Agreement consists of, and incorporates
fully in all respects, all of the terms and conditions of a form of subscription
agreement (the "Original Subscription Agreement") previosuly submitted to the
undersigned by the Company (a copy of which is attached hereto and incorporated
by reference herein), in connection with the delivery of the Company's
Confidential Private Offering Memorandum dated April 2, 1999 (the "Offering
Memorandum"), OTHER THAN paragraph "3. Registration Rights." Paragraph 3 of the
Original Subscription Agreement is deleted in its entirety, and the following
paragraph 3 is substituted in lien thereof:
3. Registration Rights. In consideration of the purchase in
this Offering by the undersigned of one or more Units, and in
recognition of the financial benefits to the Company in connection
therewith, the Company hereby agrees that the undersigned shall have
the rights with respect to the registration and sale of the securities
comprising the Units (collectively referred to as "Securities"), which
are set forth in this paragraph 3. In connection with the rights so
provided, the Company will bear the expenses of such registration other
than underwriter discounts and commissions attributable to the
Securities sold by investors thereunder, fees and expenses of counsel
for the investors who sell such Securities, and transfer taxes payable
by such sellers. The Company will indemnify the sellers and any
underwriters against claims and losses due to material misstatements or
ommissions in the registration statement other than misstatements or
omissions based on information provided by such sellers. Each seller of
Securities will indemnify the Company and the underwriters against
claims and losses due to material misstatement or omissions in the
registration statement based on information provided by such seller.
(i) Standing Registration. Not more than fourteen days after
the completion of the Offering of the Units in accordance with
the terms of the Offering Memorandum, the Company shall file
with the U.S. Securities and Exchange Commission (the "SEC")
and applicable state securities regulators, a registration
statement covering the public offering and sale of all of the
Securities (both the Common Stock, the Purchase Warrants, and
the Common Stock issuable upon the exercise of the Purchase
Warrants) issued by the Company in the Offering. The Company
shall cooperate with the SEC in its review and approval of
such registration statement, and will use all reasonable
efforts to diligently pursue the effectiveness of such
registration statement at the earliest possible date. The
Company shall use every reasonable effort to maintain the
effectiveness of such registration statement for thirty-eight
months after the date upon which it first become effective. In
furtherance thereof, the Company shall amend the registration
statement from time to time in accordance
- 15 -
<PAGE>
with applicable legal requirements, and shall prepare and file
all require public reports under applicable securities laws.
THE COMPANY ACKNOWLEDGES THAT THE REGISTRATION OF THE
SECURITIES, AND THE CONTINUED STATUS OF THE SECURITIES AS
REGISTERED SECURITIES, IS A MATERIAL FACTOR IN THE DECISION OF
THE UNDERSIGNED TO PURCHASE A UNIT. In furtherance thereof,
the Company will take all reasonable steps which are required
in order for its common stock to continue to be traded in the
NASDAQ System; for its Purchase Warrants to be listed on the
NASDAQ System if and when such warrants so quality and, if not
so qualified, for its Purchase Warrants to be listed on the
NASDAQ bulletin board if and when such warrants so qualify,
and the Company agrees to cooperate in the effort of any
holder of Securities to accomplish the same.
(ii) Registration by Request. Nothwithstanding the foregoing
paragraph (i), if at any time during the thrity-eight month
period set forth in the preceding paragraph, a registration
statement covering all Securities is not currently in effect
under any applicable securities law, the holder or holders of
Units purchased in this Offering may require the Company to
promptly prepare and file a registration or registrations of
Securities of the Company under the Act and under applicable
state securities laws (a "Request for Registration"). Upon
receipt of a Request for Registration, the Company shall
notify all other holders of Units purchased in this Offering
of the receipt of such Request for Registration, and shall
include in such registration statement any Securities of such
holders which the holder(s) request that the Company so
register.
(iii) "Piggy-Back" Registration. Notwithstanding the foregoing
paragraphs (i) and (ii), if at any time during the forty-eight
month period following the completion of the Offering, a
registration statement covering all of the Securities is not
currently in effect, and the Company proposes to file any
resistration statement covering any of its Securities, the
Company shall notify all other holders of Units purchased in
this Offering of its intention to file such a registration
statement. Upon receipt of such notice of an intent to file a
registration statement, the holder or holders of Units
purchased in this Offering may require th Company to include
in such registration statement any Securities of such holders
which the holder(s) request that the Company so register.
(iv) Determental Impact on Warrant Holders. The Company hereby
agrees that it will not issue any additional warrants or
rights to acquire shares of Common Stock while the Purchase
Warrants are outstanding without the consent of the holders of
a holders of 75% of the Purchase Warrants then outstanding,
nor will the Company register any currently issued and
outstanding warrants or rights to acquire Common Stock which
the Purchase Warrants are outstanding.
IN WITNESS WHEREOF, the undersigned has executed this
Subscription Agreement this _____ day of April, 1999.
- 16 -
<PAGE>
SIGNATURE PAGE
Organization Signature: Individual Signature:
- ---------------------------- -------------------------
Print Name of Subscriber
By:------------------------- -------------------------
Signature(s)
-------------------------- -------------------------
Print Name and Title of Print Name(s)
Person Signing
-------------------------
Print Name(s)
Number of Units Subscribed for:
(Please print information below exactly as you wish it
to appear in the records of the Company)
- --------------------------------------- -------------------------------
Name and capacity in which subscription Social Security Number of
is made - see below for particular Individual or other
requirements Taxpayer I.D. Number
Address Address for notices if different:
- --------------------------------------- --------------------------------
- --------------------------------------- ---------------------------------
Number and Street Number and Street
- --------------------------------------- ---------------------------------
City State Zip City State Zip
Please indicate form of ownership:
- ------------------------------ ---------------------------------
TENANTS-IN-COMMON JOINT TENANTS WITH RIGHT OF
(Both Parties must sign above) SURVIVORSHIP
(Both Parties must sign above)
- 17 -
<PAGE>
ACCEPTANCE OF SUBSCRIPTION
The foregoing subscription is hereby accepted by EuroWeb
International Corp., this day of , 1999, for Units.
EUROWEB INTERNATIONAL CORP.
By: -------------------------
Frank R. Cohen
Chairman of the Board
- 18 -
<PAGE>
CERTIFICATE OF CORPORATE RESOLUTION
(FOR CORPORATE INVESTORS TO BE COMPLETED ONLY IF
A UNIT IS TO HELD IN A CORPORATION'S NAME)
CERTIFICATE OF
(the "Corporation") (Name of Corporation)
The undersigned certifies that he/she is the Secretary of the
Corporation and that, as such, he/she is authorized to execute this Certificate
on behalf of the Corporation, and further certifies that:
(a) At a meeting of the duly elected Board of Directors of the
Corporation duly called, convened and held on 19 at which a quorum was present
and acting throughout, the following resolutions were duly adopted:
"RESOLVED, that the Corporation be, and it hereby is authorized and
directed to make an investment of $ for Units consisting of shares of
Common Stock and Warrants of EuroWeb International Corp. pursuant to
the terms of the attached Subscription Agreement.
FURTHER RESOLVED, that in payment for such a Unit any of the following
officers be, and each of them, hereby is, authorized, empowered and
directed to issue, or have issued, and deliver a check in the amount of
$ .
Name Title Signature
------------------------------------------------------------------
FURTHER RESOLVED that any of the foregoing officers of the Corporation
be, empowered and directed to execute any documents required and to
take all other actions necessary or appropriate to carry out the intent
of these resolutions including, but not limited to, completing an
Investor Questionnaire and executing the Subscription Agreement.
(b) Such resolutions have not been rescinded, amended or changed in any
respect, and are in full force and effect on the date hereof.
(c) Each of the foregoing officers now is and at all times since the
date of such resolutions and the date of the subscription of the Corporation for
a Unit, and the completion and execution of all necessary documents to effect
such subscription has been a duly elected, qualified and acting officer of the
Corporator, holding the office of the Corporation set opposite his name, and the
signature of each such person appearing opposite the name is a true signature.
- 19 -
<PAGE>
(d) The Corporation was incorporated under the laws of the State
of and commenced business on .
(e) A true and correct copy of the Articles of Incorporation and Bylaws
of the Corporation is attached hereto and that, as of the date hereof, the
Articles of Incorporation and Bylaws have not been amended (except as to any
attached amendments) or revoked and are still in full force and effect.
WITNESS the seal of the Corporation and the signature of the
undersigned on the date hereof.
DATE: , 1999.
Name of Corporation
Signature of Authorized Officer:
--------------------------------
Name:
Title:
- 20 -
<PAGE>
PARTNERSHIP CERTIFICATE
(FOR PARTNERSHIP INVESTORS TO BE COMPLETED ONLY IF
A UNIT IS TO BE HELD IN PARTNERSHIP NAME)
CERTIFICATE OF
(the "Partnership") (Name of the Partnership)
The undersigned, constituting all of the general partners of the
Partnership, a
state) limited/general (strike one) partnership, hereby certify as
follows:
1. That the Partnership was established pursuant to a partnership agreement
dated and commenced business on .
2. That a true and correct copy of the Partnership Agreement is attached hereto
and that, as of the date hereof, the Partnership Agreement has not been amended
(except as indicated by attached amendments) or revoked and is still in full
force and effect. 3. That as the general partners of the Partnership, we have
determined that the investment in, and purchase of Units consisting of shares of
Common Stock and Warrants of EuroWeb International Corp. is of benefit to the
Partnership and have determined to make such investment on behalf of the
Partnership. 4. That any of the undersigned general partner(s) of the
Partnership has been duly authorized and empowered to execute and deliver the
various documents required to evidence the Partnership's investment, and to take
such other actions to effect the Partnership's investment, and that all such
documents and actions have been duly executed and/or ratified and are binding on
the Partnership. 5. That each general partner of the Partnership executing this
Partnership Certificate has been furnished with and reviewed the Private
Placement Memorandum.
IN WITNESS WHEREOF, we have executed this Certificate as the general
partners of the Partnership on the date hereof and declare that it is truthful
and correct on the date hereof.
DATE: , 1999
Name of Partnership
General Partner
By: -------------------------
General Partner
By: -------------------------
General Partner
- 21 -
<PAGE>
TRUST CERTIFICATE
(FOR TRUST INVESTORS TO BE COMPLETED ONLY IF
A UNIT IS TO BE HELD IN TRUST NAME)
CERTIFICATE OF
(the "Trust") (Name of the Trust)
The undersigned, constituting all of the Trustees of the Trust, hereby
certify as follows:
1. That the Trust was established pursuant to a Trust Agreement dated . 2. That
a true and correct copy of the Trust Agreement and a true and correct copy of
all other documents relating to the powers, authorities and limitations of the
Trustee(s) are attached hereto and that, as of the date hereof, the Agreement
and such other documents has not been amended (except as indicated by attached
amendments) or revoked and is still in full force and effect.
That, if the Trustee(s) was (were) appointed by a court, the attached
certificate evidencing the appointment of the trustee(s), is a true and correct
copy of such certificate. 3. That as the Trustee(s) of the Trust, we have
determined that the investment in, and purchase of Units consisting of shares of
Common Stock and Warrants of EuroWeb International Corp. is of benefit to the
Trust and have determined to make such investment on behalf of the Trust. 4.
That any of the undersigned is (are) all of the Trustee(s) of the Trust, which
is still in existence, with due authority to make such investment on behalf of
the Trust and to legally bind the Trust. 5. That the Trust executing the
Subscription Documents and taking such other necessary actions to effect the
investment of the trust is authorized and empowered to do so and all such
documents and actions are hereby ratified and are binding on the Trust.
IN WITNESS WHEREOF, we have executed this Certificate as the Trustee(s) of
the Trust on the date hereof and declare that it is truthful and correct on the
date hereof.
DATE: , 1999
Name of Trust
By:
-----------------------
Trustee
By:
-----------------------
Trustee
By:
-----------------------
- 22 -
EXHIBIT F
EUROWEB INTERNATIONAL CORP.
B WARRANT FOR THE PURCHASE OF COMMON SHARES
NO. W- ________ SHARES
FOR VALUE RECEIVED, EUROWEB INTERNATIONAL CORP., a Delaware
corporation (the "Company"), hereby certifies that ________________or its
permitted assigns is entitled to purchase from the Company , at any time or from
time to time after April 2, 1999 but prior to 5:00 P.M. on April 1, 2002,
__________Thousand (_______) fully paid and non-assessable shares of common
stock, par value $.001 per share, of the Company for an aggregate purchase price
of $_______ (computed on the basis of $3.50 per share). (Hereinafter, (i) said
common shares, together with any other equity securities which may be issued by
the Company in substitution therefor, are referred to as the "Common Shares",
(ii) the Common Shares purchasable hereunder are referred to as the "Warrant
Shares", (iii) the aggregate purchase price payable hereunder for the Warrant
Shares is referred to as the "Aggregate Warrant Price", (iv) the price payable
hereunder for each of the Warrant Shares, as adjusted in the manner set forth in
Section 3, is referred to as the "Per Share Warrant Price" and (v) this Warrant
and all warrants hereinafter issued in exchange or substitution for this Warrant
are referred to as the "Warrants".) The Aggregate Warrant Price is not subject
to adjustment. The Per Share Warrant Price and the number of Warrant Shares are
subject to adjustment as hereinafter provided.
1. EXERCISE OF WARRANT. (a) This Warrant may be exercised, in whole at
any time or in part from time to time (such partial exercises to be in amounts
of not less than 10,000 Warrant Shares), on and after April 2, 1999, but prior
to 5:00 P.M. on April 1, 2002, by the holder of this Warrant) the ("Holder") by
the surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the principal office of the Company's counsel Cohen & Cohen, 445
Park
1
<PAGE>
Avenue, New York, NY 10022, together with proper payment of the Aggregate
Warrant Price applicable on such date, or the proportionate part thereof if this
Warrant is exercised in part. Payment for Warrant Shares shall be made by check
or checks, payable to the order of the Company. If this Warrant is exercised in
part, this Warrant must be exercised for a number of whole Warrant Shares, and
the Holder is entitled to receive a new Warrant covering the number of Warrant
Shares in respect of which this Warrant has not been exercised and setting forth
the proportionate part of the Aggregate Warrant Price applicable to such Warrant
Shares. Upon such surrender of this Warrant, the Company will (a) issue a
certificate or certificates in the name of the Holder for the largest number of
whole Warrant Shares to which the Holder shall be entitled and, if this Warrant
is exercised in whole, in lieu of any fractional Warrant Share to which the
Holder shall be entitled, cash equal to the fair value of such fractional share
(determined in such reasonable manner as the Board of Directors of the Company
shall determine), and (b) deliver the other securities and properties receivable
upon the exercise of this Warrant, or the proportionate part thereof if this
Warrant is exercised in part, pursuant to the provisions of this Warrant. (b)
The Company shall have the right to call this Warrant at any time after April 1,
2001 (two years) by paying the holder $.125 for each share covered by this
Warrant.
2. RESERVATION OF WARRANT SHARES. The Company agrees that, prior to
the expiration of this Warrant, the Company will at all times have authorized
and will reserve, and will keep available, solely for issuance or delivery upon
the exercise of this Warrant, the shares receivable upon the exercise of this
Warrant, the Warrant Shares and other securities and properties as from time to
time shall be receivable upon the exercise of this Warrant, free and clear of
all restrictions on sale or transfer (except as may arise under applicable
securities laws) and free and clear of all preemptive rights.
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3. PROTECTION AGAINST DILUTION.
(a) If, at any time or from time to time after the date of
this Warrant, the Company shall issue to the holders of the Common Shares any
Common Shares by way of a stock dividend or stock split (including, without
limitation, a reverse stock split), then, and in each such case, the Per Share
Warrant Price on the date of such stock dividend or stock split shall be
adjusted, or further adjusted, to a price (to the nearest cent) determined by
dividing (i) an amount equal to the number of Common Shares outstanding
immediately prior to such issuance multiplied by the Per Share Warrant Price in
effect immediately prior to such issuance by (ii) the total number of Common
Shares outstanding immediately after such issuance. Upon each adjustment in the
Per Share Warrant Price resulting from a stock split or stock dividend, the
number of Warrant Shares shall be adjusted by dividing the Aggregate Warrant
Price by the Per Share Warrant Price in effect immediately after such
adjustment. Notice of each such adjustment and each such readjustment shall be
forthwith mailed to the Holder.
(b) If the Company shall be consolidated with or merged into
another corporation, or shall sell all or substantially all of its assets in
part of a reorganization to which the Company is a party within the meaning of
the Internal Revenue Code of 1986, as presently in effect, or shall issue a
security convertible into its Common Shares as a dividend on its Common Shares,
or shall reclassify or reorganize its capital structure (except a stock split
covered by Subsection 3(a) hereof), each Warrant Share shall be replaced for the
purposes hereof by the securities or properties issuable or distributable in
respect of one Common Share upon such consolidation, merger, sale,
reclassification or reorganization, and adequate provisions to that effect shall
be made at the time thereof. Notice of such consolidation, merger, sale,
reclassification or reorganization, and of said
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provisions so proposed to be made, shall be mailed to the Holder not less than
15 days prior to such event.
(c) If the Company shall sell all or substantially all of its
assets, other than as part of a reorganization to which the Company is a party
within the meaning of the Internal Revenue Code of 1986, as presently in effect,
or shall distribute its assets in dissolution or liquidation (other than as part
of such a reorganization), the Company shall mail notice thereof to the Holder
and shall make no distribution to shareholders until the expiration of 15 days
from the date of mailing of said notice and then only to shareholders of record
as of a date at least 15 days after the date of mailing of said notice.
(d) If the Board of Directors of the Company shall declare any
dividend or other distribution in cash with respect to the Common Shares, other
than out of surplus, the Company shall mail notice thereof to the Holder not
less than 15 days prior to the record date fixed for determining shareholders
entitled to participate in such dividend or other distribution.
4. FULLY PAID SHARES; TAXES. The Company agrees that the Common Shares
represented by each and every certificate for Warrant Shares delivered on the
exercise of this Warrant shall, at the time of such delivery, be validly issued
and outstanding, fully paid and non-assessable, and the Company will take all
such actions as may be necessary to assure that the par value or stated value,
if any, per Warrant Share is at all times equal to or less than the then Per
Share Warrant Price. The Company further covenants and agrees that it will pay,
when due and payable, any and all Federal and state stamp, original issue or
similar taxes which may be payable in respect of the issue of any Warrant Share
or certificate therefor.
5. LOSS, ETC. OF WARRANT. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and of
indemnify reasonably satisfactory to the
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Company, if lost, stolen or destroyed, and upon surrender and cancellation of
this Warrant, if mutilated, and upon reimbursement of the Company's reasonably
incidental expenses, the Company shall execute and deliver to the Holder a new
Warrant of like date, tenor and denomination.
6. WARRANT HOLDER NOT SHAREHOLDER. Except as otherwise provided
therein, this Warrant does not confer upon the Holder any right to vote or to
consent or to receive notice as a shareholder of the Company, as such, in
respect of any matters whatsoever, or any other rights or liabilities as a
shareholder, prior to the exercise hereof.
7. COMMUNICATION. No notice or other communication under this Warrant
shall be effective unless the same is in writing and is mailed by first-class
mail, postage prepaid, addressed to:
(a) the Company at c/o Cohen & Cohen, at 445 Park Avenue, 15th
Floor, New York, New York 10022, or such other address as the Company has
designated in writing to the Holder, or
(b) the Holder at 136 Ridge Avenue, Passaic, NJ 07055-2421 or
such other address as the Holder has designated in writing to the Company.
8. HEADINGS. The headings of this Warrant have been inserted as a
matter of convenience and shall not affect the construction hereof.
9. APPLICABLE LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, EUROWEB INTERNATIONAL CORP. has caused this
Warrant to be signed by its President and its corporate seal to be hereunto
affixed this __ day of _______, 1999.
ATTEST: EUROWEB INTERNATIONAL CORP.
By: /s/Frank R. Cohen
-----------------
Chairman of the Board
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SUBSCRIPTION
The undersigned, ___________________________________________________
pursuant to the provisions of the Warrant, dated April 2, 1999, granted by
EuroWeb International Corp. for ________ Common Shares hereby elects to purchase
____________________ (____________) Common Shares of EuroWeb International
Corp. covered by that Warrant.
Dated:____________, 1999
Signature __________________________________________
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