Dated 23 February 2004
SALE AND PURCHASE AGREEMENT
between
(1) VITONAS INVESTMENTS LIMITED
(2) CERTUS KFT
(3) RUMED 2000 KFT
and
(4) EUROWEB INTERNATIONAL CORP.
relating to
Elender uzleti kommunikacios es szolgaltato reszvenyTARSasag
TABLE OF CONTENTS
ARTICLE I: DEFINITIONS; INTERPRETATION
1.1 Definitions
1.2 Singular/Plural; References
ARTICLE II: the transaction
2.1 Purchase and Sale of the Sale Shares
2.2 Assignment of the Transferable Shareholders Loan
2.3 Total Consideration
2.4 Cash Consideration
2.5 Share Consideration
ARTICLE III: CLOSING
3.1 Closing Date; Place of the Closing
3.2 Closing Matters
ARTICLE IV: TRANSACTIONS PRIOR TO CLOSING
4.1 Conduct of Business prior to Closing
4.2 Webigen Property Rights
4.3 Repayment of Shareholders Loan prior to Closing
4.4 Further Actions
ARTICLE V: CONDITIONS TO CLOSING
5.1 Condition to Obligations of the Parties
5.2 Actions Relating to the Closing Conditions
5.3 Notices
ARTICLE VI: REPRESENTATIONS AND WARRANTIES 6.1 Representations and Warranties of
the Vendors 6.2 Representations and Warranties of the Purchaser 6.3
Indemnification by the Vendors 6.4 Indemnification by the Purchaser 6.5
Conduct of Litigation 6.6 Limitation on Indemnification 6.7 Management
Representation Letter
ARTICLE VII: SUPPLY OF INFORMATION
ARTICLE VIII: TERMINATION
8.1 General
8.2 Procedure Upon Termination
8.3 Survival of Certain Provisions
ARTICLE IX: POST CLOSING OBLIGATIONS
9.1 Repayment of the Non-transferable Shareholders Loan 9.2 Security for
the Repayment of the Non-transferable Shareholders Loan 9.3 The Vendors'
Right to Appoint Board Member of the Purchaser 9.4 The Vendors' Right to
Appoint Board Member of the Company 9.5 Claims Against Officers 9.6
Covenants not to Compete 9.7 Filing Pursuant to Securities Exchange Act
of 1934
ARTICLE X: MISCELLANEOUS
10.1 Fees and Expenses
10.2 Arbitration
10.3 Notices
10.4 Entire Agreement
10.5 Assignability
10.6 Amendment and Modification
10.7 Public Announcements
10.8 Language
10.9 Counterparts
10.10 Applicable Law
10.11 Severability
10.12 Confidentiality
SCHEDULE 1: Particulars of the Vendors
ANNEX A: Management Representation Letter
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Sale and PURCHASE AGREEMENT dated as of 23 February 2004 by and between
1. Vitonas Investments Limited (registered seat: Chrysanthou Xxxxxx 0, X.X. 0000
Xxxxxxxx, Xxxxxx; registration number: HE 111437) ("Vitonas")
2. Certus KFT. (registered seat: X-0000 Xxxxxxxx, Xxxxxxx, Vihorlat u. 10.;
registration number: Cg. 01-09-169062) ("Certus")
3. RUMED 2000 Kft. (registered seat: X-0000 Xxxxxxxx, Xxxxxxx, Iranyi u. 1.;
registration number: 01-09-691194) ("Rumed")
and
4. EuroWeb International Corp. (business address: 0000 Xxxxxx xx xxx Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, XX 00000, XXX; IRS NUMBER: 133696015) ("Purchaser" or
"EuroWeb")
Vitonas, Certus and Rumed will be referred to collectively as "Vendors" and
individually as "Vendor". Purchaser and Vendors will be referred to collectively
as "the Parties" and individually as a "Party".
RECITALS
A. WHEREAS, Elender Uzleti Kommunikacios es Szolgaltato Reszvenytarsasag
(in English: Elender Business Communications Services Ltd. (registered
seat: X-0000 Xxxxxxxx, Xxxxxxx, Vaci ut 141.; registration number: Cg.
01-10-044965) (the "Company") is engaged in the provision of business
communication application development and IT services. The Parties are
aware that Elender Uzleti Kommunikacios es Szolgaltato Reszvenytarsasag
was created through the merger of various companies with the effective
date of 13 October 2003. For the purposes of this Agreement, where
relevant, the "Company" also means its legal predecessors.
B. WHEREAS, the Vendors are the owners of the 100% of the registered
shares of the Company.
C. WHEREAS, the Vendors made available a loan to the Company in accordance
with the terms and conditions set out in the unified loan agreement
dated 4 November 2002 (the "Loan Agreement"). The Parties' intention is
that a part of the loan under the Loan Agreement in the amount equal to
the HUF counter value of USD 2.900.000,- (US Dollar two million nine
hundred thousand) (taking into account the Exchange Rate as defined
below) minus the amount of the Net External Debt as at Closing will
remain with the Vendors (the "Non-transferable Shareholders Loan"). The
remaining loan under the Loan Agreement (that part which is not the
Non-transferable Shareholders Loan) (the "Transferable Shareholders
Loan") will be transferred to the Purchaser pursuant to this Agreement.
D. WHEREAS, the Purchaser intends to buy, in accordance with the
conditions set forth in this Agreement, all the shares in the Company
and to take an assignment of the Transferable Shareholders Loan
(including accrued interest) at Closing. The Vendors intend to sell
100% of the shares in the Company and to assign the Transferable
Shareholders Loan to the Purchaser.
E. WHEREAS, the Parties entered into a term sheet on 29 January 2004
setting out their intention to enter into this Agreement ("Term Sheet")
and in the Term Sheet their agreed on the conditions on which they are
prepared to enter into this Agreement; such conditions have been either
met or waived.
NOW IT IS HEREBY AGREED as follows:
ARTICLE I: DEFINITIONS; INTERPRETATION
1.1 Definitions Wherever used in this Agreement or the Schedules
hereto, unless the context otherwise requires, the following shall apply to the
following terms, respectively, when said terms are used with an upper-case first
letter.
"Accounts" means the financial statements of the Company reflecting the
Company's business position as of the Last Accounting Date.
"Additional Security" shall have the meaning as defined in Section 9.2 (c)
hereof.
"Affiliates" means two or more companies, one of which directly or
indirectly owns at least 50% (fifty percent) of the share capital of the other
company, or which are both owned directly or indirectly as to at least 50%
(fifty percent) of their share capital by a third company.
"Agreed Encumbrances" means the encumbrances (option and pledge)
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granted by the Vendors to the Bank over their shareholding interests in the
Company in connection with the Company entering into a loan agreement with the
Bank on 22 October 2002 (No. PFS-02-09-06).
"Agreement" means this Sale and Purchase Agreement and all schedules
and annexes attached hereto, as the same may be amended or modified from time to
time.
"Articles" means the Articles of Association of the Company as at the
date hereof.
"A Shares" means the 19,997 Class `A' ordinary shares in the registered
capital of the Company.
"Assignment Notice" means the notice issued by the Vendors to the
Company pursuant to Section 328 (4) of the Hungarian Civil Code notifying the
Company that the Loan Assignment has become effective.
"Bank" means Raiffeisen Bank Reszvenytarsasag (registered office:
X-0000 Xxxxxxxx, Xxxxxxx, Akademia u. 8.; registration number: Cg.
01-10-041042).
"B Shares" means the 3 Class `B' preference shares in the registered
capital of the Company having the rights attached thereto as set out in the
Articles.
"Business Day" means a day other than a Saturday or Sunday or public
holiday in Hungary.
"Cash Consideration" shall have the meaning ascribed to it in Section
2.4 hereof.
"Closing" shall mean the occasion on which the Purchaser and the
Vendors perform their respective obligations subject to Article V hereof and as
contemplated by Section 3.2 hereof.
"Closing Date" means the date upon which the Closing occurs.
"Company" shall have the meaning as defined in Recital A hereof.
"Confidentiality Agreement" means the confidentiality agreement between
Vitonas and the Purchaser dated 25 September 2003.
"Consideration for the Loan Assignment" means the consideration to be
paid by the Purchaser to the Vendors in consideration for the assignment of the
Transferable Shareholders Loan that is equal to the outstanding loan amount
(principal and interest) of the Transferable Shareholders Loan at Closing.
"Consideration for the Sale Shares" means the consideration to be paid
by the Purchaser to the Vendors as consideration for the sale of the Sale Shares
(being equal to the Total Consideration minus the amount of the Consideration
for the Loan Assignment).
"Controlling Influence" means that the controlling entity directly or
indirectly owns more than 50% of the share capital of the controlled company or
is entitled to appoint more than 50% of the management of the controlled
company.
"Data Room" means the room at the Company's principal place of business
containing certain information and documents in connection with the Company.
"Escrow Agent" means the escrow agent appointed in the Escrow
Agreement.
"Escrow Agreement" means the escrow agreement pursuant to Section 5.2
hereof, to take effect from Closing.
"Escrow Shares" shall mean 248.122 EuroWeb Shares the face value of USD
0,001 each to be placed in escrow at the Escrow Agent and to be held pursuant to
the terms and conditions of the Escrow Agreement.
"Escrow Shares Value" means with respect to a particular reference date
the trade weighted stock market price of the Escrow Shares in the last 60 days
prior to the reference date on the NASDAQ. For the establishment of the trade
weighted average stock price, the daily closing stock price should be multiplied
with the number of daily trading volumes. This methodology should be used for
the last 60 days and they are to be added together. This result should be
divided with the sum of all of the trading volumes during this 60-day period of
time.
"EuroWeb Shares" shall mean outstanding and issued shares in EuroWeb
International Corp. of common stock par value USD 0,001 each, and "EuroWeb
Share" means any one of the EuroWeb Shares.
"Event of Default" shall mean the event that the Company following the
Closing fails to discharge any of its payment obligation under the
Non-Transferable Shareholders Loan.
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"Exchange Rate" shall have the meaning as defined in Section 2.3
hereof.
"Last Accounting Date" means 31 December 2003.
"Loan Agreement" shall have the meaning as defined in Recital C.
"Loan Assignment" means the assignment of the Transferable Shareholders
Loan pursuant to this Agreement.
"Material Condition" means a condition precedent or condition
subsequent or obligation established by the Competition Office in accordance
with Section 30 (3) of the Act LVII of 1996 on unfair market practices and the
prohibition of market restrictions, established by the Competition Office, which
if complied with by the Purchaser would have an obvious material adverse effect
on the combined operations of the Company and Euroweb Internet Szolgaltato
Reszvenytarsasag (registered seat: X-0000 Xxxxxxxx, Xxxxxxx, Varosmajor u. 13.;
registration number: Cg. 01-10-043569), e.g. which requires the Purchaser to
sell certain assets or shareholding interests in companies or terminate
important supply or customer contracts in connection with the transaction
contemplated by this Agreement.
"Non-transferable Debt" shall mean the aggregate of (i) both short and
long term borrowings of the Company due to parties other than the
Vendors (including bank overdrafts and liabilities arising from
hire-purchase contracts) and including accrued interest up to the
date of Closing ("Net External Debt") and (ii) the
Non-transferable Shareholders Loan including accrued interest
thereon.
"Non-transferable Shareholders Loan" and "Transferable Shareholders Loan"
shall have the meaning as defined in Recital C hereof.
"Party" or "Parties" shall mean, collectively the Purchaser and the
Vendors, and individually any one of them.
"Reference Price" means USD 4,43 / 1 EuroWeb Share.
"Registration Rights Agreement" means the registration rights agreement
pursuant to Section 5.2 hereof to take effect from Closing.
"Required Security Value" means 75% of the outstanding amount of the
Non-transferable Shareholders Loan at and after Closing.
"Sale Shares" shall mean all the A Shares and the B Shares being
purchased by the Purchaser from the Vendors pursuant to this Agreement and being
all the issued registered capital of the Company.
"Security Obligations" shall mean collectively (i) the Agreed
Encumbrances and (ii) the prompt suretyship obligation undertaken by Wallis in
connection with the Company entering into a loan agreement with the Bank on 22
October 2002 (No. PFS-02-09-06).
"Share Consideration" shall have the meaning ascribed to it in Section
2.5 hereof.
"Sulinet Agreements" shall mean the agreements between
the Company on one side and the Ministry of Informatics and
Communications and the Ministry of Education on the other side on
(i) providing Internet services for 5,000 Public Network
("Kozhalo") service termination points that are connected to
Sulinet sub-network built on the basic telecommunication and
network services of the Public Network and (ii) providing costumer
and remote control services for the users of Public Network
service termination points that are connected to Sulinet
sub-network built on the basic telecommunication and network
services of the Public Network.
"Term Sheet" shall have the meaning as defined in Recital E hereof.
"Term Sheet Amendment" means Amendment No. 1 to the Term Sheet of even
date with this Agreement between the Parties hereto.
"Total Consideration" shall have the meaning ascribed to it in Section
2.3 hereof.
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"Transferable EuroWeb Shares" shall mean the EuroWeb Shares comprising the
Share Consideration (677.201 that is six hundred seventy seven
thousand two hundred and one EuroWeb Shares, assuming that the
value of the Share Consideration will be USD 3.000.000,-).
"Vendors' Board Member" shall have the meaning as defined in Section
9.4 hereof.
"Vendors' Proportion" in respect of each Vendor is the percentage set out
against his name in Schedule 1 under the caption Vendors'
Proportion.
"Vitonas Security Obligations" means encumbrances (option and pledge)
granted by Vitonas to the Bank over its shareholding interest in the Company in
connection with a loan agreement dated 7 October 2002.
"Wallis" means WALLIS Befektetesi, Gazdasagi Tanacsado es Vagyonkezelo
Reszvenytarsasag (registered office: X-0000 Xxxxxxxx, Xxxxxxx,
Xxxxxx xxxx 00.; registration number: Cg. 01-10-041766).
1.2 Singular/Plural; References In this Agreement:
(a) unless the context otherwise requires, words denoting
the singular include the plural and vice versa, and words
denoting persons include natural or juridical persons,
corporations, partnerships and legal entities;
(b) the terms "hereof", "hereto" and "hereunder" and similar
expressions mean and refer to this Agreement; and any particular
Article, Section, Clause or Paragraph of this Agreement followed
by a number means and refers to the specified Article, Section,
Clause or Paragraph of this Agreement.
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ARTICLE II: THE TRANSACTION
2.1 Purchase and Sale of the Sale Shares Subject to the terms and
conditions of this Agreement, each of the Vendors hereby agrees to sell,
transfer and deliver the number of Sale Shares set out against its name in
Schedule 1 to the Purchaser, and the Purchaser agrees to purchase the Sale
Shares at the Closing. In consideration of the sale, transfer and delivery of
the Sale Shares by the Vendors, the Purchaser shall pay the Consideration for
the Sale Shares to the Vendors at Closing.
2.2 Assignment of the Transferable Shareholders Loan Subject to the
terms and conditions of this Agreement, the Vendors agree to assign and the
Purchaser agrees to take assignment of the Transferable Shareholders Loan with
effect from Closing. The Consideration for the Loan Assignment shall be paid by
the Purchaser to the Vendors at the Closing. The Consideration for the Loan
Assignment shall be allocated among the Vendors in the Vendors' Proportion.
2.3 Total Consideration The Parties agree that assuming the
Non-Transferable Debt at Closing is USD 2.900.000,- (US Dollar two million nine
hundred thousand) (including accrued interest), the total consideration ("Total
Consideration") payable by the Purchaser for the transfer of the Sale Shares and
the assignment of the Transferable Shareholders Loan (including accrued
interest) will be equal to USD 9.500.000,- (US Dollar nine million five hundred
thousand) whereas if the Non-Transferable Debt of the Company at Closing is
higher than USD 2.900.000,- (US Dollar two million nine hundred thousand) the
Total Consideration will be decreased accordingly. For the purposes of the
calculation of the Total Consideration the amount of the Non-transferable Debt
shall be taken into account by using the HUF/USD medium foreign exchange rate of
the Bank prevailing one Business Day before the Closing Date ("Exchange Rate").
For the avoidance of doubt it is agreed between the Parties that the amount of
the Non-Transferable Debt and any repayment of shareholders loan in excess of
the Permitted Repayment under Section 4.3 are the only factors which may result
in the decreasing of the Total Consideration. The Total Consideration consists
of two elements: cash consideration ("Cash Consideration") and EuroWeb Shares
("Share Consideration").
2.4 Cash Consideration The Cash Consideration is USD 6.500.000,-
(US Dollar six million five hundred thousand). The Cash
Consideration is due at Closing.
2.5 Share Consideration In addition to the payment of the Cash
Consideration the Purchaser shall transfer the number of EuroWeb Shares the
value of which is equal to USD 3.000.000,- (US Dollar three million) - or if the
Total Consideration will be lower than USD 9.500.000,- (US Dollar nine million
five hundred thousand) based on Section 2.3 above, then the amount of the Share
Consideration will be decreased with the corresponding amount ("Transferable
EuroWeb Shares"). The number of Transferable EuroWeb Shares shall be calculated
based on the Reference Price. The Share Consideration is due at the time of
Closing.
ARTICLE III: CLOSING
3.1 Closing Date, Place of the Closing The Closing shall take place
in Budapest, Hungary at the offices of the Bank five business days after all of
the conditions precedent (set out in Article V hereof) have been satisfied or on
such other date as the Parties may mutually agree.
3.2 Closing Matters Subject to the terms and conditions of thi
Agreement:
3.2.1 at the Closing, the Purchaser shall
(a) pay to the Vendors the Cash Consideration in full by
wire transfer of immediately available funds to the Vendors'
accounts and in the Vendors' Proportion, provided that not later
than 3 (three) Business Days preceding the Closing Date any of
the Vendors shall be entitled to designate alternative accounts
for the respective amounts due to each of them, with the proviso
that any new account designated by Vitonas shall also be with the
Bank. The payment by the Purchaser of the Cash Consideration to
such accounts shall be deemed an effective discharge of the
7
requirement to pay such sum if and when the relevant sums shall
have been received for the credit of each of such accounts;
(b) issue the Transferable EuroWeb Shares in the names of
the Vendors and based upon the Vendors' Proportion and deliver
stock certificates representing the Transferable EuroWeb Shares
to the Vendors or to the agents or brokerage firms as designated
by the Vendors to the Purchaser in writing not later than 5
Business Days prior to Closing which Transferable EuroWeb Shares
shall be qualified for trading on the NASDAQ National Market
System or SmallCap Market;
(c)deliver the stock certificates representing the Escrow
Shares and the irrevocable signed stock power to the Escrow Agent
in full accordance with the Escrow Agreement; delivery to be
confirmed in writing by the Escrow Agent to the Vendors (and if
required, in accordance with Section 9.2 (c) hereof deliver the
Additional Security to the Vendors in form and substance
reasonably satisfactory to the Vendors).
3.2.2 at the Closing, the Vendors shall
(a) deliver to the Purchaser such resignations or recalls of
members of the board of directors and supervisory board, and the
auditors of the Company as the Purchaser shall request;
(b) upon receipt of the Cash Consideration, the transfer of
the Transferable EuroWeb Shares and the written confirmation from
the Escrow Agent pursuant to Section 3.2.1 (c) hereof
(i) obtain the release from the Bank of the Vitonas Security Obligations;
(ii) deliver to the Purchaser the Sale Shares endorsed to the Purchaser; and
(iii) deliver to the Company the duly signed Assignment Notice.
3.2.3 Immediately following the delivery of the Sale Shares pursuant
to Section 3.2.2(b)(ii) the Purchaser shall be registered in the share register
of the Company as the owner of the sale shares.
ARTICLE IV: ACTIONS PRIOR TO CLOSING
4.1 Conduct of Business prior to Closing In the period as from the
signing this Agreement until Closing, the following shall apply:
(a) the Vendors shall cause the Company to provide
reasonable notice to the Purchaser of all significant
transactions (having a value of at least HUF 30,000,000) in which
the Company is involved;
(b) the Vendors shall cause the Company to operate in the
ordinary course in all material respects;
(c) the Vendors shall not cause adverse change to the
Company's business.
4.2 Webigen Property Rights The Purchaser shall have the option to
have the Company to write-off the Webigen property rights (capitalised cost of
HUF 171,711,594 as at the 13 October 2003 shown under balance sheet caption
"intangible assets") prior to Closing. Any tax risks and liabilities connected
with the write-off pursuant to the Purchaser's request of the Webigen Property
rights shall solely be the Purchaser's responsibility and such risks and
liabilities shall be deemed to be exceptions from the warranties and
representations made by the Vendors in this Agreement.
4.3 Repayment of Shareholders Loan prior to Closing If the Company at
Closing has an overdraft financing facility agreement for at least HUF 100
million, then any repayment of shareholders loans (including applicable
interest) that the Vendors have received during the period as from 1 January
2004 to Closing, up to a maximum of HUF 220 million shall be permitted
("Permitted Repayment"). Any payment of dividends during the period as from 1
January 2004 to Closing will be included in the HUF 220 million cap.
8
If the Company at Closing has an overdraft financing
facility agreement for HUF 50 million then any repayments of
shareholder loans (including applicable interest) that the
Vendors have received during the period as from 1 January 2004 to
Closing, up to a maximum of HUF 180 million shall be permitted
(Permitted Repayment). Any payment of dividends during the period
as from 1 January 2004 to Closing will be included in the HUF 180
million cap.
If the Company at Closing has no overdraft financing
facility then any repayments of shareholder loans (including
applicable interest) that the Vendors have received during the
period as from 1 January 2004 to Closing upto a maximum of HUF
140 million shall be permitted (Permitted Repayment). Any payment
of dividends during the period as from 1 January 2004 to Closing
will be included in the HUF 140 million cap.
Any overdraft financing facility agreement in the amount
between HUF 50 million and HUF 100 million shall result in a
proportionate adjustment to the amount of the Permitted Repayment
between HUF 180 million and HUF 220 million; whereas an overdraft
facility in an amount less than HUF 50 million shall result in a
proportionate adjustment to the amount of the Permitted Repayment
between HUF 140 million and HUF 180 million.
If the actual shareholders loan (including principal and
interest) repayment and dividend payment made in the period as
from 1 January 2004 to Closing is in excess of the Permitted
Repayment, the excess amount will be deducted from the Cash
Consideration and the Total Consideration, respectively.
Within 5 business days prior to Closing, the Vendors will
allow the Purchaser or its advisors upon the Purchaser's request
to review the payments of the Company as from 1 January 2004 upto
Closing and to confirm the actual amount of shareholders loan
(including principal and interest) repayments and dividend
payments, if any made to the Vendors during the period as from 1
January 2004 to Closing.
4.4 Further Actions Subject to the terms and conditions hereof, each
of the Parties hereto agrees to use all reasonable efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective the transactions
contemplated by this Agreement.
ARTICLE V: CONDITIONS TO CLOSING
5.1 Condition to Obligations of the Parties The respective
obligations of the Parties hereto are subject to the satisfaction at or prior to
Closing of the following conditions precedent:
(a) the printing out of the Sale Shares;
(b) the Purchaser shall have obtained
(i) the approval of the Competition Office containing no Material Condition; or
(ii) the Purchaser shall have obtained the approval of the
Competition Office with Material Condition(s), which are
acceptable to the Purchaser, such acceptance to be notified in
writing to the Vendors within 8 Business Days following the
delivery of the approval of the Competition Office to the
Purchaser;
(c) the release of the Vendors and Wallis from the Security
Obligations and the obtaining of the approval of the Bank to the change in the
Company's ownership and management structure pursuant to this Agreement;
(d) the sale and purchase agreement with respect to the sale by the
Company of its shareholding interest in XXXXX.XX Rt. has been signed and
consummated (the shares have been transferred and the proceeds have been paid
pursuant to terms and conditions of such sale and purchase agreement).
(e) the Vendors and the Purchaser shall have entered into the Escrow
Agreement to take effect from Closing;
(f)the Vendors and the Purchaser shall have entered into the
Registration Rights Agreement to take effect from Closing.
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5.2 Actions Relating to the Closing Conditions The Purchaser shall
use its best endeavours to obtain the approval of the Competition Office to the
transaction contemplated in this Agreement, which includes that the Purchaser
shall in a timely manner make all the necessary filings and shall provide all
the information to the Competition Office as required by law and as requested by
the Competition Office. Without limitation to the above, the Purchaser shall
file the request for the approval of the Competition Office as soon as
practicable but in any even not later than within the statutory deadline (i.e.
30 days from the signing of this Agreement). To the extent any filing and
information relates to the Vendors and the Company, the Vendors shall co-operate
and shall also cause the Company to co-operate with the Purchaser. The Purchaser
shall promptly provide to the Vendors copies of all of its submissions filed
with the Competition Office and all written correspondence from the Competition
Office. If the approval of the Competition Office contains Material
Condition(s), the Parties shall promptly discuss the possibility of meeting the
Material Condition, and in any event the Purchaser shall notify the Vendors
within 8 Business Days following the receipt by the Purchaser of approval of the
Competition Office the Vendors in writing whether or not it accepts the Material
Condition(s).
The Parties will mutually co-operate as to procuring the release of
the Vendors and Wallis from the Security Obligations and the obtaining of the
approval of the Bank to the change in the ownership and management structure of
the Company. The Parties are aware that this will likely involve that the
Purchaser will be required to provide appropriate replacement securities, and
the Purchaser will comply with the Bank's reasonable requests to provide such
replacement securities.
The Parties agree that the Company's 30.9% shareholding interest in
XXXXX.XX Rt. (registered seat: X-0000 Xxxxxxxx, Xxxxxxx, Xxxxxx x. 1-3.;
registration number: Cg. 01-10-044202) and a related HUF 190 million
shareholders loan made to the Company (and its accrued interest) is not part of
this transaction. Before the date of the Closing the still outstanding HUF 164
million principal and the accrued interest of such shareholders loan will be
repaid to Wallis from the proceeds of the sale by the Company of its
shareholding interest in XXXXX.XX Rt. The sale price of the shareholding
interest in XXXXX.XX Rt. shall not be less than the book value of such
shareholding interest in the books of the Company minus HUF 15.000.000,-.
The Vendors and the Purchaser undertake to enter into a pledge and
escrow agreement within 30 days of the signing of this Agreement providing by
the Purchaser to the Vendors a security for the repayment of the
Non-Transferable Shareholders Loan consisting of the Escrow Shares in accordance
with Section 9.2 hereof (the "Escrow Agreement").
The Vendors and the Purchaser undertake to enter into a registration
rights agreement in accordance with Section 1 of the Term Sheet Amendment (the
"Registration Rights Agreement") within 30 days of the signing of this
Agreement.
In the course of negotiating the Escrow Agreement and the Registration
Rights Agreement the Parties shall use their best efforts to agree on a mutually
acceptable wording.
5.3 Notices Each Party shall give prompt written notice to the other
Parties of:
(a) the occurrence of each event or action required as a condition
set forth in Section 5.1; and
(b) the occurrence of any event or action of which it becomes aware
which may reasonably be anticipated to result in the non-satisfaction of any
such condition by the Closing Date.
For the purpose of this Section 5.3, notice given by one Vendor shall be deemed
to be notice given by all Vendors.
Article VI. REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties of the Vendors The Vendors
represent and warrant to the Purchaser severally, not jointly as follows (unless
the wording of the representations and warranties refer to a specific date, the
following representations and warranties refer to both the date of the signing
of this Agreement as well as the Closing Date):
(a) Authorisation and Validity of the Agreement Each of the Vendors
has the legal capacity, right, power and authority to execute, deliver and
perform this Agreement and the other agreements and documents contemplated by
this Agreement. The execution, delivery and performance by the Vendors of this
Agreement and the consummation by them of the transactions contemplated hereby
have been duly authorised by all necessary action on the part of the Vendors.
This Agreement has been duly executed and delivered by the Vendors.
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(b) Capitalisation Following the registration of the merger described
in Recital A hereof the Company initiated the required procedures regarding the
printing out of the Sale Shares, such printing out will take place prior to the
Closing. The Sale Shares are the whole of the issued registered capital of the
Company. Except for the right of first refusal attached to the B Shares as
provided in the Articles, there are no rights of first refusal, pre-emptive
rights or other similar agreements (whether by the Vendors or otherwise)
obligating the Company or any Vendor to offer any Sale Shares to any person and
none of the Sale Shares were issued in violation of any pre-emptive or similar
rights.
(c) Sale Shares At Closing the Sale Shares shall be validly issued,
fully paid up and owned by and registered under the name of the Vendors. Upon
the Closing the Sale Shares will be transferred to the Purchaser, free from all
encumbrances, claims and litigation except for the Agreed Encumbrances and other
encumbrances as the Bank and the Purchaser may agree.
(d) Organisation of the Company The Company is a company limited by
shares established under the laws of the Republic of Hungary and is duly
organized, validly existing and in good standing.
(e) Taxation To the best of the knowledge of the Vendors the Company
has lawfully performed its obligations to file all relevant tax returns and to
pay taxes and contributions.
(f) Books To the best of the knowledge of the Vendors the Company has
kept its books in accordance with the relevant legal rules and its financial
statements present a true and fair view of the Company's financial position in
all material respects.
(g) XXXXX.XX Rt. Following the execution of the sale of the
shareholding interest in XXXXX.XX Rt. neither the Company nor its shareholders
will have any remaining material legal, financial or tax liabilities in
connection with or arising from the sale of the shareholding interest in
XXXXX.XX Rt..
11
(h) Adherence with Securities Laws. Each of the Vendors agree that
they are acquiring the Transferable EuroWeb Shares for investment purposes and
will not offer, sell or otherwise transfer, pledge or hypothecate any of the
Transferable EuroWeb Shares issued to them (other than pursuant to an effective
Registration Statement under the Securities Act of 1933, as amended) directly or
indirectly unless:
(i) the sale is made pursuant to the exemption from registration
under the Securities Act of 1933, as amended, provided by
Rule 144 thereunder; or
(ii) the Transferable EuroWeb Shares are sold in a transaction
that does not require registration under the Securities Act
of 1933, as amended, or any applicable United States state
laws and regulations governing the offer and sale of
securities, and the Vendor has furnished to Euroweb an
opinion of counsel to that effect or such other written
opinion as may be reasonably required by Euroweb.
The Vendors acknowledge that the certificates representing the
Transferable EuroWeb Shares shall bear the following legend:
NO SALE, OFFER TO SELL, OR TRANSFER OF THE SHARES REPRESENTED
BY THIS CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION
STATEMENT UNDER THE FEDERAL SECURITIES ACT OF 1933, AS
AMENDED, IN RESPECT OF SUCH SHARES IS THEN IN EFFECT OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SAID ACT IS
THEN IN FACT APPLICABLE TO SAID SHARES.
6.2 Representations and Warranties of the Purchaser The Purchaser
represents and warrants to the Vendors as of the date of this Agreement and the
Closing Date:
(a) Authorisation and Validity of the Agreement The Purchaser has the
legal capacity, right, power and authority to execute, deliver and perform this
Agreement and the other agreements and documents contemplated by this Agreement.
The execution, delivery and performance by the Purchaser of this Agreement and
the consummation by the Purchaser of the transactions contemplated hereby have
been duly authorised by all necessary action on the part of the Purchaser. This
Agreement has been duly executed and delivered by the Purchaser.
(b) Capitalisation There are no rights of first refusal, pre-emptive
rights or other similar agreements obligating the Purchaser or any other person
to offer any Transferable EuroWeb Shares and Escrow Shares to any person and
none of the Transferable EuroWeb Shares and the Escrow Shares were issued in
violation of any pre-emptive or similar rights.
(c) EuroWeb Shares Upon the Closing the Transferable EuroWeb Shares
shall be validly issued, fully paid up and owned by and registered under the
name of the Vendors and such Shares shall be free from all encumbrances, claims
and litigation. By Closing the Escrow Shares shall be validly issued, fully paid
up and owned by and registered under the name of the Purchaser. Upon an Event of
Default the Escrow Shares shall be transferred to the Vendors, free from all
encumbrances, claims and litigation.
(d) Organisation of the Company The Purchaser is a company limited by
shares established under the laws of the State of Delaware and is duly
organized, validly existing and in good standing.
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(e) No devaluation, filings The Purchaser is not aware of any fact
which may result a material devaluation of the EuroWeb Shares compared to the
Reference Price. Purchaser has made all necessary filings with the US Securities
and Exchange Commission and each such filing, as of its respective filing date,
complied with all applicable requirements of the US securities laws and none of
such filings contained or contains any untrue statement of a material fact or
omits to state a material fact required to be stated in order to make the
statements therein not misleading and none of the information provided to
Vendors regarding Purchaser contains an untrue statement of material fact or
omits to state a material fact required to be stated in order to make the
statements not misleading.
6.3 Indemnification by the Vendors Subject to the limitations set
forth below, the Vendors agree to indemnify the Purchaser against any and all
losses which the Purchaser may sustain which arise out of or result from a
breach of any of the representations, warranties, covenants or agreements of the
Vendors contained in this Agreement.
The Vendors shall not be under any obligation to indemnify or
recompense the Purchaser for any contingent or other such losses of a similar
nature (unless and to the extent that such losses become realized) and the
Purchaser hereby unconditionally waive any claim therefor.
6.4 Indemnification by the Purchaser Subject to the limitations set
forth below, the Purchaser agrees to indemnify the Vendors against any and all
losses which the Vendors may sustain which arise out of or result from a breach
of any of the representations, warranties, covenants or agreements of the
Purchaser contained in this Agreement.
The Purchaser shall not be under any obligation to indemnify or
recompense the Vendors for any contingent or other such losses of a similar
nature (unless and to the extent that such losses become realized) and the
Vendors hereby unconditionally waive any claim therefor.
6.5 Conduct of Litigation
(a) Subject to the limitations set forth in Section 6.6 hereof,
whenever a claim for indemnification shall arise under this Article VI, the
Party (or Parties) seeking indemnification (the "Indemnified Party") shall
notify, in writing, the Party (or Parties) from whom indemnification is sought
(the "Indemnifying Party") of such claim, together with an estimate of the
amount of such claim in reasonable detail, and, as soon as known, the facts
constituting the basis for such claim. The Indemnified Party shall be under a
duty to take commercially reasonable efforts to mitigate the losses relating to
any such claim, and any losses incurred in such commercially reasonable
mitigation efforts shall constitute losses for purposes of this Article VI.
(b) Without limiting the generality of Section 6.5 (a) hereof, in the
event of a claim for indemnification hereunder resulting from or in connection
with any claim or legal proceeding by a third party (a "Third Party Claim"), the
Indemnified Party shall give notice to the Indemnifying Party no later than 20
(twenty) Business Days prior to the time any response to an asserted Third Party
Claim is required. The Indemnified Party (or the Company as the case may be)
shall not make admission of liability, agreement, settlement or compromise
without the prior written consent of the Indemnifying Party, which consent shall
not be unreasonably withheld. The Indemnifying Party may assume the defence of
any Third Party Claim, provided, however, that no settlement shall be made
without the prior written consent of the Indemnified Party, which consent shall
not be unreasonably withheld. If an Indemnifying Party assumes the defence of
any such Third Party Claim or related legal proceeding, the Indemnifying Party
shall be entitled to select counsel and take all steps necessary in the
settlement or defence thereof; provided, however, that the Indemnified Party
may, at its own expense, participate in any such proceeding with the counsel of
its choice. If any of the Vendors as Indemnifying Party assumes the defence of
any Third Party Claim, the Purchaser shall, and shall cause the Company to,
provide such Vendor such access to persons and information as it may reasonably
request in the defence of such Third Party Claim.
(c) In the case of any claim that is not a Third Party Claim, the
Indemnifying Party shall have 30 (thirty) Business Days within which it may
respond to a notice of a claim for indemnification given by an Indemnified Party
pursuant to Section 6.5(a) hereof. If such claim is not contested, then the
Indemnifying Party shall as soon as practicable proceed to take whatever action
is required to carry out its indemnification obligations.
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6.6 Limitations on Indemnification
(a) The Vendors' total liability in respect of all claims under the
warranties and representations is limited to 10% of the Total Consideration.
(b) Vendors are not liable in respect of a claim under the warranties
and representations unless and until liability determined in respect of any such
claim, when aggregated with any other amount or amounts of liability determined
in respect of other claims under the warranties and representations exceeds 2%
of the Total Consideration (excluding interest, costs, etc.) in which event all
the claims under the warranties and representations will be recoverable
hereunder including those within the 2 % threshold, provided that the other
limitations contained in Section 6.6 hereof will remain unaffected.
(c) The Vendors are not liable in respect of a claim under the
warranties and representations unless and until liability determined in respect
of any such claim exceeds 0,2% of the Total Consideration (excluding interest,
costs, etc.).
(d) The Vendors are not liable for a claim under the warranties and
representations unless the Purchaser has given the Vendor notice of the claim
setting out full particulars of the grounds on which such claim is based on or
before the end of the 9th calendar month following the date of the Closing or 30
April 2005, whichever is the later.
(e) The Vendors shall not be liable under this Agreement in respect
of any claim to the extent that a provision or reserve is made in the Accounts
for the matter giving rise to the claim.
(f) The Purchaser shall not be entitled to recover damages or
otherwise obtain reimbursement or restitution more than once in respect of any
individual breach of the warranties and representations where the Purchaser
would thereby reap a windfall. In particular, the
Vendors shall not be liable in respect of any claim (i) to the extent that any
losses arising from such claim are covered by a policy of insurance in force on
the date of Closing or would have been so covered had such policy of insurance
been maintained beyond Closing; or (ii) for any losses suffered by the Purchaser
or the Company to the extent of any actual monetary savings realized by the
Purchaser or the Company directly corresponding to such losses.
(g) The Vendors shall not be liable under this Agreement for any
losses to the extent that such losses arise out of or result
from:
(i) any act taken by the Company after the Closing other than acts
taken
for the purpose of mitigating losses;
(ii) any change in accounting or taxation policy, bases or practice of the
Company introduced after the Closing.
6.7 Management Representation Letter Concurrently with the signing of
this Agreement the Purchaser will be provided a management representation letter
in form and substance set out in Annex A hereto.
ARTICLE VII: SUPPLY OF INFORMATION
7.1 The Purchaser acknowledges that the Data Room and any other
written, visual or oral information made available to the Purchaser or its
advisers in connection with its or their investigation of the Company and the
purchase of the Sale Shares (altogether the "Information") is not necessarily
complete nor sufficient to enable it to decide whether or not to purchase the
Sale Shares but the Purchaser has made such investigations as it believes
necessary in order to purchase the Sale Shares.
7.2 The Purchaser acknowledges that none of the managers of the
Company shall be responsible or liable for any Information nor for any errors
therein or omissions therefrom. For the avoidance of doubt this will not have an
impact on the liability in accordance with the rules and limitations contained
in the Labour Code of the employees of the Company for any damages caused for
the Company, which liability will remain unaffected.
7.3 Without prejudice to the generality of Sections 7.1 and 7.2, the
Purchaser acknowledges that all Information speaks as of the date of the
document in which it is contained or the date on which it was otherwise given.
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ARTICLE VIII: TERMINATION
8.1 General This Agreement may be terminated or rescinded only prior
to the Closing, under the following circumstances: -------
(a) by mutual consent of the Purchaser and the Vendors; or
(b) by the Vendors after 45 days following the signing of this
Agreement if the Purchaser failed the deadline for the filing of the request for
the approval of the Competition Office with more that 15 days for reasons
attributable to the Purchaser; or
(c) by the Vendors if the Purchaser fails any deadline set by the
Competition Office in the procedure pursuant to Section 5.1 (b) hereof with more
than 15 days, for reasons attributable to the Purchaser;
(d) by any of the Parties if the Competition Office in its final
written resolution rejects its approval to the transaction contemplated in this
Agreement or the Competition Office's final written resolution contains a
Material Condition, which is not acceptable to the Purchaser and this is
notified in writing to the Vendors;
(e) by any of the Parties if the Bank explicitly rejects in writing
(i) the release of the Vendors and Wallis from the Security Obligations; and /
or (ii) its approval to the change of the Company's ownership and management
structure pursuant to this Agreement.
8.2 Procedure Upon Termination In the event of the termination of
this Agreement pursuant to Section 8.1 by a Party hereto, written notice thereof
specifying the cause of such termination shall promptly be given to each of the
other Parties hereto and this Agreement shall terminate and the transactions
contemplated hereby shall be abandoned without further action by any of the
Parties hereto. Notwithstanding anything to the contrary in this Article VIII,
the termination of this Agreement shall not release any Party hereto from any
obligations or damages attributable to a breach of such Party's representations,
warranties, obligations or covenants prior to the termination of this Agreement.
8.3 Survival of Certain Provisions Notwithstanding Section 8.2
hereof, the respective obligations of the Parties hereto pursuant to Sections
10.1 to 10.3, 10.8, 10.10 and 10.12 shall survive any termination of this
Agreement.
ARTICLE IX: POST CLOSING OBLIGATIONS
15
9.1 Repayment of the Non-transferable Shareholders Loan Following
Closing the Purchaser shall cause the Company to repay the Non-transferable
Shareholders Loan in HUF in accordance with the following schedule: (i) 15% of
the principal loan (i. e. Non-transferable Shareholders Loan) amount will be
repayable by the Company within 3 months after Closing; (ii) 35% of the
principal loan amount will be repayable by 31 December 2004; and (iii) 50% of
the principal loan amount will be repayable in equal quarterly instalments on
the last day of each quarter in the period from 1 January 2005 until 31 December
2005. The interest payable to the Vendors on the Non-transferable Shareholders
Loan shall be BUBOR + 2.25% p.a., except for the period from 1 July 2005 until
full repayment, when the interest will be BUBOR + 5.25% p.a. The interest on the
Non-transferable Shareholders Loan will be payable on the same day as the
principals and on each interest payment date all the interest accrued until the
interest payment date shall be paid.
If the Purchaser must provide short term financing to the Company in
excess of USD 300,000,- in the 6 months following Closing to ensure the solvency
of the Company's operations as a result of the fact that all other commercially
reasonable possible means have been fully utilized, then the repayment of the
Non-Transferable Shareholders loan will be delayed until the repayment of this
financing provided by the Purchaser, but in any event such delay cannot be
longer that 6 months ("Delay Period"). For the avoidance of doubt this delay in
the repayment of Non-Transferable Shareholders Loan shall only have an effect on
those parts of the Non-Transferable Shareholders Loan which pursuant to Section
9.1 hereof would otherwise be due in the Delay Period, but the repayment
schedule of the remaining Non-Transferable Shareholders Loan shall not be
effected.
If an Event of Default occurs the Vendors shall be entitled to
exercise their rights under the securities pursuant to Section 9.2 which rights
are cumulative and are not in lieu of each other. If there is dispute whether or
not an Event of Default occurred the Parties shall endeavour to settle such
dispute in amicable negotiations within 15 day with the involvement of any third
party expert of their choice. If such dispute cannot be settled within this
deadline such dispute shall be referred to the arbitration pursuant to Section
10.2 hereof.
9.2 Security for the Repayment of the Non-transferable Shareholders
Loan The Purchaser shall provide the following securities for the repayment of
the Non-transferable Shareholders Loan:
(a) the Purchaser hereby irrevocably undertakes prompt suretyship obligation (in
Hungarian: "keszfizeto kezesseg") for the full repayment, effective as from the
Closing;
(b) the Purchaser shall provide the security deposit of the Escrow
Shares, effective as from the Closing;
(c) furthermore, upon the request of the Vendors the Purchaser shall
provide additional security (e.g. bank guarantee, security deposit of other
shares or securities) securing the repayment of the Non-Transferable
Shareholders Loan to the Company if and when the Escrow Shares Value falls below
the Required Security Value ("Additional Security"); such Additional Security
must have a value which if added together with the Escrow Shares Value equals
the Required Security Value.
9.3 The Vendors' Right to Appoint Board Member of the Purchaser The
Purchaser undertakes to convene a shareholders' meeting of the Purchaser, and to
use its best endeavours to cause the shareholders to appoint and maintain at
least one board member nominated by the Vendors in the board of directors of the
Purchaser. The Purchaser shall initiate to convene this shareholders' meeting on
or immediately after Closing. As a result, the Vendors will be entitled to
maintain at least one board member in the board of directors of the Purchaser as
long as the Vendors' shareholding in the Purchaser represents at least 5% of the
outstanding shares in the Purchaser.
16
9.4 The Vendors' Right to Appoint Board Member of the Company The
Vendors shall have the right to appoint and maintain at least one board member
in the board of directors of the Company (including its legal successors) as
long as the full amount of the Non-Transferable Shareholders Loan is not repaid
("Vendors' Board Member"). If the Purchaser creates a holding company or any
other entity to manage the operations of its Hungarian subsidiaries the right to
appoint and maintain one Vendors' Board Member pursuant to this Section hereof
shall automatically apply to such holding company or entity. The Purchaser shall
exercise its ownership (voting etc.) rights in the Company so that the Vendors
can appoint, revoke and maintain one Vendors' Board Member at their discretion.
As long as the Non-transferable Shareholding Loan is not fully repaid the
Purchaser shall maintain shareholding interest in the Company enabling it to
ensure that the Vendors be able to appoint and maintain one Vendors' Board
Member.
9.5 Claims Against Officers The Purchaser hereby irrevocably agrees
that it will not and will cause the Company not to commence any legal action or
pursue any claim (other than claims for damages caused wilfully) against members
of the board of directors and supervisory board of the Company in office at any
time between 7 October 2002 and the Closing Date with respect to their
activities performed for the Company prior to the Closing as members of the
board of directors or as supervisory board members. This will not have an impact
on the liability in accordance with the rules and limitations contained in the
Labour Code of the employees of the Company including those who have been
also members of the board of directors for any damages caused for the Company,
which liability will remain unaffected.
9.6 Covenants Not to Compete Unless acting with the Purchaser's prior
written consent, neither the Vendors nor Wallis or any entity over which a
Vendor or Wallis has Controlling Influence will at any time within the one (1)
year period immediately following the Closing:
(a) divert from the Company any business conducted in Hungary
existing as at Closing;
(b) request or advise any present or future customer of the Company
to withdraw, curtail or cancel its business dealings with the Company;
(c) directly or indirectly solicit or encourage any employee of the
Company working in the web consulting or the web hosting business lines to leave
the employ of the Company;
or
(d) actively solicit or encourage any consultant under contract with
the Company to cease work with the Company.
9.7 Filings Pursuant to Securities Exchange Act of 1934 Vendors
acknowledge that Sections 13 and 16 of the Securities Exchange Act of 1934, as
amended, oblige holders of shares of a registered class of securities to make
certain filings once the interests of such holders reach specified thresholds
and that such filing requirements may apply to one or more of the Vendors upon
the acquisition of the Transferable EuroWeb Shares.
ARTICLE X: MISCELLANEOUS
10.1 Fees and expenses Whether or not the transactions contemplated
hereby are consummated, each of the Parties hereto shall pay its own fees and
expenses incident to the negotiation, preparation and execution of this
Agreement and through Closing, including attorneys', accountants and other
advisors' fees and the fees and expenses of any broker, finder or agent retained
by such Party in connection with the transactions contemplated by this
Agreement. Notwithstanding the foregoing, the Vendors may cause the Company to
pay up to HUF 4.000.000,- from its own funds professional fees and out-of-pocket
expenses incurred in connection with this Agreement and the transaction
contemplated hereby including the costs of US legal counsel in connection with
the US legal implications of this Agreement and the transactions contemplated
hereby.
10.2 Arbitration Any dispute, controversy or claim arising out of or
in connection with this Agreement, or the breach, termination or invalidity
thereof, shall be finally settled by arbitration in accordance with the Rules of
the Permanent Arbitration Court attached to the Hungarian Chamber of Commerce
and Industry. The place of arbitration shall be Budapest, the number of
arbitrators shall be three (3) and the language to be used in the arbitral
proceedings shall be English.
17
10.3 Notices Any notice, request, demand, waiver or other
communication to be given or made under this Agreement to the Parties shall be
in writing. Except as otherwise provided in this Agreement, such notice,
request, demand, waiver or other communication shall be deemed to have been duly
given or made to the Party to which it is required or permitted to be given or
made at such Party's address specified below or at such other address as such
Party shall have designated by notice to the Party making such notice, request,
demand, waiver or other communication, if hand-delivered, on the date of such
delivery, if sent by certified or registered mail, on the date of receipt
specified in any return receipt, if sent by telex or telefax or other similar
form of telecommunications (with receipt confirmed) on the next working day
following such transmission.
(a) If to Vitonas Investments Limited
Address: X-0000 Xxxxxxxx, Xxxxxx u. 11.
Fax: x00-0-000-0000
Attention: Xxxxxx Xxxxxx
With a copy to: Forgo, Xxxxx xx Tarsai Ugyvedi Iroda
Address: 1123 Alkotas u. 17-19.
Fax: x00-0-000-0000
Attention: Dr. Forgo Zoltan
(b) If to Certus Kft, at:
Address: 1025 Budapest, Vihorlat u. 10.
Fax: x00-0-000-0000
Attention: Xxxx Xxxxx
With a copy to: Forgo, Xxxxx xx Tarsai Ugyvedi Iroda
Address: 0000 Xxxxxxxx, Xxxxxxx x. 00-00.
Fax: x00-0-000-0000
Attention: Dr. Forgo Zoltan
18
(c) If to Rumed 2000 Kft, at:
Address: X-0000 Xxxxxxxx, Xxxxxxxxxxxx u. 4-6.
With a copy to: Forgo, Xxxxx xx Tarsai Ugyvedi Iroda
Address: 0000 Xxxxxxxx, Xxxxxxx x. 00-00.
Fax: x00-0-000-0000
Attention: Dr. Forgo Zoltan
(d) If to Euroweb International Corp., at:
Address: X-0000 Xxxxxxxx, Xxxxxxxxxx u. 13.
Fax: 00-0-000-0000
attention: Xxxxx Xxxx
with a copy to: Szabo, Kovari, Tercsak es
Tarsai Ugyvedi Iroda
Address: H-1132 Budapest, Vaci ut 20.
Fax: 00-0-000-0000
Attention: Xx. Xxxxx Tamas
or to such other persons, addresses and fax numbers as a Party shall specify as
to itself by notice in writing to the other Parties.
10.4 Entire Agreement This Agreement constitutes the entire agreement
between the Parties pertaining to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties as to such subject matter, save that the confidentiality
and non-solicitation obligations set out in sections 2.5 and 8. of the Term
Sheet shall not be superseded and shall remain in effect until Closing, or if no
Closing occurs until the time limitation specified in the Term Sheet.
10.5 Assignability None of the rights and obligations under this
Agreement shall be assignable by any of the Parties hereto without the prior
written consent of the other Parties, except that any of the Parties may,
without such consent, assign its rights hereunder to any of its Affiliates or
successors thereof.
10.6 Amendment and ModificationThis Agreement may be amended,
modified and supplemented only by a written instrument authorised and executed
on behalf of each of the Parties.
10.7 Public Announcements Within 3 (three) days following the date
hereof the Parties shall enter into bona fide negotiations and will, without
delay, mutually agree on the principles of making public disclosure in respect
of this Agreement. None of the Purchaser or the Vendors shall, unless fully in
compliance with such principles, make or issue, or cause to be made or issued,
any public disclosure, announcement or written statement concerning this
Agreement or the transactions contemplated hereby without the prior consent of
the other Parties.
10.8 Language This Agreement has been executed in the English
language, which shall be the binding and controlling language for all matters
relating to the meaning or interpretation of this Agreement.
10.9 Counterparts This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same instrument.
10.10 Applicable Law This Agreement shall be governed by and
construed in accordance with the laws of the Republic of Hungary without regard
to the conflict of laws principles thereof, provided, however, that provisions
specifically referencing the laws of the United States, any actions to be taken
pursuant to or in compliance with such laws shall be construed in accordance
with US laws and matters relating to the legal authority or capacity of
Purchaser, the issuance and nature of EuroWeb Shares, the rights of holders of
EuroWeb Shares and the organization of Purchaser shall be construed in
accordance with the laws of the State of Delaware.
10.11 Severability The provisions of this Agreement will be deemed
severable, and if any part of any provision is held to be illegal, void or
unenforceable in its entirety or partially or as to any Party, for any reason,
such provision may be changed by the applicable arbitration tribunal or court of
competent jurisdiction, consistent with the intent of the Parties hereto, to the
extent reasonably necessary to make the provision, as so changed, legal, valid,
binding, and enforceable. If any provision of this Agreement is held to be
illegal, void, or unenforceable in its entirety or partially or as to any Party,
for any reason, and if such provision cannot be changed consistent with the
intent of the Parties hereto to make it fully legal, valid, binding, and
enforceable, then such provisions will be stricken from this Agreement, and the
remaining provisions of this Agreement will not in any way be affected or
impaired, but will remain in full force and effect.
19
10.12. Confidentiality Except as permitted or contemplated by Section
10.7 hereof, each of the Parties undertakes to keep any and all information
relating to this Agreement confidential and not to divulge or disclose such
information to any third party without the prior express written consent of the
other Parties to this Agreement. This will not limit any of the Parties to
provide information on this Agreement to the extent reasonably necessary to its
Affiliates.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as set forth herein, on the day and year first above written.
VITONAS INVESTMENTS LIMITED
Name (print):
Signature:
Name (print):
Signature:
CERTUS KFT
Name (print):
Signature:
RUMED 2000 KFT
Name (print):
Signature:
EUROWEB INTERNATIONAL CORP.
Name (print):
Signature:
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