ESCROW AGREEMENT dated as of January 28, 2005
AMONG:
(1) KPN TELECOM B.V., a limited liability company organized under the laws of
The Netherlands (SELLER);
(2) CORCYRA D.O.O., a Croatian company (PURCHASER); and
(3) JPMORGAN CHASE BANK N.A., a bank organized under the laws of the State of
New York (ESCROW AGENT).
WHEREAS, Seller and Purchaser have entered into a stock purchase agreement dated
January 28, 2005 (the PURCHASE AGREEMENT), pursuant to which Purchaser has
agreed to purchase and Seller has agreed to sell 2,326,043 shares of common
stock of EuroWeb International Corp., a Delaware corporation (the COMPANY), on
the terms and subject to the conditions set forth in the Purchase Agreement.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings given them in the Purchase Agreement.
WHEREAS, pursuant to the Purchase Agreement, Seller has agreed to sell and
Purchaser has agreed to purchase 289,855 shares of Company common stock at the
Initial Closing for the Initial Closing Purchase Price. Seller shall deliver to
Purchaser the Initial Shares at the Initial Closing, and accordingly, the
Initial Shares will not be placed in escrow and will not be subject to this
Agreement.
WHEREAS, pursuant to the Purchase Agreement, Seller has agreed to sell and
Purchaser has agreed to purchase 2,036,188 shares of Company common stock at the
Final Closing for the Final Closing Purchase Price.
WHEREAS, in accordance with Section 2.2(c) of the Purchase Agreement, Seller is
depositing with Escrow Agent one or more certificates representing the 2,036,188
shares of Company common stock (the ESCROWED SHARES) to be purchased at the
Final Closing.
NOW, THEREFORE, the parties, intending to be legally bound, hereby agree as
follows:
1. DEPOSIT OF ESCROWED SHARES
(a) In accordance with the Purchase Agreement, Seller is depositing with
Escrow Agent one or more certificates representing the Escrowed Shares and
appropriate stock powers executed by Seller in blank with respect to the
Escrowed Shares (the STOCK POWERS). Escrow Agent acknowledges receipt
thereof.
(b) Escrow Agent hereby agrees to act as escrow agent and to hold, safeguard
and deliver the Escrowed Shares pursuant to the terms and conditions
hereof. The Escrowed Shares shall be treated by the parties for all
purposes as owned by Seller unless and until the Escrowed Shares are
released to Purchaser pursuant to the terms of this Agreement.
2. VOTING OF ESCROWED SHARES
Seller shall retain all voting and other rights associated with the
Escrowed Shares until the Final Closing Purchase Price is paid in full
pursuant to the terms of the Purchase Agreement at the Final Closing;
provided, however, that so long as Purchaser is not in default in its
obligations under the Purchase Agreement, and the Purchase Agreement
remains in effect, Seller shall vote the Escrowed Shares in accordance
with instructions from Purchaser, so long as such instructions are
received sufficiently in advance of the applicable vote and such voting
would not violate applicable law or require amendments to any SEC filing
of Seller or Purchaser. Seller shall not be obligated to vote the Final
Shares in accordance with Purchaser's instructions in connection with any
matter (i) proposed by or on behalf of Purchaser or any of its Affiliates
that Purchaser did not previously disclose to Seller in its Schedule 13D
or (ii) as to which Purchaser or any of its Affiliates would have an
interest that is different from the interests of the other stockholders of
the Company such as an interest that would be of a nature that would have
to be disclosed pursuant to Item 1005(d) of Regulation M-A or Item 404 of
Regulation S-K, if either of such provisions were applicable.
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3. RELEASE OF ESCROWED SHARES
(a) Upon Purchaser's payment of the Final Closing Purchase Price pursuant to
the terms of the Purchase Agreement, and upon satisfaction (or waiver by
Seller) of the closing conditions to Seller's obligation contained in
Section 7.2 of the Purchase Agreement, Seller shall give notice to Escrow
Agent directing Escrow Agent to transfer to Purchaser one or more
certificates representing the Escrowed Shares purchased at the Final
Closing. Upon the receipt of such notice, Escrow Agent shall deliver the
Stock Powers endorsed to Purchaser together with one or more certificates
representing the Escrowed Shares.
(b) In the event that (a) Purchaser does not timely satisfy the conditions
contained in Section 7.2 of the Purchase Agreement or (b) the Purchase
Agreement is otherwise terminated pursuant to Section 8.1 of the Purchase
Agreement, including if Purchaser shall be in default of its obligation to
make any Premium Payment specified in Section 2.3 of the Purchase
Agreement, then upon notice to such effect from Seller, Escrow Agent shall
return the certificates representing the Escrowed Shares and the Stock
Powers to Seller, and this Agreement shall terminate. In such event,
neither Purchaser nor Seller shall have any claim against the other
arising out of this Agreement.
4. DUTIES OF ESCROW AGENT
(a) This Agreement expressly sets forth all the duties of Escrow Agent with
respect to any and all matters pertinent hereto. No implied duties or
obligations shall be read into this agreement against Escrow Agent. Escrow
Agent shall not be bound by the provisions of any agreement among the
other parties hereto except this Agreement. Escrow Agent's duties are
ministerial in nature.
(b) Escrow Agent shall not be liable, except for its own gross negligence or
willful misconduct, and, except with respect to claims based upon such
gross negligence or willful misconduct that are successfully asserted
against Escrow Agent, the other parties hereto shall jointly and severally
indemnify and hold harmless Escrow Agent (and any successor Escrow Agent)
from and against any and all losses, liabilities, claims, actions, damages
and expenses, including reasonable attorneys' fees and disbursements,
arising out of and in connection with this Agreement.
(c) Escrow Agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity or the
service thereof. Escrow Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that any person
purporting to give notice or receipt or advice or make any statement or
execute any document in connection with the provisions hereof has been
duly authorized to do so.
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(d) Escrow Agent may act pursuant to the advice of counsel with respect to any
matter relating to this Agreement and shall not be liable for any action
taken or omitted in accordance with such advice.
(e) Escrow Agent does not have any interest in the Escrowed Shares deposited
hereunder but is serving as escrow agent only and having only possession
thereof.
(f) Escrow Agent makes no representation as to the validity, value,
genuineness or the collectability of any security or other documents or
instrument held by or delivered to it.
(g) Escrow Agent (and any successor Escrow Agent) may at any time resign as
such by delivering the Escrowed Shares to any successor Escrow Agent
jointly designated by the other parties hereto in writing, or to any court
of competent jurisdiction, whereupon Escrow Agent shall be discharged of
and from any and all further obligations arising in connection with this
Agreement. The resignation of Escrow Agent shall take effect on the
earlier of (i) the appointment of a successor (including a court of
competent jurisdiction) or (ii) the day that is 30 days after the date of
delivery of its written notice of resignation to the other parties hereto.
If at that time Escrow Agent has not received a designation of a successor
Escrow Agent, Escrow Agent's sole responsibility after that time shall be
to retain and safeguard the Escrowed Shares until receipt of a designation
of successor Escrow Agent or a joint written disposition instruction by
the other parties hereto or a final and nonappealable order of a court of
competent jurisdiction.
(h) In the event that Escrow Agent in good faith is in doubt as to what action
it should take hereunder, Escrow Agent shall be entitled to retain the
Escrowed Shares until Escrow Agent shall have received (i) a final
nonappealable order of a court of competent jurisdiction directing
delivery of the Escrowed Shares or (ii) a written agreement executed by
Seller and Purchaser directing delivery of the Escrowed Shares, in which
event Escrow Agent shall deliver the Escrowed Shares in accordance with
such order or agreement. Escrow Agent shall act on any court order without
further question.
(i) Seller and Purchaser shall pay Escrow Agent compensation as payment in
full for the services to be rendered by Escrow Agent hereunder in the
amount of U.S.$7,500 at the time of execution of this Agreement. Any such
compensation and reimbursement to which Escrow Agent is entitled shall be
borne 50% by Seller, 50% by Purchaser.
(j) Anything in this agreement to the contrary notwithstanding, in no event
shall Escrow Agent be liable for special, indirect or consequential damage
of any kind whatsoever (including but not limited to lost profits), even
if Escrow Agent has been advised of the likelihood for such loss or damage
and regardless of the form of action. The parties hereto acknowledge that
this Section 4(j) shall survive the resignation or removal of Escrow Agent
or the termination of this agreement.
5. NOTICES
All notices, requests, claims, demands and other communications required
or permitted to be given hereunder shall be in writing and shall be
delivered by hand or sent by facsimile or sent, postage prepaid, return
receipt requested, by registered, certified or express mail or overnight
courier service and shall be deemed given when so delivered by hand or
facsimile, or if mailed, three days after mailing (one Business Day in the
case of express mail or overnight courier service), to the respective
parties at the following addresses (or at such other address for a party
as shall be specified in a notice given in accordance with this Section
5):
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(i) if to Seller
KPN Telecom B.V.
Xxxxxxxxx 00
0000 XX Xxx Xxxxx
Xxx Xxxxxxxxxxx
Fax: x00 00 000 0000
Attn: Xxxx-Xxx Xxxxxxxxx
(ii) if to Purchaser
CORCYRA x.x.x.
Xxxxxxxx 00, Xxxx Xxxxxxx 00000
Fax: x000 00 000 000
Attn: Xxxxx Har Adir
with a copy to:
Xxxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Fax: x0 000 000 0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
(iii) if to Escrow Agent, to:
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: x0 000 000 0000
Attention: Xxxxxx Xxxxxxxx
6. TERMINATION
In the event that (a) Purchaser does not timely satisfy the conditions
contained in Section 7.2 of the Purchase Agreement or (b) the Purchase
Agreement is otherwise terminated pursuant to Section 8.1 of the Purchase
Agreement, including if Purchaser shall be in default of its obligation to
make any Premium Payment specified in Section 2.3 of the Purchase
Agreement, then upon notice to such effect from Seller, Escrow Agent shall
return the certificates representing the Escrowed Shares and the Stock
Powers to Seller, and this Agreement shall terminate. In such event,
neither Purchaser nor Seller shall have any claim against the other
arising out of this Agreement.
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7. MISCELLANEOUS
(a) None of the parties may assign any of its rights under this Agreement
without the prior consent of the other parties (such consent not to be
unreasonably withheld, delayed or conditioned), except that Seller may
assign any of its rights under this Agreement to any Subsidiary or
affiliate of Seller without the prior written consent of any other party.
Subject to the preceding sentence, this Agreement will apply to, be
binding in all respects upon, and inure to the benefit of the successors
and permitted assigns of the parties. Nothing expressed or referred to in
this Agreement will be construed to give any person other than the parties
to this Agreement any legal or equitable right, remedy, or claim under or
with respect to this Agreement or any provision of this Agreement. This
Agreement and all of its provisions and conditions are for the sole and
exclusive benefit of the parties to this Agreement and successors and
assigns.
(b) This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, and shall become effective
when one or more such counterparts have been signed by each of the parties
and delivered to the other party.
(c) This Agreement contains the entire agreement and understanding among the
parties hereto with respect to the subject matter hereof and supersedes
all prior agreements and understandings relating to such subject matter.
(d) Each party irrevocably and unconditionally submits to the exclusive
jurisdiction of (a) the Supreme Court of the State of New York, New York
County, and (b) the United States District Court for the Southern District
of New York, for the purposes of any suit, action or other proceeding
arising out of this Agreement or any transaction contemplated hereby. Each
party to this Agreement hereby waives formal service of process and agrees
that service of any process, summons, notice or document by U.S.
registered mail to such party's respective address set forth above shall
be effective service of process for any action, suit or proceeding in New
York with respect to any matters to which it has submitted to jurisdiction
in this Section 7(d). Each party to this Agreement irrevocably and
unconditionally waives, pursuant to the provisions of Section 5-1402 of
the New York General Obligations Law, any objection to the laying of venue
of any action, suit or proceeding arising out of this Agreement, any
Ancillary Agreement or the transactions contemplated hereby and thereby in
(i) the Supreme Court of the State of New York, New York County, or (ii)
the United States District Court for the Southern District of New York,
and hereby and thereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such action, suit
or proceeding brought in any such court has been brought in an
inconvenient forum.
(e) This Agreement (and any claims or disputes arising out of or related
thereto or to the transactions contemplated thereby or to the inducement
of any party to enter therein, whether for breach of contract, tortious
conduct or otherwise and whether predicated on common law, statute or
otherwise) shall in all respects be governed by and construed in
accordance with the laws of the State of New York, including all matters
of construction, validity and performance, in each case without reference
to any conflict of law rules that might lead to the application of the
laws of any other jurisdiction. Each party to this Agreement further
agrees that the laws of the State of New York bear a reasonable
relationship to this Agreement and irrevocably and unconditionally waives,
pursuant to Section 5-1401 of the New York General Obligations Law, any
objection to the application of the laws of the State of New York to any
action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby and further irrevocably and
unconditionally waives and agrees not to plead or claim that any such
action, suit or proceeding should not be governed by the laws of the State
of New York. This Agreement has been negotiated, executed and delivered in
the State of New York.
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(f) EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT TO ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) DIRECTLY OR INDIRECTLY RELATING TO ANY
DISPUTE ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY. Each party (i) certifies that no
representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and (ii) acknowledges
that it and the other parties hereto have been induced to enter into this
Agreement by, among other things, the mutual waivers and certifications in
this Section 7(f).
(g) Any corporation into which Escrow Agent in its individual capacity 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 in its individual capacity shall be a party, or any
corporation to which substantially all the corporate trust business of
Escrow Agent in its individual capacity may be transferred, shall be
Escrow Agent under the Agreement without requirement for further action.
(h) In the event that Escrow Agent is unable to perform its obligations under
the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or other cause reasonably beyond its control, Escrow
Agent shall not be liable for damages to the other parties for any damages
resulting from such failure to perform otherwise from such causes.
Performance under this Agreement shall resume when Escrow Agent is able to
perform substantially.
(i) In the event that any Escrowed Shares shall be attached, garnished or
levied upon by any court order, or the delivery thereof shall be stayed or
enjoined by any order of a court, or any order, judgment or decree shall
be made or entered by any court order affecting the Escrowed Shares
deposited under this Agreement, Escrow Agent is hereby expressly
authorized, in its sole discretion, to obey and comply with all writs,
orders or decrees so entered or issued, which it is advised by legal
counsel of its own choosing is binding upon it, whether with or without
jurisdiction, and in the event that Escrow Agent obeys or complies with
any such writ, order or decree it shall not be liable to any of the
parties hereto or to any other person, firm or corporation, by reason of
such compliance notwithstanding such writ, order or decree be subsequently
reversed, modified, annulled, set aside or vacated.
(j) This Agreement shall not take effect unless and until the Initial Closing
shall have occurred.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first written above.
KPN TELECOM B.V.
By: KONINKLIJKE KPN N.V.,
its sole Director
By: /s/ X.X. XXXXXXXXX
---------------------------------
Name: X.X. Xxxxxxxxx
Title: Senior Vice President
CORCYRA d.o.o.
By: /s/ XXXXX HAR ADIR
-------------------------------------
Name: Xxxxx Har Adir
Title: Sole Officer, Director and
Shareholder
JPMORGAN CHASE BANK, N.A.
as Escrow Agent
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
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