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Exhibit 2
Dated as of 19th November, 1999
KPN TELECOM B.V.
AND
EUROWEB INTERNATIONAL CORP.
__________________________________
AMENDED AND RESTATED
OPTION AGREEMENT
RELATING TO
SHARES OF COMMON STOCK OF EUROWEB INTERNATIONAL CORP.
__________________________________
Signed on 19th November, 1999
and amended and restated on 13th December, 1999
▇▇▇▇▇ & ▇▇▇▇▇
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CONTENTS
CLAUSES PAGE
1. Interpretation 1
2. Grant of the KPN Options 2
3. The Option Price 3
4. Exercise of the KPN Options 3
5. Conditions Precedent 3
6. Completion 4
7. Adjustments 4
8. Certification 4
9. Specific Performance 4
10. Warranties 5
11. Notices 5
12. Announcements 6
13. Further assurances 6
14. General 6
16. Governing law and jurisdiction 6
SCHEDULES
1. Form of Exercise Notice 8
2. Form of Rejection Notice 9
3 Details of Options and Warrants 10
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Exhibit 2
THIS AMENDED AND RESTATED OPTION AGREEMENT is dated as of 19th November, 1999
BETWEEN:
(1) EUROWEB INTERNATIONAL CORP., a Delaware corporation whose principal place
of business is at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (the
"COMPANY"); and
(2) KPN TELECOM B.V., a Netherlands limited liability company incorporated in
the Netherlands whose registered office is at ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ (the "SUBSCRIBER").
RECITALS:
(A) The Company has granted various options and warrants to third parties,
each as described in Schedule 3, in respect of shares of common stock of
the Company.
(B) The Company wishes to grant to the Subscriber Options which mirror the
Third Party Options on the terms and subject to the conditions of this
agreement so that the Subscriber may maintain its 51 per cent. stake in
the Company, as more fully set out in the Subscription Agreement (the
"SUBSCRIPTION AGREEMENT") of today's date between the Company, the
Subscriber, ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ as directors.
(C) The parties have amended and restated the option agreement executed by
the parties on 19th November, 1999 to correct certain inaccuracies in
Schedule 3 thereto. This amended and restated agreement, including the
correct Schedule 3, sets out the agreement between the parties as of 19th
November.
IT IS AGREED as follows:
1. INTERPRETATION
(1) In this agreement:
"ADJUSTMENT" means an adjustment to the Shares and/or the Option Price in
accordance with clause 7;
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
banks are generally open in New York for normal business;
"COMPANY" includes any other issuer of any securities which for the time
being form part of the Shares as a result of any Adjustment;
"COMPLETION DATE" means the date for completion of the issue and
subscription of the Third Party Option Shares and the Shares in
accordance with clause 6(1);
"CORRESPONDING OPTION" means each KPN Option set out in column 4 of
Schedule 3 which corresponds to the Third Party Option set out next to
such KPN Option in columns 2 and 3 of Schedule 3;
"EXERCISE DATE" means the date on which a Third Party Option Holder
notifies the Company that it wishes to exercise its Third Party Option;
"EXERCISE NOTICE" means a notice substantially in the form of Schedule 1;
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"KPN OPTION" means each call option specified in columns 1 and 4 of
Schedule 3 granted by the Company to the Subscriber under clause 2;
"OPTION PRICE" means the price per Share referred to in clause 3;
"REJECTION NOTICE" means a notice substantially in the form of Schedule
2;
"REORGANISATION" means every issue by way of capitalisation of profits or
reserves and every issue by way of rights and every consolidation or
sub-division or reduction of capital or capital distribution or other
reconstruction or adjustment relating to the equity share capital of the
Company and any amalgamation or reconstruction affecting the equity share
capital of the Company;
"SHARES" means, with respect to any KPN Option, the number of shares of
ordinary common stock of the Company specified in column 3 of Schedule 3
and includes such other securities as are for the time being subject to
an KPN Option as a result of any Adjustment;
"THIRD PARTY OPTION" means each third party option or warrant specified
in column 2 and 3 of Schedule 3;
"THIRD PARTY OPTION HOLDER" means each third party specified in column 2
of Schedule 3 as holding the Third Party Option; and
"THIRD PARTY OPTION SHARES" means, with respect to any Third Party
Option, the number of shares of ordinary common stock which the Company
must issue to a Third Party Option Holder upon exercise of such Third
Party Option specified in column 3 of Schedule 3.
(2) In this agreement:
(a) references to a person include a body corporate and an
unincorporated association of persons;
(b) references to a natural person include his estate and
personal representatives; and
(c) subject to clause 14(2) below, references to a party to this
agreement include references to the successors or assigns (immediate
or otherwise) of that party.
(3) Subclauses (1) and (2) above apply unless the contrary intention appears.
(4) The headings in this agreement do not affect its interpretation.
2. GRANT OF THE KPN OPTIONS
In consideration of the Subscriber subscribing 51 per cent. of the
outstanding share capital of the Company under the Subscription
Agreement, the Company grants to the Subscriber each KPN Option to
subscribe the Shares at the Option Price on the terms and subject to the
conditions of this agreement.
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3. THE OPTION PRICE
The price payable by the Subscriber for the Shares shall be the sum of
$1.38 per share, subject to any Adjustment.
4. EXERCISE OF THE KPN OPTIONS
(1) Within 1 Business Day of a Third Party Option Holder exercising its Third
Party Option, the Company shall serve an Exercise Notice on the Company
notifying the Subscriber that the Third Party Option Holder has exercised
the Third Party Option, referring to it by the number given to it in
Schedule 3 and describing the Corresponding Option as set out in Schedule
3.
(2) The Subscriber shall be deemed to have exercised the Corresponding Option
subject of the Exercise Notice if it does not serve a Rejection Notice on
the Company within 2 Business Days of receiving an Exercise Notice under
subclause (1).
(3) A Corresponding Option may only be exercised in respect of all (and not
some only) of the Shares, unless the Third Party Option has been exercised
in part only, in which case the Exercise Notice shall specify that the
Corresponding Option may be exercised in part only, in respect of Shares
amounting to 100% of the number of Third Party Option Shares which were
the subject of the corresponding Third Party Option which was exercised.
In case of such part exercise, the Subscriber shall be deemed to have
exercised the Corresponding Option in part, as described in this clause,
if it does not serve a Rejection Notice on the Company within 2 Business
Days of receiving an Exercise Notice under subclause (1).
(4) Exercise of a Corresponding Option shall oblige the Company to issue and
the Subscriber to subscribe the Shares.
(5) The Shares shall be issued free from all liens, charges, equities and
encumbrances and together with all rights attached to the Shares at the
date of service of the Exercise Notice.
(6) If a Third Party Option is not duly exercised within the relevant period
specified in such Third Party Option, the Corresponding Option shall cease
to be exercisable and shall lapse.
(7) Notwithstanding the foregoing, in the event the Company delivers an
Exercise Notice in respect of less than 500,000 Third Party Option Shares
in aggregate, the Subscriber may, within 2 Business Days of receiving the
Exercise Notice, notify the Company that it wishes to exercise the
Corresponding Option but wishes to delay the Completion Date until at
least 500,000 Third Party Option Shares in aggregate have become the
subject of this and future Exercise Notices. In such case, the Subscriber
shall be deemed to have exercised the Corresponding Option in respect of
all of the subject Shares whose subscription is so delayed, and shall
complete the subscription of the subject Shares in accordance with clause
6.
5. CONDITIONS PRECEDENT
The exercise of each Corresponding Option shall be conditional on (i)
Closing (as defined in the Subscription Agreement) under the Subscription
Agreement and (ii) exercise of the related Third Party Option.
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6. COMPLETION
(1) Completion of any issue and subscription of the Shares following the
exercise of a Corresponding Option shall take place simultaneously with
the scheduled completion for the Third Party Option as set out in the
Exercise Notice or, if the outcome of any Adjustment is not known at that
time, the third Business Day after the outcome has been ascertained.
(2) At that time the Company shall procure the delivery to the Subscriber of:
(a) the share certificate(s) representing the Shares; and
(b) such other documents as may be necessary to enable the
Subscriber or its nominee(s) to obtain good title to the Shares.
(3) Against delivery of the documents referred to in subclause (2) above, the
Subscriber shall pay in full for the Shares in immediately available
funds.
(4) If for any reason the provisions of subclause (2) are not fully complied
with the Subscriber shall be entitled (in addition and without any
prejudice to all other rights or remedies available to it) to elect to
rescind this agreement or to fix a new Completion Date.
7. ADJUSTMENTS
If any Reorganisation takes place after the date of this agreement but on
or before the Exercise Date, all shares, stock and other securities (if
any) which become owned by the Company or to which it may be entitled as
a result of the Reorganisation shall be subject to the KPN Option and/or
the Option Price shall be adjusted appropriately to take account of any
such Reorganisation.
8. CERTIFICATION
On 15th January of each year, the secretary of the Company shall deliver
to the Subscriber a certificate (the "SECRETARY'S CERTIFICATE") setting
out, with respect to the previous 12 months:
(a) the number of Third Party Option Shares issued to Third Party
Option Holders;
(b) the number of Shares issued to the Subscriber as a result of
the exercise of KPN Options;
(c) the number of shares of common stock of the Company
outstanding as of the date of the Secretary's Certificate; and
(d) the percentage of shares in the Company owned by the
Subscriber as of the date of the Secretary's Certificate as shown in
the Company's records.
9. SPECIFIC PERFORMANCE
It being the intention of the parties that the Subscriber maintain its
holding of 51 per cent. of the outstanding share capital of the Company,
and it being acknowledged by each of the parties that the Subscriber may
suffer irreparable harm in the event the Company fails to notify the
Subscriber of the exercise of a Third Party Option, the parties agree
that the Subscriber will be entitled to equitable relief, including
specific performance, in the event the Company breaches any of its
obligations under this agreement.
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10. WARRANTIES
The Company represents, warrants and undertakes to the Subscriber that:
(a) other than under the Third Party Options no person is
entitled or has claimed to be entitled to require the Company to
issue any share or loan capital either now or at any future date,
whether contingently or not, and there is no subscription, option,
warrant, call, right, agreement or commitment relating to the
issuance, sale, delivery or transfer by the Company or any of its
subsidiaries (including any right of conversion or exchange under
any outstanding security or other instrument) of the Company's share
capital.
(b) the Company has the requisite power and authority to enter
into and perform this agreement;
(c) this agreement has been duly authorised and executed by, and
constitutes a binding obligation on, the Company;
(d) compliance with the terms of this agreement does not and will
not conflict with or constitute a default under any provision of:
(i) any agreement or instrument to which the Company is a party; or
(ii) the Company's certificate of incorporation or by-laws; or
(iii) any lien, lease, order, judgment, award, injunction, decree,
ordinance or regulation or any other restriction of any kind
or character by which the Company is bound;
(e) no further consent, approval or authorisation of any
governmental agency or other person is required by it for the entry
into and the performance of its obligations under this agreement;
and
(f) the Company has the right to issue the full legal and
beneficial interest in the Shares free from any lien, charge, equity
or encumbrance and all the Shares are fully paid or credited as
fully paid.
11. NOTICES
Any notice or other document to be served under this agreement may be
delivered or sent by facsimile process to the party to be served at its
address appearing in this agreement or at such other address as it may
have notified to the other parties in accordance with this clause.
Any notice or document shall be deemed to have been served:
(a) if delivered, at the time of delivery; or
(b) if sent by facsimile process, at the expiration of 2 hours
after the time of despatch, if despatched before 3.00 p.m. on any
Business Day, and in any other case at 10.00 a.m. on the Business
Day after the date of despatch.
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In proving service of a notice or document it shall be sufficient to
prove that delivery was made or that the facsimile message was properly
addressed and despatched as the case may be.
12. ANNOUNCEMENTS
Neither party shall make or permit any person connected with it to make
any announcement concerning this agreement or any ancillary matter except
as required by law or any competent regulatory body or with the written
approval of the other parties, such approval not to be unreasonably
withheld or delayed.
13. FURTHER ASSURANCES
The Company will, at its own cost and expense, execute and do (or procure
to be executed and done by any other necessary party) all such deeds,
documents, acts and things as the Subscriber may from time to time after
the relevant Completion Date require in order to vest any of the Shares
in the Subscriber or as otherwise may be necessary to give full effect to
this agreement.
14. GENERAL
(1) Each obligation, representation and warranty on the part of each party
under this agreement (except any obligation fully performed) shall
continue in force after the Completion Date.
(2) None of the rights or obligations under this agreement may be assigned or
transferred by one party without the written consent of the other party.
(3) This agreement and the documents referred to in it contain the whole
agreement between the parties relating to the transactions contemplated by
in this agreement and supersede all previous agreements between the
parties relating to those transactions.
(4) In entering into this agreement no party may rely on any representation,
warranty, collateral contract or other assurance (except those set out in
this agreement and the documents referred to in it) made by or on behalf
of any other party before the signature of this agreement and each of the
parties waives all rights and remedies which, but for this subclause,
might otherwise be available to him in respect of any such representation,
warranty, collateral contract or other assurance; provided that nothing in
this subclause shall limit or exclude any liability for fraud.
(5) This agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same agreement and any
party may enter into this agreement by executing a counterpart.
(6) Each party shall bear its own costs and expenses incidental to the
negotiation, preparation and completion of this agreement and the
Subscriber shall be solely liable for payment of any stamp duty or stamp
duty reserve tax in respect of any transfer of the Shares.
16. GOVERNING LAW AND JURISDICTION
This agreement is governed by and shall be construed in accordance with
the law of the State of New York. The Subscriber submits to the
jurisdiction of the New York courts for all purposes relating to this
agreement.
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AS WITNESS the hands of the duly authorised representatives of the parties on
the date which appears first on page 1.
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SCHEDULE 1
FORM OF EXERCISE NOTICE
To: [The Subscriber]
Dear Sirs,
We refer to the Option Agreement dated [ ] between you and us and to
the KPN Option granted by us to you under that agreement.
We hereby give notice under clause 3 of the Option Agreement that [specify
Third Party Option Holder] has exercised [specify Third Party Option] in
respect of [specify Third Party Option Shares]. In the event you do not
respond within 2 Business Days of receiving this notice by delivering to us a
Rejection Notice, you shall be deemed to have exercised the following
Corresponding Option:
[Specify terms of KPN Option]
By not responding to this notice, you agree to deliver $o to us in immediately
available funds on the Completion Date, which shall be o.
Yours faithfully,
For and on behalf of
[The Company]
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SCHEDULE 2
FORM OF REJECTION NOTICE
To: [The Company]
Dear Sirs,
We, [the Subscriber], refer to the Option Agreement dated [ ] and
between you and us and to the KPN Option granted by you to us under that
agreement.
We refer to the Exercise Notice dated o which you delivered to us and notify
you that we do not exercise our Corresponding Option to subscribe the subject
Shares.
Yours faithfully,
For and on behalf of
[The Subscriber]
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SCHEDULE 3
DETAILS OF OPTIONS AND WARRANTS
OPTIONS OUTSTANDING
OPTION HOLDER NUMBER OF OPTIONS
▇▇▇▇▇▇▇ ▇▇▇▇ and Lucie Kozova 50,000
▇▇▇▇ ▇. ▇▇▇▇▇▇ 25,000
▇▇▇▇▇ ▇▇▇▇▇ 515,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ 500,000
▇▇▇▇▇ ▇▇▇▇ 465,000
▇▇▇▇▇ ▇▇▇▇▇▇▇ 100,000
Laszlo Josa 10,000
Kriszine Holla 10,000
▇▇▇▇ ▇. ▇▇▇▇ 5,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 100,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 100,000
Radio Telephony 50,000
TOTAL 1,930,000
----- -----------------
WARRANTS OUTSTANDING
WARRANT HOLDER NUMBER OF WARRANTS
MJJ Management Group Corp. 200,000
▇▇▇▇▇ ▇▇▇▇▇▇ 50,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 25,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 50,000
▇▇▇▇▇▇ Investment Partners 25,000
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 250,000
▇▇▇▇ ▇▇▇▇▇▇ 50,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 100,000
▇.▇. ▇▇▇▇▇ Securities Inc. 206,514
▇▇▇▇▇▇ ▇▇▇▇▇▇ 50,000
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 114,284
Greenwood Partners LP 399,994
GMG & Associates Inc. 57,142
▇▇▇▇▇▇▇▇▇ Partners LP 399,994
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 257,138
The ▇▇▇▇▇▇ Family 57,142
HRG Trust 57,142
▇▇▇▇▇▇ ▇▇▇▇▇▇ 28,570
▇▇▇▇▇▇ ▇▇▇▇▇▇ 57,140
▇▇▇ ▇▇▇▇▇▇▇ 57,142
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 57,142
▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 114,284
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 57,142
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 57,140
▇▇▇▇ ▇. ▇▇▇▇ 57,142
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇. 57,142
TOTAL 2,892,194
TOTAL WARRANTS AND OPTIONS 4,822,194
OUTSTANDING
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THE COMPANY:
EUROWEB INTERNATIONAL CORP.
By:___________________________________
Name:
Title
THE SUBSCRIBER:
KPN TELECOM B.V.
By:___________________________________
Name:
Title
::ODMA\PCDOCS\CO\688111\1