[LOGO] Cukierman & Co.
Investment House Ltd.
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December 2, 2004
Mr. Xxx Adir
Corcyra d.o.o.
Pula, Croatia
Dear Mr. Xxx Xxxx,
This letter shall serve as the basis for our firm to act as the advisor together
with Xx. Xxxxx Xxxxxxx, in establishing a future strategic plan (SP Plan) for
EuroWeb (NASDAQ Eweb).
Our firm has been engaged in consulting and advising clients on financing and
restructuring for the past 10 years. You should note the 167M Euro restructuring
transaction of Eurobike, a German based company, which concluded our
transactions for 2003. We also represent in Israel the government of Western
Switzerland and the government of Honk Kong.
We will base our analysis on material provided to us by management, public data
and the McKann Ericsson report - a copy of which is attached here for your
review. Since this report was made in April 2004, there will be obvious, broad
and specific adjustments made to it. We believe that the current market
conditions pose new threats as well as new opportunities.
Our proposal of the SP Plan, will aim to provide you with a restructuring plan
that will enable you to enhance shareholder's wealth. This will be our prime
target. It is our belief, that creating wealth is closely linked to creativity.
Some of the issues we want to explore and propose are:
o Retain advisors so as to implement cost cutting measurements where
applicable.
o Recruit technology, marketing and financial experts
o Recruit highly skilled members for new divisions and/or entities, if
and when established, and if and when applicable.
o Pending market conditions, retain bankers to raise cash and/or enter
into strategic alliances and partnerships and/or make acquisitions
which are not less favorable than transactions which the company has
previously entered into.
o Look at alternative Stock Exchanges for possible spinning out of non
core assets, such as the recent Republic of Czech ISP. Rather than
selling it, it may have been wiser to spin it off into a separate
entity, and thereafter float it on exchanges like the Aim or on
local exchanges in Hungary, Romania or Slovenia.
o Look into re-arranging the company asset's via a possible IPO for
Euro Hungary, and Euro Romania, in the local markets, or the AIM in
London.
o Implement cash management policies with the assistance of a new CFO.
o Create efficient cash flow management to eliminate cash volatility
in the Group level.
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3, Xxxxxx Xxxxx St. Tel-Aviv 64731, Tel: x000 0 0000000, Fax: x000 0 0000000, 1
E-mail: xxx.x@xxxxxxxxx.xx.xx xxx.xxxxxxxxx.xx.xx
[LOGO] Cukierman & Co.
Investment House Ltd.
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o Aggressively seek opportunities which will enable the company to
realize both organic and non-organic growth.
o Analyze peer groups and competition in Hungary and neighboring
countries.
o Enhance the balance sheet items by acquiring tangible and non
tangible assets in areas which are Telecom related. This will
include expansion into countries, outside where current operation
lies. Austria, being central to the region may be one such country
we would like to focus on. Others may include the USA or Israel, for
their technology innovation.
o Allow for an efficient deployment of the Company's assets.
o Focus on profitable segments, and develop new products via potential
acquisitions of intellectual properties (for example VOIP).
o Recommendation on how to create market awareness for the Company's
products and services.
o Recommendation on how to create market awareness for the company's
shares in accordance with SEC rules and regulations.
o Recommendation on how to retain PR companies, market makers and
institutions as long term investors with the company.
In short, we will advise to implement measurements to enhance shareholders
wealth.
The above list is by no mean complete. It only provides you with an
understanding of the scope of the work that we will be engaged in. A
restructuring plan can be in the neighborhood of 30-50 pages and can take a few
weeks, as it needs to cover all the aspects mentioned above. We will in due
course, send you a detailed proposal with time line and a budget.
Yours truly,
Xxxx Xxxxxxxxx
Managing Director
Cukierman & Co. Consulting Ltd.
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3, Xxxxxx Xxxxx St. Tel-Aviv 64731, Tel: x000 0 0000000, Fax: x000 0 0000000, 2
E-mail: xxx.x@xxxxxxxxx.xx.xx xxx.xxxxxxxxx.xx.xx
