REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of
July 21, 2005 by and among Euroweb International Corp., a Delaware corporation
(the "Company"), and the person whose name appear on the signature page attached
hereto (the "Holder").
WHEREAS, pursuant to a Sale and Purchase Agreement dated July 21,
2005 (the "Securities Purchase Agreement") between the Company and Euroweb
Internet Szolgaltato Rt on one hand, and the Holder and Marivaux Investments
Limited (the "Vendor") on the other hand, the Company is acquiring shares in
Navigator Informatika Uzleti Szolgaltato es Kereskedelmi Reszvenytarsasag
("Navigator") from the Holder in consideration for 441,566 shares (the "Shares")
of common stock of the Company to be issued to the Holder;
WHEREAS, pursuant to the terms of and in order to induce the Holder
to enter into the Securities Purchase Agreement, the Company and the Holder have
agreed to enter into this Agreement; and
WHEREAS, it is intended by the Company and the Holder that this
Agreement shall become effective immediately upon the acquisition by the Holder
of the Shares;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Company hereby agrees as follows:
1. Registration Rights.
a. Piggyback Registration. If the Company at any time proposes
to register any of its securities under the Securities Act of 1933, as amended
(the "1933 Act") (other than pursuant to a registration statement filed on Form
S-8 or other comparable form) ("Company Registration"), the Company shall
include in such registration statement the Shares (the Shares are hereinafter
referred to collectively as the "Registrable Securities"). Provided, however,
that if, at any time after giving such written notice of the Company's intention
to register any of the Holder's Registerable Securities and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay the Company Registration, the Company may give written notice of such
determination to the Holder and thereupon shall be relieved of its obligation
under this Section 1(a) to register any Registerable Securities issued or
issuable in connection with such registration (but not from its obligation to
pay registration expenses in connection therewith or to register the
Registerable Securities in a subsequent registration); and in the case of a
determination to delay a registration shall thereupon be permitted to delay
registering any Registerable Securities for the same period as the delay in
respect of securities being registered for the Company's own account.
b. Required Filing. The Company shall prepare and file within
75 days from the date of Closing (the "Filing Date") a registration statement
(the "Resale Registration Statement") covering the resale of the Shares. The
Company shall cause the Resale Registration Statement to be declared effective
by the Securities and Exchange Commission ("SEC") as soon as possible following
the Filing Date but in no event later than 150 days following the Filing Date.
c. Timing. If (i) the Resale Registration Statement is not
filed by the Filing Date; (ii) the Resale Registration Statement is not declared
effective within 150 days of the Filing Date for reasons attributable to the
Company; or (iii) the Holder is unable to utilize a Registration Statement for a
period of time in excess of 30 calendar days at any time following the date as
of which the SEC initially declared such registration statement effective (the
"Effective Date") for reasons attributable to the Company (each of (i), (ii) and
(iii) a "Failure"), then the Company will make payments to the Holder in such
amounts and at such times as shall be determined pursuant to this Section 1(c)
as full relief for the damages to the Holder. The Company shall pay to each
Holder an amount equal to the value (the "Value") of the Transferable Euroweb
Shares, as defined in Article II of the Securities Purchase Agreement multiplied
by the Applicable Percentage (as defined below) times the number of months
(prorated for partial months) during which a Failure has occurred or is
continuing, provided, however, that there shall be excluded from such period any
delays which are solely attributable to changes required by the Holder in the
Registration Statement with respect to information relating to the Holders. The
term "Applicable Percentage" means one hundredth (.01). For example, if the
Registration Statement is filed one (1) month after the Filing Date, the Company
would pay $30,000 if the Value is equal to $3,000,000.
2. Cooperation with Company. Holder will cooperate with the Company
in all respects in connection with this Agreement, including, timely supplying
all information reasonably requested by the Company and executing and returning
all documents reasonably requested in connection with the registration and sale
of the Registerable Securities.
3. Registration Procedures. If and whenever the Company is required
by any of the provisions of this Agreement to effect the registration of any of
the Registerable Securities under the 1933 Act, the Company shall (except as
otherwise provided in this Agreement), as expeditiously as possible:
a. prepare and file with the SEC a registration statement and
cause such registration statement to become effective and remain effective until
all the Registerable Securities are sold or become capable of being publicly
sold without registration under the 1933 Act.
b. prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the 1933 Act with respect to the sale or other
disposition of all securities covered by such registration statement whenever
the Holder shall desire to sell or otherwise dispose of the same (including
prospectus supplements with respect to the sales of securities from time to time
in connection with a registration statement pursuant to Rule 415 of the SEC);
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c. furnish to the Holder such numbers of copies of a summary
prospectus or other prospectus, including a preliminary prospectus or any
amendment or supplement to any prospectus, in conformity with the requirements
of the 1933 Act, and such other documents, as such Holder may reasonably request
in order to facilitate the public sale or other disposition of the securities
owned by such Holder;
d. register and qualify the securities covered by such
registration statement under such other securities or blue sky laws of such
jurisdictions as each Holder shall reasonably request, and do any and all other
acts and things which may be necessary or advisable to enable such Holder to
consummate the public sale or other disposition in such jurisdiction of the
securities owned by such Holder, except that the Company shall not for any such
purpose be required to qualify to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified or to file therein any general
consent to service of process;
e. list such securities on any securities exchange on which
any securities of the Company is then listed, if the listing of such securities
is then permitted under the rules of such exchange;
f. enter into and perform its obligations under an
underwriting agreement, if the offering is an underwritten offering, in usual
and customary form, with the managing underwriter or underwriters of such
underwritten offering;
g. as soon as practicable after becoming aware of such event,
notify the Holder at any time when a prospectus relating thereto covered by such
registration statement is required to be delivered under the 1933 Act, of the
happening of any event of which it has knowledge as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing and promptly (within
5 days) prepare a supplement or amendment to the registration statement to
correct such untrue statement or omission and deliver such number of copies of
such supplement or amendment to the Holder as the Holder may reasonably request;
h. furnish, at the request of the Holder on the date such
Registerable Securities are delivered to the underwriters for sale pursuant to
such registration or, if such Registerable Securities are not being sold through
underwriters, on the date the registration statement with respect to such
Registerable Securities becomes effective, (i) an opinion, dated such date, of
the counsel representing the Company for the purpose of such registration,
addressed to the underwriters, if any, and to the Holder, covering such legal
matters with respect to the registration in respect of which such opinion is
being given as the Holder of such Registerable Securities may reasonably request
and are customarily included in such an opinion and (ii) letters, dated,
respectively, (1) the effective date of the registration statement and (2) the
date such Registerable Securities are delivered to the underwriters, if any, for
sale pursuant to such registration from a firm of independent certified public
accountants of recognized standing selected by the Company, addressed to the
underwriters, if any, and to the Holder, covering such financial, statistical
and accounting matters with respect to the registration in respect of which such
letters are being given as the Holder of such Registerable Securities may
reasonably request and are customarily included in such letters; and
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i. prevent the issuance of a stop order or other suspension of
effectiveness of a Registration Statement, and, if such order, is issued, to
obtain the withdrawal of such order at the earliest practicable time.
4. Restrictions on Transfer of Registerable Securities. The Holder
hereby agrees that from the Closing Date to and including a date eighteen months
thereafter (the "Lock-Up Period"), the Holder will not sell, pledge, transfer,
hypothecate or otherwise dispose of any capital stock of the Company, any rights
to acquire capital stock of the Company or any capital stock which the Holder
has a right to acquire; provided, however, (i) the Holder will be permitted to
sell up to 150,000 shares of common stock of the Company each month commencing
on the Effective Date of the Resale Registration Statement during the Lock-Up
Period; (ii) the Holder will be permitted to sell its shares in connection with
an offer made to all stockholders of the Company or any merger, consolidation or
similar transaction involving the Purchaser, and (iii) the Holder will be
permitted to sell Shares with the prior written consent of the Company.
5. Expenses. All expenses incurred in any registration of the
Holder's Registerable Securities under this Agreement shall be paid by the
Company, including, without limitation, printing expenses, fees and
disbursements of counsel for the Company, expenses of any audits to which the
Company shall agree or which shall be necessary to comply with governmental
requirements in connection with any such registration, all registration and
filing fees for the Holder's Registerable Securities under federal and State
securities laws, and expenses of complying with the securities or blue sky laws
of any jurisdictions pursuant to Section 3(h)(i); provided, however, the Company
shall not be liable for (a) any discounts or commissions to any underwriter; (b)
any stock transfer taxes incurred with respect to Registerable Securities sold
in the Offering or (c) the fees and expenses of counsel for any Holder, provided
that the Company will pay the costs and expenses of Company counsel when the
Company's counsel is representing any or all selling security holders.
6. Indemnification. In the event any Registerable Securities are
included in a registration statement pursuant to this Agreement:
a. Company Indemnity. Without limitation of any other
indemnity provided to the Holder, either in connection with the Securities
Purchase Agreement or otherwise, to the extent permitted by law, the Company
shall indemnify and hold harmless the Holder, the affiliates, officers,
directors, employees, agents, counsel, representatives, and partners of each
Holder, any underwriter (as defined in the ▇▇▇▇ ▇▇▇) for such Holder, and each
person, if any, who controls such Holder or underwriter (within the meaning of
the 1933 Act or the Securities Exchange Act of 1934 (the "Exchange Act"),
against any losses, claims, damages, liabilities (joint or several) or expenses
to which they may become subject under the 1933 Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any
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alleged untrue statement of a material fact contained in a Registration
Statement including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, (iii) any violation or alleged
violation by the Company of the 1933 Act, the Exchange Act, or (iv) any state
securities law or any rule or regulation promulgated under the 1933 Act, the
Exchange Act or any state securities law, and the Company shall reimburse each
such Holder, affiliate, officer, director, employee, agent, counsel,
representative or partner, underwriter or controlling person for any legal or
other expenses incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
Company shall not be liable to any Holder in any such case for any such loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon a violation which occurs solely in reliance upon and in conformity
with written information furnished expressly for use in connection with such
registration by any such Holder or any other officer, director or controlling
person thereof.
▇. ▇▇▇▇▇▇ Indemnity. The Holder shall indemnify and hold
harmless the Company, its affiliates, its counsel, officers, directors and
representatives, any underwriter (as defined in the ▇▇▇▇ ▇▇▇) and each person,
if any, who controls the Company or the underwriter (within the meaning of the
▇▇▇▇ ▇▇▇) against liabilities (joint or several) to which they may become
subject under the 1933 Act, the Exchange Act or any state securities law,
insofar as based upon such losses, claims, damages or liabilities (or actions
and respect thereof) arise out of or are solely based upon any statements or
information provided by such Holder to the Company expressly for use in a
Registration Statement relating to the offer or sale of Registerable Securities
and the Holder shall reimburse the Company or such affiliate, counsel, officer,
director, representative or underwriter for any legal or other expenses incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability or action provided that a Holder shall be liable under this
Section 6(b) for only that amount as shall not exceed the net proceeds actually
received by such Holder as a result of the sale of Registrable Securities
pursuant to such Registration Statement.
c. Notice; Right to Defend. Promptly after receipt by an
indemnified party under this Section 6 of notice of the commencement of any
action (including any governmental action), such indemnified party shall, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 8 deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in and if
the indemnifying party agrees in writing that it will be responsible for any
costs, expenses, judgments, damages and losses incurred by the indemnified party
with respect to such claim, jointly with any other indemnifying party similarly
noticed, to assume the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an indemnified party shall have the right to
retain its own counsel, with the fees and expenses to be paid by the
indemnifying party, if the indemnified party reasonably believes that
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall relieve such indemnifying party of any liability to the indemnified
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party under this Agreement only if and to the extent that such failure is
prejudicial to its ability to defend such action, and the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Agreement.
d. Contribution. If the indemnification provided for in this
Agreement is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and the relative fault of the indemnified
party on the other hand in connection with the statements or omissions which
resulted in such loss, liability, claim, damage or expense as well as any other
relevant equitable considerations. The relative fault of the indemnifying party
and the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. Notwithstanding the foregoing, the amount any Holder
shall be obligated to contribute pursuant to the Agreement shall be limited to
an amount equal to the net proceeds to such Holder of the Registerable
Securities sold pursuant to the Registration Statement which gives rise to such
obligation to contribute (less the aggregate amount of any damages which the
Holder has otherwise been required to pay in respect of such loss, claim,
damage, liability or action or any substantially similar loss, claim, damage,
liability or action arising from the sale of such Registerable Securities).
e. Survival of Indemnity. The indemnification provided by this
Agreement shall be a continuing right to indemnification and shall survive the
registration and sale of any Registerable Securities by any person entitled to
indemnification hereunder and the expiration or termination of this Agreement.
7. Remedies.
a. Time is of Essence. The Company agrees that time is of the
essence of each of the covenants contained herein and that, in the event of a
dispute hereunder, this Agreement is to be interpreted and construed in a manner
that will enable the Holders to sell its Registerable Securities as quickly as
possible after the Holder has indicated to the Company that it desires its
Registerable Securities to be registered. Any delay on the part of the Company
not expressly permitted under this Agreement, whether material or not, shall be
deemed a material breach of this Agreement.
b. Remedies Upon Default or Delay. The Company acknowledges
the breach of any part of this Agreement may cause irreparable harm to Holder
and that monetary damages alone may be inadequate. The Company therefore agrees
that the Holdersshall be entitled to injunctive relief or such other applicable
remedy as a court of competent jurisdiction may provide. Nothing contained
herein will be construed to limit a Holder's right to any remedies at law,
including recovery of damages for breach of any part of this Agreement.
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8. Notices.
a. All communications under this Agreement shall be in writing
and shall be mailed by first class mail, postage prepaid, or telegraphed or
telexed with confirmation of receipt or delivered by hand or by overnight
delivery service,
b. If to the Company, at:
Euroweb International Corp.
▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
or at such other address as it may have furnished
in writing to the Holders of Registerable Securities at the time
outstanding, or
c. if to the Holder, at:
Graeton Holdings Limited
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇; ▇▇▇.▇▇. 160814
d. Any notice so addressed, when mailed by registered or
certified mail shall be deemed to be given three days after so mailed, when
telegraphed or telexed shall be deemed to be given when transmitted, or when
delivered by hand or overnight shall be deemed to be given when delivered.
9. Successors and Assigns. Except as otherwise expressly provided
herein, this Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of the Company and the Holders.
10. Amendment and Waiver. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, but only with the
written consent of the Company and the Holder; provided, however, that no such
amendment or waiver shall take away any registration right of the Holder of
Registerable Securities or reduce the amount of reimbursable costs to any Holder
of Registerable Securities in connection with any registration hereunder without
the consent of the Holder; further provided, however, that without the consent
of the Holder of Registerable Securities, the Holder may from time to time enter
into one or more agreements amending, modifying or waiving the provisions of
this Agreement if such action does not adversely affect the rights or interest
of the Holder of Registerable Securities. No delay on the part of any party in
the exercise of any right, power or remedy shall operate as a waiver thereof,
nor shall any single or partial exercise by any party of any right, power or
remedy preclude any other or further exercise thereof, or the exercise of any
other right, power or remedy.
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11. Counterparts. One or more counterparts of this Agreement may be
signed by the parties, each of which shall be an original but all of which
together shall constitute one and same instrument.
12. Governing Law. This Agreement shall be construed in accordance
with and governed by the internal laws of the State of New York, without giving
effect to conflicts of law principles.
13. Invalidity of Provisions. If any provision of this Agreement is
or becomes invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not be affected thereby.
14. Headings. The headings in this Agreement are for convenience of
reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Agreement as of the date first written above.
HOLDER COMPANY
GRAETON HOLDINGS LIMITED EUROWEB INTERNATIONAL CORP.
By: By:
---------------------------- ----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇
Title: attorney-in-fact Title: Chief
Executive Officer
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