0001104659-04-017344.txt : 20040621 0001104659-04-017344.hdr.sgml : 20040621 20040621094738 ACCESSION NUMBER: 0001104659-04-017344 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20040621 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Vitonas Investments LTD CENTRAL INDEX KEY: 0001293989 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: BUSINESS PHONE: 36-1-451-4829 MAIL ADDRESS: STREET 1: KLAPKA U. 11 CITY: BUDAPEST STATE: K5 ZIP: H-1134 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: EUROWEB INTERNATIONAL CORP CENTRAL INDEX KEY: 0000905428 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 133696015 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-57093 FILM NUMBER: 04871748 BUSINESS ADDRESS: STREET 1: VAROSMAJOR UTCA 13 STREET 2: VAROSMAJOR UTCA 13 CITY: BUDAPEST STATE: K5 ZIP: 1122 BUSINESS PHONE: 36-1-22-44-000 MAIL ADDRESS: STREET 1: EUROWEB INTERNATIONAL CORP STREET 2: VAROSMAJOR UTCA 13 CITY: BUDAPEST STATE: K5 ZIP: 1122 FORMER COMPANY: FORMER CONFORMED NAME: HUNGARIAN TELECONSTRUCT CORP DATE OF NAME CHANGE: 19950207 SC 13D 1 a04-7072_1sc13d.htm SC 13D

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. __)

EUROWEB INTERNATIONAL CORP.

(Name of Issuer)

Common Stock

(Title of Class of Securities)

298801101

(CUSIP Number)

Gordon Bajnai

H-1134 Budapest

Klapka u. 11, Hungary

+36-1-451-4829

COPY TO:

Thomas J. Egan, Jr.

Baker & McKenzie

815 Connecticut Avenue, N.W.

Washington, DC 20006

(202) 452-7000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

June 9, 2004

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

Page 1 of 9

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

Page 2 of 9

CUSIP No. 298801101

1.		Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
		Vitonas Investments Limited
2.		Check the Appropriate Box if a Member of a Group (See Instructions)				(a)	[ ]
						(b)	[ X ]
3.		SEC Use Only


4.		Source of Funds (See Instructions)
		SC, OO
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)					[ ]
6.		Citizenship or Place of Organization
		Cyprus


	Number of Shares Beneficially Owned by Each Reporting Person With		7.	Sole Voting Power
					522,054
			8.	Shared Voting Power
					0
			9.	Sole Dispositive Power
					522,054
			10.	Shared Dispositive Power
					0
11.		Aggregate Amount Beneficially Owned by Each Reporting Person
					522,054
12.		Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares					[X]
13.		Percent of Class Represented by Amount in Row (11)
		9.8 percent
14.		Type of Reporting Person

		OO

SEE INSTRUCTIONS BEFORE FILLING OUT

Page 3 of 9

CUSIP No. 298801101

Item 1. Security and Issuer.

This statement on Schedule 13D (“Schedule 13D”) relates to the common stock, par value $.001 per share, (the “Common Stock”) of EuroWeb International Corp. (“EuroWeb”). EuroWeb’s principal executive offices are located at 1122 Budapest, Varosmajor utca 13. Hungary.

Item 2. Identity and Background.

This Schedule 13D is filed by Vitonas Investments Limited (“Vitonas”), a limited liability company, incorporated in Cyprus. The principal business of Vitonas is asset holding. The registered office of Vitonas is situated at Chrysanthou Mylona, 3., P.C. 3030, Limassol, Cyprus.

The name, business address, present principal occupation, and citizenship of each executive officer and director of Vitonas are set forth on Appendix A hereto, which is incorporated herein by reference.

During the last five years, neither Vitonas, nor to the best of its knowledge, any of its executive officers or directors, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which he was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration.

Pursuant to the Sale and Purchase Agreement between Vitonas, Certus KFT, Rumed 2000 KFT, as the shareholders of Elender Business Communications Services Ltd., a Hungarian Limited Liability Corporation, (“Elender”) and EuroWeb, dated February 23, 2004 (“Sale and Purchase Agreement”), EuroWeb purchased all of the issued and outstanding shares of the capital stock of Elender from Vitonas, Certus KFT and Rumed 2000 KFT in exchange for cash in the amount of USD $6.5 million and 677,201 newly issued shares of the common stock of EuroWeb. As such, in exchange for 19,997 Class “A” ordinary shares and 3 Class B preference shares of Elender (“Elender Shares”), Vitonas received cash in the amount of USD $ 5,010,850 and 522,054 shares of common stock of EuroWeb (“EuroWeb Shares”). Together with the newly issued 677,201 EuroWeb shares, the number of issued and outstanding shares of EuroWeb has increased from 4,665,332 to 5,342,533.

References to, and descriptions of, the Sale and Purchase Agreement as set forth above in this Item 3 are qualified in their entirety by reference to the copy of the Sale and Purchase Agreement attached to this Schedule 13D as Exhibit 1, and is incorporated in this Item 3 in its entirety where such references and descriptions appear.

Item 4. Purpose of Transaction.

Vitonas acquired the EuroWeb Shares as partial consideration for the sale of its Elender Shares pursuant to the Sale and Purchase Agreement as described in Item 3, which is incorporated in this Item 4 by reference. Vitonas, Certus KFT and Rumed 2000 KFT acquired 677,201 newly issued EuroWeb

Page 4 of 9

CUSIP No. 298801101

shares pursuant to the Sale and Purchase Agreement. As a result, the number of issued and outstanding shares of EuroWeb has increased from 4,665,332 to 5,342,533.

Pursuant to the Sale and Purchase Agreement, EuroWeb undertakes to convene a shareholders’ meeting and use its best endeavours to cause the shareholders to appoint and maintain at least one board member nominated by Vitonas, Certus KFT and Rumed 2000 FT in the board of directors of EuroWeb.

Pursuant to the Pledge and Escrow Agreement, dated as of June 1, 2004 (“Escrow Agreement”), among EuroWeb, Vitonas, Certus KFT and Rumed 2000 KFT, EuroWeb granted Vitonas, Certus KFT and Rumed 2000 KFT a security interest in 248,122 shares of common stock of EuroWeb in order to secure a loan outstanding from Elender to Vitonas, Certus KFT and Rumed 2000 KFT, which Elender will be obliged to repay following the closing of the transaction pursuant to the terms of the Sale and Purchase Agreement. Vitonas has a security interest in 191,277 shares of EuroWeb’s common stock as a result of the Escrow Agreement (“Pledged Shares”). If Elender fails to make the required repayment under the outstanding loan, Vitonas will be entitled to receive the Pledged Shares. Vitonas disclaims beneficial ownership of the Pledged Shares.

Pursuant to the Sale and Purchase Agreement Vitonas, CERTUS KFT and Rumed 2000 KFT will have the right to appoint and maintain at least one board member in the board of directors of Elender even after the closing of the transaction as long as the loan outstanding from Elender to Vitonas, Certus KFT and Rumed 2000 KFT is fully repaid.

References to, and descriptions of, the Sale and Purchase Agreement and the Escrow Agreement as set forth above in this Item 4 are qualified in their entirety by reference to the copy of the Sale and Purchase Agreement and the Escrow Agreement attached to this Schedule 13D as Exhibit 1 and Exhibit 2, respectively, and are incorporated in this Item 4 in its entirety where such references and descriptions appear.

Except as described herein, Vitonas has no plans or proposals which relate to or would result in the types of transactions set forth in subparagraphs (a) through (j) of Item 4.

Item 5. Interest in Securities of the Issuer.

a) – b) As of the date of this Schedule 13D, Vitonas beneficially owns 522,054 shares of Common Stock. In aggregate, these shares constitute 9.8% of the outstanding shares of Common Stock including the newly issued shares of Common Stock of EuroWeb. To the best knowledge of Vitonas, no director or executive officer of Vitonas owns any shares of the Common Stock.

The number of shares of the Common Stock to which there is sole power to vote or to direct the vote, shared power to vote or to direct the vote, sole power to dispose or to direct the disposition, or shared power to dispose or direct the disposition, is set forth in the cover pages hereof and such information is incorporated herein by reference.

The information set forth in Items 3 and 4 is incorporated in this Item 5 by reference.

Page 5 of 9

CUSIP No. 298801101

c) Other than as set forth in Item 5(a) and (b), to the best of Vitonas’s knowledge as of the date of this Schedule 13D, (1) neither Vitonas nor any of its subsidiaries or affiliates nor any of its executive officers or directors, beneficially owns any shares of the Common Stock, and (2) there have been no transactions in shares of the Common Stock effected during the past 60 days by Vitonas, its subsidiaries and affiliates, or its executive officers or directors.

d) No other person is known by Vitonas to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, shares of the Common Stock.

e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

The information set forth in Items 3 and 4 is incorporated in this Item 6 by reference. Copies of the Sale and Purchase Agreement and Escrow Agreement are attached to this Schedule 13D as Exhibit 1 and Exhibit 2, respectively.

Pursuant to the Registration Rights Agreement, dated as of June 1, 2004 (‘Registration Rights Agreement”), among EuroWeb, Vitonas, Certus KFT and Rumed 2000 KFT, EuroWeb shall prepare and file within 30 days from the date of Closing, as defined in the Sale and Purchase Agreement (the “Filing Date”) a registration statement (the “Resale Registration Statement”) covering the resale of the newly issued shares of Common Stock of EuroWeb to Vitonas, Certus KFT and Rumed 2000 KFT. EuroWeb 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 120 days following the Filing Date.

Pursuant to the Registration Rights Agreement Vitonas, Certus KFT and Rumed 2000 KFT undertook that from the Closing to and including a date twelve months thereafter (the “Lock-Up Period”), they will not sell, pledge, transfer, hypothecate or otherwise dispose of any capital stock of EuroWeb, any rights to acquire capital stock of EuroWeb or any capital stock which Vitonas, Certus KFT and Rumed 2000 KFT have a right to acquire; provided, however, (i) Vitonas, Certus KFT and Rumed 2000 KFT, in the aggregate, will be permitted to sell up to 150,000 shares of common stock of EuroWeb each month commencing on the effective date of the Resale Registration Statement during the Lock-Up Period; (ii) Vitonas, Certus KFT and Rumed 2000 KFT will be permitted to sell their shares in connection with an offer made to all stockholders of EuroWeb or any merger, consolidation or similar transaction involving EuroWeb, (iii) Vitonas, Certus KFT and Rumed 2000 KFT will be permitted to sell their shares without limitation in transactions that are exempt from registration and outside of the stock exchange, (iv) Vitonas, Certus KFT and Rumed 2000 KFT will be permitted to sell their shares with the prior written consent of EuroWeb.

References to, and descriptions of, the Registration Rights Agreement as set forth above in this Item 6 are qualified in their entirety by reference to the copy of the Registration Rights Agreement attached to this Schedule 13D as Exhibit 3.

Page 6 of 9

CUSIP No. 298801101

To the best of Vitonas’s knowledge, except as described in this Schedule 13D, there are at present no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 and between any person with respect to any securities of EuroWeb.

Item 7. Material to be filed as Exhibits.

	The following are attached as exhibits:

	Exhibit Description

	1.	Sale and Purchase Agreement, dated February 23, 2004.
	2.	Pledge and Escrow Agreement, dated as of June 1, 2004.
	3.	Registration Rights Agreement, dated as of June 1, 2004.

Page 7 of 9

CUSIP No. 298801101

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

June 17, 2004

VITONAS INVESTMENTS LIMITED

a Cyprus limited liability company

/s/ Gordon Bajnai
By:	Gordon Bajnai
Its:	Director

/s/ Gyula Gansperger
By:	Gyula Gansperger
Its:	Director

Page 8 of 9

CUSIP No. 298801101

Appendix A

Directors of Vitonas Investments Limited:

Gordon Bajnai
Business Address:		Klapka u. 11., Budapest, H-1134, Hungary
Citizenship:		Hungarian
Present Principal Occupation:		Chief Executive Officer of Wallis Befektetesi Gazdasagi Tanacsado Es Vagyonkezelo Rt., “Wallis Rt”. Wallis Rt., is a 99.9% shareholder of Vitonas

Gyula Gansperger
Business Address:		Klapka u. 11., Budapest, H-1134, Hungary
Citizenship:		Hungarian
Present Principal Occupation:		Deputy Chief Executive Officer of Wallis Rt.

Tamas Onody
Business Address:		Klapka u. 11., Budapest, H-1134, Hungary
Citizenship:		Hungarian
Present Principal Occupation:		Treasurer

Tibor Veres
Business Address:		Klapka u. 11., Budapest, H-1134, Hungary
Citizenship:		Hungarian
Present Principal Occupation:		President of Wallis Rt.

Maria Elia
Business Address:		Chrysanthou Mylona, 3., P.C. 3030, Limassol, Cyprus
Citizenship:		Cypriot
Present Principal Occupation:		Financial Adviser

Panayiota Constantinou
Business Address:		Chrysanthou Mylona, 3., P.C. 3030, Limassol, Cyprus
Citizenship:		Cypriot
Present Principal Occupation:		Financial Adviser

Company Secretary:

Meritservus Limited
Principal Business Office:		Chrysanthou Mylona, 3., Limassol, Cyprus
Principal Business:		Administrative Service Provider Company of Deloitte and Touche
State of Organization:		Cyprus

Page 9 of 9

EX-1 2 a04-7072_1ex1.htm EX-1

Exhibit 1

EXECUTION COPY

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 ÜZLETI KOMMUNIKÁCIÓS ÉS SZOLGÁLTATÓ

RÉSZVÉNYTÁRSASÁG

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

SALE AND PURCHASE AGREEMENT dated as of 23 February 2004 by and between

1. VITONAS INVESTMENTS LIMITED (registered seat: Chrysanthou Mylona 3, P.C. 3030 Limassol, Cyprus; registration number: HE 111437) (“Vitonas”)

2. CERTUS KFT. (registered seat: H-1025 Budapest, Hungary, Vihorlát u. 10.; registration number: Cg. 01-09-169062) (“Certus”)

3. RUMED 2000 KFT. (registered seat: H-1056 Budapest, Hungary, Irányi u. 1.; registration number: 01-09-691194) (“Rumed”)

and

4. EUROWEB INTERNATIONAL CORP. (business address: 1065 Avenue of the Americas, 21^st Floor, New York, NY 10018, USA; 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 Üzleti Kommunikációs és Szolgáltató Részvénytársaság (in English: Elender Business Communications Services Ltd. (registered seat: H-1138 Budapest, Hungary, Váci út 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 Üzleti Kommunikációs és Szolgáltató Részvénytársaság 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) 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 Részvénytársaság (registered office: H-1054 Budapest, Hungary, Akadémia 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.

“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 Szolgáltató Részvénytársaság (registered seat: H-1122 Budapest, Hungary, Városmajor 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 (“Közháló”) 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.

“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 Befektetési, Gazdasági Tanácsadó és Vagyonkezelõ Részvénytársaság (registered office: H-1134 Budapest, Hungary, Klapka utca 11.; 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.

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 this 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 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;

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.

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 INDEX.HU 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.

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 INDEX.HU Rt. (registered seat: H-1134 Budapest, Hungary, Klapka u. 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 INDEX.HU Rt. The sale price of the shareholding interest in INDEX.HU 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.

(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) INDEX.HU Rt. Following the execution of the sale of the shareholding interest in INDEX.HU 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 INDEX.HU Rt..

(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.

(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.

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 9^th 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.

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

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: “készfizetõ kezesség”) 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.

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;

(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.

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: H-1134 Budapest, Klapka u. 11.
		Fax: +36-1-451-4981
		Attention: Bajnai Gordon
		With a copy to: Forgó, Varga és Társai Ügyvédi Iroda
		Address: 1123 Alkotás u. 17-19.
		Fax: +36-1-214-0078
		Attention: Dr. Forgó Zoltán


(b)		If to Certus Kft, at:

		Address: 1025 Budapest, Vihorlát u. 10.
		Fax: +36-1-325-7819
		Attention: Lepp Judit
		With a copy to: Forgó, Varga és Társai Ügyvédi Iroda
		Address: 1123 Budapest, Alkotás u. 17-19.
		Fax: +36-1-214-0078
		Attention: Dr. Forgó Zoltán


(c)		If to Rumed 2000 Kft, at:

		Address: H-1122 Budapest, Kissvábhegyi u. 4-6.

		With a copy to: Forgó, Varga és Társai Ügyvédi Iroda
		Address: 1123 Budapest, Alkotás u. 17-19.
		Fax: +36-1-214-0078
		Attention: Dr. Forgó Zoltán

(d)		If to Euroweb International Corp., at:

		Address: H-1122 Budapest, Városmajor u. 13.
		Fax: 36-1-889-7100
		attention: Csaba Törõ
		with a copy to: Szabó, Kõvári, Tercsák és Társai Ügyvédi Iroda
		Address: H-1132 Budapest, Váci út 20.
		Fax: 36-1-451-8599
		Attention: Dr. Szabó Tamás

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 Modification This 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.

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):					Bajnai Gordon
Signature:	/s/ Bajnai Gordon
Name (print):					Gyula Gansperger
Signature:				/s/ Gyula Gansperger

CERTUS KFT
Name (print):					Lepp Judit
Signature:			/s/ Lepp Judit


RUMED 2000 KFT
Name (print):					DR. Kokane DR. Ruzsovics Agnes
Signature:		/s/ DR. Kokane DR. Ruzsovics Agnes

EUROWEB INTERNATIONAL CORP.
Name (print):					Toro Csaba
Signature:				/s/ Toro Csaba

EX-2 3 a04-7072_1ex2.htm EX-2

Exhibit 2

EXECUTION COPY

PLEDGE AND ESCROW AGREEMENT

PLEDGE AND ESCROW AGREEMENT, dated as of June 1, 2004, by and among Euroweb International Corp., a Delaware corporation (business address: 1065 Avenue of the Americas 21^st floor, New York, NY 10018, USA; IRS NUMBER: 133696015) (“Euroweb”), Vitonas Investments Limited (registered seat: Chrysanthou Mylona 3, P. C. 3030 Limassol, Cyprus; registration number: HE 111437) (“Vitonas”), Certus Kft. (registered seat: H-1025 Budapest, Hungary, Vihorlát u. 10.; registration number: Cg. 01-09-169062) (“Certus”), RUMED 2000 Kft (registered seat: H-1056 Budapest, Hungary, Irányi u. 1.; registration number: 01-09-691194) (“RUMED”) (Vitonas, Certus and RUMED are hereinafter collectively referred to as the “Sellers”) and Concorde Securities Ltd. (registered seat: H-1123 Budapest, Hungary, Alkotás u. 50.; registration number: 01-10-043521) as escrow agent (the “Escrow Agent”).

Euroweb and the Sellers have entered into a Sale and Purchase Agreement dated as of February 23, 2004 hereof (the “Sale and Purchase Agreement”), whereby Euroweb has agreed to purchase, and the Sellers have agreed to sell, all of the issued and outstanding shares of Elender Üzleti Kommunikációs Részvénytársaság (“Elender”).

The parties desire to provide for the grant by Euroweb to the Sellers of a security interest in 248,122 shares of common stock of Euroweb in order to secure the Non-transferable Shareholders Loan, as defined in the Sale and Purchase Agreement, payable by Elender to the Sellers as set forth in Section 9.1 of the Sale and Purchase Agreement (the “Secured Obligation”) to arise and be effective on and after the Closing Date (as defined in the Sale and Purchase Agreement). The terms and conditions of this Agreement and any obligations arising therefrom shall be effective as from the Closing Date.

The parties therefore agree as follows:

1. To secure the complete and timely performance by Elender of the Secured Obligation, Euroweb hereby pledges to the Sellers, and grants to the Sellers a first priority security interest in the shares of stock of Euroweb set forth on Schedule A hereto. To perfect such pledge, such shares of stock, as evidenced by a properly issued and countersigned stock certificate issued and registered in Euroweb’s name, and accompanied by a duly executed stock power therefor endorsed in blank and accompanying board of directors resolution of Euroweb authorizing such endorsement and delivery, are being delivered to the Escrow Agent on the Closing Date, and receipt thereof by the Escrow Agent is notified in writing to the Sellers forthwith. Escrow Agent further acknowledges that it holds possession of the Pledged Securities for the benefit of Sellers in accordance with Section 9-313(c) of the New York

Uniform Commercial Code. The term “Pledged Securities,” as used herein, means the shares, certificate and stock power so delivered, plus any additional money, property or securities delivered to the Escrow Agent as additional security pursuant to Section 2.

2. Pledgor does hereby create a further such security interest in all dividends and distributions that may hereafter be declared or paid upon the Pledged Securities as well as any securities issued in subdivision or combination thereof, or in substitution therefor, to be received by the Escrow Agent and held as additional security for the Secured Obligation. Upon receipt of same, Euroweb shall forthwith deliver to the Escrow Agent any and all of such dividends, distributions and securities, to be held by the Escrow Agent as though the same were Pledged Securities, in accordance with the terms of this Agreement.

3. Euroweb hereby represents, warrants and covenants that the Pledged Securities are, and will be while on deposit hereunder, duly and validly issued and duly and validly pledged to Sellers in accordance with applicable law, and agrees to defend Sellers’ right, title, lien and security interest in and to the Pledged Securities against the claims and demands of all persons whomsoever. Euroweb also represents and warrants to Sellers that it has, and will have while the Pledged Securities are on deposit with the Escrow Agent hereunder, good title to all of the Pledged Securities, free and clear of all claims, mortgages, pledges, liens, encumbrances and security interests of every nature whatsoever; and that no consent or approval of any governmental or regulatory authority, or of any securities exchange, was or is necessary to the validity of this pledge that has not been obtained.

4. Euroweb and the Sellers hereby irrevocably appoint the Escrow Agent as escrow agent pursuant to the terms and conditions hereof. The Escrow Agent hereby agrees to act as escrow agent and to hold, safeguard and deliver the Pledged Securities pursuant to the terms and conditions hereof. The Escrow Agent’s duties hereunder shall cease upon its delivery of all of the Pledged Securities in accordance with this Agreement.

5. Upon receipt of notice of Elender’s default under the Non-transferable Shareholders Loan and Euroweb’s failure to make the required repayment under the Non-transferable Shareholders Loan as set forth in Section 9.1 of the Sale and Purchase Agreement, written instruction executed by each of Vitonas, Certusand RUMED shall be delivered to the Escrow Agent and Euroweb identifying the breach and requesting the Escrow Agent to deliver to the Sellers the Pledged Securities. Such collective written instruction shall be given (i) by telecopier (with receipt confirmed), provided that a copy is mailed (on the same date) by certified or registered mail, return receipt requested, postage prepaid, (ii) by hand delivery, (iii) by Express Mail, Federal Express or other reputable express delivery service (receipt requested), or (iv) by first class certified or registered mail, return receipt requested, postage

prepaid, in each case, to the Escrow Agent at its offices at Concorde Securities Ltd., Attn: Mihaly Boris, telecopier no. (+361) 489 2200 and to Euroweb at the address for notice set forth in the Sale and Purchase Agreement. Euroweb shall have five business (5) days from the receipt of such notice to seek a declaratory judgment or injunction from a court of competent jurisdiction to the effect that no default has occurred under the Non-transferable Shareholders Loan or that Euroweb has made the repayment as required by Section 9.1 of the Sale and Purchase Agreement (a “Court Order”). In the event Euroweb obtains a Court Order prior to the expiration of such five day period, Euroweb shall deliver a copy of the Court Order to both the Escrow Agent and the Sellers and the Escrow Agent shall not transfer the Pledged Securities to Sellers on the basis of the notice sent by Sellers to Escrow Agent. The issuance of a Court Order shall not preclude Sellers from giving notice of a subsequent breach of the Non-transferable Shareholders Loan. In the event Euroweb does not obtain a Court Order within such five day period, the Escrow Agent shall cause the Pledged Securities to be delivered to the Sellers in accordance with the collective written instructions of Sellers. Sellers shall thereafter be entitled to exercise any and all rights with respect to the Pledged Securities as a secured party including, without limitation, selling any or all of the Pledged Securities it being understood and agreed that the delivery of the Pledged Securities to Sellers shall not constitute a cure of any such default or payment in full of the obligation of Euroweb under the Non-Transferable Shareholders Loan and, notwithstanding the delivery of the Pledged Securities to Sellers, Sellers shall be entitled to exercise any and all remedies otherwise available to them as secured creditors. Notwithstanding the foregoing, any proceeds received from the sale of the Pledged Securities by the Sellers shall offset any amount owed in connection with the Non-Transferable Shareholders Loan. Euroweb acknowledges and agrees that it may not be possible for Sellers to sell the Pledged Securities other than by means of a private sale which may result in prices that are less favorable than could be achieved through a public sale. The Sellers agree to use a reasonable commercial manner in selling the Pledged Securities. Upon receipt of notice from Sellers that the Non-Transferable Shareholders Loan has been paid in full, the Escrow Agent shall deliver the Pledged Securities to Euroweb.

6. (a) The Escrow Agent undertakes to perform only such duties as are expressly set forth herein.

(b) The Escrow Agent may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to him hereunder and believed by him to be genuine and to have been signed or presented by the proper party or parties, and may assume that any person purporting to give notice, instruction, consent or request or acknowledge receipt in connection with the provisions hereof has been duly authorized to do so and that the same is properly made or given. The Escrow Agent may rely upon any order, judgment, certification, demand or other writing delivered to it by

a court or governmental agency or authority without being required to determine the propriety or validity of the service thereof or the jurisdiction of any court.

(c) The Escrow Agent shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the rights or powers conferred upon it by this Agreement, and may consult with counsel of its own choice and shall have full and complete authorization and protection for any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel.

(d) The Escrow Agent shall not be required to expend or risk any of its own funds or otherwise incur any financial liability in the performance of any of its duties or obligations hereunder.

(e) The Escrow Agent may resign and be discharged from its duties or obligations hereunder by giving notice in writing of such resignation specifying a date upon which such resignation shall take effect, whereupon a successor Escrow Agent shall be appointed by Sellers.

(f) Notwithstanding anything to the contrary contained herein, in the event of a dispute between the parties as to the proper disposition of the Pledged Securities, the Escrow Agent shall be entitled to deliver the Pledged Securities into the Supreme Court of New York, New York County, and shall thereupon be relieved of all further responsibility.

(g) The parties hereto (other than the Escrow Agent) hereby jointly and severally agree to reimburse the Escrow Agent for all losses, claims, costs, damages, liabilities or expenses, including reasonable attorneys’ fees, incurred by it arising out of or in connection with its entering into this Agreement or carrying out its duties hereunder, otherwise than as a result of its material negligence or willful misconduct. This Section 6(g) shall survive termination of this Agreement pursuant to Section 4 or Section 6(e) above.

(h) This Agreement expressly sets forth all the duties of the Escrow Agent with respect to any and all matters pertinent hereto. No implied duties or obligations shall be read into this Agreement against the Escrow Agent. The Escrow Agent shall not be bound by the provisions of any agreement among the parties hereto except this Agreement. The Escrow Agent shall not be responsible in any respect for the form, execution, validity, value or genuineness of documents or securities deposited hereunder, or for any description therein, or for the identity, authority or rights of persons executing or delivering or purporting to execute or deliver any such document, security or endorsement.

(i) The Escrow Agent may appoint agents or custodians to perform any of its duties or obligations hereunder if the Escrow Agent, in its sole discretion, determines that such appointment is necessary to perform such duties or obligations. The Escrow Agent shall notify the Sellers and Euroweb in writing about the appointment and any change of the custodian. The Escrow Agent shall be liable for the acts of any such agent or custodian selected by it in the same manner as if they were its own acts subject to the limitations contained in this Agreement. The fees or expenses of such agents or custodians shall be paid pursuant to Section 13 below as if they were fees and expenses of the Escrow Agent.

7. Euroweb hereby appoints Sellers as Euroweb’s attorney-in-fact for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument which either may deem necessary or advisable to accomplish the purposes hereof. Without limiting the generality of the foregoing, Sellers shall have the right and power to receive, endorse and collect all checks and other orders for the payment of money made payable to Euroweb representing any interest or dividend or other distribution payable in respect of the Pledged Securities or any part thereof and to give full discharge for the same.

8. Euroweb agrees that in the event the Pledged Securities are delivered to Sellers it will take any action requested by Sellers to cause the Pledged Securities to be issued in the names of Sellers or as directed by Sellers including issuing opinions and/or instructions to the registrar and transfer agent to register the transfer of the Pledged Securities in the stock records of Euroweb and to promptly issue new certificates representing such Pledge Securities as directed by Sellers.

9. This Agreement shall inure to the benefit of and be binding upon the parties and their respective heirs, successors, assigns and legal representatives, shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed therein and cannot be changed or terminated except by a writing signed by the parties hereto.

10. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original instrument and all of which together shall constitute a single agreement.

11. Euroweb agrees to execute, acknowledge and deliver any instrument, certificate, financing statement or other document, and to do all further acts, assignments and assurances, as Sellers may request in order to perfect the security interest granted hereby or otherwise carry out the intent of this Agreement.

12. 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.

13. Euroweb agrees that it will pay one-half of the fees and expenses of the Escrow Agent for performing the services specified herein and the Sellers shall pay in proportion to their shareholdings in Euroweb the remaining one-half of the fees and expenses of the Escrow Agent. The parties agree that the Escrow Agent’s total fee (including cost and fees of consultant, subcontractors, etc.) shall be a one time fee of USD 2,000 as a consideration for the performance of all of its duties under this Agreement, provided that such fee shall not cover any additional tasks and duties. The fee is due within eight days from deposit of the Pledged Securities with the Escrow Agent.

14. Unless otherwise provided above, 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,

(a) if to the Escrow Agent, at

Address: 1123 Budapest, Alkotas u. 50, Hungary

Fax: +36-1-489-2201

Attention: Mihaly Boris, Tamas Moro

(b) If to the Company, at:

Euroweb International Corp.

c/o Sichenzia Ross Friedman Ference LLP

1065 Avenue of the Americas, 21^st Floor

New York, New York 10018

Fax: 212-930-9725

Attention: Gregory Sichenzia, Esq.

If to Vitonas Investments Limited

Address: H-1134 Budapest, Klapka u. 11.

Fax: +36-1-451-4981

Attention: Bajnai Gordon

With a copy to: Forgó, Varga és Társai Ügyvédi Iroda

Address: 1123 Budapest, Alkotás u. 17-19.

Fax: +36-1-214-0078

Attention: Dr. Forgó Zoltán

If to Certus Kft., at:

Address: 1025 Budapest, Vihorlát u. 10.

Fax: +36-1-325-7819

Attention: Lepp Judit

With a copy to: Forgó, Varga és Társai Ügyvédi Iroda

Address: 1123 Budapest, Alkotás u. 17-19

Fax: +36-1-214-0078

Attention: Dr. Forgó Zoltán

If to Rumed 2000 Kft., at:

Address: H-1222 Budapest, Kissvábhegyi u. 4-6.

With a copy to: Forgó, Varga és Társai Ügyvédi Iroda

Address: 1123 Budapest, Alkotás u. 17-19.

Fax: +36-1-214-0078

Attention: Dr. Forgó Zoltán

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.

IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement on the date first above written.

EUROWEB INTERNATIONAL CORP.


By:		/s/ Csaba Toro
Name: Csaba Toro
Title: Chief Executive Officer

VITONAS INVESTMENTS LIMITED


By:	/s/ Bajnai Gordon /s/ Onody Tamas
Name:				Bajnai Gordon, Onody Tamas
Title:			Director Director

CERTUS KFT.

By:	/s/ Lepp Judit
Name:				Lepp Judit
Title:			Managing Director

RUMED 2000 KFT


By:	/s/ DR. Kokane DR. Ruzsovics Agnes
Name:				DR. Kokane DR. Ruzsovics Agnes
Title:			Managing Director


CONCORDE SECURITIES LTD

By:	/s/ Jaksity Gyorgy /s/ Boris Mihaly
Name:				Jaksity Gyorgy Boris Mihaly
Title:			Managing Director Director

Schedule A to Pledge and Escrow Agreement

Description of Stock:

Stock Issuer		Class of Stock		Certificate Number		Number of Shares
Euroweb International Corp.		Common Stock		[ ]		248,122

EX-3 4 a04-7072_1ex3.htm EX-3

Exhibit 3

EXECUTION COPY

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”), dated as of June 1, 2004 by and among Euroweb International Corp., a Delaware corporation (the “Company”), and the persons whose names appear on the signature page attached hereto (the “Holders”).

WHEREAS, pursuant to a Sale and Purchase Agreement dated February 23, 2004 between the Company and the Holders (the “Securities Purchase Agreement”), the Company is acquiring Elender Üzleti Kommunikációs Részvénytársaság from the Holders in part consideration for 677,201 shares (together with any additional securities of the Company issued in respect of such shares, the “Shares”) of common stock of the Company;

WHEREAS, pursuant to a Pledge and Escrow Agreement by and among the Company, Holders and an escrow agent identified therein (the “Escrow Agent”) executed concurrently with the execution hereof (the “Escrow Agreement”), the Company will deliver 248,122 shares of common stock of the Company (the “Escrow Shares”) to the Escrow Agent to secure the repayment of the Non-Transferable Shareholders Loan (as defined in the Securities Purchase Agreement).

WHEREAS, pursuant to the terms of and in order to induce the Holders to enter into the Securities Purchase Agreement, the Company and the Holders 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 Holders 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 and, in the event such shares have been delivered or are deliverable by Escrow Agent to the Holders pursuant to the Escrow Agreement, the Escrow Shares (the Escrow Shares and 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 Holders’ 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 each Holder and thereupon shall be relieved of its obligation under this Section 1a 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 30 days from the date of Closing, as defined in the Securities Purchase Agreement (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 120 days following the Filing Date.

c. Escrow Shares. In the event the Escrow Shares are delivered or deliverable to Holders pursuant to the terms of the Escrow Agreement, the Company shall prepare and file a Registration Statement covering the resale of the Escrow Shares (the “Escrow Registration Statement” and together with the Resale Registration Statement, the “Registration Statements” or, individually a “Registration Statement”) within 30 days of the date the Holders give written instruction to the Escrow Agent to deliver the Escrow Shares to the Holders pursuant to Section 5 of the Escrow Agreement (the “Escrow Filing Date”). The Company shall cause the Escrow Registration Statement to be declared effective by the SEC as soon as possible following the date such registration statement is filed with the SEC but in no event later than 60 days following the Escrow Filing Date.

d. Timing. If (i) the Resale Registration Statement is not filed by the Filing Date; (ii) the Escrow Registration Statement is not filed by the Escrow Filing Date; (iii) the Resale Registration Statement is not declared effective within 120 days of Closing for reasons attributable to the Company; (iv) the Escrow Registration Statement is not declared effective within 60 days of the Escrow Filing Date for reasons attributable to the Company; or (v) the Holders are unable to utilize a Registration Statement for a period of time in excess of 10 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), (iii), (iv) and (v) a “Failure”), then the Company will make payments to the Holders in such amounts and at such times as shall be determined pursuant to this Section 1(d) as full relief for the damages to the Holders. The Company shall pay to each Holder an amount equal to the value (the “Value”) of the Transferable Euroweb Shares, as defined in Section 2.5 of the Securities Purchase Agreement, or the Escrow Shares (as the case may be) 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 Holders in the Registration Statement with respect to information relating to the Holders. The

term “Applicable Percentage” means two hundredths (.02). For example, if the Registration Statement is filed one (1) month after the Filing Date, the Company would pay $60,000 if the Value is equal to $3,000,000.

2. Cooperation with Company. Holders 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 or Holders of such securities 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);

c. furnish to each of the Holders 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 each Holder of Registerable Securities covered by such registration statement, 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 each Holder as such Holder may reasonably request;

h. furnish, at the request of any 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 making such request, 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 making such request, 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

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 Holders hereby agree that from the Closing to and including a date twelve months thereafter (the “Lock-Up Period”), the Holders 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 Holders have a right to acquire; provided, however, (i) the Holders, in the aggregate, 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 Holders will be permitted to sell their shares in connection with an offer made to all stockholders of the Company or any merger, consolidation or similar transaction involving the Purchaser, (iii) the Holders will be permitted to sell their shares without limitation in

transactions that are exempt from registration and outside of the stock exchange, (iv) the Holders will be permitted to sell Shares with the prior written consent of the Company, and (v) the Holders will be able to sell Escrow Shares without regard to the limitations set forth in this Section 4.

5. Expenses. All expenses incurred in any registration of the Holders’ 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 Holders’ 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 any Holder, either in connection with the Securities Purchase Agreement or otherwise, to the extent permitted by law, the Company shall indemnify and hold harmless each Holder, the affiliates, officers, directors, employees, agents, counsel, representatives, and partners of each Holder, any underwriter (as defined in the 1933 Act) 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 or, 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 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.

b. Holder Indemnity. Each Holder shall indemnify and hold harmless the Company, its affiliates, its counsel, officers, directors and representatives, any underwriter (as defined in the 1933 Act) and each person, if any, who controls the Company or the underwriter (within the meaning of the 1933 Act) 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 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 their Registerable Securities as quickly as possible after such Holder have indicated to the Company that they desire their 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 Holders and that monetary damages alone may be inadequate. The Company therefore agrees that the Holders shall 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.

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.

c/o Sichenzia Ross Friedman Ference LLP

1065 Avenue of the Americas, 21^st Floor

New York, New York 10018

Fax: 212-930-9725

Attention: Gregory Sichenzia, 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 Holders of any Registerable Securities, to the address of such Holder as follows:

If to Vitonas Investments Limited

Address: H-1134 Budapest, Klapka u. 11.

Fax: +36-1-451-4981

Attention: Bajnai Gordon

With a copy to: Forgó, Varga és Társai Ügyvédi Iroda

Address: 1123 Budapest, Alkotás u. 17-19.

Fax: +36-1-214-0078

Attention: Dr. Forgó Zoltán

If to Certus Kft, at:

Address: 1025 Budapest, Vihorlát u. 10.

Fax: +36-1-325-7819

Attention: Lepp Judit

With a copy to: Forgó, Varga és Társai Ügyvédi Iroda

Address: 1123 Budapest, Alkotás u. 17-19.

Fax: +36-1-214-0078

Attention: Dr. Forgó Zoltán

If to Rumed 2000 Kft, at:

Address: H-1122 Budapest, Kissvábhegyi u. 4-6.

With a copy to: Forgó, Varga és Társai Ügyvédi Iroda

Address: 1123 Budapest, Alkotás u. 17-19.

Fax: +36-1-214-0078

Attention: Dr. Forgó Zoltán

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 Holders of securities representing a majority of the Registerable Securities; provided, however, that no such amendment or waiver shall take away any registration right of any 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 such Holder; further provided, however, that without the consent of any other Holder of Registerable Securities, any 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 any other 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.

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.

[INTENTIONALLY LEFT BLANK]

HOLDERS

COMPANY

VITONAS INVESTMENTS LIMITED

EUROWEB INTERNATIONAL CORP.

By:

/s/ Bajnai Gordon /s/ Onody Tamas

By:

/s/ Csaba Toro

Name:

Bajnai Gordon, Onody Tamas

Name:

Csaba Toro

Title:

Director

Title:

Chief Executive Officer

CERTUS KFT.

By:

/s/ Lepp Judit

Name:

Lepp Judit

Title:

Managing Director

RUMED 2000 KFT.

By:

/s/ DR. Kokane DR. Ruzsovics Agnes

Name:

DR. Kokane DR. Ruzsovics Agnes

Title:

Managing Director