PLACEMENT AGENCY AGREEMENT
THIS AGREEMENT ("Agreement"), made as of the 2nd day of September,
1998, by and between EuroWeb International Corp., a Delaware corporation
("Company"), and X.X. Xxxxx Securities,
Inc., a Georgia corporation (the "Agent").
WITNESSETH:
WHEREAS, the Company proposes to issue and sell up to $700,000 of its
shares of common stock, par value $0.001, in an offering (the "Offering") not
involving a public offering without registration under the Securities Act of
1933, as amended (the "Act"), pursuant to exemptions from the registration
requirements of the Act under Regulation D promulgated under the Act
("Regulation D"), as described below; and
WHEREAS, the Agent has offered to assist the Company in placing the
Securities on a "best efforts," basis with and the Company desires to secure
the services of the Agent on the terms and conditions hereinafter set forth;
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
promises, conditions and covenants herein contained, the parties hereto do
hereby agree as follows:
1. ENGAGEMENT OF AGENT. The Company hereby appoints the Agent as its
exclusive placement agent for the Offering, to sell up to $700,000 of
Securities in a series of tranches on a "best efforts" basis. resulting in
gross proceeds to the Company of a minimum of $4,000,000 and a maximum of
$7,000,000. The Shares are to be offered based upon a 25% discount to the
current market price at the time of closing. The Agent, on the basis of the
representations and warranties herein contained, but subject to the terms and
conditions herein set forth, accepts such appointment and agrees to use its
best efforts to find purchasers for the Securities. This appointment shall be
irrevocable for the period commencing on September 2, 1998, and ending as
further described in Section 5 herein, which period maybe extended by the
consent of the Company and the Agent (the "Offering Period").
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. In order to induce
the Agent to enter into this Agreement, the Company hereby represents and
warrants to and agrees with the Agent as follows:
2.1 OFFERING DOCUMENTS. The Company and the Placement Agent have
prepared a Securities Purchase Agreement, certain exhibits thereto, and
Registration Rights Agreement regarding the Securities, which documents have
been or will be sent to proposed investors. In addition, proposed investors
have received or will receive prior to closing copies of the Company's Annual
Report on Form 10-KSB for the period ended December 31, 1997, and other
documents that were subsequently filed with the SEC ("SEC Documents"). The SEC
Documents were prepared in conformity with the requirements (to the extent
applicable) of the Securities and Exchange Act of 1934, as amended, and the
rules and
1
regulations ("Rules and Regulations") of the Commission promulgated thereunder.
As used in this Agreement, the term "Offering Documents" refers to and means
the SEC Documents, the Subscription Agreement and all amendments, exhibits and
supplements thereto, together with any other documents which are provided to
the Agent by, or approved for Agent's use by, the Company for the purpose of
this Offering.
2.2 PROVISION OF OFFERING DOCUMENTS. The Company shall deliver to the
Agent, without charge, as many copies of the Offering Documents as the Agent
may reasonably require for the purposes contemplated by this Agreement. The
Company authorizes the Agent, in connection with the Offering of the
Securities, to use the Offering Documents as from time to time amended or
supplemented in connection with the offering and sale of the Securities and in
accordance with the applicable provisions of the Act and Regulation D. The
Company consents to the Agent's distribution of the Offering Documents to
prospective subscribers as a disclosure document about the Company, its
business, prospects, financial condition and other matters.
2.3 ACCURACY OF OFFERING DOCUMENTS. Taken together, the Offering
Documents, at the time of delivery to subscribers for the Securities, conformed
in all material respects with the requirements, to the extent applicable, of
the Act and the applicable Rules and Regulations and did not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. On the Closing Date
(as hereinafter defined), the Offering Documents, taken together, will contain
all statements which are required to be stated therein in accordance with the
Act and the Rules and Regulations for the purposes of the proposed Offering,
and all statements of material fact contained in the Offering Documents will be
true and correct, and the Offering Documents will not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; PROVIDED, however,
that the Company does not make any representations or warranties as to the
information contained in or omitted from the Offering Documents in reliance
upon written information furnished on behalf of the Agent specifically for use
therein.
2.4 DUTY TO AMEND. If during such period of time, as in the opinion of
the Agent or its counsel, any Offering Documents relating to this Offering are
required to be delivered under the Act, any event occurs, or any event known to
the Company relating to or affecting the Company shall occur as a result of
which the Offering Documents as then amended or supplemented would include an
untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or if it is necessary at any time after
the date hereof to amend or supplement the Offering Documents to comply with
the Act or the applicable Rules and Regulations, the Company shall forthwith
notify the Agent thereof and shall prepare such further amendment or supplement
to the Offering Documents as may be required and shall furnish and
2
deliver to the Agent and to others, whose names and addresses are designated by
the Agent, all at the cost of the Company, a reasonable number of copies of the
amendment or supplement or of the amended or supplemented Offering Documents
which, as so amended or supplemented, will not contain an untrue statement of a
material fact or omit to state any material fact necessary in order to make the
Offering Documents not misleading in the light of the circumstances when it is
delivered to a purchaser or prospective purchaser, and which will comply in all
respects with the requirements (to the extent applicable) of the Act and the
applicable Rules and Regulations.
2.5 CORPORATION CONDITION. The Company's condition is as described in
its Offering Documents, except for changes in the ordinary course of business
and normal year-end adjustments that are not in the aggregate materially
adverse to the Company. The Offering Documents, taken as a whole, present
fairly the business and financial position of the Company as of the Closing
Date.
2.6 NO MATERIAL ADVERSE CHANGE. Except as may be reflected in or
contemplated by the Offering Documents, subsequent to the dates as of which
information is given in the Offering Documents, and prior to the Closing Date,
there shall not have been any material adverse change in the condition,
financial or otherwise, or in the results of operations of the Company or in
its business taken as a whole.
2.7 NO DEFAULTS. Except as disclosed in the Offering Documents or in
writing to the Agent, the Company is not in default in any material respect in
the performance of any obligation, agreement or condition contained in any
material debenture, note or other evidence of indebtedness or any material
indenture or loan agreement of the Company. The execution and delivery of this
Agreement, and the consummation of the transactions herein contemplated, and
compliance with the terms of this Agreement will not conflict with or result in
a breach of any of the terms, conditions or provisions of, or constitute a
default under, the Articles of Incorporation or By-Laws of the Company (in any
respect that is material to the Company), any material note, indenture,
mortgage, deed of trust, or other agreement or instrument to which the Company
is a party or by which the Company or any property of the Company is bound, or
to the Company's knowledge, any existing law, order, rule, regulation, writ,
injunction or decree of any government, governmental instrumentality, agency or
body, arbitration tribunal or court, domestic or foreign, having jurisdiction
over the Company or any property of the Company. The consent, approval,
authorization or order of any court or governmental instrumentality, agency or
body is not required for the consummation of the transactions herein
contemplated except such as may be required under the Act or under the Blue Sky
or securities laws of any state or jurisdiction.
2.8 INCORPORATION AND STANDING. The Company is, and at the Closing
Date will be, duly formed and validly existing in good standing as a
corporation under the laws of the State of Delaware and with full power and
authority (corporate and other) to own its properties and conduct its business,
present and proposed, as described in the Offering Documents; the Company, has
full power and authority to enter
3
into this Agreement; and the Company is duly qualified and in good standing as
a foreign entity in each jurisdiction in which the failure to so qualify would
have a material adverse effect on the Company or its properties.
2.9 LEGALITY OF OUTSTANDING SECURITIES. Prior to the Closing Date, the
outstanding securities of the Company have been duly and validly authorized and
issued, fully paid and nonassessable and conform in all material respects to
the statements with regard thereto contained in the Offering Documents.
2.10 LEGALITY OF SECURITIES. The Securities, when sold and delivered,
will constitute legal, valid and binding obligations of the Company,
enforceable in accordance with the terms thereof, and shall be duly and validly
issued and outstanding, fully paid and nonassessable.
2.11 LITIGATION. Except as set forth in the Offering Documents, there
is now, and at the Closing Date there will be, no action, suit or proceeding
before any court or governmental agency, authority or body pending or, to the
knowledge of the Company, threatened, which might result in judgements against
the Company not adequately covered by insurance or which collectively might
result in any material adverse change in the condition (financial or otherwise)
or business of the Company or which would materially adversely affect the
properties or assets of the Company.
2.12 FINDERS. The Company does not know of any outstanding claims for
services in the nature of a finder's fee or origination fees with respect to
the sale of the Securities hereunder for which the Agent may be responsible.
2.13 TAX RETURNS. The Company has filed all federal and state tax
returns which are required to be filed, and has paid all taxes shown on such
returns and on all assessments received by it to the extent such taxes have
become due. All taxes with respect to which the Company is obligated have been
paid or adequate accruals have been set up to cover any such unpaid taxes.
2.14 AUTHORITY. The execution and delivery by the Company of this
Agreement have been duly authorized by all necessary action, and this Agreement
is the valid, binding and legally enforceable obligation of the Company subject
to standard qualifications as to the availability of equitable remedies, the
effect of bankruptcy and other laws relating to the protection of debtors and
public policy opinions promulgated by the Commission with respect to
indemnification against liabilities under the Act.
2.15 ACTIONS BY THE COMPANY. The Company will not take any action
which will impair the effectiveness of the transactions contemplated by this
Agreement.
4
3. ISSUE, SALE AND DELIVERY OF THE SECURITIES.
3.1 DELIVERIES OF SECURITIES. Certificates in such form that, subject
to applicable transfer restrictions as described in the Subscription Agreement,
they can be negotiated by the purchasers thereof (issued in such denominations
and in such names as the Agent may direct the Company to issue) for the
Securities, and warrants representing the Agent's warrant compensation
described in Section 3.6 below ("Warrants"), shall be delivered by the Company
to the Escrow Agent, with copies made available to the Agent for checking at
least one (1) full business day prior to the Closing Date, it being understood
that the directions from the Agent to the Company shall be given at least two
(2) full business days prior to the Closing Date. The certificates for the
Securities and the Warrants shall be delivered at the Closing and at each
Subsequent Closing (as defined hereinafter).
3.2 ESCROW OF FUNDS. Pursuant to the Escrow Agreement, a copy of which
is attached hereto as Exhibit "A" (the "Escrow Agreement"), executed by the
Company, the Agent and the escrow agent (the "Escrow Agent"), the subscribers
shall place all funds for purchase of Securities for each Closing in an escrow
account. The Company shall have the right to approve or object the
subscriptions of each subscriber, as described in the Subscription Agreement
prior to each closing. At such time as subscribers, subscribing for at least
$100,000 of Securities, have delivered to the Escrow Agent their signed
subscription documents, those subscribers have been approved by the Company,
and all other Closing conditions have been met, Escrow Agent shall release the
subscription funds and signed documents to the Company and release the
certificates representing the Securities to the subscribers (the "Initial
Closing"). In the event that the Initial Closing shall be for an amount of
Securities less than $700,000, the Offering may be continued, and additional
Closings may be held (each a "Subsequent Closing") throughout the Offering
Period. In addition, the Agent shall have the right to act as agent for the
sale of additional Debentures or Securities as set forth in Section 5 herein.
3.3 CLOSING DATE. The Initial Closing and any Subsequent Closing shall
take place at the offices of Xxxx Xxxx Xxxxx & Xxxxx LLP, 000 Xxxxxxxxx Xxxx
Xxxxxx, Xxxxx 000, 0000 Xxxxxxxxx Xxxx, XX, Xxxxxxx, Xxxxxxx 00000 at such time
and date ("Closing Date") as will be fixed either orally or in writing by
notice to be given by the Agent to the Company after consultation with the
Company, such Closing Date to be not less than one (1) full business day after
the date on which such notice shall have been given and not less than one (1))
and not more than ten (10) full business days after the date on which the
Escrow Agent shall have given written notice to the Company and the Agent that
funds deposited with the Escrow Agent total at least $100,000. The Closing Date
may be changed by mutual agreement of the Agent and the Company.
3.4 AGENT'S COMPENSATION. The Company shall pay the Agent:
(a) A commission of ten percent (10%) of the gross subscription
proceeds of the Initial Offering and any subsequent Offerings; and
5
(b) In addition to the fees and reimbursement of costs set forth
in Sections 3.4 and 3.5 of this Agreement, the Company shall issue to
the Agent warrants ("Warrants") to purchase 100,000 shares of the
Company's Common Stock, provided $700,000 is raised in the Offering at
an exercise price equal to 100% of the Closing Bid Price (as defined
in the Securities Purchase Agreement). The Warrants shall have
cashless exercise provisions. The term of the Warrant shall be five
years. The shares of Common Stock issuable upon exercise of the
Warrants shall have registration rights. The Warrants shall be
delivered by the Company to the Escrow Agent prior to each Closing,
and the Escrow Agent shall deliver to the Agent the Warrants
applicable to each Closing simultaneous with the respective Closing.
3.5 PAYMENT OF FEES. The Escrow Agent shall be instructed to pay all
fees up to $15,000 (including, but not limited to Agent's legal fees) and cost
reimbursements and Warrants pursuant to section 3.4 of this Agreement, directly
to the Agent from the proceeds of the Closing and all Subsequent Closing,
simultaneous with the transfer of proceeds to the Company.
4. OFFERING OF THE SECURITIES ON BEHALF OF THE COMPANY.
4.1 In offering the Securities for sale, the Agent shall offer them
solely as an agent for the Company, and such offer shall be made upon the terms
and subject to the conditions set forth in the Offering Documents. The Agent
shall commence making such offer as an agent for the Company as soon as
possible following delivery of the Offering Documents.
4.2 The Agent will not make offers to sell the Securities to, or
solicit offers to subscribe for any Securities from, persons or entities that
are not "accredited investors" as defined in Regulation D.
5. RIGHT OF FIRST REFUSAL. The Company hereby grants Agent rights of
first refusal as follows:
5.1 [ADD RFR] Beginning the date hereof and ending six (6)months from
the final Closing, the Company grants to the Agent a right of first refusal to
act as the Company's exclusive placement agent for the sale of any debt or
equity to be issued by the Company ("Financing Transaction"). The Agent shall
have five (5) business days from the date of its receipt from the Company of a
detailed and complete summary of any proposed Financing Transaction to exercise
its right of first refusal to act as Agent upon the same terms and conditions
on an all or nothing basis. In the event that the Company changes or deviates
from any of the terms of the proposed Financing Transaction contained in such
written notice, then such changes or deviation shall be deemed to constitute a
new proposed Financing Transaction and the Company shall b e required to submit
a new written right of first refusal notice to Agent and Agent shall have five
(5) business days from the date of such notice to exercise its right of first
refusal as described herein.
6
5.2 The Company agrees to maintain the confidentiality of the Agent=s
clients, except as required by applicable law. Such clients shall be those
entities which invest in the Offering (the "Clients"). For a period of two
years from the Closing (the "Exclusivity Period"), the Company will not solicit
or enter into any financing transaction ("Transaction") with the clients
without the written consent of Agent.
5.3 In the event that Company breaches Section 5.1 or 5.2 of this
Agreement and engages in a Transaction with the Clients during the Exclusivity
Period, Agent shall be entitled to receive compensation in the same proportion
to the financing done without Agent's participation as the compensation to
Agent under this Agreement bears to the financing raised in this Offering.
6(a) COVENANTS OF THE COMPANY. The Company covenants and agrees with
the Agent that:
6.1 After the date hereof, the Company will not at any time,
prepare and distribute any amendment or supplement to the Offering Documents,
of which amendment or supplement the Agent shall not previously have been
advised and the Agent and its counsel furnished with a copy within a reasonable
time period prior to the proposed adoption thereof, or to which the Agent shall
have reasonably objected in writing on the ground that it is not in compliance
with the Act or the Rules and Regulations (if applicable).
6.2 The Company will pay, whether or not the transactions
contemplated hereunder are consummated or this Agreement is prevented from
becoming effective or is terminated, all actual costs and expenses incident to
the performance of its obligations under this Agreement, including all expenses
incident to the authorization of the Securities and their issue and delivery to
the Agent, any original issue taxes in connection therewith, all transfer
taxes, if any, incident to the initial sale of the Securities, the fees and
expenses of the Company's counsel (except as provided below) and accountants,
the cost of reproduction and furnishing to the Agent copies of the Offering
Documents as herein provided.
6.3 As a condition precedent to the Initial Closing, the Company
will deliver to the Agent a true and correct copy of the Articles of
Incorporation of the Company, and all amendments and certificates of
designation of preferences of preferred stock, including without limitation the
certificate of designation of preferences regarding the Securities, if
applicable, certified by the Secretary of State of Delaware.
6.4 Prior to the Closing Date, the Company will cooperate with
the Agent in such investigation as it may make or cause to be made of all of
the properties, business and operations of the Company in connection with the
Offering of the Securities. The Company will make available to it in connection
therewith such information in its possession as the Agent may reasonably
request and will make available to the Agent such persons as the Agent shall
deem reasonably necessary and appropriate
7
in order to verify or substantiate any such information so supplied.
6.5 The Company shall be responsible for making any and all
filings required by the Blue Sky authorities and filings required by the laws
of the jurisdictions in which the subscribers who are accepted for purchase of
Securities are located, if any. Agent shall assist Company in this respect, but
such filings shall be the responsibility of Company.
7. INDEMNIFICATION.
7.1 The Company agrees to indemnify and hold harmless the Agent, each
person who controls the Agent within the meaning of Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934, as amended, and the Agent's
employees, accountants, attorneys and agents (the "Agent's Indemnitees")
against any and all losses, claims, damages or liabilities, joint or several,
to which they or any of them may become subject under the Act or any other
statute or at common law for any legal or other expenses (including the costs
of any investigation and preparation) incurred by them in connection with any
litigation, whether or not resulting in any liability, but only insofar as such
losses, claims, damages, liabilities and litigation arise out of or are based
upon any untrue statement of material fact contained in the Offering Documents
or any amendment or supplement thereto or any application or other document
filed in any state or jurisdiction in order to qualify the Securities under the
Blue Sky or securities laws thereof, or the omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, under the circumstances under which they were made, not misleading,
all as of the date of the Offering Documents or of such amendment as the case
may be; PROVIDED, however, that the indemnity agreement contained in this
Section 7.1 shall not apply to amounts paid in settlement of any such
litigation, if such settlements are made without the consent of the Company,
nor shall it apply to the Agent's Indemnitees in respect to any such losses,
claims, damages or liabilities arising out of or based upon any such untrue
statement or alleged untrue statement or any such omission or alleged omission,
if such statement or omission was made in reliance upon information furnished
in writing to the Company by the Agent specifically for use in connection with
the preparation of the Offering Documents or any such amendment or supplement
thereto or any application or other document filed in any state or jurisdiction
in order to qualify the Securities under the Blue Sky or securities law
thereof. This indemnity agreement is in addition to any other liability which
the Company may otherwise have to the Agent's Indemnitees. The Agent's
Indemnitees agree, within a reasonable time after the receipt by them of
written notice of the commencement of any action against them in respect to
which indemnity may be sought from the Company under this Section 7. 1, to
notify the Company in writing of the commencement of such action, and if the
Agent's Indemnitees shall notify the Company of the commencement thereof, the
Company shall be entitled to participate in (and, to the extent that the
Company shall wish, to direct) the defense thereof at its own expense, but such
defense shall be conducted by counsel of recognized standing and reasonably
satisfactory to the Agent's Indemnitees, defendant or defendants, in such
litigation. The Company agrees to notify the Agent's
8
Indemnitees promptly of the commencement of any litigation or proceedings
against the Company or any of the Company's officers or directors of which the
Company may be advised in connection with the issue and sale of any of the
Securities and to furnish to the Agent's Indemnitees, at their request, copies
of all pleadings therein and o permit the Agent=s Indemnities to be observers
therein and apprise the Agent's Indemnitees of all developments therein, all at
the Company's expense.
7.2 The Agent agrees, in the same manner and to the same extent as set
forth in Section 7.1 above, to indemnify and hold harmless the Company, and the
Company's employees, accountants, attorneys and agents (the "Company's
Indemnitees") with respect to (i) any statement in or omission from the
Offering Documents or any amendment or supplement thereto or any application or
other document filed in any state or jurisdiction in order to qualify the
Securities under the Blue Sky or securities laws thereof, or any information
furnished pursuant to Section 3.4 hereof, if such statement or omission was
made in reliance upon information furnished in writing to the Company by the
Agent or on its behalf specifically for use in connection with the preparation
thereof or supplement thereto, or (ii) any untrue statement of a material fact
made by the Agent or its agents not based on statements in the Offering
Documents or authorized in writing by the Company, or with respect to any
misleading statement made by the Agent or its agents resulting from the
omission of material facts which misleading statement is not based upon the
Offering Documents, or information furnished in writing by the Company or,
(iii) any breach of any representation, warranty or covenant made by the Agent
in this Agreement. The Agent's liability hereunder shall be limited to the
amount received by it for acting as Agent in connection with the Offerings. The
Agent shall not be liable for amounts paid in settlement of any such litigation
if such settlement was effected without its consent. In case of the
commencement of any action in respect of which indemnity may be sought from the
Agent, the Company's Indemnitees shall have the same obligation to give notice
as set forth in Section 7.1 above, subject to the same loss of indemnity in the
event such notice is not given, and the Agent shall have the same right to
participate in (and, to the extent that it shall wish, to direct) the defense
of such action at its own expense, but such defense shall be conducted by
counsel of recognized standing reasonably satisfactory to the Company. The
Agent agrees to notify the Company's Indemnitees and , at their request, to
provide copies of all pleadings therein and to permit the Company's Indemnitees
to be observers therein and apprise them of all the developments therein, all
at the Agent's expense.
7.3 If for any reason the indemnity provided for in Section 7.1 or 7.2
is unavailable to an Indemnified Person or insufficient to hold an Indemnified
Person harmless, then the Indemnifying Party, to the fullest extent permitted
by law, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such claims, liabilities, losses, damages or expenses in
such proportion as is appropriate to reflect the relative benefits received by
the Company on one hand and by the Agent on the other, from the transaction or
proposed transaction under this Agreement or if allocation on that basis is not
permitted under applicable law, in such proportion as is appropriate to reflect
not only the relative benefits received by the Company on the one hand and the
Agent on the other, but also the relative fault
9
of the Company and the Agent, as well as any relevant equitable considerations.
It is hereby further agreed that the relative benefits to the Company on the
one hand and the Agent on the other with respect to any transaction
contemplated by this Agreement shall be deemed to be paid in the same
proportion as (i) the total value of the transaction bears to (ii) the fees
paid to the Agent with respect to the transaction. The relative fault of the
Company on the one hand and the Agent on the other with respect to the
transaction shall be determined by reference to, among other things, whether
any untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or by the Agent and the parties relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The indemnity, contribution and expense reimbursement obligations set
forth herein (i) shall be in addition to any liability an Indemnifying Party
may have to any Indemnified Person at common law of otherwise, (ii) shall
survive the termination of this Agreement, (iii) shall apply to any
modification of this Agreement and shall remain in full force and effect
following the completion or termination of the Agreement, (iv) shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Agent or any other Indemnified Person, and (v) shall be
binding on any successor or assign of the Company or the Agent and the
respective successors or assigns to all or substantially all of the Company's
or the Agent's business and assets.
8. EFFECTIVENESS OF AGREEMENT. This Agreement shall become effective
(i) at 9:00 A.M., Atlanta, Georgia time, on the date hereof or (ii) upon
release by the Agent of the Securities for offering after the date hereof,
whichever shall last occur. The Agent agrees to notify the Company immediately
after the Agent shall have taken any action by such release or otherwise
wherein this Agreement shall have become effective. This Agreement shall,
nevertheless, become effective at such time earlier than the time specified
above after the date hereof as the Agent may determine by notice to the
Company.
9. CONDITIONS OF THE AGENT'S OBLIGATIONS. The Agent's obligations to
act as agent of the Company hereunder and to find purchasers for the Securities
shall be subject to the accuracy, as of the Closing Date, of the
representations and warranties on the part of the Company herein contained, to
the fulfillment of or compliance by the Company with all covenants and
conditions hereof, and to the following additional conditions:
9.1 Counsel to the Agent shall not have objected in writing or shall
not have failed to give his consent to the Offering Documents (which objection
or failure to give consent shall not have been done unreasonably).
9.2 The Agent shall not have disclosed to the Company that the
Offering Documents, or any amendment thereof or supplement thereto, contains an
untrue statement of fact, which, in the opinion of counsel to the Agent, is
material, or omits to state a fact, which, in the opinion of such counsel, is
material and is required to be stated therein, or is necessary to make the
statements therein, under the
10
circumstances in which they were made, not misleading.
9.3 Between the date hereof and the Closing Date, the Company shall
not have sustained any loss on account of fire, explosion, flood, accident,
calamity or any other cause of such character as would materially adversely
affect its business or property considered as an entire entity, whether or not
such loss is covered by insurance.
9.4 Between the date hereof and the Closing Date, there shall be no
litigation instituted or threatened against the Company, and there shall be no
proceeding instituted or threatened against the Company before or by any
federal or state commission, regulatory body or administrative agency or other
governmental body, domestic or foreign, wherein an unfavorable ruling, decision
or finding would materially adversely affect the business, franchises, license,
permits, operations or financial condition or income of the Company considered
as an entity.
9.5 Except as contemplated herein or as set forth in the Offering
Documents, during the period subsequent to the most recent financial statements
contained in the Offering Documents, if any, and prior to the Closing Date, the
Company (i) shall have conducted its business in the usual and ordinary manner
as the same is being conducted as of the date hereof and (ii) except in the
ordinary course of business, the Company shall not have incurred any
liabilities or obligations (direct or contingent) or disposed of any assets, or
entered into any material transaction or suffered or experienced any
substantially adverse change in its condition, financial or otherwise. At the
Closing Date, the equity account of the Company shall be substantially the same
as reflected in the most recent balance sheet contained in the Offering
Documents without considering the proceeds from the sale of the Securities
other than as may be set forth in the Offering Documents.
9.6 The authorization of the Securities by the Company and all
proceedings and other legal matters incident thereto and to this Agreement
shall be reasonably satisfactory in all respects to counsel to the Agent, who
shall have furnished the Agent on the Closing Date with such favorable opinion
with respect to the sufficiency of all corporate proceedings and other legal
matters relating to this Agreement as the Agent may reasonably require, and the
Company shall have furnished such counsel such documents as he may have
requested to enable him to pass upon the matters referred to in this
subparagraph.
9.7 The Company shall have furnished to the Agent the opinion, dated
the Closing Date, addressed to the Agent, from counsel to the Company, as
required by the Subscription Agreement.
9.8 The Company shall have furnished to the Agent a certificate of the
Chief Executive Officer and the Chief Financial Officer of the Company, dated
as of the Closing Date, to the effect that:
11
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects at and as of
the Closing Date (other than representations and warranties which by
their terms are specifically limited to a date other than the Closing
Date), and the Company has complied with all the agreements and has
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date; and
(ii)the respective signers have each carefully examined the
Offering Documents, and any amendments and supplements thereto, and,
to the best of their knowledge, in the Offering memorandum, and any
amendments and supplements thereto, all statements contained in the
Offering Documents are true and correct, and neither the Offering
Documents, nor any amendment or supplement thereto, includes any
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 under the circumstances in which they were made not
misleading, and since the date hereof, there has occurred no event
required to be set forth in an amended or supplemented Offering
Documents, which has not been set forth; except as set forth in the
Offering Documents, since the respective dates as of which or the
periods for which the information is given in the Offering Documents
and prior to the date of such certificate, (a) there has not been any
substantially adverse change, financial and otherwise, in the affairs
of condition in the Company, and (b) the Company has not incurred any
material liabilities, direct or contingent, or entered into any
material transactions, otherwise than in the ordinary course of
business.
10. TERMINATION.
10.1 This Agreement may be terminated by the Agent by notice to the
Company in the event that the Company shall have failed or been unable to
comply with any of the terms, conditions or provisions of this Agreement on the
part of the Company to be performed, complied with or fulfilled within the
respective times, if any, herein provided for, unless compliance therewith or
performance or satisfaction thereof shall have been expressly waived by the
Agent in writing.
10.2 This Agreement may be terminated by the Company by notice to the
Agent in the event that the Agent shall have failed or been unable to comply
with any of the terms, conditions or provisions of this Agreement on the part
of the Agent to be performed, complied with or fulfilled within the respective
times, if any, herein provided for, unless compliance therewith or performance
or satisfaction thereof shall have been expressly waived by the Company in
writing.
10.3 This Agreement may be terminated by the Agent by notice to the
Company at any time, if, in the reasonable, good faith judgment of the Agent,
payment for and delivery of the Securities is rendered impracticable or
inadvisable because: (i) additional material governmental restrictions not in
force and effect on the date hereof shall have been imposed upon trading in
securities generally; (ii) a war
12
or other national calamity shall have occurred; or (iii) the condition of
the market (either generally or with reference to the sale of the Securities to
be offered hereby) or the condition of any matter affecting the Company or any
other circumstance is such that it would be undesirable, impracticable or
inadvisable, in the judgment of the Agent, to proceed with this Agreement or
with the Offering.
10.4 Any termination of this Agreement pursuant to this Section shall
be without liability of any character (including, but not limited to, loss of
anticipated profits or consequential damages) on the part of any party thereto,
except that the Company shall remain obligated to pay the costs and expenses
provided to be paid by it specified in Sections 3, 5, and 6; and the Company
and the Agent shall be obligated to pay, respectively, all losses, claims,
damages or liabilities, joint or several, under Section 7.1 in the case of the
Company and Section 7.2 in the case of the Agent.
11. Agent's Representations, Warranties and Covenants. The Agent
represents and warrants to and agrees with the Company that:
11.1 Agent is a corporation duly incorporated and existing under the
laws of the state of Georgia. Agent is registered with the Securities Exchange
Commission and the NASD.
11.2 There is not now pending or threatened against the Agent any
action or proceeding of which the Agent has been advised, either in any court
of competent jurisdiction, before the Commission or before any state securities
commission or the NASD, concerning the Agent's activities which would impair
the ability of the Agent to conduct the Offering as contemplated by this
Agreement.
11.3 Agent's representations and warranties under this Section shall
be true and correct as of each Closing, and shall survive each Closing for a
period of six months.
12. NOTICES. Except as otherwise expressly provided in this Agreement:
12.1 Whenever notice is required by the provisions of this Agreement
to be given to the Company, such notice shall be in writing, addressed to the
Company, at:
If to Company: EuroWeb International Corp.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
with a copy to: Xxxxx & Xxxxx
15th Floor
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
12.2 Whenever notice is required by the provisions of this Agreement
to be given to the Agent, such notice shall be given in writing, addressed to
the Agent, at:
13
If to the Agent: X.X. Xxxxx Securities, Inc.
Atlanta Financial Center, East Tower
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
with a copy to: Xxxxxxx X. Xxxx, Esq.
Xxxx Xxxx Xxxxx & Xxxxx LLP
000 Xxxxxxxxx Xxxx Xxxxxx, Xxxxx 000
1000 Xxxxxxxxx Road, N.E.
Xxxxxxx, Xxxxxxx 00000
12.3 Any notice instructing the Escrow Agent to distribute monies or
Securities held in Escrow must be signed by authorized agents of both the
Company and the Agent in order to be valid.
13. MISCELLANEOUS.
13.1 BENEFIT. This Agreement is made solely for the benefit of the
Agent and the Company, their respective officers and directors and any
controlling person referred to in Section 15 of the Act and their respective
successors and assigns, and no other person may acquire or have any right under
or by virtue of this Agreement, including, without limitation, the holders of
any Securities. The term "successor" or the term "successors and assigns" as
used in this Agreement shall not include any purchasers, as such, of any of the
Securities.
13.2 SURVIVAL. The respective indemnities, agreements,
representations, warranties, covenants and other statements of the Company and
the Agent, or the officers, directors or controlling persons of the Company and
the Agent as set forth in or made pursuant to this Agreement and the indemnity
agreements of the Company and the Agent contained in Section 7 hereof shall
survive and remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company or the Agent or any such
officer, director or controlling person of the Company or of the Agent; (ii)
delivery of or payment for the Securities; or (iii) the Closing Date, and any
successor of the Company or the Agent or any controlling person, officer or
director thereof, as the case may be, shall be entitled to the benefits hereof.
13.3 GOVERNING LAW. The validity, interpretation and construction of
this Agreement and of each party hereof will be governed by the Laws of the
State of Georgia. This Agreement and each Warrant Certificate hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware without regard to the principles of conflict of laws. The parties
further agree that any action between them shall be heard in Atlanta, Georgia,
and expressly consent to the jurisdiction and venue of the Superior Court of
Xxxxxx County, Georgia, and the United States District Court for the Northern
District of Georgia, Atlanta Division for the adjudication of any action
asserted pursuant to this Paragraph.
14
13.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be deemed an original and all of which together
will constitute one and the same instrument.
13.5 CONFIDENTIAL INFORMATION. All confidential financial or business
information (except publicly available or freely usable material otherwise
obtained from another source) respecting either party will be used solely by
the other party in connection with the within transactions, be revealed only to
employees or contractors of such other party who are necessary to the conduct
of such transactions, and be otherwise held in strict confidence.
13.6 PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, neither party
hereto will issue any public announcement concerning the within transactions
without the approval of the other party.
13.7 FINDERS. The parties acknowledge that no person has acted as a
finder in connection with the transactions contemplated herein and each will
agree to indemnify the other with respect to any other claim for a finder's fee
in connection with the offering.
13.8 RECITALS. The recitals to this Agreement are a material part
hereof, and each recital is incorporated into this Agreement by reference and
made a part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement
to be executed as of the day and year first above written.
"THE COMPANY"
EUROWEB INTERNATIONAL CORP.
By:_____________________________________
Title: _______________________________
"THE AGENT"
X.X. XXXXX SECURITIES, INC.
By:_____________________________________
Title:_________________________________
EXHIBIT "A"
ESCROW AGREEMENT
SEE ATTACHED
EUROWEB INTERNATIONAL CORP ("COMPANY") AND X.X. XXXXX SECURITIES , INC.
("PLACEMENT AGENT")
ESCROW ACCOUNT
XXXX XXXXXXX, XX XXXXX SEC., FAX 000 000 0000 0000 TAS # 091404
EUROWEB INTERNATIONAL CORP., FAX 000 000 0000
XXX XXXX, XXXX XXXX XXXXX & XXXXX, FAX 000 000 000 RECD. FROM
9/15/98 $400,000.00 THOMSON KEMAGHAN
GRAND TOTAL $400,000.00
BALANCE DUE $600,000.00
MIN REQUIRED $300,000.00
MAX REQUIRED $1,000,000.00
CLOSING OF EUROWEB INTERNATIONAL CORP.
COMMON STOCK
PRIVATE PLACEMENT
(A) CASH RECEIPTS TO ESCROW AGENT
From Investors referred to in Item II(A) $400,000.00
(B) CASH DISBURSEMENTS
Funds in escrow with Bank of New York as Escrow Agent $400,000.00
DEDUCTIONS
(1) Placement Agent fee to X.X. Xxxxx Securities, Inc. as
Placement Agent. $ 40,000.00
(2) Attorney's fees of Xxxx Moss Kline & Xxxxx LLP $ 15,000,00
counsel to Placement Agent to be wired to firm
Operating Account at Wachovia Bank
(ABA # 000000000
Account # 12 884 733
Account Name: Xxxx Moss Kline & Xxxxx)
(3) Escrow Agent Fee to Bank of New York
as Escrow Agent $ 1,250,00
Amount to be wired to EuroWeb International Corp., $343,750.00
Bank Name: Chase Manhattan Bank
Account Name: EuroWeb International Corp.
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Account # 116084367
ABA # 000000000
Amount to be wired to X. X. Xxxxx Securities, Inc. $ 40,000.00
South Trust Bank
Atlanta Financial Center
Xxxxxxx, Xxxxxxx 00000
ABA # 061 000 256
Account # 6871 293
Beneficiary: XX Xxxxx Securities, Inc.
(C) COMMON STOCK TO BE ISSUED TO INVESTORS
NAME CERTIFICATE NOS NUMBER OF SHARES
--------------------------------------------------------------------------------
Atlantis Capital Fund Ltd * HT 0607 533,333
(D) WARRANTS TO PLACEMENT AGENT
The Warrants for this Closing have been deferred until a total of
$700,000 is raised.
Accepted and agreed to as of this 15th day of September, 1998.
EUROWEB INTERNATIONAL CORP.
--------------------------
By: Xxxxx X. Xxxxx
Title: Chairman of Board
BANK OF NEW YORK
as Escrow Agent
By:
Title:
X.X.XXXXX SECURITIES, INC.,
as Placement Agent
By:
Title
* Atlantis Capital Fund Ltd is managed by an affiliate of X.X. Xxxxx
Securities, Inc., (the"Agent"). The investment decisions made by the Fund are
independent of the Agent and may be contrary to any actions or recommendations
made by the Agent or its affiliates at any time.
WARRANT AGREEMENT
WARRANT AGREEMENT dated as of September 9, 1998, between EuroWeb
International Corp., a Delaware corporation (the "Company"), and X.X. Xxxxx
Securities, Inc., a Georgia corporation (hereinafter referred to as "X.X.
Xxxxx").
W I T N E S S E T H:
WHEREAS, X.X. Xxxxx has assisted the Company in connection with the
Company's offering (the "Offering") of up to $700,000 of common stock, par
value $.001 per share; and
WHEREAS, the Warrants issued pursuant to this Agreement are being issued
by the Company to X.X. Xxxxx and/or its designees, in consideration for, and as
part of the compensation to be paid in connection with, the services of X.X.
Xxxxx in connection with the Offering;
NOW, THEREFORE, in consideration of the premises, the agreements herein
set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1.GRANT.
X.X. Xxxxx and/or its designees are hereby granted the right to purchase,
at any time from the date of issuance of the aforementioned Warrants until 5:00
P.M., Eastern Standard Time, on September 9, 2003 (the "Warrant Exercise
Term"), 100,000 shares of the Company's Common Stock, par value $.001 per share
(the "Shares") at an exercise price (subject to adjustment as provided in
Article 7 hereof) equal to $_____________ (the "Initial Exercise Price").
2.WARRANT CERTIFICATES.
The warrant certificates (the "Warrant Certificates") delivered and to be
delivered pursuant to this Agreement shall be in the form set forth as EXHIBIT
"A", attached hereto and made a part hereof, with such appropriate insertions,
omissions, substitutions and other variations as required or permitted by this
Agreement.
3.EXERCISE OF WARRANTS.
3.1 CASH EXERCISE. The Exercise Price may be paid in cash or by check to the
order of the Company, or any combination of cash or check, subject to
adjustment as provided in Article 7 hereof. Upon surrender of the Warrant
Certificate with the annexed Form of Election to Purchase duly executed,
together with payment of the Exercise Price (as hereinafter defined) for the
Shares purchased, at the Company's executive offices (currently located at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 10022) the registered holder of a Warrant
Certificate ("Holder" or "Holders") shall be entitled to receive a certificate
or certificates for the Shares so purchased. The purchase rights represented by
each Warrant Certificate are exercisable at the option of the Holder hereof, in
whole or in part (but not as to fractional shares of the Common Stock). In the
case of the purchase of less than all the Shares purchasable under any Warrant
Certificate, the Company shall cancel said Warrant Certificate upon the
surrender thereof and shall execute and deliver a new Warrant Certificate of
like tenor for the balance of the Shares purchasable thereunder.
3.2 CASHLESS EXERCISE. At any time during the Warrant Exercise Term, the Holder
may, at its option, exchange this Warrant, in whole or in part (a "Warrant
Exchange"), into the number of Shares determined in accordance with this
Section 3.2, by surrendering this Warrant at the principal office of the
company or at the office of its transfer agent, accompanied by a notice stating
such Holder's intent to effect such exchange, the number of Shares to be
exchanged and the date on which the Holder requests that such Warrant Exchange
occur (the "Notice of Exchange"). The Warrant Exchange shall take place on the
date specified in the Notice of Exchange or, if later, the date the Notice of
Exchange is received by the Company (the "Exchange Date"). Certificates for the
Shares issuable upon such Warrant Exchange and, if applicable, a new warrant of
like tenor evidencing the balance of the Shares remaining subject to this
Warrant, shall be issued as of the Exchange Date and delivered to the Holder
within seven (7) business days following the Exchange Date. In connection with
any Warrant Exchange, this Warrant shall represent the right to subscribe for
and acquire the number of Shares (rounded to the next highest integer) equal to
(i) the number of Shares specified by the Holder in its Notice of Exchange (the
"Total Number") less (ii) the number of Shares equal to the quotient obtained
by dividing (A) the product of the Total Number and the then existing Exercise
Price by (B) the current market value of a share of Common Stock.
4. ISSUANCE OF CERTIFICATES.
Upon the exercise of the Warrants, the issuance of certificates for the
Shares shall be made forthwith (and in any event within five business days
thereafter) without charge to the Holder thereof including, without limitation,
any tax which may be payable in respect of the issuance thereof, and such
certificates shall be issued in the name of, or in such names as may be
directed by, the Holder thereof; provided, however, that the Company shall not
be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of any such certificates in a name other than that of the Holder and
the Company shall not be required to issue or deliver such certificates unless
or until the person or persons requesting the issuance thereof shall have paid
to the Company the amount of such tax or shall have established to satisfaction
of the Company that such tax has been paid.
The Warrant Certificates and the certificates representing the Shares shall be
executed on behalf of the Company by the manual or facsimile signature of the
present or any future Chairman or Vice Chairman of the Board of Directors,
Chief Executive officer or President or Vice President of the Company under its
corporate seal reproduced thereon, attested to by the manual or facsimile
signature of the present or any future Secretary or Assistant Secretary of the
Company. Warrant Certificates shall be dated the date of execution by the
Company upon initial issuance, division, exchange, substitution or transfer.
The Warrant Certificates and, upon exercise of the Warrants, in part or in
whole, certificates representing the Shares shall bear a legend substantially
similar to the following:
The securities represented by this certificate have not been registered under
the Securities Act of 1933, as amended (the "Act"), and may not be offered or
sold except (i) pursuant to an effective registration statement under the Act,
(ii) to the extent applicable, pursuant to Rule 144 under the Act (or any
similar rule under such Act relating to the disposition of securities), or
(iii) upon the delivery by the holder to the Company of an opinion of counsel,
reasonably satisfactory to counsel to the issuer, stating that an exemption
from registration under such Act is available.
5. PRICE.
5.1 ADJUSTED EXERCISE PRICE. The adjusted Exercise Price shall be the price
which shall result from time to time from any and all adjustments of the
Initial Exercise Price in accordance with the provisions of Article 7 hereof.
5.2 EXERCISE PRICE. The term "Exercise Price" herein shall mean the Initial
Exercise Price or the adjusted Exercise Price, depending upon the context.
6. REGISTRATION RIGHTS.
6.1 REGISTRATION UNDER THE SECURITIES ACT OF 1993. The Warrants and the Shares
have not been registered for purposes of public distribution under the
Securities Act of 1933, as amended ("the Act").
6.2 REGISTRABLE SECURITIES. As used herein the term "Registrable Security"
means each of the Warrants, the Shares and any shares of Common Stock issued
upon any stock split or stock dividend in respect of such Shares; provided,
however, that with respect to any particular Registrable Security, such
security shall cease to be a Registrable Security when, as of the date of
determination, (i) it has been effectively registered under the Securities Act
and disposed of pursuant thereto, (ii) registration under the Securities Act is
no longer required for the immediate public distribution of such security or
(iii) it has ceased to be outstanding. The term "Registrable Securities" means
any and/or all of the securities falling within the foregoing definition of a
"Registrable Security." In the event of any merger, reorganization,
consolidation, recapitalization or other change in corporate structure
affecting the Common Stock, such adjustment shall be made in the definition of
"Registrable Security" as is appropriate in order to prevent any dilution or
enlargement of the rights granted pursuant to this Article 6.
6.3 PIGGYBACK REGISTRATION. If, at any time during the five years following the
date of this Agreement, the Company proposes to prepare and file any
registration statement or post-effective amendments thereto covering equity or
debt securities of the Company, or any such securities of the Company held by
its shareholders (in any such case, other than in connection with a merger,
acquisition or pursuant to Form S-8 or successor form), (for purposes of this
Article 6, collectively, a "Registration Statement"), it will give written
notice of its intention to do so by registered mail ("Notice"), at ten (10)
business days prior to the filing of each such Registration Statement, to all
holders of the Registrable Securities. Upon the written request of such a
holder (a "Requesting Holder"), made within ten (10) business days after
receipt of the Notice, that the Company include any of the Requesting Holder's
Registrable Securities in the proposed Registration Statement, the Company
shall, as to each such Requesting Holder, use its best efforts to effect the
registration under the Securities Act of the Registrable Securities which it
has been so requested to register ("Piggyback Registration"), at the Company's
sole cost and expense and at no cost or expense to the Requesting Holders;
Notwithstanding the provisions of this Section 6.3, the Company shall have the
right at any time after it shall have given written notice pursuant to this
Section 6.3 (irrespective of whether any written request for inclusion of such
securities shall have already been made) to elect not to file any such proposed
Registration Statement, or to withdraw the same after the filing but prior to
the effective date thereof.
6.4 DEMAND REGISTRATION.
(a) At any time, commencing one hundred twenty (120) days from the date of this
Agreement and during the Warrant Exercise Term, any "Majority Holder" (as such
term is defined in Section 6.4(d) below) of the Registrable Securities shall
have the right (which right is in addition to the piggyback registration rights
provided for under Section 6.3 hereof), exercisable by written notice
to the Company (the "Demand Registration Request"), to have the Company prepare
and file with the Securities and Exchange Commission (the "Commission"), on one
occasion, at the sole expense of the Company, a Registration Statement and such
other documents, including a prospectus, as may be necessary (in the opinion of
both counsel for the Company and counsel for such Majority Holder), in order to
comply with the provisions of the Act, so as to permit a public offering and
sale of the Registrable Securities by the holders thereof, for nine (9)
consecutive months.
(b) The Company covenants and agrees to give written notice of any Demand
Registration Request to all holders of the Registrable Securities within ten
(10) days from the date of the Company's receipt of any such Demand
Registration Request. After receiving notice from the Company as provided in
this Section 6.4(b), holders of Registrable Securities may request the Company
to include their Registrable Securities in the Registration Statement to be
filed pursuant to Section 6.4(a) hereof by notifying the Company of their
decision to include such securities within twenty (20) days of their receipt of
the Company's notice.
(c) In addition to the registration rights provided for under Section 6.3 and
subsection (a) of this Section 6.4, at any time during the Warrant Exercise
Term, any Majority Holder (as defined below in Section 6.4(d)) of Registrable
Securities shall have the right, exercisable by written request to the Company,
to have the Company prepare and file with the Commission, on one occasion in
respect of all holders of Registrable Securities, a Registration Statement so
as to permit a public offering and sale of such Registrable Securities for nine
(9) consecutive months, provided, however, that all costs incident thereto
shall be at the expense of the holders of the Registrable Securities included
in such Registration Statement. If a Majority Holder shall give notice to the
Company at any time of its or their desire to exercise the registration right
granted pursuant to this Section 6.4(c), then within ten (10) days after the
Company's receipt of such notice, the Company shall give notice to the other
holders of Registrable Securities, advising them that the Company is proceeding
with such registration and offering to include therein the Registrable
Securities of such holders, provided they furnish the Company with such
appropriate information in connection therewith as the Company shall reasonably
request in writing.
(d) The term "Majority Holder" as used in this Section 6.4 shall mean any
holder or any combination of holders of Registrable Securities, if included in
such holders, Registrable Securities are that aggregate number of Shares
(including Shares already issued and Shares issuable pursuant to the exercise
of outstanding Warrants) as would constitute a majority of the aggregate number
of Shares (including Shares already issued and Shares issuable pursuant to the
exercise of outstanding Warrants) included in all of the Registrable
Securities.
6.5 COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION. The Company
covenants and agrees as follows:
(a) In connection with any registration under Section 6.4 hereof, the Company
shall file the Registration Statement as expeditiously as possible, but in no
event later than forty-five (45) business days following receipt of any demand
therefor, shall use its best efforts to have any such Registration Statements
declared effective at the earliest possible time, and shall furnish each holder
of Registrable Securities such number of prospectuses as shall reasonably be
requested.
(b) The Company shall pay all costs, fees and expenses (excluding fees of
holders for their counsel, transfer taxes and underwriting discounts or
commissions) in connection with all Registration Statements filed pursuant to
Sections 6.3 and 6.4(a) hereof including, without limitation, the Company's
legal and accounting fees, printing expenses, and blue sky fees and expenses.
The holders of Registrable Securities included in any Registration Statement
filed pursuant to Section 6.4(c) hereof will pay all costs, fees and expenses
in connection with such registration.
(c) The Company will take all necessary action which may be required in
qualifying or registering the Registrable Securities included in a Registration
Statement for offering and sale under the securities or blue sky laws of such
states as are requested by the holders of such securities.
(d) The Company shall indemnify any holder of the Registrable Securities to be
sold pursuant to any Registration Statement and any underwriter or person
deemed to be an underwriter under the Act and each person, if any, who controls
such holder or underwriter or person deemed to be an underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange
Act of 1934, as amended ("Exchange Act"), against all loss, claim, damage,
expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
any of them may become subject under the Act, the Exchange Act or otherwise,
arising from such Registration Statement to the same extent and with the same
effect as the provisions pursuant to which the Company has agreed to indemnify
the purchasers of the Company's Convertible Debentures contained in the
Registration Rights Agreement dated of even date herewith.
(e) Any holder of Registrable Securities to be sold pursuant to a Registration
Statement, and its successors and assigns, shall severally, and not jointly,
indemnify, the Company, its officers and directors and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against all loss, claim, damage or expense or
liability (including all expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which they may become
subject under the Act, the Exchange Act or otherwise, arising from information
furnished in writing by or on behalf of such holder, or its successors or
assigns, for specific inclusion in such Registration Statement to the same
extent and with the same effect as the provisions pursuant to which purchasers
of the Company's Convertible Debentures have agreed to indemnify the Company
contained in the Registration Rights Agreement dated of even date herewith.
(f) Nothing contained in this Agreement shall be construed as requiring any
Holder to exercise his Warrants prior to the initial filing of any Registration
Statement or the effectiveness thereof.
(g) If the Company shall fail to comply with the provisions of this Article 6,
the Company shall, in addition to any other equitable or other relief available
to the holders of Registrable Securities, be liable for any or all incidental,
special and consequential damages sustained by the holders of Registrable
Securities, requesting registration of their Registrable Securities.
(h) Except as otherwise provided to the contrary herein, the Company shall not
permit the inclusion of any securities other than the Registrable Securities to
be included in any Registration Statement filed pursuant to Section 6.4 hereof,
or permit any other registration statement to be or remain effective during the
effectiveness of a Registration Statement filed pursuant to Section 6.4 hereof,
without the prior written consent of the Majority Holders, which consent shall
not be unreasonably withheld.
(i) The Company shall deliver promptly to each holder of Registrable Securities
participating in the offering requesting the correspondence and memoranda
described in this Section 6.5(i) and to the managing underwriter, if any,
copies of all correspondence between the Commission and the Company, its
counsel or auditors and all memoranda relating to discussions with the
Commission or its staff with respect to the Registration Statement and permit
each holder of Registrable Securities and underwriters to do such
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the Registration Statement as it deems reasonably
necessary to comply with applicable securities laws or rules of the National
Association of Securities Dealers, Inc. Such investigation shall include access
to books, records and properties and opportunities to discuss the business of
the Company with its officers and independent auditors, all to such reasonable
extent and at such reasonable times and as often as any such holder of
Registrable Securities or underwriter shall reasonably request.
(j) If the Company shall enter into an underwriting agreement with the managing
underwriter selected for such underwriting, such agreement shall be
satisfactory in form and substance to the Company, each holder of Registrable
Securities and such managing underwriter, and shall contain such
representations, warranties and covenants by the Company and such other terms
as are customarily contained in agreements of that type used by the managing
underwriter. The holders of Registrable Securities shall be parties to any
underwriting agreement relating to an underwritten sale of their Registrable
Securities and may, at their option, require that any or all the
representations, warranties and covenants of the Company to or for the benefit
of such underwriter shall also be made to and for the benefit of such holders
of Registrable Securities. Such holders of Registrable Securities shall not be
required to make any representations or warranties to or agreements with the
Company or the underwriter except as they may relate to such holders of
Registrable Securities and their intended methods of distribution.
7. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF SHARES.
7.1 SUBDIVISION AND COMBINATION. In case the Company shall at any time
subdivide or combine the outstanding shares of Common Stock, the Exercise Price
shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
7.2 Adjustment in Number of Shares. Upon each adjustment of the Exercise Price
pursuant to the provisions of this Article 7, the number of Shares issuable
upon the exercise of each Warrant shall be adjusted to the nearest full Share
by multiplying a number equal to the Exercise Price in effect immediately prior
to such adjustment by the number of Shares issuable upon exercise of the
Warrants immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.
7.3 RECLASSIFICATION, CONSOLIDATION, MERGER, ETC. In case of any
reclassification or change of the outstanding shares of Common Stock (other
than a change in par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination), or in the case of any
consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger in which the Company is the
surviving corporation and which does not result in any reclassification or
change of the outstanding shares of Common Stock, except a change as a result
of a subdivision or combination of such shares or a change in par value, as
aforesaid), or in the case of a sale or conveyance to another corporation of
the property of the Company as an entirety, the Holders shall thereafter have
the right to purchase the kind and number of shares of stock and other
securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance as if the Holders were the owners of
the shares of Common Stock underlying the Warrants immediately prior to any
such events at a price equal
to the product of (x) the number of shares issuable upon exercise of the
Warrants and (y) the Exercise Price in effect immediately prior to the record
date for such reclassification, change, consolidation, merger, sale or
conveyance as if such Holders had exercised the Warrants.
7.4 NO ADJUSTMENT OF EXERCISE PRICE IN CERTAIN CASES. No adjustment of the
Exercise Price shall be made:
(a) Upon the issuance or sale of shares of Common Stock upon the
exercise of the Warrants; or
(b) Upon (i) the issuance of options pursuant to the Company's
employee stock option plan in effect on the date hereof or the issuance or sale
by the Company of any shares of Common Stock pursuant to the exercise of any
such options, or (ii) the issuance or sale by the Company of any shares of
Common Stock pursuant to the exercise of any options or warrants previously
issued and outstanding on the date hereof; or
(c) Upon the issuance of shares of Common Stock pursuant to
contractual obligations existing on the date hereof; or
(d) If the amount of said adjustment shall be less than two cents (24)
per Share, provided, however, that in such case any adjustment that would
otherwise be required then to be made shall be carried forward and shall be
made at the time of and together with the next subsequent adjustment which,
together with any adjustment so carried forward, shall amount to at least two
cents (24) per Share.
7.5 DIVIDENDS AND OTHER DISTRIBUTIONS WITH RESPECT TO OUTSTANDING SECURITIES.
In the event that the Company shall at any time prior to the exercise of all
Warrants declare a dividend (other than a dividend consisting solely of shares
of Common Stock or a cash dividend or distribution payable out of current or
retained earnings) or otherwise distribute to its shareholders any monies,
assets, property, rights, evidences of indebtedness, securities (other than
shares of Common Stock), whether issued by the Company or by another person or
entity, or any other thing of value, the Holder or Holders of the unexercised
Warrants shall thereafter be entitled, in addition to the shares of Common
Stock or other securities receivable upon the exercise thereof, to receive,
upon the exercise of such Warrants, the same monies, property, assets, rights,
evidences of indebtedness, securities or any other thing of value that they
would have been entitled to receive at the time of such dividend or
distribution. At the time of any such dividend or distribution, the Company
shall make appropriate reserves to ensure the timely performance of the
provisions of
this Subsection 7.5.
7.6 SUBSCRIPTION RIGHTS FOR SHARES OF COMMON STOCK OR OTHER SECURITIES. In the
case the Company or an affiliate of the Company shall at any time after the
date hereof and prior to the exercise of all the Warrants issue any rights to
subscribe for shares of Common Stock or any other securities of the Company or
of such affiliate to all the shareholders of the Company, the Holders of the
unexercised Warrants shall be entitled, in addition to the shares of Common
Stock or other securities receivable upon the exercise of the Warrants, to
receive such rights at the time such rights are distributed to the other
shareholders of the Company.
8. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES.
Each Warrant Certificate is exchangeable without expense, upon the
surrender hereof by the registered Holder at the principal executive office of
the Company, for a new Warrant Certificate of like tenor and date representing
in the aggregate the right to purchase the same number of Shares in such
denominations as shall be designated by the Holder thereof at the time of such
surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor, in lieu thereof.
9. ELIMINATION OF FRACTIONAL INTERESTS.
The Company shall not be required to issue certificates representing
fractions of shares of Common Stock and shall not be required to issue scrip or
pay cash in lieu of fractional interests, it being the intent of the parties
that all fractional interests shall be eliminated by rounding any fraction up
to the nearest whole number of shares of Common Stock.
10. RESERVATION AND LISTING OF SECURITIES.
The Company shall at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of issuance upon the
exercise of the Warrants, such number of shares of Common Stock as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon
exercise of the Warrants and payment of the Exercise Price
therefor, all shares of Common Stock issuable upon such exercise shall be duly
and validly issued, fully paid, nonassessable and not subject to the preemptive
rights of any shareholder. As long as the Warrants shall be outstanding, the
Company shall use its best efforts to cause all shares of Common Stock issuable
upon the exercise of the Warrants to be listed on or quoted by NASDAQ.
11. NOTICES TO WARRANT HOLDERS.
Nothing contained in this Agreement shall be construed as conferring
upon the Holder or Holders the right to vote or to consent or to receive notice
as a shareholder in respect of any meetings of shareholders for the election of
directors or any other matter, or as having any rights whatsoever as a
shareholder of the Company. If, however, at any time prior to the expiration of
the Warrants and their exercise, any of the following events shall occur:
(a) the Company shall take a record of the holders of its shares of
Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or distribution
payable otherwise than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the
Company; or
(b) the Company shall offer to all the holders of its Common Stock any
additional shares of capital stock of the Company or securities convertible
into or exchangeable for shares of capital stock of the Company, or any option,
right or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed; then, in any one or more of said events, the Company shall give
written notice of such event at least fifteen (15) days prior to the date fixed
as a record date or the date of closing the transfer books for the
determination of the shareholders entitled to such dividend, distribution,
convertible or exchangeable securities or subscription rights, options or
warrants, or entitled to vote on such proposed dissolution, liquidation,
winding up or sale. Such notice shall specify such record date or the date of
closing the transfer books, as the case may be. Failure to give such notice or
any defect therein shall not affect the validity of any action taken in
connection with the declaration or payment of any such dividend or
distribution, or the issuance of any convertible or exchangeable securities or
subscription rights, options or warrants, or any proposed dissolution,
liquidation, winding up or sale.
12. NOTICES.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made when delivered,
or mailed by registered or certified mail, return receipt requested:
(a) If to a registered Holder of the Warrants, to the address of such
Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3 of this
Agreement or to such other address as the Company may designate by notice to
the Holders.
13. SUPPLEMENTS AND AMENDMENTS.
The Company and the Placement Agent may from time to time supplement
or amend this Agreement without the approval of any Holders of Warrant
Certificates in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any
provisions herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Placement Agent may deem
necessary or desirable and which the Company and the Placement Agent deem not
to adversely affect the interests of the Holders of Warrant Certificates.
14. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the
benefit of the Company and the Holders inure to the benefit of their respective
successors and assigns hereunder.
15. TERMINATION.
This Agreement shall terminate at the close of business on September
9, 2003. Notwithstanding the foregoing, this Agreement will terminate on any
earlier date when all Warrants have been exercised and all the Shares issuable
upon exercise of the Warrants have been resold to the public; provided,
however, that the provisions of Article 6 shall survive such termination until
the close of business on September 9, 2002.
16. GOVERNING LAW.
This Agreement and each Warrant Certificate hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware without regard to the principles of conflict of laws. Any dispute or
controversy between the parties arising in connection with this
Agreement or the subject matter contemplated by this Agreement shall be
resolved by arbitration before a three-member panel of the American Arbitration
Association in accordance with the commercial arbitration rules of said forum
and the Federal Arbitration Act, 9 U.S.C. 1 ET SEQ., with the resulting award
being final and conclusive. Said arbitrators shall be empowered to award all
forms of relief and damages claimed, including, but not limited to, attorney's
fees, expenses of litigation and arbitration, exemplary damages, and
prejudgment interest. The parties further agree that any arbitration action
between them shall be heard in Atlanta, Georgia, and expressly consent to the
jurisdiction and venue of the Superior Court of Xxxxxx County, Georgia, and the
United States District Court for the Northern District of Georgia, Atlanta
Division for the adjudication of any civil action asserted pursuant to this
Paragraph.
17. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company and the Placement Agent and any other
registered holder or holders of the Warrant Certificates, Warrants or the
Shares any legal or equitable right, remedy or claim under this Agreement; and
this Agreement shall be for the sole and exclusive benefit of the Company and
the Placement Agent and any other holder or holders of the Warrant
Certificates, Warrants or the Shares.
18. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and
such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.
EUROWEB INTERNATIONAL CORP.
By:______________________________________
Name: Xxxxx X. Xxxxx
Title: Chairman of Board
Attest: ___________________________
Name: Xxxx X. Xxxxxxxx
Title: Assistant Secretary
X.X. XXXXX SECURITIES, INC.
By:______________________________________
Name:
Title:
Attest: ___________________________
Name: ___________________________
Title:_____________________________
EXHIBIT "A"
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE
EXTENT APPLICABLE, PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE
UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) UPON THE
DELIVERY BY THE HOLDER TO THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO COUNSEL FOR THE ISSUER, STATING THAT AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT
REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:00 P.M., EASTERN STANDARD TIME, SEPTEMBER 9, 2003
No. ___________________ 100,000 Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that X.X. Xxxxx Securities, Inc.
("X.X. Xxxxx") or registered assigns, is the registered holder of 100,000
Warrants to purchase, at any time from September 9, 1998, until 5:00 p.m.
Eastern Standard Time on September 9, 2003 ("Expiration Date"), up to 80,000
shares ("Shares") of fully-paid and non-assessable common stock, par value
$.001 per share ("Common Stock"), of EuroWeb International Corp., a Delaware
corporation (the "Company"), at the Initial Exercise Price, subject to
adjustment in certain events (the "Exercise Price"), of $_______________ per
Share upon surrender of this Warrant Certificate and payment of the Exercise
Price at an office or agency of the Company, but subject to the conditions set
forth herein and in the warrant agreement dated as of September ___________,
1998, between the Company and X.X. Xxxxx (the "Warrant Agreement"). Payment of
the Exercise Price may be made in cash, or by certified or official bank check
in New York Clearing House funds payable to the order of the Company, or any
combination of cash or check.
No Warrant may be exercised after 5:00 p.m., Eastern Standard Time, on
the Expiration Date, at which time all Warrants evidenced hereby, unless
exercised prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorpo rated by reference in and made a part of
this instrument and is hereby referred to in a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Company and the holders (the words "holders" or "holder" meaning the registered
holders or registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events, the Exercise Price and/or number of the Company's securities issuable
thereupon may, subject to certain conditions, be adjusted. In such event, the
Company will, at the, request of the holder, issue a new Warrant Certificate
evidencing the adjustment in the Exercise Price and the number and/or type of
securities issuable upon the exercise of the Warrants; provided, however, that
the failure of the Company to issue such new Warrant Certificates shall not in
any way change, alter, or otherwise impair, the rights of the holder as set
forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferees in exchange for this
Warrant Certificate, subject to the limitations provided herein and in the
Warrant Agreement, without any charge except for any tax, or other governmental
charge imposed in connection therewith.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated: September 9, 1998
EUROWEB INTERNATIONAL CORP.
By:___________________________________________
Name: Xxxxx X. Xxxxx
Title: Chairman of Board
Attest:_______________________________
Name: Xxxx X. Xxxxxxxx
Title: Assistant Secretary
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ____________ Shares and
herewith tenders in payment for such Shares cash or a certified or official
bank check payable in New York Clearing House Funds to the order of
_____________________ in the amount of $_______________, all in accordance with
the terms hereof. The undersigned requests that a certificate for such Shares
be registered in the name of _______________________whose address
is__________________________________________________, and that such Certificate
be delivered to __________________________________________, whose address is
-----------------------------------------------------------------------------
Dated: ________ Signature:______________________________
(Signature must conform in
all respects to name of
holder as specified on the
face of the Warrant
Certificate.)
------------------------------------
------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED ___________________________________________ hereby
sells, assigns and transfers unto ____________________________________________
______________________________________________________________________________
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint
___________________________________, Attorney, to transfer the within Warrant
Certificate on the books of the within-named Company, with full power of
substitution.
Dated:_______________ Signature:___________________________________
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant
Certificate)
-------------------------------------
-------------------------------------
(Insert Social Security or Other
Identifying Number of Assignee)
