UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities and Exchange Act of 1934
Date of Report (Date of earliest reported): September 27, 2005
EUROWEB INTERNATIONAL CORP.
(Exact name of registrant as specified in charter)
Delaware 1-1200 13-3696015
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1138 Budapest, Vaci ut 141. Hungary
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: +36-1-8897000
Copies to:
Gregory Sichenzia, Esq.
Stephen M. Fleming, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, New York 10018
Phone: (212) 930-9700
Fax: (212) 930-9725
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instructions A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01 Entry Into a Material Definitive Agreement
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under
an Off- Balance Sheet Arrangement of a Registrant.
On July 21, 2005, Euroweb International Corp. ("Euroweb") and Euroweb Hungary
Rt. ("Euroweb Hungary"), a wholly-owned subsidiary of Euroweb (collectively,
Euroweb Hungary and Euroweb are hereinafter referred to as the "Company"),
entered into a Sale and Purchase Agreement (the "Agreement") with Marivaux
Investments Limited ("Marivaux") and Graeton Holdings Limited ("Graeton")
(collectively, Marivaux and Graeton are hereinafter referred to as the
"Sellers"), which are both registered under the laws of the Cyprus. Pursuant to
the Agreement, the Company has agreed to acquire and, the Sellers have agreed to
sell, 100% of the Seller's interest in Navigator Informatika Rt. ("Navigator"),
a Hungarian company. In consideration for Marivaux's interest in Navigator, the
Euroweb Hungary will pay Marivaux USD $8,500,000 of which USD $150,000 was paid
upon signing of the Agreement and $8,350,000 shall be paid upon closing. In
addition, at closing, Euroweb shall issue Graeton 441,566 shares of common stock
of Euroweb (the "Shares"). Euroweb Hungary will utilize $6,000,000 (the "Funds")
long term bank loan from Commerzbank Hungary ("Commerzbank") to finance the cash
part of purchase price, while the remaining cash balance of the transaction
$2,350,000 will be financed from existing cash on hand.
On September 27, 2005, Euroweb Hungary entered into a loan contract with
Commerzbank pursuant to which Commerzbank has agreed to loan the Funds to
Euroweb Hungary. Euroweb Hungary is required to draw down the loan on or prior
to October 10, 2005. The interest rate in connection with the loan is BUBOR plus
2.5%. Euroweb Hungary is required to make scheduled payments in connection with
the loan in varying amounts from $166,828 to $354,513 commencing March 31, 2006
through June 30, 2010.
As security for providing the Funds, Euroweb Hungary granted a security interest
in all of its assets, the assignment of its revenue, the assignment of all
future dividends payable by Navigator and the pledge of all of the securities of
Euroweb Hungary and Navigator held by Euroweb. Further, in the event that
Euroweb Hungary fails to satisfy its obligations under the loan agreement with
Commerzbank, Commerzbank holds an option to acquire all of the securities of
Navigator.
Upon closing of the loan, the Euroweb Hungary will have obligations of
$6,000,000 issued to Commerzbank. The Loan will be a debt obligation arising
other than in the ordinary course of business, which constitutes a direct
financial obligation of the Company.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit No. Description
10.1 Sale and Purchase Agreement by and between the Company
and the Sellers dated July 21, 2005 (1)
10.2 Registration Rights Agreement dated July 21, 2005 (1)
10.3 Loan Agreement dated September 27, 2005 by and between
Commerzbank Rt. and Euroweb International Corp.
(1) Incorporated by reference to the Form 8-K Current Report filed with the
Securities and Exchange Commission on July 26, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
EUROWEB INTERNATIONAL CORPORATION
By: /s/ CSABA TORO
---------------------------
Name: Csaba Toro
Title: Chief Executive Officer
Date: October 3, 2005
Budapest, Hungary