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As filed with the Securities & Exchange Commission on September 24, 1999
Registration No. 333-86465
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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WEBB INTERACTIVE SERVICES, INC.
(Exact name of issuer as specified in its charter)
Colorado 84-1293864
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
1800 Glenarm Place, Suite 700
Denver, Colorado 80202
(303) 296-9200
(Address and telephone number of principal executive offices)
-------------------------
R. Steven Adams
Webb Interactive Services, Inc.
1800 Glenarm Place, Suite 700
Denver, Colorado 80202
(303) 296-9200
(Name, address and telephone number of agent for service)
Copy to:
Lindley S. Branson
Steven J. Price
Gray, Plant, Mooty, Mooty & Bennett, P.A.
33 South Sixth Street
3400 City Center
Minneapolis, Minnesota 55402
(612) 343-2800
-------------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of earlier effective registration
statement for same offering. [ ] ___________________________________________
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for same offering. [ ] ____________________________________________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of securities to Amount to be Proposed maximum Proposed maximum aggregate Amount of
be registered registered offering price (1) offering price (1) registration fee*
- ----------------------- -------------- ------------------- ---------------------------- ------------------
<S> <C> <C> <C> <C>
Common Stock, no par
value (2) 1,280,838 $11.625 $14,889,741 $4,139.35
Common Stock, no par
value (3) 304,013 $11.625 $3,534,151 $982.49
-------------- ---------------------------- ------------------
Total 1,584,851 $18,423,892 $5,121.84
</TABLE>
- ------------------------------
* A filing fee of $3,192.54 was previously paid.
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of Regulation C as of the close of the market on
September 21, 1999.
(2) Common stock and convertible securities issued by Webb pursuant to
conversion of securities of Durand Communications, Inc. ("DCI") pursuant
to the terms of an Agreement and Plan of Merger between Webb, Durand
Acquisition Corporation, and DCI dated March 19, 1998 (the "Merger") and
as compensation.
(3) Common stock issuable by Webb upon exercise of options and warrants to
purchase common stock and conversion of convertible securities of Webb
issued pursuant to the terms of the Merger or in payment of outstanding
indebtedness.
-------------------------------
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a),
may determine.
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PROSPECTUS
WEBB INTERACTIVE SERVICES, INC.
This is a public offering of a maximum of 1,584,851 shares of common stock
of Webb Interactive Services, Inc. The selling shareholders are offering all of
the shares to be sold. We will not receive any of the proceeds from the offer
and sale of the shares, however, 236,528 of the shares offered by the selling
shareholders are issuable upon the exercise of issued and outstanding
transferable warrants at various exercise prices. If all of the warrants are
exercised in full, we will receive proceeds of $2,262,689.
The Nasdaq SmallCap Market lists our common stock under the symbol WEBB.
Investing in our common stock involves risks. You should not purchase our
common stock unless you can afford to lose your entire investment. See "Risk
Factors" beginning on page 4 of this prospectus.
Because the selling shareholders will offer and sell the shares at various
times, we have not included in this prospectus information about the price to
the public of the shares or the proceeds to the selling shareholders.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities or passed on the
adequacy of the disclosures in this prospectus. Any representation to the
contrary is a criminal offense.
The date of this prospectus is September 27, 1999.
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WEBB INTERACTIVE SERVICES, INC.
Webb Interactive Services, Inc. (Nasdaq: WEBB) ("Webb") is developing a
new generation of XML-based Internet applications that simplify and support
e-commerce transactions in local markets. Our products provide an interactive
framework of local commerce and community-based services comprised of publishing
content management, community-building and communications. Branded
CommunityWare/XML, our products generally are offered on a private-labeled,
application service basis through high-volume distribution partners such as
yellow page publishers, newspapers, city guides and search engines.
To date, we have generated revenues through the sale of design and
consulting services for Web site development and network engineering services,
resale of software licenses, mark-ups on computer hardware and software sold to
customers, maintenance fees charged to customers to maintain computer hardware
and Web sites, license fees based on a percentage of revenues from our products
and services, training course fees, and monthly fees paid by customers for
Internet access which we have provided. We commenced sales in February 1995 and
have incurred losses from operations since inception. At June 30, 1999, we had
an accumulated deficit of $30,620,542. The reports of our independent public
accountants for the years ended December 31, 1998 and 1997 contained a paragraph
noting substantial doubt regarding our ability to continue as a going concern.
Based on our current projections, we have cash on hand which will allow us
to operate through February, 2000. Accordingly, we will need to raise additional
capital, which could involve the issuance of dilutive equity securities and/or
reduce our operating activity to conserve cash.
Prior to the third quarter of 1997, our focus generally was on three
markets: general Web site development, maintenance and hosting; rural or small
market Internet service providers ("ISPs"); and healthcare information services
and continuing medical education. Each of these activities involved, to varying
degrees, the building of online communities and the development of tools and
services to allow for the building of strategic and customized Web sites. As an
outgrowth of these activities, since mid 1997, our business has evolved to the
development of online communities and more recently, the development of Internet
applications that simplify and support e-commerce transactions in local markets.
Our application services are being developed to solve two of the largest
problems in the local online market; the failure of merchants to have their web
sites found by their target customers, and the inability of customers to find
merchants, compare products and services, and ask questions, or conduct
transactions such as making an appointment or requesting a bid.
The opportunity to connect buyers and sellers in the rapidly emerging
local online market is significant. The Kelsey Group estimates that the number
of U.S. based local businesses that are active advertisers and that have a web
presence will increase from 1.9 million in 1999 to 5.2 million in 2004.
According to Forrester Research, local online sales are projected to grow from
$680 million in 1998 to $6.1 billion in 2003. The local only advertising dollars
spent in support of these web site activities are projected to grow from $135
million in 1998 to $1.7 billion in 2003.
Our application solutions are intended to provide:
o Local market merchants with advanced yet easy-to-use web site
publishing tools, new ways to have their site found by their target
customers, and services that turn web site visitors into leads,
buyers, and repeat customers.
o Consumers with unique abilities to easily comparison shop and
interact online with merchants in support of e-commerce or in-store
transactions.
o Directory services and yellow page publishers who host local market
merchant sites with enhanced services to attract a larger share of
merchant web sites and command premium fees for site development and
hosting.
In addition to targeting the local directory and e-commerce markets, we
also offer online banking transaction processing and management services to
local-market focused credit unions and community banks. Over
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the next year, we intend to offer a suite of XML-enabled services to these
financial institutions to enhance customer service and support and connect their
loans and other financial services into the local e-commerce marketplace.
We have over five years of experience in web site development and in
developing and marketing community building tools supported by a full suite of
content rich services. Customers have included Citicorp Diners Club, Invesco
Funds Group, TCI International, Intermedia Partners and Bresnan Communications,
Inc.
During the first six months of 1999, we acquired privately held Durand
Communications, Inc. and NetIgnite, Inc.
We have contracted with Switchboard, Inc. as a key anchor distribution
partner in the online local directories market and with CU Cooperative Systems,
Inc. in the community banking arena. We believe these partners provide a
critical mass of end users that will generate sustainable and recurring revenue
for Webb and a strong foundation on which to build enhanced distribution
relationships with other market leaders. As a result of these agreements, we
expect our revenues to increase during the remainder of fiscal 1999 and beyond.
Our strategy is to develop a competitive advantage and build a leadership
position in local e-commerce by:
o Delivering leading-edge technical solutions that provide first mover
advantage and capitalize on our expertise in online community,
communication and XML-based technologies;
o Securing additional distribution partnerships that drive the
deployment of our technologies to a critical mass of end-users; and
o Providing innovative, value-added services to enhance buyer-seller
interaction.
On August 25, 1999, we issued to an investor a three-year Promissory Note
in the amount of $5,000,000 and a five-year Warrant representing the right to
acquire 136,519 shares of our common stock at an exercise price of $11.44 per
share in consideration for which the investor loaned to the Company $5,000,000.
The Note becomes convertible 120 days after issuance if it has not been redeemed
by the Company at a conversion price equal to the lesser of $11.14 or the
average of the five lowest closing bid prices for our common stock during the 15
trading days prior to the date of conversion.
Webb was incorporated under the laws of the State of Colorado on March 22,
1994. Our executive offices are located at 1800 Glenarm Place, Suite 700,
Denver, Colorado 80202, telephone number (303) 296-9200.
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RISK FACTORS
Our limited operating history could affect our business. We were founded
in March 1994 and commenced sales in February 1995. Accordingly, we have a
limited operating history upon which you may evaluate us. Our business is
subject to the risks, expenses and difficulties frequently encountered by
companies with a limited operating history including:
o Limited ability to respond to competitive developments,
o Exaggerated effect of unfavorable changes in general economic and
market conditions,
o Ability to attract qualified personnel, and
o Ability to develop and introduce new product and service offerings.
There is no assurance we will be successful in addressing these risks. If we are
unable to successfully address these risks our business could be significantly
affected.
We have accumulated losses since inception and we anticipate that we will
continue to accumulate losses for the foreseeable future. We have incurred net
losses since inception totaling $30,620,542 through June 30, 1999. In addition,
we expect to incur additional substantial operating and net losses in 1999 and
for one or more years thereafter. We expect to incur these additional losses
because:
o We currently intend to increase our capital expenditures and
operating expenses to expand the functionality and performance of
our products and services,
o We recorded goodwill and other intangible assets in connection with
the DCI and NetIgnite acquisitions which will be amortized over
their estimated useful lives of approximately three years. We have
allocated approximately $15 million to goodwill and other intangible
assets in connection with these acquisitions.
Net losses since inception include approximately $10.2 million of non-cash
expenses related to the issuance of preferred stock and warrants in financing
transactions and warrants issued to three customers. The current competitive
business environment may result in our issuance of similar securities in future
financing transactions or to other companies as an inducement for them to enter
into a business relationship with us. While these transactions represent
non-cash charges, to the extent that we enter into similar transaction in the
future, they will increase our expenses and may increase our net loss.
If we are unable to raise additional working capital funds, we may not be
able to sustain our operations. We believe that our present cash and cash
equivalents, working capital and commitments for additional equity investments
will be adequate to sustain our current level of operations only through
February 2000. If we cannot raise additional funds when needed, we may be
required to curtail or scale back our operations. These actions could have a
material adverse effect on our business, financial condition, or results of
operations. We estimate that we will need to raise through equity, debt or other
external financing at least $10 million to sustain operations for the next 12
months. There is no assurance that we will be able to raise additional funds in
amounts required or upon acceptable terms. In addition, we may discover that we
have underestimated our working capital needs, and we may need to obtain
additional funds to sustain our operations. In its report accompanying the
audited financial statements for the years ended December 31, 1998 and 1997, our
auditor, Arthur Andersen LLP, expressed substantial doubt about our ability to
continue as a going concern.
We may never become or remain profitable. Our ability to become profitable
depends on the ability of our products and services to generate revenues. The
success of our revenue model will depend upon many factors including:
o The success of our distribution partners in marketing their products
and services, and
o The extent to which consumers and businesses use our products and
conduct e-commerce transactions and advertising utilizing our
products.
Because of the new and evolving nature of the Internet, we cannot predict
whether our revenue model will prove to be viable, whether demand for our
products and services will materialize at the prices we expect to be charged, or
whether current or future pricing levels will be sustainable. Additionally, our
customer contracts may
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result in significant development revenue in one quarter, which will not recur
in the next quarter for that customer. As a result, it is likely that certain
components of our revenue will be volatile, which may cause our stock price to
be volatile as well.
Our business depends on the growth of the Internet. Our business plan
assumes that the Internet will develop into a significant source of
communication and communication interactivity. However, the Internet market is
new and rapidly evolving and there is no assurance that the Internet will
develop in this manner. If the Internet does not develop in this manner, our
business, operating results and financial condition would be materially
adversely effected. Numerous factors could prevent or inhibit the development of
the Internet in this manner, including:
o The failure of the Internet's infrastructure to support Internet
usage or electronic commerce,
o The failure of businesses developing and promoting Internet commerce
to adequately secure the confidential information, such as credit
card numbers, needed to carry out Internet commerce, and
o Regulation of Internet activity
Use of many of our products and services will be dependent on distribution
partners. Because we have elected to partner with other companies for the
distribution of many of our products and services, many users of our products
and services are expected to utilize our products through our distribution
partners. As a result, our distribution partners, and not us, will substantially
control the customer relationship with these users. If the business of the
companies with whom we partner is adversely affected in any manner our business,
operating results and financial condition could be materially adversely
effected.
We may be unable to develop desirable products. Our products are subject
to rapid obsolescence and our future success will depend upon our ability to
develop new products and services that meet changing customer and marketplace
requirements. There is no assurance that we will be able to successfully:
o Identify new product and service opportunities, or
o Develop and introduce new products and services to market in a
timely manner.
If we are unable to accomplish these items, our business, operating
results and financial condition could be materially adversely affected.
Our products and services may not be successful. Even if we are able to
successfully identify, develop, and introduce new products and services there is
no assurance that a market for these products and services will materialize to
the size and extent that we anticipate. If a market does not materialize as we
anticipate, our business, operating results, and financial condition could be
materially adversely affected. The following factors could affect the success of
our products and services:
o The failure of our business plan to accurately predict the rate at
which the market for Internet products and services will grow,
o The failure of our business plan to accurately predict the types of
products and services the future Internet marketplace will demand,
o Our limited experience in marketing our products and services,
o The failure of our business plan to accurately predict our future
participation in the Internet marketplace,
o The failure of our business plan to accurately predict the estimated
sales cycle, price, and acceptance of our products and services,
o The development by others of products and services that renders our
products and services noncompetitive or obsolete, or
o Our failure to keep pace with the rapidly changing technology,
evolving industry standards, and frequent new product and service
introductions that characterize the Internet marketplace.
The intense competition that is prevalent in the Internet market could
have a material adverse effect on our business. Our current and prospective
competitors include many companies whose financial, technical, marketing and
other resources are substantially greater than ours. There is no assurance that
we will have the financial resources, technical expertise, or marketing, sales
and support capabilities to compete successfully. The
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presence of these competitors in the Internet marketplace could have a material
adverse effect on our business, operating results, or financial condition by
causing us to:
o Reduce the average selling price of our products and services, or
o Increase our spending on marketing, sales and product development.
There is no assurance that we would be able to offset the effects of any
such price reductions or increases in spending through an increase in the number
of our customers, higher sales from premium services, cost reductions or
otherwise. Further, our financial condition may put us at a competitive
disadvantage relative to our competitors. If we fail to, or cannot, meet
competitive challenges, our business, operating results and financial condition
could be materially adversely affected.
A limited number of our customers generate a significant portion of our
revenues. We had four customers representing 77% of revenues for the June 30,
1999 three-month period and four customers representing 82% of net revenues for
the similar 1998 period. We had four customers representing 83% of revenues for
the June 30, 1999 six-month period and three customers representing 74% of
revenues for the similar 1998 period. There is no assurance that we will be able
to attract or retain major customers. The loss of, or reduction in demand for
products or related services from major customers could have a material adverse
effect on our business, operating results, cashflows, and financial condition.
The sales cycle for our products and services is lengthy and
unpredictable. While our sales cycle varies from customer to customer, it
typically has ranged from one to six months for projects. Our pursuit of sales
leads typically involves an analysis of our prospective customer's needs,
preparation of a written proposal, one or more presentations and contract
negotiations. We often provide significant education to prospective customers
regarding the use and benefits of our Internet technologies and products. Our
sales cycle may also be affected by a prospective customer's budgetary
constraints and internal acceptance reviews, over which we have little or no
control. In order to quickly respond to, or anticipate, customer requirements,
we may begin development work prior to having a signed contract, which exposes
us to the risk that the development work will not be recovered from revenue from
that customer.
We may be unable to adjust our spending to account for potential
fluctuations in our quarterly results. As a result of our limited operating
history, we do not have historical financial data for a sufficient number of
periods on which to base planned operating expenses. Therefore, our expense
levels are based in part on our expectations as to future sales and to a large
extent are fixed. We typically operate with little backlog and the sales cycles
for our products and services may vary significantly. As a result, our quarterly
sales and operating results generally depend on the volume and timing of and the
ability to close customer contracts within the quarter, which are difficult to
forecast. We may be unable to adjust spending in a timely manner to compensate
for any unexpected sales shortfalls. If we were unable to so adjust, any
significant shortfall of demand for our products and services in relation to our
expectations would have an immediate adverse effect on our business, operating
results and financial condition. Further, we currently intend to increase our
capital expenditures and operating expenses to fund product development and
increase sales and marketing efforts. To the extent that such expenses precede
or are not subsequently followed by increased sales, our business, operating
results and financial condition will be materially adversely affected.
We may be unable to retain our key executives and development personnel.
Our future success also depends in part on our ability to identify, hire and
retain additional personnel, including key product development, sales,
marketing, financial and executive personnel. Competition for such personnel is
intense and there is no assurance that we can identify or hire additional
qualified personnel.
Executives and research and development personnel who leave us may compete
against us in the future. We generally enter into written nondisclosure and
nonsolicitation agreements with our officers and employees which restrict the
use and disclosure of proprietary information and the solicitation of customers
for the purpose of selling competing products or services. However, we generally
do not require our employees to enter into non-competition agreements. Thus, if
any of these officers or key employees left, they could compete with us, so long
as they did not solicit our customers. Any such competition could have a
material adverse effect on our business.
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We may be unable to manage our expected growth. If we are able to
implement our growth strategy, we will experience significant growth in the
number of our employees, the scope of our operating and financial systems, and
the geographic area of our operations. There is no assurance that we will be
able to implement in whole or in part our growth strategy or that our management
or other resources will be able to successfully manage any future growth in our
business. Any failure to do so could have a material adverse effect on our
operating results and financial condition.
We may be unable to protect our intellectual property rights. Intellectual
property rights are important to our success and our competitive position. There
is no assurance that the steps we take to protect our intellectual property
rights will be adequate to prevent the imitation or unauthorized use of our
intellectual property rights. Policing unauthorized use of proprietary systems
and products is difficult and, while we are unable to determine the extent to
which piracy of our software exists, we expect software piracy to be a
persistent problem. In addition, the laws of some foreign countries do not
protect software to the same extent as do the laws of the United States. Even if
the steps we take to protect our proprietary rights prove to be adequate, our
competitors may develop products or technologies that are both non-infringing
and substantially equivalent or superior to our products or technologies.
Computer viruses and similar disruptive problems could have a material
adverse effect on our business. Our software and equipment may be vulnerable to
computer viruses or similar disruptive problems caused by our customers or other
Internet users. Our business, financial condition or operating results could be
materially adversely effected by:
o Losses caused by the presence of a computer virus that causes us or
third parties with whom we do business to interrupt, delay or cease
service to our customers,
o Losses caused by the misappropriation of secured or confidential
information by a third party who, in spite of our security measures,
obtains illegal access to this information,
o Costs associated with efforts to protect against and remedy security
breaches, or
o Lost potential revenue caused by the refusal of consumers to use our
products and services due to concerns about the security of
transactions and commerce that they conduct on the Internet.
Future government regulation could materially adversely effect our
business. There are currently few laws or regulations directly applicable to
access to, communications on, or commerce on the Internet. Therefore, we are not
currently subject to direct regulation of our business operations by any
government agency, other than regulations applicable to businesses generally.
Due to the increasing popularity and use of the Internet, however, federal,
state, local, and foreign governmental organizations are currently considering a
number of legislative and regulatory proposals related to the Internet. The
adoption of any of these laws or regulations may decrease the growth in the use
of the Internet, which could, in turn:
o Decrease the demand for our products and services,
o Increase our cost of doing business, or
o Otherwise have a material adverse effect on our business, results of
operations and financial condition.
Moreover, the applicability to the Internet of existing laws governing
issues such as property ownership, copyright, trademark, trade secret,
obscenity, libel and personal privacy is uncertain and developing. Our business,
results of operations and financial condition could be materially adversely
effected by the application or interpretation of these existing laws to the
Internet.
Our systems may not be year 2000 compliant. We have reviewed our internal
software and hardware systems. Based on this review, we believe that our
internal software and hardware systems will function properly with respect to
dates in the year 2000 and thereafter. We expect to incur no significant costs
in the future for Year 2000 problems. Nonetheless, there is no assurance in this
regard until our internal software and hardware systems are operational in the
year 2000.
The failure to correct material Year 2000 problems by our suppliers and
vendors could result in an interruption in, or a failure of, certain of our
normal business activities or operations. Due to the general uncertainty
inherent in the Year 2000 problem, resulting from the uncertainty of the Year
2000 readiness of third-party suppliers and vendors and of our customers, we are
unable to determine at this time that the consequences of Year 2000 failures
will not have a material impact on our results of operations, liquidity or
financial condition.
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Our articles of incorporation and bylaws may discourage lawsuits and other
claims against our directors. Our articles of incorporation provide, as
permitted by Colorado law, that our directors shall have no personal liability
for certain breaches of their fiduciary duties to us. In addition, our bylaws
provide for mandatory indemnification of directors and officers to the fullest
extent permitted by Colorado law. These provisions may reduce the likelihood of
derivative litigation against directors and may discourage shareholders from
bringing a lawsuit against directors for a breach of their duty.
The price of our common stock has been highly volatile due to factors that
will continue to effect the price of our stock. Our common stock traded as high
as $19.38 per share and as low as $8.00 between January 1, 1999 and September
15, 1999. Historically, the over-the-counter markets for securities such as our
common stock have experienced extreme price and volume fluctuations. Some of the
factors leading to this volatility include:
o Price and volume fluctuations in the stock market at large that do
not relate to our operating performance,
o Fluctuations in our quarterly revenue and operating results,
o Announcements of product releases by us or our competitors,
o Announcements of acquisitions and/or partnerships by us or our
competitors, and
o Increases in outstanding shares of common stock upon exercise or
conversion of derivative securities.
These factors may continue to affect the price of our common stock in the
future.
The trading volume of our common stock may diminish significantly if our
common stock is prohibited from being traded on the Nasdaq SmallCap Market.
Although our shares are currently traded on The Nasdaq SmallCap Market, there is
no assurance that we will remain eligible to be included on Nasdaq. If our
common stock was no longer eligible for quotation on Nasdaq, it could become
subject to rules adopted by the Securities and Exchange Commission regulating
broker-dealer practices in connection with transactions in "penny stocks." If
our common stock became subject to the penny stock rules, many brokers may be
unwilling to engage in transactions in our common stock because of the added
regulation, thereby making it more difficult for purchasers of our common stock
to dispose of their shares.
We have issued numerous options, warrants, and convertible securities to
acquire our common stock that could have a dilutive effect on our shareholders.
We have issued numerous options, warrants, and convertible securities to acquire
our common stock. During the terms of these outstanding options, warrants, and
convertible securities, the holders of these securities will have the
opportunity to profit from an increase in the market price of our common stock
with resulting dilution to the holders of shares who purchased shares for a
price higher than the respective exercise or conversion price. The existence of
such stock options, warrants and convertible securities may adversely affect the
terms on which we can obtain additional financing, and you should expect the
holders of such options or warrants to exercise or convert those securities at a
time when we, in all likelihood, would be able to obtain additional capital by
offering securities on terms more favorable to us than those provided by the
exercise or conversion of such options or warrants.
As of September 15, 1999, we have issued the following warrants and
options and convertible notes convertible into shares of our common stock:
o Options and warrants to purchase 2,052,119 shares of common stock
upon exercise of such options and warrants, exercisable at prices
ranging from $0.50 to $18.25 per share, with a weighted average
exercise price of approximately $9.75 per share.
o Options issued to EBI Securities Corporation, the representative of
the underwriters involved in our initial public offering (the
"Representative's Option"), to purchase 106,700 shares of common
stock upon exercise of the Representative's Option at a purchase
price of $8.10 per share.
o Warrants issued in connection with the issuance of the 10% Preferred
Stock to purchase 53,500 shares of common stock upon exercise of
such warrants, exercisable at $15.00 per share.
o Warrants issued in connection with the issuance of the 5% Preferred
Stock to purchase 100,000 shares of common stock upon exercise of
such warrants, exercisable at $16.33 per share.
o Warrants issued to customers to purchase 231,829 shares of common
stock upon exercise of such warrants, exercisable at $8.77 to $9.94
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o Warrants issued to purchase 242,293 shares of common stock at prices
ranging from $4.30 to $20.33 assumed in connection with the
acquisition of Durand Communications, Inc.
o Notes convertible into approximately 70,000 shares of common stock
at conversion prices ranging from $9.61 to $9.75.
o Warrant issued to purchase 136,519 shares of common stock at an
exercise price of $11.44.
In addition to these derivative securities and options, we have reserved
an indeterminate number of shares of common stock for issuance upon conversion
of outstanding shares of our 10% Preferred Stock and which may become issuable
upon the conversion of our 10% promissory note which will become convertible on
December 23, 1999, if not previously redeemed. Based on the market value for the
common stock as of September 15, 1999, the then outstanding 10% Preferred Stock
were convertible into approximately 99,508 shares of common stock. The number of
shares of common stock issuable upon conversion of the 10% Preferred Stock could
increase significantly if the market value for our common stock decreases in the
future. Further, there could be issuances of additional similar securities in
connection with our need to raise additional working capital.
Future sales of our common stock in the public market could adversely
affect the price of our common stock. Sales of substantial amounts of common
stock in the public market that is not currently freely tradable, or even the
potential for such sales, could have an adverse affect on the market price for
shares of our common stock and could impair the ability of purchasers of our
common stock to recoup their investment or make a profit. As of September 15,
1999, these shares consist of:
o Approximately 650,000 shares owned by our officers and directors
("Affiliate Shares"),
o Approximately 700,000 shares issuable by Webb upon exercise of a
stock purchase warrant (136,519 shares) and which may be issuable
upon conversion of an outstanding promissory note in the principal
amount of $5,000,000, provided that the note is not redeemed; which
shares are to be registered with the SEC, and
o The shares being offered pursuant to this Prospectus.
Unless the Affiliate Shares are further registered under the securities
laws, they may not be resold except in compliance with Rule 144 promulgated by
the SEC, or some other exemption from registration. Rule 144 does not prohibit
the sale of these shares but does place conditions on their resale which must be
complied with before they can be resold.
Future sales of our common stock in the public market could limit our
ability to raise capital. Sales of substantial amounts of common stock in the
public market pursuant to Rule 144, upon exercise or conversion of derivative
securities or otherwise, or even the potential for such sales, could affect our
ability to raise capital through the sale of equity securities.
Provisions in our articles of incorporation allow us to issue shares of
stock that could make a third party acquisition of us difficult. Our Articles of
Incorporation authorize our Board of Directors to issue up to 20,000,000 shares
of common stock and 5,000,000 shares of preferred stock in one or more series,
the terms of which may be determined at the time of issuance by the Board of
Directors, without further action by our shareholders. Preferred stock
authorized by the Board of Directors may include voting rights, preferences as
to dividends and liquidation, conversion and redemptive rights and sinking fund
provisions. If the Board of Directors authorizes the issuance of preferred stock
in the future, this authorization could affect the rights of the holders of
common stock, thereby reducing the value of the common stock, and could make it
more difficult for a third party to acquire us, even if a majority of the
holders of our common stock approved of an acquisition.
Our issuances of derivative securities will require us to record non-cash
expenses which will, in turn, increase our net loss available to shareholders.
We will record a non-cash expense in the amount of approximately $900,000 during
the quarter ending September 30, 1999 as a result of our issuance of a
three-year warrant to acquire 150,000 shares to a customer. The agreement with
the customer contemplates the issuance of a second warrant, subject to certain
conditions, to purchase 150,000 shares of common stock which, if issued, could
result in similar charges in the future. In addition, on August 26, 1999, we
completed a bridge financing in the amount of $5,000,000. The financing was in
the form of a redeemable promissory note which becomes convertible into our
common stock if not redeemed prior to December 23, 1999, and a five-year warrant
representing the right to acquire 136,519 shares of our common stock. During the
120-day period following the issuance of the note, we will record a non-cash
charge for accretion relating to the conversion feature of the note of from
approximately $1.3
9
<PAGE>
million to $1.9 million and during the term of the note we expect to incur
additional non-cash charges for interest expense of from approximately $500,000
to $1.1 million based upon the fair value of the warrant.
We do not anticipate paying dividends on our common stock for the
foreseeable future. We have never paid dividends on our common stock and do not
intend to pay any dividends on our common stock in the foreseeable future. Any
decision by us to pay dividends on our common stock will depend upon our
profitability at the time, cash available therefor, and other factors. We
anticipate that we will devote profits, if any, to our future operations.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements made in this prospectus and the documents
incorporated by reference in this prospectus under the captions "Webb
Interactive Services, Inc." and "Risk Factors" and elsewhere in this prospectus
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are subject to the
safe harbor provisions of the reform act. Forward-looking statements may be
identified by the use of the terminology such as may, will, expect, anticipate,
intend, believe, estimate, should, or continue or the negatives of these terms
or other variations on these words or comparable terminology. To the extent that
this prospectus contains forward-looking statements regarding the financial
condition, operating results, business prospects or any other aspect of Webb,
you should be aware that our actual financial condition, operating results and
business performance may differ materially from that projected or estimated by
Webb in the forward-looking statements. We have attempted to identify, in
context, some of the factors that we currently believe may cause actual future
experience and results to differ from their current expectations. These
differences may be caused by a variety of factors, including but not limited to
adverse economic conditions, intense competition, including entry of new
competitors, ability to obtain sufficient financing to support our operations,
progress in research and development activities, variations in costs that are
beyond our control, changes in capital expenditure budgets for cable companies,
adverse federal, state and local government regulation, inadequate capital,
unexpected costs, lower sales and net income, or higher net losses than
forecasted, price increases for equipment, inability to raise prices, failure to
obtain new customers, the possible fluctuation and volatility of our operating
results and financial condition, inability to carry out marketing and sales
plans, loss of key executives, and other specific risks that may be alluded to
in this prospectus.
USE OF PROCEEDS
We will not receive any of the proceeds from the offer and sale of the
shares, however, 236,528 of the shares offered by the selling shareholders are
issuable upon the exercise of issued and outstanding transferable warrants of
Webb at various exercise prices. If all of these warrants are exercised in full,
we will receive proceeds of $2,262,689.
SELLING SHAREHOLDERS
The selling shareholders have indicated that the shares offered by this
prospectus may be sold from time to time by them or by their pledgees, donees,
transferees or other successors in interest. The following table shows as of
September 15, 1999:
o The name of each of the selling shareholders,
o The number of shares of our common stock beneficially owned by each
of the selling shareholders, and
o The number and percentage of securities offered by this prospectus
that may be sold from time to time by each of the selling
shareholders.
In addition, under the registration statement of which this prospectus is
a part we have registered an additional number of shares of our common stock
that we may be required to issue to the selling shareholders as a
10
<PAGE>
result of any stock split, stock dividend or similar transaction involving our
common stock. In the following table, we have calculated percentage ownership by
assuming that all shares of common stock which the selling shareholder has the
right to acquire within 60 days from the date of this prospectus upon the
exercise of options, warrants, or convertible securities are outstanding for the
purpose of calculating the percentage of common stock owned by the selling
shareholder.
There is no assurance that the selling shareholders will sell the shares
offered by this prospectus.
<TABLE>
<CAPTION>
- ------------------------------------- ----------------- ----------------- -------------------- ----------------------
Shares of Percentage of
Common Stock Shares of Shares of Common Common Stock
Owned Common Stock Stock Owned Owned Beneficially
Name of Selling Beneficially Offered By This Beneficially After Before Offering/After
Shareholder Before Offering Prospectus Offering Offering
- ------------------------------------- ----------------- ----------------- -------------------- ----------------------
<S> <C> <C> <C> <C>
Daniel B. Najor 13,004 13,004 0 * / *
CJ Overseas, Ltd. 94,438 (1) 94,438 0 1.2% / *
Page Whyte 7,668 7,668 0 * / *
David Schmidt 13,523 13,523 0 * / *
Kevin Kimberlin Partners, PL 100,860 (2) 100,860 0 1.3% / *
Chavalit Kanchanachayphoom 9,225 9,225 0 * / *
Chatchawn Kanchanachayphoom 9,225 9,225 0 * / *
Chana Kanchanachayphoom 9,225 9,225 0 * / *
Sally L. Irving Michael Cook 4,920 (3) 4,920 0 * / *
Randall N. Green 23,026 (4) 23,026 0 * / *
Walter Goodman 14,723 14,723 0 * / *
Earnest J. Friedman 6,150 6,150 0 * / *
Bryan Field-Elliot 30,991 (5) 26,991 4,000 * / *
Kristine Esters 7,850 7,850 0 * / *
Elisabeth Esters 7,850 7,850 0 * / *
Fuel Systems Consulting Profit
Sharing Plan 10,022 10,022 0 * / *
Namchai Charnmanoon 9,225 9,225 0 * / *
Berkus Family Trust dated
September 17, 1993 47,219 (6) 36,088 11,131 * / *
Megumi Armano 6,150 6,150 0 * / *
Andrew F. Pollet and Sally M.
Pollet C -- Trustee of the Andrew F
and Sally M. Pollet Revocable Trust
DTD March 6, 1990 2,460 2,460 0 * / *
Phillip L. Becker 15,540 (7) 9,636 5,904 * / *
Frank Perna 13,542 (8) 7,638 5,904 * / *
Sarah H. Blackmun 24,912 24,912 0 * / *
Irwin Dubinsky 6,111 6,111 0 * / *
Seymour Eskow 24,910 24,910 0 * / *
Harold B. Goldring, Trustee of the
Harold B. Goldring Revocable
Living Trust dtd 10/3/96 1,272 1,272 0 * / *
AJ Capital, LLC 38,745 38,745 0 * / *
Kendell R. Lang 3,291 3,291 0 * / *
Michael Towbes 12,915 (9) 12,915 0 * / *
Continental Far East Inc. 18,450 18,450 0 * / *
Daniel Esters 7,850 7,850 0 * / *
Suncrest Investors Asset, Inc. 52,002 (10) 52,002 0 * / *
Amy Belongie 1,119 (11) 1,119 0 * / *
Morris Asset Management 86,839 (12) 86,839 0 1.1% / *
Casey Hughes 8,620 (13) 8,620 0 * / *
Robert Molnar 16,384 (14) 16,384 0 * / *
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Mark Cardello 2,236 (15) 2,236 0 * / *
John Cardello 4,472 (16) 4,472 0 * / *
Patric Kealy 7,380 (17) 7,380 0 * / *
National Securities 11,014 (18) 11,014 0 * / *
Andre Durand 144,320 (19) 80,000 64,320 1.9% / 1.0%
Jeffrey Schlossberg 349 349 0 * / *
Pamela Dyer 1,014 1,014 0 * / *
Peter J. Sprague 2,881 2,881 0 * / *
Raymond Y. Wong or Rose Marie
Wong 10,278 10,278 0 * / *
Rupert Gonsalves 13,523 13,523 0 * / *
Sanford B. Weiss 2,736 2,736 0 * / *
Fran Wilson Creative Cosmetics,
Inc. AKA Wilson Marketing
Enterprises, Inc. 696 696 0 * / *
Kevin Robinson 608 608 0 * / *
Gerald Morris 3,690 3,690 0 * / *
Lester Leslie 500 500 0 * / *
Lion Sutton 2,214 2,214 0 * / *
Casino World Holdings 4,598 4,598 0 * / *
Arun Pande 3,690 (20) 3,690 0 * / *
Dale Craighead 1,203 1,203 0 * / *
Donna Payne 1,274 1,274 0 * / *
Grand Harvest Limited 12,300 12,300 0 * / *
Craig Wirths 50,265 50,265 0 * / *
Peter P. Vukovich and Ellen W.
Vukovich, Husband and Wife,
Joint Tenants 1,198 1,198 0 * / *
Steven Wells 1,230 1,230 0 * / *
Pollet Law Firm 16,034 16,034 0 * / *
Robert Alan Weiss 6,531 6,531 0 * / *
William Cullen 83,830 (21) 6,497 77,333 1.1% / 1.0%
Ray Rhone 308 308 0 * / *
Linda Beltramini 7,380 7,380 0 * / *
Robert B. Prage 43,500 31,150 12,350 * / *
Canterbury Securities Corporation 62,411 (22) 62,411 0 * / *
Esters Family Parntership 66,439 (23) 55,308 11,131 * / *
Gerald S. Armstrong 57,463 57,463 0 * / *
Educational Industrial Sales, Inc. 7,323 (24) 7,323 0 * / *
Durand Brazil Holdings, Ltd. 8,023 (25) 8,023 0 * / *
Grayson Family Trust dated January
28, 1996 55,062 (26) 49,158 5,904 * / *
Liviakus Financial
Communications, Inc. 416,250 (27) 318,850 97,400 5.5% / 1.3%
Prospect Creek Limited 5,749 5,749 0 * / *
</TABLE>
---------------
* Less than 1% of shares outstanding.
(1) Includes warrants for the purchase of 25,462 shares and warrants for
the purchase of 7,380 shares registered in the name of Glenn
Hartman.
(2) Includes warrants for the purchase of 27,060 shares.
(3) Includes warrants for the purchase of 3,690 shares.
(4) Includes warrants for the purchase of 3,690 shares.
(5) Includes options for the purchase of 4,000 shares.
(6) Includes options for the purchase of 9,006 shares and options for
the purchase of 2,125 shares held in the name of David Berkus.
(7) Includes options for the purchase of 5,904 shares.
(8) Includes options for the purchase of 5,904 shares.
12
<PAGE>
(9) Includes warrants for the purchase of 1,968 shares held in the name of
Montecito Bancorp and warrants for the purchase of 4,920 shares held
in the name of Sand Hill Capital, LLC.
(10) Includes warrants for the purchase of 7,380 shares.
(11) Includes warrants for the purchase of 1,119 shares.
(12) Includes warrants for the purchase of 59,264 shares and 27,575
shares issuable upon the conversion of a convertible note at an
exercise price of $9.61 per share.
(13) Includes warrants for the purchase of 8,620 shares.
(14) Includes warrants for the purchase of 11,181 shares and 5,203 shares
issuable upon the conversion of a convertible note at an exercise
price of $9.61 per share.
(15) Includes warrants for the purchase of 2,236 shares.
(16) Includes warrants for the purchase of 4,472 shares.
(17) Includes warrants for the purchase of 7,380 shares.
(18) Includes warrants for the purchase of 8,110 shares and 2,904 shares
issuable upon the conversion of a convertible note, based upon the
minimum conversion price of $9.75 per share.
(19) Includes options for the purchase of 25,000 shares. Mr. Durand is
Senior Vice President of Webb.
(20) Includes warrants for the purchase of 3,690 shares.
(21) Includes options for the purchase of 53,333 shares. Mr. Cullen is
Executive Vice President and Chief Financial Officer of Webb.
(22) Includes warrants for the purchase of 45,955 shares and 16,457
shares issuable upon the conversion of a convertible note, based
upon the minimum conversion price of $9.75 per share.
(23) Includes options for the purchase of 6,606 shares and options for
the purchase of 4,525 shares held in the name of Don Esters.
(24) Includes 7,323 shares issuable upon the conversion of a convertible
note, based upon the minimum conversion price of $9.75 per share.
(25) Includes 8,023 shares issuable upon the conversion of a convertible
note, based upon the minimum conversion price of $9.75 per share.
(26) Includes options for the purchase of 3,504 shares and options for
the purchase of 2,400 shares held in the name of Robert Grayson.
(27) The address for Liviakus Financial Communications, Inc. is 2420 K
Street, Suite 220, Sacramento, California 95816.
PLAN OF DISTRIBUTION
The sale of the shares offered by this prospectus may be made in the
Nasdaq SmallCap Market or other over-the-counter markets at prices and at terms
then prevailing or at prices related to the then current market price or in
negotiated transactions. These shares may be sold by one or more of the
following:
o A block trade in which the broker or dealer will attempt to sell
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction.
o Purchases by a broker or dealer as principal and resale by a broker
or dealer for its account using this prospectus.
o Ordinary brokerage transactions and transactions in which the broker
solicits purchasers.
o In privately negotiated transactions not involving a broker or
dealer.
In effecting sales, brokers or dealers engaged to sell the shares may
arrange for other brokers or dealers to participate. Brokers or dealers engaged
to sell the shares will receive compensation in the form of commissions or
discounts in amounts to be negotiated immediately prior to each sale. These
brokers or dealers and any other participating brokers or dealers may be deemed
to be underwriters within the meaning of the Securities Act of 1933 in
connection with these sales. Webb will receive no proceeds from any resales of
the shares offered by this prospectus, and we anticipate that the brokers or
dealers, if any, participating in the sales of the shares will receive the usual
and customary selling commissions.
To comply with the securities laws of some states, if applicable, the
shares will be sold in these states only through brokers or dealers. In
addition, in some states, the shares may not be sold in those states unless they
have been registered or qualified for sale in these states or an exemption from
registration or qualification is available and is complied with.
13
<PAGE>
DESCRIPTION OF SECURITIES
General
Our articles of incorporation authorize our board of directors to issue
25,000,000 shares of capital stock, including 20,000,000 shares of common stock
and 5,000,000 shares of preferred stock, with rights, preferences and privileges
as are determined by our board of directors.
Common Stock
As of September 15, 1999, we had 7,630,745 shares of common stock
outstanding. All outstanding shares of our common stock are fully paid and
nonassessable and the shares of our common stock offered by this prospectus will
be, upon issuance, fully paid and nonassessable. The following is a summary of
the material rights and privileges of our common stock.
Voting. Holders of our common stock are entitled to cast one vote for each
share held at all shareholder meetings for all purposes, including the election
of directors. The holders of more than 50% of the voting power of our common
stock issued and outstanding and entitled to vote and present in person or by
proxy, together with any preferred stock issued and outstanding and entitled to
vote and present in person or by proxy, constitute a quorum at all meetings of
our shareholders. The vote of the holders of a majority of our common stock
present and entitled to vote at a meeting, together with any preferred stock
present and entitled to vote at a meeting, will decide any question brought
before the meeting, except when Colorado law, our articles of incorporation, or
our bylaws require a greater vote and except when Colorado law requires a vote
of any preferred stock issued and outstanding, voting as a separate class, to
approve a matter brought before the meeting. Holders of our common stock do not
have cumulative voting for the election of directors.
Dividends. Holders of our common stock are entitled to dividends when, as
and if declared by the board of directors out of funds available for
distribution. The payment of any dividends may be limited or prohibited by loan
agreement provisions or priority dividends for preferred stock that may be
outstanding.
Preemptive Rights. The holders of our common stock have no preemptive
rights to subscribe for any additional shares of any class of our capital stock
or for any issue of bonds, notes or other securities convertible into any class
of our capital stock.
Liquidation. If we liquidate or dissolve, the holders of each outstanding
share of our common stock will be entitled to share equally in our assets
legally available for distribution to our shareholders after payment of all
liabilities and after distributions to holders of preferred stock legally
entitled to be paid distributions prior to the payment of distributions to
holders of our common stock.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file with the
SEC at the SEC's public reference room located at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's public reference rooms located at it's
regional offices in New York, New York and Chicago, Illinois. Please call the
SEC at 1-800-SEC-0300 for further information on the operation of public
reference rooms. You can also obtain copies of this material from the SEC's
Internet web site located at http://www.sec.gov.
The SEC allows us to incorporate by reference the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be a part of this prospectus, and information that we file later with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings we will make with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934, file no. 0-28462:
o Our annual report on Form 10-KSB for the year ended December 31,
1998.
o Our quarterly report on Form 10-QSB for the quarter ended March 31,
1999.
14
<PAGE>
o Our quarterly report on Form 10-QSB for the quarter ended June 30,
1999.
o The description of our common stock contained in our registration
statement on Form 8-A filed with the SEC on May 22, 1996.
o Our current report on Form 8-K dated January 11, 1999.
o Our current report on Form 8-K dated July 14, 1999.
o Our current report on Form 8-K dated August 25, 1999.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address and telephone number:
Shareholder Services
Attn: Kim Castillo
Webb Interactive Services, Inc.
1800 Glenarm Place
Suite 700
Denver, Colorado 80202
(303) 296-9200
This prospectus is part of a registration statement we filed with the SEC.
You should rely only on the information or representations provided in this
prospectus. We have authorized no one to provide you with different information.
The selling shareholders will not make an offer of these shares in any state
where the offer is not permitted. You should not assume that the information in
this prospectus is accurate as of any date other than the date on the front page
of this prospectus.
LEGAL MATTERS
Gray, Plant, Mooty, Mooty & Bennett, P.A., Minneapolis, Minnesota, will
issue an opinion about the legality of the shares registered by this prospectus.
EXPERTS
The financial statements of Webb, which are incorporated by reference in
this prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports. Reference is made to
said report, which includes an explanatory paragraph with respect to the
uncertainty regarding the Company's ability to continue as a going concern as
discussed in Note 1 to the financial statements incorporated by reference.
INDEMNIFICATION
Our articles of incorporation provide that we shall indemnify, to the full
extent permitted by Colorado law, any of our directors, officers, employees or
agents who are made, or threatened to be made, a party to a proceeding by reason
of the fact that he or she is or was one of our directors, officers, employees
or agents against judgments, penalties, fines, settlements and reasonable
expenses incurred by the person in connection with the proceeding if specified
standards are met. Although indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to our directors, officers and
controlling persons under these provisions, we have been advised that, in the
opinion of the SEC, indemnification for liabilities arising under the Securities
Act of 1933 is against public policy as expressed in the Securities Act and is,
therefore, unenforceable.
Our articles of incorporation also limit the liability of our directors to
the fullest extent permitted by the Colorado law. Specifically, our articles of
incorporation provide that our directors will not be personally liable for
monetary damages for breach of fiduciary duty as directors, except for:
o Any breach of the duty of loyalty to Webb or its shareholders,
15
<PAGE>
o Acts or omissions not in good faith or that involved intentional
misconduct or a knowing violation of law,
o Dividends or other distributions of corporate assets that are in
contravention of specified statutory or contractual restrictions,
o Violations of specified laws, or
o Any transaction from which the director derives an improper personal
benefit.
16
<PAGE>
================================================================================
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in this
prospectus in connection with the offer made by this prospectus and, if given or
made, the information or representations must not be relied upon as having been
authorized by Webb. This prospectus does not constitute an offer to sell or the
solicitation of any offer to buy any security other than the securities offered
by this prospectus, nor does it constitute an offer to sell or a solicitation of
any offer to buy the securities offered by this prospectus by anyone in any
jurisdiction in which the offer or solicitation is not authorized, or in which
the person making the offer or solicitation is not qualified to do so, or to any
person to whom it is unlawful to make an offer or solicitation. Neither the
delivery of this prospectus nor any sale made under this prospectus shall, under
any circumstances, create any implication that information contained in this
prospectus is correct as of any time subsequent to the date of this prospectus.
---------------
TABLE OF CONTENTS
Page
----
Webb Interactive Services, Inc...............................................2
Risk Factors.................................................................3
Special Note Regarding Forward-Looking
Statements................................................................7
Use of Proceeds..............................................................8
Selling Shareholders........................................................10
Plan of Distribution........................................................11
Description of Securities...................................................12
Where You Can Find More Information.........................................14
Legal Matters...............................................................15
Experts.....................................................................15
Indemnification.............................................................15
================================================================================
================================================================================
================================================================================
WEBB INTERACTIVE
SERVICES, INC.
_______________
PROSPECTUS
_______________
September 27, 1999
================================================================================
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED TO BE IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses of Webb in connection
with the sale and distribution of the Shares being registered pursuant to this
Form S-3 Registration Statement. All of the amounts shown are estimates, except
for the Securities and Exchange Commission registration fee and the Nasdaq
listing fee. All of such expenses will be paid by Webb.
Securities and Exchange Commission fee $5,121.84
Accounting fees and expenses $2,500.00
Legal fees and expenses $7,000.00
Printing, Mailing $1,000.00
Transfer Agent fees $2,000.00
Miscellaneous $2,378.16
-----------------
TOTAL $20,000.00
Item 15. Indemnification of Officers and Directors
Webb's articles of incorporation provide that Webb shall indemnify, to the
full extent permitted by Colorado law, any director, officer, employee or agent
of Webb made or threatened to be made a party to a proceeding, by reason of the
fact that such person is or was a director, officer, employee or agent of Webb
against judgments, penalties, fines, settlements and reasonable expenses
incurred by the person in connection with the proceeding if certain standards
are met. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of Webb pursuant to the foregoing provisions, or otherwise, Webb has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
Webb's articles of incorporation limit the liability of its directors to
the fullest extent permitted by Colorado law. Specifically, the articles of
incorporation provide that directors of Webb will not be personally liable for
monetary damages for breach of fiduciary duty as directors, except for (i) any
breach of the duty of loyalty to Webb or its shareholders, (ii) acts or
omissions not in good faith or that involved intentional misconduct or a knowing
violation of law, (iii) dividends or other distributions of corporate assets
that are in contravention of certain statutory or contractual restrictions, (iv)
violations of certain laws, or (v) any transaction from which the director
derives an improper personal benefit. Liability under federal securities law is
not limited by the Articles.
Item 16. Exhibits
2.1 Agreement and Plan of Merger dated March 19, 1998 among Webb, Durand
Acquisition Corporation and Durand Communications, Inc. (1)
3.1 Articles of Incorporation, as amended, of Webb Interactive Services,
Inc. (3) 3.2 Bylaws of Webb Interactive Services, Inc. (2)
4.1 Specimen form of Webb Interactive Services, Inc. Common Stock
certificate*
4.2 Forms of Warrants issued in connection with Durand Merger*
4.3 Form of Promissory Note issued in the aggregate principal amount of
$558,161*
4.4 Form of Promissory Note issued to two investors in the aggregate
principal amount of $315,000*
4.5 Form of Warrant issued to finders in connection with the acquisition
of Durand Communications, Inc.*
4.6 Securities Purchase Agreement dated August 25, 1999 between Webb and
Castle Creek Technology Partners LLC (5)
5.1 Opinion of Counsel*
II-1
<PAGE>
10.1 Development, Access and License Agreement effective June 30, 1999
between Switchboard, Inc. and Webb (4)
10.2 Amendment to Development, Access and License Agreement effective
June 30, 1999 between Switchboard, Inc. and Webb (4)
10.3 Engineering Services Agreement effective June 30, 1999 between
Switchboard, Inc. and Webb (4)
10.4 Development, Access and License Agreement effective August 11, 1999
between NetShepherd, Inc. and Webb (4)
23.1 Consent of Arthur Andersen LLP*
- --------------------
* Filed herewith
(1) Filed with the Form 10-KSB Annual Report for the year ended December
31, 1997, Commission File No. 0-28462.
(2) Filed with the initial Registration Statement on Form SB-2, filed April
5, 1996, Commission File No. 333-3282-D.
(3) Filed with the Registration Statement on Form S-3, filed January 29,
1999, Commission File No. 333-71503.
(4) Filed with the Registration Statement on Form S-3, filed September 2,
1999, Commission File No. 333-86465.
(5) Filed with the current report on Form 8-K, filed September 2, 1999,
Commission File No. 000-28462.
Item 17. Undertakings
A. The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement
to:
(a) include any prospectus required by Section
10(a)(3) of the Securities Act of 1933,
(b) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or together, represent a fundamental change in
the information in the registration statement, and
(c) to include any additional or changed material
information on the plan of distribution;
(2) to treat, for determining liability under the Securities
Act of 1933, each such post-effective amendment as a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered that remain unsold at
the termination of the offering.
B. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the registrant as discussed above, or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this amendment to
the registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, State of Colorado, on
September 23, 1999.
WEBB INTERACTIVE SERVICES, INC.
By /s/ R. Steven Adams
-----------------------------------
R. Steven Adams, Chairman and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the registration statement has been signed below on September 23,
1999, by the following persons in the capacities indicated:
/s/ R. Steven Adams
- -------------------------------------------------------------
R. Steven Adams,
(Chairman, Chief Executive Officer and a Director)
/s/ William R. Cullen
- -------------------------------------------------------------
William R. Cullen
(Executive Vice President, Chief Financial Officer and a Director)
/s/ Stuart J. Lucko
- -------------------------------------------------------------
Stuart J. Lucko
(Controller)
/s/ Perry Evans
- -------------------------------------------------------------
Perry Evans
(President and a Director)
/s/ *
- -------------------------------------------------------------
Robert J. Lewis
(Director)
- -------------------------------------------------------------
Richard C. Jennewine
(Director)
*By R. Steven Adams, attorney-in-fact
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<PAGE>
Webb Interactive Services, Inc.
Form S-3
Index to Exhibits
2.1 Agreement and Plan of Merger dated March 19, 1998 among Webb, Durand
Acquisition Corporation and Durand Communications, Inc. (1)
3.1 Articles of Incorporation, as amended, of Webb Interactive Services,
Inc. (3)
3.2 Bylaws of Webb Interactive Services, Inc. (2)
4.1 Specimen form of Webb Interactive Services, Inc. Common Stock
certificate*
4.2 Forms of Warrants issued in connection with Durand Merger*
4.3 Form of Promissory Note issued in the aggregate principal amount of
$558,161*
4.4 Form of Promissory Note issued to two investors in the aggregate
principal amount of $315,000*
4.5 Form of Warrant issued to finders in connection with the acquisition
of Durand Communications, Inc.*
4.6 Securities Purchase Agreement dated August 25, 1999 between Webb and
Castle Creek Technology Partners LLC (5)
5.1 Opinion of Counsel*
10.1 Development, Access and License Agreement effective June 30, 1999
between Switchboard, Inc. and Webb (4)
10.2 Amendment to Development, Access and License Agreement effective
June 30, 1999 between Switchboard, Inc. and Webb (4)
10.3 Engineering Services Agreement effective June 30, 1999 between
Switchboard, Inc. and Webb (4)
10.4 Development, Access and License Agreement effective August 11, 1999
between NetShepherd, Inc. and Webb (4)
23.1 Consent of Arthur Andersen LLP*
- --------------------
* Filed herewith
(1) Filed with the Form 10-KSB Annual Report for the year ended December
31, 1997, Commission File No. 0-28462.
(2) Filed with the initial Registration Statement on Form SB-2, filed April
5, 1996, Commission File No. 333-3282-D.
(3) Filed with the Registration Statement on Form S-3, filed January 29,
1999, Commission File No. 333-71503.
(4) Filed with the Registration Statement on Form S-3, filed September 2,
1999, Commission File No. 333-86465.
(5) Filed with the current report on Form 8-K, filed September 2, 1999,
Commission File No. 000-28462.
II-4
<PAGE>
Exhibit 4.1
webb
www.webb.net
NUMBER SHARES
webb interactive services, inc.
INCORPORATED UNDER THE LAWS OF THE STATE OF COLORADO
AUTHORIZED 15,000,000 SHARES, NO PAR VALUE
SEE REVERSE FOR
CERTAIN DEFINITIONS
[CUSIP 9478P 10 4]
This Certifies That
is the registered owner of
FULLY PAID AND NON-ASSESSABLE COMMON SHARES, NO PAR VALUE PER SHARE OF
Webb Interactive Services, Inc.
transferable only on the books of the Corporation by the holder hereof in person
or by Attorney upon surrender of this Certificate properly endorsed.
In Witness Whereof, the Corporation has caused this Certificate to be
signed by the facsimile signatures of its duly authorized officers and be sealed
with the facsimile seal of the Corporation.
Dated:
[CORPORATE SEAL]
SECRETARY PRESIDENT
<PAGE>
Exhibit 4.2
Warrant for the purchase of shares of Common Stock
________ Shares
FOR VALUE RECEIVED, WEBB Interactive Services, Inc. (the "Company"), hereby
certifies that _______________________, or a permitted assign thereof, is
entitled to purchase from the Company, at any time or from time to time
commencing June 30, 1999 and prior to 5:00 P.M., P.S.T., on June 5, 2003,
___________________ (________) fully paid and nonassessable shares of the common
stock, of the Company for an aggregate purchase price of $________ (computed on
the basis of $____ per share). (Hereinafter, (i) said common stock, together
with any other equity securities which may be issued by the Company with respect
thereto or in substitution therefor, is referred to as the "Common Stock," (ii)
the shares of the Common Stock purchasable hereunder or under any other Warrant
(as hereinafter defined) are referred to as the "Warrant Shares," the aggregate
purchase price payable hereunder for the Warrant Shares is referred to as the
"Aggregate Warrant Price," (iii) the price payable hereunder for each of the
Warrant Shares is referred to as the "Per Share Warrant Price," (iv) this
Warrant, all identical warrants issued on the date hereof and all warrants
hereafter issued in exchange or substitution for this Warrant or such other
warrants are referred to as the "Warrants" and (v) the holder of this Warrant is
referred to as the "Holder" and the holder of this Warrant and all other
Warrants are referred to as the "Holders"). The Aggregate Warrant Price is not
subject to adjustment. The Per Share Warrant Price is subject to adjustment as
hereinafter provided; in the event of any such adjustment, the number of Warrant
Shares shall be adjusted by dividing the Aggregate Warrant Price by the Per
Share Warrant Price in effect immediately after such adjustment.
1. Exercise of Warrant.
a) Exercise for Cash
This Warrant may be exercised, in whole at any time or in part from time to
time, commencing June 30, 1999, and prior to 5:00 P.M., P.S.T., on June 5,
2003, by the Holder by the surrender of this Warrant (with the subscription
form at the end hereof duly executed) at the address set forth in
Subsection 9(a) hereof, together with proper payment of the Aggregate
Warrant Price, or the proportionate part thereof if this Warrant is
exercised in part. Payment for Warrant Shares shall be made by certified or
official bank check payable to the order of the Company. If this Warrant is
exercised in part, this Warrant must be exercised for a number of whole
shares of the Common Stock, and the Holder is entitled to receive a new
Warrant Covering the Warrant Shares which have not been exercised and
setting forth the proportionate part of the Aggregate Warrant Price
applicable to such Warrant Shares. Upon such surrender of this Warrant the
Company will (a) issue a certificate or certificates in the name of the
Holder for the largest number of whole shares of the Common Stock to which
the Holder shall be entitled and, if this Warrant is exercised in whole, in
lieu of any fractional share of the Common Stock to which the Holder shall
be entitled, pay to the Holder cash in an amount equal to the fair value of
such fractional share (determined in such reasonable manner as the Board of
Directors of the Company shall determine), and (b) deliver the other
securities and properties receivable upon the exercise of this Warrant, or
the proportionate part thereof if this Warrant is exercised in part,
pursuant to the provisions of this Warrant.
<PAGE>
b) Cashless Exercise
In lieu of exercising this Warrant in the manner set forth in paragraph
1(a) above, the Warrant may be exercised, in whole or in part, by surrender
of the Warrant without payment of any other consideration, commission or
remuneration, by execution of the cashless exercise subscription form (at
the end hereof, duly executed). The number of shares to be issued in
exchange for the Warrant will be computed by subtracting the Warrant
Exercise Price from either (i) the closing bid price of the common stock on
the date of receipt of the cashless exercise subscription form, or (ii) the
most recent negotiated value used in connection with any sale of the
Company's securities or in connection with any business combination
involving the Company, and multiplying that amount by the number of shares
represented by the Warrant, and dividing by the closing bid price as of the
same date.
2. Reservation of Warrant Shares, Listing.
The Company agrees that, prior to the expiration of this Warrant, the
Company will at all times have authorized and in reserve, and will keep
available, solely for issuance or delivery upon the exercise of this
Warrant, the shares of the Common Stock and other securities and properties
as from time to time shall be receivable upon the exercise of this Warrant,
free and clear of all restrictions on sale or transfer (except for
applicable state or federal securities law restrictions) and free and clear
of all pre-emptive rights.
3. Protection Against Dilution.
a.) If, at any time or from time to time after the date of this Warrant,
the Company shall issue or distribute (for no consideration) to the
holders of shares of Common Stock evidences of its indebtedness, any
other securities of the Company or any cash, property or other assets
(excluding a subdivision, combination or reclassification, or dividend
or distribution payable in shares of Common Stock, referred to in
Subsection 3(b) and also excluding cash dividends or cash
distributions paid out of net profits legally available therefor if
the full amount thereof, together with the value of other dividends
and distributions made substantially concurrently therewith or
pursuant to a plan which includes payment thereof, is equivalent to
not more than 5% of the Company's net worth) (any such nonexcluded
event being herein called a "Special Dividend"), the Per Share Warrant
Price shall be adjusted by multiplying the Per Share Warrant Price
then in effect by a fraction, the numerator of which shall be the then
current market price of the Common Stock (defined as the average for
the thirty consecutive business days immediately prior to the record
date of the daily closing price of the Common Stock as reported by the
principal exchange or market on which the Common Stock is listed) less
the fair market value (as determined by the Company's Board of
Directors) of the evidences of indebtedness, securities or property,
or other assets issued or distributed in such Special Dividend
applicable to one share of Common Stock and the denominator of which
shall be such then current market price per share of Common Stock. An
adjustment made pursuant to this Subsection 3(a) shall become
effective immediately after the record date of any such Special
Dividend.
b) In case the Company shall hereafter (i) pay a dividend or make a
distribution on its capital stock in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock into a greater number
of shares, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares or (iv) issue by reclassification of its
Common Stock any shares of capital stock of the Company, the Per Share
Warrant Price shall be adjusted so that the Holder of any Warrant upon
the exercise hereof shall be entitled to receive the number of shares
of Common Stock or other capital stock of the Company which he would
have owned immediately prior thereto. An adjustment made pursuant to
this Subsection 3(b) shall become effective immediately after the
record date in the case of a dividend or distribution and shall become
effective immediately after
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<PAGE>
the effective date in the case of a subdivision, combination or
reclassification. If, as a result of an adjustment made pursuant to
this Subsection 3(b), the Holder of any Warrant thereafter surrendered
for exercise shall become entitled to receive shares of two or more
classes of capital stock or shares of Common Stock and other capital
stock of the Company, the Board of Directors (whose determination
shall be conclusive and shall be described in a written notice to the
Holder of any Warrant promptly after such adjustment) shall reasonably
determine the allocation of the adjusted Per Share Warrant Price
between or among shares of such classes or capital stock or shares of
Common Stock and other capital stock.
c) In case of any capital reorganization or reclassification, or any
consolidation or merger to which the Company is a party other than a
merger or consolidation in which the Company is the continuing
corporation, or in case of any sale or conveyance to another entity of
the property of the Company as an entirety or substantially as an
entirety, or in the case of any statutory exchange of securities with
another corporation (including any exchange effected in connection
with a merger of a third corporation into the Company), the Holder of
this Warrant shall have the right thereafter to convert such Warrant
into the kind and amount of securities, cash or other property which
he would have owned or have been entitled to receive immediately after
such reorganization, reclassification, consolidation, merger,
statutory exchange, sale or conveyance had this Warrant been converted
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, statutory exchange, sale or
conveyance and in any such case, if necessary, appropriate adjustment
shall be made in the application of the provisions set forth in this
Section 3 with respect to the rights and interests thereafter of the
Holder of this Warrant to the end that the provisions set forth in
this Section 3 shall thereafter correspondingly be made applicable, as
nearly as may reasonably be, in relation to any shares of stock or
other securities or be, in relation to any shares of stock or other
securities or property thereafter deliverable on the conversion of
this Warrant. The above provisions of this Subsection 3(e) shall
similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, statutory exchanges. sales or conveyances.
The issuer of any shares of stock or other securities or property
thereafter deliverable on the conversion of this Warrant shall be
responsible for all of the agreements and obligations of the Company
hereunder. Notice of any such reorganization, reclassification,
consolidation, merger, statutory exchange, sale or conveyance and of
said provisions so proposed to be made, shall be mailed to the Holders
of the Warrants not less than 10 days prior to such event. A sale of
all or substantially all of the assets of the Company for a
consideration consisting primarily of securities shall be deemed a
consolidation or merger for the foregoing purposes.
d) No adjustment in the Per Share Warrant Price shall be required unless
such adjustment would require an increase or decrease of at least
$0.05 per share of Common Stock, provided, however, that any
adjustments which by reason of this Subsection 3(d) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment, provided further, however, that adjustments
shall be required and made in accordance with the provisions of this
Section 3 (other than this Subsection 3(d)) not later than such time
as may be required in order to preserve the tax-free nature of a
distribution to the Holder of this Warrant or Common Stock issuable
upon exercise hereof. All calculations under this Section 3 shall be
made to the nearest cent. Anything in this Section 3 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Per Share Warrant Price, in addition to those required by this
Section 3, as it in its discretion shall deem to be advisable in order
that any stock dividend, subdivision of shares or distribution of
rights to purchase stock or securities convertible or exchangeable for
stock hereafter made by the Company to its shareholders shall not be
taxable.
e) Whenever the Per Share Warrant Price is adjusted as provided in this
Section 3 and upon any modification of the rights of a Holder of
Warrants in accordance with this Section 3, the Company shall promptly
obtain, at its expense, a certificate of a firm of independent public
accountants of recognized standing selected by the Board of Directors
(who may be the regular auditors of the
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<PAGE>
Company) setting forth the Per Share Warrant Price and the number of
Warrant Shares after such adjustment or the effect of such
modification, a brief statement of the facts requiring such adjustment
or modification and the manner of computing the same and cause copies
of such certificate to be mailed to the Holders of the Warrants.
f) If the Board of Directors of the Company shall declare any dividend or
other distribution with respect to the Common Stock, other than a cash
distribution out of earned surplus, the Company shall mail notice
thereof to the Holders of the Warrants not less than 10 days prior to
the record date fixed for determining shareholders entitled to
participate in such dividend or other distribution.
4. Fully Paid Stock, Taxes.
The Company agrees that the shares of the Common Stock represented by each
and every certificate for Warrant Shares delivered on the exercise of this
Warrant shall, at the time of such delivery, be validly issued and
outstanding, fully paid and nonassessable, and not subject to pre-emptive
rights, and the Company will take all such actions as may be necessary to
assure that the par value or stated value, if any, per share of the Common
Stock is at all times equal to or less than the then Per Share Warrant
Price. The Company further covenants and agrees that it will pay, when due
and payable, any and all Federal and state stamp, original issue or similar
taxes which may be payable in respect of the issue of any Warrant Share or
certificate therefor.
5. Registration Under Securities Act of 1933.
a) The Company agrees that if; at any time and from time to time during
the period commencing on June 30, 1999 and ending on June 5, 2003, the
Board of Directors of the Company shall authorize the filing of a
registration statement or a post-effective amendment to a registration
statement (any such registration statement being hereinafter called a
"Subsequent Registration Statement") under the Act other than a
registration statement on Form S-8 or other form which does not
include substantially the same information as would be required in a
form for the general registration of securities) in connection with
the proposed offer of any of its securities by it or any of its
shareholders, the Company will (i) promptly notify the Holder and each
of the Holders, if any, of other Warrants and/or Warrant Shares that
such Subsequent Registration Statement will be filed and that the
Warrant Shares which are then held, and/or which may be acquired upon
the exercise of the Warrants, by the Holder and such Holders, will, at
the Holder's and such Holders' request, be included in such Subsequent
Registration Statement, (ii) include in the securities covered by such
Subsequent Registration Statement all Warrant Shares which it has been
so requested to include, (iii) use its best efforts to cause such
Subsequent Registration Statement to become effective as soon as
practicable and (iv) take all other action necessary under any Federal
or state law or regulation of any governmental authority to permit all
Warrant Shares which it has been so requested to include in such
Subsequent Registration Statement or to be sold or otherwise disposed
of, and will maintain such compliance with each such Federal and state
law and regulation of any governmental authority for the period
necessary for the Holder and such Holders to effect the proposed sale
or other disposition. Provided however, that the Holders shall be
entitled to only one registration under this section 5(a).
b) In connection with any registration under Section 5 hereof; the
Company covenants and agrees (i) to use its best efforts to have any
registration statement declared effective as soon as reasonably
possible, (ii) to furnish each Holder desiring to sell Warrant Shares
such number of prospectuses as shall reasonably he requested, (iii) to
pay all costs (excluding fees and expenses of Holder(s) counsel and
any underwriting or selling commissions), fees and expenses in
connection with all registration statements filed pursuant to Section
5 hereof including, without limitation, registration filing fees, the
Company's legal and accounting fees, printing expenses, and blue sky
fees and expenses, (iv) to take all necessary action which may be
required in qualifying or registering the
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<PAGE>
Warrant Shares included in a registration statement for offering and
sale under the securities or blue sky laws of such states as
reasonably are requested by the Holder(s), provided that the Company
shall not be obligated to execute or file any general consent to
service of process or to qualify as a foreign corporation to do
business under the laws of any such jurisdiction, (v) to indemnify the
Holder(s) of the Warrant Shares to be sold pursuant to any
registration statement and each person, if any, who controls such
Holders 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 any other statute, common law or
otherwise, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in such
registration statement executed by the Company or based upon written
information furnished by the Company filed in any jurisdiction in
order to qualify the Warrant Securities under the securities laws
thereof or filed with the Securities and Exchange Commission (the
"Commission"), any state securities commission or agency, the National
Association of Securities Dealers, Inc., The Nasdaq Stock Market or
any securities exchange, or the omission or alleged omission therefrom
of material fact required to be stated therein or necessary to make
the statements contained therein not misleading, unless such statement
or omission was made in reliance upon and in conformity with written
information furnished to the Company by the Holder(s) expressly for
use in such registration statement, any amendment or supplement
thereto or any application, as the case may be. If any action is
brought against the Holder(s) or any controlling person of the
Holder(s) in respect of which indemnity may be sought against the
Company pursuant to this Section 5, the Holder(s) or such controlling
person shall within thirty (30) days after the receipt thereby of a
summons or complaint notify the Company in writing of the institution
of such action and the Company shall assume the defense of such
action, including the employment and payment of reasonable fees and
expenses of counsel (which counsel shall be reasonably satisfactory to
the Holder(s) or such controlling person), but the failure to give
such notice shall not affect such indemnified person's right to
indemnification hereunder except to the extent that the Company's
defense of such action was materially adversely affected thereby. The
Holder(s) or such controlling person shall have the tight to employ
its or their own counsel in any such case, but the fees and expenses
of such counsel shall be at the expense of the Holder(s) or such
controlling person unless the employment of such counsel shall have
been authorized in writing by the Company in connection with the
defense of such action, the Company shall not have employed counsel to
have charge of the defense of such action or such indemnified party or
parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to
those available to the Company (in which case the Company shall not
have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events the fees and
expenses of not more than one additional firm of attorneys for the
Holder(s) and/or such controlling person shall be borne by the
Company. Except as expressly provided in the previous sentence, in the
event that the Company shall not previously have assumed the defense
of any such action or claim, the Company shall not thereafter be
liable to the Holder(s) or such controlling person in investigating,
preparing or defending any such action or claim. The Company agrees
promptly to notify the Holder(s) of the commencement of any litigation
or proceedings against the Company or any of its officers, directors
or controlling persons in connection with the resale of the Warrant
Shares or in connection with such registration statement. The
Holder(s) of the Warrant Securities to be sold pursuant to a
registration statement, and their 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. Holders, or their
successors or assigns, for specific inclusion in such registration
statement. Notwithstanding the foregoing provisions of this Section 5,
any such payment or reimbursement
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<PAGE>
by the Holder(s) of fees, expenses or disbursements incurred by an
indemnified person in any proceeding in which a final judgment by a
court of competent jurisdiction (after all appeals or the expiration
of time to appeal) is entered against the Company or such indemnified
person as a direct result of the Company or such person's gross
negligence or willful misfeasance will be promptly repaid to the
Holder(s).
6. Transferability.
Subject to compliance with federal and applicable state securities laws,
the Holder of any Warrant may, prior to exercise or expiration thereof,
surrender such Warrant at the principal office of the Company for transfer
or exchange. Within a reasonable time after notice to the Company from a
registered Holder of its intention to make such exchange and without
expense (other than transfer taxes, if any) to such registered Holder, the
Company shall issue in exchange therefor another Warrant or Warrants, in
such denominations as requested by the registered Holder, for the same
aggregate number of Warrant Shares so surrendered and containing the same
provisions and subject to the same terms and conditions as the Warrant(s)
so surrendered. The Company may beat the registered Holder of this Warrant
as he or it appears on the Company's books at any time as the Holder for
all purposes. The Company shall permit any Holder of a Warrant or his duly
authorized attorney, upon written request during ordinary business hours,
to inspect and copy or make extracts from its books showing the registered
holders of Warrants. All warrants issued upon the transfer or assignment of
this Warrant will be dated the same date as this Warrant, and all rights of
the Holder thereof shall be identical to those of the Holder.
7. Loss, etc., of Warrant.
Upon receipt of evidence satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and of indemnity reasonably
satisfactory to the Company, if lost, stolen or destroyed, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver to the Holder a new Warrant of like date, tenor and
denomination.
8. Warrant Holder Not Shareholders.
Except as otherwise provided herein, this Warrant does not confer upon the
Holder any right to vote or to consent to or receive notice as a
shareholder of the Company, as such, in respect of any matters whatsoever,
or any other rights or liabilities as a shareholder, prior to the exercise
hereof.
9 Communication.
No notice or other communication under this Warrant shall be effective
unless, but any notice or other communication shall be effective and shall
be deemed to have been given if, the same is in writing and is mailed by
first-class mail, postage prepaid, addressed to:
a) the Company at 1800 Glenarm Place, 7th Floor, Denver, Colorado 80202
or such other address as the Company has designated in writing to the
Holder; or
b) the Holder at _____________________________________________ or such
other address as the Holder has designated in writing to the Company.
10. Headings.
The headings of this Warrant have been inserted as a matter of convenience
and shall not affect the construction hereof.
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<PAGE>
11. Applicable Law.
This Warrant shall be governed by and construed in accordance with the law
of the State of Colorado without giving effect to the principles of
conflicts of law thereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
Chief Executive Officer as of the 30th day of June, 1999.
ATTEST: DURAND COMMUNICATIONS, INC.
By:_______________________________
Name: R. Steven Adams
Title: Chief Executive Officer
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<PAGE>
SUBSCRIPTION
The undersigned, ______________________, pursuant to the provisions of the
foregoing Warrant, hereby agrees to subscribe for and purchase shares of the
Common Stock of WEBB Interactive Services, Inc. covered by said Warrant, and
makes payment therefor in full at the price per share provided by said Warrant.
Dated: Signature:
Address:
ASSIGNMENT
FOR VALUE RECEIVED ______________________ hereby sells, assigns and transfers
unto __________________ the foregoing Warrant and all rights evidenced thereby,
and does irrevocably constitute and appoint _________________________, attorney,
to transfer said Warrant on the books of WEBB Interactive Services, Inc.
Dated: Signature:
Address:
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<PAGE>
PARTIAL ASSIGNMENT
------------------
FOR VALUE RECEIVED _______________________ hereby assigns and transfers unto
_______________________ the right to purchase _____________ shares of the Common
Stock of WEBB Interactive Services, Inc. by the foregoing Warrant, and a
proportionate part of said Warrant and the rights evidenced hereby, and does
irrevocably constitute and appoint attorney, to transfer that part of said
Warrant on the books of WEBB Interactive Services, Inc.
Dated: Signature:
Address:
CASHLESS EXERCISE SUBSCRIPTION
The undersigned _____________________ pursuant to the provisions of the
foregoing Warrant, hereby agrees to subscribe to that number of shares of stock
of WEBB Interactive Services, Inc. as are issuable in accordance with the
formula set forth in paragraph 1(b) of the Warrant, and makes payment therefore
in full by surrender and delivery of this Warrant.
Dated: Signature:
Address:
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Exhibit 4.2 (Cont.)
Option to Purchase Common Stock
of
WEBB INTERACTIVE SERVICES, INC.
Expiring December 26,2000
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF. NO SUCH SALE OR
DISTRIBUTION MAY BE EFFECTED WITHOUT A REGISTRATION UNDER THE SECURITIES ACT OF
1933 OR AN OPINION OF COUNSEL SKILLED IN SECURITIES LAWS MATTERS AND REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933.
ANY VOLUNTARY OR INVOLUNTARY SALE, ASSIGNMENT, GIFT, BEQUEST TRANSFER, PLEDGE,
HYPOTHECATION OR ANY OTHER DISPOSITION OF THIS OPTION OR ANY INTEREST THEREIN IS
SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN THIS OPTION. BY ACCEPTANCE
OF THIS DOCUMENT THE HOLDER HEREOF AGREES TO BE BOUND BY THE TERMS OF SUCH
RESTRICTIONS ON TRANSFER.
THIS IS TO CERTIFY THAT:
1. GRANT
For valuable consideration, receipt of which is hereby acknowledged,
_______________ ("Holder"), or registered assigns, is entitled to purchase from
WEBB INTERACTIVE SERVICES, INC., a Colorado corporation (the "Company"), at any
time on and after June 30, 1999 (the "Exercise Date"), but not later than the
close of business (Colorado time) on December 26, 2000 (the "Expiration Date"),
_________________ (______) shares of Common Stock of the Company (the "Shares"),
at an exercise price of ____________________ ($____) per share and to exercise
the other rights, powers and privileges specified herein.
2. DEFINITIONS
As used in this Option, unless the context otherwise requires the following
terms shall the following meanings.
2.1 "Common Stock" means the Company's presently authorized Common Stock as
such class of security existed on the Exercise Date and any stock into which
such Common Stock may thereafter be changed.
2.2 "Holder" of any security means the owner of such security.
2.3 "Person" means and includes all natural persons, corporations, business
trusts, associations, companies, partnerships, joint ventures and other entities
and governments and agencies and political subdivisions.
3. EXERCISE OF OPTION
3.1 Right. The Holder of this Option may, at any time on and after the
Exercise Date, but not later than the close of business (Colorado time) on the
Expiration Date, exercise this Option in whole at any time or in part from time
to time for the purchase of the shares of Common Stock which such Holder is then
entitled to purchase hereunder, at the exercise price per share determined in
accordance with the provisions hereof.
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3.2 Delivery. In order to exercise this Option in whole or in part, the
Holder hereof shall deliver to the Company at its principal office (i) a written
notice, substantially in the form set forth on Exhibit A hereto, of such
Holder's election of exercise this Option, which notice shall specify the number
of shares of Common Stock to be purchased, (ii) a certified or bank cashier's
check or checks payable to the Company, in an amount equal to the aggregate
exercise price of the shares of Common Stock being purchased, and (iii) this
Option. Upon receipt thereof, the Company shall, as promptly as practicable and
in any event within five (5) business days (if the place of delivery specified
in the exercise notice is located in the United States) or within ten (10)
business days (if the place of delivery specified in the exercise notice is
located elsewhere) thereafter, cause to be executed and delivered to such Holder
a certificate or certificates representing the aggregate number of shares of
Common Stock specified in said notice. Such certificate(s) shall be deemed to
have been issued and such Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such shares as of
the date of said notice. If this Option shall have been exercised only in part,
the Company shall, at the time of delivery of said certificate or certificates,
deliver to such Holder a new Option evidencing the rights of such Holder to
purchase the remaining shares of Common Stock covered by this Option, which new
Option shall in all other respects be identical with this Option.
3.3 Expenses. The Company shall pay all expenses, taxes and other charges
payable in connection with the preparation, issue and delivery of stock
certificates under this Section 3, except that, in case such stock certificates
shall be registered in a name or names other than the name of the Holder of this
Option, funds sufficient to pay all stock transfer taxes which shall be payable
upon the issuance of such stock certificate or certificates shall be paid by the
Holder at the time of the delivery of the notice of exercise mentioned above.
3.4 Valid Issuance. All shares of Common Stock issuable upon the exercise
of this Option shall, when issued, be validly issued, free from preemptive
rights (other than any such rights of the Holder), fully paid and nonassessable.
3.5 No Fractional Shares. The Company shall not be required upon any
exercise of this Option to issue a certificate representing any fraction of a
share of Common Stock, but, in lieu thereof, shall pay for such fraction of a
share at the exercise price in effect on the date of such exercise of this
Option.
4. ADJUSTMENT OF RIGHTS
The number of shares of Common Stock which the Holder of this Option is
entitled to purchase and the exercise price shall be subject to adjustment from
time to time as hereinafter provided in this Section 4.
4.1 Effect of Stock Splits and Dividends. In case at any time or from time
to time the Company shall subdivide as a whole, by reclassification, by the
issuance of a stock dividend on the Common Stock payable in Common Stock, or
otherwise, the number of shares of Common Stock then outstanding into a greater
number of shares of Common Stock, with or without par value, the exercise Price
then in effect shall be reduced proportionately and the number of shares of
Common Stock which may be purchased hereunder shall be increased
proportionately. In case at any time or from time to time the Company shall
consolidate as a whole, by reclassification or otherwise, the number of shares
of Common Stock then outstanding into a lesser number of shares of Common Stock,
with or without par value, the Exercise Price then in effect shall be increased
proportionately and the number of shares of Common Stock which may be purchased
hereunder shall be reduced proportionately.
4.2 Effect of Merger or Consolidation. Subject to the provisions of Section
6 of this Option, in ease the Company shall enter into any agreement for the
consolidation or merger of the Company with or into another corporation wherein
the Company is not the surviving corporation, or for the sale or conveyance of
all or substantially all of the Company's assets, and in connection with such
consolidation, merger, sale or conveyance, shares of stock or other securities
or property shall be issuable or deliverable in exchange for the Common Stock of
the Company, the Holder of this Option shall thereafter be entitled to purchase
pursuant to this Option (in lieu of the number of shares of Common Stock which
such Holder would have been entitled to purchase immediately prior to such
consolidation, merger, sale or conveyance) the shares of stock or other
securities or property to which such
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number of shares of Common Stock would have been entitled at the time of such
consolidation, merger, sale or conveyance, at an aggregate purchase price equal
to the aggregate purchase price which would have been payable if such number of
shares of Common Stock had been purchased immediately prior thereto. In case of
any such consolidation, merger, sale or conveyance, appropriate provision (as
determined by resolution of the Board of Directors of the Company) shall be made
with respect to the rights and interests thereafter of the Holder of this
Option, to the end that all the provisions of this Option (including adjustment
provisions) shall thereafter be applicable, as nearly as reasonably practicable,
in relation to such stock or other securities or property.
4.3 Reorganization and Reclassification. In case of any capital
reorganization or any reclassification of the capital stock of the Company
(except as provided in Section 4.1) the Holder of this Option shall thereafter
be entitled to purchase pursuant to this Option (in lieu of the number of shares
of Common Stock which such Holder would have been entitled to purchase
immediately prior to such reorganization or reclassification) the shares of
stock of any class or classes or other securities or property to which such
number of shares of Common Stock would have been entitled at the time of such
reorganization or reclassification, at an aggregate purchase price equal to the
aggregate purchase price which would have been payable if such number of shares
of Common Stock had been purchased immediately prior to such reorganization or
reclassification. In case of any such reorganization or reclassification,
appropriate provision (as determined by resolution of the Board of Directors of
the Company) shall be made with respect to the rights and interests thereafter
of the Holder of this Option, to the end that all of the provisions of this
Option (including adjustment provisions) shall thereafter be applicable, as
nearly as reasonably practicable, in relation to such stock or other securities
or property.
4.4 Statement of Adjustment. Whenever the exercise price and the number of
shares of Common Stock subject to this Option are adjusted pursuant to this
Section 4, the Company shall prepare a written statement signed by an officer of
the Company setting forth the adjusted exercise price and the number of shares
purchasable under this Option, determined as provided in this Section 4, and the
facts requiring such an adjustment. Such statement shall be filed among the
permanent records of the Company and a copy thereof shall be furnished to the
Holder of this Option and shall at all reasonable times during business hours be
open to inspection by the Holder of the Option. The Company shall promptly cause
a copy of such notice to be mailed, first class postage prepaid, to the Holder
of record of this Option.
5. RESERVATION OF STOCK
5.1 Reservation. The Company covenants and agrees that it will reserve and
set apart and have at all times a number of shares of authorized but unissued
Common Stock, or other stock or securities deliverable pursuant to this Option,
sufficient to enable it at any time to fulfill all of its obligations hereunder.
The Company covenants that at any time when the Common Stock is listed on any
national securities exchange the Company will, if permitted by the rules of such
exchange, list and keep listed on such exchange, upon official notice of
issuance, all shares of Common Stock issuable upon the exercise of this Option.
5.2 Approvals. The Company covenants that if any shares of Common Stock
required to be reserved for issuance upon the exercise of this Option require
registration with or approval of any governmental authority under federal or
sate law, before such shares may be validly issued upon exercise of this Option,
the Company will, in good faith and as expeditiously as possible, endeavor to
cause such shares to be duly registered or approved.
6. COMPANY'S RIGHT OF ACCELERATION
6.1 Right to Accelerate. Notwithstanding anything in this Option to the
contrary, (a) if the Company or the shareholders of the Company enter into a
bona fide agreement (i) for the consolidation with or merger of the Company into
any other Company wherein (A) the Company is not the surviving Company or (B)
the Company is the surviving Company but the transaction is effected as a
reverse triangular merger, a downstream merger, or a similar transaction as a
result of which the other Company, or its shareholders, acquire control of the
Company, or (ii) for the sale of 80% or more of the issued and outstanding
capital stock of the Company, or (iii) the sale or conveyance of all or
substantially all of the Company's assets and (b) as a condition of the
consummation of any such agreement the surviving Company, or the disappearing
Company which is not the Company, or the purchase(s)
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of the capital stock or assets, require that this Option either be exercised or
canceled prior to the consummation of such agreement then the Company shall have
the right to give the Holder notice of such condition and demand that the Holder
deliver to the Company within thirty (30) days after the Company's delivery of
such notice written notice of (I) the Holder's exercise in full of this Option,
or (II) the Holder's consent to the cancellation of this Option pursuant to this
Section 6, or (III) the Holder's exercise in part of this Option and consent to
the cancellation of the unexercised portion of this Option pursuant to this
Section 6. Any exercise or cancellation of this Option shall be effective
immediately prior to the closing of the transaction described in this Section.
6.2 Consideration. In full consideration for the Holder's cancellation of
this Option pursuant to this Section 6, the Company shall pay to the Holder in
cash the sum of One Hundred Dollars ($100.00) if this Option is canceled in
full, or the applicable proportionate amount thereof if this Option is canceled
in part.
6.3 Power of Attorney. If the Holder does not deliver any such written
notice to the Company within such 30-day period, for all purposes the Holder
shall be conclusively presumed to have consented to the cancellation of this
Option in full and to the appointment of the person who is then the Chief
Executive Officer of the Company as the Holder's attorney-in-fact, with right of
substitution, for the sole purpose of effecting such cancellation. The Chief
Executive Officer of the Company, if appointed attorney-in-fact for the Holder
of this Option pursuant to the provisions of the preceding sentence, may effect
the cancellation of this Option or the remaining unexercised portion thereof by
delivery to the Holder of this Option of payment in cash of the full
consideration for the cancellation of this Option and this Option shall be
canceled for all purposes upon delivery of such consideration to the Holder
hereof and the consummation of the transaction with respect to which notice was
given to the Holder hereof. The Holder of this Option acknowledges that the
grant of the foregoing power-of-attorney is coupled with an interest and shall
survive the death or disability of the Holder.
6.4 Termination. If the transaction described in Section 6.1 above is not
consummated or the parties abandon any such agreement, the Company shall notify
the Holder of this Option of such event, the notice previously given by the
Company with respect to such agreement shall be canceled, and the Holder of this
Option shall have no further obligation to exercise or cancel this Option by
reason of the notice from the Company; provided that the provisions of this
Section 6 shall survive the cancellation of any notice from the Company and
shall apply to any subsequent agreement entered into by the Company or the
shareholders of the Company to the same extent as if they had not entered into
any prior agreement.
7. NOTICES
7.1 In case the Company proposes:
7.1.1 to pay any dividend upon any class of its stock which is payable
in stock (of any class or classes) or to make any distribution to the
Holders of any class of its stock; or
7.1.2 to issue or grant any rights or options with respect to the
Common Stock; or
7.1.3 to effect any capital reorganization or reclassification of the
capital stock of the Company; or
7.1.4 to consolidate with, or merge into, any other corporation or to
transfer its property as an entirety or substantially as an entirety; or
7.1.5 to convey, sell or distribute all or substantially all of its
assets or to divide the business or ownership of the Company; or
7.1.6 to effect the liquidation, dissolution or winding up of the
Company;
then the Company shall cause notice of such intended action to be given to the
Holder of this Option which shall include notification of the record date for
such stock dividend, distribution, issuance or grant, or the date when such
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issuance, grant, capital reorganization, reclassification, consolidation,
merger, liquidation, dissolution or winding up shall be effective, as the case
may be.
7.2 Any notice or other document required or permitted to be given or
delivered to the Holder of this Option shall be personally delivered, or mailed
by first-class mail, registered or certified, postage prepaid and return-receipt
requested, or sent by facsimile or other form of electronic transmission, to the
Holder at such address as shall have been furnished to the Company by the Holder
of record of this Option. Any notice or other document required or permitted to
be given or delivered to the Company shall be personally delivered, or mailed by
first-class mail, registered or certified, postage prepaid and return-receipt
requested, or sent by facsimile or other form of electronic transmission, to the
principal office of the Company at 1800 Glenarm Place, 7th Floor, Denver,
Colorado 80202, Attention: Chief Executive Officer, Facsimile No. (303)
292-5039, or such other address as shall have been furnished by the Company to
the Holder of record of this Option. All notices and other documents given under
this Option shall be deemed to have been duly given when delivered, if
personally delivered, five (5) days after mailing, if mailed, and when
transmitted if sent by facsimile or other form of electronic transmission.
8. SECURITIES LAW
Neither the sale and issuance of this Option nor the sale and issuance of
any shares of Common Stock or other capital stock and securities issuable upon
the exercise of this Option have been registered under the Securities Act of
1933, as amended (the `Securities Act"). Neither this Option nor any shares of
Common Stock or other capital stock and securities issued upon the exercise of
this Option may be resold unless and until they have been registered under the
Securities Act or pursuant to the terms of an applicable exemption from
registration under the Securities Act. The Company may place such restrictive
legends on this Option and any certificates and other documents evidencing any
Common Stock or other capital stock and securities issued upon exercise of this
Option as the Company deems necessary or appropriate for purposes of complying
with any federal or state securities laws.
9. LIMITATION OF LIABILITY
The Holder of this Option shall have no rights as a shareholder of the
Company unless and until the Holder properly exercises this Option and the
Company issues to the Holder shares of Common Stock or other securities of the
Company by reason of such exercise. No provision hereof, in the absence of
affirmative action by the Holder hereof to purchase shares of Common Stock, and
no mere enumeration herein of the rights or privileges of the Holder hereof,
shall give rise to any liability of such Holder for the exercise price or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.
10. FURNISH INFORMATION
The Company shall deliver to the Holder of this Option promptly after their
becoming available copies of all financial statements, reports and proxy
statements which the Company shall have sent to its stockholders generally.
11. ASSIGNMENT
The Holder of this Option may not assign all or any portion of his right,
tide arid interest under this Option to any person.
12. INTERPRETATION
All pronouns and any variation thereof shall be deemed to refer to the
masculine, feminine, or neuter and to the singular or plural, as the identity of
the person or persons may require for proper interpretation of this Option.
13. GOVERNING LAW
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This Option shall be construed in accordance with, and governed by, the
laws of the State of Colorado, in which it is being executed, delivered, and is
to be performed.
IN WITNESS WHEREOF, the Company has caused this Option to be signed in its
name by its President and its corporate seal to be impressed hereon.
"COMPANY":
WEBB INTERACTIVE SERVICES, INC.,
a Colorado corporation
By________________________________________
R. Steven Adams, Chief Executive Officer
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NOTICE OF
EXERCISE OF OPTION TO
PURCHASE COMMON STOCK OF
WEBB INTERACTIVE SERVICES, INC.
EXPIRING ________, 20___
The undersigned, the Holder of the above-referenced Option, hereby elects to
exercise purchase rights represented by said Option for, and to purchase
thereunder, _________ shares of Common Stock covered by said Option and herewith
makes payment in full therefor of $__________, and requests that certificates
for such shares (and any securities or other property issuable upon such
exercise) be issued in the name of and delivered to ________________whose
address is ________________________________________________; and, if such shares
shall not include all of the shares issuable as provided in said Option,
requests that a new Option of like tenor and date for the balance of the shares
issuable thereunder be delivered to the undersigned.
________________ ___________________________________________________________
Date
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Exhibit 4.3
CONVERTIBLE PROMISSORY NOTE
$___________ June 30, 1999
For value received, the undersigned WEBB INTERACTIVE SERVICES, INC., a
Colorado corporation, (the "Promisor" or "WEBB") promises to pay to the order of
_____________________________________ (the "Payee"), at
__________________________________________________, (or such other place as the
Payee may designate in writing) the sum of $__________ with interest, payable
monthly, form the date above, on the unpaid principal at the rate of ___%
annually.
Penalty interest shall accrue at an 18% annual rate for any payments in
arrears.
All unpaid principal and interest shall be due and payable in full on March
31, 2000. Any partial payments on this Note shall be applied first in payment of
accrued interest and any remainder in payment of principal.
If this Note is not paid when due, the Promisor promises to pay all cost of
collection, including reasonable attorney fees, whether or not a lawsuit is
commenced as part of the collection process.
If any of the following events of default occur, this Note and any other
obligations of the Promisor to the Payee, shall become due and payable
immediately, without demand or notice:
(1) The failure of the Promisor to pay the principal and any accrued
interest in full, when due;
(2) The filing of bankruptcy proceedings invovling the Promisor as a
Debtor;
(3) The application for appointment of a receiver for the Promisor;
(4) The making of a general assignment for the benefit of the Promisor's
creditors;
(5) The insolvency of the Promisor; or
(6) Any misrepresentation by the Promisor to the Payee for the purpose of
obtaining or extending credit.
At the election of Payee, the unpaid principal and accrued interest, if
any, may be converted into shares of common stock of Promisor at a conversion
price equal to the greater of $9.75 per share or the closing bid price for
Promisor's common stock on the Nasdaq SmallCap Market as of the close of
business on the date that the Payee gives Promisor written notice of its
election to convert all or a portion of this Note. In the event of any
subdivision or combination of the Promisor's common stock, the terms upon which
this Note is convertible shall be appropriately adjusted as determined by
Promisor's Board of Directors in order to equitably protect the Payee's rights
hereunder. Neither this Note nor the shares of common stock issuable upon
conversion hereof have been registered pursuant to the registration requirements
of the federal or state securities laws. The transfer of this Note and the
shares of common stock, if any, issued upon conversion hereof, are subject to
compliance with the federal securities laws and any applicable state securities
laws. The certificates representing any shares of common stock issued upon
conversion hereof shall bear an appropriate restrictive legend describing such
restriction on the transfer of the shares represented thereby.
No renewal or extension of this Note, delay in enforcing any right of the
Payee under this Note, or assignment by Payee of this note shall affect the
liability of the Promisor. All rights of the Payee under this Note are
cumulative and may be exercised concurrently or consecutively at the Payee's
option.
This Note shall be construed in accordance with the laws of the State of
Colorado.
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If any one or more of the provisions of this Note is/are determined to be
unenforceable, in whole or in part, for any reason, the remaining provisions
shall remain fully operable.
All payments of principal and interest on this Note shall be paid in the
legal currency of the United States.
Promisor waives presentment for payment, protest and notice of protest and
nonpayment of this Note.
Signed this ____ day of ________ 1999.
Webb Interactive Services, Inc.
_______________________________
By: R. Steven Adams
Chairman of the Board and CEO
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Exhibit 4.4
CONVERTIBLE PROMISSORY NOTE
$___________ June 30, 1999
For value received, the undersigned WEBB INTERACTIVE SERVICES, INC., a
Colorado corporation, (the "Promisor" or "WEBB") promises to pay to the order of
_____________________________________ (the "Payee"), at
__________________________________________________, (or such other place as the
Payee may designate in writing) the sum of $__________ with interest, payable
monthly, form the date above, on the unpaid principal at the rate of ___%
annually.
Penalty interest shall accrue at an 18% annual rate for any payments in
arrears.
All unpaid principal and interest shall be due and payable in full on March
31, 2000. Any partial payments on this Note shall be applied first in payment of
accrued interest and any remainder in payment of principal.
If this Note is not paid when due, the Promisor promises to pay all cost of
collection, including reasonable attorney fees, whether or not a lawsuit is
commenced as part of the collection process.
If any of the following events of default occur, this Note and any other
obligations of the Promisor to the Payee, shall become due and payable
immediately, without demand or notice:
(1) The failure of the Promisor to pay the principal and any accrued
interest in full, when due;
(2) The filing of bankruptcy proceedings invovling the Promisor as a
Debtor;
(3) The application for appointment of a receiver for the Promisor;
(4) The making of a general assignment for the benefit of the Promisor's
creditors;
(5) The insolvency of the Promisor; or
(6) Any misrepresentation by the Promisor to the Payee for the purpose of
obtaining or extending credit.
At the election of Payee, the unpaid principal and accrued interest, if
any, may be converted into shares of common stock of Promisor at a conversion
price equal to $9.61 per share. In the event of any subdivision or combination
of the Promisor's common stock, the terms upon which this Note is convertible
shall be appropriately adjusted as determined by Promisor's Board of Directors
in order to equitably protect the Payee's rights hereunder. Neither this Note
nor the shares of common stock issuable upon conversion hereof have been
registered pursuant to the registration requirements of the federal or state
securities laws. The transfer of this Note and the shares of common stock, if
any, issued upon conversion hereof, are subject to compliance with the federal
securities laws and any applicable state securities laws. The certificates
representing any shares of common stock issued upon conversion hereof shall bear
an appropriate restrictive legend describing such restriction on the transfer of
the shares represented thereby.
No renewal or extension of this Note, delay in enforcing any right of the
Payee under this Note, or assignment by Payee of this note shall affect the
liability of the Promisor. All rights of the Payee under this Note are
cumulative and may be exercised concurrently or consecutively at the Payee's
option.
This Note shall be construed in accordance with the laws of the State of
Colorado.
If any one or more of the provisions of this Note is/are determined to be
unenforceable, in whole or in part, for any reason, the remaining provisions
shall remain fully operable.
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All payments of principal and interest on this Note shall be paid in the
legal currency of the United States.
Promisor waives presentment for payment, protest and notice of protest and
nonpayment of this Note.
Signed this ____ day of ________ 1999.
Webb Interactive Services, Inc.
_______________________________
By: R. Steven Adams
Chairman of the Board and CEO
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Exhibit 4.5
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (ii) TO THE
EXTENT APPLICABLE, PURSUANT TO RULE 144 UNDER THE SECURITIES ACT (OR ANY SIMILAR
RULE UNDER THE SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES), OR
(iii) UPON THE DELIVERY OF THE HOLDER TO THE COMPANY OF AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY, TO THE EFFECT THAT
THIS WARRANT OR THE SECURITIES TO BE SOLD OR TRANSFERRED MAY BE SOLD OR
TRANSFERRED PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION.
WEBB INTERACTIVE SERVICES, INC.
WARRANT TO PURCHASE COMMON STOCK
The Transferability of this Warrant is
Restricted as Provided in Section 2.
Void after May 4, 2000 Right to Purchase ______ Shares of Common Stock
(subject to adjustment)
No. ___
PREAMBLE
WEBB Interactive Services, Inc., a Colorado corporation, hereby certifies
that, for value received _______________________, whose address is
____________________________, or its registered assigns (the "Registered
Holder"), is entitled, subject to the terms set forth below, to purchase from
the Company at any time after June 30, 1999, or from time to time thereafter on
or before 5:00 P.M. Denver time, June 30, ____ (such time, the "Expiration
Time"), ______ of the Company's fully paid and nonassessable shares of Common
Stock at the purchase price per share of $8.94 (the "Purchase Price"). The
number and character of such Common Stock and the Purchase Price are subject to
adjustment as provided herein.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" means Online System Services, Inc. and also
includes any corporation which shall succeed to or assume the obligations
of Online System Services, Inc. hereunder.
(b) The term "Common Stock" includes the Company's shares of common
stock, no par value, and also includes all shares of any class or classes
(however designated) of the Company, authorized on or after the date
hereof, the holders of which shall have the right, without limitation as to
amount, either to all or to a share of the balance of current dividends and
liquidating dividends after the payment of dividends and distributions on
any shares entitled to preference, and the holders of which shall
ordinarily
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be entitled to vote for the election of directors of the Company (even
though the right so to vote has been suspended by the happening of a
contingency).
(c) The term "Other Securities" refers to any class of shares (other
than Common Stock) and other securities of the Company or any other person
(corporate or otherwise) which the holders of the Warrants at any time
shall be entitled to receive, or shall have received, upon the exercise of
the Warrants, in lieu of or in addition to Common Stock, or which at any
time shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section 6 or
otherwise.
(d) The term "Shares" means the Common Stock issued or issuable upon
exercise of this Warrant.
1. Transfer Restriction. The Registered Holder acknowledges that (i) neither
this Warrant nor the Shares have been, or will be, registered under the
Securities Act and may not be transferred unless (a) subsequently registered
thereunder or (b) the Registered Holder shall have delivered to the Company an
opinion of counsel, reasonably satisfactory in form and substance to the
Company, to the effect that the Warrant or Shares to be sold or transferred may
be sold or transferred pursuant to an exemption from such registration, (ii) any
sale or transfer of this Warrant or the Shares made in reliance upon Rule 144
under the Securities Act may be made only in accordance with the terms of Rule
144 and, if Rule 144 is not applicable, any resale of this Warrant or the Shares
under circumstances in which the seller, or the person through whom the sale is
made, may be deemed to be an underwriter, as that term is used in the Securities
Act, may require compliance with another exemption under the Securities Act and
the rules and regulations promulgated thereunder, and (iii) neither the Company
nor any other person is under any obligation to comply with the terms and
conditions of any exemption under the Securities Act or the rules and
regulations promulgated thereunder. The Registered Holder acknowledges that this
Warrant and the Shares may be subject to a stop-transfer order placed against
the transfer of this Warrant or the Shares.
2. Exercise of Warrant.
2.1. Exercise in Full. The holder of this Warrant may exercise it in full
prior to the Expiration Time by surrendering to the Company this Warrant
together with the form of Election to Purchase attached hereto as Annex A duly
executed by such holder. Such exercise may be accomplished by faxing an executed
and completed Election to Purchase to the Company and delivering, within three
business days thereafter, the original Election to Purchase and Warrant via hand
delivery or overnight courier. Such exercise shall be deemed to have occurred on
the date on which the facsimile copy of the Election to Purchase was received by
the Company. The surrendered Warrant shall be accompanied by payment, in cash or
by certified or official bank check payable to the order of the Company, in the
amount obtained by multiplying the number of Shares of Common Stock called for
on the face of this Warrant (after giving effect to any adjustment provided for
in this Warrant) by the Purchase Price, as adjusted.
2.2. Partial Exercise. This Warrant may be exercised in part by surrender
of this Warrant in the manner provided in Section 2.1, except that the exercise
price shall be calculated by multiplying (a) the number of shares of Common
Stock as shall be designated by the holder in the form of Election of Purchase
by (b) the Purchase Price, as adjusted. On any such partial exercise, subject to
the provisions of Section 1 hereof, the Company, at its expense, will issue and
deliver to or upon the order of the Registered Holder hereof a new Warrant or
Warrants of like tenor, in the name of the Registered Holder hereof or as such
Registered Holder may request, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock (after giving effect to any
adjustment provided for in this Warrant) equal to the number of such shares
called for on the face of this Warrant minus the number of such shares
designated by the Registered Holder in the applicable Election to Purchase.
3. Delivery of Share Certificates upon Exercise. Following the exercise of this
Warrant in full or in part, within the time periods and in the manner provided
in this Warrant, the Company, at its expense (including the payment by it of any
applicable issue taxes), will cause to be issued in the name of and delivered to
the Registered Holder hereof, or as such Registered Holder (upon payment by such
Registered Holder of any applicable transfer taxes) may direct, a certificate or
certificates for the number of fully paid and nonassessable shares of Common
Stock to which such Registered Holder shall be entitled on such exercise, plus,
in lieu of any fractional share to which such Registered Holder would otherwise
be entitled, cash equal to such fraction multiplied by the then
<PAGE>
current market value of one full share of Common Stock (as computed in
accordance with Subsection 4.1(c) of this Warrant).
4. Adjustment of Purchase Price and Number of Shares of Common Stock.
4.1. Adjustment of Purchase Price. The Purchase Price hereof shall be
subject to adjustment from time to time as follows:
(a) If the Company (i) pays a dividend on its shares of Common Stock
in Common Stock, (ii) subdivides its outstanding shares of Common Stock or
(iii) combines its then outstanding shares of Common Stock into a smaller
number of shares of Common Stock, then the Purchase Price in effect
immediately prior thereto shall be adjusted proportionately so that the
adjusted Purchase Price will bear the same relation to the Purchase Price
in effect immediately prior to any such event as the total number of shares
of Common Stock outstanding immediately prior any such event shall bear to
the total number of shares of Common Stock outstanding immediately after
such event. An adjustment made pursuant to this Section 4.1(a) shall, (i)
become effective retroactively immediately after the record date in the
case of a dividend and shall (ii) become effective immediately after the
effective date in the case of a subdivision or combination. The Purchase
Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein.
(b) If the Company distributes to all holders of its shares of Common
Stock, (i) Other Securities, (ii) evidences of its indebtedness or assets
(excluding cash dividends or distributions) or (iii) purchase rights,
options or warrants to subscribe for or purchase Other Securities, then the
Purchase Price in effect thereafter shall be determined by multiplying the
Purchase Price in effect immediately prior to any such event by a fraction,
the numerator of which shall be the total number of outstanding shares of
Common Stock multiplied by the current market price per share of Common
Stock (determined in accordance with the provisions of Section 4.1(c) of
this Warrant) on the record date mentioned below, less the fair market
value (as determined by the Board of Directors, whose determination shall
be conclusive) of the Other Securities, evidences of indebtedness or
assets, or the rights, options or warrants so distributed, and the
denominator of which shall be the total number of outstanding shares of
Common Stock multiplied by such current market price per share of Common
Stock. Such adjustment shall be made whenever any such distribution is made
and shall become effective retroactively immediately after the record date
for the determination of shareholders entitled to receive such
distribution.
(c) For the purpose of any computation under subdivision (b) above,
the current market price per share of Common Stock shall be deemed to be
the closing price of the Company's shares of Common Stock on the date that
the computation is made.
(d) No adjustment of the Purchase Price shall be made if the amount of
such adjustment shall be less than $.02 per share, but any adjustment that
would otherwise be then required 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 not less than $.02 per share. If the Company at any time issues
shares of Common Stock by way of dividend on any class of stock of the
Company or subdivides or combines the outstanding shares of Common Stock,
said amount of $.02 per share (as increased or decreased, if the same
amount shall have been adjusted previously in accordance with the
provisions of this Section 4) shall be proportionately increased in the
case of a combination or decreased in the case of a subdivision or stock
dividend so as to appropriately reflect the same.
4.2. Adjustment of Shares. Upon each adjustment of the Purchase Price
pursuant to subdivisions (a) and (b) of Section 4.1 of this Warrant, the number
of shares of Common Stock purchasable upon exercise of this Warrant shall be
adjusted to the number of shares of Common Stock, calculated to the nearest one
hundredth of a share, obtained by multiplying the number of shares of Common
Stock purchasable immediately prior to such adjustment upon the exercise of this
Warrant by a fraction, the numerator of which is the Purchase Price in effect
prior to such adjustment and the denominator of which is the adjusted Purchase
Price.
4.3. Certification by Company. Whenever the Purchase Price is adjusted as
provided in this Section 4, the Company shall compute the adjusted Purchase
Price in accordance with this Section 4 and shall prepare a
<PAGE>
certificate signed by its Chief Financial Officer or any other executive officer
setting forth the adjusted Purchase Price, and setting forth in reasonable
detail the facts requiring such adjustment, the information on which such
calculation is based, and the method of such adjustment. Such certificate shall
be delivered to the Registered Holder.
4.4. Form of Warrant. The form of this Warrant need not be changed because
of any change in the Purchase Price pursuant to this Section 4 and any Warrant
issued after such change may state the same Purchase Price and the same number
of shares of Common Stock as are stated in this Warrant as initially issued.
5. Adjustment for Reorganization, Consolidation, Merger, Etc.
5.1. Merger, Etc. If at any time or from time to time after the date of
issuance of this Warrant, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company within three (3)
years from the date of such transfer (any such transaction being hereinafter
referred to as a "Reorganization"), then the Registered Holder, upon the
exercise of this Warrant at any time after the consummation or effective date of
such Reorganization, shall receive, in lieu of the shares of Common Stock
issuable on such exercise prior to such consummation or such effective date, the
stock and other securities and property (including cash) to which the Registered
Holder would have been entitled upon such consummation or effective date of such
Reorganization, if the Registered Holder had so exercised this Warrant
immediately prior thereto (all subject to further adjustment thereafter as
provided in Section 4).
5.2. Dissolution. Except as otherwise expressly provided in Section 5.1, in
the event of any dissolution of the Company following the transfer of all or
substantially all of its properties or assets, the Company, prior to such
dissolution, shall at its expense deliver or cause to be delivered the stock and
other securities and property (including cash, where applicable) receivable by
the Registered Holder after the effective date of such dissolution to a bank or
trust company having its principal office in Denver, Colorado, as trustee for
the Registered Holder.
5.3. Continuation of Terms. Except as otherwise expressly provided in
Section 5.1, upon any reorganization, consolidation, merger or transfer (and any
dissolution following any transfer) referred to in this Section 5, this Warrant
shall continue in full force and effect and the terms hereof shall be applicable
to the shares of stock and other securities and property receivable on the
exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer of any such
stock or other securities, including, in the case of any such transfer, the
person acquiring all or substantially all of the properties or assets of the
Company, whether or not such person shall have expressly assumed the terms of
this Warrant.
6. No Dilution or Impairment. The Company will not, by amendment of its Articles
of Incorporation or Bylaws, or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Registered Holder
against dilution (to the extent specifically provided in this Warrant) or other
impairment. Without limiting the generality of the foregoing, the Company (a)
will not increase the par value of any shares of stock receivable on the
exercise of the Warrants above the amount payable therefor on such exercise, and
(b) will not effect a subdivision or split up of shares or similar transaction
with respect to any class of the Common Stock without effecting an equivalent
transaction with respect to all other classes of Common Stock.
7. Representations and Warranties of Record Holder. By accepting delivery of
this Warrant, the Registered Holder hereby represents and warrants to, and
covenants with, the Company as follows:
(a) The Registered Holder has been given access to full and complete
information regarding the Company and has utilized such access to the
Registered Holder's satisfaction for the purpose of obtaining such
information regarding the Company as the Registered Holder has reasonably
requested; and, particularly, the Registered Holder has been given
reasonable opportunity to ask questions of, and
<PAGE>
receive answers from, representatives of the Company concerning the terms
and conditions of the offering of the Warrant and the Shares and to obtain
any additional information, to the extent reasonably available.
(b) The Registered Holder believes that an investment in the Warrant
and the Shares is suitable for the Registered Holder based upon the
Registered Holder's investment objectives and financial needs. The
Registered Holder (i) recognizes that the Securities as an investment
involve a high degree of risk; (ii) has adequate means for providing for
the Registered Holder's current financial needs and business contingencies;
(iii) has no need for liquidity in this investment; (iv) at the present
time, can afford a complete loss of such investment; and (v) does not have
an overall commitment to investments which are not readily marketable that
is disproportionate to the Registered Holder's net worth, and the
Registered Holder's investment in the Warrant and the Shares will not cause
such overall commitment to become excessive.
(c) The Registered Holder, in reaching a decision to subscribe, has
such knowledge and experience in financial and business matters that the
Registered Holder is capable of reading and interpreting financial
statements and evaluating the merits and risk of an investment in the
Warrant and the Shares and has the net worth to undertake such risks.
(d) The Registered Holder has obtained, to the extent the Registered
Holder deems necessary, the Registered Holder's own professional advice
with respect to the risks inherent in the investment in the Warrant and the
Shares, and the suitability of an investment in the Warrant and the Shares
in light of the Registered Holder's financial condition and investment
needs.
(e) The Registered Holder realizes that (i) the purchase of the
Warrant and the Shares is a long-term investment; (ii) the purchaser of the
Warrant and the Shares must bear the economic risk of investment for an
indefinite period of time because the Warrant and the Shares have not been
registered under the Act or under the securities laws of any state and,
therefore, the Warrant and the Shares cannot be resold unless they are
subsequently registered under said laws or exemptions from such
registrations are available; and (iii) the transferability of the Warrant
and the Shares is restricted and (A) requires conformity with the
restrictions contained in Section 1 of this Warrant and (B) stop transfer
instructions will be placed with the transfer agent for the Warrant and the
Shares and a legend will be placed on the certificate(s) representing the
Warrant and the Shares referring to the applicable restrictions on
transferability.
(f) The Registered Holder has been advised and understands that the
Warrant and the Shares have not been registered under the Securities Act or
applicable state securities laws and that the Warrant and the Shares are
being offered and sold pursuant to exemptions from such laws. The Warrant
and the Shares are being acquired for the Registered Holder's own account
and for investment purposes only, and without the intention of reselling or
redistributing the same, and the Registered Holder has made no agreement
with others regarding any of the Warrant and the Shares. The Registered
Holder's financial condition is such that it is not likely that it will be
necessary to dispose of any of the Warrant or the Shares in the foreseeable
future. The Registered Holder is aware that, in the view of the Securities
and Exchange Commission, a purchase of such securities with an intent to
resell by reason of any foreseeable specific contingency or anticipated
change in market value, or any change in the condition of the Company, or
in connection with a contemplated liquidation settlement of any loan
obtained for the acquisition of such securities and for which such
securities were pledged, would represent an intent inconsistent with the
representations set forth above.
(g) The Registered Holder represents and warrants that the Registered
Holder is a bona fide resident of, is domiciled in and received the offer
and made the decision to invest in the Warrant and the Shares in the state
of Colorado. The Warrant and the Shares are being purchased by the
Registered Holder in the Registered Holder's name solely for the Registered
Holder's own beneficial interest and not as nominee for, or on behalf of or
for the beneficial interest of, or with the intention to transfer to, any
other person, trust or organization.
<PAGE>
8. Notice of Record Date. In case of:
(a) any taking by the Company of a record of the holders of any class
of its securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right,
or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company, any transfer of all
or substantially all the assets of the Company, any consolidation or merger
of the Company, or any voluntary or involuntary dissolution, liquidation or
winding up of the Company, or
(c) the occurrence of any event resulting in the voluntary or
involuntary dissolution, liquidation or winding up of the Company,
then the Company will mail or cause to be mailed to each Registered Holder a
notice specifying (i) the date on which any record is to be taken for the
purpose of any such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, (ii) the date on which any
such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock (or Other Securities) shall be entitled to exchange their Common Stock (or
Other Securities) for securities or other property deliverable on such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding up, and (iii) the amount and
character of any stock or other securities, or rights or options with respect
thereto, proposed to be issued or granted, the date of such proposed issue or
grant and the persons or class of persons to whom such proposed issue or grant
is to be offered or made. Such notice shall be mailed at least 30 days prior to
the date specified in such notice on which any such action is to be taken.
9. Exchange of Warrants. On surrender for exchange of any Warrant, properly
endorsed, to the Company, the Company, at its expense, will issue and deliver to
or (subject to Section 1 of this Warrant) on the order of the holder thereof a
new Warrant or Warrants of like tenor, in the name of such holder or as such
holder (on payment by such holder of any applicable transfer taxes) may direct,
calling in the aggregate on the face or faces thereof for the number of shares
of Common Stock called for on the face or faces of the Warrant or Warrants so
surrendered.
10. Replacement of Warrants. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of any Warrant and, in
the case of any such loss, theft or destruction of any Warrant, on delivery of
an indemnity agreement or security reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, on surrender and
cancellation of such Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
11. Warrant Agent. The Company may, by written notice to each holder of a
Warrant, appoint an agent having an office in Denver, Colorado, for the purpose
of issuing shares of Common Stock on the exercise of this Warrant pursuant to
Section 2, exchanging Warrants pursuant to Section 9, and replacing Warrants
pursuant to Section 10, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such agent.
12. Remedies. The Company stipulates that the remedies at law of the holder of
this Warrant in the event of any default or threatened default by the Company in
the performance of or compliance with any of the terms of this Warrant are not
and will not be adequate, and that such terms may be specifically enforced by a
decree for the specific performance of the terms of this Warrant or by an
injunction against a violation of any of the terms of this Warrant.
13. Negotiability, Etc. This Warrant is issued upon the following terms, to all
of which each Registered Holder or owner hereof by the taking hereof consents
and agrees:
(a) subject to the terms of Section 1 of this Warrant, title to this
Warrant may be transferred by endorsement (by the Registered Holder hereof
executing the form of Assignment attached hereto as
<PAGE>
Annex B) and delivery in the same manner as in the case of a negotiable
instrument transferable by endorsement and delivery;
(b) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered
to transfer absolute title hereto by endorsement and delivery hereof to a
bona fide purchaser hereof for value; each prior taker or owner waives and
renounces all of his equities or rights in this Warrant in favor of each
such bona fide purchaser, and each such bona fide purchaser shall acquire
absolute title hereto and to all rights represented hereby; and
(c) until this Warrant is transferred on the books of the Company, the
Company may treat the Registered Holder hereof as the absolute owner hereof
for all purposes, notwithstanding any notice to the contrary.
14. Notices. All notices and other communications from the Company to the
Registered Holder of this Warrant shall be given in writing (unless otherwise
specified herein) and shall be effective upon personal delivery, via facsimile
(upon receipt of confirmation of error-free transmission) or two business days
following deposit of such notice with an internationally recognized courier
service, with postage prepaid and addressed, to such address as may have been
furnished to the Company in writing by such Registered Holder or, until any such
Registered Holder furnishes to the Company an address, then to, and at the
address of, the last Registered Holder of this Warrant who has so furnished an
address to the Company.
15. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of Colorado, without regard to principles of
conflict of laws. The headings in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms hereof. All nouns
and pronouns used herein shall be deemed to refer to the masculine, feminine or
neuter, as the identity of the person or persons to whom reference is made
herein may require.
IN WITNESS WHEREOF, the undersigned has executed this Warrant effective as
of June 30, 1999.
WEBB INTERACTIVE SERVICES, INC.
By:____________________________
Name:_______________________
Title:______________________
<PAGE>
Annex A
-------
FORM OF ELECTION TO PURCHASE
(To be executed by the Registered Holder if such Holder desires to
exercise the Warrant.)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant, to purchase ____________ shares of Common Stock and
herewith tenders in payment for such securities a certified or official bank
check to the order of WEBB INTERACTIVE SERVICES, INC., in the amount of
$__________, all in accordance with the terms hereof. The undersigned requests
that a certificate for such shares of Common Stock be registered in the name of
_____________, whose address is _________________________________________ and
that such Certificate be delivered to _________________________________________
whose address is _____________________________.
Dated: ___________________________
Name: _________________________________________
Signature: ____________________________________
(Signature must conform in all respects to the name of the
Registered Holder, as specified on the face of the Warrant.)
_______________________________________________
(Insert Social Security or Other Identifying Number of Holder)
<PAGE>
Annex B
-------
FORM OF ASSIGNMENT
(To be executed by the Registered Holder if such Holder desires to
transfer the Warrant.)
FOR VALUE RECEIVED, _____________________ hereby sells, assigns and
transfers unto _______________________________________________________ (Please
print name and address of transferee) this Warrant, together with all right,
title and interest therein, and does so hereby irrevocably constitute and
appoint ________________________________________ Attorney, to transfer this
Warrant on the books of the Company, with full power of substitution.
<PAGE>
[Letterhead of Gray Plant Mooty Mooty & Bennett]
Exhibit 5.1
Lindley S. Branson
612 343-2827
September 23, 1999
Webb Interactive Services, Inc.
1800 Glenarm Place
Suite 800
Denver, CO 80202
RE: Form S-3 Registration Statement
Ladies/Gentlemen:
This opinion is furnished in connection with the registration, pursuant
to the Securities Act of 1933, as amended, of a maximum of 1,584,851 shares of
common stock, no par value (the "Shares"), of Webb Interactive Services, Inc.
(the "Company" or "Webb") issued in connection with the merger of Durand
Acquisition Corporation, a wholly-owned subsidiary of the Company, and Durand
Communications, Inc., for services rendered, issuable upon the exercise of
outstanding transferable options and warrants of Webb and the conversion of
issued and outstanding convertible securities of Webb which may be sold from
time to time by various selling shareholders for their own account.
We have acted as counsel to the Company in connection with the
preparation of the Form S-3 Registration Statement, file number 333-86465 (the
"Registration Statement"). We have examined the Articles of Incorporation, as
amended, the Bylaws of the Company, such records of proceedings of the Company
as we deemed material and such other certificates, records and documents as we
considered necessary for the purposes of this opinion.
Based on the foregoing, we are of the opinion that the Shares issued in
connection with the merger and for services rendered are, and the shares to be
issued upon exercise of options or warrants or conversion of convertible
securities will be, when issued in accordance with the terms of such securities,
legally issued, fully paid and non-assessable securities of the Company. We
understand that this opinion is to be issued in connection with the Registration
Statement. We consent to a filing of a copy of this opinion with the
Registration Statement.
Very truly yours,
GRAY, PLANT, MOOTY,
MOOTY & BENNETT, P.A.
By /s/ Lindley S. Branson
---------------------------
Lindley S. Branson
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-3 of our report dated March
10, 1999, included in Webb Interactive Services, Inc.'s Form 10-KSB for the year
ended December 31, 1998 and to all references to our Firm included in this
Registration Statement on Form S-3.
/s/ Arthur Andersen LLP
Denver, Colorado
September 23, 1999
