SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 31, 1998
JVWEB, INC.
(Exact name of registrant as specified in its Charter)
Delaware 000-24001 76-0552098
(State or other (Commission File (IRS Employer
jurisdiction of Incorporation) Number) Identification Number)
5444 Westheimer, Suite 2080, Houston, Texas 77056
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 622-9287
N/A
(Former address if changed since last report)
<PAGE>
ITEM 5.
ACQUISITION OR DISPOSITION OF ASSETS
On July 31, 1998, JVWeb, Inc., a Delaware corporation (the "Company"),
entered into an Asset Purchase Agreement (the "Agreement") to acquire from
Market Data Corporation, a Texas corporation, and Time Financial Services, Inc.,
a Nevada Corporation (collectively, "Sellers"), all of Sellers' respective
assets (collectively, the "Assets") comprising Sellers' financial publication
know as "Wall Street Whispers" (the "Publication"). The Publication is an
on-line daily financial publication that summarizes information from over 15
analysts sources under contract with the Company. There is no material
relationship between Sellers, on the one hand, and the Company or any of the
Company's affiliates, any director or officer of the Company, or any associate
of any director or officer of the Company, on the other hand.
The Assets include all machinery, equipment, inventories, contracts,
employees, copyrights, trademarks, trade names, service marks (including the
registered "Wall Street Whispers" name), business names and any and all other
intangible rights whatsoever, used in connection with the Publication. The
Agreement provides that title to the Assets shall be transferred to the Company
upon full payment of the purchase price for the Assets (the "Purchase Price").
Prior to entering into the Agreement, Sellers used the Assets in connection with
the publication, marketing and sale of the Publication, and the Company intends
to continue this use for the foreseeable future.
The Purchase Price of the Assets is $140,000. The Purchase Price was
determined after considerable arms-length negotiations, and management believes
that the Purchase Price represents the fair market value of the Assets. The
Company made a down payment toward the Purchase Price in the amount of $25,000
from available cash. The Agreement provides that the Company must pay to Sellers
by certain dates certain cumulative portions of the remaining $115,000 of the
Purchase Price (the "Remaining Amount"). The Agreement provides that $10,000 of
the Remaining Amount shall be paid by August 2, 1998, a cumulative total
(including prior payments) of the Remaining Amount of $20,000 shall be paid by
August 15, 1998, a cumulative total (including prior payments) of the Remaining
Amount of $30,000 shall be paid by September 15, 1998, and all of the Remaining
Amount shall be paid by October 15, 1998. The Company has made the August 2nd
payment and has funds available for the August 15th and September 15th payments.
The Company does not now have funds available for the October 15th payment.
However, the Company has the ability to issue to Sellers shares of the Company's
common stock to pay the Remaining Amount in lieu of the payment of cash, and the
Company has thus far issued to Sellers 75,000 shares of the Company's common
stock. Shares of the Company's common stock issued as payment of the Remaining
Amount are credited against the Remaining Amount in the manner provided for in
the Agreement. The Company is also working to assure that it has cash available
to make timely the October 15th payment.
The Agreement provides that, if the Company fails to pay timely
installments of the Remaining Amount when due, Sellers may immediately terminate
the Agreement and be freed from their obligations to transfer ownership of the
Assets to the Company. In such event, the Company will forfeit all payments made
on the Purchase Price thus far. In addition, under the Agreement, Sellers are
obligated to obtain certain third party consents to the transfer of the Assets.
If Sellers fail to obtain these consents by the time the Company stands ready to
pay the remaining balance of the Remaining Amount, the Company may immediately
terminate the Agreement and be freed from its obligation to acquire ownership of
the Assets. Moreover, the Company will also be entitled to a full refund of all
payments made on the Purchase Price thus far.
A portion of the Purchase Price was paid from proceeds from a $50,000
loan (the "Loan") from a stockholder of the Company (the "Lending Stockholder").
The documentation governing the Loan did not have any requirements for, or
restriction on, the use the Loan's proceeds. The promissory note governing the
Loan provides that it and the Loan will be converted into 200,000 shares of the
Company's common stock ("Common Stock") upon the occurrence of certain events.
The agreement governing the Loan also requires the Lending Stockholder to
purchase an additional 200,000 shares of Common Stock at a per-share purchase
price of $.25 upon the occurrence of certain events. Moreover, as a further
inducement to make the Loan, the Company granted to the Lending Stockholder an
option to purchase at a certain specified time an additional 100,000 shares of
Common Stock at a per-share purchase price of $.25. The Company obligated itself
to register with the U.S. Securities and Exchange Commission all of the shares
of Common Stock that the Lending Stockholder may acquire pursuant to the
foregoing.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
The financial statements of the business acquired are not being filed
as an exhibit to this filing, but will be filed when available but not
later than sixty (60) days after the date on which this Current Report
on Form 8-K must be filed.
(b) Pro Forma Financial Information
Pro forma financial information reflecting the Registrant's acquisition
is not being filed as an exhibit to this filing, but will be filed when
available but not later than sixty (60) days after the date on which
this Current Report on Form 8-K must be filed.
(c) Exhibits
10.1 Asset Purchase Agreement dated July 31, 1998 by and among
Market Data Corporation, a Texas corporation, and Time
Financial Services, Inc., a Nevada Corporation (as sellers),
and the Company (as purchaser).
10.2 Agreement dated August 3, 1998 by and between Equitrust
Mortgage Corporation and the Company governing a certain loan
of $50,000 to the Company, the possible acquisition of common
stock in the Company, the grant of an option to acquire common
stock in the Company and the registration of certain shares of
common stock in the Company.
10.3 Promissory Note dated August 3, 1998 in the original principal
amount of $50,000 made payable by the Company to the order of
Equitrust Mortgage Corporation, which may by its terms be
converted into 200,000 shares of the Company's common stock.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
JVWEB, INC.
(Registrant)
Date: August 13, 1998 By: /s/ Greg J. Micek
------------------
Greg J. Micek, President
<PAGE>
EXHIBIT INDEX
<TABLE>
<S> <C> <C>
10.1 Asset Purchase Agreement dated July 31, 1998 FILED HEREWITH
by and among Market Data Corporation, a Texas
corporation, and Time Financial Services,
Inc., a Nevada Corporation (as sellers), and the
Company (as purchaser).
10.2 Agreement dated August 3, 1998 by and between FILED HEREWITH
Equitrust Mortgage Corporation and the Company governing a certain loan
of $50,000 to the Company, the possible acquisition of common stock in
the Company, the grant of an option to acquire common stock in the
Company and the registration of certain shares of common stock in the
Company.
10.3 Promissory Note dated August 3, 1998 in the original FILED HEREWITH
principal amount of $50,000 made payable by the
Company to the order of Equitrust Mortgage Corporation,
which may by its terms be converted into 200,000 shares
of the Company's common stock.
</TABLE>
EXHIBIT 10.1 ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made and entered into
this _____ day of July, 1998, by and among Market Data Corporation, a Texas
Corporation, and Time Financial Services, Inc., a Nevada Corporation (each of
the preceding corporations are referred to hereinafter singly, as a "Seller" and
collectively as the "Sellers"), on the one hand, and JVWeb, Inc., a Delaware
corporation ("Purchaser"), on the other hand.
WHEREAS, each Seller desires to sell and transfer to Purchaser all of
the assets (the "Assets") comprising Seller's financial publication know as
"Wall Street Whispers" (the "Publication"), subject to no liens, security
interests, encumbrances, claims, charges or restrictions on the transfer
thereof, and Purchaser desires to purchase and acquire from Sellers the Assets,
all upon and subject to the terms, provisions and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
promises, covenants, agreements, representations and warranties set forth
hereinafter, and subject to the terms, provisions and conditions hereof, the
parties hereto agree as follows:
ARTICLE ONE
SALE AND PURCHASE OF THE ASSETS
1.1 Sale and Purchase of Assets. Each Seller hereby agrees to sell,
assign, transfer and convey to Purchaser, and Purchaser hereby agrees to
purchase and receive, full right, title and interest in and to the Assets (free
and clear of any and all liens, security interests, encumbrances, claims,
charges and restrictions on transfer), in all cases subject to the terms,
provisions and conditions hereof. The Assets include all of the following, as
well as those items listed on Schedule 1.1 hereto:
(a) All machinery, equipment and appliances located at 14505
Torrey Chase Blvd., Suite 410, Houston, Texas 77014, which items of personal
property are listed on Schedule 1.1 hereto; and
(b) All inventories (including inventories on consignment or
lease) of raw materials, work-in-process, finished products, supplies, tools,
spare parts, and shipping containers and materials, held for use in connection
with the Publication; and
(c) All rights of each Seller in, to and under any and all
contracts, agreements, commitments, leases, licenses, franchises, and permits
(including, without limitation, those pertaining to suppliers, customers,
employees, equipment, and motor vehicles), including those items described on
Schedule 1.1 hereto under the caption "CONTRACTS", which items are referred to
hereinafter as the "Contracts"; and
(d) Copies of all records relating to the Publication in
whatever form (originals of which each Seller may retain), including accounting
records, tax records, property records, personnel records, and credit records,
and all of the Publication's subscriber lists, customer lists, supplier lists,
catalogs, and brochures; and
(e) All of the copyrights, business names (including, without
limitation, the registered "Wall Street Whispers" name), registered designs,
trademarks, trade names, service marks, patents, and applications and
registrations thereof, and any and all other intangible rights whatsoever used
in connection with the Publication and the goodwill of the business symbolized
by such copyrights, business names, registered designs, trademarks, trade names,
service marks, and patents; and all of the trade secrets and confidential
know-how used in connection with the Publication.
1.2 Excluded Assets. Neither Seller is selling, and Purchaser is not
acquiring, either Seller's cash, cash equivalents, interests in bank accounts of
either Seller, accounts receivable owed to either Seller, or bills, notes, and
securities of either Seller.
1.3 Purchase Price and Payment Thereof. The aggregate purchase price for the
Assets (the "Purchase Price") shall be $140,000.00. Each Seller hereby
acknowledges that a downpayment in the amount of $25,000.00 has been made on the
Purchase Price. A portion of the remaining $115,000.00 portion of the Purchase
Price (the "Remaining Amount") shall be paid to Sellers, on a cumulative basis,
by the dates set forth opposite to the figures for such cumulative portions in
Table I immediately below:
TABLE I
Cumulative Portion of Date by which Cumulative
Remaining Amount Portion Must be Paid
$10,000 August 3, 1998
$20,000 August 15, 1998
$30,000 September 15, 1998
$115,000 October 15, 1998
The Remaining Amount shall be paid, at Purchaser's election, either in cash, in
shares of Common Stock, or in some combination thereof. The Remaining Amount
shall be reduced and be deemed paid by (a) the amount of cash tendered by
Purchaser, (b) the sales proceeds of any shares of Common Stock tendered by
Purchaser and sold by either Seller, and (c) by the product of (i) the number of
shares of Common Stock which Purchaser indicates, in a written notice (a "Notice
to Sell") given to Sellers pursuant to this Section 1.3 by fax to Sellers' fax
number ______________________, that Purchaser wants Sellers to sell, multiplied
by (ii) the closing price of the Common Stock on the day Purchaser gives the
Notice to Sell to Sellers (if the Notice to Sell is faxed on or before 12:00
p.m. Central time) or the closing price of the Common Stock on the day after
Purchaser gives the Notice to Sell to Sellers (if the Notice to Sell is faxed
after 12:00 p.m. Central time); provided, however, that if either Seller sells
any shares of Common Stock within 24 hours after Purchaser gives a Notice to
Sell then the Remaining Amount shall be reduced and be deemed paid only by the
amount provided for in subsection (b) immediately preceding and not the amount
provided for in subsection (c) immediately preceding. In order to assist in
maintaining an orderly market for the Common Stock and to assist in assuring the
best price for the Common Stock, each Seller hereby agrees not to offer any
shares of Common Stock in a manner that would cause, and not take any action
that would cause, the bid price for the Common Stock to be lowered, and each
Seller hereby agrees always to act through a brokerage firm acting as agent for
such Seller in connection with the sale of any Common Stock issued pursuant
hereto.
1.4 Conveyance on Full Performance. On payment of the full amount of
the Remaining Amount, each Seller agrees to execute and deliver to Purchaser (a)
a bill of sale in the form of the bill of sale attached hereto as Exhibit A
("Bill of Sale"), conveying full right, title and interest in and to the Assets
(free and clear of any and all liens, security interests, encumbrances, claims,
charges and restrictions on transfer other than liens, security interests,
encumbrances, claims, charges that may have been created by Purchaser against
the Assets), (b) assignments of the registered "Wall Street Whispers" name in
forms reasonably satisfactory to Purchaser (the "Copyright Assignments"), and
(c) such other agreements, documents and instruments as reasonably requested by
Purchaser to effect the sale to Purchaser of the Assets in accordance with the
terms hereof.
1.5 Assumed Liabilities. Purchaser does not hereby or otherwise assume
and shall not be obligated to pay, perform or discharge any obligation,
liability or debt of each Seller whether written or oral, existing or
contingent, except for obligations accruing after the date hereof (but not
obligations, liabilities or debts accrued as of the date hereof) with respect to
those Assets described in Section 1.1(c) above. Each Seller hereby agrees to
pay, perform or discharge after the date hereof all of Seller's obligations,
liabilities and debts not expressly assumed by Purchaser in this Section 1.5.
ARTICLE TWO
REPRESENTATIONS, WARRANTIES, AND
AGREEMENTS OF SELLERS
Each Seller hereby represents, warrants and agrees, jointly and
severally, to and with Purchaser that (except as expressly set forth on a
disclosure schedule attached hereto and signed by Purchaser):
2.1 Organization and Standing of Sellers. Seller is a corporation duly
organized and validly existing under the laws of the state of its incorporation.
Each Seller has full requisite power and authority to carry on its business as
it is now being conducted, and to own, operate, and lease the properties now
owned, operated, or leased by it. Each Seller is duly authorized and qualified
to carry on its business in the manner as now conducted in state in which
authorization and qualification is required. Each Seller has made available to
Purchaser true, correct and complete copies of the corporate authorization for
the sale of the Assets, and such other contents of its minute book as Purchaser
has reasonably requested.
2.2 Capacity to Enter into Agreement. Each Seller and each Owner has
full right, power and authority to execute and deliver this Agreement and all
other agreements, documents and instruments to be executed in connection
herewith and perform such its or his obligations hereunder and thereunder. The
execution and delivery by each Seller of this Agreement and all other
agreements, documents and instruments to be executed by such Seller in
connection herewith have been authorized by all necessary corporate action by
such Seller. When this Agreement and all other agreements, documents and
instruments to be executed by a Seller in connection herewith are executed by a
Seller and delivered to Purchaser, this Agreement and such other agreements,
documents and instruments will constitute the valid and binding agreements of
such Seller enforceable against such Seller in accordance with their respective
terms. When the Bill of Sale, the Copyright Assignments and all other
agreements, documents and instruments executed pursuant to Section 1.4 hereof
are executed and delivered to Purchaser, the Bill of Sale, the Copyright
Assignments and such other agreements, documents and instruments will vest in
Purchaser full right, title and interest in and to the Assets, free and clear of
any and all encumbrances, security interests, liens, charges, claims,
restrictions or limitations, whatsoever, by any person of any kind, including
those on the transfer thereof, whether known or unknown.
2.3 Conflicts. The execution, delivery, and consummation of the
transactions contemplated by this Agreement will not (a) violate, conflict with
or result in the breach or termination of, or otherwise give any other
contracting party the right to terminate, or constitute a default (by way of
substitution, novation or otherwise) under the terms of, any contract to which
either Seller is a party or by which either Seller is bound or by which any of
the Assets is bound or affected, (b) violate any judgment against, or binding
upon, either Seller or upon the Assets, (c) result in the creation of any lien,
charge or encumbrance upon any Assets pursuant to the terms of any such
contract, or (d) violate any provision in the charter documents, bylaws or any
other agreement affecting the governance and control of either Seller.
2.4 Consents. No consent from, or other approval of, any governmental
entity or any other person, which has not been obtained, is necessary in
connection with the execution, delivery, or performance of this Agreement by
either Seller.
2.5 Litigation. There is no action, suit, proceeding, or claim pending
or, to the knowledge of either Seller, threatened against either Seller by
persons not a party to this Agreement wherein an unfavorable decision, ruling,
or finding would render unlawful or otherwise adversely affect the consummation
of the transactions contemplated by this Agreement.
2.6 Financial Statements and Subscriber Information. Sellers have
delivered to Purchaser copies of the following financial statements (hereinafter
collectively referred to as the "Financial Statements"): a balance sheet of
Seller as of _________________________ _____, 1998, (the "Balance Sheet") and a
statement of income for Sellers (separated into monthly periods) for the period
beginning with the inception of Sellers and ending May 31, 1998. The Financial
Statements are complete and correct, present fairly the financial condition of
Sellers as at the respective dates thereof, and the results of operations for
the respective periods covered thereby, and have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis.
There is no basis for the assertion of any liabilities or obligations, either
accrued, absolute, contingent, or otherwise, which might adversely affect
Purchaser's ownership of the Assets, or the value, use, operation or enjoyment
of the Assets by Purchaser which is not expressly set forth on the Balance
Sheet. Neither Seller is a party to or bound either absolutely or on a
contingent basis by any agreement of guarantee, indemnification, assumption or
endorsement or any like commitment of the obligations, liabilities or
indebtedness of any other person (whether accrued, absolute, contingent or
otherwise). Attached hereto as Exhibit B is certain historical information
supplied by Sellers to Purchaser regarding the subscribers to the Publication
(the "Subscriber Information"). All of the Subscriber Information is true and
correct as of the dates with respect to which such Subscriber Information is
given.
2.7 Absence of Certain Changes and Events. Since the date of the
Balance Sheet, there has not been:
(a) Financial Change. Any adverse change in the financial
condition, operations, business prospects, employee relations, customer
relations, assets, liabilities (accrued, absolute, contingent, or otherwise) or
income of either Seller, or the business of either Seller, from that shown on
the Financial Statements;
(b) Incurrence of Debt. Any borrowing of, or agreement to
borrow any funds or any debt, obligation, or liability (absolute or contingent)
incurred by either Seller (whether or not presently outstanding) except current
liabilities incurred, and obligations under agreements entered into in the
ordinary course of business;
(c) Creation of Liens. Any mortgage, pledge, lien, security
interest, charge, claim or other encumbrance created on or in any of either
Seller's properties or assets, except liens for current taxes not yet due and
payable;
(d) Assets. Any sale, assignment, or transfer of either
Seller's assets, except in the ordinary course of business, any cancellation of
any debts or claims owed to eitherSeller, any capital expenditures or
commitments therefor exceeding in the aggregate $5,000, any damage, destruction
or casualty loss exceeding in the aggregate $5,000.00 (whether or not covered by
insurance), or any charitable contributions or pledges;
(e) Material Contracts. Any amendment or termination of any
contract, agreement, license, or arrangement to which either Seller is or was a
party or to which any properties or Assets are or were subject, which amendment
or termination has had, or may be reasonably expected to have, an adverse effect
on the financial condition, properties, assets, liabilities (accrued, absolute,
contingent, or otherwise), or income of either Seller, or the business of either
Seller; or
(f) Other Material Changes. Any other material transaction by
either Seller outside the ordinary course of business or any other event or
condition pertaining to, and adversely affecting the operations, assets,
liabilities (accrued, absolute, contingent, or otherwise) or income of either
Seller, or the business of either Seller.
In addition, since the dates reflected in the Subscriber Information,
there has not been any material change in the Subscriber Information not already
reflected in the Subscriber Information.
2.8 Assets. Each Seller has good and indefeasible title to all of its
properties, interests in properties, and assets, real and personal, reflected in
the Balance Sheet, free and clear of all mortgages, liens, pledges, charges, or
encumbrances of any nature whatsoever, except (a) liens and encumbrances
expressly disclosed in Schedule 2.8, and (b) liens for current taxes not yet due
and payable. Each Seller is selling, and Purchaser is purchasing the equipment
comprising the Assets AS IS, WHERE IS, AND WITHOUT ANY WARRANTIES OF WHATSOEVER
NATURE, EXPRESS OR IMPLIED, IT BEING THE INTENTION OF SELLER AND PURCHASER
EXPRESSLY TO NEGATE AND EXCLUDE ALL WARRANTIES, INCLUDING WITHOUT LIMITATION THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE,
WARRANTIES CREATED BY AN AFFIRMATION OF FACT OR PROMISE OR BY ANY DESCRIPTION OF
THE ASSETS, AND ALL OTHER WARRANTIES WHATSOEVER CONTAINED IN OR CREATED BY THE
UNIFORM COMMERCIAL CODE EXCEPT THE WARRANTY OF TITLE SET FORTH HEREIN AND SUCH
WARRANTIES TO SELLER FROM THIRD PARTIES THAT ARE TRANSFERABLE. The inventories
of each Seller reflected in the Balance Sheet or acquired thereafter (including,
without limitation, raw materials, spare parts and supplies, work-in-process,
finished goods) consist of items of a quality, condition and quantity useable
and saleable in the normal course of business.
2.9 Contracts. All Contracts are in good standing, valid, and
effective. There is not, under any Contract any existing or prospective default
or event of default by either Seller or event which with notice or lapse of
time, or both would constitute a default and in respect to which either Seller
has not taken adequate steps to prevent a default from occurring; and, to the
knowledge of either Seller, no other party to any Contract is in default or
breach thereof nor has any event occurred which with notice or lapse of time
would constitute a breach or default of any of the Contracts.
2.10 Permits. Each Seller holds all licenses, permits, registrations,
and authorizations required to carry on its business (including, without
limitation, those required by federal and state securities laws), and all
licenses, permits, registrations, and authorizations are in good standing. Each
Seller is in full compliance with and not in default or violation with respect
to any term or provision of any of its licenses, permits, registrations, and
authorizations. No notice of pending, threatened, or possible violation or
investigation in connection with, or loss of, any license, permit, registration,
or authorization of either Seller, has been received by either Seller. Neither
Seller has any knowledge that the issuance of such a notice is being considered
or of any facts or circumstances which form the basis for the issuance of such a
notice. No license, permit, registration, or authorization of either Seller is
affected by the transactions provided for herein or contemplated hereby.
2.11 Intellectual Property. Schedule 2.11 contains a listing and
summary description of all of each Seller's patents, trademarks, service marks,
trade names, business names, copyrights, and registered designs, and
applications and registrations thereof, trade secrets and confidential know-how,
including, but not limited to, product formulations, drawings, technical
specifications, manufacturing data, and test and development data (the foregoing
intellectual property is collectively referred to hereinafter as the
"Intellectual Property"). Each Seller possesses all Intellectual Property
necessary to the conduct of its businesses, and the loss or expiration of any
Intellectual Property or group of Intellectual Property would not have an
adverse effect on the conduct of its businesses. No such loss or expiration is
threatened, pending or reasonably foreseeable. Except as indicated on Schedule
2.11, (a) each Seller owns all right, title, and interest in and to all of the
Intellectual Property, (b) there have been no claims made against either Seller
for the assertion of the invalidity, abuse, misuse, or unenforceability of any
of such rights, and there are no grounds for the same, (c) neither Seller has
received a notice of conflict with the asserted rights of others within the last
five years, and (d) the conduct of either Seller's business has not infringed
any Intellectual Property of others and, to the best of the knowledge of either
Seller, the Intellectual Property of either Seller has not been infringed by
other persons.
2.12 Compliance with Law. Neither Seller is in violation of, or in
default with respect to, or in alleged violation of or alleged default with
respect to, any applicable law, rule, regulation, permit, or any writ or decree
of any court or any governmental commission, board, bureau, agency, or
instrumentality, including without limitation, any laws, ordinances, rules,
regulations, permits, or orders relating to the business of either Seller, or
the business operations and practices, health and safety, and employment
practices of either Seller. Neither Seller is delinquent with respect to any
report required to be filed with any governmental commission, board, bureau,
agency, or instrumentality, or with any trade association or certification
organization that has in the past certified or endorsed the business of either
Seller. Neither Seller is delinquent with respect to any reports required by
private covenants or agreements to which it is a party.
2.13 Finder's Fees. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by each Seller, and their
counsel directly with Purchaser and its counsel, without the intervention of any
other person as the result of any act of any of them, and as far as is known to
either Seller, without the intervention of any other person in such manner as to
give rise to any valid claim against any of the parties hereto for a brokerage
commission, finder's fee, or any similar payment.
2.14 Untrue Statements. This Agreement, the schedules and exhibits
hereto, and all other documents and information furnished by either Seller or
its representatives pursuant hereto or in connection herewith do not include any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements made herein and therein not misleading or otherwise.
ARTICLE THREE
REPRESENTATIONS, WARRANTIES, AND
AGREEMENTS OF PURCHASER
Purchaser hereby represents, warrants and agrees to and with each
Seller that (except as expressly set forth on a disclosure schedule attached
hereto and signed by each Seller):
3.1 Organization and Standing of Purchaser. Purchaser is a corporation
duly organized, validly existing, and in good standing under the laws of the
state of Delaware. Purchaser has full requisite corporate power and authority to
carry on its business as it is now being conducted, and to own, operate, and
lease the properties now owned, operated, or leased by it. Purchaser is duly
authorized and qualified to carry on its business in the manner as now conducted
in state in which authorization and qualification is required. Purchaser has
made available to each Seller true, correct and complete copies of the corporate
authorization for the purchase of the Assets, and such other contents of its
minute book as each Seller has reasonably requested.
3.2 Capacity to Enter into Agreement. Purchaser has full right, power
and authority to execute and deliver this Agreement and all other agreements,
documents and instruments to be executed in connection herewith and perform such
its or his obligations hereunder and thereunder. The execution and delivery by
Purchaser of this Agreement and all other agreements, documents and instruments
to be executed by Purchaser in connection herewith have been authorized by all
necessary corporate action by Purchaser. When this Agreement and all other
agreements, documents and instruments to be executed by Purchaser in connection
herewith are executed by Purchaser and delivered to Purchaser, this Agreement
and such other agreements, documents and instruments will constitute the valid
and binding agreements of Purchaser or enforceable against Purchaser in
accordance with their respective terms.
3.3 Conflicts. The execution, delivery, and consummation of the
transactions contemplated by this Agreement will not (a) violate, conflict with
or result in the breach or termination of, or otherwise give any other
contracting party the right to terminate, or constitute a default (by way of
substitution, novation or otherwise) under the terms of, any contract to which
Purchaser is a party or by which Purchaser is bound or by which any of the
assets of Purchaser is bound or affected, (b) violate any judgment against, or
binding upon, Purchaser or upon the assets of Purchaser, (c) result in the
creation of any lien, charge or encumbrance upon any assets of Purchaser
pursuant to the terms of any such contract, or (d) violate any provision in the
charter documents, bylaws or any other agreement affecting the governance and
control of Purchaser.
3.4 Consents. No consent from, or other approval of, any governmental
entity or any other person, which has not been obtained, is necessary in
connection with the execution, delivery, or performance of this Agreement by
Purchaser.
3.5 Litigation. There is no action, suit, proceeding, or claim pending
or, to the knowledge of Purchaser, threatened against Purchaser by persons not a
party to this Agreement wherein an unfavorable decision, ruling, or finding
would render unlawful or otherwise adversely affect the consummation of the
transactions contemplated by this Agreement.
3.6 Finder's Fees. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by Purchaser and its
counsel directly with the Sellers, and their counsel, without the intervention
of any other person as the result of any act by Purchaser, and so far as is
known to Purchaser, without the intervention of any other person in such manner
as to give rise to any valid claim against any of the parties hereto for a
brokerage commission, finders' fee, or any similar payment.
ARTICLE FOUR
ADDITIONAL AGREEMENTS
4.1 Further Assurances. At any time after the date hereof, each Seller
shall execute and deliver such other documents, and take such other actions, as
may be reasonably requested by Purchaser to complete the transactions
contemplated by this Agreement, and to perfect in Purchaser title to the Assets
as contemplated herein.
4.2 Information. At any time after the date hereof, each Seller shall
promptly give to Purchaser such information about either Seller, its business
and the Assets as Purchaser shall reasonably request.
4.3 Possession and Licensing of Assets. On the date hereof, each Seller
shall deliver to Purchaser possession to all of the Assets. Each Seller hereby
grants to Purchaser, from the date hereof until termination pursuant to Section
5.2 of this Agreement, the exclusive, world-wide, royalty-free right and license
to use the Assets for purposes of producing, marketing and selling the
Publication.
4.4 Licensing of Intellectual Property. As the date hereof, each Seller
hereby grants to Purchaser, from the date hereof until termination pursuant to
Section 5.2 of this Agreement, the exclusive, world-wide, royalty-free right and
license to use such Seller's Intellectual Property for purposes of producing,
marketing and selling the Publication.
4.5 Employees. On the date hereof, each Seller shall terminate its employment
relationship with each of its employees that Purchaser indicated it wants to
employ, and Purchaser is hereby expressly permitted by each Seller to enter into
an employment relationship with each of these former employees.
4.6 Consents. Each Seller shall use its best efforts to assist in
obtaining any third party consents necessary to sell to Purchaser the Assets
(including, without limitation, the Contracts). To the extent that any of the
Assets are not assignable without the consent of another party and such consent
has not been obtained on or prior to the date hereof, such Assets shall not be
assigned or attempted to be assigned if such assignment or attempted assignment
would constitute a breach thereof. While each Seller is trying to procure all
necessary consents, each Seller and Purchaser shall cooperate in any reasonable
arrangements designed to provide to Purchaser the benefits of any such Assets,
including enforcement at the cost and for the account of Purchaser of any and
all rights of a Seller against the other party thereto arising out of a
cancellation or breach by such other party or otherwise. Notwithstanding
anything else contained herein, each Seller shall have obtained any and all
third party consents necessary to sell to Purchaser the Assets (including,
without limitation, the Contracts) by the date that the Remaining Amount is paid
in full.
4.7 Non-Compete Agreement. In further consideration of Purchaser's
purchase of the Assets and other independent valuable consideration (the receipt
of which each Seller hereby acknowledges), each Seller and each Owner hereby
agrees as follows:
(a) For a period of five (5) years from the date hereof, each
Seller shall not, directly or indirectly, acting alone or in any capacity with
any other business entity: (i) engage in the financial publication business
anywhere in the world, each Seller hereby acknowledging that the business
conducted with the Assets and being purchased by Purchaser is essentially
worldwide in nature; (ii) solicit, deal, negotiate, enter into an arrangement,
contract or attempt to do any of the foregoing, in any respect pertaining to any
financial publication with any person who was a subscriber of the Publication
during the year prior to the date hereof, or attempt to cause any such person
not to continue with Purchaser the previous business relationship that it had
with each Seller; (iii) induce or attempt to influence, directly or indirectly,
any person employed by each Seller immediately prior to the date hereof to
terminate his employment or contractual relationship with Purchaser established
in connection with the sale or purchase of the Assets or otherwise; or (iv)
disclose to any person, firm, or corporation any trade secrets or proprietary
data relating to, or any details relating to the methods of operation of each
Seller's business purchased by Purchaser hereby, including, without limitation,
the subscriber lists and contents of other business records, or otherwise
attempt to take any form of advantage of such information.
(b) Notwithstanding the foregoing provisions, each Seller
shall be permitted to own up to five percent (5%) of the publicly traded
securities, whose securities are registered under Section 12 or who file reports
under Section 15(d) of the Securities Exchange Act of 1934, of any company that
is in the financial publication business.
(c) Each Seller hereby specifically acknowledges and agrees
that the temporal and other restrictions contained in (a) immediately above are
reasonable and necessary to protect the business that Purchaser intends to
conduct with the Assets, and that the enforcement of the provisions of this
section will not work an undue hardship on it or him.
(d) Each Seller further agrees that in the event either the
duration, geographical scope, or any other restriction, or portion thereof, set
forth in (a) immediately above is held to be overly restrictive and
unenforceable in any court proceeding, the court may reduce or modify such
restrictions to those which it deems reasonable and enforceable under the
circumstances and the parties agree that the restrictions of (a) immediately
above will remain in full force and effect as reduced or modified.
(e) Each Seller further agrees and acknowledges that Purchaser
does not have an adequate remedy at law for the breach or threatened breach by
it or him of the covenants contained in (a) immediately above, and each Seller
therefore specifically agrees that Purchaser, in addition to other remedies
which may be available to it hereunder, may file a suit in equity to enjoin each
Seller from such breach or threatened breach.
(f) Each Seller further agrees, in the event that any
provision of (a) immediately above is held to be invalid or against public
policy, the remaining provisions of (a) immediately above and the remainder of
this Agreement shall not be affected thereby.
ARTICLE FIVE
EVENTS OF DEFAULT AND REMEDIES
5.1 Buyer's Events of Default. The failure by Purchaser to pay any
cumulative portion of the Remaining Amount of the Purchase Price by the date set
forth with respect thereto in Table I, and the breach of any representation,
warranty or other agreement of Purchaser contained in this Agreement, shall be
an Event of Default under this Agreement.
5.2 Seller's Remedy on Default. On the occurrence of an Event of
Default specified in Section 5.1 above, Seller shall have the right to terminate
this Agreement and retain as liquidated damages any payments theretofore made
hereunder by Purchaser, to compensate Seller for breach of this Agreement and
for rental and deterioration of the Assets. If Seller elects this remedy, then:
(a) Purchaser shall immediately surrender possession of the Assets
to Sellers.
(b) the licensing of the Assets pursuant to Section 4.3 shall
immediately terminate.
(c) the licensing of Seller's Intellectual Property pursuant to Section
4.4 shall immediately terminate.
(d) Purchaser's employment relationship with each of Seller's employees
hired pursuant to the authorization contained in Section 4.5 shall immediately
terminate, and Seller shall be expressly permitted by Purchaser to enter into an
employment relationship with each of these employees.
5.3 Seller's Events of Default. The failure by either Seller to obtain
all necessary consents required by Section 4.6 of this Agreement within the time
periods established by Section 4.6 of this Agreement, and the breach of any
representation, warranty or other agreement of either Seller contained in this
Agreement, shall be an Event of Default under this Agreement.
5.4 Purchaser's Remedy on Default. On the occurrence of an Event of
Default specified in Section 5.3 above, Purchaser shall have the right to
terminate this Agreement, receive a return of any and all of the payments
theretofore made hereunder by Purchaser and bring an action to recovery damages.
If Purchaser elects this remedy, each Seller shall immediately remit all such
payments to Purchaser.
ARTICLE SIX
SURVIVAL AND INDEMNITY
6.1 Survival. All of the representations, warranties, covenants, and
agreements made by the parties hereto in this Agreement or pursuant hereto,
shall be continuing and shall survive the closing hereof and the consummation of
the transactions contemplated hereby, notwithstanding any investigation at any
time made by or on behalf of any party hereto.
6.2 Indemnities Relating to Representations, Warranties and Agreements.
Each Seller, jointly and severally, on the one hand, and Purchaser, on the other
hand, shall protect, indemnify and hold harmless the other, and the other's
shareholders, directors, officers, employees, agents, affiliates, successors and
assigns, from any and all losses, damages, injuries, obligations, liabilities,
expenses and costs (including costs of litigation and attorney's fees), demands,
claims, suits, proceedings, actions and causes of actions arising from the
breach of any representation, warranty, covenant, agreement, or promise made by
the indemnifying party to the indemnified party herein or pursuant hereto.
6.3 Indemnities Relating to Operations.
(a) Each Seller and each Owner, jointly and severally, shall protect,
indemnify and hold harmless Purchaser, and Purchaser's shareholders, directors,
officers, employees, agents, affiliates, successors and assigns, from any and
all losses, damages, injuries, obligations, liabilities, expenses and costs
(including costs of litigation and attorney's fees), demands, claims, suits,
proceedings, actions and causes of actions arising from any action or omission
of either Seller, or either Seller's directors, officers, employees, agents,
affiliates, in connection with the operation of the Assets and either Seller's
business prior to the date hereof and (if either Seller ever resumes ownership
and operation of the Assets after the date hereof) in connection with the
operation of the Assets and either Seller's business after either Seller resumes
ownership and operation of the Assets after the date hereof.
(b) Purchaser shall protect, indemnify and hold harmless each Seller,
and each Seller's directors, officers, employees, agents, affiliates, successors
and assigns, from any and all losses, damages, injuries, obligations,
liabilities, expenses and costs (including costs of litigation and attorney's
fees), demands, claims, suits, proceedings, actions and causes of actions
arising from any action or omission of Purchaser, or Purchaser's owners,
directors, officers, employees, agents, affiliates, in connection with the
operation of the Assets and Purchaser's business after the date hereof, except
that (if either Seller ever resumes ownership and operation of the Assets after
the date hereof) Purchaser shall not be obligated to protect, indemnify and hold
harmless any person with respect to any matter arising from any act or omission
pertaining to the operation of the Assets and either Seller's business after
either Seller resumes ownership and operation of the Assets after the date
hereof.
ARTICLE SEVEN
MISCELLANEOUS
THIS AGREEMENT AND ALL QUESTIONS RELATING TO ITS VALIDITY,
INTERPRETATION, PERFORMANCE, AND ENFORCEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Neither of the Sellers nor Purchaser may
assign its rights or obligations under this Agreement without the prior express
written consent of the other party; provided, however, that Purchaser may assign
its rights and obligations under this Agreement to a majority-owned subsidiary.
This Agreement contains the entire understanding among the parties hereto with
respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings, inducements, or conditions,
express or implied, oral or written, except as herein contained. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof. This Agreement may not be
modified or amended other than by an agreement in writing. The section headings
in this Agreement are for convenience only; they form no part of this Agreement
and shall not affect its interpretation. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together constitute one and the same instrument. If any term, provision,
covenant, or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remainder of the terms,
provisions, covenants and restrictions shall remain in full force and effect and
shall in no way be affected, impaired, or invalidated. Any waiver of the terms,
provisions, covenants, representations, warranties, or conditions hereof shall
be made only by a written instrument executed and delivered by the party waiving
compliance. No waiver by any party in one or more instances shall be deemed to
be or construed as a further or continuing waiver or a waiver of any other
matter than the matter expressly waived in writing. Any notices, requests,
demands, or other communications herein required or permitted to be given shall
be in writing and may be personally served or sent by United States certified or
registered mail postage prepaid and addressed to the address of the party to be
notified as set forth on the signature pages of this Agreement (which address
shall remain in effect until a party notifies all other parties of the change of
address in accordance with this sentence), and all such notices, requests,
demands, or other communications shall be deemed to have been given if
personally served, when served, or if mailed in the foregoing manner, on the
third business day after deposit in the United States mail.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed and made effective
this Agreement as of the day and year first above written.
"SELLER"
TIME FINANCIAL SERVICES, INC.
By:_________________________________
Name:______________________________
Address: ________________________
------------------------
------------------------------------
Mike Pope
Address: ________________________
------------------------
------------------------------------
Phil LaPuma
Address: ________________________
------------------------
"PURCHASER"
JVWEB, INC.
By:_________________________________
Greg J. Micek, President
Address: 5444 Westheimer, Suite 2080
Houston, Texas 7056
EXHIBIT 10.2 EQUITRUST AGREEMENT
AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of the 3rd
day of August, 1998 by and between JVWeb, Inc., a Delaware corporation
("JVWeb"), and Equitrust Mortgage Corporation ("Equitrust").
Recitals
WHEREAS, JVWeb desires a loan in the amount of $50,000 (the "Loan"),
and Equitrust is willing to provide the Loan, in each case upon the terms,
provisions and conditions set forth hereinafter;
WHEREAS, Equitrust desires the Loan to be represented by a promissory
note (the "Note") in the form of the promissory note attached hereto as Exhibit
A, and JVWeb is willing for the Loan to be represented by the Note;
WHEREAS, JVWeb intends to register with the U.S. Securities and
Exchange Commission (the "Commission"), pursuant to a Registration Statement on
Form SB-2 (the "Registration Statement"), certain shares of its common stock,
par value $.01 per share (the "Common Stock"), some of which may be issued to
Equitrust as set forth herein;
WHEREAS, the Note provides that, if the Registration Statement is filed
with the Commission within 90 days after the date the Note is executed, the Note
will be automatically converted into 200,000 shares of Common Stock, or if the
Registration Statement is not filed with the Commission within such period of
time, Equitrust will have the option to convert the Note into 200,000 shares of
Common Stock, but in any event the 200,000 shares of Common Stock into which the
Note may be converted will be covered by the Registration Statement;
WHEREAS, Equitrust is willing to purchase an additional 200,000 shares
of Common Stock at a purchase price of $.25 per share immediately after the
Registration Statement has been filed so long as such 200,000 additional shares
of Common Stock will be covered by the Registration Statement; and
WHEREAS, Equitrust desires to have an option (the "Option") to purchase
an additional 100,000 shares of Common Stock at a purchase price of $.25 per
share immediately before the Registration Statement is declared effective so
long as such 100,000 option shares of Common Stock will be covered by the
Registration Statement;
Agreement
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, $10.00, and other good and valuable consideration (the
receipt, adequacy and sufficiency of which each of JVWeb and Equitrust hereby
acknowledges), each of JVWeb and Equitrust hereby agrees as follows:
1. General Representations and Warranties.
(a) Equitrust hereby represents and warrants to JVWeb that Equitrust
has full right, power and authority to execute and deliver this Agreement and
all other agreements, documents and instruments to be executed in connection
herewith and perform Equitrust's obligation hereunder and thereunder; Equitrust
has been duly organized, is validly existing and is in good standing in the
jurisdiction in which it was incorporated; the execution and delivery by
Equitrust of this Agreement and all other agreements, documents and instruments
to be executed by it in connection herewith have been authorized by all
necessary corporate action; when this Agreement and all other agreements,
documents and instruments to be executed by Equitrust in connection herewith are
executed by Equitrust and delivered to JVWeb, this Agreement and such other
agreements, documents and instruments will constitute the valid and binding
agreements of Equitrust enforceable against Equitrust in accordance with their
respective terms; neither the execution and delivery of this Agreement or any
other agreements, documents and instruments to be executed in connection
herewith nor the consummation of the transactions contemplated hereby or thereby
will (i) violate, conflict with or result in the breach or termination of, or
otherwise give any other contracting party the right to terminate, or constitute
a default (by way of substitution, novation or otherwise) under the terms of,
any contract to which Equitrust is a party or by which Equitrust is bound or by
which any of the assets of Equitrust is bound or affected, (ii) violate any
judgment against, or binding upon, Equitrust or the assets of Equitrust, (iii)
result in the creation of any lien, charge or encumbrance upon any assets of
Equitrust pursuant to the terms of any contract referred to in (i) of this
Section 1(a), or (iv) violate any provision in the charter documents, bylaws or
any other agreement affecting the governance and control of Equitrust; there are
no actions, suits, claims or legal, administrative or arbitration proceedings or
investigations pending or threatened against, involving or affecting any of the
assets of Equitrust, this Agreement, or the transactions contemplated hereby,
and there are no outstanding orders, writs, injunctions or decrees of any court,
governmental agency or arbitration tribunal against, involving or affecting any
assets of Equitrust, this Agreement, or the transactions contemplated hereby; no
consent or approval from any person is required in connection with the execution
and delivery of this Agreement or any of the other agreements, documents and
instruments to be executed by Equitrust in connection herewith, which has not
already been obtained; and the representations and warranties made immediately
above and elsewhere herein are material to JVWeb and are being relied upon by
JVWeb in connection with its decision to enter into the transactions provided
for by this Agreement.
(b) JVWeb hereby represents and warrants to Equitrust that it has full
right, power and authority to execute and deliver this Agreement and all other
agreements, documents and instruments to be executed by it in connection
herewith and perform its obligation hereunder and thereunder; it has been duly
organized, is validly existing and is in good standing in the jurisdiction in
which it was incorporated; the execution and delivery by it of this Agreement
and all other agreements, documents and instruments to be executed by it in
connection herewith have been authorized by all necessary corporate action; when
this Agreement and all other agreements, documents and instruments to be
executed by it in connection herewith are executed by it and delivered to the
Equitrust, this Agreement and such other agreements, documents and instruments
will constitute the valid and binding agreements of it enforceable against it in
accordance with their respective terms; neither the execution and delivery of
this Agreement or any other agreements, documents and instruments to be executed
in connection herewith nor the consummation of the transactions contemplated
hereby or thereby will (i) violate, conflict with or result in the breach or
termination of, or otherwise give any other contracting party the right to
terminate, or constitute a default (by way of substitution, novation or
otherwise) under the terms of, any contract to which it is a party or by which
it is bound or by which any of the assets of it is bound or affected, (ii)
violate any judgment against, or binding upon, it or upon its assets, (iii)
result in the creation of any lien, charge or encumbrance upon any of its assets
pursuant to the terms of any contract referred to in (i) of this Section 1(b),
or (iv) violate any provision in the charter documents, bylaws or any other
agreement affecting the governance and control of it; there are no actions,
suits, claims or legal, administrative or arbitration proceedings or
investigations pending or threatened against, involving or affecting any of its
assets, this Agreement, or the transactions contemplated hereby, and there are
no outstanding orders, writs, injunctions or decrees of any court, governmental
agency or arbitration tribunal against, involving or affecting any of its
assets, this Agreement, or the transactions contemplated hereby; no consent or
approval from any person is required in connection with the execution and
delivery of this Agreement or any of the other agreements, documents and
instruments to be executed by it in connection herewith, which has not already
been obtained; the shares of Common Stock to be issued to Equitrust outright or
pursuant to the conversion of the Note or the exercise of the Option shall be
duly authorized, validly issued, fully paid and non-assessable at the time that
they are issued; and the representations and warranties made immediately above
are material to Equitrust and are being relied upon by Equitrust in connection
with Equitrust's decision to enter into the transactions provided for by this
Agreement.
2. Securities Representations and Warranties.
Equitrust hereby represents and warrants to JVWeb that it is familiar
with the business and financial condition, properties, operations and prospects
of JVWeb, it has been given full access to all material information concerning
the condition, properties, operations and prospects of JVWeb, it has had an
opportunity to ask such questions of, and to receive such information from,
JVWeb as it has desired and to obtain any additional information necessary to
verify the accuracy of the information and data received; it has such knowledge,
skill and experience in business, financial and investment matters so that it is
capable of evaluating the merits and risks of an acquisition of the Note and the
Option and an acquisition of the shares of Common Stock pursuant to this
Agreement or pursuant to the Note or the Option; it has reviewed its financial
condition and commitments and that, based on such review, it is satisfied that
it (a) has adequate means of providing for contingencies, (b) has no present or
contemplated future need to dispose of all or any portion of the Note or the
Option or the shares of the Common Stock to be acquired pursuant to this
Agreement or pursuant to the Note or the Option, to satisfy existing or
contemplated undertakings, needs or indebtedness, (c) is capable of bearing for
the indefinite future the economic risk of the ownership of the Note and the
Option and the shares of Common Stock to be acquired pursuant to this Agreement
or pursuant to the Note or the Option, and (d) has assets or sources of income
which, taken together, are more than sufficient so that it could bear the loss
of the entire value of the Note and the Option and the shares of Common Stock to
be acquired pursuant to this Agreement or pursuant to the Note or the Option; it
is and will be acquiring the Note and the Option and the shares of Common Stock
pursuant to this Agreement or pursuant to the Note or the Option solely for its
own beneficial account, for investment purposes, and not with a view to, or for
resale in connection with, any distribution of the Note or the Option or the
shares of Common Stock (except pursuant to registration or an available
exemption therefrom); it understands that the Note and the Option and the shares
of Common Stock to be acquired pursuant to this Agreement or pursuant to the
Note or the Option have not been registered under the Securities Act of 1933
(the "Act") or any state securities laws and therefore the Note and the Option
and the shares of Common Stock to be acquired pursuant to this Agreement or
pursuant to the Note or the Option are and will be "restricted" under such laws
and may not be resold without registration or an exemption therefrom, and the
Note and the Option and all stock certificates representing shares of Common
Stock sold or to be sold to Equitrust pursuant hereto or pursuant to the Note or
the Option will bear a legend to such effect; and it has not offered or sold and
will not offer or sell any portion of the Note or the Option or any shares of
Common Stock to be acquired pursuant to this Agreement or pursuant to the Note
or the Option (except pursuant to registration or an available exemption
therefrom) and has no present intention of reselling or otherwise disposing of
any portion of the Note or the Option or any shares of Common Stock to be
acquired pursuant to this Agreement or pursuant to the Note or the Option either
currently or after the passage of a fixed or determinable period of time or upon
the occurrence or non-occurrence of any predetermined event or circumstance
(except pursuant to registration or an available exemption therefrom).
Notwithstanding the preceding, in the event that Equitrust ever desires to
transfer any of its interest in the Note or the Option, JVWeb shall accommodate
Equitrust with respect to any such transfer to the extent that such transfer is
pursuant to an available exemption from registration.
3. Loan. Equitrust hereby agrees to extend the Loan to JVWeb
immediately upon the execution of this Agreement and the execution and delivery
of the Note. The Loan shall be governed by the terms, provisions and conditions
of the Note, including those pertaining to the repayment of the Loan, the
accrual of interest on the Note and the automatic and optional conversion of the
Note into 200,000 shares of Common Stock as set forth in greater detail in the
Note and as described in the recitals above.
4. Sale and Purchase of Common Stock. In addition to the 200,000 shares
of Common Stock into which the Note may be converted, Equitrust hereby agrees to
purchase from JVWeb, and JVWeb hereby agrees to sell to Equitrust, an additional
200,000 shares of Common Stock, upon the terms, provisions and conditions
contained herein. The per-share purchase price for the shares of Common Stock
sold and purchased pursuant to this Section 4 shall be $.25. The Common Stock to
be sold and purchased pursuant to this Section 4 shall be sold and purchased in
a closing (a "Closing") to be held within five working days after the
Registration Statement is filed with the Commission.
5. Option to Purchase Common Stock. For $10.00 and other good and
valuable consideration (the receipt, adequacy and sufficiency of which JVWeb
hereby acknowledges), JVWeb hereby grants the Option in favor of Equitrust,
under the terms and conditions hereinafter specified, to acquire 100,000 shares
of Common Stock, free and clear of all encumbrances, security interests, liens,
charges, claims and restrictions on the transfer thereof. The shares of Common
Stock subject to the Option are referred to hereafter as the "Option Shares."
The per-share purchase price of the Option Shares shall be $.25. JVWeb hereby
agrees to give to Equitrust, at least five days prior to the date that the
Registration Statement is expected to be declared effective by the Commission,
written notice of the anticipated effectiveness of the Registration Statement
(the "Notice of Anticipated Effectiveness"). The Option shall become effective
upon the giving of the Notice of Anticipated Effectiveness, and shall be
exercisable for up to five days after the giving of the Notice of Anticipated
Effectiveness, after which time the Option shall expire. The Option may be
exercised by Equitrust's giving written notice to JVWeb of Equitrust's desire to
exercise the Option. Such notice shall specify a date for a Closing of the sale
and purchase of the Option Shares, which shall not be less than ten (10) nor
more than twenty (20) days after the date of such notice. JVWeb agrees that,
until the Option expires, JVWeb shall not, without the written consent of
Equitrust, pay a dividend on its Common Stock payable in shares of Common Stock,
subdivide its outstanding Common Stock into a larger number of shares, or
combine the outstanding shares of Common Stock into a smaller number of shares
by reclassification or otherwise.
6. Closings.
(a) The issuance of and payment for shares of Common Stock pursuant to
the automatic or optional conversion of the Note, pursuant to the sale and
purchase provided for in Section 4, or pursuant to the exercise of the Option,
shall occur at a Closing. A Closing may occur at such place and time and in such
manner as JVWeb and Equitrust may agree to in writing. A Closing need not be one
in which every party hereto is physically present but may be one in which all
documents and instrument necessary to close the transactions provided for in or
contemplated by this Agreement are transmitted among the parties by means of
ordinary or express mails. At a Closing, Equitrust shall deliver in immediately
available funds the aggregate purchase price for the shares of Common Stock
being acquired (or in the case of the conversion of the Note, Equitrust shall
deliver the Note marked "Cancelled") and the certificates required of Equitrust
as provided in Section 6(b) below, and JVWeb shall deliver one or more stock
certificates representing the shares of Common Stock being acquired and the
certificates required of JVWeb as provided in Section 6(b) below.
(b) The obligations of Equitrust at a Closing are subject, at
Equitrust's election, to the satisfaction on or prior to Closing of each of the
following conditions: (i) each of the representations and warranties of JVWeb
contained in this Agreement shall be true and correct in all respects at and as
of the Closing as if each such representation and warranty was made at and as of
the Closing, and at the Closing there shall be delivered to Equitrust a
customary bring-down certificate (dated as of the Closing and signed by JVWeb)
to the foregoing effect; and (ii) no suit or other proceeding by any third party
shall be pending before any court or governmental agency seeking to restrain,
prohibit or declare illegal, or seeking substantial damages from Equitrust in
connection with, the transactions contemplated by this Agreement. The
obligations of JVWeb at a Closing are subject, at JVWeb's election, to the
satisfaction on or prior to Closing of each of the following conditions: (x)
each of the representations and warranties of Equitrust contained in this
Agreement shall be true and correct in all respects at and as of the Closing as
if each such representation and warranty was made at and as of the Closing, and
at the Closing there shall be delivered to JVWeb a customary bring-down
certificate (dated as of the Closing and signed by Equitrust) to the foregoing
effect; (y) Equitrust shall have delivered to JVWeb a certificate signed by
Equitrust containing such other representations and warranties of Equitrust as
JVWeb shall believe necessary or advisable to determine that the issuance of the
related Common Stock is exempt from federal and state securities offering
registration requirements; and (z) no suit or other proceeding by any third
party shall be pending before any court or governmental agency seeking to
restrain, prohibit or declare illegal, or seeking substantial damages from JVWeb
in connection with, the transactions contemplated by this Agreement. In addition
to the preceding, Equitrust agrees to furnish to JVWeb any other information
required by JVWeb in order for JVWeb to determine that the issuance of any
Common Stock will not violate federal or state securities laws. If JVWeb
believes that the issuance of any Common Stock will violate such laws, then the
date of the related Closing shall be extended until all action believed by JVWeb
to be necessary in order to avoid violating such laws can be taken.
7. Registration Agreement. JVWeb agrees to use its best efforts to
register with the Commission the 200,000 shares of Common Stock into which the
Note may be converted, the 200,000 shares of Common Stock that may be purchased
pursuant to Section 4 hereof, and the 100,000 shares of Common Stock that may be
purchased pursuant to an exercise of the Option (such 500,000 shares are
referred to hereinafter as the "Registered Shares"). In this connection, JVWeb
agrees to use its best efforts to file with the Commission the Registration
Statement within 90 days after the date of this Agreement. JVWeb hereby agrees
that if the Registration Statement is not filed with the Commission within 90
days after the date of this Agreement, then JVWeb shall issue to Equitrust an
additional 50,000 shares of Common Stock (which shall also be covered by the
Registration Statement), as liquidated damages for JVWeb's failure to so file
the Registration Statement. In addition, JVWeb hereby agrees that if the
Registration Statement is not declared effective within one year after the date
of this Agreement, then JVWeb shall issue to Equitrust a promissory note in the
form of the promissory note attached hereto as Exhibit B, as liquidated damages
for JVWeb's failure to cause the Registration Statement to be so declared
effective. JVWeb shall use its best efforts to qualify the Registered Shares
under the securities laws for each state for which an exemption is not available
and qualification is required, unless the cost and expense of such qualification
outweighs the benefit of qualification. In connection with the registration
undertaken pursuant to this Section 7, Equitrust shall use reasonable efforts to
cooperate with JVWeb and will furnish to JVWeb in writing such information, as
shall be reasonably necessary in order to assure compliance with federal and
applicable state securities laws pertaining to disclosure and otherwise. JVWeb
shall pay all registration expenses in connection with the registration
undertaken pursuant to this Section 7, and Equitrust shall pay all underwriting
discounts and selling commissions applicable to the sale of the Registered
Shares.
8. General Indemnification.
(a) All representations and warranties made herein by a party hereto
shall survive all transactions provided for or contemplated herein, including,
without limitation, the issuances and sales and purchases of Common Stock
pursuant hereto.
(b) Equitrust shall protect, indemnify and hold JVWeb harmless from any
and all demands, claims, actions, causes of actions, lawsuits, proceedings,
judgments, losses, damages, injuries, liabilities, obligations, expenses and
costs (including costs of litigation and attorneys' fees), arising from any
breach of any agreement, representation or warranty made by Equitrust in this
Agreement.
(c) JVWeb shall protect, indemnify and hold Equitrust harmless from any
and all demands, claims, actions, causes of actions, lawsuits, proceedings,
judgments, losses, damages, injuries, liabilities, obligations, expenses and
costs (including costs of litigation and attorneys' fees), arising from any
breach of any agreement, representation or warranty made by JVWeb in this
Agreement.
9. Securities Indemnification.
(a) JVWeb shall protect, indemnify and hold Equitrust, and its
officers, directors, shareholders, attorneys, accountants, employees,
affiliates, successors and assigns, harmless from any and all demands, claims,
actions, causes of actions, lawsuits, proceedings, investigations, judgments,
losses, damages, injuries, liabilities, obligations, expenses and costs
(including costs of litigation and attorneys' fees), arising out of or based
upon (a) any untrue statement or alleged untrue statement of any material fact
contained in or incorporated by reference into the Registration Statement, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, (b) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (c) any material violation by JVWeb of any rule or
regulation promulgated under the Act applicable to JVWeb and relating to action
or inaction by JVWeb in connection with such registration; provided, however,
that JVWeb will not be liable in the case of (a) and (b) above if and to the
extent that the event otherwise giving rise to indemnification arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in conformity with information furnished by a person
otherwise entitled to indemnification in writing specifically for use in the
Registration Statement of prospectus.
(b) Equitrust shall protect, indemnify and hold JVWeb and its officers,
directors, shareholders, attorneys, accountants, employees, affiliates,
successors and assigns, harmless from any and all demands, claims, actions,
causes of actions, lawsuits, proceedings, investigations, judgments, losses,
damages, injuries, liabilities, obligations, expenses and costs (including costs
of litigation and attorneys' fees), arising out of or based upon (a) any untrue
statement or alleged untrue statement of any material fact contained in or
incorporated by reference into the Registration Statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, (b) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (c) any material violation by Equitrust of any rule or regulation
promulgated under the Act applicable to Equitrust and relating to action or
inaction by Equitrust in connection with such registration; provided, however,
that Equitrust shall be liable in the case of (a) and (b) above only if and to
the extent that the event giving rise to indemnification arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in conformity with information furnished by Equitrust in
writing specifically for use in the Registration Statement or prospectus.
(c) Promptly after receipt by an indemnified party under this Section 9
of notice of the threat or commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying party
hereunder, notify each such indemnifying party in writing thereof, but the
omission so to notify an indemnifying party shall not relieve it from any
liability which it may have to any indemnified party to the extent that the
indemnifying party is not prejudice as a result thereof. In case any such action
shall be brought against any indemnified party and it shall notify an
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel reasonably satisfactory to such
indemnified party, and, after notice from the indemnifying party to such
indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under this Section 9 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so elected; provided,
however, that, if the defendants in any such action include both an indemnified
party and an indemnifying party and the related indemnified party shall have
reasonably concluded that there may be reasonable defenses available to it which
are different from or additional to those available to the indemnifying party or
if the interests of the indemnified party reasonably may be believed to conflict
with the interests of the indemnifying party, the indemnified party shall have
the right to select separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the indemnifying party as incurred. No indemnifying party
will be subject to any liability for any settlement made without consent which
shall not be unreasonably withheld. No indemnifying party will consent to the
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability with respect to such claim or
litigation.
10. General.
(a) THIS AGREEMENT AND ALL QUESTIONS RELATING TO ITS VALIDITY,
INTERPRETATION, PERFORMANCE, AND ENFORCEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF MISSISSIPPI.
(b) Mandatory venue for any controversy arising out of or relating to
this Agreement or any modification or extension thereof, including any claims
for breach, for damages, and/or for recision or reformation, shall be in a court
of competent jurisdiction located in Harrison County, Mississippi.
(c) This Agreement contains the entire understanding among the parties
hereto with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings, inducements, or conditions,
express or implied, oral or written, except as herein contained. This Agreement
may not be modified or amended other than by an agreement in writing signed by
all parties affected.
(d) The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms hereof.
The section headings in this Agreement are for convenience only; they form no
part of this Agreement and shall not affect its interpretation.
(e) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together constitute one and
the same instrument.
(f) The parties hereto hereby agree that time is of the essence for all
purposes of this Agreement.
(g) Any notices to be given hereunder by any party to the other party
may be effected either by personal delivery in writing, by telecopier, or by
mail, registered or certified, postage prepaid with return receipt requested,
addressed to the party to be notified at the address set forth beneath such
party's signature below. Such notices shall be deemed to have been given if
personally delivered, when delivered; if telecopied, when receipt of the notice
is confirmed by the person giving the notice; and if mailed, on the third
business day after deposit in the United States mail with postage prepaid by
certified or registered mail and properly addressed. As used in this Agreement,
the term "business day" means days other than Saturdays, Sundays, and holidays
recognized by Federal banks.
IN WITNESS WHEREOF, the undersigned have set their hands hereunto as of
the first date written above.
JVWEB, INC. EQUITRUST MORTGAGE CORPORATION
By: /s/ Greg J. Micek By /s/ Kent E. Lovelace, Jr.
Greg J. Micek, President
Name: Kent E. Lovelace, Jr.
Title President
EXHIBIT 10.3 PROMISSORY NOTE
PROMISSORY NOTE
$50,000.00 Harrison County, Mississippi
____________ ___, 1999
The undersigned, JVWeb, Inc., a Delaware corporation (hereinafter
called "Maker"), whose address for the purposes of this Note is 5444 Westheimer,
Suite 2080, Houston, Texas 77056, for value received, without grace, in the
manner, on the dates and in the amounts herein stipulated, promises to pay to
the order of Equitrust Mortgage Corporation (hereinafter called "Payee"), at
Payee's principal place of business located at 1201-25th Avenue, Suite One,
Gulfport, Mississippi 39501-1950, or at such other place as Payee may hereafter
designate, the sum of FIFTY THOUSAND DOLLARS ($50,000.00), in lawful money of
the United States of America, at the interest rate herein specified.
The unpaid principal balance from time to time outstanding hereunder
shall bear interest from and after the date hereof until such balance is paid in
full at a fixed rate per annum equal to TWELVE PERCENT (12.0%). Interest on this
Note shall be computed on the basis of a 365-day (or 366-day, as the case may
be) year for the actual number of days elapsed.
The unpaid principal balance of this Note with all accrued but unpaid
interest thereon shall be due and payable in full on DEMAND, or in the event
there is no demand, on or before midnight on August 2, 2004. However, if this
Note is converted in accordance with the terms hereof, then no unpaid principal
balance of this Note or accrued interest shall ever be due and payable.
Payee shall have the option until midnight on August 2, 2004 to convert
the Note into 400,000 shares of Common Stock. Such conversion may be exercised
by Payee's giving written notice to Maker, in accordance with the notice
provisions of that certain Agreement dated August 3, 1998 between Maker and
Payee, of Payee's desire to effect such conversion. Immediately upon the
conversion of this Note, the rights of Payee under this Note shall cease except
with regard to the right to receive the 400,000 shares of Common Stock issuable
upon conversion, and Payee shall be treated for all purposes as the record
holder of the 400,000 shares of Common Stock from and after such time. As
promptly as practicable after the conversion, Payee shall surrender this Note
marked "Cancelled", and Maker shall issue and deliver to Payee one or more
certificates for the 400,000 shares of Common Stock issuable upon conversion.
Maker hereby acknowledges that the holding period, for purposes of Rule
144 of the Securities Act of 1933 (the "Act"), of the shares of Common Stock
into which this Note may be converted commenced on the date of this Note rather
than the date of conversion. Moreover, Maker hereby acknowledges that, if Payee
ever tranfers this Note and the Note is converted as provided herein, Payee and
each transferee of the Note shall be regarded as separate persons for purposes
of the volume limitation set forth in Rule 144 under the Act.
If this Note is not paid at maturity and said Note is placed in the
hands of an attorney for collection or if collection by suit or through the
probate court, bankruptcy court, or by any other legal or judicial proceeding is
sought, Maker agrees to pay all expenses incurred, including reasonable
attorneys' fees, all of which shall become a part of the principal hereof.
Maker and each and all other liable parties expressly and specifically,
(i) severally waive grace, presentment for payment, demand for payment, notice
of intent to accelerate and notice of acceleration, notice of dishonor, protest
and notice of protest, notice of nonpayment, and any and all other notices, the
filing of suit and diligence in collecting this Note or enforcing any of the
security herefor, (ii) severally agree to any substitution, subordination,
exchange or release of any security held for the payment of this Note or any
other obligation to Payee and release of any party primarily or secondarily
liable hereon, (iii) severally agree that Payee shall not be required first to
institute suit or exhaust Payee's remedies hereon against Maker or other parties
liable hereon or to enforce Payee's rights against them or any security herefor
in order to enforce payment of this Note by any of them, and (iv) severally
agree to any extension or postponement of time of payment of this Note and to
any other indulgence with respect hereto without notice thereof to any of them.
The invalidity, or unenforceability in particular circumstances, of any
provision of this Note shall not extend beyond such provision or such
circumstances and no other provision of this Note shall be affected thereby.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF MISSISSIPPI AND THE APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.
JVWEB, INC.
By:__________________________________
Greg J. Micek, President
