UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 For the quarterly period
ended: September 30, 1999
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 For the transition period from
_______ to _________
Commission file number: 000-24001
JVWEB, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 76-0552098
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization identification No.)
5444 Westheimer, Suite 2080, Houston, Texas 77056
(Address of principal executive officer) (Zip Code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes _X_No __
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court Yes No ___
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares of common stock, $0.01 par value, outstanding as
September 30, 1999: 9,640,557 shares
Transitional Small Business Disclosure Format (check one): Yes No X_
<PAGE>
JVWEB, INC.
PERIOD ENDED SEPTEMBER 30, 1999
INDEX
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PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Condensed financial statements of JVWeb, Inc.:
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Balance sheet as of September 30, 1999 3
Income statements for the three months ended September
30, 1999 and 1998 4
Statements of cash flows for the three months ended
September 30, 1999 and 1998 5
Notes to financial statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition And Results of Operations 7
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds 8
Item 6. Exhibits and Reports on Form 8-K. 8
(a)Exhibits
SIGNATURE 8
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<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
JVWeb, Inc.
(A Development Stage Company)
Balance Sheet
September 30, 1999
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ASSETS
Cash $ 25,924
Accounts receivable 10,833
Note receivable 51,333
Prepaid professional fees 28,137
------
Total Current Assets 116,227
Office equipment and furniture (net of
$2,041 accumulated depreciation) 2,349
iHomeline.com, Inc. investment 0
Linksxpress.com, Inc. investment 60,000
AMP3.com LLC investment 100,000
-------
Total Assets $ 278,576
===========
LIABILITIES & STOCKHOLDERS? EQUITY
Accounts payable $ 86,688
Accrued expenses 11,463
Note payable to an individual 20,000
Notes payable to founding shareholder 254,411
-------
Total Liabilities 372,562
Preferred stock, $0.01 par, 10,000,000
shares authorized, no shares issued or
outstanding
Common stock, $0.01 par, 50,000,000 shares
authorized, 9,640,557 shares issued and
outstanding 96,406
Paid-in capital 1,353,456
Retained deficit (1,543,848)
-----------
Total Stockholders' Equity ( 93,986)
-----------
Total Liabilities & Stockholders' Equity $ 278,576
===========
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<PAGE>
JVWeb, Inc.
Income Statements
For the Three Months Ended September 30, 1999 and 1998
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1999 1998
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REVENUES $ 22,833 $16,315
Operating Expenses
General and administrative 250,978 195,596
Depreciation 341 195
--------- ---------
(251,319) (195,791)
--------- ---------
Operating (Loss) (228,486) (179,476)
Interest income 1,000
Interest(expense) ( 4,534)
--------- ---------
Net (loss) $(232,020) $(179,476)
========= =========
NET LOSS PER COMMON SHARE $(.02) $(.02)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 9,460,557 7,261,638
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<PAGE>
JVWeb, Inc.
Statements of Cash Flows
For the Three Months Ended September 30, 1999 and 1998
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1999 1998
CASH FLOW FROM OPERATIONS
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Net (loss) $(232,020) $(179,476)
Adjustments to reconcile net loss to cash
provided from operating activities
Depreciation 341 195
Common stock for services 55,350 33,943
Writeoff of deposit on purchase
of a subsidiary 55,000
Changes in:
Employee advances 2,550
Accounts receivable (10,833)
Note receivable (1,000)
Inventory ( 3,641)
Prepaid expenses 19,487
Accrued interest 3,610
Accounts payable 39,790 7,316
--------- ---------
NET CASH USED BY OPERATING ACTIVITIES (125,275) ( 84,113)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Deposit on purchase of subsidiary ( 30,000)
------------- ---------
NET CASH USED BY INVESTING ACTIVITIES ( 30,000)
------------- ---------
CASH FLOW FROM FINANCING ACTIVITIES
Change in notes payable
to founding shareholder 92,773
Proceeds from notes payable 20,000
Payments on notes payable ( 4,297)
Issuance of common stock 120,240
--------- ---------
NET CASH FROM FINANCING ACTIVITIES 108,476 120,240
--------- ---------
NET INCREASE (DECREASE) IN CASH ( 16,799) 6,127
CASH - Beginning of period 42,723 412
--------- ----------
- End of period $ 25,924 $ 6,539
========= =========
DISCLOSURE OF NON-CASH TRANSACTIONS
Issuance of 150,000 shares of Company
common stock in exchange for 500,000
shares of Linksxpress.com, Inc. $ 60,000
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<PAGE>
JVWEB, INC
NOTES TO FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of JVWeb, Inc., a Texas
corporation ("Company"), have been prepared in accordance with generally
accepted accounting principles and the rules of the Securities and Exchange
Commission ("SEC"), and should be read in conjunction with the audited financial
statements and notes thereto contained in the Company's latest Annual Report
filed with the SEC on Form 10-KSB. In the opinion of management, all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of financial position and the results of operations for the interim
periods presented have been reflected herein. The results of operations for
interim are not necessarily indicative of the results to be expected for the
full year. Notes to the financial statements which would substantially duplicate
the disclosure contained in the audited financial statements for the most recent
fiscal year, 1999, as reported in the Form 10-KSB, have been omitted.
NOTE B - ACQUISITION OF LINKSXPRESS.COM, INC.
On September 15, 1999, the Company acquired 500,000 shares of Linksxpress.com,
Inc. in exchange for 150,000 shares of Company stock, valued at current market
price of $.40 per share.
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
GENERAL DISCUSSION
Results from operations for the first fiscal quarter ending 9/30/99 suffered
from a variety of unexpected setbacks. Primary to that involved the relationship
with Lernout and Hauspie, and the significant investment in AMP3.COM.
With Lernout and Hauspie, despite a year-long mutual courting of an agreement,
the support that had been promised towards the www.crisis-communications.com
program failed to materialize over the course of the quarter. As a result, with
the exception of one significant opportunity that we hope will mature early next
year, management was unable to significantly capitalize on the marketing efforts
that had been opened up through our New York presence. Significant staff
reductions within the L&H division that management was dealing with have caused
us to reach out to new contacts at L&H to further the relationship. We have
opened up encouraging dialogue within the U.S. divisions of L&H, and are
continuing to pursue that relationship.
Therefore, the focus of our marketing efforts is being re-directed towards
capturing marketing and on-line corporate sponsorship consulting revenue for
clients and projects generated by management. Specifically, for example, our
www.ihomeline.com joint venture represents opportunities for corporate
sponsorships and joint marketing campaigns.
With www.amp3.com, the significant event for the quarter was their sponsorship
of the emerging artist stage at Woodstock in July. That sponsorship, of which
JVWeb had been instrumental in supporting, was anticipated to catapult AMP3 into
a material presence in the emerging digital music download, or MP3, Industry.
Although, as of this time, that investment has not yet realized its anticipated
potential, management is optimistic that a return on that investment will occur.
On-going efforts have concentrated on the following areas: 1) continuing the
development of www.ihomeline.com. Management is anticipating a live simulcast of
the program will soon take place. Once this occurs, this will give the ihomeline
joint venture a platform to simultaneously webcast and broadcast on the radio
programs that can be syndicated into a variety of avenues. 2) the
www.linksxpress.com investment. Linksxpress has a strong management team and is
well-funded. There are proving to be a number of opportunities for synergy
between our two organizations, and we are presently in negotiations to fully
capitalize on those synergies. Management is optimistic that those discussions
will bring positive results. 3) In the hosting area, management has had a number
of meetings with various GTE representatives, in order to fully maximize our
co-location facility in Phoenix. At least two significant proposals have been
issued in conjunction with GTE. However, none have yet resulted in significant
contracts, although some minor revenue is beginning to materialize. 4)
Considerable energies have been applied in securing additional joint ventures.
Management has striven to be prudent in securing good agreements with worthwhile
projects. As a result, although we continue to be in serious negotiations with a
variety of ventures, as of this time, no additional agreements have been signed.
For the future, management is consolidating its resources into the generation of
immediate consulting revenue. Management will also continue to work towards
developing www.ihomeline.com, which is presently in a capital raising phase.
Management has recently begun exploring various business combination
possibilities to create greater momentum for the company. No serious discussions
are underway at this time. However, management believes internet market forces
and technology changes continue to rapidly create new business models, and
challenge existing ones. Therefore, an alignment with a compatible entity with
additional resources could be a benefit.
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On September 15, 1999, the Company exchanged 150,000 shares of the Company's
common stock for 500,000 shares of common stock of Linksxpress.com, Inc. This
issuance is claimed to be exempt pursuant to Regulation D under the Act.
On July 22, 1999, the Company agreed to issue to a person providing
accounting services to the Company an aggregate of 50,000 shares of the
Company's common stock for an aggregate purchase price of $20,000. This issuance
is claimed to be exempt pursuant to Regulation D under the Act.
On May 12, 1998, the Company's Registration Statement on Form SB-2
(Commission File No. 333-43379) was declared effective by the U.S Securities and
Exchange Commission. The Company's Quarterly Report on Form 10-QSB for the
quarter ended March 31, 1998 contained a detail discussion of the securities
registered by this Registration Statement. This discussion remains true and
correct as of the end of the quarter ended September 30, 1999 except in certain
regards discussed in the remainder of this paragraph. First, the Common Stock
and the Company's Class A Warrants ("Class A Warrants") have commenced trading.
In addition, 10,240 Class A Warrants have been exercised, and proceeds from such
exercises in the aggregate amount of $10,240 have been received by the Company.
All such proceeds have been used for general corporate purposes and were paid to
persons other than directors and officers of the Company and persons owning more
than 10% of any class of equity securities of the Company. Moreover, the Company
believes that LS Capital Corporation has sold material numbers of the shares of
Common Stock and Class A Warrants previously owned by it.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed with this Quarterly Report or are
incorporated herein by reference:
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Exhibit
Number Description
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10.1 Agreement dated September _____, 1999 between the Company and LinksXpress.com, Inc.
10.2 Stock Option Agreement dated September ___, 1999 executed by the Company in favor of
LinksXpress.com, Inc.
10.3 Stock Option Agreement dated September __, 1999 executed by LinksXpress.com, Inc. in favor of
the Company
10.4 Warrant dated September _____, 1999 executed by LinksXpress.com, Inc. in favor of the Company
27 Financial Data Schedule
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(b) Reports on Form 8-K
None
SIGNATURE
In accordance with the requirements of the Exchange Act, the Registrant
has duly caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
JVWEB, INC.
(Registrant)
By: /s/Greg J. Micek
Greg J. Micek, President
(Principal Executive Officer, Principal
Financial Officer and Principal
Accounting Officer)
Dated: November 19, 1999
EXHIBITS INDEX
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Exhibit
Number Description
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10.1 Agreement dated September _____, 1999 between the Company and LinksXpress.com, Inc.
10.2 Stock Option Agreement dated September _____, 1999 executed by the Company
in favor of LinksXpress.com, Inc.
10.3 Stock Option Agreement dated September _____, 1999 executed by LinksXpress.com, Inc. in favor of the Company
10.4 Warrant dated September _____, 1999 executed by LinksXpress.com, Inc. in favor
of the Company
27 Financial Data Schedule
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- --------------------------------------------------------------------------------
THIS AGREEMENT (the "Agreement") is made and entered into as of this the 17th
day of September, 1999 by and between (a) LinksXpress.com, Inc. a Colorado
corporation (the "Company"), and (b) JVWeb, Inc., a Delaware corporation
("JVWeb, Inc.").
Recitals:
WHEREAS, the Company desires to issue and sell to JVWeb, Inc. units ("Units")
comprised of shares of common stock in the Company ("Common Stock") and warrants
to purchase shares of Common Stock, and JVWeb, Inc. desires to receive and
purchase Units, in each cases upon the terms, provisions and conditions set
forth herein;
WHEREAS, in connection with the issuance and sale of the Units, the Company and
JVWeb, Inc. intend that the Company will register with the United States
Securities and Exchange Commission (the "Commission") an in-kind dividend (the
"Dividend") to the stockholders of JVWeb, Inc. consisting a portion of the Units
being issued and sold to JVWeb, Inc. pursuant hereto; and
WHEREAS, the Company and JVWeb, Inc. desire to set forth in writing the terms,
provisions and conditions pertaining to the sale and issuance of Units to JVWeb,
Inc. and pertaining to the Dividend;
Agreement:
NOW, THEREFORE, in consideration of the mutual agreements contained herein,
$10.00 and other good and valuable consideration (the receipt, adequacy and
sufficiency of which are hereby acknowledged by each of the parties hereto),
each of the Company and JVWeb, Inc. hereby agrees as follows:
1. General Representations and Warranties.
(a) JVWeb, Inc. hereby represents and warrants to the Company that JVWeb,
Inc. has been duly organized, is validly existing and is in good standing in the
jurisdiction in which it was incorporated; JVWeb, Inc. 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
JVWeb, Inc.'s obligation hereunder and thereunder; the execution and delivery by
JVWeb, Inc. of this Agreement and all other agreements, documents and
instruments to be executed by JVWeb, Inc. in connection herewith have been
authorized by all necessary corporate action by JVWeb, Inc.; when this Agreement
and all other agreements, documents and instruments to be executed by JVWeb,
Inc. in connection herewith are executed by JVWeb, Inc. and delivered to the
Company, this Agreement and such other agreements, documents and instruments
will constitute the valid and binding agreements of JVWeb, Inc. enforceable
against JVWeb, Inc. 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,
notation or otherwise) under the terms of, any contract to which JVWeb, Inc. is
a party or by which JVWeb, Inc. is bound or by which any of the assets of JVWeb,
Inc. is bound or affected, (ii) violate any judgment against, or binding upon,
JVWeb, Inc. or upon the assets of JVWeb, Inc., (iii) result in the creation of
any lien, charge or encumbrance upon any assets of JVWeb, Inc. pursuant to the
terms of any such contract, or (iv) violate any provision in the charter
documents, bylaws or any other agreement affecting the governance and control of
JVWeb, Inc.; 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 JVWeb, Inc., this Agreement, or the
transactions contemplated hereby (other than as described in JVWeb, Inc.'s
filings with the Commission), 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 JVWeb, Inc., this Agreement, or
the transactions contemplated hereby; no consent or approval from any person on
the part of JVWeb, Inc. is required in connection with the execution and
delivery of this Agreement other than board of director approval of JVWeb, Inc.,
which has already been obtained; and the representations and warranties made
immediately above and elsewhere herein are material to the Company and are being
relied upon by the Company in connection with its decision to issue and sell
Units to JVWeb, Inc. pursuant to Section 2 of this Agreement.
(b) The Company hereby represents and warrants to JVWeb, Inc. that
(deletion) the Company has full right, power and authority to execute and
deliver this Agreement and all other agreements, documents and instruments to be
executed by the Company in connection herewith (including, without limitation,
the Warrant Agreement, as defined herein) and perform the Company's obligation
hereunder and thereunder; the Company is duly organized, validly existing and in
good standing in the State of Colorado; the authorized capital stock of the
Company consists of 100 million shares of Common Stock, 7,862,150 of which were
issued and outstanding as of the date hereof; Ian Scott-Moncrieff owns 3.0
million shares of the outstanding Common Stock; the execution and delivery by
the Company of this Agreement and all other agreements, documents and
instruments to be executed by the Company in connection herewith (including,
without limitation, the Warrant Agreement) have been authorized by all necessary
corporate action; when this Agreement and all other agreements, documents and
instruments to be executed by the Company in connection herewith (including,
without limitation, the Warrant Agreement) are executed by the Company and
delivered to JVWeb, Inc., this Agreement and such other agreements, documents
and instruments will constitute the valid and binding agreements of the Company
enforceable against the Company 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 (including,
without limitation, the Warrant Agreement) 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,
notation or otherwise) under the terms of, any contract to which the Company is
a party or by which the Company is bound or by which any of the assets of the
Company is bound or affected, (ii) violate any judgment against, or binding
upon, the Company or upon the Company's assets, (iii) result in the creation of
any lien, charge or encumbrance upon any of the Company's assets pursuant to the
terms of any such contract, 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 the Company's 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 the Company's assets, this Agreement, or the
transactions contemplated hereby; no consent or approval from any person is
required on the party of the Company in connection with the execution and
delivery of this Agreement other than board of director approval, which has
already been obtained (deletion); the shares of Common Stock to be issued to
JVWeb, Inc. pursuant to this Agreement 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 and elsewhere herein are
material to JVWeb, Inc. and are being relied upon by JVWeb, Inc. in connection
with JVWeb, Inc.'s decision to purchase Units pursuant to Section 2 of this
Agreement.
2. Sale and Purchase of Units.
(a) Each Unit shall consist of one share of Common Stock and two separately
assignable (i.e. "detachable") "First Tier Warrants." In addition to the other
rights pertaining thereto, the exercise of each First Tier Warrant shall
entitled the holder thereof to receive, without the payment of any additional
amount, two "Second Tier Warrants." In addition to the other rights pertaining
thereto, the exercise of each Second Tier Warrant shall entitle the holder
thereof to receive, without the payment of any additional amount, one "Third
Tier Warrant." First Tier Warrants, Second Tier Warrants and Third Tier Warrants
are referred to hereinafter collectively as the "Warrants." Each Warrant shall
entitle the holder thereof to purchase one share of Common Stock at any time
within three years after the date it is issued at a purchase price of $2.00 (in
the case of the First Tier Warrants), $3.00 (in the case of the Second Tier
Warrants) and $5.00 (in the case of the Third Tier Warrants). Each Warrant shall
be redeemable at any time after the Common Stock has had, for 10 consecutive
trading days, a per-share closing price above $2.25 (in the case of the First
Tier Warrants), $3.25 (in the case of the Second Tier Warrants) and $5.50 (in
the case of the Third Tier Warrants). The redemption price shall be $.01 per
Warrant. The Company and JVWeb, Inc. expect that the Warrants will eventually be
in a registered, book-entry form.
(b) On the execution of this Agreement, JVWeb issued to the Company a stock
certificate representing 100,000 shares of JVWeb's common stock ("JVWeb Common
Stock"), the receipt of which the Company hereby acknowledges, (plus 200,000
options with an exercise price of $0.40 cents a share). In consideration of the
issuances of the foregoing shares (and options) the Company delivered to JVWeb a
stock certificate representing 500,000 shares of Common Stock and a warrant
agreement (the Warrant Agreement"), a copy of which is attached hereto, creating
1,000,000 Class A Warrants. JVWeb hereby agrees that, promptly after the Company
enters into an agreement with a transfer agent with regard to the creation of
the Warrants, the Warrant Agreement shall be canceled, and thus the underlying
Class A Warrants created thereby, and in connection therewith JVWeb shall be
issued 1,000,000 Class A Warrants pursuant to the terms of the Company's
agreement with its transfer agent.
(c) In further consideration of JVWeb's issuance of 100,000 shares of JVWeb
Common Stock to the Company and other agreements contained herein, the Company
has granted to JVWeb, pursuant to a stock option agreement, a copy of which is
attached hereto as an exhibit (the "Option Agreement"), an option to purchase
500,000 shares of Common Stock at per-share exercise prices of: 125,000 at
$0.10, 125,000 at $0.25, 125,000 at $0.50, and 125,000 at $0.75.
(d) The Company hereby agrees to grant from time to time hereafter, to
persons believed to be important to the success of the Company's business,
options to purchase up to 2,000,000 shares of Common Stock at per-share exercise
prices of $.10. Such options shall be granted pursuant to stock option
agreements in forms akin to the Option Agreement.
(e) The Company hereby agrees to issue to Keith J. Mckenzie., 200,000
shares of Common Stock as a finder's fee for arranging certain of the
transactions provided for by this Agreement. The Company hereby further agrees
to include such 200,000 shares in any registration pursuant to Section 4 below.
(Consider registering these immediately following as a second registration
relative to whether Keith would need a broker/deler license).
3. Securities Representations and Warranties.
(a) JVWeb, Inc. hereby represents and warrants to the Company that it is
familiar with the business and financial condition, properties, operations and
prospects of the Company, it has been given full access to all material
information concerning the condition, properties, operations and prospects of
the Company, it has had an opportunity to ask such questions of, and to receive
such information from, the Company as it has desired and to obtain any
additional information necessary to verify the accuracy of the information and
data received, and it is satisfied that there is no material information
concerning the condition, properties, operations and prospects of the Company,
of which it is unaware; JVWeb, Inc. 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 its shares of Common Stock; JVWeb,
Inc. 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 of its shares of Common Stock to satisfy existing or contemplated
undertakings, needs or indebtedness, (c) is capable of bearing the economic risk
of the ownership of the shares of Common Stock to be issued to it for the
indefinite future, 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 shares of Common Stock being issued to it; JVWeb, Inc. is acquiring
its shares of Common Stock solely for its own beneficial account, for investment
purposes, and not with a view to, or for resale in connection with, any
distribution of its shares of Common Stock; JVWeb, Inc. understands that its
shares of Common Stock have not been registered under the Securities Act of 1933
(the "Act") or any state securities laws and therefore its shares of Common
Stock are "restricted" under such laws until such time as they are registered;
and JVWeb, Inc. has not offered or sold any portion of its shares of Common
Stock and has no present intention of reselling or otherwise disposing of any
portion of its shares of Common Stock 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 (other than the registration thereof).
(b) The Company hereby represents and warrants to JVWeb, Inc. that it is
familiar with the business and financial condition, properties, operations and
prospects of JVWeb, Inc., it has been given full access to all material
information concerning the condition, properties, operations and prospects of
JVWEb, Inc., it has had an opportunity to ask such questions of, and to receive
such information from, JVWeb, Inc. as it has desired and to obtain any
additional information necessary to verify the accuracy of the information and
data received, and it is satisfied that there is no material information
concerning the condition, properties, operations and prospects of JVWeb, Inc.,
of which it is unaware;The Company 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 its shares of JVWeb, Inc.; The
Company. 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 of its shares of Common Stock to satisfy existing or contemplated
undertakings, needs or indebtedness, (c)is capable of bearing the economic risk
of the ownership of the shares of Common Stock to be issued to it for the
indefinite future, 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 shares of Common Stock being issued to it; The Company is acquiring
its shares of Common Stock solely for its own beneficial account, for investment
purposes, and not with a view to, or for resale in connection with, any
distribution of its shares of Common Stock; The Company understands that its
shares of Common Stock have not been registered under the Securities Act of 1933
(the "Act") or any state securities laws and therefore its shares of Common
Stock are "restricted" under such laws until such time as they are registered;
and The Company has not offered or sold any portion of its shares of Common
Stock and has no present intention of reselling or otherwise disposing of any
portion of its shares of Common Stock 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 (other than the registration thereof).
4. Securities Registration.
Within six months after the date of this Agreement, the Company shall file
a registration statement to register the Dividend with the Commission. The
Dividend shall consist of 250,000 of the shares of Common Stock issued and sold
to JVWeb, Inc. pursuant hereto and all (Aren't the first tier warrants at
1,000,000?) 500,000 of the First Tier Warrants issued and sold to JVWeb, Inc.
pursuant hereto. (IF it is 1,000,000, then this appropriately creates a 1 to 4
ratio of stock to warrants). In the event of such registration, the Company
shall use its best efforts to qualify such shares of Common Stock and First Tier
Warrants 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 any
registration undertaken pursuant to this Section 4, JVWeb, Inc. shall use
reasonable efforts to cooperate with the Company and will furnish to the Company
and 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, with respect to the Dividend. JVWeb shall advance
on behalf of the Company registration expenses for legal fees, accounting fees,
filing fees and printing charges in connection with any registration undertaken
pursuant to this Section 5 up to $35,000 and corporate updating expenses for
legal fees up to $2,000. The Company shall be obligated to repay to JVWeb all
amounts advanced pursuant to the preceding sentence once this Agreement has been
terminated pursuant to Section 9 below or once more than 50% of the Class A
Warrants have been exercised, whichever occurs first.
5. Spin-Off.
As soon as possible after the registration statement filed in connection
with any registration undertaken pursuant to Section 4 above is declared
effective, JVWeb, Inc. shall declare and effect the Dividend to its
stockholders. In this connection, JVWeb, Inc. shall deliver to each of its
stockholders receiving the registered shares of Common Stock an stock
certificate representing the shares of Common Stock that such stockholder is to
receive (unlegended except to the extent necessary to implement the agreements
described in Section 6 below) and a notification that such stockholder now owns
the number of First Tier Warrants that such stockholder is to receive, as well
as a copy of the prospectus comprising part of the registration statement
declared effective during the course of any registration undertaken pursuant to
Section 4.
6. Lock-Up Agreement.
In connection with the execution of this Agreement, Greg Micek (a
significant stockholder of JVWeb, Inc.) entered into a certain agreement, a copy
of which is attached hereto as an exhibit, in which he agreed that he would not
sell any Common Stock received by him in connection with the Dividend until four
weeks after public trading commenced in the Common Stock and then he would not
sell in any three-month period a number of shares exceeding the average weekly
reported volume of trading in the Common Stock for the four weeks most recently
completed at the time at which any sale is being contemplated.
7. Web Hosting Agreement.
In connection with the execution of this Agreement, the Company entered
into a certain web hosting agreement with JVWeb, a copy of which is attached
hereto as an exhibit.
8. Right of First Refusal Regarding Web Development Work.
In further consideration of JVWeb's issuance of 100,000 shares (and 200,000
options) of JVWeb Common Stock to the Company and other agreements contained
herein, whenever the Company needs web development services, JVWeb will be given
priority to provide these services. Whenever the Company needs web development
services and before the Company enters into negotiations with any other
provider, the Company shall contact JVWeb and give to JVWeb a detailed
description of the services needed and the Company's functionality requirements,
expectations and time frame. JVWeb and the Company shall then negotiate in good
faith the terms, provisions and conditions upon which JVWeb shall provide to the
Company the web development services. If after good faith efforts JVWeb and the
Company are unable to agree upon the terms, provisions and conditions upon which
JVWeb shall provide to the Company the web development services within a
reasonable time frame, the Company may solicit another qualified provider. All
terms, provisions and conditions for the web development services provided by
JVWeb to the Company shall be memorialized in a written agreement.
9. Termination.
If the registration statement under which shares of Common Stock are
registered pursuant to Section 5 is not declared effective within six months
after the date of this Agreement through no breach of this Agreement by the
Company, or if (prior to the effectiveness of such registration statement) the
Company elects to terminate this Agreement (which may be done so by giving
written notice to JVWeb), this Agreement shall, except as hereafter provided,
become null and void, and the parties hereto shall be relieved of any further
duties, obligations and responsibilities with respect to this Agreement.
Notwithstanding the preceding, the Company shall be obligated, immediately upon
the termination of this Agreement pursuant to the preceding, to repay to JVWeb
all amounts advance to the Company pursuant Section 4 above. However, the
Company shall be entitled to retain the 100,000 shares of JVWeb Common Stock
(and 200,000 options) issued pursuant to Section 3(b). Upon repayment of the
advances made pursuant to Section 5 above, JVWeb shall be obligated to return to
the Company the Warrant Agreement and the Option Agreement for cancellation.
However, JVWeb shall be entitled to retain the 500,000 shares of Common Stock
issued and sold to JVWeb pursuant to this Agreement. Moreover, notwithstanding
the termination of this Agreement, the agreements described in Section 7 and 8
and the indemnification provisions of Section 10 shall remain in full force and
effect for two years after the date of termination.
10. 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 issuance and sale of Units to JVWeb, Inc., the Dividend and the
termination of this Agreement.
(b) The Company shall protect, indemnify and hold JVWeb, Inc., 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, 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 the Company in this Agreement.
(c) JVWeb, Inc. shall protect, indemnify and hold the Company, 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, 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, Inc. in this Agreement.
11. Securities Indemnification.
(a) The Company shall protect, indemnify and hold JVWeb, Inc., 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 under
which the shares of Common Stock are registered pursuant to Section 4, 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 the Company of any rule
or regulation promulgated under Act applicable to the Company and relating to
action or inaction by the Company in connection with any such registration;
provided, however, that the Company 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 or prospectus or
information contained in a writing that has been expressly approved or deemed
approved by a person otherwise entitled to indemnification.
(b) JVWeb, Inc. shall protect, indemnify and hold the Company 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 under
which shares of Common Stock are registered pursuant to Section 4, 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, Inc. of any rule
or regulation promulgated under the Act applicable to JVWeb, Inc. and relating
to action or inaction by JVWeb, Inc. in connection with any such registration;
provided, however, that JVWeb, Inc. 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
JVWeb, Inc. in writing specifically for use in the registration statement or
prospectus or information contained in a writing that has been expressly
approved or deemed approved by JVWeb, Inc..
(c) Promptly after receipt by an indemnified party under this Section 11 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 11 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.
12. 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 TEXAS.
(b) 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 recession or reformation, shall be settled by binding arbitration in
Harris County, Texas according to the rules and regulations of the American
Arbitration Association, Commercial Arbitration Rules.
(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 parties may
be effected either by personal delivery in writing, or by mail, registered or
certified, postage prepaid with return receipt requested, addressed to the one
or more parties to be notified at the addresses set forth beneath such parties'
respective signatures below.
(h) All obligations of the Company and all agreements made herein for the
benefit of the Company shall become effective immediately upon the formation and
organization of the Company. The person signing this Agreement on behalf of the
Company shall use reasonable efforts to cause the Company to be formed. Upon the
formation of the Company, such person shall have no further obligations or
liability pertaining to the Company or this Agreement except as is expressly
agreed to by such person in writing.
IN WITNESS WHEREOF, the parties hereto have signed their names hereto as of
the first date written above.
LINKSXPRESS.COM, INC. JVWEB, INC.
a Colorado corporation a Delaware corporation
By:________________________________ By:_________________________________
Ian Scott Moncrieff, Greg Micek,
Chief Executive Officer Chief Executive Officer
Address: Address:
625 Howe Street, Suite 402 5444 Westheimer, Suite 2080
Vancouver, B.C. V6C-2T6 Houston, Texas 77094
EXHIBIT 10.2
STOCK OPTION AGREEMENT BY JVWEB, INC.
IN FAVOR OF LINKSXPRESS.COM, INC.
THIS STOCK OPTION AGREEMENT (the "Agreement") is made effective the
20th day of September, 1999, between JVWEB, INC., a Delaware corporation (the
"Company"), and LINKSXPRESS.COM, INC., a Colorado corporation ("Optionee").
RECITALS:
A. The Company and Optionee have entered into an agreement to
exchange certain of their securities.
B. As part of such exchange, the Company agreed to grant to Optionee
the right to acquire certain shares of the Company's common stock with par value
of $0.01 per share (hereinafter called "Common Stock"), all as provided more
fully hereinafter, all subject to the terms, provisions and conditions of this
Agreement.
WITNESSETH:
1. Grant of Stock Option; Purchase Price; Expiration Date. In
consideration of $10.00 and other good and valuable consideration (the receipt,
adequacy and sufficiency of which the Company hereby acknowledges), the Company
hereby grants to Optionee the right to purchase 150,000 shares of Common Stock
at a per-share purchase price of $.40 (the shares of Common Stock pursuant to
which Optionee has acquired the right to purchase are referred to hereinafter as
the "Option Shares"). The option granted hereunder shall expire five years after
the date of this Agreement.
2. Exercise. Subject to the limitations contained herein, Optionee may
exercise the option created pursuant to this Agreement, in whole or in part, at
any time or from time to time after the date hereof prior to expiration. If
Optionee or Optionee's permitted successor fails to exercise the option created
under this Agreement in full on or before the expiration date provided for
herein with respect to such option, the unexercised portion of such option shall
expire on such expiration date and be of no further force and effect. The option
to purchase granted hereunder shall be exercised by giving written notice to the
Company in compliance with this Agreement. Such notice shall state the number of
Option Shares with respect to which the option is being exercised and shall
specify a date which shall not be fewer than ten (10) nor more than thirty (30)
days after the date of such notice, as the date on which the Option Shares will
be taken up and payment made therefor in cash, certified or bank cashier's
check, or the equivalent, at the principal office of the Company. If any law or
regulation requires the Company to take any action with respect to the Option
Shares specified in such notice, then the date of the delivery of such Option
Shares against payment therefor shall be extended for the period necessary to
take such action. In the event of any failure to take up and pay for the number
of Option Shares specified in such notice on the date set forth therein, as the
same may be extended as provided above, such exercise of this option may be
terminated by the Company with respect to such number of Option Shares not taken
and paid for.
3. Adjustments.
(a) If the outstanding shares of the Common Stock shall be subdivided
into a greater number of shares or a dividend in Common Stock shall be paid in
respect of Common Stock, the per share purchase price of the Option Shares in
effect immediately prior to such subdivision or at the record date of such
dividend shall simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend be proportionately reduced.
If the outstanding shares of Common Stock shall be combined into a smaller
number of shares, the per share purchase price of the Option Shares in effect
immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased. When any
adjustment is required to be made in the per share purchase price of the Option
Shares, the number of Option Shares purchasable upon the exercise of the Option
shall be changed to the number determined by dividing (i) an amount equal to the
number of shares issuable upon the exercise of the Option immediately prior to
such adjustment, multiplied by the per share purchase price of the Option Shares
in effect immediately prior to such adjustment, by (ii) the per share purchase
price of the Option Shares in effect immediately after such adjustment.
(b) If there shall occur any capital reorganization or reclassification
of the Common Stock (other than a change in par value or a subdivision or
combination as provided for in subsection (a) immediately above), or any
consolidation or merger of the Company with or into another corporation, or a
transfer of all or substantially all of the assets of the Company, or the
payment of a liquidating distribution then, as part of any such reorganization,
reclassification, consolidation, merger, sale or liquidating distribution,
lawful provision shall be made so that Optionee shall have the right thereafter
to receive upon the exercise hereof (to the extent, if any, still exercisable)
the kind and amount of shares of stock or other securities or property which
Optionee would have been entitled to receive if, immediately prior to any such
reorganization, reclassification, consolidation, merger, sale or liquidating
distribution, as the case may be, Optionee had held the number of shares of
Common Stock which were then purchasable upon the exercise of the Option. In any
such case, appropriate adjustment (as reasonably determined by the Board of
Directors of the Company) shall be made in the application of the provisions set
forth herein with respect to the rights and interests thereafter of Optionee
such that the provisions set forth in this Section 3 (including provisions with
respect to adjustment of the per share purchase price of the Option Shares)
shall thereafter be applicable, as nearly as is reasonably practicable, in
relation to any shares of stock or other securities or property thereafter
deliverable upon the exercise of the Option.
4. Shares Reserved. The Company will, at all times during the term of
this Agreement, reserve and keep available such number of its common shares as
will be sufficient to satisfy the requirements of this Agreement and will pay
all fees and expenses necessarily incurred by the Company in connection with the
issuance of such shares.
5. Restriction on Issuance of Shares; Legends. The Company will not be
obligated to sell any Option Shares hereunder unless the Option Shares are at
the time registered (or exempt from registration) under the Securities Act of
1933, as amended (the "Act"), and applicable state securities laws. Optionee
shall make such investment representations to the Company and shall consent to
the imposition of such legends on the stock certificates as are necessary, in
the opinion of the Company's counsel, to secure to the Company an appropriate
exemption from applicable securities laws if the Option Shares are not then
registered.
6. Piggyback Registration Rights.
(a) If at any time after the date hereof the Company proposes to
register any Common Stock under the Act for sale to the public for cash, the
Company shall give written notice to Optionee of its intention so to do at least
20 days prior to filing the related registration statement (the "Registration
Statement"). Upon the written request of Optionee, given within 10 days after
receipt of any such notice, to register any Option Shares (whether such Option
Shares have been issued or remain underlying the option created hereby), the
Company shall use its best efforts to cause all Option Shares, as to which
registration shall have been so requested, to be included in the securities to
be covered by the Registration Statement, all to the extent requisite to permit
the sale or other disposition by Optionee of the Option Shares requested to be
so registered; provided, however, that:
(i) If, at any time after giving such written notice of its
intention to register any securities and prior to the effective date of
the Registration Statement, the Company shall determine for any reason
not to register such securities, the Company may, at its election, give
written notice of such determination to Optionee, and thereupon the
Company shall be relieved of its obligation to register any Option
Shares in connection with such registration.
(ii) If such registration involves an underwritten offering,
Optionee must sell its Option Shares to the underwriters selected by
the Company on the same terms and conditions as apply to the Company
(except as otherwise agreed to by the Company in writing).
The number of Option Shares to be included in such an underwriting may be
reduced, pro rata among all the Company's shareholders selling shares in the
offering, in a ratio equal to the respective amounts of shares proposed to be
sold by such shareholders, if and to the extent that the managing underwriter
shall advise Optionee and the Company by letter of its belief that the number of
securities requested to be registered exceeds the number that can be sold in (or
during the term of) such offering without adversely affecting the marketing of
the securities to be sold by the Company.
(b) In connection with the registration provided for hereunder,
Optionee shall use reasonable efforts to cooperate with the Company and shall
furnish to the Company in writing such information with respect to it and its
proposed distribution as shall be reasonably necessary in order to assure
compliance with federal and applicable state securities laws.
(c) The Company shall pay all expenses incurred by the Company in
complying with this Section, including, without limitation, all registration,
qualification, and filing fees, blue sky fees and expenses, printing expenses,
fees and disbursements of counsel and independent public accountants for the
Company, all fees and expenses of the underwriter customarily paid by issuers or
sellers of securities (including fees of the National Association of Securities
Dealers, Inc.), transfer taxes, escrow fees, fees of transfer agents and
registrars, and costs of insurance. Optionee shall pay all underwriting
discounts and selling commissions applicable to the sale of the Option Shares
being registered.
(d) (i) The Company shall protect, indemnify and hold Optionee, 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 (aa) 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, (bb) 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 (cc) any material violation by the Company of any
rule or regulation promulgated under Act applicable to the Company and relating
to action or inaction by the Company in connection with any such registration;
provided, however, that the Company shall not be liable in the case of (aa) and
(bb) 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 or prospectus or
information contained in a writing that has been expressly approved or deemed
approved by a person otherwise entitled to indemnification.
(ii) Optionee shall protect, indemnify and hold the Company
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 (aa) 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, (bb) 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 (cc) any material violation by Optionee of any rule
or regulation promulgated under the Act applicable to Optionee and relating to
action or inaction by Optionee in connection with any such registration;
provided, however, that Optionee shall be liable in the case of (aa) and (bb)
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
Optionee in writing specifically for use in the Registration Statement or
prospectus or information contained in a writing that has been expressly
approved or deemed approved by Optionee.
(iii) Promptly after receipt by an indemnified party under
this Section 6 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 6 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
shall be subject to any liability for any settlement made without consent which
shall not be unreasonably withheld. No indemnifying party shall 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.
7. Successors. This Agreement shall be binding upon any successor of
the Company.
8. No Rights as Shareholder. Optionee shall have no rights as a
shareholder by reason of this Agreement and shall have only those rights
expressly conferred by this Agreement.
9. Nontransferability. This option will not be transferable without the
express prior written consent of the Company. More particularly (but without
limiting the generality of the foregoing), the option may not be assigned,
transferred, pledged or hypothecated in any way, may not be assignable by
operation of law, and may not be subject to execution, attachment or similar
process. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of the option contrary to the provisions hereof, and the levy of any
execution, attachment or similar process upon the option, will be null and void
and without effect.
10. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been given if
delivered or mailed, first class, with postage prepaid, to:
if to the Company, addressed to:
JVWeb, Inc.
5444 Westheimer, Suite 2080
Houston, Texas 77056
Attention: Mr. Greg J. Micek; and
if to Optionee, addressed to the address for notice set forth
beneath Optionee's signature below;
or to such other address for notice as either party shall hereafter notify the
other party in writing, from time to time.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first set forth above.
"COMPANY"
JVWEB, INC.
By:/s/ Greg J. Micek
Greg J. Micek, President
"OPTIONEE"
LINKSXPRESS.COM, INC.
By:/s/ Ian Scott Moncrieff
Ian Scott Moncrieff,
President
Address for Optionee:
625 Howe Street, Suite 402
Vancouver, B.C. V6C-2T6
EXHIBIT 10.3
STOCK OPTION AGREEMENT BY LINKSXPRESS.COM, INC.
IN FAVOR OF JVWEB, INC
THIS STOCK OPTION AGREEMENT (the "Agreement") is made effective the
20th day of September, 1999, between LINKSXPRESS.COM, INC., a Colorado
corporation (the "Company"), and JVWEB, INC., a Delaware corporation
("Optionee").
RECITALS:
A. The Company and Optionee have entered into an agreement to
exchange certain of their securities.
B. As part of such exchange, the Company agreed to grant to Optionee
the right to acquire certain shares of the Company's common stock (hereinafter
called "Common Stock"), all as provided more fully hereinafter, all subject to
the terms, provisions and conditions of this Agreement.
WITNESSETH:
1. Grant of Stock Option; Purchase Price; Expiration Date. In
consideration of $10.00 and other good and valuable consideration (the receipt,
adequacy and sufficiency of which the Company hereby acknowledges), the Company
hereby grants to Optionee the right to purchase the numbers of shares of Common
Stock set forth in the table immediately below at the per-share purchase prices
with respect to such numbers of shares set forth to the immediate right of such
numbers of shares, respectively (the shares of Common Stock pursuant to which
Optionee has acquired the right to purchase are referred to hereinafter as the
"Option Shares").
Number of Option Shares Per-Share Purchase Price
50,000 Shares $0.25
50,000 Shares $0.50
50,000 Shares $0.75
50,000 Shares $1.00
100,000 Shares $1.50
200,000 Shares $2.00
The option granted hereunder shall expire five years after the date of this
Agreement.
2. Exercise. Subject to the limitations contained herein, Optionee may
exercise the option created pursuant to this Agreement, in whole or in part, at
any time or from time to time after the date hereof prior to expiration. If
Optionee or Optionee's permitted successor fails to exercise the option created
under this Agreement in full on or before the expiration date provided for
herein with respect to such option, the unexercised portion of such option shall
expire on such expiration date and be of no further force and effect. The option
to purchase granted hereunder shall be exercised by giving written notice to the
Company in compliance with this Agreement. Such notice shall state the number of
Option Shares with respect to which the option is being exercised and shall
specify a date which shall not be fewer than ten (10) nor more than thirty (30)
days after the date of such notice, as the date on which the Option Shares will
be taken up and payment made therefor in cash, certified or bank cashier's
check, or the equivalent, at the principal office of the Company. Unless
otherwise specified in such notice, the exercise of the option shall be with
respect to unpurchased Option Shares having the lowest per-share purchase price.
If any law or regulation requires the Company to take any action with respect to
the Option Shares specified in such notice, then the date of the delivery of
such Option Shares against payment therefor shall be extended for the period
necessary to take such action. In the event of any failure to take up and pay
for the number of Option Shares specified in such notice on the date set forth
therein, as the same may be extended as provided above, such exercise of this
option may be terminated by the Company with respect to such number of Option
Shares not taken and paid for.
3. Adjustments.
(a) If the outstanding shares of the Common Stock shall be subdivided
into a greater number of shares or a dividend in Common Stock shall be paid in
respect of Common Stock, the per-share purchase prices of the Option Shares in
effect immediately prior to such subdivision or at the record date of such
dividend shall simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend be proportionately reduced.
If the outstanding shares of Common Stock shall be combined into a smaller
number of shares, the per-share purchase prices of the Option Shares in effect
immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased. When any
adjustment is required to be made in the per-share purchase prices of the Option
Shares, the numbers of Option Shares purchasable upon the exercise of the Option
shall be changed to the numbers determined by dividing (i) an amount equal to
the numbers of shares issuable upon the exercise of the Option immediately prior
to such adjustment, multiplied by the per-share purchase prices of the Option
Shares in effect immediately prior to such adjustment, by (ii) the per-share
purchase prices of the Option Shares in effect immediately after such
adjustment.
(b) If there shall occur any capital reorganization or reclassification
of the Common Stock (other than a change in par value or a subdivision or
combination as provided for in subsection (a) immediately above), or any
consolidation or merger of the Company with or into another corporation, or a
transfer of all or substantially all of the assets of the Company, or the
payment of a liquidating distribution then, as part of any such reorganization,
reclassification, consolidation, merger, sale or liquidating distribution,
lawful provision shall be made so that Optionee shall have the right thereafter
to receive upon the exercise hereof (to the extent, if any, still exercisable)
the kind and amount of shares of stock or other securities or property which
Optionee would have been entitled to receive if, immediately prior to any such
reorganization, reclassification, consolidation, merger, sale or liquidating
distribution, as the case may be, Optionee had held the number of shares of
Common Stock which were then purchasable upon the exercise of the Option. In any
such case, appropriate adjustment (as reasonably determined by the Board of
Directors of the Company) shall be made in the application of the provisions set
forth herein with respect to the rights and interests thereafter of Optionee
such that the provisions set forth in this Section 3 (including provisions with
respect to adjustment of the per-share purchase prices of the Option Shares)
shall thereafter be applicable, as nearly as is reasonably practicable, in
relation to any shares of stock or other securities or property thereafter
deliverable upon the exercise of the Option.
4. Shares Reserved. The Company will, at all times during the term of
this Agreement, reserve and keep available such number of its common shares as
will be sufficient to satisfy the requirements of this Agreement and will pay
all fees and expenses necessarily incurred by the Company in connection with the
issuance of such shares.
5. Restriction on Issuance of Shares; Legends. The Company will not be
obligated to sell any Option Shares hereunder unless the Option Shares are at
the time registered (or exempt from registration) under the Securities Act of
1933, as amended (the "Act"), and applicable state securities laws. Optionee
shall make such investment representations to the Company and shall consent to
the imposition of such legends on the stock certificates as are necessary, in
the opinion of the Company's counsel, to secure to the Company an appropriate
exemption from applicable securities laws if the Option Shares are not then
registered.
6. Piggyback Registration Rights.
(a) If at any time after the date hereof the Company proposes to
register any Common Stock under the Act for sale to the public for cash, the
Company shall give written notice to Optionee of its intention so to do at least
20 days prior to filing the related registration statement (the "Registration
Statement"). Upon the written request of Optionee, given within 10 days after
receipt of any such notice, to register any Option Shares (whether such Option
Shares have been issued or remain underlying the option created hereby), the
Company shall use its best efforts to cause all Option Shares, as to which
registration shall have been so requested, to be included in the securities to
be covered by the Registration Statement, all to the extent requisite to permit
the sale or other disposition by Optionee of the Option Shares requested to be
so registered; provided, however, that:
(i) If, at any time after giving such written notice of its
intention to register any securities and prior to the effective date of
the Registration Statement, the Company shall determine for any reason
not to register such securities, the Company may, at its election, give
written notice of such determination to Optionee, and thereupon the
Company shall be relieved of its obligation to register any Option
Shares in connection with such registration.
(ii) If such registration involves an underwritten offering,
Optionee must sell its Option Shares to the underwriters selected by
the Company on the same terms and conditions as apply to the Company
(except as otherwise agreed to by the Company in writing).
The number of Option Shares to be included in such an underwriting may be
reduced, pro rata among all the Company's shareholders selling shares in the
offering, in a ratio equal to the respective amounts of shares proposed to be
sold by such shareholders, if and to the extent that the managing underwriter
shall advise Optionee and the Company by letter of its belief that the number of
securities requested to be registered exceeds the number that can be sold in (or
during the term of) such offering without adversely affecting the marketing of
the securities to be sold by the Company.
(b) In connection with the registration provided for hereunder,
Optionee shall use reasonable efforts to cooperate with the Company and shall
furnish to the Company in writing such information with respect to it and its
proposed distribution as shall be reasonably necessary in order to assure
compliance with federal and applicable state securities laws.
(c) The Company shall pay all expenses incurred by the Company in
complying with this Section, including, without limitation, all registration,
qualification, and filing fees, blue sky fees and expenses, printing expenses,
fees and disbursements of counsel and independent public accountants for the
Company, all fees and expenses of the underwriter customarily paid by issuers or
sellers of securities (including fees of the National Association of Securities
Dealers, Inc.), transfer taxes, escrow fees, fees of transfer agents and
registrars, and costs of insurance. Optionee shall pay all underwriting
discounts and selling commissions applicable to the sale of the Option Shares
being registered.
(d) (i) The Company shall protect, indemnify and hold Optionee, 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 (aa) 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, (bb) 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 (cc) any material violation by the Company of any
rule or regulation promulgated under Act applicable to the Company and relating
to action or inaction by the Company in connection with any such registration;
provided, however, that the Company shall not be liable in the case of (aa) and
(bb) 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 or prospectus or
information contained in a writing that has been expressly approved or deemed
approved by a person otherwise entitled to indemnification.
(ii) Optionee shall protect, indemnify and hold the Company
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 (aa) 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, (bb) 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 (cc) any material violation by Optionee of any rule
or regulation promulgated under the Act applicable to Optionee and relating to
action or inaction by Optionee in connection with any such registration;
provided, however, that Optionee shall be liable in the case of (aa) and (bb)
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
Optionee in writing specifically for use in the Registration Statement or
prospectus or information contained in a writing that has been expressly
approved or deemed approved by Optionee.
(iii) Promptly after receipt by an indemnified party under
this Section 6 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 6 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
shall be subject to any liability for any settlement made without consent which
shall not be unreasonably withheld. No indemnifying party shall 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.
7. Successors. This Agreement will be binding upon any successor of the
Company.
8. No Rights as Shareholder. Optionee shall have no rights as a
shareholder by reason of this Agreement and shall have only those rights
expressly conferred by this Agreement.
9. Nontransferability. This option will not be transferable without the
express prior written consent of the Company. More particularly (but without
limiting the generality of the foregoing), the option may not be assigned,
transferred, pledged or hypothecated in any way, may not be assignable by
operation of law, and may not be subject to execution, attachment or similar
process. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of the option contrary to the provisions hereof, and the levy of any
execution, attachment or similar process upon the option, will be null and void
and without effect.
10. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been given if
delivered or mailed, first class, with postage prepaid, to:
if to the Company, addressed to:
LinksXpress.Com, inc.
625 Howe Street, Suite 402
Vancouver, B.C. V6C-2T6
Attention: Mr. Ian Scott Moncrieff; and
if to Optionee, addressed to the address for notice set forth
beneath Optionee's signature below;
or to such other address for notice as either party shall hereafter notify the
other party in writing, from time to time.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first set forth above.
"COMPANY"
LINKSXPRESS.COM, INC.
By: /s/ Ian Scott Moncrieff,
Ian Scott Moncrieff,
President
"OPTIONEE"
JVWEB, INC.
By:/s/ Greg J. Micek
Greg J. Micek, President
Address for Optionee:
5444 Westheimer, Suite 2080
Houston, Texas 77056
EXHIBIT 10.4
<PAGE>
THESE WARRANTS AND THE SHARES OF COMMON STOCK AND OTHER WARRANTS THAT MAY BE
PURCHASED ON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THESE WARRANTS AND THE
SHARES OF COMMON STOCK AND OTHER WARRANTS THAT MAY BE PURCHASED ON THE EXERCISE
HEREOF ARE BEING OFFERED AND SOLD FOR INVESTMENT. EXCEPT AS PROVIDED IN SECTION
7(b) HEREOF, THESE WARRANTS MAY NOT BE TRANSFERRED. THE SHARES OF COMMON STOCK
AND OTHER WARRANTS ISSUED OR ISSUABLE UPON EXERCISE OF THESE WARRANTS ARE
SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT.
LINKSXPRESS.COM, INC.
CLASS A WARRANTS FOR THE PURCHASE OF
SHARES OF COMMON STOCK OF
LINKSXPRESS.COM, INC.
(A Colorado Corporation)
VOID AFTER 5:00 P.M., CENTRAL STANDARD TIME,
ON SEPTEMBER 20, 2002
LinksXpress.com, Inc., a Colorado corporation (the "Company") hereby
certifies that JVWeb, Inc., a Delaware corporation (together with its permitted
assigns, the "Registered Holder"), is the holder of 1,000,000 of the Company's
Class A Warrants (singly, a "Warrant," and collectively, the "Warrants") thus
entitling it, subject to the terms set forth below, to purchase from the
Company, at any time or from time to time on or after September 20, 1999 and on
or before the earlier of September 20, 2002 at not later than 5:00 p.m. (Central
Standard Time), to purchase one share of Common Stock of the Company ("Common
Stock") for each Warrant at a purchase price of $2.00 per share. The number of
shares purchasable upon exercise of a Warrant, and the purchase price per share,
each as adjusted from time to time pursuant to the provisions of this Warrant
Certificate, are hereinafter referred to as the "Warrant Stock" and the
"Purchase Price", respectively.
1. Exercise.
(a) This Warrant Certificate may be exercised by the Registered Holder,
in whole or in part, by surrendering this Warrant Certificate, with the purchase
form appended hereto as Exhibit A duly executed by such Registered Holder, at
the principal office of the Company, or at such other office or agency as the
Company may designate, accompanied by payment in full, by bank or certified
check in lawful money of the United States, of the Purchase Price payable in
respect of the number of shares of Warrant Stock purchased upon such exercise.
(b) Each exercise of a Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this Warrant
Certificate shall have been surrendered to the Company as provided in subsection
1(a) above. At such time, the person or persons in whose name or names any
certificates for Warrant Stock shall be issuable upon such exercise as provided
in subsection 1(c) below shall be deemed to have become the holder or holders of
record of the Warrant Stock represented by such certificates.
(c) As soon as practicable after the exercise of a Warrant, and in any
event within ten (10) days thereafter, the Company at its expense will cause to
be issued in the name of, and delivered to, the Registered Holder, or, subject
to the terms and conditions hereof, as the Registered Holder (upon payment by
the Registered Holder of any applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full
shares of Warrant Stock to which such Registered Holder shall be entitled upon
such exercise plus, in lieu of any fractional share to which such Registered
Holder would otherwise be entitled, cash in an amount determined pursuant to
Section 3 hereof, and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number of shares of Warrant Stock equal (without
giving effect to any adjustment therein) to the number of such shares called for
on the face of this Warrant Certificate minus the number of such shares
purchased by the Registered Holder upon such exercise as provided in subsection
1(a) above, and
(iii) a warrant certificate substantially in the form of this
Warrant Certificate except that such warrant certificate shall provide that:
(aa) The warrant certificate shall represent
2,000,000 of the Company's Class B Warrants entitling the holder
thereof to purchase from the Company, at any time or from time to time
on or after the issuance thereof and on or before the earlier of
September 20, 2005, one share of Common Stock for each Class B Warrant
at a purchase price of $3.00 per share;
(bb) Upon the exercise of a Class B Warrant, the
exercising holder thereof shall receive one the Company's Class C
Warrants entitling the holder thereof to purchase from the Company, at
any time or from time to time on or after the issuance thereof and on
or before the earlier of September 20, 2008, one share of Common Stock
for each Class C Warrant at a purchase price of $5.00 per share; and
(cc) Each Class B Warrant shall be redeemable, at a
redemption price shall be $.01 per Class B Warrant, at any time after
the Common Stock has had, for 10 consecutive trading days, a per-share
closing price above $3.25, and Class C Warrant shall be redeemable, at
a redemption price shall be $.01 per Class C Warrant, at any time after
the Common Stock has had, for 10 consecutive trading days, a per-share
closing price above $5.50.
2. Adjustments.
(a) If the outstanding shares of the Company's Common Stock shall be
subdivided into a greater number of shares or a dividend in Common Stock shall
be paid in respect of Common Stock, the Purchase Price in effect immediately
prior to such subdivision or at the record date of such dividend shall
simultaneously with the effectiveness of such subdivision or immediately after
the record date of such dividend be proportionately reduced. If the outstanding
shares of Common Stock shall be combined into a smaller number of shares, the
Purchase Price in effect immediately prior to such combination shall,
simultaneously with the effectiveness of such combination, be proportionately
increased. When any adjustment is required to be made in the Purchase Price, the
number of shares of Warrant Stock purchasable upon the exercise of a Warrant
shall be changed to the number determined by dividing (i) an amount equal to the
number of shares issuable upon the exercise of a Warrant immediately prior to
such adjustment, multiplied by the Purchase Price in effect immediately prior to
such adjustment, by (ii) the Purchase Price in effect immediately after such
adjustment. Whenever any adjustments are required to be made by this Section
2(a), similar adjustments with respect to the number of and exercise prices of
the Company's Class B and Class C Warrants shall also be made.
(b) If there shall occur any capital reorganization or reclassification
of the Company's Common Stock (other than a change in par value or a subdivision
or combination as provided for in subsection 2(a) above), or any consolidation
or merger of the Company with or into another corporation, or a transfer of all
or substantially all of the assets of the Company, or the payment of a
liquidating distribution then, as part of any such reorganization,
reclassification, consolidation, merger, sale or liquidating distribution,
lawful provision shall be made so that the Registered Holder of this Warrant
Certificate shall have the right thereafter to receive upon the exercise hereof
(to the extent, if any, still exercisable) the kind and amount of shares of
stock or other securities or property which such Registered Holder would have
been entitled to receive if, immediately prior to any such reorganization,
reclassification, consolidation, merger, sale or liquidating distribution, as
the case may be, such Registered Holder had held the number of shares of Common
Stock which were then purchasable upon the exercise of a Warrant. In any such
case, appropriate adjustment (as reasonably determined by the Board of Directors
of the Company) shall be made in the application of the provisions set forth
herein with respect to the rights and interests thereafter of the Registered
Holder of this Warrant Certificate such that the provisions set forth in this
Section 2 (including provisions with respect to adjustment of the Purchase
Price) shall thereafter be applicable, as nearly as is reasonably practicable,
in relation to any shares of stock or other securities or property thereafter
deliverable upon the exercise of a Warrant.
(c) In any case in which this Section 2 shall require that any
adjustment in the number of shares of Warrant Stock or other property for which
a Warrant may be exercised be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event issuing
to the Registered Holder the amount of Warrant Stock and other property, if any,
issuable upon exercise of a Warrant after such record date that is over and
above the Warrant Stock and other property, if any, issuable upon exercise of a
Warrant as in effect prior to such adjustment; provided that upon request the
Company shall deliver to the Registered Holder a due bill or other appropriate
instrument evidencing the Registered Holder's right to receive such additional
shares or property upon the occurrence of the event requiring such adjustment.
(d) When any adjustment is required to be made in the Purchase Price,
the Company shall promptly mail to the Registered Holder a certificate setting
forth the Purchase Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Such certificate shall also
set forth the kind and amount of stock or other securities or property for which
a Warrant shall be exercisable following the occurrence of any of the events
specified in subsection 2(a) or 2(b) above.
3. Fractional Shares.
The Company shall not be required upon the exercise of a Warrant to
issue any fractional shares, but shall make an adjustment therefor in cash on
the basis of the mean between the low bid and high asked prices of the Warrant
Stock on the OTC Bulletin Board, or the mean between the low bid and high asked
prices of the Warrant Stock on the over-the-counter market as reported by the
National Association of Securities Dealers Automated Quotations ("NASDAQ")
System or the closing market price of the Warrant Stock on a national securities
exchange on the trading day immediately prior to the date of exercise, whichever
is applicable, or if none is applicable, then on the basis of the then market
value of the Warrant Stock as shall be reasonably determined by the Board of
Directors of the Company.
4. Limitation on Sales.
(a) The Registered Holder, and each subsequent holder of this Warrant
Certificate, if any, acknowledges that the Warrants, the Warrant Stock and the
Class B Warrants have not been registered under the Securities Act of 1933, as
now in force or hereafter amended, or any successor legislation (the "Act"), and
agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise
dispose of any of the Warrants, the Warrant Stock or the Class B Warrants issued
upon its exercise in the absence of (i) an effective registration statement
under the Act as to a Warrant, such Warrant Stock or such Class B Warrants and
registration or qualification of a Warrant, such Warrant Stock or such Class B
Warrants under any applicable blue sky or state securities law then in effect,
or (ii) an opinion of counsel, satisfactory to the Company, that such
registration and qualification are not required. Without limiting the generality
of the foregoing, unless the offering and sale of the Warrant Stock or the Class
B Warrants to be issued upon the particular exercise of a Warrant shall have
been effectively registered under the Act, the Company shall be under no
obligation to issue the shares or warrants covered by such exercise unless and
until the Registered Holder shall have executed an investment letter in form and
substance satisfactory to the Company, including a warranty at the time of such
exercise that it is acquiring such shares or warrants for its own account, for
investment and not with a view to, or for sale in connection with, the
distribution of any such shares or warrants, in which event the Registered
Holder shall be bound by the provisions of a legend to such effect on the
certificate(s) representing the Warrant Stock or the Class B Warrants. In
addition, without limiting the generality of the foregoing, the Company may
delay issuance of the Warrant Stock or the Class B Warrants until completion of
any action or obtaining of any consent, which the Company believes necessary or
advisable under any applicable law (including without limitation state
securities or "blue sky" laws).
(b) The Registered Holder agrees, and each other holder of Warrant
Stock agrees, if requested by the Company and/or the representative of the
underwriters underwriting an offering of Common Stock (or other securities of
the Company) from time to time, not to sell or otherwise transfer or dispose of
any Warrant Stock then held by the Registered Holder and/or such other holder
during such period of time following the effective date of any registration
statement of the Company filed under the Act for the period of time with respect
to which a majority of the executive officers of the Company agree not to sell
shares of Common Stock (or other securities of the Company). Such agreement
shall be in writing in a form satisfactory to the Company and such
representative. The Company may impose stop-transfer instructions with respect
to the Warrant Stock subject to the foregoing restriction until the end of such
period.
5. Reservation of Stock.
The Company will at all times reserve and keep available, solely for
issuance and delivery upon the exercise of a Warrant, such shares of Warrant
Stock and other stock, securities and property, as from time to time shall be
issuable upon the exercise of a Warrant.
6. Replacement of Warrant Certificates.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant Certificate and (in the
case of loss, theft or destruction) upon delivery of an indemnity agreement
(with surety if reasonably required) in an amount reasonably satisfactory to the
Company, or (in the case of mutilation) upon surrender and cancellation of this
Warrant Certificate, the Company will issue, in lieu thereof, a new Warrant
Certificate of like tenor.
7. Transfers. etc.
Subject to Section 4 above:
(a) The Company will maintain a register containing the names and
addresses of the Registered Holders of this Warrant Certificate. The Registered
Holder may change its address as shown on the warrant register by written notice
to the Company requesting such change.
(b) This Warrant Certificate shall not be transferable by the
Registered Holder and shall be exercisable only by the Registered Holder;
provided that this Warrant Certificate may be transferred to, and may be
exercisable by, any company that directly, or indirectly through one or more
intermediaries, is controlled by, or is under common control with, the
Registered Holder. Subject to the foregoing, this Warrant Certificate shall not
be assigned, pledged or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process
without the prior written consent of the Company. Any attempted transfer,
assignment, pledge, hypothecation or other disposition of this Warrant
Certificate or of any rights granted hereunder contrary to the provisions of
this Section 7, or the levy of any attachment or similar process upon this
Warrant Certificate or such rights, shall be null and void.
(c) Until any transfer of this Warrant Certificate is made in the
warrant register, the Company may treat the Registered Holder of this Warrant
Certificate as the absolute owner hereof for all purposes; provided, however,
that if and when this Warrant Certificate is properly assigned in blank, the
Company may (but shall not be obligated to) treat the bearer hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
8. Redemptions.
Any Warrant may be redeemed prior to its expiration date, at the option
of the Company, upon notice, at the price of $.01 per Warrant, provided, (i) the
closing bid quotation of the Common Stock as quoted by the National Association
of Securities Dealers Automated Quotation System; (ii) the last reported sale
price, regular way, or if no such reported sale has occurred on any such day,
the average of the closing bid and asked prices, regular way, on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading, or (iii) if not so quoted or reported, the average of the bid and asked
prices as furnished by two members of the NASD selected for that purpose, in any
such case, has been at least $2.25, on each of the ten (10) consecutive trading
days ending on the third (3rd) day prior to the day on which notice is given.
9. Mailing of Notices, etc.
All notices and other communications from the Company to the Registered
Holder of this Warrant shall be mailed by first-class certified or registered
mail, postage prepaid, to the address furnished to the Company in writing by the
last Registered Holder of this Warrant Certificate who shall have furnished an
address to the Company in writing. All notices and other communications from the
Registered Holder of this Warrant Certificate or in connection herewith to the
Company shall be mailed by first-class certified or registered mail, postage
prepaid, to the Company at its offices at 625 Howe Street, Suite 402, Vancouver,
B.C. V6C-2T6, or such other address as the Company shall so notify the
Registered Holder.
10. No Rights as Stockholder.
Until the exercise of a Warrant, the Registered Holder of this Warrant
Certificate shall not have or exercise any rights by virtue hereof as a
stockholder of the Company.
11. Change or Waiver.
Any term of this Warrant Certificate may be changed or waived only by
an instrument in writing signed by the party against which enforcement of the
change or waiver is sought.
12. Headings.
The headings in this Warrant Certificate are for purposes of reference
only and shall not limit or otherwise affect the meaning of any provision of
this Warrant Certificate.
13. Governing Law.
THIS WARRANT CERTIFICATE WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO.
IN WITNESS WHEREOF, the undersigned has set his hand hereunto as of the
20th day of September, 1999.
LINKSXPRESS.COM, INC.
By: /s/ Ian Scott Moncrieff
Ian Scott Moncrieff, President
<PAGE>
22
EXHIBIT A
PURCHASE FORM
LinksXpress.com, Inc.
625 Howe Street, Suite 402
Vancouver, B.C. V6C-2T6
Gentlemen:
The undersigned pursuant to the provisions set forth in the attached
Warrant Certificate hereby irrevocably elects to purchase _________ shares of
the Common Stock (the "Common Stock") covered by such Warrant Certificate and
herewith makes payment of $_____________, representing the full purchase price
for such shares at the price per share provided for in such Warrant Certificate.
The undersigned understands and acknowledges the terms and restrictions
on the right to transfer or dispose of the Common Stock set forth in Section 4
of the attached Warrant Certificate, which the undersigned has carefully
reviewed. The undersigned consents to the placing of a legend on its certificate
for the Common Stock referring to such restrictions and the placing of stop
transfer orders until the Common Stock may be transferred in accordance with the
terms of such restrictions.
By:________________________
Name:______________________
Title:_____________________
Dated:_____________________
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM ITEM 1
OF FORM 1O-QSB FOR THE QUARTER ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001051902
<NAME> JVWeb, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-1-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 25925
<SECURITIES> 0
<RECEIVABLES> 72166
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 116227
<PP&E> 4390
<DEPRECIATION> 2041
<TOTAL-ASSETS> 278576
<CURRENT-LIABILITIES> 372562
<BONDS> 0
0
0
<COMMON> 96406
<OTHER-SE> (190392)
<TOTAL-LIABILITY-AND-EQUITY> 278576
<SALES> 22833
<TOTAL-REVENUES> 22833
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 251319
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4534
<INCOME-PRETAX> (232020)
<INCOME-TAX> 0
<INCOME-CONTINUING> (232020)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (232020)
<EPS-BASIC> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
