EXHIBIT 10.02
DOWNTOWN WEB, INC.
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
THIS AGREEMENT is entered into as of May ___, 1997 by and among Downtown
Web, Inc. (the "Company"), a California corporation dba AutoWeb Interactive and
each of those purchasers listed on Exhibit 1 hereto (individually referred to as
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a "Purchaser" and collectively as the "Purchasers").
In consideration of the mutual promises, covenants and conditions
hereinafter set forth, the parties hereto agree as follows:
1. Authorization and Sale of the Shares.
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(a). Authorization; Articles of Incorporation. The Company has
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authorized the issuance and sale pursuant to the terms and conditions hereof of
up to 622,630 shares of its Series A Preferred Stock (the "Preferred Shares"),
having the rights, preferences, privileges and restrictions as set forth in the
Articles of Incorporation of the Company, as amended to date (the "Articles")
and substantially in the form attached hereto as Exhibit 2.
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(b). Issuance and Sale. Subject to the terms and conditions hereof, on
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the Closing Date (as defined below), the Company will issue and sell to the
Purchasers up to 622,630 Preferred Shares, at a purchase price of $0.17667 per
share.
2. Closing; Delivery.
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(a). Closing Date. The purchase and sale of up to 622,630 of the
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Preferred Shares to the Purchasers (the "Closing") shall take place at such time
and place as shall be acceptable to the Company and the Purchasers (a "Closing
Date").
(b). Delivery. Subject to the terms of this Agreement, at the Closing,
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the Company will deliver to each Purchaser a stock certificate registered in
each Purchaser's name representing the number of Preferred Shares purchased by
each Purchaser at the Closing in exchange for the cancellation of existing
indebtedness to each Purchaser from the Company in the amount of $55,000 as
described in each individual's respective employment agreement. The number of
Preferred Shares being purchased is set forth opposite such Purchaser's name on
Exhibit 1.
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3. Representations and Warranties of the Purchasers and Restrictions on
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Transfer Imposed by the Securities Act of 1933 and the California Corporate
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Securities Law of 1968.
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4. Representations and Warranties by the Purchasers. Each of the
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Purchasers represents and warrants to the Company, severally and not jointly, as
follows:
(a). The Preferred Shares and the Common Stock of the Company issuable
upon the proper conversion of the Preferred Shares (the "Underlying Common
Shares") (collectively, the "Securities") will be acquired for the Purchaser's
own account, for investment and not with a view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of the
Securities Act or the California Corporate Securities Law of 1968, as amended
(the "California Law").
(b). Each Purchaser understands that the Securities have not been
registered under the Securities Act by reason of their issuance in a
transaction exempt from the registration and prospectus delivery requirements
of the Securities Act pursuant to Section 4(2) thereof, that the Company has no
present intention of registering the Securities, that the Securities must be
held by such Purchaser indefinitely, and that such Purchaser must therefore
bear the economic risk of such investment indefinitely, unless a subsequent
disposition thereof is registered under the Securities Act or is exempt from
registration. Purchaser further understands that the Securities have not been
qualified under the California Law by reason of their issuance in a transaction
exempt from the qualification requirements of the California Law pursuant to
Section 25102(f) thereof, which exemption depends upon, among other things, the
bona fide nature of such Purchaser's investment intent expressed above.
(c). During the negotiation of the transactions contemplated herein,
Purchaser and its representatives have been afforded full and free access to
corporate books, financial statements, records, contracts, documents, and other
information concerning the Company, and to its offices and facilities, have
been afforded an opportunity to ask such questions of the Company's officers,
employees, agents, accountants and representatives concerning the Company's
business, operations, financial condition, assets, liabilities and other
relevant matters as they have deemed necessary or desirable, and have been given
all such information as has been requested, in order to evaluate the merits and
risks of the prospective investment contemplated herein.
(d). Each Purchaser and its representatives have been solely
responsible for such Purchaser's own "due diligence" investigation of the
Company and its management and business, for its own analysis of the fairness
and desirability of the terms of the investment; in taking any action or
performing any role relative to the arranging of the proposed investment, such
Purchaser has acted solely in its own interest, and neither such Purchaser nor
any of its representatives has acted as an agent of the Company. Purchaser has
such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the purchase of the Securities
pursuant to the terms of this Agreement and of protecting its interests in
connection therewith.
(e). Each Purchaser is able to bear the economic risk of the purchase
of the Securities pursuant to the terms of this Agreement, including a complete
loss of such Purchaser's investment in the Securities.
(f). Each Purchaser has the full right, power and authority to enter
into and perform such Purchaser's obligations under this Agreement, and this
Agreement constitutes a
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valid and binding obligation of such Purchaser enforceable in accordance with
its terms except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting enforcement of creditors rights and rules or laws concerning equitable
remedies.
(g). No consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of such
Purchaser is required in connection with the valid execution and delivery of
this Agreement.
5. Legends. Each certificate or instrument representing the Securities
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may be endorsed with legends in substantially the following forms:
(a). "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND ARE "RESTRICTED
SECURITIES" AS DEFINED IN THE RULE 144 PROMULGATED UNDER THE ACT. THE
SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT
(I) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES
UNDER SUCH ACT, OR (II) IN COMPLIANCE WITH RULE 144 OR (III) PURSUANT TO AN
OPINION OF COUNSEL TO THE CORPORATION THAT SUCH REGISTRATION OR COMPLIANCE IS
NOT REQUIRED AS TO SUCH SALE, OFFER OR DISTRIBUTION."
(b). Any other legends required by California law or other applicable
state securities laws.
The Company need not register a transfer of any Securities, and may also
instruct its transfer agent not to register the transfer of the Securities,
unless the conditions specified in the foregoing legends are satisfied to the
extent applicable.
6. Removal of Legends and Transfer Restrictions.
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(a). Any legend endorsed on the Securities pursuant to Section 4.2(a)
and the stop transfer instructions with respect to the Securities shall be
removed and the Company shall issue a certificate or instrument without such
legend to the holder thereof if such Securities are registered under the
Securities Act and a prospectus meeting the requirements of Section 10 of the
Securities Act is available, if such legend may be properly removed under the
terms of Rule 144 promulgated under the Securities Act or if such holder
provides the Company with an opinion of counsel for such holder reasonably
satisfactory to legal counsel for the Company, to the effect that a sale,
transfer or assignment of such Securities may be made without registration.
(b). Any legend endorsed on a certificate pursuant to Section 4.2(c)
and the stop transfer instructions with respect to such Securities shall be
removed upon receipt by the Company of an order of the California Department of
Corporations or other appropriate state securities authority authorizing such
removal, which order the Company shall seek in a timely manner in those
circumstances in which such order is appropriate in the Company's reasonable
opinion.
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7. Miscellaneous.
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(a). Waivers and Amendments. With the written consent of the record
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holders of at least a majority of the Preferred Shares, the rights of the
holders of the Purchasers under this Agreement may be waived or amended (either
generally or in a particular instance); provided, however, that no such waiver
or amendment shall reduce the aforesaid proportion of Preferred Shares, the
holders of which are required to consent to any waiver or supplemental
agreement, without the consent of the record holders of all of the Preferred
Shares. Upon the effectuation of each such waiver or amendment, the Company
shall promptly give written notice thereof to the record holders of the
Preferred Shares who have not previously consented thereto in writing. Except
to the extent provided in this Section 4.1, this Agreement or any provision
hereof may be amended, waived, discharged or terminated only by a statement in
writing signed by the party against which enforcement of the amendment, waiver,
discharge or termination is sought.
(b). Governing Law. This Agreement shall be governed in all respects
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by the laws of the State of California as such laws are applied to agreements
between California residents entered into and to be performed entirely within
California.
(c). Successors and Assigns. Except as otherwise expressly provided
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herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
(d). Entire Agreement. This Agreement, the exhibits to this Agreement
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and the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
(e). Notices, etc. All notices and other communications required or
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permitted hereunder shall be in writing and shall be sent by facsimile,
overnight courier or mailed by certified or registered mail, postage prepaid,
return receipt requested, to the facsimile number or address shown on the
signature pages to this Agreement or to such other facsimile number address
provided to the parties to this Agreement in accordance with this Section 4.6.
Such notices or other communications shall be deemed received upon receipt of a
confirmation of facsimile receipt or three (3) business days after deposit in
the mails.
(f). Separability. In case any provision of this Agreement shall be
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declared invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
(g). Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
COMPANY:
Downtown Web, Inc.
By:_____________________________
Xxxxx Xxxxxx, President
Address: 000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000
Phone No.: (000) 000-0000
Fax No.: (000) 000-0000
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COUNTERPART SIGNATURE PAGE TO
DOWNTOWN WEB, INC.
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
MAY ___, 1997
PURCHASERS:
______________________________
Xxxxx Xxxxxx
Address:______________________
______________________________
______________________________
Phone No.:____________________
Fax No.:______________________
______________________________
Xxxxx Xxxxxx
Address:______________________
______________________________
______________________________
Phone No.:____________________
Fax No.:______________________
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Exhibit 1
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DOWNTOWN WEB, INC.
Schedule of Purchasers to the
Series A Preferred Stock Purchase Agreement
Dated May ___, 1997
Name of Purchaser Number of Preferred Shares Amount Invested
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Xxxxx Xxxxxx 311,315 $55,000
Xxxxx Xxxxxx 311,315 $55,000
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Total 622,630 $110,000
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AMENDMENT TO
INVESTOR'S RIGHTS AGREEMENT
This Amendment to that certain Investor's Rights Agreement dated as of June
5, 1996 (the "Rights Agreement"), by and between Downtown Web, Inc. (the
"Company"), a California corporation dba AutoWeb Interactive and On Word
Information, Inc. (the "Prior Investor") is made as of May ___, 1997 by and
among the Company, the Prior Investor and the undersigned purchasers of Series A
Preferred Stock of the Company (the "New Investors"). Capitalized terms used
herein and not otherwise defined herein shall have the same meanings as in the
Rights Agreement.
RECITALS
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A. The Company and the Prior Investor have previously entered into the
Rights Agreement .
B. The Board of Directors of the Company has determined that it is in the
best interests of the Company to amend the Rights Agreement to make the New
Investors parties thereto.
C. It is intended that by their signatures hereto the New Investors become
parties to the Rights Agreement, as amended by this Agreement, effective as of
the date upon which they purchase shares of Series A Preferred Stock and be
included in the definitions of "Investor" (except for the purposes of Section
2.4 therein) and "Holder" as those terms are defined in the Rights Agreement.
NOW, THEREFORE, IT IS AGREED between the parties as follows:
1. The recitals of the Rights Agreement are deleted in their entirety and are
amended to read as follows:
"A. The Investor has previously been granted certain registration rights
and other rights by the Company pursuant to this Agreement.
B. The Company proposes to sell and issue up to an aggregate of up to
approximately 622,630 shares of its Series A Preferred Stock (the "Shares") to
certain investors (the "New Investors") pursuant to the Series A Preferred Stock
Purchase Agreement of even date herewith and desires that the New Investors
receive the same rights as the Investor, except for those rights described in
Section 2.4 therein.
C. Pursuant to Section 3.7 of this Agreement, holders of a majority of the
Registrable Securities currently outstanding desire to amend this Agreement to
grant registration rights and other rights to the New Investors identical to the
registration rights of the Investor.
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D. The New Investors desire to become a party to this Agreement as amended
hereby."
2. By their signature hereto, the New Investors become parties to the Rights
Agreement, as amended by this Agreement, and are included for all purposes in
the definition of "Holder" and "Investor" as those terms are defined in the
Rights Agreement; provided, however, that the New Investors shall have no rights
pursuant to Section 2.4 of the Rights Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
"COMPANY"
DOWNTOWN WEB, INC.
By:___________________________
Xxxxx Xxxxxx, President
"PRIOR INVESTOR"
ON WORD INFORMATION, INC.
By:___________________________
Xxxx Xxxx, President
"NEW INVESTORS"
______________________________
Xxxxx Xxxxxx
______________________________
Xxxxx Xxxxxx
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