EXHIBIT 10.2 EQUITRUST AGREEMENT
AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of the 3rd
day of August, 1998 by and between JVWeb, Inc., a Delaware corporation
("JVWeb"), and Equitrust Mortgage Corporation ("Equitrust").
Recitals
WHEREAS, JVWeb desires a loan in the amount of $50,000 (the "Loan"),
and Equitrust is willing to provide the Loan, in each case upon the terms,
provisions and conditions set forth hereinafter;
WHEREAS, Equitrust desires the Loan to be represented by a promissory
note (the "Note") in the form of the promissory note attached hereto as Exhibit
A, and JVWeb is willing for the Loan to be represented by the Note;
WHEREAS, JVWeb intends to register with the U.S. Securities and
Exchange Commission (the "Commission"), pursuant to a Registration Statement on
Form SB-2 (the "Registration Statement"), certain shares of its common stock,
par value $.01 per share (the "Common Stock"), some of which may be issued to
Equitrust as set forth herein;
WHEREAS, the Note provides that, if the Registration Statement is filed
with the Commission within 90 days after the date the Note is executed, the Note
will be automatically converted into 200,000 shares of Common Stock, or if the
Registration Statement is not filed with the Commission within such period of
time, Equitrust will have the option to convert the Note into 200,000 shares of
Common Stock, but in any event the 200,000 shares of Common Stock into which the
Note may be converted will be covered by the Registration Statement;
WHEREAS, Equitrust is willing to purchase an additional 200,000 shares
of Common Stock at a purchase price of $.25 per share immediately after the
Registration Statement has been filed so long as such 200,000 additional shares
of Common Stock will be covered by the Registration Statement; and
WHEREAS, Equitrust desires to have an option (the "Option") to purchase
an additional 100,000 shares of Common Stock at a purchase price of $.25 per
share immediately before the Registration Statement is declared effective so
long as such 100,000 option shares of Common Stock will be covered by the
Registration Statement;
Agreement
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, $10.00, and other good and valuable consideration (the
receipt, adequacy and sufficiency of which each of JVWeb and Equitrust hereby
acknowledges), each of JVWeb and Equitrust hereby agrees as follows:
1. General Representations and Warranties.
(a) Equitrust hereby represents and warrants to JVWeb that Equitrust
has full right, power and authority to execute and deliver this Agreement and
all other agreements, documents and instruments to be executed in connection
herewith and perform Equitrust's obligation hereunder and thereunder; Equitrust
has been duly organized, is validly existing and is in good standing in the
jurisdiction in which it was incorporated; the execution and delivery by
Equitrust of this Agreement and all other agreements, documents and instruments
to be executed by it in connection herewith have been authorized by all
necessary corporate action; when this Agreement and all other agreements,
documents and instruments to be executed by Equitrust in connection herewith are
executed by Equitrust and delivered to JVWeb, this Agreement and such other
agreements, documents and instruments will constitute the valid and binding
agreements of Equitrust enforceable against Equitrust in accordance with their
respective terms; neither the execution and delivery of this Agreement or any
other agreements, documents and instruments to be executed in connection
herewith nor the consummation of the transactions contemplated hereby or thereby
will (i) violate, conflict with or result in the breach or termination of, or
otherwise give any other contracting party the right to terminate, or constitute
a default (by way of substitution, novation or otherwise) under the terms of,
any contract to which Equitrust is a party or by which Equitrust is bound or by
which any of the assets of Equitrust is bound or affected, (ii) violate any
judgment against, or binding upon, Equitrust or the assets of Equitrust, (iii)
result in the creation of any lien, charge or encumbrance upon any assets of
Equitrust pursuant to the terms of any contract referred to in (i) of this
Section 1(a), or (iv) violate any provision in the charter documents, bylaws or
any other agreement affecting the governance and control of Equitrust; there are
no actions, suits, claims or legal, administrative or arbitration proceedings or
investigations pending or threatened against, involving or affecting any of the
assets of Equitrust, this Agreement, or the transactions contemplated hereby,
and there are no outstanding orders, writs, injunctions or decrees of any court,
governmental agency or arbitration tribunal against, involving or affecting any
assets of Equitrust, this Agreement, or the transactions contemplated hereby; no
consent or approval from any person is required in connection with the execution
and delivery of this Agreement or any of the other agreements, documents and
instruments to be executed by Equitrust in connection herewith, which has not
already been obtained; and the representations and warranties made immediately
above and elsewhere herein are material to JVWeb and are being relied upon by
JVWeb in connection with its decision to enter into the transactions provided
for by this Agreement.
(b) JVWeb hereby represents and warrants to Equitrust that it has full
right, power and authority to execute and deliver this Agreement and all other
agreements, documents and instruments to be executed by it in connection
herewith and perform its obligation hereunder and thereunder; it has been duly
organized, is validly existing and is in good standing in the jurisdiction in
which it was incorporated; the execution and delivery by it of this Agreement
and all other agreements, documents and instruments to be executed by it in
connection herewith have been authorized by all necessary corporate action; when
this Agreement and all other agreements, documents and instruments to be
executed by it in connection herewith are executed by it and delivered to the
Equitrust, this Agreement and such other agreements, documents and instruments
will constitute the valid and binding agreements of it enforceable against it in
accordance with their respective terms; neither the execution and delivery of
this Agreement or any other agreements, documents and instruments to be executed
in connection herewith nor the consummation of the transactions contemplated
hereby or thereby will (i) violate, conflict with or result in the breach or
termination of, or otherwise give any other contracting party the right to
terminate, or constitute a default (by way of substitution, novation or
otherwise) under the terms of, any contract to which it is a party or by which
it is bound or by which any of the assets of it is bound or affected, (ii)
violate any judgment against, or binding upon, it or upon its assets, (iii)
result in the creation of any lien, charge or encumbrance upon any of its assets
pursuant to the terms of any contract referred to in (i) of this Section 1(b),
or (iv) violate any provision in the charter documents, bylaws or any other
agreement affecting the governance and control of it; there are no actions,
suits, claims or legal, administrative or arbitration proceedings or
investigations pending or threatened against, involving or affecting any of its
assets, this Agreement, or the transactions contemplated hereby, and there are
no outstanding orders, writs, injunctions or decrees of any court, governmental
agency or arbitration tribunal against, involving or affecting any of its
assets, this Agreement, or the transactions contemplated hereby; no consent or
approval from any person is required in connection with the execution and
delivery of this Agreement or any of the other agreements, documents and
instruments to be executed by it in connection herewith, which has not already
been obtained; the shares of Common Stock to be issued to Equitrust outright or
pursuant to the conversion of the Note or the exercise of the Option shall be
duly authorized, validly issued, fully paid and non-assessable at the time that
they are issued; and the representations and warranties made immediately above
are material to Equitrust and are being relied upon by Equitrust in connection
with Equitrust's decision to enter into the transactions provided for by this
Agreement.
2. Securities Representations and Warranties.
Equitrust hereby represents and warrants to JVWeb that it is familiar
with the business and financial condition, properties, operations and prospects
of JVWeb, it has been given full access to all material information concerning
the condition, properties, operations and prospects of JVWeb, it has had an
opportunity to ask such questions of, and to receive such information from,
JVWeb as it has desired and to obtain any additional information necessary to
verify the accuracy of the information and data received; it has such knowledge,
skill and experience in business, financial and investment matters so that it is
capable of evaluating the merits and risks of an acquisition of the Note and the
Option and an acquisition of the shares of Common Stock pursuant to this
Agreement or pursuant to the Note or the Option; it has reviewed its financial
condition and commitments and that, based on such review, it is satisfied that
it (a) has adequate means of providing for contingencies, (b) has no present or
contemplated future need to dispose of all or any portion of the Note or the
Option or the shares of the Common Stock to be acquired pursuant to this
Agreement or pursuant to the Note or the Option, to satisfy existing or
contemplated undertakings, needs or indebtedness, (c) is capable of bearing for
the indefinite future the economic risk of the ownership of the Note and the
Option and the shares of Common Stock to be acquired pursuant to this Agreement
or pursuant to the Note or the Option, and (d) has assets or sources of income
which, taken together, are more than sufficient so that it could bear the loss
of the entire value of the Note and the Option and the shares of Common Stock to
be acquired pursuant to this Agreement or pursuant to the Note or the Option; it
is and will be acquiring the Note and the Option and the shares of Common Stock
pursuant to this Agreement or pursuant to the Note or the Option solely for its
own beneficial account, for investment purposes, and not with a view to, or for
resale in connection with, any distribution of the Note or the Option or the
shares of Common Stock (except pursuant to registration or an available
exemption therefrom); it understands that the Note and the Option and the shares
of Common Stock to be acquired pursuant to this Agreement or pursuant to the
Note or the Option have not been registered under the Securities Act of 1933
(the "Act") or any state securities laws and therefore the Note and the Option
and the shares of Common Stock to be acquired pursuant to this Agreement or
pursuant to the Note or the Option are and will be "restricted" under such laws
and may not be resold without registration or an exemption therefrom, and the
Note and the Option and all stock certificates representing shares of Common
Stock sold or to be sold to Equitrust pursuant hereto or pursuant to the Note or
the Option will bear a legend to such effect; and it has not offered or sold and
will not offer or sell any portion of the Note or the Option or any shares of
Common Stock to be acquired pursuant to this Agreement or pursuant to the Note
or the Option (except pursuant to registration or an available exemption
therefrom) and has no present intention of reselling or otherwise disposing of
any portion of the Note or the Option or any shares of Common Stock to be
acquired pursuant to this Agreement or pursuant to the Note or the Option either
currently or after the passage of a fixed or determinable period of time or upon
the occurrence or non-occurrence of any predetermined event or circumstance
(except pursuant to registration or an available exemption therefrom).
Notwithstanding the preceding, in the event that Equitrust ever desires to
transfer any of its interest in the Note or the Option, JVWeb shall accommodate
Equitrust with respect to any such transfer to the extent that such transfer is
pursuant to an available exemption from registration.
3. Loan. Equitrust hereby agrees to extend the Loan to JVWeb
immediately upon the execution of this Agreement and the execution and delivery
of the Note. The Loan shall be governed by the terms, provisions and conditions
of the Note, including those pertaining to the repayment of the Loan, the
accrual of interest on the Note and the automatic and optional conversion of the
Note into 200,000 shares of Common Stock as set forth in greater detail in the
Note and as described in the recitals above.
4. Sale and Purchase of Common Stock. In addition to the 200,000 shares
of Common Stock into which the Note may be converted, Equitrust hereby agrees to
purchase from JVWeb, and JVWeb hereby agrees to sell to Equitrust, an additional
200,000 shares of Common Stock, upon the terms, provisions and conditions
contained herein. The per-share purchase price for the shares of Common Stock
sold and purchased pursuant to this Section 4 shall be $.25. The Common Stock to
be sold and purchased pursuant to this Section 4 shall be sold and purchased in
a closing (a "Closing") to be held within five working days after the
Registration Statement is filed with the Commission.
5. Option to Purchase Common Stock. For $10.00 and other good and
valuable consideration (the receipt, adequacy and sufficiency of which JVWeb
hereby acknowledges), JVWeb hereby grants the Option in favor of Equitrust,
under the terms and conditions hereinafter specified, to acquire 100,000 shares
of Common Stock, free and clear of all encumbrances, security interests, liens,
charges, claims and restrictions on the transfer thereof. The shares of Common
Stock subject to the Option are referred to hereafter as the "Option Shares."
The per-share purchase price of the Option Shares shall be $.25. JVWeb hereby
agrees to give to Equitrust, at least five days prior to the date that the
Registration Statement is expected to be declared effective by the Commission,
written notice of the anticipated effectiveness of the Registration Statement
(the "Notice of Anticipated Effectiveness"). The Option shall become effective
upon the giving of the Notice of Anticipated Effectiveness, and shall be
exercisable for up to five days after the giving of the Notice of Anticipated
Effectiveness, after which time the Option shall expire. The Option may be
exercised by Equitrust's giving written notice to JVWeb of Equitrust's desire to
exercise the Option. Such notice shall specify a date for a Closing of the sale
and purchase of the Option Shares, which shall not be less than ten (10) nor
more than twenty (20) days after the date of such notice. JVWeb agrees that,
until the Option expires, JVWeb shall not, without the written consent of
Equitrust, pay a dividend on its Common Stock payable in shares of Common Stock,
subdivide its outstanding Common Stock into a larger number of shares, or
combine the outstanding shares of Common Stock into a smaller number of shares
by reclassification or otherwise.
6. Closings.
(a) The issuance of and payment for shares of Common Stock pursuant to
the automatic or optional conversion of the Note, pursuant to the sale and
purchase provided for in Section 4, or pursuant to the exercise of the Option,
shall occur at a Closing. A Closing may occur at such place and time and in such
manner as JVWeb and Equitrust may agree to in writing. A Closing need not be one
in which every party hereto is physically present but may be one in which all
documents and instrument necessary to close the transactions provided for in or
contemplated by this Agreement are transmitted among the parties by means of
ordinary or express mails. At a Closing, Equitrust shall deliver in immediately
available funds the aggregate purchase price for the shares of Common Stock
being acquired (or in the case of the conversion of the Note, Equitrust shall
deliver the Note marked "Cancelled") and the certificates required of Equitrust
as provided in Section 6(b) below, and JVWeb shall deliver one or more stock
certificates representing the shares of Common Stock being acquired and the
certificates required of JVWeb as provided in Section 6(b) below.
(b) The obligations of Equitrust at a Closing are subject, at
Equitrust's election, to the satisfaction on or prior to Closing of each of the
following conditions: (i) each of the representations and warranties of JVWeb
contained in this Agreement shall be true and correct in all respects at and as
of the Closing as if each such representation and warranty was made at and as of
the Closing, and at the Closing there shall be delivered to Equitrust a
customary bring-down certificate (dated as of the Closing and signed by JVWeb)
to the foregoing effect; and (ii) no suit or other proceeding by any third party
shall be pending before any court or governmental agency seeking to restrain,
prohibit or declare illegal, or seeking substantial damages from Equitrust in
connection with, the transactions contemplated by this Agreement. The
obligations of JVWeb at a Closing are subject, at JVWeb's election, to the
satisfaction on or prior to Closing of each of the following conditions: (x)
each of the representations and warranties of Equitrust contained in this
Agreement shall be true and correct in all respects at and as of the Closing as
if each such representation and warranty was made at and as of the Closing, and
at the Closing there shall be delivered to JVWeb a customary bring-down
certificate (dated as of the Closing and signed by Equitrust) to the foregoing
effect; (y) Equitrust shall have delivered to JVWeb a certificate signed by
Equitrust containing such other representations and warranties of Equitrust as
JVWeb shall believe necessary or advisable to determine that the issuance of the
related Common Stock is exempt from federal and state securities offering
registration requirements; and (z) no suit or other proceeding by any third
party shall be pending before any court or governmental agency seeking to
restrain, prohibit or declare illegal, or seeking substantial damages from JVWeb
in connection with, the transactions contemplated by this Agreement. In addition
to the preceding, Equitrust agrees to furnish to JVWeb any other information
required by JVWeb in order for JVWeb to determine that the issuance of any
Common Stock will not violate federal or state securities laws. If JVWeb
believes that the issuance of any Common Stock will violate such laws, then the
date of the related Closing shall be extended until all action believed by JVWeb
to be necessary in order to avoid violating such laws can be taken.
7. Registration Agreement. JVWeb agrees to use its best efforts to
register with the Commission the 200,000 shares of Common Stock into which the
Note may be converted, the 200,000 shares of Common Stock that may be purchased
pursuant to Section 4 hereof, and the 100,000 shares of Common Stock that may be
purchased pursuant to an exercise of the Option (such 500,000 shares are
referred to hereinafter as the "Registered Shares"). In this connection, JVWeb
agrees to use its best efforts to file with the Commission the Registration
Statement within 90 days after the date of this Agreement. JVWeb hereby agrees
that if the Registration Statement is not filed with the Commission within 90
days after the date of this Agreement, then JVWeb shall issue to Equitrust an
additional 50,000 shares of Common Stock (which shall also be covered by the
Registration Statement), as liquidated damages for JVWeb's failure to so file
the Registration Statement. In addition, JVWeb hereby agrees that if the
Registration Statement is not declared effective within one year after the date
of this Agreement, then JVWeb shall issue to Equitrust a promissory note in the
form of the promissory note attached hereto as Exhibit B, as liquidated damages
for JVWeb's failure to cause the Registration Statement to be so declared
effective. JVWeb shall use its best efforts to qualify the Registered Shares
under the securities laws for each state for which an exemption is not available
and qualification is required, unless the cost and expense of such qualification
outweighs the benefit of qualification. In connection with the registration
undertaken pursuant to this Section 7, Equitrust shall use reasonable efforts to
cooperate with JVWeb and will furnish to JVWeb in writing such information, as
shall be reasonably necessary in order to assure compliance with federal and
applicable state securities laws pertaining to disclosure and otherwise. JVWeb
shall pay all registration expenses in connection with the registration
undertaken pursuant to this Section 7, and Equitrust shall pay all underwriting
discounts and selling commissions applicable to the sale of the Registered
Shares.
8. General Indemnification.
(a) All representations and warranties made herein by a party hereto
shall survive all transactions provided for or contemplated herein, including,
without limitation, the issuances and sales and purchases of Common Stock
pursuant hereto.
(b) Equitrust shall protect, indemnify and hold JVWeb harmless from any
and all demands, claims, actions, causes of actions, lawsuits, proceedings,
judgments, losses, damages, injuries, liabilities, obligations, expenses and
costs (including costs of litigation and attorneys' fees), arising from any
breach of any agreement, representation or warranty made by Equitrust in this
Agreement.
(c) JVWeb shall protect, indemnify and hold Equitrust harmless from any
and all demands, claims, actions, causes of actions, lawsuits, proceedings,
judgments, losses, damages, injuries, liabilities, obligations, expenses and
costs (including costs of litigation and attorneys' fees), arising from any
breach of any agreement, representation or warranty made by JVWeb in this
Agreement.
9. Securities Indemnification.
(a) JVWeb shall protect, indemnify and hold Equitrust, and its
officers, directors, shareholders, attorneys, accountants, employees,
affiliates, successors and assigns, harmless from any and all demands, claims,
actions, causes of actions, lawsuits, proceedings, investigations, judgments,
losses, damages, injuries, liabilities, obligations, expenses and costs
(including costs of litigation and attorneys' fees), arising out of or based
upon (a) any untrue statement or alleged untrue statement of any material fact
contained in or incorporated by reference into the Registration Statement, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, (b) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (c) any material violation by JVWeb of any rule or
regulation promulgated under the Act applicable to JVWeb and relating to action
or inaction by JVWeb in connection with such registration; provided, however,
that JVWeb will not be liable in the case of (a) and (b) above if and to the
extent that the event otherwise giving rise to indemnification arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in conformity with information furnished by a person
otherwise entitled to indemnification in writing specifically for use in the
Registration Statement of prospectus.
(b) Equitrust shall protect, indemnify and hold JVWeb and its officers,
directors, shareholders, attorneys, accountants, employees, affiliates,
successors and assigns, harmless from any and all demands, claims, actions,
causes of actions, lawsuits, proceedings, investigations, judgments, losses,
damages, injuries, liabilities, obligations, expenses and costs (including costs
of litigation and attorneys' fees), arising out of or based upon (a) any untrue
statement or alleged untrue statement of any material fact contained in or
incorporated by reference into the Registration Statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, (b) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (c) any material violation by Equitrust of any rule or regulation
promulgated under the Act applicable to Equitrust and relating to action or
inaction by Equitrust in connection with such registration; provided, however,
that Equitrust shall be liable in the case of (a) and (b) above only if and to
the extent that the event giving rise to indemnification arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in conformity with information furnished by Equitrust in
writing specifically for use in the Registration Statement or prospectus.
(c) Promptly after receipt by an indemnified party under this Section 9
of notice of the threat or commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying party
hereunder, notify each such indemnifying party in writing thereof, but the
omission so to notify an indemnifying party shall not relieve it from any
liability which it may have to any indemnified party to the extent that the
indemnifying party is not prejudice as a result thereof. In case any such action
shall be brought against any indemnified party and it shall notify an
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel reasonably satisfactory to such
indemnified party, and, after notice from the indemnifying party to such
indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under this Section 9 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so elected; provided,
however, that, if the defendants in any such action include both an indemnified
party and an indemnifying party and the related indemnified party shall have
reasonably concluded that there may be reasonable defenses available to it which
are different from or additional to those available to the indemnifying party or
if the interests of the indemnified party reasonably may be believed to conflict
with the interests of the indemnifying party, the indemnified party shall have
the right to select separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the indemnifying party as incurred. No indemnifying party
will be subject to any liability for any settlement made without consent which
shall not be unreasonably withheld. No indemnifying party will consent to the
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability with respect to such claim or
litigation.
10. General.
(a) THIS AGREEMENT AND ALL QUESTIONS RELATING TO ITS VALIDITY,
INTERPRETATION, PERFORMANCE, AND ENFORCEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF MISSISSIPPI.
(b) Mandatory venue for any controversy arising out of or relating to
this Agreement or any modification or extension thereof, including any claims
for breach, for damages, and/or for recision or reformation, shall be in a court
of competent jurisdiction located in ▇▇▇▇▇▇▇▇ County, Mississippi.
(c) This Agreement contains the entire understanding among the parties
hereto with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings, inducements, or conditions,
express or implied, oral or written, except as herein contained. This Agreement
may not be modified or amended other than by an agreement in writing signed by
all parties affected.
(d) The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms hereof.
The section headings in this Agreement are for convenience only; they form no
part of this Agreement and shall not affect its interpretation.
(e) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together constitute one and
the same instrument.
(f) The parties hereto hereby agree that time is of the essence for all
purposes of this Agreement.
(g) Any notices to be given hereunder by any party to the other party
may be effected either by personal delivery in writing, by telecopier, or by
mail, registered or certified, postage prepaid with return receipt requested,
addressed to the party to be notified at the address set forth beneath such
party's signature below. Such notices shall be deemed to have been given if
personally delivered, when delivered; if telecopied, when receipt of the notice
is confirmed by the person giving the notice; and if mailed, on the third
business day after deposit in the United States mail with postage prepaid by
certified or registered mail and properly addressed. As used in this Agreement,
the term "business day" means days other than Saturdays, Sundays, and holidays
recognized by Federal banks.
IN WITNESS WHEREOF, the undersigned have set their hands hereunto as of
the first date written above.
JVWEB, INC. EQUITRUST MORTGAGE CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇, President
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title President