Exhibit 10.1
[LETTER HEAD OF WEBB INTERACTIVE SERVICES, INC.]
December 14, 2001
Castle Creek Technology Partners, LLC
111 West Jackson Blvd., Suite 2020
Chicago, Illinois 60604
Attn: Thomas A. Frei,
Managing Director
Re: Conversion and Exchange of shares of Series B-2 Convertible Preferred
Stock of Webb Interactive Services, Inc. (the "Series B-2 Preferred
Stock") currently held by Castle Creek Technology Partners, LLC
("CC")
Gentlemen:
Upon acceptance of this letter agreement CC will deliver to Webb
Interactive Services, Inc. (the "Company") 200.205 shares of the Series B-2
Preferred Stock held by CC against delivery of 350,205 shares of the Company's
common stock, no par value ("Common Stock") in exchange for such shares of
Series B-2 Preferred Stock and the Company agrees to deliver such 350,205 shares
of Common Stock against such delivery by CC.
CC agrees to convert 250 shares of the Series B-2 Preferred Stock into
100,000 shares of the Common Stock in accordance with the terms of the Series B-
2 Preferred Stock and to deliver its conversion notice to effect such conversion
with its acknowledgment and agreement to this letter agreement.
The Company hereby represents and warrants that all of the shares of
Common Stock to be issued upon exchange and conversion of the Series B-2
Preferred Stock will be, upon such conversion or exchange, duly and validly
issued, fully paid and non-assessable and free from all taxes, liens, claims and
encumbrances (other than liens, claims and encumbrances placed thereon by Castle
Creek or by persons claiming by, through or under Castle Creek) and will not be
subject to preemptive rights or other similar rights of stockholders of the
Company. The Company further represents and warrants that no further corporate
authorization or approval is required with respect to the issuance of the shares
of Common Stock issuable upon conversion and exchange of the Series B-2
Preferred Stock.
CC hereby agrees that notwithstanding the fact that the issuance to CC
of shares of Common Stock in exchange for Series B-2 Preferred Stock requires
adjustments to the conversion prices and exercise prices of the Company's 10%
Convertible Promissory Notes, its Series B-2 Preferred Stock, its Series C-1
Convertible Preferred Stock and all warrants issued by the Company and held by
CC (collectively, the "Outstanding Securities"), that the conversion prices and
exercise prices of the Outstanding Securities will not be adjusted to account
for such issuance in exchange for shares of Series B-2 Preferred Stock. CC
hereby agrees that it will not transfer any of the Outstanding Securities to any
party unless that party agrees that the conversion prices and exercise prices of
the Outstanding Securities transferred to that party have not been and will not
be adjusted to account for such issuance in exchange for shares of Series B-2
Preferred Stock.
The Company has not made the payment to Castle Creek for late
registration penalties that came due at the end of last week. CC has provided
notice of the material breach by the Company of its obligations to CC under the
registration rights agreement entered into in connection with the Series C-1
shares resulting from such breach in a letter dated December 11, 2001. The
Company agrees to pay on or prior to January 31, 2002 (a) all late registration
penalties due under the registration rights agreement and (b) the interest
payment due at December 31, 2001 on the Company's 10% Convertible Promissory
Notes. CC agrees that, upon receipt of the 450,205 shares of Common Stock to be
issued upon the conversion and exchange of 450.205 shares of Series B-2
Preferred Stock by CC in accordance with this letter agreement on or before
Monday, December 17, 2001, the notice of breach contained in its letter dated
December 11, 2001 to the Company shall be deemed rescinded and of no further
force or effect, without prejudice to its right to provide such notice in the
event the Company fails to pay the late registration penalties on or prior to
January 31, 2002. CC agrees that, so long as no other breach, default or event
of default shall occur under the Outstanding Securities (other than failure to
timely pay the interest payment due on the Company's 10% Promissory Notes on
December 31, 2001), until January 31, 2002, CC shall refrain from exercising its
right to exercise remedies available to it as a result of failure by the Company
to make the interest payment due on the 10% Convertible Promissory Notes on
December 31, 2001.
Notwithstanding the preceding rescission of notice and grant of
forbearance, however, the Company understands, acknowledges and agrees that (a)
CC has not waived, and is not by this agreement waiving, any other default under
the registration rights agreement or any of the Outstanding Securities; (b)
neither CC's rescission of notice nor CC's forbearance pursuant to this
agreement shall be construed to be, or result in, a waiver, suspension or
modification of any of CC's rights or remedies under the registration rights
agreement or any of the Outstanding Securities, except as expressly provided in
the immediately preceding paragraph; and (c) the period of forbearance from
exercising rights available as a result of failure to make the interest payment
due December 31, 2001 will expire automatically and without notice immediately
upon the occurrence, at any time on or prior to January 31, 2002, of any breach,
default or event of default on the part of the Company under this agreement or
any further or other breach,
default or event of default on the part of the Company under any of the
Outstanding Securities.
This letter agreement may be executed in any number of counterparts, each
of which shall be deemed an original, and all of which together shall constitute
one and the same instrument.
Sincerely,
WEBB INTERACTIVE SERVICES, INC.
By: /s/ William R. Cullen
---------------------
Name: William R. Cullen
Its: Chief Executive Officer
Acknowledged and Agreed this
14th day of December, 2001.
CASTLE CREEK TECHNOLOGY PARTNERS LLC
By: Castle Creek Partners, LLC
Its: Investment Manager
By: /s/ Thomas A. Frei
------------------
Name: Thomas A. Frei
Its: Managing Director