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BLUEBOOK
INTERNATIONAL
INNOVATIVE SOFTWARE SOLUTIONS
FOR THE GLOBAL INSURANCE ECONOMY
CONVERTIBLE PROMISSORY NOTE PURCHASE AGREEMENT
THIS CONVERTIBLE PROMISSORY NOTE PURCHASE AGREEMENT (this "Agreement") is
made as of August 13, 2004 by and between The Bluebook International Holding
Company, hereinafter the "Corporation" or the "Seller," a corporation organized
and existing under the laws of the State of Delaware with registered offices
located at 00000 Xxxx Xxxxxxx, Xxxx Xxxxxx, Xxxxxxxxxx 00000, and Xxxxxxxxxxx X.
Xxxxxxx an accredited investor, whose principal address is, 00 Xxxxxxxxxx, Xxxx
Xxxxx, Xx. 00000, hereinafter "Purchaser."
RECITALS
WHEREAS, Corporation is a validly existing corporation formed in 2001
pursuant to Delaware law for any lawful purpose including (without limitation)
providing professional, enterprise software, information and services;
WHEREAS, Purchaser desires to purchase a Convertible Promissory Note with a
principal face amount of $427,500 convertible into shares of common stock of the
Corporation under the terms of this agreement; and
NOW, THEREFORE, in consideration of the mutual benefits of the covenants
and agreements contained herein, Corporation and Purchaser hereby agree as
follows:
TERMS AND CONDITIONS
SECTION 1 - RECITALS: The above recitals and identification of parties are true
and correct.
SECTION 2 - PURCHASE AND SALE OF CONVERTIBLE NOTE: Corporation hereby issues to
Purchaser a Convertible Promissory Note in the form attached hereto as Exhibit A
(the "Note") with a principal face amount of $427,500 convertible into shares of
common stock of Corporation. Purchaser hereby pays $427,500 in U.S. dollars in
cash to Corporation in consideration for the Note.
SECTION 3 -- REPRESENTATIONS AND WARRANTIES OF PURCHASER: Purchaser represents
and warrants as follows:
(a) Statement of Business Purpose and Experience: Purchaser hereby
represents and warrants that the Note and the shares of common stock of the
Corporation issuable upon conversion of the Note are being acquired for
investment and not for the purpose of selling or otherwise disposing thereof.
Purchaser has not offered or sold a participation in the Note or the shares of
common stock of the Corporation issuable upon conversion of the Note and will
not offer or sell the Note or the shares of common stock of the Corporation
issuable upon conversion of the Note or interest therein or otherwise in
violation of the Securities Act of 1933.
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00000 Xxxx Xxxxxxx Xxxxx 000, Xxxx Xxxxxx, Xx. 00000
Purchaser further acknowledges that he or she does not have in mind any
sale of the Note or the shares of common stock of the Corporation issuable upon
conversion of the Note currently or after the passage of a fixed or determinable
period of time or upon the occurrence or non-occurrence of any predetermined
events or consequence; and that he or she has no present or contemplated
agreement, undertaking, arrangement, obligation, indebtedness or commitment
providing for or which is likely to compel a disposition of the Note or the
shares of common stock of the Corporation issuable upon conversion of the Note
and is not aware of any circumstances presently in existence that are likely in
the future to prompt a disposition of the Note or the shares of common stock of
the Corporation issuable upon conversion of the Note.
(1) Purchaser acknowledges that the Note and the shares of common
stock of the Corporation issuable upon conversion of the Note have been offered
to him or her in direct communication between himself or herself and the
Corporation and not through any advertisement of any kind.
(2) Purchaser acknowledges that he or she has been encouraged to seek
his or her own legal and financial counsel to assist him or her in evaluating
this investment. Purchaser acknowledges that he or she has sufficient knowledge,
financial and business experience concerning the affairs and conditions of the
Corporation so that he or she can make a reasoned decision as to this investment
in the Corporation and is capable of evaluating the merits and risks of this
investment. Purchaser further understands and acknowledges that he shall be
responsible for all taxes of any kind whatsoever resulting from this agreement.
(b) Access to Information: Purchaser hereby represents and warrants that
Purchaser has had access to all information pertaining to the Corporation, as
follows:
(1) Corporation -- Management: Purchaser represents and warrants that
Purchaser knows the officers and directors of the Corporation personally and has
had an opportunity to discuss the operations of the Corporation and consult with
said officers and directors concerning the purchase of the Note and the shares
of common stock of the Corporation issuable upon conversion of the Note.
(2) Corporation -- Finance: Purchaser hereby represents and warrants
that Purchaser understands that the purchase of voting common stock hereunder is
a very high risk investment.
(3) No Pre-emptive Rights: Purchaser hereby acknowledges and
understands that Purchaser does not have pre-emptive rights or any right to
maintain a percentage of ownership of the capital stock of the Corporation.
Purchaser hereby acknowledges and understands that the Corporation intends to
issue shares of voting and nonvoting capital stock to other investors from time
to time and that issuing any such shares will reduce the pro rata ownership of
Purchaser (after conversion of the Note) in the capital stock of the
Corporation.
(4) SEC Filings: Purchaser acknowledges that he or she has read or has
had access to all of the Corporation's filings with the Securities and Exchange
Commission under the Securities Exchange Act of 1934.
(c) Restrictions on Transfer: Purchaser is aware of the restrictions of
transferability of the Note and the shares of common stock of the Corporation
issuable upon conversion of the Note and further understands and acknowledges
that any certificates evidencing the shares of common stock of the Corporation
issuable upon conversion of the Note will bear the following legends, to which
such interests will be subject:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED FOR SALE UNDER ANY STATE
SECURITIES LAWS (COLLECTIVELY, "SECURITIES LAWS") AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED FOR SALE UNDER
ALL APPLICABLE SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER, IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER, ANY SUCH OFFER, SALE OR OTHER TRANSFER IS EXEMPT FROM THE
REGISTRATION OR QUALIFICATION REQUIREMENTS OF SUCH SECURITIES LAWS.
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Purchaser further understands that following the purchase of the Note and the
shares of common stock of the Corporation issuable upon conversion of the Note,
the Note and the shares of common stock of the Corporation issuable upon
conversion of the Note may only be disposed of pursuant to either (i) an
effective registration statement under the Securities Act of 1933, or (ii) an
exemption from the registration requirements of the Securities Act of 1933.
SECTION 5 -- FURTHER ASSURANCES: Purchaser and Corporation hereby represent and
warrant that all representations, warranties, statements and information
provided to each other under this Agreement are true, correct and accurate as of
the date of this Agreement to the best of their knowledge.
SECTION 6 -- BROKER - SUITABILITY: Purchaser and Corporation hereby represent
and warrant to each other that a broker has not been involved in this Agreement
or any of the transactions contemplated hereunder. Corporation does not
represent or warrant the advisability of purchasing the Note or the shares of
common stock of the Corporation issuable upon conversion of the Note and does
not represent or warrant the suitability of the proposed purchase of such
securities by Purchaser. Purchaser represents and warrants that Purchaser has
made an independent assessment of the financial risks of purchasing securities
of the Corporation and has independently determined whether such investment is
suitable in light of the Purchaser's financial circumstances and needs without
being influenced by Corporation or any of the shareholders, directors or
officers of the Corporation.
SECTION 7-- SURVIVAL OF REPRESENTATIONS AND WARRANTIES: The representations and
warranties made by Corporation and Purchaser in this Agreement shall survive
termination of this Agreement and shall continue in favor of Purchaser and
Corporation.
SECTION 8 -- ENTIRE AGREEMENT: This Agreement contains the entire understanding
of the parties and supersedes all previous verbal and written agreements
concerning the securities of the Corporation being issued to Purchaser
hereunder.
SECTION 9 -- AMENDMENTS AND MODIFICATIONS: Any waivers, alterations,
modifications, or amendments of any provision in this Agreement shall not be
binding unless such waiver, alteration, modification or amendment is in writing
and signed by the respective parties hereto.
SECTION 10 -- BINDING EFFECT: This Agreement shall inure to the benefit of and
be binding upon Purchaser and Corporation and their respective legal
representatives.
SECTION 11 -- SEVERABILITY: If any provisions of this Agreement are invalid, all
other provisions shall remain in full force and effect.
SECTION 12 -- CAPTIONS: The headings and captions of this Agreement are inserted
for convenience of reference and do not define, limit or describe the scope or
intent of this Agreement or any particular section, paragraph, or provision
herein.
SECTION 13 -- COUNTERPARTS: This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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SECTION 14 -- GOVERNING LAW: This Agreement shall be governed by the laws of the
State of California. Corporation and Purchaser agree to the exclusive
jurisdiction of the State Courts of California in the event of any dispute
arising under this Agreement or the Note and venue shall be in the County of
Orange, California.
SECTION 15 -- NOTICE: Notices shall be in writing and shall be deemed delivered
in person when delivered by courier or mailed postage prepaid by Certified or
Registered Mail -- Return Receipt Requested -- to the person and address
designated below. Notice shall be deemed given on the date of receipt -- as
evidenced in the case of Certified or Registered Mail by Return Receipt. Failure
to accept Certified or Registered Mail shall be deemed a receipt thereof within
ten days after first notice of delivery of the Certified or Registered Mail.
Seller/Corporation
The Bluebook International Holding Company
00000 Xxxx Xxxxxxx Xxxxx 000
Xxxx Xxxxxx, XX 00000
Purchaser
Xxxxxxxxxxx Xxxxxxx
00 Xxxxxxxxxx
Xxxx Xxxxx, Xx. 00000
------------------------------
Signature
SECTION 16 -- MISCELLANEOUS:
(a) Pronouns/Gender: Pronouns shall refer to the masculine, feminine,
neuter, singular or plural as the context shall require.
(b) Equitable Remedies: In addition to all other rights which may be
available, each party shall have the right of specific performance, injunction
or other equitable remedy in the event of a breach or threatened breach of this
Agreement, the parties acknowledging that damages at law may be an inadequate
remedy.
(c) Litigation Expenses: In the event of litigation or arbitration arising
out of this Agreement, each party shall pay its own costs and expenses of
litigation and arbitration (excluding fees and expenses of arbitrators and
administrative fees and expenses of arbitration).
(d) Waiver: A waiver of any breach of this Agreement shall not be held as a
waiver of any other breach. All remedies under this Agreement are in addition to
remedies provided by law and are cumulative. Failure to enforce any provision of
this Agreement shall not be a waiver or create an estoppel from enforcing such
provisions.
[Signature begin on next page]
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00000 Xxxx Xxxxxxx Xxxxx 000, Xxxx Xxxxxx, Xx. 00000
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first written above.
CORPORATION:
The Bluebook International Holding Company
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxxx
Title: COO
PURCHASER:
/s/ Xxxxxxxxxxx Xxxxxxx
-----------------------
Xxxxxxxxxxx Xxxxxxx
00 Xxxxxxxxxx
Xxxx Xxxxx, Xx. 00000
Exhibit A
CONVERTIBLE PROMISSORY NOTE
$427,500.00
Unless Otherwise Converted
Maturity Date: August 13, 2005
Date of Agreement: August 13, 2004
1. For value received, The Bluebook International Holding Company ("Maker")
promises to pay to the order of Xxxxxxxxxxx X. Xxxxxxx (the "holder"), as per
the term of the agreement , at 00 Xxxxxxxxxx, Xxxx Xxxxx, Xx. 00000 or at such
other place as the holder of this Note may from time to time designate in
writing, the principal sum of Four Hundred Twenty Seven Thousand Five Hundred
Dollars ($427,500.00) together with interest from the date hereof until paid at
the rate of ten percent (10%) per annum compounded annually on the outstanding
principal balance from time to time remaining unpaid payable at the same time as
principal. All principal and interest under this Note shall be payable at
maturity, unless earlier converted in accordance with its terms.
2. At the option of Maker, all or any portion of the principal sum and
earned interest due on this Note may be prepaid without premium or penalty with
the amount of the prepayment to be applied first to accrued interest and the
remainder to unpaid principal unless earlier converted in accordance with its
terms.
3. Following the purchase of Maker's Common Stock by Xxxx Capital, First
American Corporation, or an affiliate thereof or other institutional investor
(the "Institutional Investor"), the holder shall be entitled to convert all (but
not less than all) of the principal balance plus accrued interest then
outstanding under this Note (the "Indebtedness") into shares of Maker's Common
Stock. The holder shall be entitled to make this conversion up to five days
after the closing date of the purchase of Maker's Common Stock by the
Institutional Investor; if the holder does not make this conversion during such
time, the holder shall no longer be entitled to make such conversion of this
Note. The number of shares into which the Indebtedness may be converted shall be
determined by dividing the total amount of the Indebtedness outstanding as of
the date of the conversion by the Institutional Investor Share Price. The term
"Institutional Investor Share Price" shall mean the price per share at which the
Institutional Investor shall purchase shares of Maker's Common Stock. The holder
may make such conversion by delivery of written notice thereof to Maker for
which the maker shall give the holder 5 days notice. Maker shall then
immediately cause certificates representing such shares to be delivered to the
holder and this Note shall be canceled and null and void.
4. No delay or omission by the holder in exercising or enforcing any of the
holder's rights or remedies under this Note shall constitute a waiver thereof,
nor shall a waiver by the holder of any default under this Note constitute a
waiver of any other default under the same or any other provision hereof except
as otherwise stated. No waiver or modification of any of the terms of this Note
shall be valid or binding unless set forth in writing signed by the holder of
this Note and the Maker.
5. If any provision of this Note is held by any court of competent
jurisdiction to be unlawful, void or unenforceable, such provision or provisions
shall be deemed separable from and shall in no way affect the enforceability and
validity of the remaining provisions of this Note.
6. Principal and interest shall be payable in lawful money of the United
States of America.
7. By the signature of this agreement, the "Maker" shall have full control
of the $427,500 as deposited into its bank account on August 11, 2004. By this
agreement, the "holder" agrees that the "Maker" shall use the funds in any
manner as they see fit without limitation or condition for "Maker's" business
purposes. By signature of this agreement, the "holder" acknowledges and agrees
that all funds used prior to the signature of this agreement where fully allowed
and authorized by the "holder" and shall not be contested for any reason.
8. All notices under this Note shall be in writing and shall be effective
only (a) when delivered in person to the recipient, or (b) three days after
deposit in a sealed envelope in the United States mail, postage prepaid, by
registered or certified mail, return receipt requested, addressed to the
recipient at his or its business address, whichever is earlier.
9. The Note shall be governed by and construed in accordance with the
internal laws of the State of California. Maker and the holder agree to the
exclusive jurisdiction of the State Courts of California in the event of any
dispute arising under this Note.
10. Entire Agreement: This Agreement contains the entire understanding of
the parties and supersedes all previous verbal and written agreements concerning
the securities of the Corporation being issued to Purchaser hereunder.
11. Amendments and modifications: Any waivers, alterations, modifications,
or amendments of any provision in this Agreement shall not be binding unless
such waiver, alteration, modification or amendment is in writing and signed by
the respective parties hereto.
THE BLUEBOOK INTERNATIONAL HOLDING COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxxx
COO
ACKNOWLEDGED/ACCEPTED:
/s/ Xxxxxxxxxxx X. Xxxxxxx
--------------------------
Xxxxxxxxxxx X. Xxxxxxx
00 Xxxxxxxxxx
Xxxx Xxxxx, Xx. 00000
