Exhibit 10.1





 







Exhibit 10.1

 



Tax Benefit Preservation Plan Exemption Agreement

 


This
Tax Benefit Preservation Plan Exemption Agreement
(“Agreement”) is
made and entered into on and as of November 30, 2018
(“Effective
Date”), by and between AutoWeb, Inc., a Delaware
corporation (“Company”), and each of the
Requesting Persons (as such term is defined below).

 



Background Facts

 


Effective as of May
26, 2010, the Company adopted a Tax Benefit Preservation Plan,
which plan was amended by Amendment No. 1 to Tax Benefit
Preservation Plan dated as of April 14, 2014 and by Amendment No. 2
to Tax Benefit Preservation Plan dated April 13, 2017 and the
rights thereunder adjusted by that Certificate of Adjustment dated
as of July 12, 2012 (the original plan, as amended and adjusted, is
collectively referred to herein as the “Plan”; capitalized terms used but
not otherwise defined herein shall have the definitions given in
the Plan). The Board of Directors of the Company
(“Board”)
adopted the Plan to protect stockholder value by preserving
important tax assets. The Company has generated substantial net
operating loss carryovers and other tax attributes for United
States federal income tax purposes (“Tax Benefits”) that can generally
be used to offset future taxable income and therefore reduce
federal income tax obligations. However, the Company’s
ability to use the Tax Benefits will be adversely affected if there
is an “ownership change” of the Company as defined
under Section 382 of the Internal Revenue Code
(“Section 382”).
In general, an ownership change will occur if the Company’s
Section 382 5% Shareholders (as defined below) collectively
increase their ownership in the Company by more than 50% over a
rolling three-year period. The Plan was adopted to reduce the
likelihood that the Company’s use of its Tax Benefits could
be substantially limited under Section 382. The Plan is
intended to deter any Person from becoming an Acquiring Person and
thereby jeopardizing the Company’s Tax Benefits. In general,
an Acquiring Person is any Person, itself or together with all
Affiliates of such Person, that becomes the Beneficial Owner of
4.9% or more of the Company’s outstanding Common Stock. Under
the Plan, the Board may, in its sole discretion, exempt any person
from being deemed an Acquiring Person for purposes of the Plan if
the Board determines that such person’s ownership of Common
Stock will not be likely to directly or indirectly limit the
availability of the Company’s Tax Benefits or is otherwise in
the best interests of the Company.  The Board shall not
have any obligation, implied or otherwise, to grant such an
exemption.


 


The
Initial Requesting Persons (as defined below) have informed the
Company that as of the Effective Date, the Initial Requesting
Persons, together with all of their respective Affiliates and
Associates, Beneficially Own the Current Beneficially Owned Shares.
In the Plan Exemption Request Letter, the Initial Requesting
Persons have requested that the Initial Requesting Persons be
considered for a Plan Exemption to acquire Beneficial Ownership of
additional shares of Common Stock.


 


The
Board has considered the Initial Requesting Persons’ request
and is prepared to grant the Requesting Persons a Plan Exemption
pursuant to this Agreement to acquire shares of Common Stock in
excess of the Current Beneficially Owned Shares, provided that the
aggregate number of shares of Common Stock Beneficially Owned by
the Requesting Persons and any of their respective Affiliates and
Associates does not collectively exceed the Plan Exemption Limit at
the time of the acquisition of Beneficial Ownership of the
additional shares of Common Stock, subject to and in reliance upon
the Requesting Persons entering into this Agreement and the
Requesting Persons and their respective Affiliates and Associates
remaining in compliance with the terms and conditions set forth in
this Agreement.


 


 




 

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In
consideration of the representations, warranties, covenants and
agreements set forth in this Agreement, and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereby agree as follows:


 



Article I



Definitions

 


For
purposes of this Agreement, the following terms shall have the
meanings set forth in this Section 1.

 


“Additional Beneficially Owned Shares
Acquisition Window Expiration Date” means the
three-month anniversary of the Effective Date.

 


“Associate” shall be as defined in
the Plan.

 


“Beneficial Ownership” shall be as
determined pursuant to the Plan.


 


“Beneficial Ownership Schedule”
means Exhibit A attached hereto.


 


“Beneficially Own” shall be as
defined in the Plan.


 


“Beneficially Owned Shares” means
all issued and outstanding shares of Common Stock that the
Requesting Persons and any of their respective Affiliates or
Associates are collectively deemed to Beneficially Own from time to
time. In the event of any change in the number of issued and
outstanding shares of Common Stock (including by reason of any
stock split, reverse split, stock dividend (including any dividend
or distribution of securities convertible into shares of Common
Stock), combination, reorganization, recapitalization or other like
change, conversion or exchange of shares, or any other change in
the corporate or capital structure of the Company), the term
“Beneficially Owned
Shares” shall be deemed to refer to and include the
Beneficially Owned Shares as well as all such stock dividends and
distributions and any shares of capital stock into which or for
which any or all of the Shares may be changed or
exchanged.


 


“Company Acquisition Transaction”
means (i) the commencement (within the meaning of Rule 14d-2 of the
General Rules and Regulations under the Exchange Act) of a tender
or exchange offer for at least 4.9% of the then outstanding shares
of Common Stock of the Company or any direct or indirect Subsidiary
of the Company, (ii) the commencement of a proxy solicitation with
respect to the election of any directors of the Company or with
respect to any transaction under clauses (iii) or (iv) of this
definition, (iii) any sale, license,
lease, exchange, transfer, disposition or acquisition of any
portion of the business or assets of the Company or any direct or
indirect Subsidiary of the Company (other than in the ordinary
course of business), or (iv) any merger, consolidation, business
combination, share exchange, reorganization, recapitalization,
restructuring, liquidation, dissolution or similar transaction or
series of related transactions involving the Company or any direct
or indirect Subsidiary of the Company.


 


“Current Beneficially Owned Shares”
means the 621,970 shares of Common
Stock Beneficially Owned by the Initial Requesting Persons and
their respective Affiliates and Associates as set forth on
the Beneficial Ownership Schedule.


 


 



 

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“Electronic Transmission” means a
communication (i) delivered by facsimile, telecommunication or
electronic mail when directed to the facsimile number of record or
electronic mail address of record, respectively, which the intended
recipient has provided to the other party for sending notices
pursuant to the Agreement and (ii) that creates a record of
delivery and receipt that is capable of retention, retrieval, and
review, and that may thereafter be rendered into clearly legible
tangible form.


 


“Exchange Act” means the Securities Exchange Act
of 1934, as amended.

 


“Exemption Shares” shall
mean the number of Beneficially Owned Shares that exceeds the
number of shares of Common Stock that equals (i) the number of
shares of Common Stock that equals 4.9% of the shares of Common
Stock outstanding as of the Effective Date minus (ii) one (1) share
of Common Stock.


 


“Group” shall have the meaning set
forth in Section 13(d)(3) of the Exchange Act and Rule 13d-5 of the
General Rules and Regulations under the Exchange Act.


 


“Irrevocable Proxy” means a proxy
in the form attached hereto as Exhibit B.


 


“Initial Requesting Persons” means
the Requesting Persons who are signatories to this Agreement as of
the Effective Date.


 


“Person” shall be as defined
in the Plan.


 


“Plan Exemption” shall mean a grant
by the Board contemplated by Section 30 of the Plan to a Requesting
Person (as defined in the Plan) of authority to engage in an Exempt
Transaction (as defined in the Plan).


 


“Plan Exemption Limit” means
1,942,342 shares of Common Stock, representing approximately
fifteen percent (15.0%) of the Company’s outstanding Common
Stock as of the Effective Date.


 


“Plan Exemption Request Letter”
means the letter dated October 24, 2018 from Negari and Ambrose to
the Company (which was received by the Company by certified mail on
October 29, 2018), as attached hereto as Exhibit
C.  


 


“Requesting Persons” means Daniel
M. Negari (“Negari”), The 1 8 999 Trust, a
trust organized under the laws of Nevada (“The 1 8 999 Trust”), Michael R.
Ambrose (“Ambrose”) and The Insight Trust, a
trust organized under the laws of Nevada (“The Insight Trust”), and all other
direct or beneficial holders of Common Stock (as hereinafter
defined) of the Company that may become parties to this Agreement
in the future in accordance with the terms of this
Agreement.


 


“Section 382 5% Shareholder” means
a “5-percent
shareholder” as defined under Section 382 and the
rules and regulations thereunder.


 


“SEC” means the Securities and
Exchange Commission.


 


“Subsidiary” of any Person shall mean any
corporation or other entity of which a majority of the voting power
of the voting equity securities or equity interest is owned,
directly or indirectly, by such Person.


 




 

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Article II



Standstill and Grant of Plan Exemption


 


2.1           Standstill
Provisions.

 


(a)           Unless
and until this Agreement is terminated pursuant to Section 6.2, and
except (i) pursuant to a negotiated transaction approved by the
Board; or (ii) as may otherwise be approved by the Board, no
Requesting Person will, and each Requesting Person will cause their
respective Affiliates and Associates to not, in any manner,
directly or indirectly:

 

(i) make, effect,
initiate, cause or participate in (1) any acquisition of Beneficial
Ownership of any securities of the Company or any securities of any
Subsidiary or other Affiliate or Associate of the Company (except
such transfers between Requesting Persons in compliance with
Section 2.2), (2) any Company Acquisition Transaction, or (3) any
“solicitation” of “proxies” (as those terms
are defined in Rule 14a-1 of the General Rules and Regulations
under the Exchange Act) or consents with respect to any securities
of the Company; provided,
the parties acknowledge that (x) no Requesting Person nor any of
their respective Affiliates and Associates shall be deemed to make,
effect, initiate, cause or participate in any acquisition of
Beneficial Ownership under subclause (1) of this clause 2.1(i)
solely by reason of engaging in any event permitted by Section 2.3;
(y) no Requesting Person nor any of their respective Affiliates and
Associates shall be deemed to make, effect, initiate, cause or
participate in any Company Acquisition Transaction under subclause
(2) of this clause 2.1(i) or any solicitation of proxies under
subclause (3) of this clause 2.1(i) solely by reason of a
Requesting Person or such Requesting Person’s Affiliates and
Associates voting its Shares in compliance with Section 3.1(a); and
(z) no Requesting Person nor any of their respective Affiliates and
Associates shall be deemed to make, effect, initiate, cause or
participate in any solicitation of proxies under subclause (3) of
this clause 2.1(i) solely by reason of any solicitation of a proxy,
agreement or understanding from a Requesting Person or any of such
Requesting Persons Affiliates and Associates regarding the voting
of the Beneficially Owned Shares in compliance with Sections 3.1(a)
and 3.1(b);

 

(ii) nominate
or seek to nominate any person to the Board or otherwise act, alone
or in concert with others, to seek to control or influence the
management, Board or policies of the Company; provided
that a Requesting Person may seek privately with the Board or the
Company’s Chief Executive Officer to influence the decisions
made by the existing management or Board of the Company in a manner
(1) that is not disclosed publicly and (2) that would not force the
Company to make a public announcement regarding such
influence.

 

(iii) take
any action which might force the Company to make a public
announcement regarding any of the types of matters set forth in
clause (i) of this Section 2.1;

 

(iv) request
or propose that the Company (or its directors, officers, employees
or agents), directly or indirectly, amend or waive any provision of
this Section 2.1, including this subsection 2.1(iv),
unless such request or proposal is made privately to the Board in a
manner (1) that is not disclosed publicly and (2) that would not
force the Company to make a public announcement regarding such
request or proposal;

 


 




 

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(v) agree or offer to
take, or encourage or propose (publicly or otherwise) the taking
of, any action referred to in clauses (i), (ii), (iii) or (iv) of
this Section 2.1;

 

(vi) assist,
induce or encourage any other Person to take any action referred to
in clauses (i), (ii), (iii) or (iv) of this Section 2.1;
or

 

(vii) enter
into any discussions or arrangements with any third party with
respect to the taking of any action referred to in clauses (i),
(ii), (iii) or (iv) of this Section 2.1.

 


(b)           Notwithstanding
the foregoing provisions of Section 2.1(a), the Requesting Persons
and their respective Affiliates and Associates may from time to
time in one or more transactions acquire Beneficial Ownership of
additional shares of Common Stock (“Additional Beneficially Owned
Shares”) in excess of the Current Beneficially Owned
Shares, provided that (i) the collective Beneficial Ownership of
Requesting Persons and their respective Affiliates and Associates
does not exceed the Plan Exemption Limit at the time of the
acquisition of Beneficial Ownership of Additional Beneficially
Owned Shares; (ii) Requesting Persons and their respective
Affiliates and Associates are in compliance with all of the
provisions of this Agreement as of the acquisition date of any
Additional Beneficially Owned Shares; (iii) the representations and
warranties of Requesting Persons and their respective Affiliates
and Associates in this Agreement shall be true, accurate and
complete as if made as of the date of any such acquisition of
Additional Shares; (iv) the acquisition of Additional Shares would
not result in any Person who is not the Requesting Persons and
their respective Affiliates and Associates, individually or
collectively, constituting a Section 382 5% Shareholder; and (v)
the acquisition of the Additional Beneficially Owned Shares is
completed prior to the Additional Beneficially Owned Shares
Acquisition Window Expiration Date. Additional Beneficially Owned
Shares may not be acquired after the Additional Beneficially Owned
Shares Acquisition Window Expiration Date. Any acquisition of
additional shares of Common Stock by the Requesting Persons or
their respective Affiliates or Associates (i) will not be made with
the purpose or the effect of changing or influencing the control of
the Company, and (ii) will not be made in connection with (and
neither Requesting Person nor any of their respective Affiliates
and Associates will be a participant in) any transaction having
such purpose or effect.


 


(c)           The
Requesting Persons and their respective Affiliates and Associates
shall not be required to divest shares of Common Stock solely as
the result of any decrease in the number of issued and outstanding
shares of Common Stock (including by reason of any reverse stock
split or repurchase and retirement of shares of Common Stock), even
if such change causes Requesting Persons and their respective
Affiliates and Associates to Beneficially Own shares of Common
Stock in excess of the Plan Exemption Limit (either individually or
in the aggregate).


 


2.2           Section
382 Compliance. Unless and until this Agreement is
terminated pursuant to Section 6.2, no direct or indirect transfers
of shares of Common Stock between and among Requesting Persons and
their respective Affiliates and Associates shall be permitted if,
as a result of any such transfer, any Requesting Person or any of
their respective Affiliates and Associates shall become the
Beneficial Owner of shares of Common Stock in an amount that would
result in such Person being a Section 382 5% Shareholder of the
Company.

 


 




 

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2.3           Transfers
of Common Stock. Unless and until this Agreement is
terminated pursuant to Section 6.2, no Requesting Person nor any
Requesting Person’s Affiliates and Associates will sell or
otherwise transfer any Beneficial Ownership in any shares of Common
Stock to any Person not a party to this Agreement
except:

 


(i)           in
open market transactions on The Nasdaq Capital Market or on such
principal stock exchange as the Common Stock is then listed for
trading; or if the Common Stock is not listed on any stock exchange
at the time, then in transactions effected through trading on an
inter-dealer quotation system if the Common Stock is then quoted on
such a system, and if not, then through trading on over-the-counter
bulletin boards or “pink sheets;” or

 


(ii)           in
private transactions and only if any such private transaction is
not to any Person or Group that the Requesting Persons or their
respective Affiliates and Associates reasonably believes after due
inquiry Beneficially Owns or as a result of such transaction would
Beneficially Own 4.9% or more of the Company’s then
outstanding Common Stock.

 


2.4           Grant
of Plan Exemption. Subject to and in reliance upon the
representations, warranties and obligations of the Requesting
Persons under this Agreement and in accordance with the terms and
conditions of this Agreement, the Board has granted the Initial
Requesting Persons a Plan Exemption. As long as the Requesting
Persons and their respective Affiliates and Associates remain in
full compliance with this Agreement, the Company shall maintain the
Plan Exemption in effect. The Plan Exemption granted by the Board
shall continue for only so long as the Requesting Persons and their
respective Affiliates and Associates are in compliance with the
terms of this Agreement. If the Requesting Persons and their
respective Affiliates and Associates violate any provision herein,
then the Board shall have the right, in its sole discretion, to
revoke the Plan Exemption, upon which the Requesting Persons and
their respective Affiliates and Associates shall be an Acquiring
Person as defined in and for purposes of the Plan if the Requesting
Persons and their respective Affiliates and Associates otherwise
meets the requirements to be deemed an Acquiring Person at such
time.

 


2.5           Exchange
Act Filings. In the event that any Requesting Person or any
Requesting Person’s Affiliates and Associates files any
schedule, form or report under (i) Section 13 of the Exchange Act
with the SEC indicating that such Person is the beneficial owner
(as the term “beneficial ownership” is defined by Rule
13d-3 promulgated under the Exchange Act) of more than five percent
(5%) of the outstanding Common Stock or (ii) Section 16 of the
Exchange Act with the SEC indicating that such Person is the
beneficial owner (as the term “beneficial ownership” is
defined by Rule 13d-3 promulgated under the Exchange Act) of more
than ten percent (10%) of the outstanding Common Stock, the
Requesting Persons and their respective Affiliates and Associates
agree to cooperate with the Company upon the Company’s
reasonable request for information from the Requesting Persons and
their respective Affiliates and Associates regarding the beneficial
ownership structure and interest percentage in Common Stock held by
the Requesting Persons and their respective Affiliates and
Associates.

 


2.6           Additional
Beneficially Owned Shares and Additional Requesting
Persons.


 


(a)           Any
shares of Common Stock Beneficially Owned by the Requesting Persons
and their respective Affiliates and Associates, the Beneficial
Ownership of which was acquired on or after the Effective Date and
before the termination of this Agreement pursuant to Section 6.2,
shall be subject to the terms and conditions of this Agreement to
the same extent as if they constituted Beneficially Owned Shares as
of the Effective Date.


 


 




 

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(b)           If,
during the period commencing on the Effective Date and continuing
until this Agreement terminates pursuant to Section 6.2, any
Affiliate or Associate of a Requesting Person who is not already a
holder of Current Beneficially Owned Shares as of the Effective
Date and a party to this Agreement acquires Beneficial Ownership of
shares of Common Stock, then the Requesting Persons and their
respective Affiliates and Associates of which the Person is an
Affiliate or Associate shall cause the Person to become a party to
this Agreement and agree to be bound by and subject to the terms
and conditions of this Agreement as a Requesting Person by
executing and delivering a joinder and counterpart signature page
hereto and an Irrevocable Proxy.


 


2.7           Reporting
of Changes in Beneficial Ownership. Within five (5) days
after the Additional Beneficially Owned Shares Acquisition Window
Expiration Date and thereafter within five (5) days after the end
of any month in which a change in Beneficially Owned Shares occurs,
or at such other times as the Company may request, the Requesting
Persons will deliver to the Company a description of the changes in
Beneficially Owned Shares and the then-current Beneficial Ownership
of shares of Common Stock by the Requesting Persons and their
Affiliates and Associates, accompanied by an updated Beneficial
Ownership Schedule reflecting such new Beneficial Ownership. In
addition, at any time the Requesting Persons and their respective
Affiliates and Associates collectively Beneficially Own less than
4.9% of the then-outstanding shares of Common Stock, the Requesting
Persons will deliver to the Company a certification executed by the
Requesting Persons, certifying that the Requesting Persons and
their respective Affiliates and Associates collectively
Beneficially Own less than 4.9% of the then-outstanding shares of
Common Stock.


 



Article III



Voting of Exemption Shares


 


3.1           Agreement
to Vote Exemption Shares.

 

(a) The Requesting
Persons, on their own behalf and on behalf of their respective
Affiliates and Associates, hereby covenant and agree, jointly and
severally, that during the period commencing on the date hereof and
continuing until this Agreement terminates pursuant to Section 6.2,
at any meeting (whether annual or special and whether or not an
adjourned or postponed meeting) of the stockholders of the Company,
and in any action by written consent of the stockholders of the
Company, the Requesting Persons and their respective Affiliates and
Associates shall (i) appear at the meeting or otherwise cause any
and all Exemption Shares to be counted as present thereat for
purposes of establishing a quorum, and (ii) vote (or cause to be
voted) any and all Exemption Shares with respect to any matter at
any meeting (whether annual or special and whether or not an
adjourned or postponed meeting) of stockholders of the Company, and
in any action by written consent of the stockholders of the
Company, in the same proportion (for or against) as the shares
actually voted for or against such matter by the stockholders of
the Company other than the Requesting Persons and their respective
Affiliates and Associates. The Requesting Persons and their
respective Affiliates and Associates hereby further agree not to
enter into any proxy, agreement or understanding with any person or
entity the effect of which would be materially inconsistent with or
violative of any provision contained in this
Section 3.1.

 


(b) The parties
acknowledge that the Requesting Persons and their respective
Affiliates and Associates may grant a proxy or enter into an
agreement or understanding with another Requesting Person for the
purposes of voting shares of Common Stock as long as (i) the shares
that are the subject of any such proxy, agreement or understanding
are voted in compliance with the provisions of this Section 3.1 and
3.2; (ii) any such proxy, agreement or understanding will not have
the effect of superseding or revoking the Irrevocable Proxy granted
by the Requesting Persons and their respective Affiliates and
Associates under Section 3.2 and shall be subject and subordinate
to the exercise of such proxy pursuant to Section 3.2; and (iii)
the granting of such proxy or entering into such an agreement or
understanding would not result in any Requesting Person other than
the Initial Requesting Persons being a Section 382 5% Shareholder
of the Company.

 


 




 

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3.2           Irrevocable
Proxy. Concurrently with the execution of this Agreement,
each of the Initial Requesting Persons have delivered to the
Company an Irrevocable Proxy, which shall be irrevocable to the
fullest extent permissible by law, with respect to the Exemption
Shares, subject to the other terms of this Agreement. The
Proxyholders (as defined in the Irrevocable Proxy) shall be
entitled to exercise the rights granted to them in the Irrevocable
Proxy in order to vote the Exemption Shares in the event and to the
extent that the Requesting Persons and their respective Affiliates
and Associates fail to vote the Exemption Shares in accordance with
Section 3.1. The Requesting Persons and their respective Affiliates
and Associates represents, covenant and agree that, except for (i)
the Irrevocable Proxy granted pursuant to the foregoing provisions
of this Section 3.2; (ii) any proxy granted by the Requesting
Persons and their respective Affiliates and Associates to another
Requesting Person in compliance with Section 3.1(b); (iii) any
proxy or other voting agreement or understanding granted or entered
into by the Requesting Persons or their respective Affiliates and
Associates to or with the Company’s Board, the Company or any
officer thereof; (iv) any proxy or other voting agreement or
understanding granted or entered into by the Requesting Persons or
their respective Affiliates and Associates with the approval of the
Board; or (v) as contemplated by this Agreement: (1) neither the
Requesting Persons nor any of their respective Affiliates and
Associates shall, during the period commencing on the Effective
Date and continuing until this Agreement terminates pursuant to
Section 6.2, grant any proxy or power of attorney, or deposit any
Shares into a voting trust or enter into a voting agreement or
other voting arrangement, with respect to the voting of the Shares
(each a “Voting
Proxy”), and (2) neither the Requesting Persons
nor their respective Affiliates and Associates has granted, entered
into or otherwise created any Voting Proxy which is currently (or
which will hereafter become) effective, and if any Voting Proxy has
been created, such Voting Proxy is hereby revoked.

 



Article IV



Representations and Warranties of Requesting Persons


 


Each
Requesting Person, upon becoming a party to this Agreement, hereby
makes the following representations and warranties, severally and
not jointly (except in the case of Sections 4.4, 4.5, 4.6, and 4.7,
which representations and warranties are made jointly and severally
by the Requesting Persons):

 


4.1           Authority;
Validity. The
Requesting Person has all requisite capacity, power and authority
to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement
by the Requesting Person and the consummation by the Requesting
Person of the transactions contemplated hereby have been duly and
validly authorized by all necessary action on the part of the
Requesting Person. This Agreement has been duly executed and
delivered by the Requesting Person. If this Agreement is being
executed in a representative or fiduciary capacity with respect to
the Requesting Person, the person signing this Agreement has full
power and authority to enter into and perform this
Agreement.

 


 




 

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4.2           Non-Contravention.
The execution, delivery and performance of this Agreement does not,
and the consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not, contravene,
conflict with, or result in any violation of, breach of, or default
by (with or without notice or lapse of time, or both) the
Requesting Person under, or give rise to a right of termination,
cancellation or acceleration of any obligation under, or result in
the creation of any encumbrance upon any of the properties or
assets of the Requesting Person or of any of the Requesting
Person’s Affiliates or Associates under, any provision of
(i) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit,
concession, franchise or license applicable to the Requesting
Person or any of the Requesting Person’s Affiliates or
Associates or to which the Requesting Person or any of the
Requesting Person’s Affiliates or Associates is a party, or
(ii) any judgment, order, decree, statute, law, ordinance,
injunction, rule or regulation applicable to the Requesting Person
or any of the Requesting Person’s Affiliates or Associates or
any of a Requesting Person’s or any of the such Requesting
Person’s Affiliates or Associates’ properties or
assets, other than any such conflicts, violations, defaults,
rights, or encumbrances that, individually or in the aggregate,
would not impair the ability of the Requesting Person or any of the
Requesting Person’s Affiliates or Associates to perform the
Requesting Person’s or any of the Requesting Person’s
Affiliates or Associates’ obligations hereunder or prevent,
limit or restrict in any respect the consummation of any of the
transactions contemplated hereby.

 


4.3           Litigation.
As of the date hereof, there is no action pending, or to the
knowledge of any Requesting Person or any of the Requesting
Person’s Affiliates or Associates, threatened with respect to
the Requesting Person’s or the Requesting Person’s
Affiliates’ or Associates’ ownership of shares of
Common Stock, nor is there any judgment, decree, injunction or
order of any applicable governmental entity or arbitrator
outstanding which would prevent the carrying out by the Requesting
Person and the Requesting Person’s Affiliates or Associates
of their respective obligations under this Agreement or any of the
transactions contemplated hereby, declare unlawful the transactions
contemplated hereby or cause such transactions to be
rescinded.

 


4.4           Beneficial
Ownership. As of the
Effective Date, the number of shares of Common Stock set forth on
the Beneficial Ownership Schedule are the only shares of Common
Stock Beneficially Owned by the Requesting Persons or any of their
respective Affiliates or Associates. On and as of the Effective
Date, the shares of Common Stock listed on the Beneficial Ownership
Schedule are free and clear of any encumbrances that, individually
or in the aggregate, would impair the ability of the Requesting
Persons and their respective Affiliates and Associates to perform
their respective obligations under this Agreement or prevent, limit
or restrict in any respect the consummation of any of the
transactions contemplated hereby. Neither Requesting Person nor any
Affiliate or Associate of either Requesting Person Beneficially
Owns 4.9% or more of the outstanding Common Stock of the Company
for purposes of Section 382 as of the Effective Date, and no
investor in, or beneficial owner of, either Requesting Person or in
any Affiliate or Associate of either Requesting Person, on a
look-through basis for purposes of Section 382, Beneficially Owns
4.9% or more of the outstanding shares of Common Stock as of the
Effective Date.

 


4.5           Acquisition
of Shares. The
Current Beneficially Owned Shares were not acquired for the purpose
or with the intention of causing the Requesting Persons or any of
their respective Affiliates or Associates (whether collectively or
individually) to become an Acquiring Person.

 


 




 

-9-








 






 


4.6           Reliance.
The Requesting Persons and their respective Affiliates and
Associates acknowledge that the Company is relying on truth and
accuracy of the statements, representations, warranties, covenants
and information contained herein and in the Plan Exemption Request
Letter for purposes of granting the Plan Exemption set forth in
this Agreement.

 


4.7           No
Influence or Control.
The Requesting Persons and their respective Affiliates and
Associates: (i) have acquired the Current Beneficially Owned Shares
in the ordinary course of their respective businesses, (ii) as of
the Effective Date, do not Beneficially Own the Current
Beneficially Owned Shares with the purpose or the effect of
changing or influencing the control of the Company (except to the
extent permitted by Section 2.1(a)(ii) of this Agreement), and
(iii) as of the Effective Date, do not Beneficially Own the Current
Beneficially Owned Shares in connection with or as a participant in
any transaction having such purpose or effect. As of the Effective
Date, the Requesting Persons and their respective Affiliates and
Associates collectively represent that the Requesting Persons and
their respective Affiliates and Associates do not have any
knowledge that any third party is currently engaged in undertaking,
or has any intention or plan to undertake, a Company Acquisition
Transaction.

 



Article V



Representations and Warranties of the Company


 


The
Company represents and warrants to the Requesting Persons
that:

 


5.1           Authority;
Validity. The Company
has all requisite capacity, power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby
have been duly and validly authorized by all necessary action on
the part of the Company. This Agreement has been duly executed and
delivered by the Company. If this Agreement is being executed in a
representative or fiduciary capacity with respect to the Company,
the person signing this Agreement has full power and authority to
enter into and perform this Agreement.

 


5.2           Non-Contravention.
The execution, delivery and performance of this Agreement does not,
and the consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not, (i) require
the Company to obtain the consent or approval of any governmental
entity, (ii) require the consent or approval of any other
person pursuant to any agreement, obligation or instrument binding
on the Company or its properties and assets, (iii) conflict
with or violate any organizational document or law, rule,
regulation, order, judgment or decree applicable to the Company or
pursuant to which any of its assets are bound, or (iv) violate
any other material agreement to which the Company or any of its
subsidiaries is a party.

 


 




 

-10-








 






 



Article VI



Effectiveness; Termination; Survival


 


6.1           Effectiveness.
This Agreement shall become effective upon its execution by each of
the Requesting Persons and the Company.

 


6.2           Termination.
This Agreement, and the obligations of the Requesting Persons and
their respective Affiliates and Associates hereunder, including,
without limitation, the Requesting Persons’ and their
respective Affiliates’ and Associates’ obligations
under Article II and Article III shall terminate: (i) at any time
by written consent of the Requesting Persons and the Company, (ii)
automatically upon the termination of the Plan, whether by the
Board or upon its own terms, unless a substitute or successor tax
benefit preservation or other stockholder rights plan is
implemented, in which case this Agreement shall not terminate, and
(iii) automatically without any further action by the parties
hereto, at such time as the Requesting Persons and their respective
Affiliates and Associates (together with their respective
Affiliates and Associates) collectively Beneficially Own less than
4.9% of the then-outstanding shares of Common Stock.

 


6.3           New
Exemption Agreements. In the event that this Agreement is
terminated in accordance with Section 6.2 and the Requesting
Persons or any of their respective Affiliates and Associates
(whether collectively or individually) are again deemed to
Beneficially Own 4.9% or more of the outstanding shares of Common
Stock, then, should the Board again exercise its discretionary
authority under the Plan to grant the Requesting Persons or any of
their respective Affiliates and Associates another Plan Exemption
(which the Board is not obligated to grant), the Requesting Persons
and their respective Affiliates and Associates (to the extent they
Beneficially Own Shares at that time) agree (and agree to compel
their respective Affiliates and Associates, as applicable) to enter
into an exemption agreement with the Company on substantially the
same terms as set forth herein. In addition, to the extent that the
Plan is terminated (whether by the Board or upon its own terms) and
replaced by a new tax benefit preservation or stockholder rights
plan, then, at the request of the Company, the Requesting Persons
and their respective Affiliates and Associates agree (and agree to
compel their respective Affiliates and Associates, as applicable)
to enter into a new exemption agreement on substantially the same
terms as this Agreement should the Board again exercise its
discretionary authority under a new plan to grant the Requesting
Persons or any of their respective Affiliates and Associates
another plan exemption (which the Board is not obligated to
grant).

 


6.4           Survival.
Section 6.3 and Article VII shall survive the termination of this
Agreement for any reason.

 



Article VII



General Provisions


 


7.1           Entire
Agreement. This Agreement, including the Exhibits attached
hereto, and the Irrevocable Proxy granted hereunder, all of which
are hereby incorporated by reference, constitutes the complete and
exclusive statement of agreement between the parties with respect
to the subject matter hereof and supersede any and all prior
negotiations, correspondence, agreements, communications,
understandings, duties or obligations of any kind by and between
the parties, whether written or oral, respecting the subject matter
hereof.


 


7.2           
Amendments and
Waivers. This Agreement may be amended, modified,
superseded, or cancelled, and the terms and conditions hereof may
be waived, only by a written instrument signed by the parties
hereto or, in the case of a waiver, by the party waiving
compliance. No delay on the part of any party in exercising any
right, power, or privilege hereunder will operate as a waiver
thereof, nor will any waiver on the part of any party of any right
hereunder, nor any single or partial exercise of any rights
hereunder, preclude any other or further exercise thereof or the
exercise of any other right hereunder.


 


 



 

-11-







 






 


 


7.3            
Assignment.
No party may assign or otherwise transfer or delegate this
Agreement or any of a party’s rights, duties or obligations
under this Agreement to another person or entity without the prior
written consent of the other parties. Notwithstanding the
foregoing, this Agreement may be assigned or transferred by the
Company to any person or entity that succeeds the Company by
operation of law or that controls, is controlled by or is under
common control of the Company without the consent of the other
parties. Nothing herein will prohibit or restrict a change of
control of the Company or any person or entity controlling,
controlled by or under common control with the Company or require
the consent of the other parties to any assignment or transfer of
this Agreement in connection with any change of control. This
Agreement will be binding on and inure to the benefit of each party
hereto and to each party's respective permitted successors and
assigns.


 


7.4           
Notices. Any
notice required or permitted under this Agreement will be
considered to be effective in the case of (i) certified mail, when
sent postage prepaid and addressed to the party for whom it is
intended at its address of record, three (3) days after deposit in
the mail; (ii) by courier or messenger service, upon receipt by
recipient as indicated on the courier's receipt; or (iii) upon
receipt of an Electronic Transmission by the party that is the
intended recipient of the Electronic Transmission. The record
addresses, facsimile numbers of record, and electronic mail
addresses of record for the parties are set forth on the signature
page to this Agreement and may be changed from time to time by
notice from the changing party to the other party pursuant to the
provisions of this Section 7.4.


 


7.5           
Public
Disclosures.
Except
as may be required, as determined in good faith by the disclosing
party, by applicable law, rules, regulations or orders or the rules
of any securities exchange or market, neither party will make any
public statement or release concerning this Agreement or any of the
transactions contemplated by this Agreement, except for such
written information as has been approved in advance in writing as
to form and content by the other party, which approval will not be
unreasonably withheld. Notwithstanding the foregoing, neither party
shall have the right to review or approve any filings or furnished
disclosure or other public disclosures that the other party
determines in good faith are reasonably required to be made (i)
with the SEC, any other governmental agency, or any securities
exchange or market or (ii) by means of a press release, website
postings or other publicly available means of
distribution.         


 


7.6           
Further
Assurances. Subject to the terms of this Agreement, from
time to time, the Requesting Persons and their respective
Affiliates and Associates shall execute and deliver such additional
documents and use commercially reasonable efforts to take, or cause
to be taken, all such further actions, and to do or cause to be
done, all things reasonably necessary, proper or advisable under
applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement.


 


7.7           Choice
of Law. This Agreement, its construction and the
determination of any rights, duties or remedies of the parties
arising out of or relating to this Agreement will be governed by,
enforced under and construed in accordance with the laws of the
State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws of such
state.


 


 



 

-12-







 






 


 


7.9            
Severability.
Each term, covenant, condition, or provision of this Agreement will
be viewed as separate and distinct, and in the event that any such
term, covenant, condition or provision will be deemed to be invalid
or unenforceable, the arbitrator or court finding such invalidity
or unenforceability will modify or reform this Agreement to give as
much effect as possible to the terms and provisions of this
Agreement. Any term or provision which cannot be so modified or
reformed will be deleted and the remaining terms and provisions
will continue in full force and effect.


 


7.10           
Interpretation.
Every provision of this Agreement is the result of full
negotiations between the parties, both of whom have either been
represented by counsel throughout or otherwise been given an
opportunity to seek the aid of counsel. Each party hereto further
agrees and acknowledges that it is sophisticated in legal affairs
and has reviewed this Agreement in detail. Accordingly, no
provision of this Agreement shall be construed in favor of or
against any of the parties hereto by reason of the extent to which
any such party or its counsel participated in the drafting thereof.
Captions and headings of sections contained in this Agreement are
for convenience only and shall not control the meaning, effect, or
construction of this Agreement. Time periods used in this Agreement
shall mean calendar periods unless otherwise expressly
indicated.


 


7.11           
Dispute
Resolution, Forum.


 


(a)           
The parties consent to and agree that any dispute or claim arising
hereunder shall be submitted to binding arbitration in New Castle
County, Delaware, and conducted in accordance with the Judicial
Arbitration and Mediation Service (“JAMS”) rules of practice then in
effect or such other procedures as the parties may agree in
writing, and the parties expressly waive any right they may
otherwise have to cause any such action or preceding to be brought
or tried elsewhere. The parties hereunder further agree that (i)
any request for arbitration shall be made in writing and must be
made within a reasonable time after the claim, dispute or other
matter in question has arisen; provided however, that in no event
shall the demand for arbitration be made after the date that
institution of legal or equitable proceedings based on such claim,
dispute, or other matter would be barred by the applicable
statue(s) of limitations; (ii) the appointed arbitrator must be a
former or retired judge or attorney at law with at least ten (10)
years’ experience in commercial matters; (iii) costs and fees
of the arbitrator shall be borne by both parties equally, unless
the arbitrator or arbitrators determine otherwise; (iv) depositions
may be taken and other discovery may be obtained during such
arbitration proceedings to the same extent as authorized in civil
judicial proceedings; and (v) the award or decision of the
arbitrator, which may include equitable relief, shall be final and
judgment may be entered on such award in accordance with applicable
law in any court having jurisdiction over the matter.


 


(b)           
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.


 


 



 

-13-







 






 


 


(c)            
The parties acknowledge and agree that money damages may not be a
sufficient remedy for a breach of certain provisions of the
Agreement, including but not limited to Articles II and III, and
accordingly, a non-breaching party may be entitled to specific
performance and injunctive relief as remedies for such violation.
Accordingly, notwithstanding the other provisions of this Section
7.11, the parties agree that a non-breaching party may seek relief
in a court of competent jurisdiction for the purposes of seeking
equitable relief hereunder, and that such remedies shall not be
deemed to be exclusive remedies for a violation of the terms of the
Agreement but shall be in addition to all other remedies available
to the non-breaching party at law or in equity.


 


(d)           
In any action, arbitration, or other proceeding by which one party
either seeks to enforce its rights under the Agreement or seeks a
declaration of any rights or obligations under the Agreement, the
prevailing party will be entitled to reasonable attorney’s
fees, and subject to Section 7.11(a), reasonable costs and expenses
incurred to resolve such dispute and to enforce any final
judgment.


 


(e)           
No remedy conferred on either party by any of the specific
provisions of this Agreement is intended to be exclusive of any
other remedy, and each and every remedy will be cumulative and will
be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or otherwise.
The election of one or more remedies by a party will not constitute
a waiver of the right to pursue other available
remedies.

 





7.12           Counterparts.
This Agreement may be executed in counterparts, each of which will
be deemed an original hereof and all of which together will
constitute one and the same instrument.


 


7.13           Facsimile,
PDF or Electronic Signatures. This Agreement may be executed
by facsimile, PDF or by means of an electronic signature by either
party and such signature shall be deemed binding for all purposes
hereof, without delivery of an original signature being thereafter
required.


 



[Remainder of Page Intentionally Left Blank; Signature Page,
Schedules and Exhibits Follow]


 




 

-14-








 






 


In Witness
Whereof, the parties hereto have caused this Agreement to be
executed as of the Effective Date.

 



AutoWeb, Inc.


 

 


By:
/s/ Glenn E. Fuller  
                 
           


Glenn
E. Fuller


Executive Vice
President, Chief Legal and


Administrative
Officer and Secretary

 


Notice
Address:


AutoWeb,
Inc.


18872
MacArthur Blvd.


Suite
200


Irvine,
California 92612


Email
Address:


autolegal@autoweb.com


Facsimile No.:
949.608.3614


Attn:
Chief Legal Officer


 


 




 

-15-








 






 



requesting persons


 



Negari


 



/s/ Daniel M.
Negari          
             
  







Daniel
M. Negari


 



The 1 8 999 Trust


 



By: /s/ Daniel M.
Negari                    







Daniel
M. Negari, Trustee

 



Ambrose


 



/s/ Michael R.
Ambrose                     








Michael
R. Ambrose


 



The Insight Trust


 



By: /s/ Michael R. Ambrose    
         
  






Michael
R. Ambrose, Trustee

 


 



Notice Address for Stockholders


 


Daniel
M. Negari


The 1 8
999 Trust


Michael
Ambrose


The
Insight Trust


2121 E.
Tropicana Avenue, Suite 2


Las
Vegas, Nevada 89119


Attention:
Daniel M. Negari


Email
Address: d@xyz.rent


 

 


 




 

-16-








 






 



Exhibit A



Beneficial Ownership Schedule


 


 


	
Requesting
Person


	

Beneficial Ownership of Common Stock


	
 

	
 


	
Daniel M.
Negari


	
593,072








	
 

	
(includes The 1 8 999 Trust shares
beneficially owned + 48 shares held directly + 30,000 call options
held directly)


	
 

	
 


	
The 1 8 999
Trust


	
593,024 (directly held
shares)


	
 

	
 


	
Michael R.
Ambrose


	
28,898








	
 

	
(includes The Insight Trust shares
beneficially owned)


	
 

	
 


	
The Insight
Trust 


	
28,898 (directly held
shares)


	
 


	
 


	
Total Shares Beneficially Owned
By

	
621,970


	
Requesting
Persons

	
 






 


 

 

 


 




 

A-1








 






 


 



Exhibit B



Irrevocable Proxy


 

 


The
undersigned (“Requesting
Person”) hereby irrevocably appoints and constitutes
the Chief Executive Officer, Chief Financial Officer, and Chief
Legal Officer (individually, a “Proxyholder,” and collectively,
the “Proxyholders”) of AutoWeb, Inc, a
Delaware corporation (“Company”), and each of them
individually, the agents, attorneys-in-fact and proxies of the
undersigned, with full power of substitution and resubstitution, to
the full extent of the undersigned’s rights with respect to
all Exemption Shares (as defined in that certain Tax Benefit
Preservation Plan Exemption Agreement dated as of November 30, 2018
among the Company and the Requesting Persons (“Plan Exemption Agreement”))
Beneficially Owned (as such term is defined in the Plan Exemption
Agreement) by the Requesting Persons (including any Exemption
Shares acquired by any Requesting Person on or after the date
hereof and before the date this proxy terminates) to vote the
Exemption Shares as follows: the Proxyholders named above, or each
of them individually, are empowered at any time before termination
of this proxy to exercise all voting rights of the undersigned at
any meeting (whether annual or special and whether or not an
adjourned or postponed meeting) of stockholders of the Company, and
in any action by written consent of the stockholders of the
Company, in the same proportion (for or against) as the shares of
Common Stock actually voted for or against such matter by the
stockholders of the Company other than the Requesting Persons and
their respective Affiliates or Associates.

 


The
proxy hereby granted by the Requesting Persons to the Proxyholders
is granted as of the date of this Irrevocable Proxy in order to
secure the obligations of the Requesting Persons set forth in
Article III of the Plan Exemption Agreement and is irrevocable in
accordance with subdivision (e) of Section 212 of the
Delaware General Corporation Law.

 


This
Irrevocable Proxy will terminate upon the termination of the Plan
Exemption Agreement in accordance with its terms. The authority of
a Proxyholder to continue to act as a Proxyholder under this
Irrevocable Proxy will terminate if the Proxyholder ceases to be an
officer or employee of the Company. This Irrevocable Proxy may not
be transferred by any Proxyholder or assumed by any person without
the express prior written consent of the undersigned. The
Requesting Persons acknowledge that the foregoing provisions of
this paragraph shall not preclude or require the Requesting
Persons’ consent for the substitution or resubstitution of a
new Proxyholder who is also an officer and/or employee of the
Company.

 


Except
as contemplated or permitted by the Plan Exemption Agreement, upon
the execution hereof, all prior proxies given by the undersigned
with respect to the Exemption Shares are hereby revoked and no
subsequent proxies regarding the Exemption Shares will be given
until such time as this Irrevocable Proxy shall be terminated in
accordance with its terms. Any obligation of the undersigned
hereunder shall be binding upon the successors and assigns of the
undersigned.

 


This
Irrevocable Proxy is irrevocable (to the fullest extent permitted
by law) and shall survive the insolvency, incapacity, death,
liquidation or dissolution of the undersigned.

 


Dated:
November 30, 2018

 



[Note that a separate Irrevocable Proxy will be prepared for each
Requesting Person]


 



 

B-1







 






 


 


 



Negari


_____________________________


Daniel
M. Negari


 



The 1 8 999 Trust


 


By:
_________________________


Daniel
Negari, Trustee


 



Ambrose


 


_____________________________


Michael
R. Ambrose


 



The Insight Trust


 


By:
_________________________


Michael
R. Ambrose, Trustee


 


 


 







 




 

B-2








 






 






 



Exhibit C



Plan Exemption Request Letter



[Attached]


 


 


 




 

C-1








 






 




 




 

C-2








 








 




 

C-3








 










 

C-4