EXHIBIT 10.2
WARRANT
TO PURCHASE SHARES OF
COMMON STOCK OF
U-SHIP, INC.
APRIL 12, 1999
This Certifies that, in consideration of having paid the sum of $50,000 to
U-Ship, Inc., a Utah corporation (the "Company") on the date hereof, and for
other good and valuable consideration, _______________________ (the
"Warrantholder"), is entitled to subscribe for and purchase from the Company, at
any time after April 12, 1999, and prior to April 12, 2004 (the "Expiration
Date") up to 50,000 shares of the Company's Common Stock at a purchase price of
$1.75 per share (the "Purchase Price"), subject to adjustment as hereinafter set
forth.
1 Definitions. For the purposes of this Warrant the following terms
shall have the following meanings:
"Commission" shall mean the Securities and Exchange Commission, or
any other federal agency then administering the Securities Act.
"Company" shall mean U-Ship, Inc., a Utah corporation, and any
corporation which shall succeed to, or assume, the obligations of said
corporation hereunder.
"Common Stock" shall mean the shares of Common Stock of the Company,
$0.004 par value.
"Other Securities" shall mean any stock (other than Common Stock) or
other securities of the Company which the Warrantholder at any time shall
be entitled to receive, or shall have received, upon the exercise of the
Warrant, in lieu of or in addition to Common Stock, or which at any time
shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder, as in effect
at the time.
"Subscription Form" shall mean the subscription forms attached
hereto.
"Transfer" shall mean any sale, assignment, pledge, or other
disposition of any Warrant and/or Warrant Shares, or of any interest in
either thereof, which would constitute a sale thereof within the meaning
of Section 2(3) of the Securities Act.
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"Warrant Shares" shall mean the shares of Common Stock purchased or
purchasable by the Warrantholder upon the exercise of the Warrant pursuant
to Section 2 hereof.
"Warrantholder" shall mean the holder or holders of the Warrant or
any related Warrant Shares.
"Warrant" shall mean this Warrant, and all Warrants issued in
exchange, transfer or replacement thereof.
All terms used in this Warrant which are not defined in Section 1 hereof
have the meanings respectively set forth elsewhere in this Warrant.
2 Exercise of Warrant, Issuance of Certificate, and Payment for
Warrant Shares. The rights represented by this Warrant may be exercised at any
time after April 12, 1999, and prior to the Expiration Date, by the
Warrantholder, in whole or in part (but not as to any fractional share of Common
Stock), by: (a) delivery to the Company of a completed Subscription Form, (b)
surrender to the Company of this Warrant properly endorsed and signature
guaranteed, and (c) delivery to the Company of a certified or cashier's check
made payable to the Company in an amount equal to the aggregate Purchase Price
of the shares of Common Stock being purchased, at its principal office or agency
in Minnesota (or such other office or agency of the Company as the Company may
designate by notice in writing to the holder hereof). The Company agrees and
acknowledges that the shares of Common Stock so purchased shall be deemed to be
issued to the holder hereof as the record owner of such shares as of the close
of business on the date on which this Warrant, properly endorsed, and the
Subscription Form shall have been surrendered and payment made for such shares
as aforesaid. Upon receipt thereof, the Company shall, as promptly as
practicable, and in any event within fifteen (15) days thereafter, execute or
cause to be executed and deliver to the Warrantholder a certificate or
certificates representing the aggregate number of shares of Common Stock
specified in said Subscription Form. Each stock certificate so delivered shall
be in such denomination as may be requested by the Warrantholder and shall be
registered in the name of the Warrantholder or such other name as shall be
designated by the Warrantholder. If this Warrant shall have been exercised only
in part, the Company shall, at the time of delivery of said stock certificate or
certificates, deliver to the Warrantholder a new Warrant evidencing the rights
of such holder to purchase the remaining shares of Common Stock covered by this
Warrant. The Company shall pay all expenses, taxes, and other charges payable in
connection with the preparation, execution, and delivery of stock certificates
pursuant to this Section 2, except that, in case any such stock certificate or
certificates shall be registered in a name or names other than the name of the
Warrantholder, funds sufficient to pay all stock transfer taxes which shall be
payable upon the execution and delivery of such stock certificate or
certificates shall be paid by the Warrantholder to the Company at the time of
delivering this Warrant to the Company as mentioned above.
3 Ownership of this Warrant. The Company may deem and treat the
registered Warrantholder as the holder and owner hereof (notwithstanding any
notations of ownership or writing made hereon by anyone other than the Company)
for all purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for transfer as provided herein and then only if
such transfer meets the requirements of Section 5.
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4 Exchange, Transfer, and Replacement. Subject to Section 5 hereof,
this Warrant is exchangeable upon the surrender hereof by the Warrantholder to
the Company at its office or agency described in Section 2 hereof for new
Warrants of like tenor and date representing in the aggregate the right to
purchase the number of shares purchasable hereunder, each of such new Warrants
to represent the right to purchase such number of shares (not to exceed the
aggregate total number purchasable hereunder) as shall be designated by the
Warrantholder at the time of such surrender. Subject to Section 5 hereof, this
Warrant and all rights hereunder are transferable, in whole or in part, upon the
books of the Company by the Warrantholder in person or by duly authorized
attorney, and a new Warrant of the same tenor and date as this Warrant, but
registered in the name of the transferee, shall be executed and delivered by the
Company upon surrender of this Warrant, duly endorsed, at such office or agency
of the Company. Upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction, or mutilation of this Warrant, and, in
the case of loss, theft, or destruction, of indemnity or security reasonably
satisfactory to it, and upon surrender and cancellation of this Warrant, if
mutilated, the Company will make and deliver a new Warrant of like tenor, in
lieu of this Warrant. This Warrant shall be promptly canceled by the Company
upon the surrender hereof in connection with any exchange, transfer, or
replacement. The Company shall pay all expenses, taxes (other than stock
transfer taxes), and other charges payable in connection with the preparation,
execution, and delivery of Warrants pursuant to this Section 4.
5 Restrictions on Transfer. Notwithstanding any provisions contained
in this Warrant to the contrary, neither this Warrant nor the Warrant Shares
shall be transferable except upon the conditions specified in this Section 5,
which conditions are intended, among other things, to ensure compliance with the
provisions of the Securities Act in respect of the transfer of this Warrant or
such Warrant Shares. The holder of this Warrant agrees that such holder will not
transfer this Warrant or the related Warrant Shares (a) prior to delivery to the
Company of an opinion of counsel selected by the Warrantholder and reasonably
satisfactory to the Company, stating that such transfer is exempt from
registration under the Securities Act, or (b) until registration of such Warrant
and/or Warrant Shares under the Securities Act has become effective and
continues to be effective at the time of such transfer. An appropriate legend
may be endorsed on the Warrant and the certificates of the Warrant Shares
evidencing these restrictions. The holder of this Warrant further agrees that
such holder will not, for a period of 180 days from the date that a registration
statement covering securities offered by the Company is declared effective by
the Commission, offer to sell, contract to sell, or otherwise sell, dispose of,
loan, pledge or grant any rights with respect to the Warrant or the Warrant
Shares owned by the holder, otherwise than with the prior written consent of the
Company.
6 Antidilution Provisions. The rights granted hereunder are subject to
the following:
(a) Stock Splits. In case at any time the Company shall subdivide
its outstanding shares of Common Stock into a greater number of shares,
the Purchase Price in effect immediately prior to such subdivision shall
be proportionately reduced and the number of Warrant Shares purchasable
pursuant to this Warrant immediately prior to such subdivision shall be
proportionately increased, and conversely, in case at any time the Company
shall combine its outstanding shares of Common Stock into a smaller number
of shares, the Purchase Price in effect immediately prior to such
combination shall be proportionately increased and the number of Warrant
Shares purchasable upon
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the exercise of this Warrant immediately prior to such combination shall
be proportionately reduced. Except as provided in this paragraph (a), no
adjustment in the Purchase Price and no change in the number of Warrant
Shares so purchasable shall be made pursuant to this Section 6 as a result
of or by reason of any such subdivision or combination.
(b) Reorganization, Reclassification, Consolidation, Merger, or
Sale. If any capital reorganization or reclassification or merger of the
Company with another corporation, or the sale of all or substantially all
of its assets to another corporation, shall be effected in such a way that
holders of shares of Common Stock shall be entitled to receive Common
Stock, Other Securities or assets with respect to or in exchange for
shares of Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate
provision shall be made whereby the Warrantholder shall thereafter have
the right to purchase and receive upon the basis and upon the terms and
conditions specified in the Warrant and in lieu of the shares of Common
Stock of the Company immediately theretofore purchasable and receivable
upon the exercise of the Warrant such shares of Common Stock, Other
Securities or assets as may be issued or payable with respect to or in
exchange for a number of outstanding shares of Common Stock equal to the
number of shares of Common Stock immediately theretofore purchasable and
receivable upon the exercise of the Warrant had such reorganization,
reclassification, consolidation, merger or sale not taken place, and in
any such case appropriate provision shall be made with respect to the
rights and interests of the Warrantholder so that the provisions of the
Warrant (including, without limitation, provisions for adjustment of the
Purchase Price and the number of shares purchasable upon the exercise of
the Warrant) shall thereafter be applicable, as nearly as may be, in
relation to any shares of Common Stock, Other Securities or assets
thereafter deliverable upon the exercise of the Warrant.
7 Special Agreements of the Company.
(a) Will Reserve Shares. The Company will reserve and set apart
and have at all times the number of shares of authorized but unissued
Common Stock deliverable upon the exercise of the Warrant, and it will
have at all times any other rights or privileges provided for herein
sufficient to enable it at any time to fulfill all of its obligations
hereunder.
(b) Will Avoid Certain Actions. The Company will not, by amendment
of its Articles of Incorporation or through any reorganization, transfer
of assets, consolidation, merger, issue or sale of securities or
otherwise, avoid or take any action which would have the effect of
avoiding the observance or performance hereunder by the Company, but will
at all times in good faith assist in carrying out of all the provisions of
the Warrant and in taking all such actions as may be necessary or
appropriate in order to protect the rights of the Warrantholder against
dilution or other impairment.
8 Provisions for Registration. Despite anything in this Warrant to the
contrary, the Warrantholder shall have the following rights regarding
registration of Warrant Shares which may be hereafter acquired upon exercise of
this Warrant.
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(a) Required Registration. If at any time the Company receives the
written request from the Holder of this Warrant, the Company shall prepare
and file a registration statement under the Securities Act covering the
Warrant Shares which are the subject of such requests and shall use its
best efforts to cause such registration statement to become effective;
provided, however, that all Warrant Shares covered by such registration
statement shall be converted into Common Stock prior to inclusion in such
registration statement. In addition, upon the receipt of the
aforementioned request, the Company shall promptly give written notice to
all other record holders of Warrant Shares that such registration is to be
effected. The Company shall include in such registration statement such
Warrant Shares for which it has received written requests to register by
such other record holders within fifteen (15) days after the Company's
written notice to such other record holders. The Company shall be
obligated to prepare, file and cause to become effective only two (2)
registration statements pursuant to this Section 8(a). In the event that
the holders of a majority of the Warrant Shares for which registration has
been requested pursuant to this Section determine for any reason not to
proceed with a registration at any time before the registration statement
has been declared effective by the Commission, and such holders thereafter
request the Company to withdraw such registration statement, the holders
of such Warrant Shares agree to bear their own expenses incurred in
connection therewith and to reimburse the Company for the expenses
incurred by it attributable to such registration statement, then, and in
such event, the holders of such Warrant Shares shall not be deemed to have
exercised their right to require the Company to register Warrant Shares
pursuant to this Section 8(a).
(b) Incidental Registration. Each time the Company shall determine
to proceed with the actual preparation and filing of a registration
statement under the Securities Act in connection with the proposed offer
and sale for money of any of its Common Stock by it or any of its security
holders, the Company will give written notice of its determination to all
record holders of Warrant Shares. Upon the written request of a record
holder of any Warrant Shares given within fifteen (15) days after receipt
of any such notice from the Company, the Company will, except as herein
provided, cause all such Warrant Shares, the record holders of which have
so requested registration thereof, to be included in such registration
statement, all to the extent requisite to permit the sale or other
disposition by the prospective seller or sellers of the Warrant Shares to
be so registered; provided, however, that (a) all such Warrant Shares to
be so registered shall be converted into Common Stock prior to sale
pursuant to such registration statement; (b) nothing herein shall prevent
the Company from, at any time, abandoning or delaying any such
registration initiated by it; and (c) if the Company determines not to
proceed with a registration after the registration statement has been
filed with the Commission and the Company's decision not to proceed is
primarily based upon the anticipated public offering price of the
securities to be sold by the Company, the Company shall promptly complete
the registration for the benefit of those selling security holders who
wish to proceed with a public offering of their securities and who bear
all expenses in excess of $25,000 incurred by the Company as the result of
such registration after the Company has decided not to proceed. If any
registration pursuant to this Section shall be underwritten in whole or in
part, the Company may require that the Warrant Shares requested for
inclusion pursuant to this Section be included in the underwriting on the
same terms and conditions as the securities otherwise being sold through
the underwriters. If in the good faith judgment of the managing
underwriter of such public offering the inclusion of all of
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the Warrant Shares originally covered by a request for registration would
reduce the number of shares to be offered by the Company or interfere with
the successful marketing of the shares of stock offered by the Company,
the number of Warrant Shares otherwise to be included in the underwritten
public offering may be reduced pro rata among the holders thereof
requesting such registration to a number that the managing underwriter
believes will not adversely affect the sale of shares by the Company.
Those securities which are thus excluded from the underwritten public
offering, and any other Common Stock owned by such holders, shall be
withheld from the market by the holders thereof for a period, not to
exceed one hundred eighty (180) days, which the managing underwriter
reasonably determines is necessary in order to effect the underwritten
public offering.
(c) Registration Procedures. If and whenever the Company is
required by the provisions of Sections 8(a) or 8(b) to effect the
registration of any Warrant Shares under the Securities Act, the Company
will:
1 prepare and file with the Commission a registration
statement with respect to such Warrant Shares, and use its best
efforts to cause such registration statement to become and remain
effective for such period as may be reasonably necessary to effect
the sale of such Warrant Shares, not to exceed three (3) months;
2 prepare and file with the Commission such amendments to
such registration statement and supplements to the prospectus
contained therein as may be necessary to keep such registration
statement effective for such period as may be reasonably necessary
to effect the sale of such Warrant Shares, not to exceed three (3)
months;
3 furnish to the security holders participating in such
registration and to the underwriters of the Warrant Shares being
registered such reasonable number of copies of the registration
statement, preliminary prospectus, final prospectus and such other
documents as such security holders and underwriters may reasonably
request in order to facilitate the public offering of such Warrant
Shares;
4 use its best efforts to register or qualify the Warrant
Shares covered by such registration statement under such state
securities or blue sky laws of such jurisdictions as such
participating holders may reasonably request within ten (10) days
following the original filing of such registration statement, except
that the Company shall not for any purpose be required to execute a
general consent to service of process or to qualify to do business
as a foreign corporation in any jurisdiction wherein it is not so
qualified;
5 notify the security holders participating in such
registration, promptly after it shall receive notice thereof, of the
time when such registration statement has become effective or a
supplement to any prospectus forming a part of such registration
statement has been filed;
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6 notify such holders promptly of any request by the
Commission for the amending or supplementing of such registration
statement or prospectus or for additional information;
7 prepare and file with the Commission, promptly upon the
request of any such holders, any amendments or supplements to such
registration statement or prospectus which, in the opinion of
counsel for such holders (and concurred in by counsel for the
Company), is required under the Securities Act or the rules and
regulations thereunder in connection with the distribution of the
Warrant Shares by such holder;
8 prepare and promptly file with the Commission and
promptly notify such holders of the filing of such amendment or
supplement to such registration statement or prospectus as may be
necessary to correct any statements or omissions if, at the time
when a prospectus relating to such securities is required to be
delivered under the Securities Act, any event shall have occurred as
the result of which any such prospectus or any other prospectus as
then in effect would include an untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances in which they were made,
not misleading;
9 advise such holders, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop
order by the Commission suspending the effectiveness of such
registration statement or the initiation or threatening of any
proceeding for that purpose and promptly use its best efforts to
prevent the issuance of any stop order or to obtain its withdrawal
if such stop order should be issued; and
10 not file any amendment or supplement to such
registration statement or prospectus to which a majority in interest
of such holders shall have reasonably objected on the grounds that
such amendment or supplement does not comply in all material
respects with the requirements of the Securities Act or the rules
and regulations thereunder, after having been furnished with a copy
thereof at least five (5) business days prior to the filing thereof,
unless in the opinion of counsel for the Company the filing of such
amendment or supplement is reasonably necessary to protect the
Company from any liabilities under any applicable federal or state
law and such filing will not violate applicable law.
(d) Expenses. With respect to any registration, requested pursuant
to Section 8(a) (except as otherwise provided in such section with respect
to registrations voluntarily terminated at the request of the requesting
security holders) and with respect to each inclusion of securities in a
registration statement pursuant to Section 8(b) (except as otherwise
provided in Section 8(b) with respect to registrations terminated by the
Company), the Company shall bear the following fees, costs and expenses:
all registration, filing and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for the Company, fees and
disbursements of counsel for the underwriter or underwriters of such
securities (if the Company and/or selling security holders are required to
bear such fees and disbursements), all internal Company expenses, the
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premiums and other costs of policies of insurance against liability
arising out of the public offering, and all legal fees and disbursements
and other expenses of complying with state securities or blue sky laws of
any jurisdictions in which the securities to be offered are to be
registered or qualified. Fees and disbursements of counsel and accountants
for the selling security holders, underwriting discounts and commissions
and transfer taxes for selling security holders and any other expenses
incurred by the selling security holders not expressly included above
shall be borne by the selling security holders.
(e) Copies of Prospectus; Amendments of Prospectus. The Company
will furnish the Warrantholder with a reasonable number of copies of any
prospectus or offering circular and one copy of the registration statement
included in such filings and will amend or supplement the same as required
during the nine (9) month period following the effective date of the
registration statement, provided, that the expenses of any amendment or
supplement made or filed more than three (3) months after the effective
date of the registration statement, at the request of the Warrantholder,
shall be borne by the Warrantholder.
(f) Conditions of the Company's Obligations. It shall be a
condition of the Company's obligation to register the Warrant Shares
hereunder that the Warrantholder agrees to cooperate with the Company in
the preparation and filing of any such registration statement, or in its
efforts to establish that the proposed sale is exempt under the Securities
Act, as to any proposed distribution. It shall also be a condition of the
Company's obligations under this Agreement that, in the case of the filing
of any registration statement, and to the extent permissible under the
Securities Act, and controlling precedent thereunder, the Company and the
Warrantholder provide cross-indemnification agreements to each other in
customary scope covering the accuracy and completeness of the information
furnished by each.
9 Notices. Any notice or other document required or permitted to be
given or delivered to the Warrantholder shall be delivered or sent by certified
mail to the Warrantholder at the last address shown on the books of the Company
maintained for the registry and transfer of the Warrants. Any notice or other
document required or permitted to be given or delivered to the Company shall be
delivered or sent by certified or registered mail to the principal office of the
Company.
10 No Rights as Shareholders; Limitation of Liability. This Warrant
shall not entitle any holder hereof to any of the rights of a shareholder of the
Company. No provisions hereof, in the absence of affirmative action by the
holder hereof to purchase shares of Common Stock, and no mere enumeration herein
of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Purchase Price or as a shareholder of the
Company whether such liability is asserted by the Company or by creditors of the
Company.
11 Governing Law. This Warrant shall be governed by, and construed and
enforced in accordance with, the laws of the State of Minnesota, without regard
to conflicts of laws principles.
12 Miscellaneous. This Warrant and any provision hereof may be changed,
waived, discharged, or terminated only by an instrument in writing signed by the
party (or any
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predecessor in interest thereof) against which enforcement of the same is
sought. The headings in this Warrant are for purposes of reference only and
shall not affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by a
duly authorized officer, and to be dated as of the 12th day of April, 1999.
U-SHIP, INC.
By:
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Xxxxx X. Xxxxx
Chief Executive Officer
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "1933 ACT") OR UNDER THE SECURITIES LAWS OF ANY
OTHER STATE AND MAY NOT BE TRANSFERRED WITHOUT (i) THE OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT
REGISTRATION UNDER THE 1933 ACT OR THE SECURITIES LAWS OF ANY APPLICABLE STATE;
OR (ii) SUCH REGISTRATION."
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FULL SUBSCRIPTION FORM
To Be Executed By the Registered Warrantholder if It/
She/He Desires to Exercise in Full the Within Warrant
The undersigned hereby exercises the right to purchase the _____________
shares of Common Stock covered by the within Warrant at the date of this
subscription and herewith makes payment of the sum of
$____________________________ representing the Purchase Price of $__________ per
share in effect at that date. Certificates for such shares shall be issued in
the name of and delivered to the undersigned, unless otherwise specified by
written instructions, signed by the undersigned and accompanying this
subscription.
Dated:
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Signature:
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Address:
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PARTIAL SUBSCRIPTION FORM
To be Executed by the Registered Warrantholder if It/She/He
Desires to Exercise in Part Only the Within Warrant
The undersigned hereby exercises the right to purchase __________ shares
of the total shares of Common Stock covered by the within Warrant at the date of
this subscription and herewith makes payment of the sum of $____________
representing the Purchase Price of $_________ per share in effect at this date.
Certificates for such shares and a new Warrant of like tenor and date for
the balance of the shares not subscribed for (if any) shall be issued in the
name of and delivered to the undersigned, unless otherwise specified by written
instructions, signed by the undersigned and accompanying this subscription.
The shares hereby subscribed for constitute ______________ shares of
Common Stock (to the nearest whole share) resulting from adjustment of
______________ shares of the total of __________________ shares of Common Stock
covered by the within Warrant, as said shares were constituted at the date of
the Warrant.
Dated:
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Signature:
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Address:
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