EXHIBIT 10.1
BRIDGE LOAN AGREEMENT
BRIDGE LOAN AGREEMENT (the "Agreement") dated as of January 4, 2001, by
and between UNITED SHIPPING & TECHNOLOGY, INC., a Utah corporation (the
"Company"), TH Xxx.Xxxxxx Internet Partners, LP, a Delaware limited partnership,
TH Xxx.Xxxxxx Internet Parallel Partners, LP, a Delaware limited partnership,
THLi Coinvestment Partners LLC, a Delaware limited liability company, and Blue
Star I, LLC, a Delaware limited liability company (together, the "Investors" and
each a "Investor").
RECITALS:
* Whereas, the Company requires bridge financing for its operations
until such time as it can complete a debt or equity financing transaction; and
* Whereas, the Investors desire to lend funds to the Company on the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
set forth herein, and for other good and valuable consideration, the parties
hereto agree as follows:
1. Loan/Note(s). The Investors agree to lend to the Company the sum of
$3,500,000, evidenced by the delivery to the Investors as of the date hereof of
a convertible bridge note in the form attached hereto as Appendix A (the
"Note"). The Investors may also, at their sole discretion and option, lend to
the Company up to a further $1,500,000 evidenced by the delivery of and one or
more convertible bridge notes in the same form as the Note (together with the
Note, the "Notes"). Interest on the Notes shall be payable at maturity in
immediately available funds or, subject to the shareholder consent set forth in
Section 10 having been obtained, at the option of the Investors, in Series D
Convertible Preferred Stock (the "Series D Preferred") of the Company, valued at
the conversion price ("Conversion Price") specified in such Notes. The Notes may
be converted into Series D Preferred of the Company or other stock of the
Company, in accordance with the terms of the Notes. Shares of Series D Preferred
of the Company issuable pursuant to the Notes or the Warrant as defined in
Section 2 hereof, are hereinafter sometimes collectively referred to as the
"Shares."
2. Warrants. As additional consideration for the loan, the Company
shall issue to each of the Investors, concurrently with delivery of the Note, a
warrant, in the form attached hereto as Appendix B (the "Warrant"), to purchase
shares of Series D Convertible Preferred Stock or other stock of the Company.
The shares of Series D Convertible Preferred Stock or other stock of the Company
issuable upon exercise of the Warrant are referred to hereinafter as "Warrant
Shares."
3. Repayment. Unless otherwise converted, all outstanding principal and
accrued interest on the Note shall be due and payable on July 4, 2001.
4. Investor Mandatory Conversion. The Investors may at any time, upon
written notice to the Company, require conversion of all or any portion of the
Notes into Series D
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Convertible Preferred Stock of the Company (or other stock of the Company as set
forth in the Notes) at the Conversion Price set forth in such Notes, plus all
accrued interest.
5. Representations and Warranties of the Company. The Company
represents and warrants to the Investors that this Agreement has been duly
authorized by all necessary corporate action on behalf of the Company, has been
duly executed and delivered by an authorized officer of the Company, and the
valid and binding agreement of the Company, subject, as to enforcement or
remedies, to applicable bankruptcy, insolvency, moratorium, reorganization and
similar laws affecting creditors' rights generally and to general equitable
principles. All corporate action necessary for the authorization, issuance, and
delivery of the Notes, the Warrant, and the Warrant Shares has been taken on or
prior to the date hereof.
6. Representations and Warranties of the Investors. Each Investor
represents and warrants to the Company as follows:
(a) This Agreement when executed and delivered by the Investor
will constitute a valid and legally binding obligation of Investor,
subject, as to enforcement of remedies, to applicable bankruptcy,
insolvency, moratorium, reorganization and similar laws affecting
creditors' rights generally and to general equitable principles.
(b) Investor acknowledges that it has had an opportunity to
discuss the business, affairs and current prospects of the Company with
its officers. Investor further acknowledges having had access to
information about the Company that it has requested. Investor has
received and carefully reviewed the following of the Company's filings
with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended: Report on Form 10-KSB for the fiscal
year ended July 1, 2000; Proxy Statement dated July 13, 2000, relating
to Special Shareholders meeting; Report on Form 10-QSB for the fiscal
quarter ended September 30, 2000; Proxy Statement dated December 22,
2000 in connection with Annual Meeting of Shareholders to be held on
January 19, 2001; S-3 Registration Statement filed March 1, 2000 and
amendments thereto dated August 18, 2000, September 10, 2000 and
prospectuses filed pursuant to Rule 424B, dated September 12, 2000 and
December 18, 2000. Investor further acknowledges:
(i) that Investor has knowledge and experience in
financial and business matters such that Investor is capable
of evaluating the merits and risks of prospective investment
in the Notes, the Warrant, the Shares and the Warrant Shares
and is able to bear such risks; and
(ii) that Investor understands that purchase of the
Notes and investment in the Shares involves a high degree of
risk, but believes that the investment is suitable for
Investor based upon Investor's objectives and financial needs,
and Investor has adequate means for providing for Investor's
current financial needs and contingencies, and has no need for
liquidity of investment with respect to the Notes, the Warrant
or the Shares.
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(c) The Shares and the Warrant Shares will be acquired for
investment purposes for the account of Investor, and not with a view to
or in connection with the resale or distribution of any part thereof.
(d) Investor understands that the Shares will not be
registered under the Act, on the ground that the sale provided for in
this Agreement is exempt from registration under of the Act, and that
the reliance of the Company on such exemption is predicated in part on
Investor's representations set forth in this Agreement. Investor
understands that the Shares and the Warrant Shares being purchased
hereunder are restricted securities within the meaning of Rule 144
under the Act; that the Shares and the Warrant Shares are not
registered and must be held indefinitely unless they are subsequently
registered or an exemption from such registration is available.
(e) It is understood that each certificate representing (a)
the Shares, (b) the Warrant Shares, and (c) any other securities issued
in respect of the any of the foregoing upon any stock split, stock
dividend, recapitalization, merger or similar event shall be stamped or
otherwise imprinted with a legend substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES
LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE
AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. EXCEPT IN CONNECTION WITH
SALES UNDER RULE 144 PROMULGATED UNDER THE ACT, THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
(f) The legend set forth above shall be removed by the Company
from any certificate evidencing Shares or Warrant Shares or upon
delivery to the Company of an opinion by counsel, reasonably
satisfactory to the Company, that a registration statement under the
Act is at that time in effect with respect to the legend security or
that such security can be freely transferred in a public sale without
such a registration statement being in effect and that such transfer
will not jeopardize the exemption or exemptions from registration
pursuant to which the Company issued the Shares or the Warrant Shares;
and if such legend is removed based upon the availability of SEC Rule
144 for such transfer or sale, such removal may be conditioned upon
compliance by the holder of the Shares or Warrant Shares or upon
evidence of compliance with Rule 144.
(g) Investor is an accredited investor as defined in SEC
Regulation D.
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7. Other.
(a) This Agreement and the rights and obligations of the
parties hereunder shall not be assignable, in whole or in part, by any
party without the prior written consent of the other party.
(b) This Agreement, including the appendices attached hereto,
constitutes the entire agreement of the parties relative to the subject
matter hereof and supersedes any and all other agreements and
understandings, whether written or oral, relative to the matters
discussed herein.
(c) This Agreement shall be construed and enforced in
accordance with the laws of the State of New York, without regard to
conflicts of laws principles.
(d) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
8. Board Members. The Investor shall have the right to appoint an
additional two persons to the Company's Board of Directors, and, subject to the
terms and conditions of the Company's bylaws and certificate of incorporation,
the Company agrees to take all the necessary action to increase the size of the
Board of Directors or otherwise reconfigure the Board to accommodate such new
members.
9. Shareholder Approval. At the next meeting of shareholders of the
Company, other than the Annual Meeting of Shareholders to be held on January 19,
2001, to be held following the issuance of the Notes, the Company shall: (a)
seek the ratification by its shareholders of the conversion of the Notes by the
Investors in accordance with their respective terms, and (b) take all reasonable
steps in its power to ensure that the Board of Directors of the Company
recommend to its shareholders that such actions of the Company be ratified.
10. Conditions to the Issue of the Note. The issue of the Note
hereunder and any further Notes shall be subject to the following:
(a) The Board of Directors of the Company shall have
authorized the issuance of sufficient Series D Convertible Preferred
Stock (such Stock having terms to be determined by mutual agreement
between the Company and the Investors, but in any case not less
advantageous and having no less priority than the Series C Convertible
Preferred Stock of the Company) to enable conversion of the Note in
accordance with its terms;
(b) The Board of Directors of the Company shall have taken all
steps necessary to enable the appointment of the additional two persons
to the Board as set forth in Section 8 above;
(c) The consent of General Electric Credit Corporation to the
issuance of the Notes on the terms set forth therein and in this
Agreement shall have been obtained.
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IN WITNESS WHEREOF, the parties have executed this Bridge Loan
Agreement as of the date first written above.
UNITED SHIPPING & TECHONOLOGY,
INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
TH XXX.XXXXXX INTERNET PARTNERS,
L.P.
By: TH Xxx.Xxxxxx Internet Advisors L.P.
Its: General Partner
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
TH XXX.XXXXXX INTERNET PARALLEL
PARTNERS, L.P.
By: TH Xxx.Xxxxxx Internet Advisors L.P.
Its: General Partner
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
THLI COINVESTMENT PARTNERS, LLC
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
BLUE STAR I, LLC
By: /s/ Xxxxxx X. Xxx
-------------------------------------
Name: Xxxxxx X. Xxx
Its: Managing Member
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