EXHIBIT 10.1
SUBSCRIPTION AGREEMENT
AND
LETTER OF INVESTMENT INTENT
United Shipping & Technology, Inc.
0000 00xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Chief Executive Officer
Gentlemen:
The undersigned, _____________________, desires to become a shareholder
of United Shipping & Technology, Inc. a Utah corporation (the "Company"), and
hereby subscribes for 666,667 shares (the "Shares") of the Company's common
stock, $0.004 par value (the "Common Stock") at a purchase price of $7.50 per
share, for the aggregate sum of $5,000,000.00.
1. The undersigned hereby acknowledges that this subscription is
contingent upon acceptance in whole or in part by the Company.
2. The undersigned acknowledges, represents and warrants that the
undersigned:
(a) is able to bear the economic risk of the investment in the
Shares;
(b) has knowledge and experience in financial and business
matters, is capable of evaluating the merits and risks of the
prospective investment in the Shares and is able to bear such risks;
(c) understands an investment in the Shares is highly
speculative but believes that the investment is suitable for it based
upon the undersigned's investment objectives and financial needs, and
has adequate means for providing for current financial needs and
personal contingencies and has no need for liquidity of investment with
respect to the Shares;
(d) has reviewed (i) copies of the Company's recent reports
filed under the Securities Exchange Act of 1934, including, the
Company's Form 10-KSB Report for the fiscal year ended June 30, 1999,
(ii) the Company's Form 10-QSB for the period ended October 2, 1999,
and (iii) the Company's Current Reports on Form 8-K filed October 8,
1999 (and as amended December 8, 1999) and November 12, 1999 and all
other relevant documents as filed with the Securities and Exchange
Commission;
(e) has been given access to full and complete information
regarding the Company and the various risk factors (including pending
litigation) pertaining to an investment in the Company (including the
opportunity to meet with Company officers and review all documents as
it may have requested in writing) and has utilized such access to its
satisfaction for the purpose of obtaining information about the
Company;
(f) recognizes that the Shares, as an investment, involve a
high degree of risk; and
(g) realizes that (i) the purchase of Shares is a long-term
investment; (ii) purchasers of Shares must bear the economic risk of
investment for an indefinite period of time because the Shares have not
been registered under the Securities Act of 1933, as amended (the
"Act") and, therefore, cannot be sold unless they are subsequently
registered under the Act or an exemption from such registration is
available; and (iii) the transferability of the Shares is restricted,
and (A) requires the written consent of the Company, (B) requires
conformity with the restrictions contained in paragraph 3 below, and
(C) will be further restricted by a legend placed on the certificate(s)
representing the Shares stating that the Shares have not been
registered under the Act and referring to the restrictions on
transferability of the Shares, and by stop transfer orders or notations
on the Company's records referring to the restrictions on
transferability.
3. The undersigned has been advised that the Shares are not being
registered under the Act or the relevant state securities laws pursuant to
exemptions from the Act and laws, and that the Company's reliance upon such
exemptions is predicated in part on the undersigned's representations to the
Company as contained herein. The undersigned represents and warrants that the
Shares are being purchased for its own account and for investment and without
the intention of reselling or redistributing the same, that the undersigned has
made no agreement with others regarding any of such Shares and that its
financial condition is such that it is not likely that it will be necessary to
dispose of any of such Shares in the foreseeable future. The undersigned is
aware that, in the view of the Securities and Exchange Commission and applicable
state bodies that administer state securities laws, a purchase of Shares with an
intent to resell by reason of any foreseeable specific contingency or
anticipated change in market values, or any change in the condition of the
Company or its business, or in connection with a contemplated liquidation or
settlement of any loan obtained for the acquisition of the Shares and for which
the Shares were pledged as security, would represent an intent inconsistent with
the representations set forth above. The undersigned further represents and
agrees that if, contrary to its foregoing intentions, it should later desire to
dispose of or transfer any of such Shares in any manner, it shall not do so
without first obtaining (a) the opinion of counsel designated by the Company
that such proposed disposition or transfer lawfully may be made without the
registration of such Shares for such purpose pursuant to the Act, as then in
effect, and applicable state securities laws, or (b) such registrations (it
being expressly understood that the Company shall not have any obligation to
register the Shares for such purpose, except insofar as paragraph 4 hereof
requires the Company, in certain instances, to register Registrable Securities).
The undersigned agrees that the Company may place the following
restrictive legend on the certificate(s) representing the Shares, containing
substantially the following language:
"The shares represented by this Certificate were issued
without registration under the Securities Act of 1933, as
amended (the "Act") and without registration under Minnesota
or any other state's securities laws, in reliance upon
exemptions contained in the Act and such laws. No transfer of
these shares or any interest therein may be made except
pursuant to effective registration statements under said laws
unless this Corporation has received an opinion of counsel
satisfactory to it that such transfer or disposition does not
require registration under said laws and, for any sales under
Rule 144 of the Act, such evidence as it shall request for
compliance with that rule."
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The undersigned agrees and consents that the Company may place a stop transfer
order on the Certificate(s) representing the Shares to assure the undersigned's
compliance with this Agreement and the matters referenced above.
The undersigned agrees to save and hold harmless, defend and indemnify
the Company and its directors, officers and agents from any claims, liabilities,
damages, losses, expenses or penalties arising out of any misrepresentation of
information furnished by the undersigned to the Company in this Subscription
Agreement.
4. The Company agrees to the following terms and conditions relative to
registration of the Shares under the Act:
(a) Definitions. As used in this Agreement, the following
terms shall have the meanings set forth respectively:
"Commission" shall mean the Securities and Exchange
Commission, or any other federal agency then administering the Act.
"Common Stock" shall mean the shares of Common Stock of the
Company, $0.004 par value.
"Holder" or, collectively, "Holders, means (i) the undersigned
purchaser of the Shares or Registrable Securities and (ii) each person
to whom Holder transfers the Shares or Registrable Securities as
provided herein.
"Other Securities" shall mean any stock (other than Common
Stock) or other securities of the Company which at any time shall be
issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities.
"Registrable Securities" means the Shares and any Other
Securities received with respect thereto or with respect to the Shares;
provided, however, that any such Common Stock and Other Securities
shall cease to be Registrable Securities when (i) a Resale Registration
Statement covering such Registrable Securities has been declared
effective and such Registrable Securities have been disposed of
pursuant to such effective Resale Registration Statement, (ii) such
Registrable Securities become eligible for sale pursuant to Rule 144
(or any similar provision then in force) ("Rule 144") under the Act or
(iii) such shares of Common Stock cease to be outstanding. Registrable
Securities may, for purposes of a registration statement filed by the
Company under the Act, include other securities of the Company which it
has a contractual obligation to register under federal or state
securities laws.
"Transfer" shall mean any sale, assignment, pledge, or other
disposition of any Shares or Registrable Securities, or of any interest
in either thereof, which would constitute a sale thereof within the
meaning of Section 2(3) of the Act.
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All terms used in this Agreement which are not defined in Section 1
hereof have the meanings respectively set forth elsewhere in this Agreement.
(b) Resale Registration. Despite anything in this Agreement to
the contrary, the Holder shall have the following rights regarding registration
of Registrable Securities.
(1) Required Registration. Upon request of a Holder owning at
least 5,000 Shares or Registrable Securities not theretofore
registered under the Act, the Company shall prepare and if it
is then eligible file a registration statement on Form S-3
under the Act covering the resale of the Registrable
Securities which are the subject of such requests and shall
use its best efforts to cause such registration statement to
become effective and to remain effective for at least 24
months. In addition, upon the receipt of the aforementioned
request, the Company shall promptly give written notice to all
other record Holders of Shares or Registrable Securities that
such registration is to be effected. The Company shall include
in such registration statement such Registrable Securities for
which it has received written requests to register by such
other Holders within fifteen (15) days after the Company's
written notice to such other Holders. The Company shall be
obligated to prepare, file and cause to become effective only
two (2) registration statements pursuant to this Section 4(b).
In the event that the holders of a majority of the Registrable
Securities 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 Registrable Securities 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 Registrable Securities shall not be
deemed to have exercised their right to require the Company to
register Registrable Securities pursuant to this Section 4(b).
(2) Incidental Registration. Each time the Company shall
determine to proceed with the actual preparation and filing of
a registration statement under the 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 (other than a
registration statement on From S-4 or S-8) or any other
successor forms prescribed by the commission, the Company will
give written notice of its determination to all Holders of
Shares and Registrable Securities. Upon the written request of
a Holder of any Shares and Registrable Securities given within
fifteen (15) days after receipt of any such notice from the
Company, the Company will, except as herein provided, cause
all such Registrable Securities, the 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 Registrable Securities to be so registered;
provided, however, that (a) nothing herein shall prevent the
Company from, at any time, abandoning or delaying any such
registration initiated by it; and (b) 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
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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 Registrable Securities 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 the Registrable Securities 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 Registrable Securities 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.
(3) Registration Procedures. If and whenever the Company is
required by the provisions of Section 4(b)(1) or 4(b)(2) to
effect the registration of any Registrable Securities under
the Act, the Company will:
(i) prepare and file with the Commission a registration
statement with respect to such Registrable
Securities, 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 Registrable Securities;
(ii) 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 Registrable Securities;
(iii) furnish to the Holders participating in such
registration and to the underwriters of the
Registrable Securities being registered such
reasonable number of copies of the registration
statement, preliminary prospectus, final prospectus
and such other documents as such Holders and
underwriters may reasonably request in order to
facilitate the public offering of such Registrable
Securities;
(iv) use its best efforts to register or qualify the
Registrable Securities 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
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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;
(v) notify the 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;
(vi) 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 reasonable opinion of
counsel for such Holders (and concurred in by counsel
for the Company), is required under the Act or the
rules and regulations thereunder in connection with
the distribution of the Registrable Securities by
such Holder;
(vii) prepare and promptly file with the Commission 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 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; and
(viii) 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.
(4) Expenses. With respect to any registration, requested
pursuant to Section 4(b)(1) (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 4(b)(2) (except as
otherwise provided in Section 4(b)(2) 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
Holders are required to bear such fees and disbursements), all
internal Company expenses, the 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
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registered or qualified. Fees and disbursements of counsel and
accountants for such Holders, underwriting discounts and
commissions and transfer taxes for such Holders and any other
expenses incurred by such Holders not expressly included above
shall be borne by such Holders.
(5) Copies of Prospectus; Amendments of Prospectus. The
Company will furnish the Holder 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 Holder, shall be borne by the Holder.
(6) Conditions of the Company's Obligations. It shall be a
condition of the Company's obligation to register the
Registrable Securities hereunder that the Holder 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 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 Act, and controlling precedent
thereunder, the Company and the Holder provide
cross-indemnification agreements to each other in customary
scope covering the accuracy and completeness of the
information furnished by each.
(c) Restrictions on Sale. In the event of an underwritten
public offering for the account of the Company, upon the written request (the
"Lock-up Request") of the managing underwriter (or underwriters) of such
offering, each Holder agrees not to effect any public sale or distribution of
any securities similar to those being registered in such offering (other than
pursuant to such offering), including, without limitation, through sales of
Registrable Securities pursuant to a registration statement, during the 14 days
prior to, and during the 180-day period beginning on the effective date of the
registration statement relating to such offering (the "Lock-up Period");
provided, however, that the Holders shall not be required to comply with such
Lock-up Request unless the Company simultaneously demands analogous restrictions
on sale and uses all reasonable efforts to obtain from all other persons who are
contractually bound with the Company to comply with such Lock-up Requests and
from the Company's directors. In the event of the delivery of a Lock-up Request,
the time periods for which a registration statement is required to be kept
effective pursuant to Section 4(b) hereof shall be extended by the number of
days during the Lock-up Period.
(d) Transfer of Registration Rights. The registration rights
of Holder and any Holders under this Section 4 may be transferred to any
transferee of Registrable Securities that acquires at least 5,000 shares of the
Common Stock (appropriately adjusted for stock splits, stock dividends and the
like). Each such transferee shall be deemed to be a "Holder" for purposes of
this Section 4.
5. The undersigned represents and warrants that the undersigned is a
bona fide resident of,
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and is domiciled in, the State of Minnesota and that the Shares are being
purchased solely for the beneficial interest of the undersigned and not as
nominee, for, or on behalf of, or for the beneficial interest of, or with the
intention to transfer to, any other person, trust or organization, except as
specifically set forth in paragraph 8 of this Agreement.
THE FOLLOWING PARAGRAPH 6 IS REQUIRED IN CONNECTION WITH THE EXEMPTIONS FROM THE
ACT AND STATE LAWS BEING RELIED ON BY THE COMPANY WITH RESPECT TO THE OFFER AND
SALE OF THE SHARES. ALL OF SUCH INFORMATION WILL BE KEPT CONFIDENTIAL AND WILL
BE REVIEWED ONLY BY THE COMPANY, THE AGENT, IF ANY, AND THEIR RESPECTIVE
COUNSEL. The undersigned agrees to furnish any additional information which the
Company, the Agent, if any, or their respective legal counsel deem necessary in
order to verify the responses set forth below.
6. Accredited Status. The undersigned represents and warrants as
follows:
(CHECK IF APPLICABLE):
__________ (a) The undersigned is an individual with a net worth, or a
joint net worth together with his or her spouse, in excess of
$1,000,000. (In calculating net worth, you may include equity
in personal property and real estate, including your principal
residence, cash, short-term investments, stock and securities.
Equity in personal property and real estate should be based on
the fair market value of such property minus debt secured by
such property.)
__________ (b) The undersigned is an individual with income in excess of
$200,000 in each of the prior two years and reasonably expects
an income in excess of $200,000 in the current year.
__________ (c) The undersigned is an individual who, with his or her
spouse, had joint income in excess of $300,000 in each of the
prior two years and reasonably expects joint income in excess
of $300,000 in the current year.
__________ (d) The undersigned is a director or executive officer of
United Shipping & Technology, Inc.
7. NASD Affiliation. The undersigned is affiliated or associated,
directly or indirectly, with a National Association of Securities Dealers, Inc.
("NASD") member firm or person.
Yes ________ No ________
If yes, list the affiliated member firm or person: ___________
______________________________________________________________
______________________________________________________________
Your relationship to such member firm or person: _____________
______________________________________________________________
______________________________________________________________
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8. Entities. If the undersigned is not an individual but an entity, the
individual signing on behalf of such entity and the entity jointly and severally
agree and certify that:
(a) The undersigned was not organized for the specific purpose of
acquiring the Shares; and
(b) This Agreement has been duly authorized by all necessary action on
the part of the undersigned, has been duly executed by an authorized
officer or representative of the undersigned, and is a legal, valid and
binding obligation of the undersigned enforceable in accordance with
its terms.
9. Miscellaneous.
(a) Manner in which title is to be held: (check one)
_____ Individual Ownership
_____ Joint Tenants with Right of Survivorship*
(b) The undersigned agrees that the undersigned understands the meaning
and legal consequences of the agreements, representations and
warranties contained herein, agrees that such agreements,
representations and warranties shall survive and remain in full force
and effect after the execution hereof and payment for the Shares, and
further agrees to indemnify and hold harmless the Company, each current
and future officer, director, employee, agent and shareholder from and
against any and all loss, damage or liability due to, or arising out
of, a breach of any agreement, representation or warranty of the
undersigned contained herein.
(c) This Agreement shall be construed and interpreted in accordance
with Minnesota law without regard to conflict of law provisions.
(d) The undersigned agrees to furnish to the Company or the Agent, if
applicable, upon request, such additional information as may be deemed
necessary to determine the undersigned's suitability as an investor.
[NOTE: SIGNATURE PAGE FOLLOWS]
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*Multiple signatures required.
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INDIVIDUAL SUBSCRIBER
Dated: January 18, 2000.
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Signature Signature
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Name Typed or Printed Name Typed or Printed
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Residence Address Residence Address
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City, State and Zip Code City, State and Zip Code
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Mailing Address Mailing Address
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City, State and Zip Code City, State and Zip Code
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Tax Identification or Social Tax Identification or Social
Security Number Security Number
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ACCEPTANCE BY THE COMPANY
United Shipping & Technology, Inc. hereby agrees to and accepts the foregoing
Subscription Agreement to the extent of 666,667 Shares.
UNITED SHIPPING & TECHNOLOGY, INC.
By
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Xxxxx X. Xxxxx
Its: Chief Executive Officer
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