EXHIBIT 10.63
THIS WARRANT WAS ORIGINALLY ISSUED AS OF MAY 31, 2000 AND HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT,
THE RULES AND REGULATIONS THEREUNDER OR THE PROVISIONS OF THIS
WARRANT. THIS WARRANT IS ALSO SUBJECT TO A SECURITIES PURCHASE
AGREEMENT DATED AS OF MAY 15, 2000 BY AND BETWEEN UNITED
SHIPPING & TECHNOLOGY, INC. (THE "COMPANY") AND THE PURCHASERS
NAMED THEREIN, AS AMENDED FROM TIME TO TIME. A COPY OF SUCH
SECURITIES PURCHASE AGREEMENT WILL BE FURNISHED WITHOUT CHARGE
BY THE COMPANY TO THE HOLDER HEREOF UPON REQUEST.
STOCK PURCHASE WARRANT
TO ACQUIRE COMMON STOCK
Date of Issuance: As of May 31, 2000
For value received, UNITED SHIPPING & TECHNOLOGY, INC., a Utah
corporation (the "Company"), hereby grants to Bayview Capital Partners LP, a
Delaware limited partnership ("Bayview"), or its transferees and assigns, the
right to purchase from the Company up to 28,147 Warrant Shares (as defined
herein) at a price per share equal to (i) the lowest exercise price per share of
Common Stock (the "Base Exercise Price") of any of the initially approved
Options for 3,000,000 shares of Common Stock issued pursuant to the Company's
2000 Stock Option Plan (the "2000 Options") less (ii) in the event that an
indemnification payment is due by the Company pursuant to Section 9.06 of the
Securities Purchase Agreement dated as of May 15, 2000 between the Company and
the purchasers named therein (as amended, restated or modified from time to
time, the "Purchase Agreement") and to the extent such indemnification payment
is payable pursuant to the terms thereof by reduction of the exercise price of
the Common Warrants (as defined in the Purchase Agreement) issued to the
purchasers thereunder, an amount equal to such reduction in the exercise price
of the Common Warrants (PROVIDED that the minimum Exercise Price resulting from
the adjustments in this clause (ii) as of the final date of such adjustments
shall be $.004 per share) (such price per share, as adjusted from time to time,
the "Exercise Price"). In the event that the difference between the highest and
the lowest exercise price per share of Common Stock of all of the 2000 Options
is material, Bayview and the Company will negotiate in good faith to consider a
mutually acceptable, alternative formula for calculating the Base Exercise Price
in a manner which is not unduly burdensome for either party and is consistent
with any such adjustment to the Base Exercise Price of the Common Warrants
issued to the purchasers under the Purchase Agreement. Certain capitalized items
used herein
are defined in Section 5 hereof. Certain other capitalized terms used herein are
defined in the Purchase Agreement.
This Warrant is subject to the following provisions:
SECTION 1. Exercise of Warrant.
1A. Exercise Period. The purchase rights represented by this Warrant
may only be exercised, in whole or in part, at any time, and from time to time
until 5:00 p.m., New York time, on May 31, 2004 or, if such day is not a
business day, on the next preceding business day (the "Exercise Period");
PROVIDED, that (i) this Warrant may only be exercised in the event and to the
extent that any of the 2000 Options have been exercised by the holders thereof
from time to time for a total number of Warrant Shares equal to (x) the total
number of shares of Common Stock then issuable upon full exercise of this
Warrant (plus any Warrant Shares that have been previously issued upon exercise
of any portion of this Warrant), multiplied by (y) a fraction, the numerator of
which is the aggregate number of shares of Common Stock represented by all 2000
Options that have been so exercised, and denominator of which is the total
number of 2000 Options that have been issued and have not been forfeited or
terminated (provided that this Warrant will become fully exercisable in the
event that any indemnification payment by the Company is due pursuant to Section
9.06 of the Purchase Agreement), and (ii) any delay described in Section 1B(ii)
which causes the issuance of the Warrant Shares to occur beyond the Exercise
Period shall in no event limit or affect the Registered Holder's rights to
receive such Warrant Shares at the termination of such delay.
1B. Exercise Procedure.
(i) This Warrant shall be deemed to have been exercised when
all of the following items have been delivered to the Company (the "Exercise
Time"):
(a) a completed Exercise Agreement, as described in
Section 1C below, executed by the Person exercising all or part of the
purchase rights represented by this Warrant (the "Purchaser");
(b) this Warrant;
(c) if the Purchaser is not the Registered Holder, an
Assignment or Assignments in the form set forth in Exhibit II attached
hereto evidencing the assignment of this Warrant to the Purchaser; and
(d) a check or wire transfer payable to the Company
in an amount equal to the product of the Exercise Price multiplied by
the number of Warrant Shares being purchased upon such exercise (the
"Aggregate Exercise Price").
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(ii) Certificates for Warrant Shares purchased upon exercise
of this Warrant shall be delivered by the Company to the Purchaser within five
days after the date of the Exercise Time together with any cash payable in lieu
of a fraction of a share pursuant to the provisions of Section 14 hereof;
PROVIDED, that in the event that the applicable waiting period under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Improvements Act of 1976, as amended, as described in Section
7.02 of the Purchase Agreement has not expired, the Company shall not issue such
Warrant Shares until such waiting period has expired. Unless this Warrant has
expired or all of the purchase rights represented hereby have been exercised,
the Company shall prepare a new Warrant, substantially identical hereto,
representing the rights formerly represented by this Warrant which have not
expired or been exercised and shall, within such five-day period, deliver such
new Warrant to the Person designated for delivery in the Exercise Agreement.
(iii) The Warrant Shares issuable upon the exercise of this
Warrant shall be deemed to have been issued to the Purchaser at the Exercise
Time, and the Purchaser shall be deemed for all purposes to have become the
Registered Holder of such Warrant Shares at the Exercise Time.
(iv) The issuance of certificates for Warrant Shares upon
exercise of this Warrant shall be made without charge to the Registered Holder
or the Purchaser for any issuance tax in respect thereof or other cost incurred
by the Company in connection with such exercise and the related issuance of
Warrant Shares.
(v) The Company shall not close its books against the transfer
of this Warrant or of any Warrant Shares issued or issuable upon the exercise of
this Warrant in any manner which interferes with the timely exercise of this
Warrant. The Company shall from time to time take all such action as may be
necessary to assure that the par value per share of the unissued Warrant Shares
acquirable upon exercise of this Warrant is at all times equal to or less than
the Exercise Price, then in effect. In the event that the Company fails to
comply with its obligations set forth in the foregoing sentence, the Purchaser
may (but shall not be obligated to) purchase Warrant Shares hereunder at par
value, and the Company shall be obligated to reimburse the Purchaser for the
aggregate amount of consideration paid in connection with such exercise in
excess of the Exercise Price then in effect.
(vi) The Company shall assist and cooperate with the
Registered Holder or any Purchaser required to make any governmental filings or
obtain any governmental approvals prior to or in connection with any exercise of
this Warrant (including any filings described in Section 1B(ii) hereof.
(vii) Notwithstanding any other provision hereof, if an
exercise of any portion of this Warrant is to be made in connection with a
public offering or a sale of the Company (pursuant to a merger, sale of stock,
or otherwise), such exercise may at the election of the Registered Holder be
conditioned upon the consummation of such transaction, in which case such
exercise shall not be deemed to be effective until immediately prior to the
consummation of such transaction.
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(viii) The Company shall at all times reserve and keep
available out of its authorized but unissued Common Stock solely for the purpose
of issuance upon the exercise of this Warrant, the maximum number of Warrant
Shares issuable upon the exercise of this Warrant. All Warrant Shares which are
so issuable shall, when issued and upon the payment of the applicable Exercise
Price, be duly and validly issued, fully paid and nonassessable and free from
all taxes, liens and charges except those created by actions of the holder
hereof. The Company shall take all such reasonable actions as may be necessary
to ensure that all such Warrant Shares may be so issued without violation by the
Company of any applicable law or governmental regulation or any requirements of
any domestic securities exchange upon which shares of Common Stock or other
securities constituting Warrant Shares may be listed (except for official notice
of issuance which shall be immediately delivered by the Company upon each such
issuance).
(ix) If the Warrant Shares issuable by reason of exercise of
this Warrant are convertible into or exchangeable for any other stock or
securities of the Company, the Company shall, at the Purchaser's option and upon
surrender of this Warrant by such Purchaser as provided above together with any
notice, statement or payment required to effect such conversion or exchange of
Warrant Shares, deliver to such Purchaser (or as otherwise specified by such
Purchaser) a certificate or certificates representing the stock or securities
into which the Warrant Shares issuable by reason of such conversion are
convertible or exchangeable, registered in such name or names and in such
denomination or denominations as such Purchaser has specified.
(x) The Company shall not, and shall not permit its
Subsidiaries to, directly or indirectly, by any action (including, without
limitation, reincorporation in a jurisdiction other than Utah, amending its
Articles of Incorporation or through any Organic Change (as defined in Section
2D), issuance or sale of securities or any other voluntary action) avoid or seek
to avoid the observance or performance of any of terms of this Warrant (except
for any action which ratably affects all Warrant Shares and shares of Common
Stock), but shall at all times in good faith assist in the carrying out of all
such terms of this Warrant. Without limiting the generality of the foregoing,
the Company shall (a) use its reasonable best efforts to obtain all such
authorizations, exemptions. or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Warrant, and (b) not undertake any reverse stock split,
combination, reorganization, or other reclassification of its capital stock
which would have the effect of making this Warrant exercisable for less than one
share of Common Stock.
1C. Exercise Agreement. Upon any exercise of this Warrant, the
Purchaser shall deliver to the Company an Exercise Agreement in substantially
the form set forth as Exhibit I hereto, except that if the Warrant Shares are
not to be issued in the name of the Registered Holder, the Exercise Agreement
shall also state the name of the Person to whom the certificates for the Warrant
Shares are to be issued, and if the number of Warrant Shares to be issued does
not include all of the Warrant Shares purchasable hereunder, it shall also state
the name of the
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Person to whom a new Warrant for the unexercised portion of the rights hereunder
is to be issued.
SECTION 2. Adjustment of Exercise Price and Number of Shares. In order
to prevent dilution of the rights granted under this Warrant, the Exercise Price
shall be subject to adjustment from time to time as provided in this Section 2,
and the number of Warrant Shares obtainable upon exercise of this Warrant shall
be subject to adjustment from time to time as provided in this Section 2.
2A. Adjustment of Exercise Price and Number of Shares upon Issuance of
Common Stock.
(i) If and whenever after the original date of issuance of this Warrant
the Company issues or sells, or in accordance with Section 2B is deemed to have
issued or sold, any shares of Common Stock for a consideration per share less
than the Market Price of the Common Stock determined as of the date of such
issue or sale, then immediately upon such issue or sale the Exercise Price shall
be determined by multiplying the Exercise Price in effect immediately prior to
such issue or sale by a fraction, the numerator of which shall be the sum of (1)
the number of shares of Common Stock Deemed Outstanding immediately prior to
such issue or sale multiplied by the Market Price of the Common Stock determined
as of the date of such issuance of sale, plus (2) the consideration, if any,
received by the Company upon such issue or sale, and the denominator of which
shall be the product derived by multiplying the Market Price of the Common Stock
by the number of shares of Common Stock Deemed Outstanding immediately after
such issue or sale. In the event of a change in the Base Exercise Price at any
time after the original date of issuance of the Warrant, any adjustments to the
Exercise Price previously made pursuant to this Section 2 shall be recalculated
on a PRO FORMA basis as if the Base Exercise Price at the time of each such
adjustment was the Base Exercise Price after giving effect to such change. In
the event that there is an Indemnification Amount which result in a reduction of
the Exercise Price, any adjustments to the Exercise Price previously made
pursuant to this Section 2 shall be recalculated on a PRO FORMA basis as if the
reduction resulting from the Indemnification Amount had occurred prior to each
such adjustment.
(ii) Upon each such adjustment of the Exercise Price hereunder, the
number of Warrant Shares acquirable upon exercise of this Warrant shall be
adjusted to the number of shares determined by multiplying the Exercise Price in
effect immediately prior to such adjustment by the number of Warrant Shares
acquirable upon exercise of this Warrant immediately prior to such adjustment
and dividing the product thereof by the Exercise Price resulting from such
adjustment.
(iii) Notwithstanding the foregoing, there shall be no adjustment to
the Exercise Price or the number of Warrant Shares obtainable upon exercise of
this Warrant with respect to (A) the issuance or granting of Common Stock,
Options or Convertible Securities to employees, officers. consultants and
directors of the Corporation and its Subsidiaries or the exercise thereof
pursuant to the Stock Option Plans, (B) the issuance or granting of Options for
up to 75,000 shares of
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Common Stock (as adjusted for any stock splits, reverse stock splits, share
combinations, stock dividends, or similar reclassifications) to employees and
consultants of the Corporation outside of the Stock Option Plans, (C) the
issuance of Series B Preferred Stock upon exercise of the Preferred Warrants,
(D) the issuance of Common Stock upon (i) exercise of the Warrant To Purchase
Shares of Common Stock of United Shipping & Technology. Inc, or (ii) the
conversion of the 9% Convertible Subordinated Promissory Note, in each case,
dated as of April 25, 2000, issued by the Company to J. Iver & Company, (E) the
issuance of Common Stock upon exercise of the Warrant To Purchase Common Stock
of United Shipping & Technology. Inc., dated as of September 24, 1999, issued to
Bayview Capital Partners L.P. (the "Bayview Warrant"), (F) the issuance of
Common Stock upon conversion of the Convertible Subordinated Note, dated as of
September 24, 1999, issued by the Company to CEX Holdings, Inc. (the "CEX
Convertible Note"), (G) the issuance of no more than 100,000 shares of Common
Stock (as adjusted for any stock splits, reverse stock splits, share
combinations, stock dividends or similar reclassifications) to ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇ ▇▇ (or a trust solely for his benefit) solely as payment in
satisfaction of a court-approved settlement of his claim against Corporate
Express Delivery Systems, Inc., ET AL., pending in the United States District
Court for the Southern District of Texas, Houston Division (Case No. H-9
8-1271), (H) the issuance of Common Stock upon exercise of the Company's Series
B Convertible Preferred Stock, par value $.004 per share (the "Preferred Stock")
and (I) the issuance of Preferred Stock upon exercise of the Preferred Warrants.
2B. Effect on Exercise Price of Certain Events. For purposes of
determining the adjusted Exercise Price under Section 2A, the following shall be
applicable:
(i) Issuance of Rights or Options. If the Company in any manner grants
or sells any Options and the price per share for which Common Stock is issuable
upon the exercise of such Options, or upon conversion or exchange of any
Convertible Securities issuable upon exercise of such Options, is less than the
Market Price of the Common Stock determined as of such time, then the total
maximum number of shares of Common Stock issuable upon the exercise of such
Options, or upon conversion or exchange of the total maximum amount of such
Convertible Securities issuable upon the exercise of such Options, shall be
deemed to be outstanding and to have been issued and sold by the Company at such
time for such price per share. For purposes of this paragraph, the "price per
share for which Common Stock is issuable" is determined by dividing (A) the
total amount, if any, received or receivable by the Company as consideration for
the granting or sale of such Options, plus the minimum aggregate amount of
additional consideration payable to the Company upon the exercise of all such
Options, plus in the case of such Options which are exercisable into Convertible
Securities. the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the issuance or sale of such Convertible Securities
and the conversion or exchange thereof, by (B) the total maximum number of
shares of Common Stock issuable upon exercise of such Options or upon the
conversion or exchange of all such Convertible Securities issuable upon the
exercise of such Options. No further adjustment of the Exercise Price shall be
made upon the actual issuance of such Common Stock or of such Convertible
Securities upon the exercise of such Options or upon
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the actual issuance of such Common Stock upon conversion or exchange of such
Convertible Securities.
(ii) Issuance of Convertible Securities. If the Company in any manner
issues or sells any Convertible Securities and the price per share for which
Common Stock is issuable upon conversion or exchange thereof is less than the
Market Price of the Common Stock determined as of such time, then the maximum
number of shares of Common Stock issuable upon conversion or exchange of such
Convertible Securities shall be deemed to be outstanding and to have been issued
and sold by the Company for such price per share. For the purposes of this
paragraph, the "price per share for which Common Stock is issuable" is
determined by dividing (A) the total amount received or receivable by the
Company as consideration for the issue or sale of such Convertible Securities,
plus the minimum aggregate amount of additional consideration, if any, payable
to the Company upon the conversion or exchange thereof, by (B) the total maximum
number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities. No further adjustment of the Exercise Price shall
be made upon the actual issue of such Common Stock upon conversion or exchange
of such Convertible Securities, and if any such issue or sale of such
Convertible Securities is made upon exercise of any Options for which
adjustments of the Exercise Price had been or are to be made pursuant to other
provisions of this Section 2, no further adjustment of the Exercise Price shall
be made by reason of such issue or sale.
(iii) Change in Option Price or Conversion Rate. If the purchase price
provided for in any Options, the additional consideration, if any, payable upon
the issue, conversion or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exchangeable for Common
Stock changes at any time, the Exercise Price in effect at the time of such
change shall be adjusted immediately to the Exercise Price which would have been
in effect at such time had such Options or Convertible Securities still
outstanding provided for such changed purchase price, additional consideration
or changed conversion rate, as the case may be, at the time initially granted,
issued or sold and the number of Warrant Shares shall be correspondingly
adjusted. For purposes of this Section 2B, if the terms of any Option or
Convertible Security which was outstanding as of the date of issuance of this
Warrant are changed in the manner described in the immediately preceding
sentence, then such Option or Convertible Security and the Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be deemed to have
been issued as of the date of such change; PROVIDED, that (A) no such change
shall at any time cause the Exercise Price hereunder to be increased, and (B) no
adjustment to the Conversion Price pursuant to this clause (iii) shall be made
as a result of any adjustment to the exercise and/or conversion price with
respect to the Bayview Warrant, CEX Convertible Note or the Preferred Warrants
pursuant to and in accordance with the anti-dilution protection provisions of
such securities as in effect on May 31, 2000.
(iv) Treatment of Expired Options and Unexercised Convertible
Securities. Upon the expiration of any Option or the termination of any right to
convert or exchange any Convertible Securities without the exercise of such
Option or right, the Exercise Price then in effect and the number of Warrant
Shares acquirable hereunder shall be adjusted immediately to the Exercise
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Price and the number of shares which would have been in effect at the time of
such expiration or termination had such Option or Convertible Securities, to the
extent outstanding immediately prior to such expiration or termination, never
been issued. For purposes of this Section 2B, the expiration or termination of
any Option or Convertible Security which was outstanding as of the date of
issuance of this Warrant shall not cause the Exercise Price hereunder to be
adjusted unless, and only to the extent that, a change in the terms of such
Option or Convertible Security caused it to be deemed to have been issued after
the date of issuance of this Warrant.
(v) Calculation of Consideration Received. If any Common Stock, Options
or Convertible Securities are issued or sold or deemed to have been issued or
sold for cash, the consideration received therefor shall be deemed to be the net
amount received by the Company therefor. In case any Common Stock, Options or
Convertible Securities are issued or sold for a consideration other than cash,
the amount of the consideration other than cash received by the Company shall be
the fair value of such consideration, except where such consideration consists
of securities, in which case the amount of consideration received by the Company
shall be the Market Price thereof as of the date of receipt. The fair value of
any consideration other than cash or securities shall be determined jointly by
the Company and the Required Holders. If such parties are unable to reach
agreement within a reasonable period of time, such fair value shall be
determined by an appraiser jointly selected by the Company and the Required
Holders. The determination of such appraiser shall be final and binding on the
Company and the Registered Holders of the Warrants, and the fees and expenses of
such appraiser shall be paid by the Company.
(vi) Integrated Transactions. In case any Option (other than the
Preferred Warrants) is issued in connection with the issue or sale of other
securities of the Company, together comprising one integrated transaction in
which no specific consideration is allocated to such Options by the parties
thereto, the Options shall be deemed to have been issued without consideration.
(vii) Treasury Shares. The number of shares of Common Stock outstanding
at any given time does not include shares owned or held by or for the account of
the Company or any of its Subsidiaries, and the disposition of any shares so
owned or held shall be considered an issue or sale of Common Stock.
(viii) Record Date. If the Company takes a record of the holders of
Common Stock for the purpose of entitling them (A) to receive a dividend or
other distribution payable in Common Stock, Options or in Convertible Securities
or (B) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be.
2C. Subdivision or Combination of Common Stock. If the Company at any
time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes
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of its outstanding shares of Common Stock into a greater number of shares, the
Exercise Price in effect immediately prior to such subdivision shall be
proportionately reduced and the number of Warrant Shares obtainable upon
exercise of this Warrant shall be proportionately increased. If the Company at
any time combines (by reverse stock split or otherwise) one or more classes of
its outstanding shares of Common Stock into a smaller number of shares, the
Exercise Price in effect immediately prior to such combination shall be
proportionately increased and the number of Warrant Shares obtainable upon
exercise of this Warrant shall be proportionately decreased.
2D. Reorganization, Reclassification, Consolidation, Merger or Sale.
Any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Company's assets or other transaction,
which in each case is effected in such a way that the holders of Common Stock
are entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock is referred
to herein as "Organic Change." Prior to the consummation of any Organic Change,
the Company shall make appropriate provision to insure that each of the
Registered Holders of the Warrants shall thereafter have the right to acquire
and receive, in lieu of the Warrant Shares immediately theretofore acquirable
and receivable upon the exercise of such holder's Warrant, such shares of stock,
securities or assets as each such Registered Holder would have received in
connection with such Organic Change if such Registered Holder had exercised its
Warrants in full immediately prior to such Organic Change. In each such case,
the Company shall make appropriate provision with respect to such holders'
rights and interests to insure that the provisions of this Section 2 and
Sections 3 and 4 hereof shall thereafter be applicable to the Warrants. The
Company shall not effect any such consolidation, merger or sale, unless prior to
the consummation thereof, the successor entity (if other than the Company)
resulting from consolidation or merger or the entity purchasing such assets
assumes by written instrument, the obligation to deliver to each such holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to acquire.
2E. Certain Events. If any event occurs of the type contemplated by the
provisions of this Section 2 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then the Company's
board of directors shall make an appropriate adjustment in the Exercise Price
and the number of Warrant Shares obtainable upon exercise of this Warrant so as
to protect the rights of the holders of the Warrants; PROVIDED, that no such
adjustment shall increase the Exercise Price or decrease the number of Warrant
Shares obtainable as otherwise determined pursuant to this Section 2.
2F. Notices,
(i) Immediately upon any adjustment of the Exercise Price, the Company
shall give written notice thereof to the Registered Holder, setting forth in
reasonable detail and certifying the calculation of such adjustment.
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(ii) The Company shall give written notice to the Registered Holder at
least 20 days prior to the date on which the Company closes its books or takes a
record (a) with respect to any dividend or distribution upon the Common Stock,
(b) with respect to any pro rata subscription offer to holders of Common Stock
or (c) for determining rights to vote with respect to any Organic Change,
dissolution or liquidation.
(iii) The Company shall also give written notice to the Registered
Holders at least 20 days prior to the date on which any Organic Change,
dissolution or liquidation shall take place.
Section 3. Liquidating Dividends. If the Company declares or pays a
dividend upon the Common Stock payable otherwise than in cash out of earnings or
earned surplus (determined in accordance with generally accepted accounting
principles, consistently applied) except for a stock dividend payable in shares
of Common Stock (a "Liquidating Dividend"), then the Company shall pay to the
Registered Holder of this Warrant at the time of payment thereof the Liquidating
Dividend which would have been paid to such Registered Holder on the Warrant
Shares had this Warrant been fully exercised immediately prior to the date on
which a record is taken for such Liquidating Dividend, or, if no record is
taken, the date as of which the record holders of Common Stock entitled to such
dividends are to be determined.
Section 4. Purchase Rights. If at any time the Company grants, issues
or sells an, Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any
class of Common Stock (the "Purchase Rights"), then the Registered holder of
this Warrant shall be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such holder could have
acquired if such holder had held the number of Warrant Shares acquirable upon
complete exercise of this Warrant immediately before the date on which a record
is taken for the grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights.
SECTION 5. Definitions. The following terms have the meanings set forth
below:
"Common Stock" means, collectively, the Company's common stock, par
value $.004 per share, and any securities into which such common stock is
hereafter converted or exchanged,
"Common Stock Deemed Outstanding" means, at any given time, the number
of shares of Common Stock actually outstanding at such time, plus the number of
shares of Common Stock deemed to be outstanding pursuant to Sections 2B(i) and
2B(ii) hereof whether or not the Options or Convertible Securities are actually
exercisable at such time.
"Market Price" of any security means the average of the closing prices
of such security's sales on all securities exchanges on which such security may
at the time be listed, or, if there has been no sales on any such exchange on
any day, the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day, or, if on any day such security is not so
listed, the average of the representative bid and asked prices quoted in the
NASDAQ System as
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of 4:00 P.M., New York time, or, if on any day such security is not quoted in
the NASDAQ System, the average of the highest bid and lowest asked prices on
such day in the domestic over-the-counter market as reported by the National
Quotation Bureau, Incorporated, or any similar successor organization, in each
such case averaged over a period of the twenty (20) consecutive trading days
immediately prior to the day as of which "Market Price" is being determined. If
at any time such security is not listed on any securities exchange or quoted in
the NASDAQ System or the over-the-counter market, the "Market Price" shall be
the fair value thereof determined jointly by the Corporation and the Required
Holders. If such parties are unable to reach agreement within a reasonable
period of time, such fair value shall be determined by an independent appraiser
experienced in valuing securities jointly selected by the Corporation and the
Required Holders. The determination of such appraiser shall be final and binding
upon the parties, and the Corporation shall pay the fees and expenses of such
appraiser.
"Person" means any individual, partnership, limited liability company,
joint venture, corporation, trust, unincorporated organization or government or
department or agency thereof.
"Preferred Warrants" means, collectively, the "Preferred Warrants" and
"Additional Warrants" as defined in, and issued pursuant to, the Purchase
Agreement, and any warrants issued in exchange, substitution or replacement
therefor.
"Registered Holder" means the holder of this Warrant as reflected in
the records of the Company maintained pursuant to the provisions of Section 13.
"Required Holders" means the holders of at least two-thirds of the
purchase rights represented by this Warrant as originally issued which remain
outstanding and unexercised.
"Stock Option Plans" means, collectively, the Company's 1995 Stock
Option Plan, 1996 Director Stock Option Plan, and 2000 Stock Option Plan (if and
only to the extent approved by the Company's stockholders).
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the partnership or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity if
such Person or Persons shall be allocated a majority of limited liability
company, partnership, association or other business entity gains or losses or
shall be or control the managing general partner of such limited liability
company, partnership, association or other business entity.
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"Warrant Shares" means shares of the Common Stock issuable upon
exercise of the Warrants, PROVIDED, that if the securities issuable upon
exercise of the Warrants are issued by an entity other than the Company or there
is a change in the class of securities so issuable, then the term "Warrant
Shares" shall mean shares of the security issuable upon exercise of the Warrants
if such security is issuable in shares, or shall mean the equivalent units in
which such security is issuable if such security is not issuable in shares.
SECTION 6. No Voting Rights: Limitations of Liability. This Warrant
shall not entitle the Registered Holder hereof to any voting rights or other
rights as a stockholder of the Company. No provision hereof, in the absence of
affirmative action by the Registered Holder to purchase Warrant Shares, and no
enumeration herein of the rights or privileges of the Registered Holder shall
give rise to any liability of such Registered Holder for the Exercise Price of
Warrant Shares acquirable by exercise hereof or as a stockholder of the Company.
SECTION 7. Transferability. Subject to compliance with the Securities
Act of 1933, as amended, and other applicable securities law, this Warrant and
all rights hereunder are transferable, in whole or in part, without charge to
the Registered Holder, upon surrender of this Warrant with a properly executed
Assignment (in the form of Exhibit II hereto).
SECTION 8. Warrant Exchangeable for Different Denominations. This
Warrant is exchangeable, upon the surrender hereof by the Registered Holder at
the principal office of the Company, for new Warrants of like tenor representing
in the aggregate the purchase rights hereunder, and each of such new Warrants
shall represent such portion of such rights as is designated by the Registered
Holder at the time of such surrender. At the request of the Registered Holder
(pursuant to a transfer of Warrants or otherwise), this Warrant may be exchanged
for one or more Warrants to purchase Common Stock. The date the Company
initially issues this Warrant shall be deemed to be the date of issuance hereof
regardless of the number of times new certificates representing the unexpired
and unexercised rights formerly represented by this Warrant shall be issued. All
Warrants representing portions of the rights hereunder are referred to herein as
the "Warrants."
SECTION 9. Exchange. In the event that it becomes unlawful or, in the
reasonable judgment of any Registered Holder of this Warrant, unduly burdensome
by reason of a change in legal or regulatory considerations or the
interpretation thereof affecting the ability of financial institutions or their
affiliates to hold equity securities, or any material change (including a
reduction in the number of shares of Common Stock outstanding) in the capital
structure of the Company, to hold any or all of the Warrants or Warrant Shares,
the Registered Holder of this Warrant shall have the right to require all or
part of such Registered Holder's Warrants or Warrant Shares to be exchanged for
nonvoting stock or similar interests that convey equivalent economic benefits to
such Warrants or Warrant Shares and include, in the case of Warrants, equivalent
anti-dilution protection. Any such exchange shall occur as soon as practicable
but in any event within sixty (60) days after written notice by the Registered
Holder of this Warrant to the Company (or such earlier date if required to
comply with applicable law).
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SECTION 10. Replacement. Upon receipt of evidence reasonably
satisfactory to the Company (an affidavit of the Registered Holder shall be
satisfactory) of the ownership and the loss, theft, destruction, or mutilation
of any certificate evidencing this Warrant, and in the case of any such loss,
theft, or destruction, upon receipt of indemnity reasonably satisfactory to the
Company (PROVIDED, that if the Registered Holder is a financial institution or
other institutional investor its own Agreement shall be satisfactory), or, in
the case of any such mutilation upon surrender of such certificate, the Company
shall (at its expense) execute and deliver in lieu of such certificate a new of
like kind representing the same rights represented by such lost, stolen,
destroyed, or mutilated certificate and dated the date of such lost, stolen,
destroyed, or mutilated certificate.
SECTION 11. Notices. Except as otherwise expressly provided herein, all
notices and deliveries referred to in this Warrant shall be in writing, shall be
delivered personally, sent by registered or certified mail, return receipt
requested and postage prepaid or sent via nationally recognized overnight
courier or via facsimile, and shall be deemed to have been given when so
delivered (or when received, if delivered by any other method) if sent (i) to
the Company, at its principal executive offices, and (ii) to a Registered
Holder, at such Registered Holder's address as it appears in the records of the
Company (unless otherwise indicated by any such Registered Holder).
SECTION 12. Amendment and Waiver. Except as otherwise provided herein,
the provisions of the Warrants may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the prior written consent of
the Required Holders.
SECTION 13. Warrant Register. The Company shall maintain at its
principal executive offices books for the registration and the registration of
transfer of Warrants. The Company may deem and treat the Registered Holder as
the absolute owner hereof (notwithstanding any notation of ownership or other
writing thereon made by anyone) for all purposes and shall not be affected by
any notice to the contrary.
SECTION 14. Fractions of Shares. The Company may, but shall not be
required to, issue a fraction of a Warrant Share upon the exercise of this
Warrant in whole or in part. As to any fraction of a share which the Company
elects not to issue, the Company shall make a cash payment in respect of such
fraction in an amount equal to the same fraction of the Market Price of a
Warrant Share on the date of such exercise,
SECTION 15. Descriptive Headings; Governing Law. The descriptive
headings of the several Sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF MINNESOTA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS OR CHOICE
OF LAW OF THE STATE OF MINNESOTA OR ANY OTHER
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JURISDICTION WHICH WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
and attested by its duly authorized officers under its corporate seal and to be
dated as of the date hereof.
UNITED SHIPPING & TECHNOLOGY, INC.
By: ________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, CEO
Attest:
_________________________________
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EXHIBIT I
EXERCISE AGREEMENT
To: Dated:
The undersigned, pursuant to the provisions set forth in the attached
Warrant (Certificate No. W-__), hereby agrees to subscribe for the purchase of
__________ Warrant Shares covered by such Warrant and makes payment herewith in
full therefor at the price per share provided by such Warrant.
Signature _______________________________
Address ________________________________
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EXHIBIT II
ASSIGNMENT
FOR VALUE RECEIVED, ___________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (Certificate No. W-__) with respect to the number of the Warrant Shares
covered thereby set forth below, unto:
Names of Assignee Address No. of Shares
----------------- ------- -------------
Dated: Signature ______________________________
______________________________
Witness ______________________________
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