EXHIBIT 10.4
SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"Agreement"), dated as of March 1, 2001, among UNITED SHIPPING & TECHNOLOGY,
INC., a Utah corporation (the "Company"), TH ▇▇▇.▇▇▇▇▇▇ INTERNET PARTNERS, L.P.,
a Delaware limited partnership ("THLI"), TH ▇▇▇.▇▇▇▇▇▇ INTERNET PARALLEL
PARTNERS, L.P., a Delaware limited partnership ("THLIP"), THLi COINVESTMENT
PARTNERS LLC ("THLI COINVEST"), a Delaware limited liability company, BLUE STAR
I, LLC ("BLUE STAR"), a Delaware limited liability company and together with
THLI, THLIP, THLI COINVEST, the "THLi Investors"), the persons executing a
Series D Purchaser Signature Page attached hereto (each a "Series D Purchaser"),
and the persons executing a Series E Purchaser Signature Page attached hereto
(each, a "Series E Purchaser"). Capitalized terms used herein but not otherwise
defined have the meaning set forth in Section 1 hereof.
WHEREAS, THLI, THLIP and the Company entered into a Securities Purchase
Agreement, dated as of May 15, 2000, pursuant to which THLI and THLIP purchased
from the Company certain shares of the Company's Series B Convertible Preferred
Stock, par value $0.004 per share (the "Series B Preferred Stock").
WHEREAS, the Investors and the Company have entered into a Securities
Purchase Agreement, dated as of September 1, 2000, pursuant to which the THLI
Entities purchased from the Company certain shares of the Company's Series C
Convertible Preferred Stock, par value $0.004 per share (the "Series C Preferred
Stock").
WHEREAS, the Series D Purchasers and the Company have entered into a
Securities Purchase Agreement dated as of March 1, 2001, pursuant to which the
Investors have agreed to purchase from the Company certain of the shares of the
Company's Series D Convertible Preferred Stock, par value $.004 per share (the
"Series D Preferred Stock").
WHEREAS, the Series E Purchasers and the Company have entered into a
Securities Purchase Agreement dated ___________, 2001, pursuant to which the
Series E Purchasers purchased from the Company certain of the shares of the
Company's Series E Convertible Preferred Stock, par value $.004 per share (the
"Series E Preferred Stock"), which is convertible into the Company's Series D
Preferred Stock (none of which have been issued as of the date hereof).
WHEREAS, the Company granted to the THLI Entities certain registration
rights with respect to the Company's equity securities held by the THLI Entities
as set forth in an Amended and Restated Registration Rights Agreement (the
"Original Agreement") dated as of September 1, 2000, and the Company and the
THLI Entities hereby desire for this Agreement to replace and supersede the
Original Agreement in its entirety to, among other things, grant the Series E
Purchasers and Series D Purchasers certain registration rights.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
Section 1. Definitions.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banks in New York City are authorized or obligated by law or executive
order to close.
"Commission" means the United States Securities and Exchange Commission, or
any successor Commission or agency having similar powers.
"Common Stock" means the Common Stock of the Company, $0.004 par value per
share.
"Existing Registrable Securities" means, collectively, (i) the Common Stock
issued or issuable (A) upon exercise of the Warrant To Purchase Shares of Common
Stock of United Shipping & Technology, Inc., or upon conversion of the 9%
Convertible Subordinated Notes, in each case dated as of April 25, 2000 and
issued by the Company to J. Iver & Company, (B) upon conversion of the
Convertible Subordinated Promissory Note, dated as of September 24, 1999, issued
by the Company to CEX Holdings, Inc., and (C) upon exercise of the Warrant To
Purchase Shares of Common Stock of United Shipping & Technology, Inc., dated as
of September 24, 1999, issued by the Company to Bayview Capital LP, and (ii) any
Common Stock issued or issuable with respect to the securities referred to in
clause (i) above by way of a stock dividend or stock split, or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization (and any and all warrants to purchase common stock issued to
holders of preferred stock); provided, that any particular Existing Registrable
Securities shall cease to be Existing Registrable Securities upon the Company no
longer having any contractual obligation to register such securities under the
Securities Act pursuant to their respective written terms as in effect on the
date hereof.
"Registrable Securities" means, collectively, the THLI Registrable
Securities, Series D Registrable Securities and the Series E Registrable
Securities.
"Registration Expenses" has the meaning set forth in Section 6(a) hereof.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Series D or E Purchasers" means any purchasers of Series D Preferred Stock
or Series E Preferred Stock.
"Series D or E Registrable Securities" means (i) any Common Stock issued or
issuable upon the conversion of any shares of Series D Preferred Stock and/or
Series E Preferred Stock (whether held by the Series D or E Purchasers or any
successors or assignees of the Series E Purchasers), (ii) any other shares of
Common Stock held by the Series D or E Purchasers, and (iii) any Common Stock
issued or issuable with respect to the Series D Preferred Stock and/or Series E
Preferred Stock held by any of the Series D or E Purchasers (or any of their
respective successors or assignees) by way of a stock dividend or stock split or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. For purposes of this Agreement, a Person
will be deemed to be a holder of Series D or E Registrable Securities whenever
such Person has the right to acquire directly or indirectly such Series D or E
Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected. For purposes of calculating the percentage of
Series D or E Registrable Securities for voting purposes, the Series D Preferred
Stock or Series E Preferred Stock held by any of the Series D or E Purchasers
(or any of their respective successors or assignees) shall be deemed to have
been converted at the then applicable conversion price. As to any particular
Series D or E Registrable Securities, such securities will cease to be Series D
or E Registrable Securities when they have been distributed to the public
pursuant to an offering registered under the Securities Act or sold to the
public through a broker, dealer or market maker in compliance with Rule 144
under the Securities Act (or any similar rule then in force).
"THLI Registrable Securities" means (i) any Common Stock issued upon the
conversion of any shares of Series B Preferred Stock, Series C Preferred Stock
and/or Series D Preferred Stock issued or issuable to the THLI Entities (whether
held by the THLI Entities or any successors or assignees of the THLI Entities),
(ii) any other shares of Common Stock held by the THLI Entities, and (iii) any
Common Stock issued or issuable with respect to the Series B Preferred Stock,
Series C Preferred Stock or any other class or series of the Company's preferred
stock held by any of the THLI Entities (or any of their respective successors or
assignees) by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. For purposes of this Agreement, a Person will be deemed to be a
holder of THLI Registrable Securities whenever such Person has the right to
acquire directly or indirectly such THLI
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Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected. For purposes of calculating the percentage of THLI
Registrable Securities for voting purposes, the Series B Preferred Stock, Series
C Preferred Stock or any other class or series of the Company's preferred stock
held by any of the THLI Entities (or any of their respective successors or
assignees) shall be deemed to have been converted at the then applicable
conversion price. As to any particular THLI Registrable Securities, such
securities will cease to be THLI Registrable Securities when they have been
distributed to the public pursuant to an offering registered under the
Securities Act or sold to the public through a broker, dealer or market maker in
compliance with Rule 144 under the Securities Act (or any similar rule then in
force).
Section 2. Demand Registrations.
2A Requests for Registration. Subject to paragraph 2(b) below, (i) the
holders of a majority of the THLI Registrable Securities may request, at
any time and from time to time, registration under the Securities Act, of
all or part of their THLI Registrable Securities on Form S-1 or any similar
long-form registration ("Long-Form Registrations"), (ii) each holder of
THLI Registrable Securities may request registration under the Securities
Act of all or part of their THLI Registrable Securities on Form S-2 or S-3
or any similar short-form registration ("Short-Form Registrations"), if
available, and (iii) the holders of a majority of the Series D Registrable
Securities or the Series E Registrable Securities may request Short-Form
Registrations, if available. Each request for a Demand Registration (as
defined below) shall specify the approximate number of Registrable
Securities requested to be registered and the anticipated per share price
range for such offering. Within ten (10) days after receipt of any such
request, the Company will give written notice of such requested
registration to all other holders of Registrable Securities and will
include in such registration all Registrable Securities with respect to
which the Company has received written requests for inclusion therein
within twenty (20) days after the receipt of the Company's notice. All
registrations requested pursuant to this paragraph 2(a) are referred to
herein as "Demand Registrations".
2B Long-Form Registrations. Subject to paragraph 1(a), the holders of
the THLI Registrable Securities will be entitled to request up to three (3)
Long-Form Registrations in which the Company will pay all Registration
Expenses. A registration will not count as one of the permitted Long-Form
Registrations until it has become effective, and no Long-Form Registration
will count as one of the permitted Long-Form Registrations unless the
holders of the THLI Registrable Securities are able to register and sell at
least 90% of the THLI Registrable Securities requested to be included in
such registration.
2C Short-Form Registrations. In addition to the Long-Form
Registrations provided pursuant to paragraph 1(b), (i) at any time, the
holders of THLI Registrable Securities will be entitled to request an
unlimited number of Short- Form Registrations in which the Company will pay
all Registration Expenses and (ii) the holders of the Series D or E
Registrable Securities will be entitled to request up to three (3)
Short-Form Registrations in which the Company will pay all Registration
Expenses; provided, that the holders of Registrable Securities shall not be
entitled to require the Company to effect any Short-Form Registration if
the aggregate offering price of Registrable Securities (based on the
mid-point of the price range specified in the request for such Short-Form
Registration) to be included in such Short-Form Registration is less than
$1,000,000. Demand Registrations will be Short-Form Registrations whenever
the Company is permitted to use any applicable short form. The Company will
use its best efforts to make Short-Form Registrations on Form S-3 available
for the sale of Registrable Securities.
2D Priority on Demand Registrations. If a Demand Registration is an
underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such
offering exceeds the number of Registrable Securities and other securities,
if any, which can
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be sold therein without adversely affecting the marketability of the
offering, the Company will include in such registration (i) first, the
number of Registrable Securities requested to be included in such Demand
Registration by the holders initially requesting such Demand Registration
pro rata, if necessary, among the holders of such Registrable Securities
based on the number of such Registrable Securities owned by each such
holder, (ii) second, the number of other Registrable Securities not
included pursuant to clause (i) above pro rata, if necessary, among the
holders of such Registrable Securities based on the number of such
Registrable Securities owned by each such holder, and (iii) third, any
other securities of the Company requested to be included in such Demand
Registration.
2E Restrictions on Demand Registrations. The Company will not be
obligated to effect any Demand Registration within sixty (60) days after
the effective date of a previous registration of equity securities by the
Company. The Company may postpone for up to ninety (90) days the filing or
the effectiveness of a registration statement for a Demand Registration if
the Company's Board of Directors determines in good faith that such Demand
Registration would reasonably be expected to be seriously detrimental to
the Company and its shareholders; provided, that in such event, (i) the
Company shall give written notice to the holders of Registrable Securities
as soon after such determination as practicable, but in any event within
ten (10) days thereafter, (ii) the holders of Registrable Securities
initially requesting such Demand Registration will be entitled to withdraw
such request and such Demand Registration will not count as one of the
permitted Demand Registrations hereunder and the Company will pay all
Registration Expenses in connection with such registration and (iii) the
Company may postpone a Demand Registration pursuant hereto only once in any
365-day period.
2F Selection of Underwriters. If any Demand Registration is an
underwritten offering, the selection of investment banker(s) and manager(s)
for the offering, which investment banker(s) and manager(s) shall be
nationally recognized, shall be made by the holders of a majority of the
Registrable Securities initially requesting such registration, subject to
the Company's approval which shall not be unreasonably withheld.
2G Other Registration Rights. Except as provided in this Agreement,
the Company shall not grant to any Persons the right to request the Company
to register any equity securities of the Company, or any securities
convertible or exchangeable into or exercisable for such securities,
without the prior written consent of the holders of at least a majority of
the THLi Registrable Securities.
Section 3. Piggyback Registrations.
3A Right to Piggyback. Whenever the Company proposes to register any
of its securities under the Securities Act (other than pursuant to a Demand
Registration) and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"), the
Company will give prompt written notice to all holders of Registrable
Securities of its intention to effect such a registration and will include
in such registration all Registrable Securities with respect to which the
Company has received written requests for inclusion therein within twenty
(20) days after the receipt of the Company's notice.
3B Piggyback Expenses. The Registration Expenses of the holders of
Registrable Securities will be paid by the Company in all Piggyback
Registrations.
3C Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their opinion
the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering without adversely
affecting the marketability of the offering, the Company will include in
such registration (i) first, the securities the Company
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proposes to sell, and (ii) second, the Registrable Securities and Existing
Registrable Securities requested to be included in such Piggyback
Registration, pro rata, if necessary, among the holders of such Registrable
Securities and Existing Registrable Securities on the basis of the number
of Registrable Securities and Existing Registrable Securities owned by each
such holder and (iii) third, other securities requested to be included in
such Piggyback Registration.
3D Priority on Secondary Registrations. If a Piggyback Registration is
an underwritten secondary registration on behalf of holders of the
Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of the offering, the
Company will include in such Piggyback Registration (i) first, the
securities requested to be included therein by the holders requesting such
registration, (ii) second, the Registrable Securities and Existing
Registrable Securities requested to be included in such Piggyback
Registration, pro rata among the holders of such Registrable Securities and
Existing Registrable Securities on the basis of the number of Registrable
Securities and Existing Registrable Securities owned by each such holder
and (iii) third, other securities requested to be included in such
Piggyback Registration.
3E Selection of Underwriters. If any Piggyback Registration is an
underwritten offering, the selection by the Company of investment banker(s)
and manager(s), which investment banker(s) and manager(s) shall be
nationally recognized, for the offering must be approved by the holders of
a majority of the Registrable Securities included in such Piggyback
Registration, which approval shall not be unreasonably withheld.
Section 4. Holdback Agreements.
4A Each holder of Registrable Securities agrees not to effect any
public sale or distribution (including sales pursuant to Rule 144) of
equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven (7) days
prior to and the ninety (90)-day period beginning on the effective date of
any underwritten Demand Registration or any underwritten Piggyback
Registration in which Registrable Securities are included (except as part
of such underwritten registration), unless the underwriters managing the
registered public offering otherwise agree.
4B The Company agrees not to effect any public sale or distribution of
its equity securities, or any securities convertible into or exchangeable
or exercisable for such securities, during the seven (7) days prior to and
during the ninety (90)-day period beginning on the effective date of any
underwritten Demand Registration or any underwritten Piggyback Registration
(except as part of such underwritten registration or pursuant to
registrations on Form S-8 or Form S-4 or any successor forms thereto),
unless the underwriters managing the registered public offering otherwise
agree.
Section 5. Registration Procedures. Whenever the holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Company will use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof including the registration of common
stock that may be obtained upon conversion of Preferred Stock held by a holder
of Registrable Securities requesting registration, and pursuant thereto the
Company will as expeditiously as possible:
5A prepare and file (in the case of a Demand Registration not more
than ninety (90) days after request therefor) with the Commission a
registration statement with respect to such Registrable Securities and use
its best efforts to cause such registration statement to become effective
(provided that as far in advance as practicable before filing a
registration statement or prospectus or any amendments or supplements
thereto, the Company will furnish to the counsel selected by the holders
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of a majority of the Registrable Securities covered by such registration
statement copies of all such documents proposed to be filed, which
documents will be subject to the review of such counsel);
5B in the event that such registration statement is not filed with the
Commission on or before the ninetieth (90) day after request therefor, or
on the next business day that the Commission is open, for each seven day
period (a "Penalty Period"), until such time as the registration statement
is filed with the Commission the holders who have requested registration
shall be entitled to a number of shares of Common Stock of the Company
equal to the product of (A) the number of shares of Common Stock then
issuable upon conversion of the number of Series D Preferred Stock or
Series E Preferred Stock, as applicable, purchased by the Investors,
multiplied by .10 (the "Penalty Shares"), multiplied by (B) The number of
Penalty Periods that has elapsed before the registration statement has been
filed with the Commission, divided by 25.714. In no event shall the number
of Penalty Shares exceed 10% of the total Series D Preferred Stock or
Series E Preferred Stock, as applicable. The ninety (90) day period shall
be extended for any period during which the filing is precluded by reason
of the Company's response to a comment or objection from holder's counsel
pursuant to Section 5(a) hereof.
5C prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period of not less than one hundred and eighty
(180) days and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration
statement;
5D furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including
each preliminary prospectus) and such other documents as such seller may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
5E use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other
acts and things which may be reasonably necessary or advisable to enable
such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller (provided that the Company will
not be required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this
subparagraph, (ii) subject itself to taxation in any such jurisdiction or
(iii) consent to general service of process in any such jurisdiction);
5F notify each seller of such Registrable Securities, at any time when
a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make the
statements therein not misleading, and, at the request of any such seller,
the Company will prepare a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus will not contain an untrue statement of a
material fact or omit to state any fact necessary to make the statements
therein not misleading;
5G cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are
then listed and, if not so listed, to be listed on the National Association
of Securities Dealers automated quotation system;
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5H provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration
statement;
5I enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the
holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities (including, without
limitation, effecting a stock split or a combination of shares);
5J make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to
such registration statement and any attorney, accountant or other agent
retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such
seller, underwriter, attorney, accountant or agent in connection with such
registration statement;
5K permit any holder of Registrable Securities which holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of
such registration or comparable statement and to require the insertion
therein of material, furnished to the Company in writing, which in the
reasonable judgment of such holder and its counsel should be included;
5L in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the
qualification of any common stock included in such registration statement
for sale in any jurisdiction, the Company will promptly notify the holders
of Registrable Securities and will use its reasonable best efforts promptly
to obtain the withdrawal of such order;
5M obtain a cold comfort letter from the Company's independent public
accountants in customary form and covering such matters of the type
customarily covered by cold comfort letters as the holders of a majority of
the Registrable Securities being sold reasonably request; and
5N in connection with an underwritten public offering, (i) cooperate
with the selling holders of Registrable Securities, the underwriters
participating in the offering and their counsel in any due diligence
investigation reasonably requested by the selling holders or the
underwriters in connection therewith and (ii) participate, to the extent
reasonably requested by the managing underwriter for the offering or the
selling holder, in efforts to sell the Registrable Securities under the
offering (including, without limitation, participating in "roadshow"
meetings with prospective investors) that would be customary for
underwritten primary offerings of a comparable amount of equity securities
by the Company.
Section 6. Registration Expenses.
6A All expenses incident to the Company's performance of or compliance
with this Agreement, including without limitation all registration and
filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and all independent certified
public accountants, underwriters (excluding discounts and commissions) and
other Persons retained by the Company (all such expenses being herein
called "Registration Expenses"), will be borne as provided in this
Agreement, except that the Company will, in any event, pay its internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense
of any annual audit or quarterly review, the expense of any liability
insurance and the expenses and fees for listing the securities to be
registered on each securities exchange on which
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similar securities issued by the Company are then listed or on the National
Association of Securities Dealers automated quotation system. The Company
shall not be required to pay an underwriting discount with respect to any
shares being sold by any party other than the Company in connection with an
underwritten public offering of any of the Company's securities pursuant to
this Agreement.
6B In connection with each Demand Registration and each Piggyback
Registration, the Company will reimburse the holders of Registrable
Securities covered by such registration for the reasonable fees and
disbursements of one counsel chosen by the holders of a majority of the
Registrable Securities initially requesting such registration.
6C The Company will reimburse the holders of Registrable Securities
for the reasonable fees and expenses (including the fees and expenses of
counsel chosen by the holders of a majority of the Registrable Securities)
incurred by such holders in enforcing any of their rights under this
Agreement.
Section 7. Indemnification.
7A Indemnification of Selling Stockholders by the Company. The Company
agrees to indemnify and hold harmless each holder of Registrable Securities
which are registered pursuant hereto (each a "Selling Stockholder") and
each person, if any, who controls any Selling Stockholder within the
meaning of Section 15 of the Securities Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
registration statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the
prospectus (or any amendment or supplement thereto), or the omission
or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided, that subject to Section 7(d) below any such
settlement is effected with the prior written consent of the Company;
and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by such
Selling Stockholder), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above; Notwithstanding the foregoing, this indemnity agreement
shall not apply to any loss, liability, claim, damage or expense to
the extent arising out of any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by the Selling
Stockholder expressly for use in the registration statement (or any
amendment thereto), or any preliminary prospectus or the prospectus
(or any amendment or supplement thereto) or by such Selling
Stockholder's failure to deliver a copy of the registration statement
or prospectus or any amendments or
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supplements thereto after the Company has furnished such Selling
Stockholder with a sufficient number of copies of the same.
7B Indemnification of Company by the Selling Stockholders. Each
Selling Stockholder, severally and not jointly, agrees to indemnify and
hold harmless the Company, its directors, each of its officers who signed
the registration statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 7(a) above, as
incurred, but only with respect to untrue or alleged untrue statements or
omissions made in the registration statement (or any amendment thereto), or
any preliminary prospectus or any prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Selling
Stockholder with respect to such Selling Stockholder expressly for use in
the registration statement (or any amendment or supplement thereto);
provided, that such Selling Stockholder's aggregate liability under this
Section 7 shall be limited to an amount equal to the net proceeds (after
deducting the underwriting discount, but before deducting expenses)
received by such Selling Stockholder from the sale of Registrable
Securities pursuant to a registration statement filed pursuant to this
Agreement.
7C Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may
be sought hereunder, but failure to so notify an indemnifying party shall
not relieve such indemnifying party from any liability hereunder to the
extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 7(a), counsel to the indemnified parties shall be
selected by the Company, subject to the approval of the holders of a
majority of the Registrable Securities included in a registration
hereunder, which shall not be unreasonably withheld and, in the case of
parties indemnified pursuant to Section 7(b), counsel to the indemnified
parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action and
counsel to the indemnifying party shall also be counsel for the indemnified
parties; provided, that if under applicable principals of legal ethics,
there is a conflict of interest that prohibits such counsel from
representing the indemnifying parties as well as the indemnified parties,
the indemnifying parties shall be liable for fees and expenses of one
additional counsel (in addition to any local counsel) separate from their
own counsel for all indemnified parties in connection with any one action
or separate but similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances. No indemnifying party
shall, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever in respect of
which indemnification or contribution could be sought under this Section 7
(whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising
out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
7D Settlement without Consent. If at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, such indemnifying party agrees that
it shall be liable for any settlement of the nature contemplated by Section
7(a)(ii) effected without its written consent if (i) such settlement is
entered into more than forty-five (45) days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party
shall have received notice of the terms of such settlement at least thirty
(30) days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
9
7E Contribution.
(i) If a claim for indemnification under Section 7(a) or 7(b) is
unavailable to an indemnified party because of a failure or refusal of
a governmental authority to enforce such indemnification in accordance
with its terms (by reason of public policy or otherwise), then each
indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, in such proportion as is appropriate
to reflect the relative fault of the indemnifying party and the
indemnified party in connection with the actions, statements or
omissions that resulted in such losses as well as any other relevant
equitable considerations. The relative fault of such indemnifying
party and indemnified party shall be determined by reference to, among
other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged
omission of a material fact, has been taken or made by, or relates to
information supplied by, such indemnifying party or indemnified party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action, statement or omission.
The amount paid or payable by a party as a result of any losses shall
be deemed to include, subject to the limitations set forth in this
Section, any reasonable attorneys' or other reasonable fees or
expenses incurred by such party in connection with any proceeding to
the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was
available to such party in accordance with its terms.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7(e) were
determined by pro rata allocation or by any other method of allocation
that does not take into account the equitable considerations referred
to in the immediately preceding paragraph. Notwithstanding the
provisions of this Section 7(e), a holder shall not be required to
contribute, in the aggregate, any amount in excess of the amount by
which the proceeds actually received by such holder from the sale of
the Registrable Securities subject to the proceeding exceeds the
amount of any damages that the holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(iii) The indemnity and contribution agreements contained in this
Section are in addition to any liability that the indemnifying parties
may have to the indemnified parties.
Section 8. Participation In Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; provided, that no
holder of Registrable Securities included in any underwritten registration shall
be required to make any representations or warranties to the Company or the
underwriters other than representations and warranties regarding such holder,
such holder's Registrable Securities and such holder's intended method of
distribution or to undertake any indemnification obligations to the Company or
the underwriters with respect thereto, except as otherwise provided in Section 7
hereof.
Section 9. Miscellaneous.
9A No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to its securities which is inconsistent
with or violates the rights granted to the holders of Registrable
Securities in this Agreement. To the extent that any registration rights
10
previously granted by the Company remain in effect and are inconsistent
with the rights granted to the Registrable Securities in this Agreement,
upon any registration of Registrable Securities hereunder, the Company
shall use its best efforts to seek a waiver, consent or amendment of such
existing rights in order to provide the holders of Registrable Securities
with the benefits and priorities set forth in this Agreement.
9B Adjustments Affecting Registrable Securities. The Company will not
take any action, or permit any change to occur, with respect to its
securities which would materially and adversely affect the ability of the
holders of Registrable Securities to include such Registrable Securities in
a registration undertaken pursuant to this Agreement or which would
materially and adversely affect the marketability of such Registrable
Securities in any such registration (including, without limitation,
effecting a stock split or a combination of shares).
9C Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement
and to exercise all other rights granted by law. The parties hereto agree
and acknowledge that money damages may not be an adequate remedy for any
breach of the provisions of this Agreement and that any party may in its
sole discretion apply to any court of law or equity of competent
jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent
violation of the provisions of this Agreement.
9D Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and holders of at least a majority of the
Registrable Securities. The failure of any party to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of
such provisions and shall not affect the right of such party thereafter to
enforce each and every provision of this Agreement in accordance with its
terms.
9E Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure
to the benefit of the permitted respective successors and assigns of the
parties hereto whether so expressed or not. In addition, whether or not any
express assignment has been made, the provisions of this Agreement which
are for the benefit of purchasers or holders of Registrable Securities are
also for the benefit of, and enforceable by, any subsequent holder of
Registrable Securities.
9F Notices. All notices, requests, consents and other communications
provided for herein shall be in writing and shall be (i) delivered in
person, (ii) transmitted by telecopy, (iii) sent by first-class, registered
or certified mail, postage prepaid, or (iv) sent by reputable overnight
courier service, fees prepaid, to the recipient at the address or telecopy
number set forth below, or such other address or telecopy number as may
hereafter be designated in writing by such recipient. Notices shall be
deemed given upon personal delivery, seven days following deposit in the
mail as set forth above, upon acknowledgment by the receiving telecopier or
one day following deposit with an overnight courier service.
11
If to the Company:
United Shipping & Technology, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Secretary and General Counsel
with a copy to (which shall not constitute notice to the
Company):
▇▇▇▇▇▇ and ▇▇▇▇▇▇ Professional Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to any of the THLI Entities:
c/o TH ▇▇▇.▇▇▇▇▇▇ Internet Fund Advisors, L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to (which shall not constitute notice to any
THLI Entities):
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
If to any of the Series D or E Purchasers:
To the address for such Series D or E Purchaser indicated on
the Series D Purchaser Signature Page or Series E Purchaser
Signature Page.
or such other address or to the attention of such other Person as the recipient
party shall have specified by prior written notice to the sending party.
9G Interpretation of Agreement; Severability. The provisions of this
Agreement shall be applied and interpreted in a manner consistent with each
other so as to carry out the purposes and intent of the parties hereto, but
if for any reason any provision hereof is determined to be unenforceable or
invalid, such provision or such part thereof as may be unenforceable or
invalid shall be deemed severed from the Agreement and the remaining
provisions carried out with the same force and effect as if the severed
provision or part thereof had not been a part of this Agreement.
9H Governing Law. The corporate law of the State of Utah shall govern
all issues concerning the relative rights of the Company and its
stockholders. All other provisions of this Agreement shall be governed by
and construed in accordance with the internal laws of the State of
12
New York, without giving effect to principles of conflicts of laws or
choice of law of the State of New York or any other jurisdiction which
would result in the application of the laws of any jurisdiction other than
the State of New York.
9I Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of
which taken together shall constitute one and the same Agreement.
9J Entire Agreement. This document, the Purchase Agreement and the
"Related Documents" (as defined in the Purchase Agreement) embodies the
complete agreement and understanding among the parties hereto with respect
to the subject matter hereof and supersede and preempt any prior
understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any
way.
9K Waiver of Jury Trial. The parties to this Agreement each hereby
waives, to the fullest extent permitted by law, any right to trial by jury
of any claim, demand, action, or cause of action (i) arising under this
Agreement or (ii) in any way connected with or related or incidental to the
dealings of the parties hereto in respect of this Agreement or any of the
transactions related hereto, in each case whether now existing or hereafter
arising, and whether in contract, tort, equity, or otherwise. The parties
to this Agreement each hereby agrees and consents that any such claim,
demand, action, or cause of action shall be decided by court trial without
a jury and that the parties to this Agreement may file an original
counterpart of a copy of this Agreement with any court as written evidence
of the consent of the parties hereto to the waiver of their right to trial
by jury.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first written above.
UNITED SHIPPING & TECHNOLOGY, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
TH ▇▇▇.▇▇▇▇▇▇ INTERNET PARTNERS, L.P.
By: TH ▇▇▇.▇▇▇▇▇▇ Internet Fund Advisors, L.P.
Its: General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
TH ▇▇▇.▇▇▇▇▇▇ INTERNET PARALLEL PARTNERS, L.P.
By: TH ▇▇▇.▇▇▇▇▇▇ Internet Fund Advisors, L.P.
Its: General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
THLI COINVESTMENT PARTNERS LLC
/s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇
Its: Managing Member
BLUE STAR I LLC
/s/ ▇▇▇▇▇▇ Ezzed
-----------------------------------------------
By: ▇▇▇▇▇▇ Ezzed
------------------------------------------
Its: Managing Member
14
SERIES D PURCHASERS SIGNATURE PAGE
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: RS Investment Management, Inc.
Address for Notices: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Name: TenX Venture Partners, LLC.
Address for Notices: ▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Name: Homepoint Corporation
Address for Notices: ▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By /s/ SALAH A.H. AL-QAHTANI
--------------------------------------------
Name: SALA A.H. AL-QAHTANI
Address for Notices:
AL-QAHTANI PIPE COATING TERMINAL
▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
AL-MAL ISLAMIC COMPANY
By /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇-▇▇▇▇▇▇
--------------------------------------------
By: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇-▇▇▇▇▇▇
Its: Chairman
Address for Notices: ▇▇▇▇▇ ▇▇-▇▇▇▇▇ ▇▇▇▇▇▇
▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
15